A weak fourth quarter, in which sales fell 24%, to $4.3 million, contributed to a 14% decline in sales, to $18.6 million, at Millbrook Press for the fiscal year ended July 31, 2002. The decline in revenue plus some one-time costs resulted in a $728,000 net loss in fiscal 2002, compared to net income of $144,000 in fiscal 2001.
In the year, revenue fell in all three of Millbrook's major distribution channels: sales fell $1.6 million in the special sales market; $1.2 million in the school and library market; and $200,000 in the trade market, a figure which includes a $700,000 decline in fourth-quarter sales due to Millbrook's decision to stop selling the Snappy product line (News, June 24). Sales of approximately $1 million in the company's new Roaring Brook Press line helped to somewhat offset the loss of Snappy. According to the company's year-end filing with the Securities and Exchange Commission, decreased funding for school libraries dropped sales to wholesalers by $375,000 in the year, while disruptions caused by the September 11 attacks resulted in a $410,000 decline in telemarketing sales.
In addition to lower sales, the publisher's bottom line was hurt by higher sales and marketing costs that included $225,000 in expenses related to transferring its distribution and customer services functions to Simon & Schuster. S&S began distributing Millbrook's titles June 1, although the company continues to sell its own titles.
The move to S&S combined with the launch of Roaring Brook and the withdrawal of Millbrook's distribution of the Snappy line are all part of the company's strategy to move the publisher into the high end of the school library and trade markets, which Millbrook hopes will give greater stability to sales and higher margins. As part of reorienting the company, Millbrook trimmed its workforce and finished the fiscal year with 46 full-time employees, compared to 52 a year earlier.
