Courier Corporation

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Courier Corporation

15 Wellman Avenue
North Chelmsford, Massachusetts 01863
U.S.A.
Telephone: (978)251-6000
Fax: (978)251-8228
Web site: http://www.courier.com

Public Company
Incorporated:
1894 as Courier-Citizen Company
Employees: 1,535
Sales: $188.32 million (2000)
Stock Exchanges: NASDAQ
Ticker Symbol: CRRC
NAIC: 323113 Commercial Screen Printing; 323117 Books Printing; 323121 Tradebinding and Related Work; 511199 Miscellaneous Printing; 551112 Offices of Other Holding Companies.

Courier Corporation is the largest book manufacturer in the Northeast, the fifth largest in the nation, and a full-service publisher, printer, distributor, and marketer of a wide variety of books. The company focuses on streamlining and enhancing the process by which printed books and digital content reach end-user markets; services include prepress and production through storage and distribution. Courier has three business segments: book manufacturing, customized education, and specialized book publishing. Five of the companys subsidiaries focus on such specialties as short-run book manufacturing, printing on lightweight paper, and four-color manufacturing. This latter segment serves more than 650 book-manufacturing customers. Sales to one customer, The Gideons International (distributor of bibles), generated about 26 percent of fiscal 2000 consolidated sales, and Pearson plc (worlds leading education business and international media company) accounted for about 17 percent of fiscal 2000 consolidated sales. Customized education is the specialty of Courier subsidiary Copyright Management Services (CMS), which provides Internet-based solutions to educators wanting to combine materials from multiple publishers into customized books and coursepacks. At the heart of the specialized book publishing segment is Dover Publications, Inc. (Dover), one of the worlds most successful niche publishers. Dover sells books worldwide and mails its proprietary catalogs to over 500,00 consumers. Dover publishes books, including Dover Thrift editions that usually sell for $1.00, in more than 40 specialty categories ranging from military history to paper dolls, and from musical scores, typographic fonts, and Egyptian hieroglyphics to CD-ROMs. In fiscal 2000, Courier produced over 300 million books. Forbes magazine, in its October 30, 2000 issue, recognized Courier as one of The Best 200 Small Companies in America and rated Courier as one of 11 companies to watch.

18001940: The Forerunners

Long before the Industrial Revolution got underway, English-speaking settlers had been drawn to New Englands surging waterways. Francis Cabot Lowell, an early settler, was a key player in the industrial development of that region. In 1814, after touring several English textile mills, he wanted to bring textile machinery back to the United States but British law prohibited its export to the United States. Upon his return home, Lowell built from memory the first power loom in the United States, set it up in Waltham, Massachusetts, and in 1815 began textile production, wrote John A. Conway in The Citizens of Courier, a history of the early years of Courier Corporation. The success of Lowells venture led to a search for a site having enough water to expand the Waltham Experiment. Lowell died in 1817, but his dream of producing textiles became a reality when friends from Boston searched for a good source of hydraulic power to run a textile operation (steam power did not become available until the 1850s and electricity until the end of the 19th century).

After traveling to East Chelmsford and inspecting the so-called raging rapids of the Merrimack River, several of Lowells admiring friends and entrepreneurs banded together to form a new company, the Merrimack Manufacturing Co., which was to develop the finest textile mills in the world, wrote Conway. Ingenious engineering of the Merrimack enabled mills to garner the energy needed to support many mills on the rivers banks, thereby fostering the development of bustling factory villages, such as Lowell and Chelmsford.

William Baldwin was the first journalist to comment on these new communities whenon June 25, 1824he began publishing the Chelmsford Journal, the predecessor of Courier Corporation. In every issue, the Journal ran an ad for itself under the headline: Book and job printing in all branches, executed on new type, with neatness and expedition, at this office. Conway commented that, like other newspapers of this period, the Journal was well written, political, candid and, at times, quite humorous. As the textile mills prospered, the population increased and so did the number of newspapers. By 1840 Lowell had more than 20,000 residents and newspapers for about every political viewpoint. After various name changes and mergers, the Chelmsford Journal became the Lowell Courier. Then, in 1856, three other newspapers merged with the Chelmsford Journal to form the Lowell Daily Citizen, which in 1882 was known as the Citizen Newspaper Co.

