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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _______________TO_______________

COMMISSION FILE NUMBER 0-7597

COURIER CORPORATION

A MASSACHUSETTS CORPORATION

I.R.S. EMPLOYER IDENTIFICATION NO. 04-2502514

15 WELLMAN AVENUE
NORTH CHELMSFORD, MASSACHUSETTS 01863
TELEPHONE NO. 978-251-6000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $1 PAR VALUE

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ]

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF THE REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [ ]

STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF
THE REGISTRANT AS OF NOVEMBER 30, 2000

COMMON STOCK, $1 PAR VALUE - $61,402,397

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK AS OF NOVEMBER 30, 2000

COMMON STOCK, $1 PAR VALUE - 3,360,083

DOCUMENTS INCORPORATED BY REFERENCE

PORTIONS OF THE REGISTRANT'S PROXY STATEMENT FOR THE ANNUAL MEETING OF
STOCKHOLDERS SCHEDULED TO BE HELD ON JANUARY 18, 2001 (PART III).

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PART I
ITEM 1. BUSINESS.
INTRODUCTION

Registrant, Courier Corporation, was incorporated under the laws of
Massachusetts on June 30, 1972. Courier Corporation owns all of the capital
stock of Courier-Citizen Company, a Massachusetts corporation organized in
1894 as successor to a printing business that originated in 1824.

Courier Corporation and its subsidiaries ("Courier" or the
"Company") are focused on streamlining and enhancing the process by which
printed books and digital content reach end-user markets. The Company has
three business segments: book manufacturing, customized education and
specialized book publishing.

Courier is the largest book manufacturer in the Northeast, offering
services from prepress and production through storage and distribution. Products
include Bibles, educational and consumer books, and technical documentation
primarily for education, religious and specialty book publishers. Revenues from
this segment accounted for 98% of Courier's consolidated revenues in fiscal
2000.

Courier's customized education segment operates businesses that
respond to the need for greater choice in education. Copyright Management
Services ("CMS") provides Internet-based solutions that enable educators to
combine materials from multiple publishers into customized books and
coursepacks. The Home School is a direct marketer of educational materials to
families engaged in educating children at home. Revenues in this segment
accounted for 2% of consolidated revenues in fiscal 2000.

On September 22, 2000, the Company acquired all of the outstanding
capital stock of Dover Publications, Inc. ("Dover"), a leading publisher of
special-interest books, which established the Company's third business segment,
specialized book publishing. Revenues in this segment were not significant in
fiscal 2000.

Additional segment information, including the amounts of net sales,
earnings or loss before taxes and total assets, for each of the last three
fiscal years, is contained in the Notes to Consolidated Financial Statements on
pages F-16 and F-17 included in this Annual Report on Form 10-K.

On September 22, 2000, the Company acquired Dover, a Mineola, New York
publisher of special-interest books. Founded in 1941, Dover is a successful,
consistently profitable niche publisher with more than 7,000 in-print titles in
over 30 specialty categories ranging from military history to paper dolls, and
from musical scores to typographic fonts. Dover sells its products through a
diverse range of wholesalers and distributors around the world and most major
American bookstore chains, independent booksellers, children's stores, craft
stores, and gift shops in museums, historic sites and elsewhere. It also sells
direct to consumers through proprietary catalogs. The combination of Dover's
publishing, sales and distribution skills with Courier's book manufacturing,
digital content conversion, and e-commerce skills will provide a powerful
end-to-end solution for Dover.

On September 30, 1997, the Company purchased the assets of The Home
School Books & Supplies ("The Home School") based in Arlington, Washington. The
Home School markets curriculum and other learning materials direct to home
schoolers through catalog and e-commerce (www.thehomeschool.com) channels. It
also offers free advice from experienced home schooling advisors.


1


On July 21, 1997, the Company acquired all of the outstanding stock of
Book-mart Press, Inc. ("Book-mart"), a North Bergen, New Jersey book
manufacturer specializing in short to medium runs of softcover and hardcover
books. Founded in 1977, Book-mart has built a strong reputation and loyal
customer following in New York and the surrounding areas. Book-mart offers high
quality offset printing and binding for order quantities as low as 300 copies.
The acquisition complemented the Company's existing range of book manufacturing
services so that the Company can offer its customers one-stop full-service
shopping for book production at any run length.

BUSINESS SEGMENTS

BOOK MANUFACTURING SEGMENT

Courier's book manufacturing segment produces hard and softcover books,
as well as related services involved in managing the process of creating and
distributing these products for publishers, religious organizations and other
information providers. Courier provides book manufacturing and related services
from six facilities in Westford, Stoughton and North Chelmsford, Massachusetts;
Philadelphia, Pennsylvania; North Bergen, New Jersey; and Kendallville, Indiana.

Courier's book manufacturing operations consist of both electronic and
conventional film processing, platemaking, printing and binding of soft and hard
bound books and manuals. These book manufacturing operations are conducted
through five subsidiaries, Courier Westford, Inc. ("Westford"), Courier
Stoughton, Inc. ("Stoughton"), Courier Kendallville, Inc. ("Kendallville"),
National Publishing Company ("National"), and Book-mart. Each of these
subsidiaries has certain specialties adapted to the needs of the market niches
Courier serves, such as short-run book manufacturing, printing on lightweight
paper and 4-color book manufacturing. These services are primarily sold to
publishers of educational, religious, consumer, professional and reference
books.

