By Ann Levine November 11, 2003 – Courier Corporation (Nasdaq: CRCC), reported fourth quarter income of $7.0 million or $1.28 per diluted share. This compares to income of $6.6 million of $1.23 per diluted share for the same period last year. Revenue during the quarter was $53.5 million a 4% decline from $55.6 million during the fourth quarter last year. For the fiscal year ending September 30th, 2003 total income was up 18% to $19.3 million compared to $16.3 million for year-end 2002. For the full year, earnings per diluted share were $3.56, a 16% increase over last year’s $3.06 per diluted share. Topics of this summary: * Segment Performance * Outlook * Q & A Segment Performance Specialty Publications Dover reported sales of $10 million for the quarter, a 1% decline from fourth quarter last year. For fiscal 2003, sales were $36.4 million, posting a 1% increase over last year’s $36.0 million in sales. Direct-to-consumer sales increased 13%, with international sales increasing 15%. Sales to domestic retailers were down 6% for the fourth quarter as a result of a 22% reduction in sales to large bookstore chains. Dover sales to on-line booksellers, craft shops and gift shops, grew significantly. Gross profit as a percent of sales increased 220 basis points to 47.2% and reflects the benefits of higher prices as well as lower product costs. Dover added 643 new titles in 2003, a 20% increase over fiscal year 2002 Book Manufacturing Book manufacturing sales were down 3% for the quarter at $45.3 million. For the full year, the segment showed a 1% increase to $172 million. In the Education market reported sales of 3% in the fourth quarter with a full year increase of 6%. The college market was down 3% in the fourth quarter and down 11% for the full year. Growth came from 4-color textbooks. The Elementary market showed an increase of 16% in the fourth quarter and an overall decline of 3% for the year. The market suffered from reductions in school funding as a result of state and local deficits. The Religious market was down 4% for the quarter and 2% for the full year. This was the first down year in this market in a decade. Specialty trade books declined 11% in the fourth quarter but showed an overall increase of 4% for 2003. In 2003, the 4-color business increased 16%. Courier will continue to grow its 4-color business through the addition of a new 4-color press in the New Jersey plant. A down payment on a new Manville press has been made with installation expected in the spring of 2004. Outlook Sales for 2004 fiscal year are expected in the $215 – 220 million range, reflecting a 6-9% growth rate. Book manufacturing is expected in all three markets in the 5-7% range. In Specialty publishing, growth is expected in the double-digit range. Earnings per share is forecasted for $3.85-$4.00, an 8-12% increase. Q & A 1. As a repeat of earlier stated performance, college sales were down by 3% for the quarter and 11% for the year. Elementary sales were up 16% for the quarter, down 3% for the year. 2. No specific number was given as a utilization rate for book manufacturing. There is excess capacity in this side of Courier’s business and utilization rates are about the same as they were last year. There is excess capacity in the industry in general. The company sees some attrition as weaker players in the marketplace are taking capacity off-line. A long-term opportunity for Courier is to grow by acquiring more market share. 3. Courier is seeing pricing change market-to-market and customer-to-customer. There is not as much pricing pressure at the moment as there was earlier in the year. 4. Courier continues to look for opportunities and companies to acquire. No further comment was made on potential acquisitions. 5. The effective tax rate increased to 35% above last year due to state tax increases and because Courier has lost some benefits on export sales. The expectation is that this will be a permanent increase going forward. 6. Large book chains are a continuing and important opportunity for Dover publications. The company has less market share in this space than others in the industry. 7. The down payment cost for the 4-color press was $4.5 million in the 2003 fiscal year. 8. Depreciation and amortization in 2003 was in the $10-11 million range. 9. The timeline for adding another press to operations is likely in 2-4 years. It will take 2-3 years for the new press to get fully loaded. 10. October and November turned out to be a busy quarter for Dover as there was a pick-up in orders. The fourth quarter recorded an actual decline in sales of 1%.