<PAGE>
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 27, 1999
-------------------------------------------------
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.
<TABLE>
<CAPTION>
Class Outstanding at April 29, 1999
- - ------------------------------------- --------------------------------------
<S> <C>
Common Stock, $1 par value 3,235,047 shares
</TABLE>
Page 1 of 13
<PAGE>
COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
March 27, September 26,
ASSETS 1999 1998
- - ------ ---------------- ---------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $28 $722
Accounts receivable, less allowance
for uncollectible accounts 32,716 27,941
Inventories (Note B) 12,569 10,828
Deferred income taxes 1,754 1,758
Other current assets 431 847
---------------- ---------------
Total current assets 47,498 42,096
Property, plant and equipment, less
accumulated depreciation: $73,021
at March 27, 1999 and $69,102
at September 26, 1998 30,665 33,257
Real estate held for sale or lease, net 324 336
Goodwill and other intangibles, net 11,091 11,421
Other assets 522 520
---------------- ---------------
Total assets $90,100 $87,630
---------------- ---------------
---------------- ---------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 2 of 13
<PAGE>
COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
March 27, September 26,
LIABILITIES AND STOCKHOLDERS' EQUITY 1999 1998
---------------- ------------------
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt $312 $312
Accounts payable 9,191 9,294
Accrued payroll 3,635 4,319
Accrued taxes 4,663 4,935
Other current liabilities 6,984 6,709
---------------- ------------------
Total current liabilities 24,785 25,569
Long-term debt (Note E) 7,379 6,781
Deferred income taxes 2,675 2,992
Other liabilities 2,436 2,498
---------------- ------------------
Total liabilities 37,275 37,840
---------------- ------------------
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 3,750,000 shares 3,750 3,750
Additional paid-in capital 569 384
Retained earnings 52,079 49,464
Treasury stock, at cost: 542,000 shares
at March 27, 1999 and 578,000
shares at September 26, 1998 (3,573) (3,808)
---------------- ------------------
Total stockholders' equity 52,825 49,790
---------------- ------------------
Total liabilities and stockholders' equity $90,100 $87,630
---------------- ------------------
---------------- ------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 3 of 13
<PAGE>
COURIER CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
------------------------------------------- ---------------------------------------
March 27, March 28, March 27, March 28,
1999 1998 1999 1998
------------------- ------------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Net sales $40,480 $39,136 $79,781 $74,442
Cost of sales 30,256 29,903 60,219 56,416
------------------- ------------------- ------------------ -----------------
Gross profit 10,224 9,233 19,562 18,026
Selling and administrative expenses 7,186 6,887 14,189 13,411
Interest expense 167 373 302 720
------------------- ------------------- ------------------ -----------------
Income before taxes 2,871 1,973 5,071 3,895
Provision for income taxes (Note C) 1,004 615 1,784 1,327
------------------- ------------------- ------------------ -----------------
Net income $1,867 $1,358 $3,287 $2,568
------------------- ------------------- ------------------ -----------------
------------------- ------------------- ------------------ -----------------
Net income per share (Note D):
Basic $0.59 $0.44 $1.03 $0.84
------------------- ------------------- ------------------ -----------------
------------------- ------------------- ------------------ -----------------
Diluted $0.56 $0.42 $0.99 $0.80
------------------- ------------------- ------------------ -----------------
------------------- ------------------- ------------------ -----------------
Cash dividends declared per share $0.105 $0.093 $0.210 $0.187
------------------- ------------------- ------------------ -----------------
------------------- ------------------- ------------------ -----------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 4 of 13
<PAGE>
COURIER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------
March 27, March 28,
1999 1998
---------- ----------
<S> <C> <C>
Cash provided from operating activities $343 $1,969
Investment activities:
Capital expenditures (1,326) (2,031)
Business acquisition -- (563)
---------- ----------
Cash used for investment activities (1,326) (2,594)
---------- ----------
Financing activities:
Repayment of long-term debt (152) (241)
Increase in long-term borrowings 750 750
Cash dividends (672) (573)
Proceeds from stock plans 363 694
---------- ----------
Cash provided from financing activities 289 630
---------- ----------
Increase (decrease) in cash and cash equivalents (694) 5
Cash at the beginning of the period 722 27
---------- ----------
Cash at the end of the period $28 $32
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 5 of 13
<PAGE>
COURIER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
UNAUDITED FINANCIAL STATEMENTS
The balance sheet as of March 27, 1999, the statements of income for the
three-month and six-month periods ended March 27, 1999 and March 28, 1998, and
the statements of cash flows for the six-month periods ended March 27, 1999 and
March 28, 1998 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 1998 have been reclassified in the accompanying financial
statements in order to be consistent with the current year's classification.
