-----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, QIeIcyOm8YZfZ2cFZUgTR9Ump5owLsqBQJDw0DvTNVrGcLZd1Qo/ulwY4fCBnINT t1o1F6rV/MEYy8Mw3iz0hg== 0000950135-98-003122.txt : 19980513 0000950135-98-003122.hdr.sgml : 19980513 ACCESSION NUMBER: 0000950135-98-003122 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19980328 FILED AS OF DATE: 19980512 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: SEC FILE NUMBER: 000-07597 FILM NUMBER: 98616706 BUSINESS ADDRESS: STREET 1: 15 WELLMAN AVENUE CITY: NORTH CHELMSFORD STATE: MA ZIP: 01863 BUSINESS PHONE: (978) 251-6000 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 28, 1998 ------------------------------------------------- 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) 15 Wellman Avenue, North Chelmsford, Massachusetts 01863 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (978) 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 May 1, 1998 - --------------------------------------- ----------------------------- Common Stock, $1 par value 2,095,910 shares Page 1 of 13 2 COURIER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) March 28, September 27, ASSETS 1998 1997 --------- ------------- Current assets: Cash and cash equivalents $ 32 $ 27 Accounts receivable, less allowance for uncollectible accounts 29,036 25,919 Inventories (Note B) 10,215 9,695 Deferred income taxes 1,659 1,642 Other current assets 649 780 ------- ------- Total current assets 41,591 38,063 Property, plant and equipment, less accumulated depreciation: $66,037 at March 28, 1998 and $62,398 at September 27, 1997 35,147 36,942 Real estate held for sale or lease, net 2,421 2,459 Goodwill and other intangibles 11,734 11,618 Other assets 531 561 ------- ------- Total assets $91,424 $89,643 ======= ======= The accompanying notes are an integral part of the consolidated financial statements. Page 2 of 13 3 COURIER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) March 28, September 27, LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1997 --------- ------------- Current liabilities: Current maturities of long-term debt $ 287 $ 387 Accounts payable 8,615 9,557 Accrued taxes 4,143 4,961 Other current liabilities 9,518 9,070 -------- -------- Total current liabilities 22,563 23,975 Long-term debt 19,202 18,593 Deferred income taxes 3,084 3,375 Other liabilities 2,082 1,952 -------- -------- Total liabilities 46,931 47,895 -------- -------- Stockholders' equity (Note E): Preferred stock, $1 par value - authorized 1,000,000 shares; none issued Common stock, $1 par value: March 28, September 27, Shares 1998 1997 ------ --------- ------------- Authorized 6,000,000 6,000,000 Issued 3,750,000 4,500,000 Outstanding 3,110,000 2,007,000 3,750 4,500 Additional paid-in capital - 9,277 Retained earnings 44,902 52,060 Treasury stock, at cost: 640,000 shares at March 28, 1998 and 2,493,000 shares at September 27, 1997 (4,159) (24,089) -------- -------- Total stockholders' equity 44,493 41,748 -------- -------- Total liabilities and stockholders' equity $ 91,424 $ 89,643 ======== ======== The accompanying notes are an integral part of the consolidated financial statements. Page 3 of 13 4 COURIER CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands except per share amounts)
QUARTER ENDED SIX MONTHS ENDED -------------------- -------------------- March 28, March 29, March 28, March 29, 1998 1997 1998 1997 --------- --------- --------- --------- Net sales $39,136 $32,011 $74,442 $62,550 Cost of sales 29,908 25,242 56,426 49,460 ------- ------- ------- ------- Gross profit 9,228 6,769 18,016 13,090 Selling and administrative expenses 6,887 5,396 13,411 10,246 Interest expense 373 202 720 362 Other income 5 7 10 14 ------- ------- ------- ------- Income before taxes 1,973 1,178 3,895 2,496 Provision for income taxes (Note C) 615 350 1,327 739 ------- ------- ------- ------- Net income $ 1,358 $ 828 $ 2,568 $ 1,757 ======= ======= ======= ======= Net income per share (Note D): Diluted* $ 0.42 $ 0.27 $ 0.80 $ 0.57 ======= ======= ======= ======= Basic* $ 0.44 $ 0.28 $ 0.84 $ 0.58 ======= ======= ======= ======= Cash dividends declared per share* $ 0.093 $ 0.080 $ 0.187 $ 0.160 ======= ======= ======= ========
* Amounts have been adjusted to reflect a three-for-two stock split effected in the form of a 50% stock dividend to be distributed on June 1, 1998 to stockholders of record on May 15, 1998. The accompanying notes are an integral part of the consolidated financial statements. Page 4 of 13 5 COURIER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands)
SIX MONTHS ENDED ----------------------- March 28, March 29, 1998 1997 --------- --------- Cash provided from operating activities $ 1,969 $ 5,270 ------- ------- Investment activities: Capital expenditures (2,031) (4,030) Business acquisition (563) - ------- ------- Cash used for investment activities (2,594) (4,030) ------- ------- Financing activities: Repayment of long-term debt (241) (230) Increase in long-term borrowings 750 203 Cash dividends (573) (482) Stock repurchase program - (798) Proceeds from stock plans 694 77 ------- ------- Cash provided from (used for) financing activities 630 (1,230) ------- ------- Increase in cash and cash equivalents 5 10 Cash at the beginning of the period 27 33 ------- ------- Cash at the end of the period $ 32 $ 43 ======= =======
