A 6% decline in revenue in its book manufacturing segment, to $170.4 million, dropped total sales at Courier Corp. by 4.6%, to $202.2 million, for the fiscal year ended September 28, 2002. Despite the sales decline, improved productivity and cost controls resulted in a 22.7% increase in net income, to $16.2 million.

The decline in sales in its book manufacturing segment was somewhat offset by an 8.1% increase in revenue at Courier's Dover Publications subsidiary, to $36 million. Pretax earnings jumped about 226%, to $4.9 million. Contributing to the sales gain was a 10% increase in title output in the year to more than 500 new titles plus higher sales through the Internet and to nontraditional retail markets.

Sales in Canada were off in the year due to the bankruptcy of Dover's distributor, General Distribution, but Courier executives said they have built a direct sales force in Canada that they expect to increase sales in fiscal 2003. The increase in Dover's profits was aided by bringing more of the company's production in-house. Courier chairman Jim Conway noted that Courier's Bookmark division's ability to do short-run printing made it feasible to launch Dover Phoenix Editions, which revives scholarly out-of-print books.

The drop in book manufacturing revenue in fiscal '02 was attributed to a 15% decline in Courier's trade business and a 3% decline in education sales. Sales to the religion book market rose 3%. Executives said they were encouraged by fourth quarter sales in the manufacturing segment, noting that while religion sales fell 6%, education sales increased 8% and trade sales were flat. Courier CFO Bob Story said the performance of the trade division reflected a "huge improvement" over the first three quarters in 2002, a year when sales were down by double digits. Story suggests that the trade category "may have bottomed out."

In Courier's third segment, coursepack publishing, sales dipped to $1.2 million from $1.5 million, but the pretax loss was reduced to $191,000 from $850,000.

Looking ahead to fiscal 2003, Courier expects manufacturing sales to increase 3%—5%, while Dover's sales are projected to rise 10%—15%.