Meanwhile, Alexander Graham Bell had invented the telephone (1876) and created a singular marketing opportunity for the Lowell Daily Citizen. In 1878, that newspaper company printed the first issue of the Boston Telephone Directory a one-page broadside containing 67 listings.

By 1890, however, the towns more than 11 newspaper publishers offered Lowells 95,000 residents more newspapers than they wanted. In 1894, to counter the diminishing profitability of newspaper publishing, the Lowell Daily Citizen and the Citizen Newspaper Company, merged into one company, to be known as the Courier-Citizen Company (Courier). The new company was to publish, print and sell newspapers, periodicals, and books as well as develop a general job printing and book-binding business, Conway reported in The Citizens of Courier. By 1900, Courier was one of the largest printing firms north of Boston; printing was the companys most profitable sector.

As New England towns and cities prospered, telephones and the need for local telephone directories increased. New England Telephones widespread operation called for centralized records. To this end, the telephone company developed business forms for various activities, especially for billing, purchasing, and requisitions. Courier, the telephone companys long-time printer of choice for directories, picked up a contract for printing these business forms. This was Couriers first stationery contract; it was soon followed by a contract to meet the printing needs of New Yorks Waldorf-Astoria Hotel. In 1920, Courier agreed to produce forms and to print all of Western Unions telegrams as well as meet all the telephone companys printing needs east of the Mississippi River. For the first time, Courier also included warehousing and distribution services in this contract. During the 1930s, Courier became one of Americas premier printers of business forms by servicing accounts for other large corporations; for example, American Cyanamid, Atlantic Refining, Uniroyal, United Fruit, and General Motors.

Forms, War, Recession, Computers: 194072

Courier further committed itself to printing forms when it sold the newspaper side of its business to the Lowell Sun. The companys next move was to buy the Chicago-based Uniform Printing and Supply Company, which printed and distributed standardized [insurance] policy forms from a central location, according to The Citizens of Courier. The acquisition included control of two plantsone in Chicago and the other in Brooklyn, New Yorkmarking the first time Courier operated printing operations outside of its home base in Lowell. Courier gained the unofficial title of Printer by Appointment to the Insurance Industry.

During the two decades following World War II, the insurance industry grew at a record paceand so did Couriers coast-to-coast market, which had more than 300,000 agents to whom it sent documents. Courier set up new systems for printing, distributing, and warehousing forms and manuals as well as for maintaining mailing lists and inventories. To assure an effective operation and to keep customers abreast of changes in state laws affecting the insurance industry, Courier also established central clearinghouses for each state.

By the early 1950s, Courier was prospering from its work with insurance companies. At about this time, James F. Conway, Jr. joined Courier as general manager. A lengthy study convinced him that moving most of the distribution out of Brooklyn to strategically placed locations would minimize shipping time and reduce expenses for delivering forms to insurance agents, according to The Citizens of Courier. Conway set up 15 distribution outlets, for which start-up costs were met within six months of operation.

Courier acquired the San Francisco-based Bosqui Printing Company in 1956 and became a truly nationwide manufacturing operation with a lucrative forms business. In 1966, James F. Conway, Jr.newly named as Couriers presidentauthorized a $4.5 million bank loan to acquire the Westford, Massachusetts-based Murray Printing Company, one of the worlds finest black and white printers. Murray had more than 500 employees working on college textbooks, dictionaries, and scientific books.

In the 1960s, however, a general shift in the insurance industry had a negative impact on Couriers Forms Division. Tough economic times and the introduction of business computers diminished the need for forms used by individual insurance agents; there was a trend to consolidate the writing of policies in regional offices. This shift in operation, pushed Couriers profits in the Forms Division to a low in 1968 and forced the company to adopt a new approach to the business, John Conway wrote in The Citizens of Courier.

