Courier Reports Third-Quarter Results

  Courier Reports Third-Quarter Results

              Net Income of $1.6 Million on Sales of $59 Million

Business Wire

NORTH CHELMSFORD, Mass. -- July 24, 2012

Courier Corporation (Nasdaq: CRRC), one of America’s leading book
manufacturers and specialty publishers, today announced results for the
quarter ended June 23, 2012, the third quarter of its 2012 fiscal year.
Revenues were $58.9 million, down 5% from last year’s third-quarter revenues
of $61.9 million. Net income was $1.6 million or $.13 per diluted share,
including severance costs of $235,000 in conjunction with the previously
announced consolidation of one-color printing operations, versus a loss of
$3.1 million or $.26 per diluted share in the third quarter of fiscal 2011,
including a non-cash, pre-tax impairment charge of $8.6 million, or $.43 per
diluted share. Excluding the impairment charge related to Research & Education
Association (REA) in the wake of the Borders Group bankruptcy, adjusted net
income for the third quarter of fiscal 2011 was $2.0 million or $.17 per
diluted share.

For the first nine months of fiscal 2012, Courier revenues were $184.2
million, down slightly from $185.7 million in fiscal 2011. Net income for the
year to date was $3.5 million or $.29 per diluted share, including pretax
charges totaling $1.8 million related to severance and post-retirement benefit
costs and a first-quarter pretax gain of $0.6 million from the sale of certain
non-operating assets. For the first nine months of fiscal 2011, the company’s
net loss was $6.3 million or $.52 per diluted share, including second-quarter
restructuring costs and a bad-debt provision related to Borders as well as the
third-quarter impairment charge. Excluding those items for both periods,
adjusted net income for the first nine months of fiscal 2012 was $4.2 million
or $.35 per diluted share, compared to $4.0 million or $.34 per diluted share
for the first nine months of fiscal 2011. Details for these items can be found
in the tables at the end of this release.

Third-quarter results in Courier’s book manufacturing segment were affected by
a shift in ordering patterns in the education market, with textbook publishers
tightening their inventory management in the current economy by reducing print
quantities and timing book production to the start of each semester. As a
result, while education sales picked up as the quarter progressed, revenues
were down from the previous year. In Courier’s specialty book publishing
segment, sales were lower at two of its three businesses, but the continued
streamlining of publishing operations enabled the segment to narrow its losses
from the prior year.

“The sluggish economy continued to be a thorn in the side of many of our
customers, and we felt it too,” said Courier Chairman and Chief Executive
Officer James F. Conway III. “Yet our relationships with key customers are
stronger than ever. While the traditional textbook ordering cycle has been
pushed back closer to the start of the school year, we are working closely
with customers to help them succeed, and we closed the quarter with a healthy
run rate. Meanwhile, our specialty book publishing businesses continued to
work through the effects of the past year’s channel turbulence with a sharper
product focus, helped by an increasing ability to deliver award-winning
content in both print and e-book form.

“Under our previously announced stock repurchase program, we purchased
approximately 445,000 shares in the third quarter, for a total of $4.8
million. Since the start of the fiscal year, our strong cash flow has also
enabled us to bring our debt down by $2.5 million. Given this performance and
our solid financial condition, our Board of Directors has once again approved
a regular quarterly dividend of $.21 per share. We head into our fourth
quarter with every expectation of a strong close to the fiscal year in keeping
with seasonal trends.”

Book manufacturing: adjusting to changes in seasonal textbook cycle

Courier’s book manufacturing segment had third-quarter sales of $52.4 million,
down from $55.0 million for the same period last year. For fiscal 2012 to
date, book manufacturing sales were $163.9 million, up slightly from $163.6
million in fiscal 2011.

