Digital Sales Growth Drives Courier Results

  Digital Sales Growth Drives Courier Results

            Strong Gains in Customized Textbooks, Religious Sales

Business Wire

NORTH CHELMSFORD, Mass. -- November 20, 2012

Courier Corporation (Nasdaq: CRRC), one of America’s leading innovators in
book manufacturing, publishing and content management, today announced
fourth-quarter and full-year results for its fiscal year ended September 29,
2012.

Courier’s 2012 fiscal year had 53 weeks, with the extra week included in the
fourth quarter. Fourth-quarter revenues in fiscal 2012 were $77.1 million, up
5% from $73.7 million in last year’s fourth quarter. Net income for the
quarter was $5.7 million or $.50 per diluted share, including restructuring
costs of $1.5 million or $.08 per diluted share primarily related to the
writedown of an unutilized one-color press. Excluding those costs,
fourth-quarter net income was $6.6 million or $.58 per diluted share. In
fiscal 2011, fourth-quarter net income was $6.4 million or $.53 per diluted
share including restructuring costs, and $6.5 million or $.54 per diluted
share excluding those costs.

For fiscal 2012, Courier sales were $261.3 million, up slightly from $259.4
million in fiscal 2011. Net income was $9.2 million or $.77 per diluted share,
including restructuring costs of $3.3 million or $.17 per diluted share as
well as a first-quarter pretax gain of $0.6 million from the sale of certain
non-operating assets. Excluding those items, net income for fiscal 2012 would
have been $10.9 million or $.91 per diluted share. In fiscal 2011, Courier’s
net income was $134,000 or $.01 per diluted share including restructuring
costs, a bad-debt provision related to Borders Group Inc. and an impairment
charge related to Research & Education Association in the wake of the Borders
bankruptcy. Excluding those charges, net income for fiscal 2011 would have
been $10.7 million or $.89 per diluted share. Details of the restructuring
costs, impairment charges and other items for both years can be found in the
tables at the end of this release.

“After another challenging year in a sluggish economy, we were pleased to have
a strong finish,” said Courier Chairman and Chief Executive Officer James F.
Conway III. “We were especially pleased to reap the growing benefits of our
steady investments in four-color digital inkjet technology, innovative content
management solutions for the education and trade markets, and global
distribution capabilities on behalf of our largest religious customer.

“It was a year of strong growth at Courier Digital Solutions, where sales
increased 48% in response to escalating demand for college textbooks
customized to individual course requirements and schedules. But it was also a
year of growth in trade book sales as publishers increasingly utilized digital
printing in combination with offset to capture the full life-cycle potential
of every title. Separate from this trend, we also saw an increase in
four-color offset sales from new and existing customers.

“Our publishing segment continues to work its way through the difficult
economy and the channel challenges of the post-Borders retail environment.
However, by continuing to take out costs we were able to trim the segment’s
losses for both the quarter and the year as a whole. Meanwhile, all three of
our publishing businesses strengthened their own digital offerings. We head
into the holiday season with more than 3,000 titles available in e-book form
on all the major platforms.

“Throughout the year, we continued to distinguish ourselves competitively by
our strong customer focus, efficient workflow and superior product quality.
Equally important, we did so while maintaining the robust cash flow we have
enjoyed for the last several years. As a result, even after a $10-million
stock buyback, $10 million in capital expenditures and our customary $10
million in dividends paid, we were able to reduce our debt by $6 million from
a year ago. I am pleased to report that once again, Courier’s Board of
Directors has declared a dividend of $.21 per share, the same as last quarter.
The Board has also authorized another $10-million stock repurchase program and
reaffirmed its commitment to the dividend based on its confidence in the
company’s balance sheet, cash flow and business prospects.”

Book manufacturing: strong growth in religious and trade markets

Courier’s book manufacturing segment had fourth-quarter sales of $69.2
million, up 4% from $66.6 million last year. Excluding restructuring costs,
fourth-quarter operating income was $11.7 million in fiscal 2012, up from
$11.2 million in fiscal 2011.

For the full year, book manufacturing sales were $233.0 million, up 1% from
$230.2 million in fiscal 2011. The segment’s full-year operating income,
excluding restructuring costs, was $23.4 million, up 4% from $22.5 million in
fiscal 2011.