Company Perspectives:

Couriers mission is to enhance and accelerate the process of getting books and information from the point of creation to the point of use.

To distinguish itself from the typical operation of other printing companies operating in 1970, Courier targeted some of the biggest companies in America by focusing on a full-service approach. Conway illustrated this new approach by quoting part of a Forms Division managers sales pitch: We tell a customer we can do two things, affect an economy and improve efficiency. We are attempting to provide a wider range of products and services, taking ourselves out of the arena of the traditional neighborhood printer. We will accomplish for you something you probably dont even appreciate you are paying for right now. The new marketing strategy paid off. By 1972 the forms business was at the top of Couriers divisions, accounting for more than $20 million of the companys total gross of approximately $53.8 million. However, severe price cutting throughout the business forms industry kept the divisions profits on the 1971 level.

Going Public, Technology and Unions, a Joint Venture:197289

The next question that the company faced was whether the forms business would assure Couriers profitable longevity. Courier President and CEO Conway was well aware of the companys assets (printing equipment, various contracts, land, and little long-term debt) but equally attuned to a trend toward consolidation: large printing firms were buying relatively small printing companies. With funds generated from a public offering, he believed, the company would be positioned to grow while maintaining its reputation for product quality, competitive prices, and technology support. To go public, the Courier-Citizen Company created a holding company, called Courier Corporation; stock was offered for $15 a share on November 16,1972 and more than $2.6 million was raised. The company planned to use the new funds to finance plant and equipment expansion.

Within a year of its public offering, Courier Corporation recorded its fifth consecutive annual increase in sales and earnings; in 1973 sales topped $60 million for the first time. The company was making good its promise of expansion and continued growth. In 1975, Courier acquired Philadelphia-based National Publishing Company, considered to be the finest printer of light-weight papers in the nation and specializing in reference texts, bibles and other religious products according to the companys history in The Citizens of Courier. National was able to handle the demanding binding assignments related to these high-quality books, making it a printer of unique capabilities and skill. Couriers new subsidiary spearheaded Couriers international expansion and reputation for excellence. National moved to a modern facility in Philadelphia in 1997.

In 1978 Conway was named chairman of the board and Alden French, Jr., became Couriers president. During the 1980s, Conway noted that the demand for forms was in steady decline, possibly because computers were making many business forms obsolete. In 1984, the company sold its Forms Division to a private investor. At the same time, Conway began to question the future profitability of printing telephone directories. This industry was changing from hand-laid, hot-metal type to a business based on new technology. The phone companies, with eyes on their bottom line, were pushing for change, and there was stiff competition for contracts. In 1985 Conway and French set up Courier in a joint venturecalled North American Directory Corporation (NADCO)with Toronto-based Bell Canada Enterprises, Inc. (BCE). That same year, Courier acquired Stoughton, Massachusetts-based Alpine Press Inc., a leading manufacturer of hard cover and softbound books serving educational, trade, and high technology markets. Alpine was later renamed Courier Stoughton.

NADCO sales grew quickly: the venture was well positioned to win the top position for publishing telephone directories in the United States. However, due in part to the rising cost of paper and to unrest resulting from jobs lost because of computers and other new equipment, there was growing unhappiness in both the workforce and management. Although sales increased, net income remained flat from year to year and in 1988 Courier sold its 50 percent interest in NADCO. That same year Alden French was succeeded as president by James F. Conway III.

Key Dates:

1824:
William Baldwin publishes the Chelmsford Journal, predecessor of Courier Corporation.
1835:
After being acquired by several new owners, Chelmsford Journal is sold to the Lowell Courier.
1878:
Lowell Daily Citizen prints the first Boston Telephone Directory.
1894:
Lowell Courier and the Lowell Daily Citizen/Citizen Newspaper Company merge to form Courier-Citizen Company (Courier).
1920:
Courier, in its first stationery contract, prints business forms for New England Telephone Company.
1930s:
Courier becomes one of Americas premier printers of business forms.
1941:
The newspaper side of Courier business is sold to The Lowell Sun.
1950s:
James F. Conway, Jr., joins Courier as general manager and leads the company to open distribution outlets across the country.
1966:
Conway is named president of Courier.
1972:
Courier-Citizen goes public under the name of Courier.
1978:
Conway is named Courier chairman of the board; Alden French, Jr. becomes president.
1990:
Courier launches Courier Connection and moves into electronic publishing.
1996:
Courier moves its corporate headquarters to North Chelmsford.
2000:
Courier acquires Dover Publications, Inc.; reports third consecutive year of record-breaking financial results; earns The Printing Industry Associations Best Workplace in America award.