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
26, 1998 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 26, 1998.
NEW ACCOUNTING PRONOUNCEMENTS
Effective September 27, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income", and SFAS
No. 132, "Employer Disclosures about Pensions and Other Postretirement
Benefits". The adoption of SFAS No. 130 was not material to the consolidated
financial statements due to a lack of any items defined as other comprehensive
income by SFAS No. 130. The adoption of SFAS No. 132 was also not material to
the consolidated financial statements. The Financial Accounting Standards Board
recently issued SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information", which will be effective for the Company's Annual Report
for the fiscal year ending September 25, 1999, and SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which will be effective in the
Company's fiscal year ending September 30, 2000. The Company does not expect
that the implementation of these new standards will be material to the
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 most inventories. Inventories consisted
of the following:
<TABLE>
<CAPTION>
(000's Omitted)
-------------------------------
March 27, September 26,
1999 1998
--------- -------------
<S> <C> <C>
Raw materials $ 3,319 $ 3,171
Work in process 6,225 4,903
Finished goods 3,025 2,754
------- --------
Total inventories $12,569 $ 10,828
------- --------
------- --------
</TABLE>
Page 6 of 13
<PAGE>
COURIER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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:
<TABLE>
<CAPTION>
(000's Omitted)
Quarter Ended Six Months Ended
---------------------- ----------------------
March 27, March 28, March 27, March 28,
1999 1998 1999 1998
------- --------- ------- ---------
<S> <C> <C> <C> <C>
Federal income taxes at
statutory rate $ 976 $ 671 $ 1,724 $ 1,324
State income taxes, net 73 26 115 76
Goodwill amortization 43 37 86 86
Export related income (66) (52) (121) (104)
Other (22) (67) (20) (55)
------- ------- ------- -------
Total provision $ 1,004 $ 615 $ 1,784 $ 1,327
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
D. NET INCOME PER SHARE
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.
<TABLE>
<CAPTION>
(000's Omitted)
Quarter Ended Six Months Ended
---------------------- ----------------------
March 27, March 28, March 27, March 28,
1999 1998 1999 1998
------- --------- ------- ---------
<S> <C> <C> <C> <C>
Average shares outstanding for basic 3,191 3,095 3,185 3,070
Effect of potentially dilutive shares 121 121 129 131
----- ----- ----- -----
Average shares outstanding for diluted 3,312 3,216 3,314 3,201
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
E. LONG-TERM DEBT
In February 1999, the Company extended the maturity date of its $30 million
long-term revolving credit facility for one year to February 2001.
Page 7 of 13
<PAGE>
Item 2. COURIER CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
Sales in the second quarter of fiscal 1999 were $40.5 million compared to $39.1
million in the second quarter of fiscal 1998, an increase of 3%. Sales from the
Company's core book manufacturing segment were up 3% to $40.0 million for the
quarter as increased sales in religious publishing more than offset seasonal
softness in other publishing markets. The Company's customized education segment
consists of The Home School and Copyright Management Services (CMS). 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 grew more than 50% during the second quarter to
$0.5 million. The Company's fourth quarter historically represents the period of
highest market demand for these educationally oriented ventures.