The accompanying notes are an integral part of the consolidated financial statements. Page 5 of 13 6 COURIER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UNAUDITED FINANCIAL STATEMENTS The balance sheet as of March 28, 1998, the statements of income for the three-month and six-month periods ended March 28, 1998 and March 29, 1997, and the statements of cash flows for the six-month periods ended March 28, 1998 and March 29, 1997 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 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 27, 1997 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 27, 1997. NEW ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board recently issued SFAS No. 130, "Reporting Comprehensive Income", SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information" and SFAS No. 132, "Employer Disclosures about Pensions and Other Postretirement Benefits". These new standards will be effective in the Company's fiscal year ending September 25, 1999. The Company has not determined the effects, if any, that these standards will have on its consolidated financial statements. 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 28, September 27, 1998 1997 --------- ------------- Raw materials $ 3,701 $3,912 Work in process 4,431 4,108 Finished goods 2,083 1,675 ------- ------ Total inventories $10,215 $9,695 ======= ====== Page 6 of 13 7 COURIER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) C. INCOME TAXES The statutory federal tax rate is 34%. The total tax 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 28, March 29, March 28, March 29, 1998 1997 1998 1997 --------- --------- --------- --------- Federal income taxes at statutory rate $671 $401 $1,324 $849 State income taxes, net 56 23 106 46 Goodwill amortization 37 - 86 - Export related income (52) (41) (104) (93) Other (97) (33) (85) (63) ---- ---- ------ ---- Total provision $615 $350 $1,327 $739 ==== ==== ====== ====
D. NET INCOME PER SHARE During the first quarter of fiscal 1998, the Company adopted SFAS No. 128, "Earnings per Share". Prior period net income per share has been restated to reflect current presentation. Following is a reconciliation of the shares used in the calculation of basic and diluted net income per share. Potentially dilutive shares, calculated using the treasury stock method, consist of shares issued under the Company's stock option and stock grant plans.
(000'S OMITTED) -------------------------------------------------- Quarter Ended Six Months Ended --------- --------- ---------------------- March 28, March 29, March 28, March 29, 1998 1997 1998 1997 --------- --------- --------- --------- Average shares outstanding* 3,095 3,009 3,070 3,026 Effect of dilutive shares* 121 53 131 43 ------ ------ ------ ------ Average shares outstanding, adjusted for dilutive effects* 3,216 3,062 3,201 3,069 ===== ====== ====== ====== Net income $1,358 $ 828 $2,568 $1,757 ====== ====== ====== ====== Basic net income per share* $ .44 $ .28 $ .84 $ .58 ====== ====== ====== ====== Diluted net income per share* $ .42 $ .27 $ .80 $ .57 ====== ====== ====== ======
* Amounts have been adjusted to reflect a three-for-two stock split effected in the form of a 50% stock dividend to be distributed on June 1, 1998 to stockholders of record on May 15, 1998 (see Note E). Page 7 of 13 8 COURIER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) E. SUBSEQUENT EVENT On April 16, 1998, the Company announced a three-for-two stock split effected in the form of a 50% stock dividend to be distributed on June 1, 1998 to stockholders of record on May 15, 1998. Per share amounts for each period presented in the accompanying financial statements have been restated to give effect to the stock split. In addition, related to this stock split, the Company will convert 2,000,000 shares of treasury stock to authorized but unissued shares. A portion of these shares will be used to effect the 50% stock dividend. These transactions have been reflected in the accompanying balance sheet at March 28 1998. The table below summarizes the changes in stockholders' equity from September 27, 1997 to March 28, 1998:
(000's omitted) Additional Common Paid-in Retained Treasury Stockholders' Stock Capital Earnings Stock Equity ------ ---------- -------- -------- ------------- Balance, September 27, 1997 $4,500 $9,277 $52,060 $(24,089) $41,748 Net income 2,568 2,568 Cash dividends (573) (573) Shares issued under stock plans 310 440 750 Convert treasury shares (2,000) (9,587) (7,903) 19,490 - Stock dividend 1,250 (1,250) - ------- ------- -------- -------- ------- Balance, March 28, 1998 $3,750 - $44,902 $ (4,159) $44,493 ====== ======= ======= ======== ========
Page 8 of 13 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 1998 increased 22% to $39.1 million from $32.0 million in the second quarter of fiscal 1997. Sales from the Company's core book manufacturing operations increased by 22% reflecting increased sales to religious and educational publishing customers, including increased revenues from 4-color book manufacturing. Also, Book-mart Press, Inc. (Book-mart), a New Jersey based printer of short and medium-run books, which was acquired by the Company in July 1997, contributed approximately $3 million to the improvement in revenues. These increases were offset by a continuing decline in software documentation sales. In addition to sales from its core business, the Company has two newer businesses, The Home School and Copyright Management Services (CMS), which are involved in customized