Going Digital, Defining Growth Markets, E-Commerce, Consolidation:19902000

During the 1980s, the technological revolution that swept American businesses had a very powerful impact on the traditional American printing industry in general and on Courier Corporation in particular. Electronic prepress and desktop publishing were the first signs that printing and publishing workflow were going digital. In 1990, Courier became a pioneer in the book industry when it established Courier Connection, designed as an electronic, integrated publishing service bureau to provide the widest possible range of services using desktop publishing technology, according to news writer Sally Taylors story in the August 2,1991 issue of Publishers Weekly. Customers gained instant online access to the companys prepress servicesand Courier positioned itself as a full-service printer. This innovation notwithstanding, however, 1992 was the worst year in Couriers history.

The toll on sales came from the companys shift of focus from commodity-like business, the addition of new services to enable growth in higher value-added turnkey relationships, and the training of service teams to deliver these new services. The company revised its operating and marketing strategies; it began to regain its leadership position by forming an Electronic Publishing Innovations Center (EPIC), which in 1993 offered on-demand, technology-based publishing services ranging from processing electronic files through reproduction and end-user distribution; products for the growing software market included kitting, fulfillment manuals, and floppy disks. The quarterly dividend was restored. In a rapid turnaround, Courier reaped the benefit of the 1993 decision to focus on three specific marketsreligion, education, and specialized publishingwhere it could be the best and find customers who would place the most value on the companys services. Sales of software documentation and educational publishers materials were particularly strong for fiscal 1994 and rose to $122.73 million. Sales dipped by about $2 million in 1995 but in 1996 Courier again reported a profit.

In December 1994, the company formed Courier New Media, Inc. (CNM), an information-management services company that worked with publishers, software developers, and other information providers to create products from new and existing intellectual properties. CNM included two operating units, Courier EPIC and Copyright Management Services (CMS), a new division established in December 1994, to help publishers and college bookstores obtain copyright permissions for products such as multiple-publisher college coursepacks. Courier EPIC conducted an electronic publishing service, including customized, on-demand printing and binding services. CMS specialized in helping publishers and college bookstores to obtain copyright permissions for educational products, such as multiple-publisher college coursepacks.

In 1996 Courier moved its corporate headquarters to North Chelmsford. In 1997, the company acquired Book-Mart Press, Inc., a book manufacturer specializing in short to medium runs of softcover and hardcover books. Book-Mart offered high-quality offset printing and binding for orders as low as 300 copies. This acquisition allowed Courier to complement its existing range of services by enabling its customers to shop for full-service book production of any run length. The company also acquired The Home School, Inc., a direct marketer (through retail, catalog and e-commerce) of educational materials to families who were educating their children at home.

By 1998 Courier was the largest book manufacturer in the Northeast. Over and above the manufacture of books and manuals, the company replicated diskettes and CD-ROMs for publishers, software developers, and other information providersand managed the creation and distribution of these products. The company consolidated the kitting, assembly, inventory management, and related services of Courier New Media with those of Courier Stoughtons. North Chelmsfords end-user fulfillment operation was expanded to handle The Home Schools national catalog roll-out and other end-user fulfillment business.

In 1999, Courier launched an e-commerce businessbookhound.comfor out-of-print books that it offered as replica books manufactured from an original; copyright permission was obtained from either publishers or authors. During the last quarter of fiscal 1999for $39 million in cashCourier acquired Mineóla, New York-based Dover Publications, Inc., a consistently successful company that, in 1951, broke new ground with the introduction of the first trade paperbacks; Courier was the manufacturer of these high-quality books.

