-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MfObiBqVOydYAmsnDgJSqtMwwYvpqTu5CRwjzS786PP2TJU06ULv3vjT49yvrtrh MMyI8P+tOr/qIsENxwCzjA== 0000950135-96-001928.txt : 19960508 0000950135-96-001928.hdr.sgml : 19960508 ACCESSION NUMBER: 0000950135-96-001928 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960507 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COURIER CORP CENTRAL INDEX KEY: 0000025212 STANDARD INDUSTRIAL CLASSIFICATION: BOOK PRINTING [2732] IRS NUMBER: 042502514 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07597 FILM NUMBER: 96557399 BUSINESS ADDRESS: STREET 1: 165 JACKSON ST CITY: LOWELL STATE: MA ZIP: 01852 BUSINESS PHONE: 5084586351 10-Q 1 COURIER CORPORATION 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - --- EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 30, 1996 ------------------------------------------------ OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - --- EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO ------------------ -------------------------- COMMISSION FILE NUMBER 0-7597 --------------------------------------------------------- COURIER CORPORATION - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2502514 - -------------------------------------------------------------------------------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 165 JACKSON STREET, LOWELL, MASSACHUSETTS 01852 - -------------------------------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (508) 251-6000 - -------------------------------------------------------------------------------- (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) NO CHANGE - -------------------------------------------------------------------------------- (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT.) INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENT FOR THE PAST 90 DAYS. YES X NO --- --- INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF COMMON STOCK, AS OF THE LASTEST PRACTICABLE DATE. CLASS OUTSTANDING AT APRIL 30, 1996 - ----------------------------------- --------------------------------- COMMON STOCK, $1 PAR VALUE 2,025,531 SHARES PAGE 1 OF 12 2 COURIER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Dollars in thousands)
March 30, September 30, ASSETS 1996 1995 - ------ --------- ------------- Current assets: Cash and cash equivalents $ 367 $ 1,147 Accounts receivable, less allowance for uncollectible accounts 21,437 20,019 Inventories (Note B) 12,413 9,449 Deferred income taxes 1,403 1,236 Other current assets 994 1,054 ------- ------- Total current assets 36,614 32,905 Property, plant and equipment, less accumulated depreciation: $58,925 at March 30, 1996 and $55,386 at September 30, 1995 34,771 36,225 Real estate held for sale or lease, net (Note D) 379 2,055 Goodwill, at cost 1,204 1,204 Other assets 564 572 ------- ------- Total assets $73,532 $72,961 ======= =======
The accompanying notes are an integral part of the consolidated financial statements. Page 2 of 12 3 COURIER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Dollars in thousands)
March 30, September 30, LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995 - ------------------------------------ --------- ------------- Current liabilities: Current maturities of long-term debt $ 382 $ 382 Accounts payable 8,373 8,979 Income taxes payable 314 1,373 Other current liabilities 8,585 9,194 ------- ------- Total current liabilities 17,654 19,928 Long-term debt 11,088 9,488 Deferred income taxes 3,659 3,447 Other liabilities 3,275 3,272 ------- ------- Total liabilities 35,676 36,135 ------- ------- Stockholders' equity: Preferred stock, $1 par value - authorized 1,000,000 shares; none issued Common stock, $1 par value - authorized 6,000,000 shares; issued 4,500,000 shares 4,500 4,500 Additional paid-in capital 8,969 8,884 Retained earnings 47,936 47,133 Treasury stock, at cost: 2,476,000 shares at March 30, 1996 and 2,493,000 shares at September 30, 1995 (23,549) (23,691) ------- ------- Total stockholders' equity 37,856 36,826 ------- ------- Total liabilities and stockholders' equity $73,532 $72,961 ======= =======
The accompanying notes are an integral part of the consolidated financial statements. Page 3 of 12 4 COURIER CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands except per share amounts)