Courier's book manufacturing sales force of 22 people is responsible
for all of the Company's sales to over 650 book-manufacturing customers.
Courier's salespeople operate out of sales offices located in New York, Chicago,
Philadelphia, Hayward, California, North Chelmsford, Massachusetts, North Bergen
and North Caldwell, New Jersey, and Buffalo Creek, Colorado.

Sales to one customer, The Gideons International, aggregated
approximately 26% of consolidated sales in fiscal 2000 while sales to Pearson
PLC aggregated approximately 17% of fiscal 2000 consolidated sales. The loss of
either of these customers would have a material adverse effect on the Company.
No other customer accounted for more than 10% of fiscal 2000 consolidated sales.
The Company distributes products around the world; export sales, as a percentage
of consolidated sales, were approximately 18% in both fiscal 2000 and fiscal
1999, and 17% in fiscal 1998.

All phases of Courier's business are highly competitive. The printing
and publishing industries, exclusive of newspapers, include over 50,000
establishments. While most of these establishments are relatively small, several
of the Company's competitors are considerably larger or are affiliated with
companies that are considerably larger and have greater financial resources than
Courier. In recent years, consolidation of both customers and competitors within
the Company's markets has increased pricing pressures. The major competitive
factors in Courier's book manufacturing business in addition to price are
product quality, speed of delivery, customer service, availability of
appropriate printing capacity, related services and technology support.


2


CUSTOMIZED EDUCATION SEGMENT

CMS specializes in providing custom books for college professors who
have created personally tailored curriculum that precisely matches the needs of
their courses. These custom books range from reading anthologies, combining
materials from multiple sources, to out-of-print books to self-authored original
teaching materials. CMS obtains copyright permissions from the publishers or
authors and prepares electronic masters from which these custom books are
produced, either by Courier or the college campus print shop.

CMS markets its custom book services direct to professors nationwide as
well as to college bookstores and campus print shops. It utilizes direct
marketing techniques to professors, including mailings and e-mail, backed up by
a series of highly targeted web sites. The web sites include www.custombook.com,
www.anthologypro.com, www.ceopress.com, www.eruditionbooks.com,
www.bookhound.com, and www.coursepack.com. Direct marketing efforts to
professors are supported by one sales person and an internal direct response
staff located in North Chelmsford, Massachusetts. Student purchases of custom
books from CMS are made over the web at www.custombookstore.com or by phone.
Sales to college bookstores and campus print shops are made through direct
marketing and a supporting web site, www.coursepackconnection.com.

CMS's competition is primarily from university bookstores and
printshops that perform copyright clearance and coursepack production in-house
for the university, and from large college textbook publishers who offer custom
publishing services. CMS distinguishes its products and services on the basis of
convenience and high-quality book manufacturing.

The Home School markets curriculum and other learning materials direct
to home schoolers through catalog and e-commerce channels
(www.thehomeschool.com). The Home School's Advisor Line and order center are
located in Arlington, Washington, while catalog and e-commerce operations are
located in North Chelmsford, Massachusetts. Customers may obtain free advice
from experienced home schooling advisors and a free e-mail newsletter, "The Home
School Advisor."

The homeschooling market is highly competitive ranging from small local
retail bookstores to national catalog booksellers to on-line book retailers. The
Home School distinguishes itself by offering a wide range of top quality
curriculum and free advice exclusively from experienced home schooling advisors.

SPECIALTY BOOK PUBLISHING SEGMENT

Dover, acquired by the Company in September 2000, is a publisher of
books in over 30 specialty categories, including fine and commercial arts,
children's books, crafts, musical scores, graphic design, mathematics, physics
and other areas of science, puzzles, games, social science, stationery items,
and classics of literature for both juvenile and adult markets, including the
Dover Thrift editions.

Dover sells its products through a diverse range of wholesalers and
distributors around the world and in most major American bookstore chains,
independent booksellers, children's stores, craft stores, and gift shops in
museums and historic sites. Dover has also sold its books directly to consumers
for over 50 years. Dover mails its proprietary catalogs to over 500,000
consumers.


3


The specialty book publishing market is comprised of hundreds of
publishers; many of which are very small, but a few that are much larger than
Dover or are part of organizations that are much larger. The number of
publishers in the United States has doubled in the past decade to approximately
63,000 at the end of 2000 according to R.R. Bowker. In addition, newer sources
of competition have emerged with large retailers launching or expanding
publishing operations and new web-based publishing businesses starting up, which
compete in the specialty book publishing market, including publishing of
specialty electronic books. Dover distinguishes its products by offering an
extremely wide variety of high quality books at modest prices.

COMPANY BUSINESS AS A WHOLE

MATERIALS AND SUPPLIES

Courier purchases its principal raw materials, primarily paper, but
also plate materials, ink, cover stock and casebinding materials, from numerous
suppliers, and is not dependent upon any one source for its requirements. Many
of Courier's book manufacturing customers purchase their own paper and furnish
it at no charge to these operations for book production. The Home School
purchases books and other learning materials from over 100 educational
publishers and it is not dependent upon any one source. Dover purchases a
significant portion of its books from Courier's book manufacturing operations.

ENVIRONMENTAL REGULATIONS

The Company periodically makes capital expenditures so that its
operations comply, in all material respects, with applicable federal, state and
local environmental laws and regulations. No significant expenditures are
anticipated in fiscal 2001. The Company does not believe that its compliance
with applicable environmental laws and regulations will have a material impact
on the Company's earnings or competitive position.

EMPLOYEES

The Company and its subsidiaries employed 1,535 persons at September
30, 2000 (including 184 at Dover) compared to 1,320 a year ago.