As previously mentioned, the results for fiscal 2012 included restructuring
costs for severance and post-retirement benefits, while last year’s
second-quarter results included plant closing costs. Excluding these
restructuring costs, the segment’s third-quarter operating income was $4.2
million, versus $5.1 million a year ago. On a year-to-date basis, operating
income was $11.7 million, up 4% from $11.3 million for the first nine months
of last year. Gross profit for the first nine months of fiscal 2012, again
excluding restructuring costs, was $32.1 million or 19.6% of sales, compared
to $31.9 million or 19.5% of sales last year. The modest year-to-date
improvement in gross profit margins, achieved despite a highly competitive
pricing environment and reduced recycling income, reflects improved operating
efficiencies created by last year’s technology investments and the further
consolidation of the company’s one-color printing operations.

The book manufacturing segment focuses on three markets: education, religious,
and specialty trade. Sales to the education market were down 12% in the
quarter and down 3% for the year to date, with publishers managing inventories
tightly and taking advantage of available capacity. Sales to the religious
market were down 3% from fiscal 2011 in the third quarter; through the first
nine months religious sales were even with last year, but sales to the
company’s largest religious customer were up 2%. Sales to the specialty trade
market were up 1% in the quarter and up 6% for the year to date, reflecting
increased orders at Courier Digital Solutions and a return to more traditional
ordering patterns as the marketplace continues to assimilate the loss of
Borders.

“Our third quarter illustrated the continuing shift in the textbook market’s
seasonal ordering cycle,” said Mr. Conway. “Between the uncertain economy and
the budget crunch in state governments, many textbook publishers have chosen
to reduce print quantities, time their orders closer to the start of the
school year and, where appropriate, order separately for each semester.
Fortunately, our efficient combination of digital and offset facilities has
enabled us to respond effectively, and we are ready for the strong fourth
quarter we foresee.

“While sales to the religious market were down modestly, we have often
experienced sizable quarter-to-quarter fluctuations in that market, a
situation compounded by this third quarter’s unusually early close on June 23.
On a year-to-date basis, we remain even with last year in the religious market
as a whole, and sales to our largest customer are up. Our customer
relationships remain excellent in both the religious and education markets,
and we look forward to long-term growth in both.”

Publishing: operating efficiencies help trim losses

Courier’s specialty publishing segment includes three businesses: Dover
Publications, a niche publisher with thousands of titles in dozens of
specialty trade markets; Creative Homeowner, which publishes books on home
design, decorating, landscaping and gardening; and Research & Education
Association (REA), a publisher of test preparation books and study guides.

Third-quarter revenues for the segment were $9.1 million, down 8% from $9.9
million in last year’s third quarter. The segment’s operating loss for the
quarter was $975,000, compared to a loss of $1.2 million last year. For fiscal
2012 to date, segment sales were $28.2 million, versus $30.8 million for the
first nine months of last year. The segment’s operating loss through nine
months was $3.9 million, unchanged from last year.

Of Courier’s three publishing businesses, REA alone was profitable during the
quarter, with sales up 2% from a year earlier despite the absence of Borders,
which had been one of REA’s largest customers prior to the chain’s closing. At
Dover, sales were off 2% but careful attention to costs enabled the business
to trim its operating loss by more than 20%. Creative Homeowner, with sales
down 31% in a challenging retail environment, lost $227,000.

Successes during the quarter included the beta-site launch of
DoverPictura.com, Dover’s new online image store, the availability of a
growing range of e-book titles on popular platforms and a very strong spring
for REA’s Crash Course series and other AP test preparation titles.

“Our publishing segment continued to deal with channel challenges and a
sluggish consumer economy,” said Mr. Conway. “Faced with this environment, we
continued to take out costs wherever we could without compromising our ability
to deliver top-drawer content such as Creative Homeowner’s Backyard
Homesteading, which recently won a Gold Medal in the 2012 Independent
Publisher Book Awards.

“At the same time, we continued to move forward on the digital front.
DoverPictura beta-site customers can now browse through more than a hundred
thousand compelling images, and readers everywhere can access a growing array
of Dover, REA and Creative Homeowner titles in e-book form through our
relationships with Apple, Amazon and Google, and our new agreement with Barnes
& Noble.”