QUARTER ENDED SIX MONTHS ENDED ------------------------ ----------------------- March 30, April 1, March 30, April 1, 1996 1995 1996 1995 ---------- ---------- ---------- ---------- (13 weeks) (13 weeks) (26 weeks) (27 weeks) Net sales $ 31,384 $ 29,643 $ 61,499 $ 60,559 Cost of sales 25,707 23,407 50,211 47,636 ---------- ----------- ---------- ---------- Gross profit 5,677 6,236 11,288 12,923 Selling and administrative expenses 4,864 4,859 9,372 9,761 Interest expense 255 260 467 484 Other income (expense) (Note D) (340) 63 (314) 108 ---------- ---------- ---------- ---------- Income before taxes 218 1,180 1,135 2,786 Provision (benefit) for income taxes (Note C) (445) 422 (152) 1,026 ---------- ---------- ---------- ---------- Net income $ 663 $ 758 $ 1,287 $ 1,760 ========== ========== ========== ========== Net income per share $ 0.32 $ 0.38 $ 0.62 $ 0.88 ========== ========== ========== ========== Cash dividends declared per share $ 0.12 $ 0.10 $ 0.24 $ 0.20 ========== ========== ========== ========== Weighted average shares outstanding 2,082,000 1,995,000 2,083,000 1,991,000
The accompanying notes are an integral part of the consolidated financial statements. Page 4 of 12 5 COURIER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands)
SIX MONTHS ENDED ----------------------- March 30, April 1, 1996 1995 --------- -------- Cash provided from (used for) operations $(1,803) $ 757 ------- ------- Investment activities: Capital expenditures (2,099) (6,488) Proceeds from sale of assets (Note D) 1,792 -- ------- ------- Cash used for investment activities (307) (6,488) ------- ------- Financing activities: Repayment of long-term debt (191) (181) Increase in long-term borrowings 1,791 3,595 Cash dividends (484) (392) Proceeds from stock plans 214 127 ------- ------- Cash provided from financing activities 1,330 3,149 ------- ------- Decrease in cash and cash equivalents (780) (2,582) Cash at the beginning of the period 1,147 3,033 ------- ------- Cash at the end of the period $ 367 $ 451 ======= =======
The accompanying notes are an integral part of the consolidated financial statements. Page 5 of 12 6 COURIER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UNAUDITED FINANCIAL STATEMENTS ------------------------------ The balance sheet as of March 30, 1996, the statements of income for the quarters ended and six month periods ended March 30, 1996 and April 1, 1995, and the statements of cash flows for the six month periods ended March 30, 1996 and April 1, 1995 are unaudited and, in the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been recorded. Such adjustments consisted only of normal recurring items. Certain amounts for fiscal 1995 have been reclassified in the accompanying financial statements in order to be consistent with the current year's classifications. Fiscal year 1996 will be comprised of 52 weeks compared to 53 weeks in fiscal 1995; the additional week was included in the first quarter of fiscal 1995 in the accompanying financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The year-end balance sheet data as of September 30, 1995 was derived from audited financial statements, but does not include disclosures required by generally accepted accounting principles. It is suggested that these interim financial statements be read in conjunction with the Company's most recent Form 10-K and Annual Report as of September 30, 1995. In October 1995, the Financial Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-Based Compensation," which establishes accounting and reporting standards for stock-based employee compensation plans; this pronouncement will apply to options granted in fiscal 1996 and thereafter. The Company has until fiscal 1997 to adopt SFAS No. 123 and is continuing to evaluate whether or not it will change to the recognition provisions of this pronouncement. Page 6 of 12 7 COURIER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) B. INVENTORIES Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out (LIFO) method for substantially all inventories. Inventories consisted of the following:
(000's Omitted) --------------- March 30, September 30, 1996 1995 ----------- ------------- Raw materials $ 5,285 $4,984 Work in process 5,493 3,529 Finished goods 1,635 936 ------- ------ $12,413 $9,449 ======= ======
C. INCOME TAXES The statutory federal tax rate is 34%. The total provision (benefit) differs from that computed using the statutory federal tax rate for the following reasons:
(000's Omitted) Quarter Ended Six Months Ended ----------------------- ---------------------- March 30, April 1, March 30, April 1, 1996 1995 1996 1995 --------- -------- --------- -------- Federal income taxes at statutory rate $ 74 $401 $ 386 $ 947 State income taxes, net 7 53 34 126 Donation of real estate (Note D) (500) -- (500) -- Export related income (15) (38) (49) (88) Other (11) 6 (23) 41 ----- ---- ----- ------ Total provision $(445) $422 $(152) $1,026 ====== ==== ===== ======
Page 7 of 12 8 COURIER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) D. OTHER INCOME (EXPENSE) On March 1, 1996, the Company completed the sale and donation of its former telephone directory manufacturing facility which had been vacant. Sale proceeds of $1.8 million for approximately half the site resulted in a pretax loss of $365,000 which is included in other income (expense). The donation of the remainder of the property generated a tax benefit of approximately $500,000 resulting in an after-tax gain on the overall transaction of approximately $250,000 or $.12 per share. Page 8 of 12 9 COURIER CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: - ---------------------- Sales in the second quarter of fiscal 1996 increased 6% to $31.4 million versus $29.6 million in the corresponding period last year. Slow sales activity early in the quarter, due in part to severe weather conditions in January and February, were offset by particularly strong sales in March. Software documentation sales, which were down sharply in the first quarter, increased in the second quarter over the same period last year, but that market continues to be impacted by volatility in the software industry as those companies adjust to rapid changes in their business. Gross profit in the second quarter was $5.7 million versus $6.2 million in the prior year's second quarter and, as a percentage of sales, decreased to 18% from 21%. The decrease in gross profit resulted from the severe winter weather and general slowness early in the quarter, as well as a significant reduction in revenue from recycling paper. Gross profit margins were also impacted by costs of a 4-color web press installed earlier this year, although performance on this press improved significantly during the quarter. Selling and administrative expenses were $4.9 million, the same as last year's second quarter. As a percentage of sales, selling and administrative expenses were 15% of sales versus 16% last year. Interest expense was $255,000 in the second quarter of fiscal 1996 which is comparable to the corresponding period last year as the impact of increased average borrowings was offset by a lower average borrowing rate. Other income (expense) includes the Company's sale and donation of its former telephone directory manufacturing facility. The sale of approximately half of the site resulted in a pretax loss of $365,000. Tax benefits of approximately $500,000 from the donation of the remainder of the property resulted in an after-tax gain of approximately $250,000 or $.12 per share on the overall transaction. The Company's tax rate, exclusive of the $500,000 tax benefit related to the donation of property discussed above, was 32% in the second quarter of 1996. This rate was lower than last year's second quarter rate of 36% primarily due to a lower effective state tax rate. Net income was $663,000, or $.32 per share, for the second quarter of fiscal 1996 compared to last year's second quarter earnings of $758,000, or $.38 per share. The lower earnings reflect the reduction in profit margins due in part to the severe weather and decreased revenue from recycling paper. The impact of lower margins was partially offset by the $250,000 after-tax gain on the sale and donation of property. Page 9 of 12 10 COURIER CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (CONTINUED): - ---------------------------------- In October 1995, the Financial Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-Based Compensation," which establishes accounting and reporting standards for stock-based employee compensation plans; this pronouncement will apply to options granted in fiscal 1996 and thereafter. The Company has until fiscal 1997 to adopt SFAS No. 123 and is continuing to evaluate whether or not it will change to the recognition provisions of this pronouncement. LIQUIDITY AND CAPITAL RESOURCES: - -------------------------------- During the first half of fiscal 1996, $1.8 million of cash was used for operations. Cash required to fund a $6.6 million increase in working capital, primarily inventory and accounts