OPERATING SEGMENTS

6 Months Ended

Mar. 30, 2013

OPERATING SEGMENTS

OPERATING SEGMENTS

D. OPERATING SEGMENTS

The Company has two operating segments: book manufacturing and publishing. The book manufacturing segment offers a full range of services from production through storage and distribution for religious, educational and specialty trade book publishers.  The publishing segment consists of Dover Publications, Inc., Federal Marketing Corporation, Inc., d/b/a Creative Homeowner, and Research & Education Association, Inc. (“REA”).

Segment performance is evaluated based on several factors, of which the primary financial measure is operating income.  Operating income is defined as gross profit (sales less cost of sales) less selling and administrative expenses, and includes severance and other restructuring costs but excludes stock-based compensation.  As such, segment performance is evaluated exclusive of interest, income taxes, stock-based compensation, intersegment profit, impairment charges, and other income.  The elimination of intersegment sales and related profit represents sales from the book manufacturing segment to the publishing segment.

The following table provides segment information for the three-month and six-month periods ended March 30, 2013 and March 24, 2012.

	(000’s Omitted)
	Quarter Ended						Six Months Ended
	March 30,			March 24,			March 30,			March 24,
	2013			2012			2013			2012
Net sales:
Book manufacturing	$	55,919		$	55,454		$	113,400		$	111,450
Publishing	9,353			9,635			18,487			19,087
Elimination of intersegment sales	(3,494		)	(2,701		)	(5,353		)	(5,213		)
Total	$	61,778		$	62,388		$	126,534		$	125,324
Pretax income:
Book manufacturing operating income	$	1,395		$	2,349		$	6,894		$	6,555
Publishing operating loss	(368		)	(1,136		)	(1,504		)	(2,963		)
Stock-based compensation	(331		)	(345		)	(672		)	(767		)
Elimination of intersegment profit	27			13			37			29
Interest expense, net	(191		)	(193		)	(381		)	(453		)
Other income	—			—			—			587
Total	$	532		$	688		$	4,374		$	2,988