The segment’s gross profit, excluding restructuring costs, was $19.6 million
or 28.4% of sales in the fourth quarter, versus $18.0 million or 27.0% of
sales a year ago. Gross profit for fiscal 2012 as a whole was $51.7 million or
22.2% of sales, excluding restructuring costs, versus $49.9 million or 21.7%
of sales last year. Despite intense price competition and reduced recycling
income, the segment’s margins improved because of a favorable sales mix and
continued gains in operating efficiency made possible by recent technology
investments and the consolidation of one-color capacity.

The book manufacturing segment focuses on three markets: education, religion,
and specialty trade. Sales to the education market were $31 million in the
fourth quarter, comparable to a year earlier. For the year, education sales
were $98 million, down 3% from fiscal 2011, due to shorter run lengths in
certain college textbooks and continued weakness in elementary and high school
sales. Sales to the religious market were up 6% to $19 million in the quarter,
and up 2% to $68 million for the full year; however, sales to Courier’s
largest religious customer were up 13% in the quarter and up 5% for the year.
Sales to the specialty trade market were up 25% to $17 million in the quarter,
and up 11% to $60 million for the full year, reflecting increased four-color
offset sales as well as growing demand for digital.

Revenues rose sharply at Courier Digital Solutions, reflecting growth in
demand for customized versions of college textbooks as well as increased sales
of trade books. With its current digital facilities running close to capacity,
in October Courier announced plans to add both a new HP digital cover press in
Massachusetts and a complete new digital production facility to complement its
four-color offset plant in Kendallville, Indiana.

“In large measure, our book manufacturing business returned to seasonal form
in the fourth quarter,” said Mr. Conway. “The difference is that the college
textbook market continues to evolve toward a shorter peak season, with more
customized editions prepared just ahead of the start of classes. However, we
remain in excellent position to capture the digital growth opportunities this
trend continues to create. With our new digital production capability at
Kendallville, customers will soon be able to integrate top-quality digital and
offset print strategies from a single location for complete life-cycle
management of every title.

“It was also a quarter in which religious sales returned to form, with a
double-digit increase at our largest customer more than making up for a couple
of short quarters. Over the year, religious sales grew in keeping with
longer-term trends associated with our ongoing partnership with this customer
to bring Scriptures to people in more than 100 countries.

“Finally, it was a quarter of continued growth in trade sales, as we landed
several new accounts while also achieving higher volume with a number of
long-time customers. In a tough competitive environment, publishers appreciate
our combination of quality, efficiency and responsiveness across the whole
spectrum of one- to four-color work, both offset and digital. And the
productivity of our people and workplaces, always high, continues to improve,
helped further by our consolidation of one-color print capacity earlier in the
year.”

Publishing segment trims loss, increases online offerings

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

Fourth-quarter revenues for the segment were $10.1 million, comparable to last
year’s fourth quarter, with 9% sales growth at Dover offset by weak results at
REA and Creative Homeowner. Despite its sales decline, REA remained
profitable, but Dover and Creative Homeowner reported operating losses.
Overall, the segment’s fourth-quarter operating loss was $426,000, versus
$872,000 in fiscal 2011.

For the year as a whole, publishing sales were $38.4 million, down 6% from
$40.8 million in fiscal 2011, with sales up modestly at Dover but down at the
other two businesses. Excluding restructuring costs in both years, the
segment’s operating loss for fiscal 2012 was $3.7 million, versus a loss of
$4.1 million in fiscal 2011. The reduction in the loss was attributable to the
effects of cost-reduction measures taken throughout the year.

“A year after the Borders bankruptcy, our publishing businesses have taken
significant steps to regain their footing,” said Mr. Conway. “Part of the
solution is to provide content which consumers can access directly online, and
we have delivered that: Dover with its DoverPictura.com online image library;
REA with its All Access program, allowing students to access test prep
materials anytime via mobile devices; and Creative Homeowner with its
UltimatePlans.com downloadable home plan business.

“A larger part of the solution, of course, is sales through online retailers,
where we saw double-digit growth this year in the segment. But while REA
shared in the growth, it continued to suffer from the absence of Borders’
bricks-and-mortar network, where REA products had benefited from prominent
placement in store displays. Developing other channels remains a key agenda
item for REA in the coming year.