education. The Home School, which was acquired on September 30, 1997, is a direct marketer of books and other educational products for supplementing or replacing traditional education with home-based learning. CMS provides customized coursepacks and copyright clearance services primarily to colleges and universities. Revenues from these two newer businesses are highly seasonal with the Company's fourth quarter historically representing the period of highest market demand. Gross profit increased to $9.2 million, or 24% of sales, in the second quarter from $6.8 million, or 21% of sales, in the same period last year. The improvement in gross profit reflects the benefits of increased sales volume, gains in productivity and lower costs. Selling and administrative expenses increased to $6.9 million in the second quarter of fiscal 1998 from $5.4 million in the same period last year. As a percentage of sales, selling and administrative expenses were 18% compared to 17% in the second quarter last year. The increase was attributable to incremental selling and administrative expenses of Book-mart and The Home School of approximately $0.9 million, including goodwill amortization of approximately $150,000, as well as expenses that relate directly to the increase in profitability. Interest expense was $373,000 in the second quarter of fiscal 1998 compared to $202,000 in the same period last year, reflecting increased average borrowings which were primarily due to the acquisitions of Book-mart and The Home School. The Company's effective tax rate for the second quarter was 31%. This rate was higher than the 30% rate in the corresponding period last year primarily because of nondeductible goodwill related to the acquisition of Book-mart. Net income for the second quarter of fiscal 1998 was $1,358,000, up 64% over last year's earnings of $828,000. Net income per share on a diluted basis increased 56% to $.42 per share from $.27 per share in the corresponding period last year after adjusting for a three-for-two stock split effected in the form of a 50% stock dividend to be distributed on June 1, 1998 to stockholders of record on May 15, 1998 (see below). Earnings from the Company's core book manufacturing operations increased 76% over last year's second quarter reflecting increased sales volume combined with higher levels of productivity and lower costs. The Company's newer businesses, CMS and The Home School, reduced second quarter earnings by $.17 per diluted share compared to a reduction of $.08 per diluted share for the same period last year. Revenues and related earnings for these businesses are expected to increase in the fourth quarter coinciding with their months of highest market demand. Weighted average shares outstanding increased approximately 150,000 shares over last year's second quarter. The increase in weighted average shares outstanding was due to shares exercised under the Company's stock option plans, shares issued as compensation for non-compete agreements and the impact of potentially dilutive shares which increased primarily due to the increase in the price per share of the Company's stock. These were partially offset by shares acquired under the Company's fiscal 1997 stock repurchase program. On April 16, 1998, the Company announced a three-for-two stock split effected in the form of a 50% stock dividend to be distributed on June 1, 1998 to stockholders of record on May 15, 1998. Weighted average shares outstanding and net income per share amounts have been restated to give effect to the stock split. Page 9 of 13 10 COURIER CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (CONTINUED): For the six months ended March 28, 1998, the Company reported net income of $2.6 million, or $.80 per diluted share, up 46% compared to $1.8 million, or $.57 per diluted share, for the same period last year. Sales for the first six months were $74.4 million, up 19% from $62.6 million in the corresponding period of fiscal 1997. The factors impacting second quarter results similarly affected year-to-date results. Sales from the Company's core book manufacturing operations increased by 18% while related earnings increased by 61% compared to the first six months of fiscal 1997. CMS and The Home School reduced earnings by $.32 per diluted share compared to $.16 per diluted share in the first half of fiscal 1997. In addition, last year's first quarter included $350,000 in costs associated with consolidating operations in Philadelphia into a newer, more efficient manufacturing facility. The Financial Accounting Standards Board recently issued SFAS No. 130, "Reporting Comprehensive Income", SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information" and SFAS No. 132, "Employer Disclosures about Pensions and Other Postretirement Benefits". These new standards will be effective in the Company's fiscal year ending September 25, 1999. The Company has not determined the effects, if any, that these standards will have on its consolidated financial statements. LIQUIDITY AND CAPITAL RESOURCES: During the first half of fiscal 1998, operations provided approximately $2.0 million of cash. Net income was $2.6 million and depreciation and amortization were $4.2 million. Working capital utilized approximately $4.7 million of cash due primarily to an increase in accounts receivable of approximately $3.1 million related to increased sales volume and a reduction in accounts payable