Dover sold its products through catalogs and a diverse range of wholesalers and booksellers, childrens stores, craft stores, and gift shops in museums and historic sitesto name but a few of its outlets. In an interview in the September 2000 issue of Graphic Arts Monthly, Couriers president and CEO, James Conway III, commented on Dovers unique process of identifying pockets of demand and its track record of bringing more than 400 new specialized publications to market each year. He went on to say that The combination of Dovers publishing, sales, and distribution skills with Couriers book manufacturing, digital-content conversion, and e-commerce skills would produce a powerful end-to end solution for Dover, and that Courier would capture revenue and profits from every step of the process.

In fiscal 1999 Couriers net income rose to $8.38 million, or $2.52 per diluted share, and sales peaked at $163.99 millioncompared to 1997 net income of $4.32 million in fiscal 1997, or $1.41 per diluted share, and sales of $131.43 million.

2000 and Beyond

Within its chosen marketsreligion, education, and specialized printingCourier was agile at anticipating customer needs. In early fiscal 2000 the company invested $16 million in new technology, printing presses, and bindery lines. In 2000, the company reported that it was the only major book manufacturer to respond as quickly to what it described as an industrywide capacity shortage.

In March 2000, Doveroperating as an autonomous subsidiarybrought its list of more than 7,500 books directly to consumers through a brand-new web site, doverpublications .com. Customers could buy books in more than 40 categories, including more than 2,000 childrens books, some priced as low as $1.00. Additionally, Dover offered sticker books, gift wrap, tattoo books, card, and paper-doll booksincluding ones on both Princess Diana and the Queen Mother. Among the new books selling for $1.00 each was Wit and Wisdom of the American Presidents, which contained over 400 bon mots by presidents from George Washington to Bill Clinton.

Having launched the Dover web site, Courier sold The Home School, Inc. to privately held Christian Book Distributors, Inc. of Peabody, Massachusetts. James Conway III, president and CEO, pointed out that this sale would allow Courier to focus more of its time and energy on Dover, a much larger business that offered far greater opportunity for development. Courier reported fiscal 2000 as another year of record growth, bringing the companys five-year compound annual growth rate to 9.3 percent for revenue and 15.3 percent for net income. Net sales for the year reached $188.32 million, and net income rose to $10.64 million, or $3.15 per diluted share. Book manufacturing accounted for 98 percent of fiscal 2000 revenues, and customized education accounted for 2 percent.

Building on three consecutive best-ever years, Courier management had reason to be optimistic about continuously profitable growth in fiscal 2001, and beyond.

Principal Subsidiaries

Book-Mart Press, Inc.; Courier-Citizen Company; Courier Foreign Sales Corporation Ltd. (Jamaica; 99 %); Courier Kendallville, Inc.; Courier New Media, Inc.; Courier Stoughton, Inc.; Courier Westford, Inc.; Dover Publications, Inc.; National Publishing Company.

Principal Competitors

Banta Corporation; Dai Nippon Printing Co., Ltd.; Hart Graphics, Inc.; Quad Graphics, Inc.; Quebecor World Inc.; R.R. Donnelley & Sons Company.

Further Reading

The Best 200 Small Companies in America, Forbes Magazine, August 30, 2000.

Conway, John A., The Citizens of Courier, Lowell, Mass.: Courier Corporation, 1994.

Cross, Linda, Official 2000 Ranking of the Industrys Top Printing Firms, Graphic Arts Monthly, November 1, 2000.

Inside Business: Book Printer Agrees to Buy Specialty Publisher, Graphic Arts Monthly, September 2000, p. 32.

Mason, Dennis E., Integrated Print Manufacturing: Whats Next?, Graphic Arts Technical Foundation, May 1, 1999, pp. 9 + .

Taylor, Sally, Courier Leaps Into Electronic Technology, Publishers Weekly, August 2, 1991, pp. 5051.

Warsh, David, Lowells Courier Corp. Prefers to Specialize, Boston Globe, December 20, 1979.

Gloria A. Lemieux

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