Gross profit increased to $10.2 million, or 25% of sales, in the second quarter
from $9.2 million, or 24% of sales, in the same period last year. The
improvement in gross profit reflects the benefits of increased sales volume and
gains in productivity.
Selling and administrative expenses increased to $7.2 million in the second
quarter from $6.9 million in the same period last year. Expenses related to
improvements in the Company's information systems and infrastructure increased
by $0.3 million during the quarter, including expenses related to "Year 2000"
remediation efforts of approximately $150,000.
Interest expense was $167,000 in the second quarter of fiscal 1999 compared to
$373,000 in the same period last year, reflecting a reduction in average
borrowings of approximately $13 million as well as a lower average interest
rate.
The Company's effective tax rate for the second quarter was 35%. This rate was
higher than the 31% rate in the corresponding period last year in part due to a
higher effective state tax rate.
Net income for the second quarter of fiscal 1999 was $1,867,000, up 37% over
last year's earnings of $1,358,000. Net income per share on a diluted basis
increased 33% to $.56 per share from $.42 per share in the corresponding period
last year. Earnings from the Company's core book manufacturing operations
increased 29% over last year's second quarter largely reflecting increased sales
volume and higher levels of productivity. The Company's newer businesses, CMS
and The Home School, reduced second quarter earnings by $.16 per diluted share
compared to a reduction of $.17 per diluted share for the same period last year.
Revenues and related earnings for these businesses, both of which are highly
seasonal, are expected to increase in the fourth quarter coinciding with the
months of highest market demand.
Weighted average shares outstanding increased approximately 96,000 shares over
last year's second quarter primarily due to options exercised under the
Company's stock option plans.
For the six months ended March 27, 1999, the Company reported net income of
$3,287,000, or $.99 per diluted share, up 28% compared to $2,568,000, or $.80
per diluted share, for the same period last year. Sales for the first six months
were $79.8 million, up 7% from $74.4 million in the corresponding period of
fiscal 1998. The factors impacting second quarter results similarly affected
year-to-date results. Sales from the Company's core book manufacturing
operations increased by 7% while related earnings increased by 23% compared to
the first six months of fiscal 1998. CMS and The Home School reduced earnings by
$.33 per diluted share compared to $.32 per diluted share in the first half of
fiscal 1998.
Page 8 of 13
<PAGE>
COURIER CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (continued):
Effective September 27, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income", and SFAS
No. 132, "Employer Disclosures about Pensions and Other Postretirement
Benefits". The adoption of SFAS No. 130 was not material to the consolidated
financial statements due to a lack of any items defined as other comprehensive
income by SFAS No. 130. The adoption of SFAS No. 132 was also not material to
the consolidated financial statements. The Financial Accounting Standards Board
recently issued SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information", which will be effective for the Company's Annual Report
for the fiscal year ending September 25, 1999, and SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which will be effective in the
Company's fiscal year ending September 30, 2000. The Company does not expect
that the implementation of these new standards will be material to the
consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES:
During the first half of fiscal 1999, operations provided approximately $0.3
million of cash. Net income was $3.3 million and depreciation and amortization
were $4.3 million. Working capital utilized approximately $6.9 million of cash
primarily due to increases in accounts receivable of $4.8 million and
inventories of $1.7 million.
Investment activities in the first six months of fiscal 1999 used approximately
$1.3 million of cash for capital expenditures. For the entire fiscal year,
capital expenditures are expected to be approximately $8 to $10 million, which
includes approximately $0.6 million related to Year 2000 issues. 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 1999 provided
approximately $0.3 million of cash. At March 27, 1999, the Company utilized $6.0
million of its borrowing capacity available under a $30 million long-term
revolving credit facility. In February 1999, the maturity date of the Company's
revolving credit facility was extended one year to February 2001.