of approximately $0.9 million. Investment activities in the first six months of fiscal 1998 used approximately $2.0 million of cash for capital expenditures and $0.6 million for the acquisition of The Home School. For the entire fiscal year, capital expenditures are expected to approximate $10 million, which includes plans for the purchase and installation of a new web press to provide additional book printing capacity. This new press may be financed under an operating lease. In addition, approximately $1 million is expected to be used to upgrade the Company's information systems and infrastructure. In December 1996, the Company completed the consolidation of operations in Philadelphia from an older, multistory facility to a recently expanded, more efficient manufacturing facility. In September 1997, the Company signed an agreement to sell the old multistory facility to a developer for approximately $4.6 million. Closing is scheduled for the third quarter of fiscal 1998, but a number of contingencies remain. The Company's Raymond, New Hampshire facility, which had been leased through June 1996, continues to be vacant pending sale or lease. Financing activities for the first six months of fiscal 1998 provided approximately $0.6 million of cash. At March 28, 1998, the Company utilized $17.5 million of its borrowing capacity available under a $30 million long-term revolving credit facility. Management is currently assessing the impact of "Year 2000" on the Company's operations and is working with vendors and consultants to formulate and implement cost effective approaches to resolving this issue. As part of this process, the Company expects to replace or upgrade certain information systems with systems designed to give the Company the benefit of new technology with enhanced functionality and resultant improvements in service and productivity. As of March 28, 1998, the cost of the Year 2000 issue is not expected to have a material impact on the Company's financial results. Page 10 of 13 11 COURIER CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING INFORMATION: Statements that describe future expectations, plans or strategies are considered forward looking. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Factors that could affect actual results include, among others, changes in customers' demand for the Company's products, changes in raw material costs and availability, seasonal changes in customer orders, pricing actions by competitors, success in the integration of recently acquired businesses, and general changes in economic conditions. These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. The forward-looking statements included herein are made as of the date hereof, and the Company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Page 11 of 13 12 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 15, 1998. All nominees of the Board of Directors of the registrant were reelected 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 26, 1998. ELECTION OF DIRECTORS Votes were cast in the election of directors as follows: Nominee For Withheld Authority ------- --- ------------------ Arnold S. Lerner 1,993,696 8,871 Charles E. Otto 1,989,715 12,852 George Q. Nichols 1,997,432 5,135 DIRECTORS CONTINUING IN OFFICE: James F. Conway III, Kathleen Foley Curley, Richard K. Donahue, Edward J. Hoff, Robert P. Story, Jr., W. Nicholas Thorndike 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 Broker Non-votes --- ------- ------- ---------------- 1,991,143 5,640 5,784 0 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits EXHIBIT NO. DESCRIPTION OF EXHIBIT 10 Amendment, dated February 27, 1998, to Note Agreement between Courier Corporation, State Street Bank and Trust Company and BankBoston, N.A., providing for a $30 million revolving credit facility (which Note Agreement was filed as Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the period ended March 29, 1997, and incorporated herein by reference). 27.1 Financial Data Schedule for the quarter ended March 28, 1998 27.2 Restated Financial Data Schedule for the quarter ended December 27, 1997 27.3 Restated Financial Data Schedule for the fiscal year ended September 27, 1997 and the quarters ended December 28, 1996, March 29, 1997 and June 28, 1997 27.4 Restated Financial Data Schedule for the fiscal year ended September 28, 1996 and the quarters ended December 30, 1995, March 30, 1996 and June 29, 1996 27.5 Restated Financial Data Schedule for the fiscal year ended September 30, 1995 (b) Reports on Form 8-K None. Page 12 of 13 13 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 11, 1998 By: /s/ James F. Conway III - ------------------- --------------------------- Date James F. Conway III Chairman, President and Chief Executive Officer May 11, 1998 By: /s/ Robert P. Story, Jr. - ------------------- --------------------------- Date Robert P. Story, Jr. Senior Vice President and Chief Financial Officer May 11, 1998 By: /s/ Peter M. Folger - ------------------- --------------------------- Date Peter M. Folger Vice President and Chief Accounting Officer Page 13 of 13 EX-10 2 AMENDMENT NO 2 TO REVOLVING CREDIT 1 COURIER CORPORATION COURIER-CITIZEN COMPANY COURIER COMPANIES, INC. COURIER DELAWARE HOLDING CORPORATION COURIER FOREIGN SALES CORPORATION LIMITED COURIER INVESTMENT CORPORATION COURIER KENDALLVILLE, INC. COURIER PROPERTIES, INC. COURIER STOUGHTON, INC. COURIER WESTFORD, INC. NATIONAL