“Finally, the third piece is our entry into e-books. After considerable
investment, we now have thousands of titles available to consumers across all
four leading e-book platforms of Amazon, Apple, Barnes & Noble and Google. The
first fruits of this effort started to materialize during the fourth quarter.”

Outlook

“Once again we have come through a year of economic uncertainty with good
prospects and solid finances,” said Mr. Conway. “With our debt down and our
organization more efficient than ever, we have been able to invest in growth
opportunities we could not have foreseen just a few years ago. Bolstered by
strong customer relationships in key long-term markets, we expect to continue
to outpace the overall education market with our integrated solutions for
customized textbook production, seize additional short-run opportunities among
trade publishers, and continue the steady expansion of our responsibilities on
behalf of our largest religious customer. And as a publisher, while we remain
cautious about consumer spending, we expect to begin to benefit from our
investments in e-books and other digital content to complement our print
offerings.

“We expect capital expenditures, which were $10 million in fiscal 2012, to
increase to between $17 million and $19 million in fiscal 2013, with
approximately $13 million dedicated to expanding our digital capabilities.

“As in the past, we expect our performance in fiscal 2013 to follow a seasonal
pattern, with the larger portion of our earnings coming in the second half.
And we expect to have the additional digital capacity in Kendallville
available in time for the busiest part of the year.

“In line with our past practice, today’s guidance, including comparisons to
prior performance, excludes impairment and restructuring charges. Overall, we
expect fiscal 2013 sales of between $269 million and $283 million, an increase
of between 3% and 8% over the 53-week period of fiscal 2012. We also expect
earnings per diluted share of between $.75 and $1.05, which compares with our
fiscal 2012 earnings of $.91 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
2013, we expect EBITDA to be between $39 million and $45 million, compared to
$42 million in fiscal 2012, excluding restructuring charges.

Factors not incorporated into this guidance include the possibility of future
impairment or restructuring charges.

About Courier Corporation

Courier Corporation is America’s third largest book manufacturer and a leader
in content management and customization in new and traditional media. It also
publishes books under three brands offering award-winning content and more
than 10,000 titles. Founded in 1824, Courier is headquartered in North
Chelmsford, Massachusetts. For more information, visit www.courier.com.

This news release includes forward-looking statements, including statements
relating to the continuation of the Company’s dividend for fiscal year 2013,
expansion into e-books and digital content offerings, and the Company’s
financial expectations for fiscal year 2013, including sales, EBITDA, earnings
per share and capital expenditures. 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, changes in
obligations of multiemployer pension plans, 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                     YEAR ENDED
                   September 29,    September 24,    September 29, September
                                                                   24,
                   2012 (1)         2011             2012 (1)      2011
                                                                   
Net sales          $  77,100        $  73,667        $  261,320    $ 259,375
Cost of sales        55,721         52,832         199,113    203,341 
                                                                   
Gross profit          21,379           20,835           62,207       56,034
                                                                   
Selling and
administrative        11,910           11,094           47,137       47,447
expenses
Impairment           -              -              -          8,608   
charge (2)
                                                                   
Operating             9,469            9,741            15,070       (21     )
income (loss)
                                                                   
Interest              196              276              895          921
expense, net
Other income         -              -              (587    )   -       
                                                                   
Income (loss)         9,273            9,465            14,762       (942    )
before taxes
                                                                   
Income tax
provision            3,564          3,051          5,595      (1,076  )
(benefit)
                                                                   
Net income         $  5,709        $  6,414        $  9,167     $ 134     
                                                                   
Net income per     $  0.50         $  0.53         $  0.77      $ 0.01    
diluted share
                                                                   
Cash dividends
declared per       $  0.21         $  0.21         $  0.84      $ 0.84    
share
                                                                   
Wtd. average
diluted shares        11,446           12,040           11,928       12,022
outstanding
                                                                   
                                                                   
SEGMENT
INFORMATION:
Net sales:
Book               $  69,177        $  66,602        $  233,040    $ 230,229
Manufacturing
Specialty             10,141           10,069           38,355       40,829
Publishing
Elimination of
intersegment         (2,218  )       (3,004  )       (10,075 )   (11,683 )
sales
Total              $  77,100        $  73,667        $  261,320    $ 259,375
                                                                   