YEAR 2000 ISSUE:
THE STATEMENTS IN THE FOLLOWING SECTION INCLUDE "YEAR 2000 READINESS DISCLOSURE"
WITHIN THE MEANING OF THE YEAR 2000 INFORMATION AND READINESS DISCLOSURE ACT.
Historically, many computer programs were written using two digits rather than
four to specify the year. Such software may recognize the year 2000 as "00"
which could result in computer system failures or miscalculations, commonly
referred to as the Year 2000 (Y2K) issue. The Company recognizes the need to
ensure that its operations will not be adversely impacted by a Year 2000
software failure. Incomplete or untimely resolution of the Y2K issue by the
Company, key suppliers, customers and other parties could have a material
adverse effect on the Company's results of operations, financial condition and
cash flows. The Company established a Year 2000 Management Task Force to address
the Y2K issue. This Task Force is coordinating efforts to identify, assess and
implement changes to information technology ("IT") systems and operational
systems such as presses and binders, telecommunications equipment, building
security and environmental controls, and is evaluating the Y2K readiness of key
suppliers, customers and other parties.
Operational systems have been inventoried and assessment has been completed.
Approximately 1.2% of operational systems are non-compliant. Remediation is
in process and is expected to be complete in September 1999.
Page 9 of 13
<PAGE>
COURIER CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
YEAR 2000 ISSUE (continued):
The Company has substantially completed inventories and assessments of its IT
systems in use at each of its locations and determined that many of the IT
systems were not compliant. The Company is in the process of replacing or
upgrading these systems with enterprise-wide systems across all of the Company's
operations, utilizing a common IT infrastructure which collectively is designed
to give the Company the benefit of new technology with enhanced functionality
and resultant improvements in service and productivity. The replacement of
non-compliant systems is complete at three locations. The remaining three
locations are in process and are expected to be completed on schedule before the
end of the fiscal year.
The Company is actively assessing the Y2K readiness of third parties (including
suppliers, financial institutions and customers) with which it has a material
relationship to identify potentially non-compliant parties. The Company has
performed site visits and is actively working with the key suppliers of raw
materials, such as paper mills and film and plate manufacturers. The Company
believes that its most reasonably likely, worst-case Y2K scenario may involve
non-compliant third parties, including suppliers of utilities. The Company is
assessing the degree of exposure and risk of non-compliance by such third
parties, which could include possible consequences such as temporary plant
disruptions and delays in the receipt of key materials, the receipt of orders,
the delivery of finished products and the preparation of invoices. The Company
is developing contingency plans specific to these risks as it works with its key
suppliers, customers and other parties. The Year 2000 Task Force will be
continually monitoring the Y2K risks and related contingency plans throughout
1999.
The Company continues to estimate the cost of achieving Y2K compliance to be
approximately $2 million of which approximately half will be capital
expenditures, primarily for new IT systems. Costs incurred in the first six
months of fiscal 1999 directly related to Y2K remediation were approximately
$0.5 million bringing total costs to date to approximately $1.3 million, of
which approximately $0.7 million was expensed. The remainder of the Y2K costs
are expected to be incurred during fiscal 1999. The Y2K costs are expected to be
funded through operating cash flows and available credit facilities. The Company
does not separately track all of the internal costs incurred for the Y2K
project, particularly the related payroll costs of its engineering and
information technology groups.
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, consolidation among customers, success in the integration of
acquired businesses, Year 2000 issues, and general changes in economic
conditions. Although the Company believes that the assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could be
inaccurate, and therefore, there can be no assurance that the forward-looking
statements will prove to be accurate. 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 10 of 13
<PAGE>
COURIER CORPORATION
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes from the information concerning the
Company's "Quantitative and Qualitative Disclosures About Market Risk" as
previously reported in the Company's Annual Report on Form 10-K for the year
ended September 26, 1998.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of the registrant was held on January 14,
1999. Following are the matters voted on at the meeting.
ELECTION OF DIRECTORS All nominees of the Board of Directors of the
registrant were reelected for a three-year term.
