OPERATING SEGMENTS

6 Months Ended

Mar. 24, 2012

OPERATING SEGMENTS

OPERATING SEGMENTS

D.            OPERATING SEGMENTS

The Company has two operating segments: book manufacturing and specialty publishing. The book manufacturing segment offers a full range of services from production through storage and distribution for religious, educational and specialty trade book publishers.  The specialty publishing segment consists of Dover Publications, Inc., Federal Marketing Corporation, Inc., d/b/a Creative Homeowner, and Research & Education Association, Inc. (“REA”).

Segment performance is evaluated based on several factors, of which the primary financial measure is operating income.  Operating income is defined as gross profit (sales less cost of sales) less selling and administrative expenses, and includes severance and other restructuring costs but excludes stock-based compensation.  As such, segment performance is evaluated exclusive of interest, income taxes, stock-based compensation, intersegment profit, impairment charges, and other income.  The elimination of intersegment sales and related profit represents sales from the book manufacturing segment to the specialty publishing segment.

The following table provides segment information for the three-month and six-month periods ended March 24, 2012 and March 26, 2011.

	(000’s Omitted)
	Quarter Ended						Six Months Ended
	March 24,			March 26,			March 24,			March 26,
	2012			2011			2012			2011
Net sales:
Book manufacturing	$	55,454		$	55,587		$	111,450		$	108,630
Specialty publishing	9,635			10,136			19,087			20,888
Elimination of intersegment sales	(2,701		)	(3,061		)	(5,213		)	(5,704		)
Total	$	62,388		$	62,662		$	125,324		$	123,814
Pretax income (loss):
Book manufacturing operating income (loss)	$	2,349		$	(5,092	)	$	6,555		$	(1,251	)
Specialty publishing operating loss	(1,136		)	(1,986		)	(2,963		)	(2,795		)
Stock-based compensation	(345		)	(368		)	(767		)	(706		)
Elimination of intersegment profit	13			31			29			120
Interest expense, net	(193		)	(248		)	(453		)	(451		)
Other income	—			—			587			—
Total	$	688		$	(7,663	)	$	2,988		$	(5,083	)