OTHER

There is no portion of Courier's business subject to cancellation of
government contracts or renegotiations of profits. Courier's overall business is
not significantly seasonal in nature. Seasonal demand from educational
publishers is highest in the Company's first and fourth quarters, but this has
been balanced in recent years by demand from customers in other publishing
markets. Demand for CMS and The Home School products and services is highest in
the Company's fourth quarter. Dover's business is not significantly seasonal in
nature.

Courier holds no material patents, licenses, franchises or concessions
that are important to its operations, but does have trademarks, service marks,
and Universal Resource Locators (URL's) on the World Wide Web in connection with
each of its businesses. Substantially all of Dover's publications are protected
by copyright, either in its own name, in the name of the author of the work, or
in the name of a predecessor publisher from whom rights were acquired.


4


ITEM 2. PROPERTIES.
REAL PROPERTIES

The following schedule lists the facilities occupied by Courier at
September 30, 2000. The list also includes real estate which is held for sale or
lease, as discussed in Note J to the Consolidated Financial Statements, which
appears on page F-18 of this Annual Report on Form 10-K. Courier considers its
plants and other facilities to be well maintained and suitable for the purpose
intended.



Owned/
Principal Activity and Location (Year Constructed) Leased Sq. Ft.
- -------------------------------------------------- ------ -------

CORPORATE HEADQUARTERS AND EXECUTIVE OFFICES
North Chelmsford, MA (1973, 1996) Owned 69,000 (1)
BOOK MANUFACTURING AND WAREHOUSING
Westford plant, Westford, MA (1900, 1968, 1969, 1981, 1990) Owned 593,000 (2)
Kendallville plant, Kendallville, IN (1978) Owned 155,000
National plant, Philadelphia, PA (1975, 1997) Owned 229,000 (3)
Stoughton plant, Stoughton, MA (1980) Leased 169,000
Book-mart plant, North Bergen, NJ (1917, 1935, 1997) Leased 75,000
DOVER OFFICES AND WAREHOUSES
Mineola, New York Leased 106,000
New Hyde Park, NY Leased 80,000
REAL ESTATE HELD FOR SALE OR LEASE
Raymond, NH (1973) Owned 59,000 (4)


(1) In September 1996, the Company relocated its corporate headquarters into
approximately 21,000 square feet of an existing facility in North
Chelmsford, MA that also houses CMS, The Home School, warehousing and
end-user fulfillment operations.

(2) In April 1999, the Company announced its intention to offer for sale the
old, unoccupied and underutilized portions of its multi-building
manufacturing complex in Westford, MA. In January 2000, the Company
signed an agreement to sell this property, but a number of significant
contingencies exist.

(3) In December 1996, the Company completed construction of a 100,000 square
foot addition to its Philadelphia manufacturing facility. The expansion
enabled the Company to consolidate operations located in an older
multistory facility to the newer, more efficient property. The older
multistory facility, which was vacated in January 1997, was sold in June
1998.

(4) In February 2000, the Company entered into a five-year lease agreement
for this facility, which had been vacant. The lease provided for a
purchase option at a price of $1.3 million. The option was exercised in
August 2000 and closed in October 2000.

EQUIPMENT

The Company's products are manufactured on equipment that in most cases
is owned by the Company, although it leases computers, image setters and
electronic printing systems which are subject to more rapid obsolescence. In
addition, it leases three printing presses where the lessor holds title. Capital
expenditures amounted to approximately $16.3 million in 2000, $5.0 million in
1999 and $4.1 million in 1998. Capital expenditures in fiscal 2000 were for new
presses, binding lines, computer-to-plate equipment, information system
improvements, and other equipment to automate workflows and reduce costs. Fiscal
2001 capital expenditures are expected to be approximately $15 million. Courier
considers its equipment to be in good operating condition and adequate for its
present needs.


5


ENCUMBRANCES AND RENTAL OBLIGATIONS

For a description of encumbrances on certain properties and equipment,
see Note D of Notes to Consolidated Financial Statements on page F-10 of this
Annual Report on Form 10-K. Information concerning leased properties and
equipment is disclosed in Note E of Notes to Consolidated Financial Statements,
which appears on page F-11 of this Annual Report on Form 10-K.

ITEM 3. LEGAL PROCEEDINGS.

In the ordinary course of business, the Company is subject to various
legal proceedings and claims. The Company believes that the ultimate outcome of
these matters will not have a material adverse effect on its financial
statements.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no matters submitted to a vote of security holders during the
quarter ended September 30, 2000.


PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

The information required by this Item is contained in the section
captioned "Selected Quarterly Financial Data (Unaudited)" which appears on page
F-19 of this Annual Report on Form 10-K.

ITEM 6. SELECTED FINANCIAL DATA.

The information required by this Item is contained in the section
captioned "Five-Year Financial Summary" appearing on page F-20 of this Annual
Report on Form 10-K.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

The information required by this Item is contained in the section
captioned "Management's Discussion and Analysis" on pages F-21 through F-23 of
this Annual Report on Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not hold any derivative financial instruments,
derivative commodity instruments or other financial instruments except as noted
in Note A of Notes to Consolidated Financial Statements, which appears on pages
F-7 and F-8 of this Annual Report on Form 10-K. The Company engages neither in
speculative nor derivative trading activities.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The information required by this Item is contained on pages F-1 through
F-18 of this Annual Report on Form 10-K.


6


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable.


PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Courier's executive officers, together with their ages and all positions
and offices with the Company presently held by each person named, are as
follows:



James F. Conway III 48 Chairman, President and Chief
Executive Officer

George Q. Nichols 71 Corporate Senior Vice President
and Chairman of National
Publishing Company

Robert P. Story, Jr. 49 Senior Vice President and
Chief Financial Officer

Peter M. Folger 47 Vice President and
Controller

Peter D. Tobin 45 Corporate Vice President and
Executive Vice President of
Courier Companies


The terms of office of all of the above executive officers continue
until the first meeting of the Board of Directors following the next annual
meeting of stockholders and the election or appointment and qualification of
their successors, unless any officer sooner dies, resigns, is removed or becomes
disqualified.

Mr. Conway III was elected Chairman of the Board in September 1994 after
serving as acting Chairman since December 1992. He has been Chief Executive
Officer since December 1992 and President since July 1988.

Mr. Nichols became an executive officer of Courier in June 1989 while
retaining his position as President of National Publishing Company, a position
he has held since 1975. He was elected a Director of the Company in March 1995
and became Senior Vice President of the Company in November 1996. He became
Chairman of National Publishing Company in December 1999.

Mr. Story became Senior Vice President and Chief Financial Officer in
April 1989. He joined Courier in November 1986 as Vice President and Treasurer.
He was elected a Director of the Company in February 1995.

Mr. Folger has been Controller since 1982 and became Vice President in
November 1992.


7


Mr. Tobin became Vice President of Courier Corporation and Executive
Vice President of Courier Companies in October 2000. He joined Courier Companies
as National Sales Manager in 1994 and became Vice President of Sales and
Marketing in 1997.

All other information called for by Item 10 is contained in the
definitive Proxy Statement to be delivered to stockholders in connection with
the Annual Meeting of Stockholders scheduled to be held on Thursday, January 18,
2001. Such information is incorporated herein by reference.


ITEM 11. EXECUTIVE COMPENSATION.

and

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

and

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information called for by Items 11, 12 and 13 is contained in the
definitive Proxy Statement to be delivered to stockholders in connection with
the Annual Meeting of Stockholders scheduled to be held on Thursday, January 18,
2001. Such information is incorporated herein by reference.


PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(A) DOCUMENTS FILED AS PART OF THIS REPORT



1. FINANCIAL STATEMENTS PAGE(S)



- Independent Auditors' Report F-1

- Consolidated Statements of Income for each of the three
years in the period ended September 30, 2000 F-2

- Consolidated Balance Sheets as of September 30, 2000
and September 25, 1999 F-3 to F-4

- Consolidated Statements of Cash Flows for each of the
three years in the period ended September 30, 2000 F-5

- Consolidated Statements of Changes in Stockholders' Equity
for each of the three years in the period ended
September 30, 2000 F-6

- Notes to Consolidated Financial Statements F-7 to F-18

2. FINANCIAL STATEMENT SCHEDULE

- Schedule II - Consolidated Valuation and Qualifying Accounts S-1



8


3. EXHIBITS



EXHIBIT NO. DESCRIPTION OF EXHIBIT


3A-1 Articles of Organization of Courier Corporation, as of June 29,
1972 (filed as Exhibit 3A-1 to the Company's Annual Report on
Form 10-K for the fiscal year ended September 26, 1981, and
incorporated herein by reference).

3A-2 Articles of Amendment of Courier Corporation (changing
stockholder vote required for merger or consolidation), as of
January 20, 1977 (filed as Exhibit 3A-2 to the Company's Annual
Report on Form 10-K for the fiscal year ended September 26,
1981, and incorporated herein by reference).

3A-3 Articles of Amendment of Courier Corporation (providing for
staggered election of directors), as of January 20, 1977 (filed
as Exhibit 3A-3 to the Company's Annual Report on Form 10-K for
the fiscal year ended September 26, 1981, and incorporated
herein by reference).

3A-4 Articles of Amendment of Courier Corporation (authorizing class
of Preferred Stock), as of February 15, 1978 (filed as Exhibit
3A-4 to the Company's Annual Report on Form 10-K for the fiscal
year ended September 26, 1981, and incorporated herein by
reference).

3A-5 Articles of Amendment of Courier Corporation (increasing number
of shares of authorized Common Stock), as of January 16, 1986
(described in item #2 of the Company's Proxy Statement for the
Annual Meeting of Stockholders held on January 16, 1986, and
incorporated herein by reference).

3A-6 Articles of Amendment of Courier Corporation (providing for fair
pricing procedures for stock to be sold in certain business
combinations), as of January 16, 1986 (filed as Exhibit A to the
Company's Proxy Statement for the Annual Meeting of Stockholders
held on January 16, 1986, and incorporated herein by reference).

3A-7 Articles of Amendment of Courier Corporation (limiting personal
liability of directors to the Corporation or to any of its
stockholders for monetary damages for breach of fiduciary duty),
as of January 28, 1988 (filed as Exhibit 3A-7 to the Company's
Annual Report on Form 10-K for the fiscal year ended September
24, 1988, and incorporated herein by reference).

3A-8 Articles of Amendment of Courier Corporation (establishing
Series A Preferred Stock), as of November 8, 1988 (filed as
Exhibit 3A-8 to the Company's Annual Report on Form 10-K for the
fiscal year ended September 24, 1988, and incorporated herein by
reference).

3B By-Laws of Courier Corporation, amended and restated as of March
18, 1999 (filed as Exhibit 3.2 to the Company's Current Report
on Form 8-K, dated March 18, 1999, and incorporated herein by
reference).