ADOPTION OF THE COURIER CORPORATION 1999 EMPLOYEE STOCK PURCHASE PLAN
Stockholders voted to adopt the Courier Corporation 1999 Employee Stock
Purchase Plan, replacing the expiring 1989 Employee Stock Purchase Plan.
The full text of the Plan was included as an exhibit to the proxy
statement and is incorporated herein by reference. Votes were cast as
follows:
<TABLE>
<CAPTION>
For Against Abstain Broker Non-votes
--- ------- ------- ----------------
<S> <C> <C> <C>
2,516,700 33,242 20,186 437,414
</TABLE>
AMENDMENT TO THE 1989 DEFERRED INCOME STOCK OPTION PLAN FOR NON-EMPLOYEE
DIRECTORS Stockholders voted to approve an amendment to the Corporation's
1989 Deferred Income Stock Option Plan for Non-Employee Directors, which
removed the termination date in the Plan and increased the number of
shares available for grant under the Plan by 100,000 shares of common
stock. The amendment was included as an exhibit to the Company's Annual
Report on Form 10-K and is incorporated herein by reference. Votes were
cast as follows:
<TABLE>
<CAPTION>
For Against Abstain Broker Non-votes
--- ------- ------- ----------------
<S> <C> <C> <C>
2,500,680 41,723 27,725 437,414
</TABLE>
Page 11 of 13
<PAGE>
COURIER CORPORATION
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (continued)
AMENDMENT TO THE 1993 AMENDED AND RESTATED STOCK INCENTIVE PLAN
Stockholders voted to approve an amendment to the Corporation's 1993
Amended and Restated Stock Incentive Plan, which increased the number of
shares available for grant under the Plan by 100,000 shares of common
stock. The amendment was included as an exhibit to the Company's Annual
Report on Form 10-K and is incorporated herein by reference. Votes were
cast as follows:
<TABLE>
<CAPTION>
For Against Abstain Broker Non-votes
--- ------- ------- ----------------
<S> <C> <C> <C>
2,322,651 220,609 26,868 437,414
</TABLE>
RATIFICATION/APPROVAL OF ACCOUNTANTS Stockholders voted to ratify and
approve the selection by the Board of Directors of Deloitte & Touche LLP
as independent public accountants for the Corporation for the fiscal year
ending September 25, 1999. Votes were cast as follows:
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
2,997,171 4,769 5,602
</TABLE>
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C>
10 Amendment, dated February 26, 1999, to Note Agreement between
Courier Corporation, State Street Bank and Trust Company and
BankBoston, N.A., providing for a $30 million revolving credit facility.
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
A Report on Form 8-K dated March 18, 1999 reporting under Item 5
the adoption of a stockholders' rights plan .
Page 12 of 13
<PAGE>
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 10, 1999 By: S/JAMES F. CONWAY III
- - ------------------------- ---------------------------
Date James F. Conway III
Chairman, President and
Chief Executive Officer
MAY 10, 1999 By: S/ROBERT P. STORY, JR.
- - ------------------------- ---------------------------
Date Robert P. Story, Jr.
Senior Vice President and
Chief Financial Officer
MAY 10, 1999 By: S/PETER M. FOLGER
- - ------------------------- ---------------------------
Date Peter M. Folger
Vice President and
Chief Accounting Officer
Page 13 of 13
<PAGE>
Exhibit 10
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.
THE HOME SCHOOL, INC.
Dated as of: February 26, 1999
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. 3 TO REVOLVING CREDIT AGREEMENT
Ladies and Gentlemen:
We refer to the Revolving Credit Agreement, dated as of March 18, 1997
(as amended, 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., BOOK-MART
PRESS, INC. and THE HOME SCHOOL, 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").
