By Trevor Shackelford July 22, 2005 -- Courier Corporation (NASDAQ: CRRC) reported its third quarter results today. The company posted revenues of $58.8 million, up 6% from $55.5 million in the same period last year. Net income was $5.9 million, or $0.47 per diluted share. This represents a 13% growth from last year’s results. The company commented that increased sales to educational publishers helped drive revenues during the quarter. Topics of this summary: Quarter Highlights Segment Performance Guidance Raine Radar Q & A Quarter Highlights Courier completes 3-for-2 stock split on May 27, 2005 Dover subsidiary replaces old IT systems with SAP Dover begins to relocate warehousing from a leased space to a warehouse owned by the company Segment Performance Book Manufacturing Courier's book manufacturing segment had third quarter sales of $50.6 million, up 8% from the same period last year. Pretax income for the segment rose 31% in the quarter to $8.3 million or $0.43 per share, versus $6.4 million or $0.34 per diluted share in 2004. Third quarter gross profit rose 20% to $15 million, and increased as a percentage of sales to 29.7% from 26.8% in 2004. The book manufacturing segment had mixed results in its three primary markets: education, religion, and specialty. Sales in the education market led with an 8% gain in the third quarter. The trend towards four color textbooks continues to drive revenue. Sales to the religion market were up 8% in the quarter, part of which was due to the timing of orders. Specialty book manufacturing revenue was down 3%. Specialty Book Publishing Courier’s specialty book publishing segment is composed of two businesses. Dover Publications publishes thousands of titles over a broad range of niche genres, including art, science, and antiques. Research & Education Association (REA) publishes test preparation and study guides. The segment reported revenues of $9.9 million, a 4% loss from the same period in 2004. REA’s third quarter sales were up 7% to $1.4 million. Dover sales were down 6% to $8.6 million, mostly due to a decline in sales to U.S. retailers. Guidance Dover continues to struggle, but the rest of the company seems to be posting modest gains. Courier had previously reduced its 2005 total sales range down to $223 - $228 million, but is now saying that it will be $224 - $228 million. The company is expecting full year sales growth between 6% and 8%. The company expects 2005 earnings per share of $1.73 to $1.80. Raine Radar Courier has seen some of its largest gains this year in the four color textbook market. Look for the company to continue to press its advantage here. During Q & A, Courier executives hinted at being interested in acquiring a publisher that would complement its current offerings. Seeing its success in textbooks, perhaps the company will consider a small educational publisher to continue to exploit this demand in the market. A smart acquisition or two in the next 6-12 months might be the best way to quickly add significant value for investors. Q & A The number of sales representatives at REA has increased to approximately 8. The new four color press has been running at full capacity, 24-7, for the last 6 to 8 months. Profitability at Dover is expected to increase in the next 1-2 quarters, based on savings from infrastructure investments as well as Courier would look to acquire a publisher that is backlist driven who will not publish materials that would upset the religious or educational customers.