9


10A-1+ Courier Corporation Stock Grant Plan (filed as Exhibit C to the
Company's Proxy Statement for the Annual Meeting of Stockholders
held on January 20, 1977, and incorporated herein by reference).

10A-2+ Amendment, effective January 19, 1989, to the Courier
Corporation Stock Grant Plan (described in Item 4 of the
Company's Proxy Statement for the Annual Meeting of Stockholders
held January 19, 1989, and incorporated herein by reference).

10B+ Letter Agreement, dated February 8, 1990, of Courier Corporation
relating to supplemental retirement benefit and consulting
agreement with James F. Conway, Jr. (filed as Exhibit 10B to the
Company's Annual Report on Form 10-K for the fiscal year ended
September 29, 1990, and incorporated herein by reference).

10C-1+ Courier Corporation 1989 Deferred Income Stock Option Plan for
Non-employee Directors, effective September 28, 1989 (filed as
Exhibit A to the Company's Proxy Statement for the Annual
Meeting of Stockholders held January 18, 1990, and incorporated
herein by reference).

10C-2+ Amendment, effective November 4, 1993, to the 1989 Deferred
Income Stock Option Plan for Non-employee Directors (filed as
Exhibit 10C-2 to the Company's Annual Report on Form 10-K for
the fiscal year ended September 25, 1993, and incorporated
herein by reference).

10C-3+ Amendment, effective September 24, 1998, to the 1989 Deferred
Income Stock Option Plan for Non-employee Directors (filed as
Exhibit 10C-3 to the Company's Annual Report on Form 10-K for
the fiscal year ended September 26, 1998, and incorporated
herein by reference).

10C-4+ Amendment, effective January 21, 1999, to the 1989 Deferred
Income Stock Option Plan for Non-employee Directors (described
in Item 3 of the Company's Proxy Statement for the Annual
Meeting of Stockholders held January 21, 1999, and incorporated
herein by reference).

10D-1+ Courier Corporation 1983 Stock Option Plan (filed as Exhibit A
to the Company's Proxy Statement for the Annual Meeting of
Stockholders held on January 20, 1983, and incorporated herein
by reference).

10D-2+ Amendment, effective January 17, 1985, to the Courier
Corporation 1983 Stock Option Plan (described in Item 2 of the
Company's Proxy Statement for the Annual Meeting of Stockholders
held on January 17, 1985, and incorporated herein by reference).

10D-3+ Amendment, effective January 19, 1989, to the Courier
Corporation 1983 Stock Option Plan (described in Item 3 of the
Company's Proxy Statement for the Annual Meeting of Stockholders
held January 19, 1989, and incorporated herein by reference).

10E-1+ The Courier Executive Compensation Program, effective October 4,
1993 (filed as Exhibit 10E-2 to the Company's Annual Report on
Form 10-K for the fiscal year ended September 25, 1993, and
incorporated herein by reference).

10


10E-2+ The Management Incentive Compensation Program, effective October
4, 1993 (filed as Exhibit 10E-3 to the Company's Annual Report
on Form 10-K for the fiscal year ended September 25, 1993, and
incorporated herein by reference).

10F+ Courier Corporation Senior Executive Severance Program and
Agreements, dated October 25, 1988 pursuant to the program with
Messrs. Conway III, Nichols, Story, and Folger (filed as Exhibit
10P to the Company's Annual Report on Form 10-K for the fiscal
year ended September 24, 1988, and incorporated herein by
reference).

10G Rights Agreement between Courier Corporation and State Street
Bank and Trust Company dated March 18, 1999 (filed as Exhibit
4.1 to the Company's Current Report on Form 8-K, dated March 18,
1999, and incorporated herein by reference).

10H+ 1989 Incentive Program, as amended and restated on May 28, 1992
for the purchase of Courier Common Stock by Executive Officers
and Key Employees of the Corporation (filed as Exhibit 10H to
the Company's Annual Report on Form 10-K for the fiscal year
ended September 24, 1994, and incorporated herein by reference).

10I+ Courier Corporation 1999 Employee Stock Purchase Plan (filed as
Exhibit A to the Company's Proxy Statement for the Annual
Meeting of Stockholders held on January 21, 1999, and
incorporated herein by reference).

10J-1+ Agreement, as of March 3, 1993, of Courier Corporation relating
to employment contract and supplemental retirement benefit with
George Q. Nichols (filed as Exhibit 10J to the Company's Annual
Report on Form 10-K for the fiscal year ended September 25,
1993, and incorporated herein by reference).

10J-2+ Amendment, as of April 16, 1997, to supplemental retirement
benefit agreement with George Q. Nichols (filed as Exhibit 10J-2
to the Company's Annual Report on Form 10-K for the fiscal year
ended September 27, 1997, and incorporated herein by reference).

10K Agreement, dated as of October 16, 1995, of Courier Corporation
relating to employment of John Pugsley (filed as Exhibit 10K to
the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1995, and incorporated herein by reference).

10L-1 Revolving Credit Agreement, dated as of March 18, 1997, between
Courier Corporation, State Street Bank and Trust Company and
BankBoston, N.A., providing for a $20 million revolving credit
facility (filed as Exhibit 10 to the Company's Quarterly Report
on Form 10-Q for the period ended March 29, 1997, and
incorporated herein by reference).

10L-2 Amendment, dated July 22, 1997, to Note Agreement between
Courier Corporation, State Street Bank and Trust Company and
BankBoston, N.A., providing for a $30 million revolving credit
facility (filed as Exhibit 10L-2 to the Company's Annual Report
on Form 10-K for the fiscal year ended September 27, 1997, and
incorporated herein by reference).