Outlook

“We enter our busiest part of the year well equipped to take advantage of our
opportunities within today’s challenging economic environment,” said Mr.
Conway. “We continue to expand the range of services we provide for our
largest customers, and we continue to attract new customers with our
state-of-the-art digital inkjet capabilities. Our four-color digital and
offset plants are running more efficiently than ever, thanks to years of
steady investment in technology and a highly professional, customer-focused
workforce. And our publishing businesses are adapting to a changing retail
environment with exciting strategies coupled to the core content strengths our
readers expect.

“We expect full-year capital expenditures to be between $8 million and $10
million, versus $16 million in fiscal 2011. We also continue to benefit from
the consolidation of one-color printing capacity and other cost-reduction
measures taken over the last year in both of our business segments. And we
look forward to a productive summer focused on meeting textbook publishers’
needs for standard and customized versions in a shortened timeframe.

“In line with our past practice, today’s guidance, including comparisons to
prior performance, excludes impairment and restructuring charges. It also
excludes this year’s non-recurring items related to severance and
post-retirement benefit costs and the gain from the sale of non-operating
assets, as well as the Borders receivable write-off in last year’s second
quarter.

“We expect fourth-quarter sales of between $80 million and $85 million,
leading to total fiscal 2012 sales of between $264 million and $269 million,
an increase over fiscal 2011 of between 2% and 4% (which includes the benefit
of a 53-week year in fiscal 2012). We expect fourth-quarter earnings per
diluted share of between $.40 and $.55, versus $.55 in last year’s fourth
quarter. And for fiscal 2012 as a whole, we expect earnings per diluted share
of between $.75 and $.90, which compares with our fiscal 2011 earnings of $.89
per diluted share.

“In addition to measuring our performance by generally accepted accounting
principles, we also track several non-GAAP measures including EBITDA (earnings
before interest, taxes, depreciation and amortization) as an additional
indicator of the company’s operating cash flow performance. This measure
should be considered in addition to, not a substitute for or superior to,
measures of financial performance prepared in accordance with GAAP. In fiscal
2012, we expect EBITDA to be between $39 million and $42 million, compared to
$39 million in fiscal 2011, excluding last year’s impairment and restructuring
charges and this year’s severance and post-retirement benefit costs and the
gain from the sale of non-operating assets.

“Factors not incorporated into our guidance include the possibility of future
impairment or restructuring charges.”

About Courier Corporation

Courier Corporation prints, publishes and sells books. Headquartered in North
Chelmsford, Massachusetts, Courier has two operating segments, full-service
book manufacturing and specialty book publishing. For more information, visit
www.courier.com.

This news release includes forward-looking statements. Statements that
describe future expectations, plans or strategies are considered
“forward-looking statements” as that term is defined under the Private
Securities Litigation Reform Act of 1995 and releases issued by the Securities
and Exchange Commission. The words “believe,” “expect,” “anticipate,”
“intend,” “estimate” and other expressions which are predictions of or
indicate future events and trends and which do not relate to historical
matters identify forward-looking statements. Such statements are subject to
risks and uncertainties that 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, including seasonal changes in customer orders and shifting orders to
lower cost regions, changes in market growth rates, changes in raw material
costs and availability, pricing actions by competitors and other competitive
pressures in the markets in which the Company competes, consolidation among
customers and competitors, insolvency of key customers or vendors, changes in
the Company’s labor relations, success in the execution of acquisitions and
the performance and integration of acquired businesses including carrying
value of intangible assets, restructuring and impairment charges required
under generally accepted accounting principles, changes in operating expenses
including medical and energy costs, changes in technology including migration
from paper-based books to digital, difficulties in the start up of new
equipment or information technology systems, changes in copyright laws,
changes in consumer product safety regulations, changes in environmental
regulations, changes in tax regulations, changes in the Company’s effective
income tax rate and general changes in economic conditions, including currency
fluctuations, changes in interest rates, changes in consumer confidence,
changes in the housing market, and tightness in the credit markets. 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.