Operating
income (loss):
Book               $  10,176        $  11,023        $  20,713     $ 14,822
Manufacturing
Specialty             (426    )        (872    )        (4,364  )    (4,821  )
Publishing
Impairment            -                -                -            (8,608  )
charge (2)
Stock based           (331    )        (368    )        (1,429  )    (1,440  )
compensation
Intersegment         50             (42     )       150        26      
profit
Total              $  9,469         $  9,741         $  15,070       ($21    )
                                                                   
(1) Fiscal year 2012 was a 53-week period; the additional week was included in
the fourth quarter.
                                                                   
(2) In 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 $5.0 million,
or $0.42 per diluted share.

                                                              
COURIER CORPORATION
SEGMENT RESULTS OF OPERATIONS (Unaudited)
(In thousands)
                                                                   
                                                                   
BOOK
MANUFACTURING      QUARTER ENDED                   YEAR ENDED
SEGMENT
                   September 29,   September 24,   September 29,   September
                                                                   24,
                   2012 (1)        2011            2012 (1)        2011
                                                                   
Net sales          $  69,177       $  66,602       $  233,040      $ 230,229
Cost of sales        51,071        48,833        183,079      187,643 
                                                                   
Gross profit          18,106          17,769          49,961         42,586
                                                                   
Selling and
administrative       7,930         6,746         29,248       27,764  
expenses
                                                                   
Operating income   $  10,176      $  11,023      $  20,713      $ 14,822  
                                                                   
                                                                   
                                                                   
                                                                   
                                                                   
                                                                   
SPECIALTY
PUBLISHING         QUARTER ENDED                   YEAR ENDED
SEGMENT
                   September 29,   September 24,   September 29,   September
                                                                   24,
                   2012 (1)        2011            2012 (1)        2011
                                                                   
Net sales          $  10,141       $  10,069       $  38,355       $ 40,829
Cost of sales        6,919         6,960         26,259       27,406  
                                                                   
Gross profit          3,222           3,109           12,096         13,423
                                                                   
Selling and
administrative       3,648         3,981         16,460       18,244  
expenses
                                                                   
Operating loss       ($426   )      ($872   )      ($4,364  )    ($4,821 )
                                                                   
                                                                   
                                                                   
(1) Fiscal year 2012 was a 53-week period; the additional week was included in
the fourth quarter.

                                                            
COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(In thousands)
                                                                 
                                                                 
                                                 September 29,   September 24,
ASSETS                                           2012            2011
                                                                 
Current assets:
  Cash and cash equivalents                      $   64          $   104
  Investments                                        765             1,141
  Accounts receivable                                35,152          35,320
  Inventories                                        36,364          39,353
  Deferred income taxes                              4,495           4,431
  Other current assets                              950            1,443
    Total current assets                             77,790          81,792
                                                                 
Property, plant and equipment, net                   89,952          100,523
Goodwill and other intangibles                       17,880          18,327
Prepublication costs                                 7,135           7,334
Deferred income taxes                                3,229           3,772
Other assets                                        1,374          1,278
                                                                 
    Total assets                                 $   197,360     $   213,026
                                                                 
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                 
Current liabilities:
  Current maturities of long-term debt           $   1,872       $   1,804
  Accounts payable                                   11,364          12,061
  Accrued taxes                                      3,857           2,185
  Other current liabilities                         15,777         15,433
    Total current liabilities                        32,870          31,483
                                                                 
Long-term debt                                       13,696          19,718
Other liabilities                                   6,283          7,502
                                                                 
    Total liabilities                               52,849         58,703
                                                                 
    Total stockholders' equity                      144,511        154,323
                                                                 
    Total liabilities and stockholders' equity   $   197,360     $   213,026

                        
COURIER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
                                                          
                              For the Years Ended
                              September 29,               September 24,
                                   2012                     2011       
Operating Activities:
Net income                    $     9,167                 $    134
Adjustments to
reconcile net income to
cash provided from
operating activities:
Depreciation and                    25,060                     23,162
amortization
Impairment charge                   -                          8,608
Stock-based                         1,429                      1,440
compensation
Deferred income taxes               479                        (5,479     )
Gain on disposition of              (587        )              -
assets
Changes in other                    5,244                      973
working capital
Other long-term, net               (1,809      )             3,475      
                                                          