11


10L-3 Amendment, dated February 27, 1998, to Note Agreement between
Courier Corporation, State Street Bank and Trust Company and
BankBoston, N.A., providing for a $30 million revolving credit
facility (filed as Exhibit 10 to the Company's Quarterly Report
on Form 10-Q for the period ended March 28, 1998, and
incorporated herein by reference).

10L-4 Amendment, dated February 26, 1999, to Note Agreement between
Courier Corporation, State Street Bank and Trust Company and
BankBoston, N.A., providing for a $30 million revolving credit
facility (filed as Exhibit 10 to the Company's Quarterly Report
on Form 10-Q for the period ended March 27, 1999, and
incorporated herein by reference).

10L-5 Amendment, dated July 22, 1999, to Note Agreement between
Courier Corporation, State Street Bank and Trust Company,
BankBoston, N.A. and KeyBank National Association, providing for
a $30 million revolving credit facility (filed as Exhibit 10L-5
to the Company's Annual Report on Form 10-K for the fiscal year
ended September 25, 1999, and incorporated herein by reference).

10L-6 Amendment, dated August 11, 2000, to Note Agreement between
Courier Corporation, Citizens Bank of Massachusetts (successor
to State Street Bank and Trust Company), Fleet National Bank
(f/k/a BankBoston, N.A.) and KeyBank National Association,
providing for a $60 million revolving credit facility (filed as
Exhibit 10 to the Company's Current Report on Form 8-K dated
September 22, 2000, and incorporated herein by reference).

10L-7* Amendment, dated October 12, 2000, to Note Agreement between
Courier Corporation, Citizens Bank of Massachusetts, Fleet
National Bank, and KeyBank National Association, providing for a
$60 million revolving credit facility.

10M-1 Term Promissory Note, dated as of October 15, 1991, between
Courier Corporation and MetLife Capital Credit Corporation for
the principal sum of $2,000,000 at 9.5% due October 15, 2001
(filed as Exhibit 4F-1 to the Company's Annual Report on Form
10-K for the fiscal year ended September 28, 1991, and
incorporated herein by reference).

10M-2 Loan and Security Agreement, dated as of October 15, 1991,
between Courier Corporation and MetLife Capital Credit
Corporation (filed as Exhibit 4F-2 to the Company's Annual
Report on Form 10-K for the fiscal year ended September 28,
1991, and incorporated herein by reference).

10N Master Lease Finance Agreement, dated as of July 27, 1994,
between Courier Corporation and BancBoston Leasing (filed as
Exhibit 10P to the Company's Annual Report on Form 10-K for the
fiscal year ended September 24, 1994, and incorporated herein by
reference).

10O-1+ Courier Corporation 1993 Stock Incentive Plan, as amended and
restated, effective May 6, 1996 (filed as Exhibit 10O to the
Company's Annual Report on Form 10-K for the fiscal year ended
September 28, 1996, and incorporated herein by reference).


12


10O-2+ Amendment, effective September 24, 1998, to the Courier
Corporation 1993 Stock Incentive Plan (filed as Exhibit 10O-2 to
the Company's Annual Report on Form 10-K for the fiscal year
ended September 26, 1998, and incorporated herein by reference).

10O-3+ Amendment, effective January 21, 1999, to the Courier
Corporation 1993 Stock Incentive Plan (described in Item 4 of
the Company's Proxy Statement for the Annual Meeting of
Stockholders held January 21, 1999, and incorporated herein by
reference).

10P Stock Purchase Agreement by and among Courier Corporation and
the stockholders of Book-mart Press, Inc., dated as of July 21,
1997 (filed as Exhibit 2.1 to the Company's Current Report on
Form 8-K dated July 21, 1997, and incorporated herein by
reference).

10Q+ Courier Corporation Deferred Compensation Program dated November
6, 1997 including Messrs. Conway III, Nichols, and Story (filed
as Exhibit 10 to the Company's Quarterly Report on Form 10-Q for
the period ended December 27, 1997, and incorporated herein by
reference).

10R Master Lease Finance Agreement, dated as of September 23, 1998
between Courier Corporation and General Electric Capital
Corporation (filed as Exhibit 10R to the Company's Annual Report
on Form 10-K for the fiscal year ended September 26, 1998, and
incorporated herein by reference).

10S Stock Purchase Agreement by and among Courier Corporation, Mrs.
Blanche Cirker, individually, the Estate of Hayward Francis
Cirker, by Blanche Cirker, executrix, and each of the
stockholders of Dover Publications, Inc., Dover Book Store Inc.
and Transfolio Express, Inc. dated as of August 14, 2000 (filed
as Exhibit 2.1 to the Company's Current Report on Form 8-K dated
September 22, 2000, and incorporated herein by reference).

10T* Master Lease Finance Agreement, dated as of September 25, 2000
between Courier Corporation and Eastern Bank.

21* Schedule of Subsidiaries.

23* Consent of Deloitte & Touche LLP, independent auditors.

27* Financial Data Schedule.



* Exhibit is furnished herewith.

+ Designates a Company compensation plan or arrangement.


(B) REPORTS ON FORM 8-K

Report on Form 8-K filed August 29, 2000 reporting under Item 5 the
proposed acquisition of Dover Publications, Inc. and Report on Form 8-K filed
October 6, 2000 reporting under Item 2 the acquisition of Dover Publications,
Inc.


13


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on December 5, 2000.