PUBLISHING COMPANY COURIER NEW MEDIA, INC. BOOK-MART PRESS, INC. Dated as of: February 27, 1998 State Street Bank and Trust Company, Individually and as Agent 225 Franklin Street Boston, Massachusetts 02110 BankBoston, N.A. 100 Federal Street Boston, Massachusetts 02110 Re: Amendment No. 2 To Revolving Credit Agreement --------------------------------------------- Ladies and Gentlemen: We refer to the Revolving Credit Agreement, dated as of March 18, 1997 (the "Agreement"), among COURIER CORPORATION, COURIER-CITIZEN COMPANY, COURIER COMPANIES, INC., COURIER DELAWARE HOLDING CORPORATION, COURIER FOREIGN SALES CORPORATION LIMITED, COURIER INVESTMENT CORPORATION, COURIER KENDALLVILLE, INC., COURIER PROPERTIES, INC., COURIER STOUGHTON, INC., COURIER WESTFORD, INC., NATIONAL PUBLISHING COMPANY, COURIER NEW MEDIA, INC. and BOOK-MART PRESS, INC. (each a "Borrower" and collectively the "Borrowers"), STATE STREET BANK AND TRUST COMPANY, in its capacity as a Bank ("SSB"), BANKBOSTON, N.A. (f/k/a The First National Bank of Boston), in its capacity as a Bank ("BKB"; and together with SSB, the "Banks"), and STATE STREET BANK AND TRUST COMPANY, in its capacity as agent for the Banks (the "Agent"). -1- 2 Terms used in this letter of agreement (this "Amendment") which are not defined herein, but which are defined in the Agreement, shall have the same respective meanings herein as therein. We have requested you to make certain amendments to the Agreement. You have advised us that you are prepared and would be pleased to make the amendments so requested by us on the condition that we join with you in this Amendment. Accordingly, in consideration of these premises, the promises, mutual covenants and agreements contained in this Amendment, and fully intending to be legally bound by this Amendment, we hereby agree with you as follows: ARTICLE I AMENDMENTS TO AGREEMENT Effective February 27, 1998, the Agreement is amended as follows: (a) The term "Borrowers" shall, wherever used in the Agreement or any of the other Loan Documents, be deemed to also mean and include The Home School, Inc., a [Massachusetts] corporation ("Home School"). It is the express understanding and intention of the parties hereto that Home School shall hereafter be entitled to make borrowings in accordance with the terms and conditions of the Agreement, and shall hereafter be bound, on a joint and several basis, by all of the terms and conditions of the Agreement, and all of the Obligations of the Borrowers under (and as defined in) the Agreement, as if it was an original signatory thereto, including, without limitation, the representations, warranties and covenants contained therein and the obligation to repay all amounts owing under the Agreement and the Notes in accordance with the respective terms thereof. (b) The term "Loan Documents" shall, wherever used in the Agreement or any of the other Loan Documents, be deemed to also mean and include Amendment No. 2 to Revolving Credit Agreement, dated as of February 27, 1998, among the Borrowers, the Banks, and the Agent. (c) Section 5.29 of the Agreement is amended to read in its entirety as follows: "5.29 CAPITAL EXPENDITURES. The Borrowers shall not make any Capital Expenditures in excess of (i) $11,000,000 in the aggregate in the fiscal year ending September 26, 1998 and (ii) $9,000,000 in the aggregate in any fiscal year thereafter." (d) EXHIBIT A to the Agreement is amended by adding Home School as a Borrower and signatory thereto. -2- 3 ARTICLE II AMENDMENT TO REVOLVING CREDIT NOTES Effective on February 27, 1998, the Revolving Credit Notes are amended as set forth in the Allonges attached hereto as ANNEX 1 and ANNEX 2. ARTICLE III REPRESENTATIONS AND WARRANTIES The Borrowers jointly and severally represent and warrant to you as follows: (a) REPRESENTATIONS IN AGREEMENT. Each of the representations and warranties made by the Borrowers to you in the Agreement was true, correct and complete when made and is true, correct and complete on and as of the date hereof with the same full force and effect as if each of such representations and warranties had been made by the Borrowers on the date hereof and in this Amendment (except to the extent that such representations and warranties relate expressly to an earlier date). (b) NO DEFAULTS OR EVENTS OF DEFAULT. No Event of Default, or any event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default, exists on the date of this Amendment (after giving effect to all of the arrangements and transactions contemplated by this Amendment). (c) BINDING EFFECT OF DOCUMENTS. This Amendment has been duly executed and delivered to you by the Borrowers and is in full force and effect as of the date hereof, and the agreements and obligations of the Borrowers contained herein constitute the joint and several, and legal, valid and binding obligations of the Borrowers enforceable against the Borrowers in accordance with their respective terms. ARTICLE IV MISCELLANEOUS This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed an original, but all of which together shall constitute one instrument. In making proof of this Amendment, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto. Except to the extent specifically amended and supplemented hereby, all of the terms, conditions and the provisions of the Agreement and each of the Loan Documents shall remain unmodified, and the Agreement and each of the Loan Documents, as