Cash provided from                 38,983                   32,313     
operating activities
                                                          
Investment Activities:
Capital expenditures                (9,934      )              (15,666    )
Prepublication costs                (4,069      )              (4,345     )
Proceeds on disposition             587                        -
of assets
Short-term investments             376                      (51        )
                                                          
Cash used for                      (13,040     )             (20,062    )
investment activities
                                                          
Financing Activities:
Long-term debt                      (5,954      )              (2,176     )
repayments, net
Cash dividends                      (10,098     )              (10,151    )
Stock repurchases                   (10,000     )              -
Proceeds from stock                 344                        413
plans
Other                              (275        )             (340       )
                                                          
Cash used for financing            (25,983     )             (12,254    )
activities
                                                          
Decrease in cash and               ($40        )             ($3        )
cash 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                    $     9,167                 $    134
Income tax provision                5,595                      (1,076     )
(benefit)
Interest expense, net               895                        921
Depreciation and                    25,060                     23,162
amortization
Impairment charge                   -                          8,608
Restructuring costs                 1,892                      7,377
Other income                       (587        )             -          
EBITDA                        $     42,022               $    39,126     

COURIER CORPORATION
OTHER RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (Unaudited)
(In thousands, except per share amounts)
                                                                                         
                                                                                                   
                          Quarter Ended September 29, 2012         Year Ended September 29, 2012
                          Income    Income               Net       Income    Income                Net
                                                         Income                                    Income
                          Before    Tax         Net      per       Before    Tax         Net       per
                                                         Diluted                                   Diluted
                          Taxes     Provision   Income  Share     Taxes     Provision   Income   Share
                                                                                                   
GAAP basis measures       $9,273    $3,564      $5,709   $0.50     $14,762   $5,595      $9,167    $0.77
                                                                                                   
      Restructuring (1)   1,511     580         931      0.08      3,325     1,260       2,065     0.17
      costs
      Other income  (2)   -         -           -        -         (587)     (222)       (365)     (0.03)
                                                                                                   
Non-GAAP measures         $10,784   $4,144      $6,640   $0.58     $17,500   $6,633      $10,867   $0.91
                                                                                                   
                                                                                                   
                          Quarter Ended September 24, 2011         Year Ended September 24, 2011
                                                         Net       Income    Income                Net
                          Income    Income               Income    (Loss)    Tax                   Income
                          Before    Tax         Net      per       Before    Provision   Net       per
                                                         Diluted                                   Diluted
                          Taxes     Provision   Income  Share     Taxes     (Benefit)   Income   Share
                                                                                                   
GAAP basis measures       $9,465    $3,051      $6,414   $0.53     ($942)    ($1,076)    $134      $0.01
                                                                                                   
      Impairment    (3)   -         -           -        -         8,608     3,582       5,026     0.42
      charge
      Restructuring (4)   200       69          131      0.01      7,672     2,646       5,026     0.42
      costs
      Bad-debt      (5)   (50)      (17)        (33)     -         700       235         465       0.04
      provision
                                                                                                   
Non-GAAP measures         $9,615    $3,103      $6,512   $0.54     $16,038   $5,387      $10,651   $0.89
                                                                                                   
                                                                                                   
                                                                                                   
      Cost reduction measures were taken throughout the year in the Company's operating segments. Related
(1)   severance and post-retirement benefit expenses were $1.9 million, while accelerated depreciation
      associated with a reduction in the Company's one-color offset press capacity of $1.4 million was
      recorded in the fourth quarter.
                                                                                                   
(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.
                                                                                                   
      In the third quarter of fiscal 2011, the Company recorded an $8.6 million non-cash, pre-tax
(3)   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 impact of technology and competitive pressures affecting the one-color
(4)   paperback books in which the plant specialized. Restructuring charges included $4.4 million related
      to severance and pension withdrawal liabilities and $3.3 million for lease termination and other
      facility closure costs.
                                                                                                   
(5)   In the second quarter of fiscal 2011, the Company recorded a $700,000 bad-debt provision related to
      the bankruptcy of Borders Group, Inc.