COURIER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
                                                              
                   QUARTER ENDED                     NINE MONTHS ENDED
                   June 23,         June 25,         June 23,      June 25,
                     2012           2011          2012        2011    
                                                                   
Net sales          $  58,896        $  61,894        $ 184,220     $ 185,708
Cost of sales        45,864         47,174        143,392     150,509 
                                                                   
Gross profit          13,032           14,720          40,828        35,199
                                                                   
Selling and
administrative        10,285           11,242          35,227        36,353
expenses
Impairment           -              8,608         -           8,608   
charge (1)
                                                                   
Operating             2,747            (5,130   )      5,601         (9,762  )
income (loss)
                                                                   
Interest              246              194             699           645
expense, net
Other income         -              -             (587    )    -       
                                                                   
Income (loss)         2,501            (5,324   )      5,489         (10,407 )
before taxes
                                                                   
Income tax
provision            937            (2,195   )     2,031       (4,127  )
(benefit)
                                                                   
Net income         $  1,564          ($3,129  )    $ 3,458       ($6,280 )
(loss)
                                                                   
Net income
(loss) per         $  0.13           ($0.26   )    $ 0.29        ($0.52  )
diluted share
                                                                   
Cash dividends
declared per       $  0.21         $  0.21         $ 0.63       $ 0.63    
share
                                                                   
Wtd. average
diluted shares        12,026           11,996          12,093        11,978
outstanding
                                                                   
SEGMENT
INFORMATION:
                                                                   
Net sales:
Book               $  52,413        $  54,997        $ 163,863     $ 163,627
Manufacturing
Specialty             9,127            9,872           28,214        30,760
Publishing
Elimination of
intersegment         (2,644  )       (2,975   )     (7,857  )    (8,679  )
sales
Total              $  58,896        $  61,894        $ 184,220     $ 185,708
                                                                   
Operating
income (loss):
Book               $  3,982         $  5,050         $ 10,537      $ 3,799
Manufacturing
Specialty             (975    )        (1,154   )      (3,938  )     (3,949  )
Publishing
Impairment            -                (8,608   )      -             (8,608  )
charge (1)
Stock based           (331    )        (366     )      (1,098  )     (1,072  )
compensation
Intersegment         71             (52      )     100         68      
profit
Total              $  2,747            ($5,130  )    $ 5,601         ($9,762 )
                                                                   
(1) In the third quarter of the prior year, the Company recorded an $8.6
million non-cash, pretax impairment charge related to REA which on an
after-tax basis was $5.2 million, or $0.43 per diluted share.

COURIER CORPORATION
SEGMENT RESULTS OF OPERATIONS (Unaudited)
(In thousands)
                                                             
                                                                   
BOOK MANUFACTURING        QUARTER ENDED              NINE MONTHS ENDED
SEGMENT
                          June 23,     June 25,      June 23,      June 25,
                           2012       2011        2012        2011    
                                                                   
   Net sales              $ 52,413     $ 54,997      $ 163,863     $ 163,627
   Cost of sales           42,193     43,445      132,008     138,810 
                                                                   
   Gross profit             10,220       11,552        31,855        24,817
                                                                   
   Selling and
   administrative          6,238      6,502       21,318      21,018  
   expenses
                                                                   
   Operating income       $ 3,982     $ 5,050      $ 10,537     $ 3,799   
                                                                   
                                                                   
                                                                   
                                                                   
                                                                   
                                                                   
SPECIALTY PUBLISHING      QUARTER ENDED              NINE MONTHS ENDED
SEGMENT
                          June 23,     June 25,      June 23,      June 25,
                           2012       2011        2012        2011    
                                                                   
   Net sales              $ 9,127      $ 9,872       $ 28,214      $ 30,760
   Cost of sales           6,387      6,653       19,340      20,446  
                                                                   
   Gross profit             2,740        3,219         8,874         10,314
                                                                   
   Selling and
   administrative          3,715      4,373       12,812      14,263  
   expenses
                                                                   
   Operating loss          ($975  )    ($1,154 )    ($3,938 )    ($3,949 )

COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(In thousands)
                                                        