amended and supplemented by this Amendment, are confirmed as being in full force and effect. -3- 4 If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed counterpart of this Amendment and return such counterpart to the undersigned, together with the signed Allonges in the form of ANNEX 1 and ANNEX 2, duly executed and certified authorizing resolutions, an officer's certificate to which are attached the charter documents, bylaws and good standing certificate of The Home School, Inc., and a favorable legal opinion from your counsel, whereupon this Amendment, as so accepted by you, shall become a binding agreement among you and the undersigned. Very truly yours, THE BORROWERS: COURIER CORPORATION By: /s/ Robert P. Story, Jr. -------------------------------- Title: Sr. VP & CFO COURIER CITIZEN COMPANY By: /s/ Robert P. Story, Jr. -------------------------------- Title: Sr. VP & CFO COURIER COMPANIES, INC. By: /s/ Robert P. Story, Jr. -------------------------------- Title: Treasurer COURIER DELAWARE HOLDING CORPORATION By: /s/ William L. Lampe, Jr. -------------------------------- Title: Vice President, Treasurer (signatures continue on next page) -4- 5 COURIER FOREIGN SALES CORPORATION LIMITED By: /s/ Robert P. Story, Jr. ------------------------------------- Title: President COURIER INVESTMENT CORPORATION By: /s/ Robert P. Story, Jr. ------------------------------------- Title: Treasurer COURIER KENDALLVILLE, INC. By: /s/ Robert P. Story, Jr. ------------------------------------- Title: Treasurer COURIER PROPERTIES, INC. By: /s/ Robert P. Story, Jr. ------------------------------------- Title: Treasurer COURIER STOUGHTON, INC. By: /s/ Robert P. Story, Jr. ------------------------------------- Title: Treasurer COURIER WESTFORD, INC. By: /s/ Robert P. Story, Jr. ------------------------------------- Title: Treasurer NATIONAL PUBLISHING COMPANY By: /s/ Robert P. Story, Jr. ------------------------------------- Title: Asst. Treasurer (signatures continue on next page) -5- 6 COURIER NEW MEDIA, INC. By: /s/ Robert P. Story, Jr. -------------------------------- Title: Treasurer BOOK-MART PRESS, INC. By: /s/ Robert P. Story, Jr. -------------------------------- Title: Treasurer THE HOME SCHOOL, INC. By: /s/ Robert P. Story, Jr. -------------------------------- Title: Treasurer The foregoing Amendment is hereby accepted by the undersigned as of February 27, 1998. THE BANKS: STATE STREET BANK AND TRUST COMPANY By: /s/ F. Andrew Beise -------------------------------- Title: V.P. BANKBOSTON, N.A. (f/k/a The First National Bank of Boston) By: /s/ William N. Latham -------------------------------- Title: Vice President (signatures continue on next page) -6- 7 THE AGENT: STATE STREET BANK AND TRUST COMPANY By: /s/ F. Andrew Beise -------------------------------- Title: V.P. -7- 8 ANNEX 1 ALLONGE TO REVOLVING CREDIT NOTE $15,000,000.00 Dated as of: February 27, 1998 This Allonge is made by COURIER CORPORATION, COURIER-CITIZEN COMPANY, COURIER COMPANIES, INC., COURIER DELAWARE HOLDING CORPORATION, COURIER FOREIGN SALES CORPORATION LIMITED, COURIER INVESTMENT CORPORATION, COURIER KENDALLVILLE, INC., COURIER PROPERTIES, INC., COURIER STOUGHTON, INC., COURIER WESTFORD, INC., NATIONAL PUBLISHING COMPANY, COURIER NEW MEDIA, INC., BOOK-MART PRESS, INC., and THE HOME SCHOOL, INC. (collectively, the "Borrowers"), to that certain Revolving Credit Note dated March 18, 1997, in the face amount of $10,000,000 (as amended by that certain Allonge dated July 22, 1997, the "Note"), executed and delivered by the Borrowers to BankBoston, N.A., f/k/a The First National Bank of Boston, (the "Bank") pursuant to the terms of a Revolving Credit Agreement, dated as of March 18, 1997, among the Borrowers, the Bank, and State Street Bank and Trust Company, Individually and as Agent (as amended, the "Loan Agreement"). Effective on the day and year first above written, The Home School, Inc. shall be added as a Borrower and signatory to the Note, and shall hereafter be bound, on a joint and several basis, by all of the terms and conditions contained therein. The Borrowers hereby confirm their joint and several promise to pay as set forth in the Note, and all other terms and conditions of the Note, as modified by this Allonge. All capitalized terms used herein but not defined herein shall have the same meaning as set forth in the Note. This Allonge shall become part of the Note, and although it is the intent of the parties that this Allonge be affixed to the Note, this Allonge shall continue in full force and effect even if it has not been so affixed. (signatures continue on next page) -8- 9 Executed as a sealed instrument as of the date first above written. THE BORROWERS: WITNESS: COURIER CORPORATION /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Treasurer Title: Sr. VP & CFO WITNESS: COURIER CITIZEN COMPANY /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Treasurer Title: Sr. VP & CFO WITNESS: COURIER COMPANIES, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: COURIER DELAWARE HOLDING CORPORATION /s/ George Q. Nichols By: /s/ William L. Lampe, Jr. - ---------------------- -------------------------- Title: President Title: Vice President, Treasurer WITNESS: COURIER FOREIGN SALES CORPORATION LIMITED /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Treasurer Title: President WITNESS: COURIER INVESTMENT CORPORATION /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Treasurer (signatures