With slight gains in both its book manufacturing and publishing segments, total revenue at Courier Corp. rose 1%, to $48.6 million, for the second quarter ended March 29. Net income increased 33.3%, to $3.8 million.
Sales in its book manufacturing group increased 1.5% in the quarter, to $41.1 million. Sales to the specialty trade market were the strongest in some time, increasing 11%. The improvement was attributed to higher demand for game books for PlayStation 2 and other videogame platforms that offset slow sales on computer and technology books. Sales to the education market were up 6%. Higher demand for reprints sparked a 20% increase in sales to the higher education market, while fewer adoptions and state budget pressures resulted in a 20% decline in sales to the elhi market. Sales to the religion market were off 6%, which Courier said was due to changes in the timing of shipments of major books. For the first six months of the year, sales to the religion segment were up 4%, while sales to the education market increased 17%, and rose 9% in the specialty education market.
Sales in its publishing segment, Dover Publications, rose 2.5%, to $9.1 million, below expectations. Bob Story, Courier's chief financial officer, said a "significant decline" in sales to the major bookstore chains was the primary reason for the weaker than expected sales, along with a 3% drop in international sales. To offset slower sales to the chains, Dover has increased its marketing efforts to nonbookstore accounts, and sales to that segment were up "strongly" in the quarter, Story said. Sales in its direct marketing operation, which generates about 14% of Dover's revenue, increased 34% in the period. Better catalogues and list management combined with more effective e-mail promotions helped to increase sales, Story said.
With solid earnings increases in the first two quarters, Courier has raised its earnings per share estimate for the full year to $3.45 to $3.60 per share, an increase of 13% to 18%. Sales are expected to increase a much more modest 4% to 6%, reaching $208 million to $213 million. The company expects gradual improvement in its book manufacturing segment over the second half of fiscal '03, but remains cautious about growth prospects for Dover. While Courier believes international sales may increase over the next six months, it remains uncertain about how the chains will perform in the rest of the year. Dover will publish 615 new titles in the current fiscal year, a 23% increase over fiscal 2002. Executives said Courier continues to look for a niche purchase that would complement Dover, but that it would be "tough to duplicate" buying a company that has performed as well as Dover.