receivable, exceeded cash provided from earnings of $1.3 million and depreciation and other non-cash charges of $3.6 million. Investment activities in the first six months of fiscal 1996 used approximately $0.3 million. Capital expenditures for the period amounted to approximately $2.1 million. This was offset by proceeds of $1.8 million received in connection with the sale of approximately half of the Company's former telephone directory facility, which had been vacant; the Company donated the remainder of the site. Capital expenditures for the entire fiscal year are expected to reach approximately $8.0 million. Financing activities in the first half of fiscal 1996 provided approximately $1.3 million under the Company's revolving credit agreement to fund the increase in working capital. At March 30, 1996, the Company had approximately $11.2 million of borrowing capacity available under an $11 million long-term revolving credit facility and a $10 million informal bank credit line. In April 1996, the Company received $1.2 million of development bond financing at a 3% interest rate in connection with the fiscal 1995 purchase of a formerly leased facility in Pennsylvania. The Company is reviewing plans to expand this facility. The expansion would enable the Company to consolidate an older, multi-story manufacturing facility into the newer, more efficient property. The Company is pursuing plans to sell the multi-story facility which would assist in the funding of expansion and relocation costs. Page 10 of 12 11 COURIER CORPORATION PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ The Annual Meeting of Stockholders of the registrant was held on January 18, 1996. All nominees of the Board of Directors of the registrant were re-elected for a three-year term. The stockholders also voted to ratify and approve the selection by the Board of Directors of Deloitte & Touche LLP as independent public accountants for the registrant for the fiscal year ending September 28, 1996. An amendment to the registrant's 1993 Stock Incentive Plan, which would, among other things, increase the number of shares available for grant under the Plan by 100,000 shares was also approved by the stockholders. The full text of the Plan amendment was included as an exhibit to the proxy statement and is incorporated herein by reference. ELECTION OF DIRECTORS Votes were cast for the election of directors as follows: Nominee For Withheld Authority ------- --- ------------------ Edward J. Hoff 1,841,236 7,340 Robert P. Story, Jr. 1,841,486 7,090 Richard K. Donahue 1,837,745 10,831 DIRECTORS CONTINUING IN OFFICE: James F. Conway III, W. Nicholas Thorndike, Kathleen Foley Curley, Arnold S. Lerner, Charles E. Otto, George Q. Nichols RATIFICATION/APPROVAL OF ACCOUNTANTS Votes were cast in the ratification and approval of Deloitte & Touche LLP as independent public accountants as follows: For Against Abstain --- ------- ------- 1,821,640 11,834 15,102 APPROVAL OF AMENDMENT TO 1993 STOCK INCENTIVE PLAN Votes were cast in the approval of the amendment to the 1993 Stock Incentive Plan as follows: For Against Abstain Broker Nonvotes --- ------- ------- --------------- 1,633,197 194,395 15,534 5,450 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (a) Exhibits Exhibit No. Description of Exhibit ----------- ---------------------- 27 Financial Data Schedule (b) Reports on Form 8-K None. Page 11 of 12 12 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COURIER CORPORATION ------------------- (REGISTRANT) May 7, 1996 By: /s/ James F. Conway III - ---------------------------- ----------------------- Date James F. Conway III Chairman, President and Chief Executive Officer May 7, 1996 By: /s/ Robert P. Story, Jr. - ---------------------------- ----------------------- Date Robert P. Story, Jr. Senior Vice President and Chief Financial Officer May 7, 1996 By: /s/ Peter M. Folger - ---------------------------- ----------------------- Date Peter M. Folger Vice President and Chief Accounting Officer Page 12 of 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 0000025212 COURIER CORPORATION 1,000 U.S. DOLLARS 6-MOS SEP-28-1996 OCT-01-1995 MAR-30-1996 1 367 0 21,437 710 12,413 36,614 93,696 58,925 73,532 17,654 0 4,500 0 0 33,356 73,532 61,499 61,499 50,211 50,211 9,540 146 467 1,135 (152) 0 0 0 0 1,287 .62 .62 Receivables are net of allowances for uncollectible accounts. Other - SE includes treasury stock.
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