continue on next page) -9- 10 WITNESS: COURIER KENDALLVILLE, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: COURIER PROPERTIES, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: COURIER STOUGHTON, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: COURIER WESTFORD, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: NATIONAL PUBLISHING COMPANY /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Asst. Treasurer WITNESS: COURIER NEW MEDIA, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: BOOK-MART PRESS, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Treasurer (signatures continue on next page) -10- 11 WITNESS: THE HOME SCHOOL, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- -------------------------- Title: Asst. Treasurer Title: Treasurer -11- 12 ANNEX 2 ALLONGE TO REVOLVING CREDIT NOTE $15,000,000.00 Dated as of: February 27, 1998 This Allonge is made by COURIER CORPORATION, COURIER-CITIZEN COMPANY, COURIER COMPANIES, INC., COURIER DELAWARE HOLDING CORPORATION, COURIER FOREIGN SALES CORPORATION LIMITED, COURIER INVESTMENT CORPORATION, COURIER KENDALLVILLE, INC., COURIER PROPERTIES, INC., COURIER STOUGHTON, INC., COURIER WESTFORD, INC., NATIONAL PUBLISHING COMPANY, COURIER NEW MEDIA, INC., BOOK-MART PRESS, INC., and THE HOME SCHOOL, INC. (collectively, the "Borrowers"), to that certain Revolving Credit Note dated March 18, 1997, in the face amount of $10,000,000 (as amended by that certain Allonge dated July 22, 1997, the "Note"), executed and delivered by the Borrowers to State Street Bank and Trust Company (the "Bank"), pursuant to the terms of a Revolving Credit Agreement, dated as of March 18, 1997, among the Borrowers, BankBoston, N.A., f/k/a The First National Bank of Boston, and State Street Bank and Trust Company, Individually and as Agent (as amended, the "Loan Agreement"). Effective on the day and year first above written, The Home School, Inc. shall be added as a Borrower and signatory to the Note, and shall hereafter be bound, on a joint and several basis, by all of the terms and conditions contained therein. The Borrowers hereby confirm their joint and several promise to pay as set forth in the Note, and all other terms and conditions of the Note, as modified by this Allonge. All capitalized terms used herein but not defined herein shall have the same meaning as set forth in the Note. This Allonge shall become part of the Note, and although it is the intent of the parties that this Allonge be affixed to the Note, this Allonge shall continue in full force and effect even if it has not been so affixed. (signatures continue on next page) -12- 13 Executed as a sealed instrument as of the date first above written. THE BORROWERS: WITNESS: COURIER CORPORATION /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Treasurer Title: Sr. VP & CFO WITNESS: COURIER CITIZEN COMPANY /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Treasurer Title: Sr. VP & CFO WITNESS: COURIER COMPANIES, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: COURIER DELAWARE HOLDING CORPORATION /s/ George Q. Nichols By: /s/ William L. Lampe, Jr. - ---------------------- --------------------------------- Title: President Title: Vice President & Treasurer WITNESS: COURIER FOREIGN SALES CORPORATION LIMITED /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Treasurer Title: President WITNESS: COURIER INVESTMENT CORPORATION /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Treasurer (signatures continue on next page) -13- 14 WITNESS: COURIER KENDALLVILLE, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: COURIER PROPERTIES, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: COURIER STOUGHTON, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: COURIER WESTFORD, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: NATIONAL PUBLISHING COMPANY /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Asst. Treasurer WITNESS: COURIER NEW MEDIA, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Treasurer WITNESS: BOOK-MART PRESS, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Treasurer (signatures continue on next page) -14- 15 WITNESS: THE HOME SCHOOL, INC. /s/ Lee Cochrane By: /s/ Robert P. Story, Jr. - ---------------------- --------------------------------- Title: Asst. Treasurer Title: Treasurer -15- EX-27.1 3 RESTATED FINANCIAL DATA 3/28/1998
5 0000025212 COURIER CORP. 1,000 6-MOS SEP-26-1998 SEP-28-1997 MAR-28-1998 32 0 29,036 1,219 10,215 41,591 101,184 66,037 91,424 22,563 0 0 0 3,750 40,743 91,424 74,442 74,442 56,426 56,426 13,306 95 720 3,895 1,327 2,568 0 0 0 2,568 .84 .80 RECEIVABLES ARE NET OF ALLOWANCES FOR UNCOLLECTIBLE ACCOUNTS. OTHER SE INCLUDES TREASURY STOCK. PER SHARE AMOUNTS REFLECT A THREE-FOR-TWO STOCK SPLIT EFFECTED IN THE FORM OF A 50% STOCK DIVIDEND TO BE DISTRIBUTED ON JUNE 1, 1998 TO STOCKHOLDERS OF RECORD ON MAY 15, 1998.
EX-27.2 4 FDS FOR RESTATED 12/27/1997
5 0000025212 COURIER CORP. 1,000 3-MOS SEP-26-1998 SEP-28-1997 DEC-27-1997 23 0 28,607 1,166 11,703 42,702 99,847 64,299 93,142 23,822 0 0 0 4,500 38,691 93,142 35,306 35,306 26,517 26,517 6,482 38 347 1,922 712 1,210 0 0 0 1,210 .40 .38 RECEIVABLES ARE NET OF ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS. OTHER SE INCLUDES TREASURY STOCK. PER SHARE AMOUNTS HAVE BEEN RESTATED TO REFLECT A THREE-FOR-TWO STOCK SPLIT EFFECTED IN THE FORM OF A 50% STOCK DIVIDEND TO BE DISTRIBUTED ON JUNE 1, 1998 TO STOCKHOLDERS OF RECORD ON MAY 15, 1998.