<PAGE>
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 26, 1999, the Agreement is amended as follows:
(a) 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. 3 to Revolving Credit Agreement, dated as of February 26, 1999, among the
Borrowers, the Banks, and the Agent.
(b) Section 1.1.56 of the Agreement is amended to read in its entirety
as follows:
"1.1.56 "Revolving Loan Maturity Date means February 15, 2001."
ARTICLE II
AMENDMENT TO REVOLVING CREDIT NOTES
Effective on February 26, 1999, the Revolving Credit Notes are amended
as set forth in the Allonges respectively 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
-2-
<PAGE>
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
authorized, 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-
<PAGE>
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, 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/Lee Cochrane
------------------------------
Title: V.P. & Treasurer
COURIER CITIZEN COMPANY
By: s/Lee Cochrane
------------------------------
Title: V.P. & Treasurer
COURIER COMPANIES, INC.
By: s/Lee Cochrane
------------------------------
Title: Asst. Treasurer
COURIER DELAWARE HOLDING CORPORATION
By: s/William L. Lampe, Jr.
------------------------------
Title: V.P. & Treasurer
COURIER FOREIGN SALES CORPORATION LIMITED
By: s/Lee Cochrane
------------------------------
Title: Treasurer
(signatures continue on next page)
-4-
<PAGE>
COURIER INVESTMENT CORPORATION
By: s/ Lee Cochrane
------------------------------
Title: Asst. Treasurer
COURIER KENDALLVILLE, INC.
By: s/ Lee Cochrane
------------------------------
Title: Asst. Treasurer
COURIER PROPERTIES, INC.
By: s/ Lee Cochrane
------------------------------
Title: Asst. Treasurer
COURIER STOUGHTON, INC.
By: s/ Lee Cochrane
------------------------------
Title: Asst. Treasurer
COURIER WESTFORD, INC.
By: s/ Lee Cochrane
------------------------------
Title: Asst. Treasurer
NATIONAL PUBLISHING COMPANY
By: s/ William L. Lampe, Jr.
------------------------------
Title: Treasurer
COURIER NEW MEDIA, INC.
By: s/ Lee Cochrane
------------------------------
Title: Asst. Treasurer
(signatures continue on next page)
-5-
<PAGE>
BOOK-MART PRESS, INC.
By: s/ Lee Cochrane
------------------------------
Title: Asst. Treasurer
THE HOME SCHOOL, INC.
By: s/ Lee Cochrane
------------------------------
Title: Asst. Treasurer
The foregoing Amendment is hereby accepted by the undersigned as of
February 26, 1999.
The Banks:
STATE STREET BANK AND TRUST COMPANY
By: s/ J. Landy
------------------------------
Title: Loan Officer
BANKBOSTON, N.A. (f/k/a The First
National Bank of Boston)
By: s/ Christopher S. Allen
------------------------------
Title: Director
The Agent:
STATE STREET BANK AND TRUST COMPANY
By: s/ J. Landy
------------------------------
Title: Loan Officer
-6-
<PAGE>
ANNEX 1
ALLONGE TO REVOLVING CREDIT NOTE
$15,000,000.00 Dated as of: February 26, 1999
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 and February 27, 1998, 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 Revolving Loan
Maturity Date shall be extended to February 15, 2001.
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)
-7-
<PAGE>
Executed as a sealed instrument as of the date first above written.
THE BORROWERS:
WITNESS: COURIER CORPORATION
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: V.P. & Treasurer
Courier Corp.
WITNESS: COURIER CITIZEN COMPANY
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: V.P. & Treasurer
Courier Corp.
WITNESS: COURIER COMPANIES, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: COURIER DELAWARE HOLDING CORPORATION
s/ Joan Cavaliere By: s/ William L. Lampe, Jr.
- - -------------------------- ----------------------------
Title: National Title: V.P. & Treasurer
WITNESS: COURIER FOREIGN SALES CORPORATION LIMITED
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Treasurer
Courier Corp.