COURIER CORPORATION

By: s/James F. Conway III
-------------------------------------
James F. Conway III
Chairman, President and
Chief Executive Officer

By: s/Robert P. Story, Jr.
-------------------------------------
Robert P. Story, Jr.
Senior Vice President and
Chief Financial Officer

By: s/Peter M. Folger
-------------------------------------
Peter M. Folger
Vice President and Chief
Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities indicated, on December 5, 2000.



s/James F. Conway III s/George Q. Nichols
- -------------------------------------- -------------------------------------
James F. Conway III George Q. Nichols
Chairman, President and Director
Chief Executive Officer

s/Kathleen Foley Curley s/Charles E. Otto
- -------------------------------------- -------------------------------------
Kathleen Foley Curley Charles E. Otto
Director Director

s/Richard K. Donahue s/Robert P. Story, Jr.
- -------------------------------------- -------------------------------------
Richard K. Donahue Robert P. Story, Jr.
Director Director

s/Edward J. Hoff s/W. Nicholas Thorndike
- -------------------------------------- -------------------------------------
Edward J. Hoff W. Nicholas Thorndike
Director Director

s/Arnold S. Lerner
- --------------------------------------
Arnold S. Lerner
Director



14


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of Courier Corporation:

We have audited the accompanying consolidated balance sheets of Courier
Corporation and subsidiaries (the "Company") as of September 30, 2000 and
September 25, 1999, and the related consolidated statements of income, changes
in stockholders' equity, and cash flows for each of the three years in the
period ended September 30, 2000. Our audits also included the financial
statement schedule listed in the Index at Item 14. These financial statements
and the financial statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of September 30,
2000 and September 25, 1999, and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 2000 in
conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.


/s/Deloitte & Touche LLP

Boston, Massachusetts
November 9, 2000


F-1


COURIER CORPORATION
CONSOLIDATED STATEMENTS OF INCOME



FOR THE YEARS ENDED

SEPTEMBER 30, 2000 SEPTEMBER 25, 1999 SEPTEMBER 26, 1998
---------------------------------------------------------------

Net sales $188,320,000 $163,991,000 $151,591,000
Cost of sales 140,226,000 123,184,000 113,923,000
------------------------------------------------------------
Gross profit 48,094,000 40,807,000 37,668,000

Selling and administrative expenses 32,002,000 27,726,000 26,653,000
Interest expense 325,000 524,000 1,303,000
Other income (expense) (Note J) 119,000 -- 2,043,000
------------------------------------------------------------
Income before taxes 15,886,000 12,557,000 11,755,000

Provision for income taxes (Note C) 5,249,000 4,181,000 4,030,000
------------------------------------------------------------

Net income $ 10,637,000 $ 8,376,000 $ 7,725,000
============================================================

Net income per share (Notes A and K):

Basic $3.25 $2.61 $ 2.49

Diluted $3.15 $2.52 $ 2.37

Cash dividends declared per share $0.48 $0.42 $0.385
============================================================


The accompanying notes are an integral part of the consolidated financial
statements.

F-2


COURIER CORPORATION
CONSOLIDATED BALANCE SHEETS



SEPTEMBER 30, 2000 SEPTEMBER 25, 1999
------------------------------------

ASSETS
Current assets:
Cash and cash equivalents (Note A) $ 562,000 $ 3,460,000
Accounts receivable, less allowance for uncollectible
accounts of $1,391,000 in 2000 and $937,000 in 1999 39,811,000 31,388,000
Inventories (Note B) 27,421,000 12,232,000
Deferred income taxes (Note C) 2,543,000 1,915,000
Other current assets 1,016,000 271,000
------------------------------------

Total current assets 71,353,000 49,266,000

Property, plant and equipment (Notes A and D):
Land 1,059,000 1,059,000
Buildings and improvements 20,812,000 19,052,000
Favorable building lease 2,816,000 2,816,000
Machinery and equipment 93,392,000 79,967,000
Furniture and fixtures 1,512,000 1,700,000
Construction in progress 2,850,000 1,723,000
------------------------------------

122,441,000 106,317,000

Less-Accumulated depreciation and amortization (81,427,000) (75,689,000)
------------------------------------

Property, plant and equipment, net 41,014,000 30,628,000


Real estate held for sale or lease, net (Note J) 323,000 344,000
Goodwill and other intangibles, net (Notes A and H) 26,040,000 10,750,000
Prepublication costs 2,949,000 --
Other assets 562,000 524,000
------------------------------------

Total assets $ 142,241,000 $ 91,512,000
====================================


The accompanying notes are an integral part of the consolidated financial
statements.


F-3


COURIER CORPORATION
CONSOLIDATED BALANCE SHEETS



SEPTEMBER 30, 2000 SEPTEMBER 25, 1999
------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt (Note D) $ 366,000 $ 338,000
Accounts payable 18,023,000 11,644,000
Accrued payroll 6,708,000 5,173,000
Accrued taxes 5,303,000 5,162,000
Other current liabilities 7,606,000 5,034,000
--------------------------------------

Total current liabilities 38,006,000 27,351,000

Long-term debt (Note D) 31,327,000 1,193,000
Deferred income taxes (Note C) 2,428,000 2,693,000
Other liabilities 2,709,000 2,716,000
--------------------------------------

Total liabilities 74,470,000 33,953,000
--------------------------------------

Commitments and contingencies (Note E)