                                                             
                                                 June 23,    September 24,
ASSETS                                           2012        2011
                                                             
Current assets:
  Cash and cash equivalents                      $ 56        $   104
  Investments                                      1,310         1,141
  Accounts receivable                              30,765        35,320
  Inventories                                      39,098        39,353
  Deferred income taxes                            4,338         4,431
  Other current assets                            2,735        1,443
    Total current assets                           78,302        81,792
                                                             
Property, plant and equipment, net                 90,116        100,523
Goodwill and other intangibles                     17,987        18,327
Prepublication costs                               7,245         7,334
Deferred income taxes                              2,882         3,772
Other assets                                      1,273        1,278
                                                             
    Total assets                                 $ 197,805   $   213,026
                                                             
                                                             
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                             
Current liabilities:
  Current maturities of long-term debt           $ 1,855     $   1,804
  Accounts payable                                 10,094        12,061
  Accrued taxes                                    745           2,185
  Other current liabilities                       15,603       15,433
    Total current liabilities                      28,297        31,483
                                                             
Long-term debt                                     17,188        19,718
Other liabilities                                 6,247        7,502
                                                             
    Total liabilities                             51,732       58,703
                                                             
    Total stockholders' equity                    146,073      154,323
                                                             
    Total liabilities and stockholders' equity   $ 197,805   $   213,026

COURIER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
                                                      
                                  For the Nine Months Ended
                                  June 23,                  June 25,
                                      2012                    2011      
Operating Activities:
Net income (loss)                 $    3,458                     ($6,280   )
Adjustments to reconcile net
income (loss) to
cash provided from operating
activities:
Depreciation and                       18,022                    17,437
amortization
Impairment charge                      -                         8,608
Stock-based compensation               1,098                     1,072
Deferred income taxes                  983                       (3,974    )
Gain on disposition of                 (587       )              -
assets
Changes in other working               (79        )              (3,840    )
capital
Other long-term, net                  (1,003     )             3,515     
                                                            
Cash provided from operating          21,892                  16,538    
activities
                                                            
Investment Activities:
Capital expenditures                   (4,065     )              (11,670   )
Prepublication costs                   (3,171     )              (3,218    )
Proceeds on disposition of             587                       -
assets
Short-term investments                (169       )             (176      )
                                                            
Cash used for investment              (6,818     )             (15,064   )
activities
                                                            
Financing Activities:
Long-term debt borrowings              (2,479     )              5,858
(repayments), net
Cash dividends                         (7,693     )              (7,610    )
Proceeds from stock plans              167                       219
Stock repurchases                      (4,842     )              -
Other                                 (275       )             -         
                                                            
Cash used for financing               (15,122    )             (1,533    )
activities
                                                            
Decrease in cash and cash             ($48       )             ($59      )
equivalents
                                                            
                                                            
In addition to measuring our performance by generally accepted accounting
principles, we also track several non-GAAP measures including EBITDA (earnings
before interest, taxes, depreciation and amortization) as additional
indicators of the company's operating cash flow performance. These measures
should be considered in addition to, not a substitute for or superior to,
measures of financial performance prepared in accordance with GAAP.
                                                            
Non-GAAP reconciliation -
EBITDA:
Net income (loss)                 $    3,458                     ($6,280   )
Income tax provision                   2,031                     (4,127    )
(benefit)
Interest expense, net                  699                       645
Depreciation and                       18,022                    17,437
amortization
Impairment charge                      -                         8,608
Severance-related                      1,814                     7,272
expense/restructuring
Other income                          (587       )             -         
EBITDA                            $    25,437              $    23,555    

COURIER CORPORATION
OTHER RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (Unaudited)
(In thousands, except per share amounts)
                                                                                                                  
                                                                                                                            
                          Quarter Ended June 23, 2012                            Nine Months Ended June 23, 2012
                          Income        Income                      Net Income   Income         Income                      Net Income
                          Before        Tax           Net           per          Before         Tax           Net           per
                                                                    Diluted                                                 Diluted
                          Taxes         Provision     Income       Share        Taxes          Provision     Income       Share
                                                                                                                            
