-----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, NWQAswNpbXPzYHs/gTd9T1+KXhWE/8LtdYjjfRhrD/+JVXdElhLBFdK6qxN/qY2w ITEHvUI2nqU5hG8h/X+TZQ== 0000950135-97-000431.txt : 19970221 0000950135-97-000431.hdr.sgml : 19970221 ACCESSION NUMBER: 0000950135-97-000431 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961228 FILED AS OF DATE: 19970211 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: 97523806 BUSINESS ADDRESS: STREET 1: 165 JACKSON ST CITY: LOWELL STATE: MA ZIP: 01852 BUSINESS PHONE: 5084586351 10-Q 1 COURIER CORP. FORM 10-Q 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 December 28, 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 (I.R.S. Employer Identification No.) of incorporation or organization) 15 Wellman Avenue, North Chelmsford, Massachusetts 01863 - ------------------------------------------------------------------------------ (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 requirements 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 latest practicable date. Class Outstanding at February 4, 1997 - ------------------------------------- ------------------------------------- Common Stock, $1 par value 2,027,939 shares Page 1 of 11 2 COURIER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Dollars in thousands)
December 28, September 28, ASSETS 1996 1996 - ------ ------------ ------------- Current assets: Cash and cash equivalents $ 29 $ 33 Accounts receivable, less allowance for uncollectible accounts 23,917 24,935 Inventories (Note B) 10,292 8,178 Deferred income taxes 1,582 1,580 Other current assets 1,092 954 ------- ------- Total current assets 36,912 35,680 Property, plant and equipment, less accumulated depreciation: $59,545 at December 28, 1996 and $58,868 at September 28, 1996 35,264 36,675 Real estate held for sale or lease, net 2,849 698 Goodwill, at cost 1,204 1,204 Other assets 497 509 ------- ------- Total assets $76,726 $74,766 ======= ======= The accompanying notes are an integral part of the consolidated financial statements.
Page 2 of 11 3 COURIER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Dollars in thousands)
December 28, September 28, LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1996 - ------------------------------------ ------------ ------------- Current liabilities: Current maturities of long-term debt $ 466 $ 466 Accounts payable 9,282 9,705 Accrued taxes 5,144 4,835 Other current liabilities 6,993 6,952 -------- -------- Total current liabilities 21,885 21,958 Long-term debt 10,644 9,277 Deferred income taxes 3,465 3,488 Other liabilities 1,293 1,279 -------- -------- Total liabilities 37,287 36,002 -------- -------- 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 9,060 9,055 Retained earnings 49,399 48,713 Treasury stock, at cost: 2,471,000 shares at December 28, 1996 and 2,471,000 shares at September 28, 1996 (23,520) (23,504) -------- -------- Total stockholders' equity 39,439 38,764 -------- -------- Total liabilities and stockholders' equity $ 76,726 $ 74,766 ======== ======== The accompanying notes are an integral part of the consolidated financial statements.
Page 3 of 11 4 COURIER CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands except per share amounts)
THREE MONTHS ENDED ---------------------------- December 28, December 30, 1996 1995 ------------ ------------ Net sales $30,539 $30,115 Cost of sales 24,218 24,446 ------- ------- Gross profit 6,321 5,669 Selling and administrative expenses 4,850 4,566 Interest expense 160 212 Other income 7 26 ------- ------- Income before taxes 1,318 917 Provision for income taxes (Note C) 389 293 ------- ------- Net income $ 929 $ 624 ======= ======= Net income per share $ 0.45 $ 0.30 ======= ======= Cash dividends declared per share $ 0.12 $ 0.12 ======= ======= Weighted average shares outstanding 2,050,000 2,084,000 The accompanying notes are an integral part of the consolidated financial statements.
Page 4 of 11 5 COURIER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands)
THREE MONTHS ENDED -------------------------- December 28, December 30, 1996 1995 ----------- ------------ Cash provided from (used for) operating activities $ 1,462 $(2,996) ------- ------- Investment activities: Capital expenditures (2,543) (682) ------- ------- Financing activities: Repayment of long-term debt (165) (146) Increase in long-term borrowings 1,532 2,944 Cash dividends (243) (241) Stock repurchase program (47) -- ------- ------- Cash provided from financing activities 1,077 2,557 ------- ------- Decrease in cash and cash equivalents (4) (1,121) Cash at the beginning of the period 33 1,147 ------- ------- Cash at the end of the period $ 29 $ 26 ======= ======= The accompanying notes are an integral part of the consolidated financial statements.