COURIER CORPORATION
OTHER RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (Unaudited)
(In thousands, except per share amounts)
                                                                                            
                                                                                                        
BOOK MANUFACTURING          Quarter Ended September 29, 2012              Year Ended September 29, 2012
SEGMENT
                            GAAP Basis   Non-Recurring   Non-GAAP         GAAP Basis    Non-Recurring   Non-GAAP
                            Measures     Items (1)       Measures         Measures      Items (1)       Measures
                                                                                                        
      Net sales             $ 69,177                     $ 69,177         $ 233,040                     $ 233,040
      Cost of sales          51,071      (1,511  )     49,560         183,079      (1,723  )     181,356 
                                                                                                        
      Gross profit            18,106        1,511          19,617           49,961         1,723          51,684
                                                                                                        
      Selling and
      administrative         7,930       -            7,930          29,248       (961    )     28,287  
      expenses
                                                                                                        
      Operating             $ 10,176    $  1,511       $ 11,687        $ 20,713     $  2,684       $ 23,397  
      income
                                                                                                        
                                                                                                        
                            Quarter Ended September 24, 2011              Year Ended September 24, 2011
                            GAAP Basis   Non-Recurring   Non-GAAP         GAAP Basis    Non-Recurring   Non-GAAP
                            Measures     Items (2)       Measures         Measures      Items (2)       Measures
                                                                                                        
      Net sales             $ 66,602                     $ 66,602         $ 230,229                     $ 230,229
      Cost of sales          48,833      (200    )     48,633         187,643      (7,261  )     180,382 
                                                                                                        
      Gross profit            17,769        200            17,969           42,586         7,261          49,847
                                                                                                        
      Selling and
      administrative         6,746       -            6,746          27,764       (411    )     27,353  
      expenses
                                                                                                        
      Operating             $ 11,023    $  200         $ 11,223        $ 14,822     $  7,672       $ 22,494  
      income
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
SPECIALTY PUBLISHING        Quarter Ended September 29, 2012              Year Ended September 29, 2012
SEGMENT
                            GAAP Basis   Non-Recurring   Non-GAAP         GAAP Basis    Non-Recurring   Non-GAAP
                            Measures     Items (1)       Measures         Measures      Items (1)       Measures
                                                                                                        
      Net sales             $ 10,141                     $ 10,141         $ 38,355                      $ 38,355
      Cost of sales          6,919                     6,919          26,259                     26,259  
                                                                                                        
      Gross profit            3,222         -              3,222            12,096         -              12,096
                                                                                                        
      Selling and
      administrative         3,648       -            3,648          16,460       (641    )     15,819  
      expenses
                                                                                                        
      Operating loss         ($426  )   $  0            ($426  )        ($4,364 )   $  641          ($3,723 )
                                                                                                        
                                                                                                        
                            Quarter Ended September 24, 2011              Year Ended September 24, 2011
                            GAAP Basis   Non-Recurring   Non-GAAP         GAAP Basis    Non-Recurring   Non-GAAP
                            Measures     Items (3)       Measures         Measures      Items (3)       Measures
                                                                                                        
      Net sales             $ 10,069                     $ 10,069         $ 40,829                      $ 40,829
      Cost of sales          6,960                     6,960          27,406                     27,406  
                                                                                                        
      Gross profit            3,109         -              3,109            13,423         -              13,423
                                                                                                        
      Selling and
      administrative         3,981       50           4,031          18,244       (700    )     17,544  
      expenses
                                                                                                        
      Operating loss         ($872  )     ($50    )     ($922  )        ($4,821 )   $  700          ($4,121 )
                                                                                                        
                                                                                                        
      Cost reduction measures were taken throughout the year in the Company's operating segments. Related severance
(1)   and post-retirement benefit expenses were $1.9 million, while accelerated depreciation associated with a
      reduction in the Company's one-color offset press capacity of $1.4 million was recorded in the fourth
      quarter.
                                                                                                        
      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 $3.3 million for lease termination and other facility closure costs.
                                                                                                        
(3)   In the second quarter of fiscal 2011, the Company recorded a $700,000 bad-debt provision related to the
      bankruptcy of 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