EX-27.3 5 FDS RESTATED FOR FYE AND QTRS FY 1997
5 0000025212 COURIER CORPORATION 1,000 YEAR 3-MOS 6-MOS 9-MOS SEP-27-1997 SEP-27-1997 SEP-27-1997 SEP-27-1997 SEP-29-1996 SEP-29-1996 SEP-29-1996 SEP-29-1996 SEP-27-1997 DEC-28-1996 MAR-29-1997 JUN-28-1997 27 29 43 25 0 0 0 0 25,919 23,917 21,949 21,980 1,242 893 934 994 9,695 10,292 10,349 10,755 38,063 36,912 34,679 35,011 99,340 94,809 96,296 97,622 62,398 59,545 61,323 63,159 89,643 76,726 74,156 73,957 23,975 21,885 20,730 21,305 0 0 0 0 0 0 0 0 0 0 0 0 4,500 4,500 4,500 4,500 37,248 34,939 34,824 35,311 89,643 76,726 74,156 73,957 131,433 30,539 62,550 95,271 131,433 30,539 62,550 95,271 103,342 24,218 49,460 75,672 103,342 24,218 49,460 75,672 20,978 4,776 10,124 15,186 242 67 108 187 867 160 362 531 6,004 1,318 2,496 3,695 1,688 389 739 1,123 4,316 929 1,757 2,572 0 0 0 0 0 0 0 0 0 0 0 0 4,316 929 1,757 2,572 1.44 .31 .58 .85 1.41 .30 .57 .84 Receivables are net of Allowance For Uncollectible Accounts. Other SE includes Treasury Stock. Per share amounts have been restated for both the adoption of SFAS 128 and to reflect a three-for-two stock split effected in the form of a 50% stock dividend to be distributed on June 1, 1998 to stockholders of record on May 15, 1998.
EX-27.4 6 FDS RESTATED FOR FY AND QTR FOR 1996
5 0000025212 COURIER CORPORATION 1,000 YEAR 3-MOS 6-MOS 9-MOS SEP-28-1996 SEP-28-1996 SEP-28-1996 SEP-28-1996 OCT-01-1995 OCT-01-1995 OCT-01-1995 OCT-01-1995 SEP-28-1996 DEC-30-1995 MAR-31-1996 JUN-29-1996 33 26 367 774 0 0 0 0 24,935 23,148 21,437 21,816 829 636 710 760 8,178 12,906 12,413 9,513 35,680 38,294 36,614 34,972 95,543 92,319 93,696 95,094 58,868 57,193 58,925 60,636 74,766 77,225 73,532 71,323 21,958 20,774 17,654 16,387 0 0 0 0 0 0 0 0 0 0 0 0 4,500 4,500 4,500 4,500 34,264 32,843 33,356 33,646 74,766 77,225 73,532 71,323 125,232 30,115 61,499 94,427 125,232 30,115 61,499 94,427 102,594 24,504 50,211 77,258 102,594 24,504 50,211 77,258 18,649 4,407 9,540 14,426 265 75 146 196 840 212 467 677 2,884 917 1,135 1,870 334 293 (152) 68 2,550 624 1,287 1,802 0 0 0 0 0 0 0 0 0 0 0 0 2,550 624 1,287 1,802 .84 .21 .43 .60 .82 .20 .41 .58 Receivables are net of Allowance For Uncollectible Accounts. Other SE includes Treasury Stock. Per share amounts have been restated for both the adoption of SFAS 128 and to reflect a three-for-two stock split effected in the form of a 50% stock dividend to be distributed on June 1, 1998 to stockholders of record on May 15, 1998.
EX-27.5 7 FDS RESTATED OR FY 9/30/1995
5 0000025212 COURIER CORP 1,000 U.S. DOLLARS YEAR SEP-30-1995 SEP-25-1994 SEP-30-1995 1 1,147 0 20,019 564 9,449 32,905 91,611 55,386 72,961 19,928 0 0 0 4,500 32,326 72,961 120,701 120,701 94,666 94,666 17,081 204 990 7,760 2,530 5,230 0 0 0 5,230 1.76 1.73 RECEIVABLES ARE NET OF ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS. OTHER SE INCLUDES TREASURY STOCK. PER SHARE AMOUNTS HAVE BEEN RESTATED FOR BOTH THE ADOPTION OF SFAS 128 AND TO REFLECT A THREE-FOR-TWO STOCK SPLIT EFFECTED IN THE FORM OF A 50% STOCK DIVIDEND TO BE DISTRIBUTED ON JUNE 1, 1998 TO STOCKHOLDERS OF RECORD ON MAY 15, 1998.
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