GAAP basis measures       $ 2,501       $ 937         $ 1,564       $ 0.13       $ 5,489        $ 2,031       $ 3,458       $ 0.29
                                                                                                                            
      Severance and
      post-
      retirement    (1)     235           87            148           0.01         1,814          671           1,143         0.09
      benefits
      Other income  (2)    -           -           -           -          (587     )    (217    )    (370    )    (0.03  )
                                                                                                                            
Non-GAAP measures         $ 2,736      $ 1,024      $ 1,712      $ 0.14      $ 6,716       $ 2,485      $ 4,231      $ 0.35   
                                                                                                                            
                                                                                                                            
                          Quarter Ended June 25, 2011                            Nine Months Ended June 25, 2011
                          Income        Income                      Net Income   Income         Income                      Net Income
                          (Loss)        Tax           Net           (Loss)       (Loss)         Tax           Net           (Loss)
                          Before        Provision     Income        per          Before         Provision     Income        per
                                                                    Diluted                                                 Diluted
                          Taxes         (Benefit)     (Loss)       Share        Taxes          (Benefit)     (Loss)       Share
                                                                                                                            
GAAP basis measures         ($5,324 )     ($2,195 )     ($3,129 )     ($0.26 )     ($10,407 )     ($4,127 )     ($6,280 )     ($0.52 )
                                                                                                                            
      Impairment    (3)     8,608         3,443         5,165         0.43         8,608          3,443         5,165         0.43
      charge
      Restructuring (4)     -             -             -             -            7,472          2,787         4,685         0.39
      costs
      Bad-debt      (5)    -           -           -           -          750          285         465         0.04   
      provision
                                                                                                                            
Non-GAAP measures         $ 3,284      $ 1,248      $ 2,036      $ 0.17      $ 6,423       $ 2,388      $ 4,035      $ 0.34   
                                                                                                                            
                                                                                                                            
                                                                                                                            
      During the first quarter of this fiscal year, the Company's Chief Operating Officer announced his retirement. In addition,
(1)   during the first nine months cost reduction measures were taken in the Company's operating segments. Related severance and
      post-retirement benefit expenses were $235,000 in the third quarter and $1.8 million for the first nine months.
                                                                                                                            
(2)   In the first quarter of fiscal 2012, the Company recorded a $0.6 million gain associated with the sale of its interests in
      non-operating real property relating to cell towers.
                                                                                                                            
(3)   In the third quarter of fiscal 2011, the Company recorded an $8.6 million non-cash, pre-tax impairment charge related to REA,
      representing all of REA's goodwill as well as $200,000 related to the write-down of under-performing titles.
                                                                                                                            
      In the second quarter of fiscal 2011, the Company closed its book manufacturing plant in Stoughton, Massachusetts, due to the
(4)   impact of technology and competitive pressures affecting the one-color paperback books in which the plant specialized.
      Restructuring charges included $4.4 million related to severance and pension withdrawal liabilities and $3.1 million for lease
      termination and other facility closure costs.
                                                                                                                            
(5)   In the second quarter of fiscal 2011, the Company recorded a $750,000 bad-debt provision related to Borders Group, Inc.

COURIER CORPORATION
OTHER RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (Unaudited)
(In thousands, except per share amounts)
                                                                                             
                                                                                                      
BOOK MANUFACTURING     Quarter Ended June 23, 2012                     Nine Months Ended June 23, 2012
SEGMENT
                       GAAP Basis     Non-Recurring   Non-GAAP         GAAP Basis     Non-Recurring   Non-GAAP
                       Measures       Items (1)       Measures         Measures       Items (1)       Measures
                                                                                                      
      Net sales        $ 52,413                       $ 52,413         $ 163,863                      $ 163,863
      Cost of           42,193         (212  )      41,981         132,008       (212    )     131,796 
      sales
                                                                                                      
      Gross              10,220           212           10,432           31,855          212            32,067
      profit
                                                                                                      