WITNESS: COURIER INVESTMENT CORPORATION
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
(signatures continue on next page)
<PAGE>
WITNESS: COURIER KENDALLVILLE, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: COURIER PROPERTIES, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: COURIER STOUGHTON, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: COURIER WESTFORD, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: NATIONAL PUBLISHING COMPANY
s/ Joan Cavaliere By: s/ William L. Lampe, Jr.
- - -------------------------- ----------------------------
Title: National Title: Treasurer
WITNESS: COURIER NEW MEDIA, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: BOOK-MART PRESS, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
(signatures continue on next page)
-8-
<PAGE>
WITNESS: THE HOME SCHOOL, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
-9-
<PAGE>
ANNEX 2
ALLONGE TO REVOLVING CREDIT NOTE
$15,000,000.00 Dated as of: February 26, 1999
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 and February 27, 1998, 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 Revolving Loan
Maturity Date shall be extended to February 15, 2001.
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)
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<PAGE>
Executed as a sealed instrument as of the date first above written.
The Borrowers:
WITNESS: COURIER CORPORATION
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: V.P. & Treasurer
Courier Corp.
WITNESS: COURIER CITIZEN COMPANY
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: V.P. & Treasurer
Courier Corp.
WITNESS: COURIER COMPANIES, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: COURIER DELAWARE HOLDING CORPORATION
s/ Joan Cavaliere By: s/ William L. Lampe, Jr.
- - -------------------------- ----------------------------
Title: National Title: VP & Treasurer
WITNESS: COURIER FOREIGN SALES CORPORATION LIMITED
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Treasurer
Courier Corp.
WITNESS: COURIER INVESTMENT CORPORATION
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
(signatures continue on next page)
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<PAGE>
WITNESS: COURIER KENDALLVILLE, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: COURIER PROPERTIES, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: COURIER STOUGHTON, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: COURIER WESTFORD, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: NATIONAL PUBLISHING COMPANY
s/ Joan Cavaliere By: s/ William L. Lampe, Jr.
- - -------------------------- ----------------------------
Title: National Title: Treasurer
WITNESS: COURIER NEW MEDIA, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
WITNESS: BOOK-MART PRESS, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
(signatures continue on next page)
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<PAGE>
WITNESS: THE HOME SCHOOL, INC.
s/ Elaine M. Imbrogna By: s/ Lee Cochrane
- - -------------------------- ----------------------------
Title: Asst. Treasurer Title: Asst. Treasurer
Courier Corp.
-14-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-25-1999
<PERIOD-START> SEP-27-1998
<PERIOD-END> MAR-27-1999
<CASH> 28
<SECURITIES> 0
<RECEIVABLES> 32,716<F1>
<ALLOWANCES> 1,154
<INVENTORY> 12,569
<CURRENT-ASSETS> 47,498
<PP&E> 103,686
<DEPRECIATION> 73,021
<TOTAL-ASSETS> 90,100
<CURRENT-LIABILITIES> 24,785
<BONDS> 0
0
0
<COMMON> 3,750
<OTHER-SE> 49,075<F2>
<TOTAL-LIABILITY-AND-EQUITY> 90,100
<SALES> 79,781
<TOTAL-REVENUES> 79,781
<CGS> 60,219
<TOTAL-COSTS> 60,219
<OTHER-EXPENSES> 14,112
<LOSS-PROVISION> 77
<INTEREST-EXPENSE> 302
<INCOME-PRETAX> 5,071
<INCOME-TAX> 1,784
<INCOME-CONTINUING> 3,287
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,287
<EPS-PRIMARY> 1.03
<EPS-DILUTED> .99
<FN>
<F1>ACCOUNTS RECEIVABLES ARE NET OF ALLOWANCES
<F2>OTHER SE INCLUDES TREASURY STOCK
</FN>
</TABLE>