Page 5 of 11 6 COURIER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UNAUDITED FINANCIAL STATEMENTS ------------------------------ The balance sheet as of December 28, 1996, the statements of income for the three-month periods ended December 28, 1996 and December 30, 1995, and the statements of cash flows for the three-month periods ended December 28, 1996 and December 30, 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 1996 have been reclassified in the accompanying financial statements in order to be consistent with the current year's classifications. 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 28, 1996 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 28, 1996. In October 1995, the Financial Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-Based Compensation," which permits either recording the estimated value of stock-based employee compensation over the applicable vesting period or disclosing the unrecorded cost and the related effect on net income per share in the notes to the financial statements. The Company will continue to apply current accounting rules for the recording of stock-based compensation (APB Opinion No. 25) and will comply with the provision of SFAS No. 123 relative to disclosure in the notes to the financial statements which will be effective with the Company's Annual Report for the fiscal year ending September 27, 1997. Page 6 of 11 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) --------------------------- December 28, September 28, 1996 1996 ------------ ------------- Raw materials $ 3,455 $2,901 Work in process 4,743 3,746 Finished goods 2,094 1,531 ------- ------ $10,292 $8,178 ======= ======
C. INCOME TAXES The statutory federal tax rate is 34%. The total tax provision differs from that computed using the statutory federal tax rate for the following reasons:
(000's Omitted) Three Months Ended --------------------------- December 28, December 30, 1996 1995 ------------ ------------- Federal income taxes at statutory rate $448 $312 State income taxes, net 23 27 Export related income (52) (34) Other (30) (12) ---- ---- Total provision $389 $293 ==== ====
Page 7 of 11 8 COURIER CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: - ---------------------- Sales in the first quarter of fiscal 1997 were $30.5 million compared to $30.1 million in the prior year's first quarter. The modest sales growth reflects market softness and increasingly competitive conditions. Gross profit increased to $6.3 million, or 21% of sales, in the first quarter from $5.7 million, or 19% of sales, in the same period last year. The improvement in gross profit was attributable to benefits realized from streamlining software documentation operations, gains in productivity and lower costs. Partially offsetting these positive factors, however, was a decrease in the market price of recycled paper which reduced gross profit by $340,000 compared to the same period last year. In addition, costs associated with consolidating operations in Philadelphia amounted to $350,000 in the first quarter of 1997. The consolidation into a newer, more efficient manufacturing facility was completed in December 1996. Selling and administrative expenses increased to $4.9 million in the first quarter of fiscal 1997 from $4.6 million in the same period last year. As a percentage of sales, selling and administrative expenses were 16% compared to 15% in the first quarter last year. The increase includes expansion of the Company's Copyright Management Services (CMS) division and expenses that relate to the increase in profitability. Interest expense was $160,000 compared to $212,000 in the first quarter of fiscal 1996 reflecting both a lower average interest rate and decreased average borrowings. In addition, interest of $28,000 was capitalized in the first quarter of fiscal 1997. The Company's effective tax rate for the first quarter was 30%. This rate was lower than the 32% rate in the corresponding period last year primarily because of a lower effective state tax rate. Net income for the first quarter of fiscal 1997 was $929,000, up 49% from $624,000 in the first quarter of last year. Net income per share increased 50% to $.45 per share from $.30 per share in the corresponding period last year. The increase in earnings reflects improvements in the Company's gross profit margins as noted above. In October 1995, the Financial Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-Based Compensation," which permits either recording the estimated value of stock-based employee compensation over the applicable vesting period or disclosing the unrecorded cost and the related effect on net income per share in the notes to the financial statements. The Company will continue to apply current accounting rules for the recording of stock-based compensation (APB Opinion No. 25) and will comply with the provision of SFAS No. 123 relative to disclosure in the notes to the financial statements which will be effective with the Company's Annual Report for the fiscal year ending September 27, 1997. Page 8 of 11 9 COURIER CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES: - -------------------------------- During the first quarter of fiscal 1997, operations provided approximately $1.5 million of cash. Net income was $0.9 million and depreciation was $1.8 million. Working capital used approximately $1.3 million of cash reflecting an increase in inventories. Investment activities in the first three months of fiscal 1997 used approximately $2.5 million of cash for capital expenditures. Capital expenditures were made primarily for the final phase of the building expansion at the Company's Philadelphia manufacturing facility and for upgrades to binding equipment. Capital expenditures for the entire fiscal year are expected to be comparable to fiscal 1996 levels, which amounted to approximately $7.3 million. In December 1996, the Company completed the consolidation of operations in Philadelphia from an older, multi-story facility to the recently expanded, more efficient property. The Company is currently renegotiating an agreement, which it had previously signed, to sell the multi-story facility to a developer for approximately $4.6 million. Closing had been scheduled for March 1997; however, if a renegotiated agreement is reached, the closing would not be until later in the year and would remain subject to certain contingencies. The Company's Raymond, New Hampshire facility, which had been leased through June 1996, is now vacant pending sale or lease. With respect to the Company's former headquarters in Lowell, Massachusetts, which was vacated in September 1996, the Company has considered various alternatives and is presently giving priority to donating the property to a not-for-profit organization. Financing activities for the first quarter of fiscal 1997 provided approximately $1.1 million of cash. At December 28, 1996, the Company had approximately $12.4 million of borrowing capacity available under an $11 million long-term revolving credit facility and a $10 million informal bank credit line. These facilities are expected to be replaced with a new $20 million revolving credit facility in the second quarter. In November 1996, the Company announced that its Board of Directors authorized the repurchase of common shares with an aggregate purchase price of up to $3 million. Through the end of the first quarter, the Company acquired 3,221 shares of common stock at an average cost of $14.63 per share under this program. Page 9 of 11 10 COURIER CORPORATION PART II. OTHER INFORMATION 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 10 of 11 11 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) February 10, 1997 By: /s/James F. Conway III - ----------------- -------------------------------- Date James F. Conway III Chairman, President and Chief Executive Officer February 10, 1997 By: /s/Robert P. Story, Jr. - ----------------- ---------------------------- Date Robert P. Story, Jr. Senior Vice President and Chief Financial Officer February 10, 1997 By: /s/Peter M. Folger - ----------------- -------------------------------- Date Peter M. Folger Vice President and Chief Accounting Officer Page 11 of 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 U.S. DOLLARS 3-MOS SEP-27-1997 SEP-29-1996 DEC-28-1996 1 29 0 23,917 893 10,292 36,912 94,809 59,545 76,726 21,885 0 0 0 4,500 34,939 76,726 30,539 30,539 24,218 24,218 4,776 67 160 1,318 389 929 0 0 0 929 0.45 0.45 RECEIVABLES ARE NET OF ALLOWANCES FOR UNCOLLECTIBLE ACCOUNTS. OTHER SE INCLUDES TREASURY STOCK.
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