      Selling and
      administrative    6,238          (23   )      6,215          21,318        (961    )     20,357  
      expenses
                                                                                                      
      Operating        $ 3,982       $   235        $ 4,217         $ 10,537      $  1,173       $ 11,710  
      income
                                                                                                      
                                                                                                      
                       Quarter Ended June 25, 2011                     Nine Months Ended June 25, 2011
                       GAAP Basis     Non-Recurring   Non-GAAP         GAAP Basis     Non-Recurring   Non-GAAP
                       Measures       Items (2)       Measures         Measures       Items (2)       Measures
                                                                                                      
      Net sales        $ 54,997                       $ 54,997         $ 163,627                      $ 163,627
      Cost of           43,445         -           43,445         138,810       (7,061  )     131,749 
      sales
                                                                                                      
      Gross              11,552           -             11,552           24,817          7,061          31,878
      profit
                                                                                                      
      Selling and
      administrative    6,502          -           6,502          21,018        (411    )     20,607  
      expenses
                                                                                                      
      Operating        $ 5,050       $   0          $ 5,050         $ 3,799       $  7,472       $ 11,271  
      income
                                                                                                      
                                                                                                      
                                                                                                      
                                                                                                      
SPECIALTY PUBLISHING   Quarter Ended June 23, 2012                     Nine Months Ended June 23, 2012
SEGMENT
                       GAAP Basis     Non-Recurring   Non-GAAP         GAAP Basis     Non-Recurring   Non-GAAP
                       Measures       Items (1)       Measures         Measures       Items (1)       Measures
                                                                                                      
      Net sales        $ 9,127                        $ 9,127          $ 28,214                       $ 28,214
      Cost of           6,387                       6,387          19,340                      19,340  
      sales
                                                                                                      
      Gross              2,740            -             2,740            8,874           -              8,874
      profit
                                                                                                      
      Selling and
      administrative    3,715          -           3,715          12,812        (641    )     12,171  
      expenses
                                                                                                      
      Operating         ($975   )    $   0           ($975   )       ($3,938 )    $  641          ($3,297 )
      loss
                                                                                                      
                                                                                                      
                       Quarter Ended June 25, 2011                     Nine Months Ended June 25, 2011
                       GAAP Basis     Non-Recurring   Non-GAAP         GAAP Basis     Non-Recurring   Non-GAAP
                       Measures       Items (3)       Measures         Measures       Items (3)       Measures
                                                                                                      
      Net sales        $ 9,872                        $ 9,872          $ 30,760                       $ 30,760
      Cost of           6,653                       6,653          20,446                      20,446  
      sales
                                                                                                      
      Gross              3,219            -             3,219            10,314          -              10,314
      profit
                                                                                                      
      Selling and
      administrative    4,373          -           4,373          14,263        (750    )     13,513  
      expenses
                                                                                                      
      Operating         ($1,154 )    $   0           ($1,154 )       ($3,949 )    $  750          ($3,199 )
      loss
                                                                                                      
                                                                                                      
      During the first quarter of this fiscal year, the Company's Chief Operating Officer announced his
(1)   retirement. In addition, during the first nine months cost reduction measures were taken in the Company's
      operating segments. Related severance and post-retirement benefit expenses were $235,000 in the third
      quarter and $1.8 million for the first nine months.
                                                                                                      
      In the second quarter of fiscal 2011, the Company closed its book manufacturing plant in Stoughton,
(2)   Massachusetts, due to the impact of technology and competitive pressures affecting the one-color paperback
      books in which the plant specialized. Restructuring charges included $4.4 million related to severance and
      pension withdrawal liabilities and $3.1 million for lease termination and other facility closure costs.
                                                                                                      
(3)   In the second quarter of fiscal 2011, the Company recorded a $750,000 bad-debt provision related to Borders
      Group, Inc.

Contact:

Courier Corporation
James F. Conway III, 978-251-6000
Chairman, President and
Chief Executive Officer
or
Peter M. Folger, 978-251-6000
Senior Vice President and
Chief Financial Officer
www.courier.com
 
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