It was a bit of two different businesses in the third quarter ended June 26 for Courier Corp. as its printing division showed improvement while its publishing group struggled. Overall, total third-quarter sales at the company rose 6%, to $64.9 million, and net income rose to $1.8 million from $1.6 million.
In the book manufacturing segment, sales rose 8% in the third quarter, to $56.8 million driven by increases in Courier’s four-color business. Sales to the education market were up 7% in the quarter, with increases at both the college and elementary/high school levels. Sales to the trade rose 22%, helped by growth in new accounts, computer game books and other four-color work. Sales to the religious market were up 1%.
In the publishing division, third quarter revenue fell 4%, to $10.9 million, as Creative Homeowner continued to be hurt by the soft housing market. Sales at the unit were down 4% and 28% for the nine months. Creative did, however, cut its operating loss. REA sales rose 2% in the quarter and increased 22% through the first nine months, while sales at Dover were down 6% in the quarter, but up 3% year-to-date. For the first nine months of fiscal 2010, publishing sales were $34.1 million, down 2% from fiscal 2009. The segment’s nine-month operating loss was $925,000, with excellent results at REA offset by losses at Dover and Creative Homeowner. For the first nine months of fiscal 2009, the segment’s operating loss was $3.1 million, including $500,000 in restructuring costs.
“Given the uneven state of the recovery, many consumers chose to stay on the sidelines,” said Courier chairman James Conway in a statement. “Only REA, with its very targeted offering, was able to extend its gains into the third quarter. The uncertain housing market continued to hamper Creative Homeowner sales. At Dover, children’s books and math and science titles did well, but others were off as caution prevailed among readers and retailers. We did make progress behind the scenes, deploying much-improved Web marketing technology at Dover and a more economical distribution solution for Creative Homeowner.”
Looking at the balance of the fiscal year, Conway said that weak consumer confidence will mean a challenging environment for its own publishing business as well as for publishers that use its manufacturing services. Still, Conway believes Courier’s mix of printing services will result in improved margins and increased market share.