Stockholders' equity (Notes A and F):
Preferred stock, $1 par value - authorized
1,000,000 shares; none issued
Common stock, $1 par value - authorized
6,000,000 shares; issued 3,750,000 shares;
outstanding 3,344,000 shares in 2000 and
3,233,000 shares in 1999 3,750,000 3,750,000
Additional paid-in capital 2,283,000 1,258,000
Retained earnings 65,551,000 56,486,000
Unearned compensation (513,000) --
Treasury stock, at cost: 406,000 shares in 2000
and 517,000 shares in 1999 (3,300,000) (3,935,000)
--------------------------------------

Total stockholders' equity 67,771,000 57,559,000
--------------------------------------

Total liabilities and stockholders' equity $ 142,241,000 $ 91,512,000
======================================


F-4


COURIER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS



FOR THE YEARS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 25, 1999 SEPTEMBER 26, 1998
----------------------------------------------------------------

Operating Activities:
Net income $ 10,637,000 $ 8,376,000 $ 7,725,000
Adjustments to reconcile net income to
cash provided from operating activities:
Depreciation and amortization 8,062,000 8,282,000 8,541,000
Deferred income taxes (893,000) (456,000) (499,000)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable (2,639,000) (3,447,000) (2,022,000)
Inventory (1,300,000) (1,404,000) (1,010,000)
Accounts payable 5,298,000 2,350,000 (263,000)
Accrued taxes (31,000) 227,000 (26,000)
Other elements of working capital 2,829,000 (245,000) 1,891,000
Other, net 557,000 687,000 (1,695,000)
----------------------------------------------------------

Cash provided from operating activities 22,520,000 14,370,000 12,642,000
----------------------------------------------------------

Investment Activities:
Business acquisitions, net of cash (Note H) (38,571,000) -- (563,000)
Capital expenditures (16,347,000) (4,999,000) (4,147,000)
Proceeds from sale of assets (Note J) -- -- 4,600,000
----------------------------------------------------------

Cash used for investment activities (54,918,000) (4,999,000) (110,000)
----------------------------------------------------------

Financing Activities:
Scheduled long-term debt repayments (338,000) (312,000) (387,000)
Other long-term borrowings (repayments) 30,500,000 (5,250,000) (11,500,000)
Cash dividends (1,572,000) (1,354,000) (1,205,000)
Stock repurchases (114,000) (455,000) --
Proceeds from stock plans 1,024,000 738,000 1,255,000
----------------------------------------------------------

Cash provided from (used for) financing activities 29,500,000 (6,633,000) (11,837,000)
----------------------------------------------------------

Increase (decrease) in cash and equivalents (2,898,000) 2,738,000 695,000

Cash and equivalents at the beginning of the period 3,460,000 722,000 27,000
----------------------------------------------------------

Cash and equivalents at the end of the period $ 562,000 $ 3,460,000 $ 722,000
==========================================================

Supplemental cash flow information:
Interest paid $ 311,000 $ 396,000 $ 1,243,000
Income taxes paid (net of receipts) $ 6,177,000 $ 3,939,000 $ 4,498,000



The accompanying notes are an integral part of the consolidated financial
statements.


F-5


COURIER CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY



TOTAL
STOCKHOLDERS' COMMON ADDITIONAL RETAINED UNEARNED TREASURY
EQUITY STOCK PAID-IN CAPITAL EARNINGS COMPENSATION STOCK
---------------------------------------------------------------------------------------

Balance, September 27, 1997 $ 41,748,000 $ 4,500,000 $ 9,277,000 $ 52,060,000 $ -- $(24,089,000)

Net income 7,725,000 -- -- 7,725,000 -- --
Cash dividends (1,205,000) -- -- (1,205,000) -- --
Stock plan activity 1,522,000 -- 734,000 -- -- 788,000
Convert treasury shares (Note A) -- (2,000,000) (9,627,000) (7,866,000) -- 19,493,000
Stock dividend (Note A) -- 1,250,000 -- (1,250,000) -- --
---------------------------------------------------------------------------------------

Balance, September 26, 1998 49,790,000 3,750,000 384,000 49,464,000 -- (3,808,000)

Net income 8,376,000 -- -- 8,376,000 -- --
Cash dividends (1,354,000) -- -- (1,354,000) -- --
Stock repurchase (455,000) -- -- -- -- (455,000)
Stock plan activity 1,202,000 -- 874,000 -- -- 328,000
---------------------------------------------------------------------------------------

Balance, September 25, 1999 57,559,000 3,750,000 1,258,000 56,486,000 -- (3,935,000)

Net income 10,637,000 -- -- 10,637,000 -- --
Cash dividends (1,572,000) -- -- (1,572,000) -- --
Stock repurchase (114,000) -- -- -- -- (114,000)
Restricted stock grant/amorti-
zation activity, net 45,000 -- 386,000 -- (513,000) 172,000
Other stock plan activity 1,216,000 -- 639,000 -- -- 577,000
---------------------------------------------------------------------------------------

Balance, September 30, 2000 $ 67,771,000 $ 3,750,000 $ 2,283,000 $ 65,551,000 $(513,000) $ (3,300,000)
=======================================================================================


The accompanying notes are an integral part of the consolidated financial
statements.


F-6


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS: Courier Corporation and its subsidiaries ("Courier" or the "Company")
is focused on streamlining and enhancing the process by which printed books and
digital content reach end-user markets, primarily for educational, religious,
and specialty book publishers. Courier has three lines of business: full service
book manufacturing, customized education and, beginning in fiscal 2001 with the
acquisition of Dover Publications, Inc. ("Dover"), specialized publishing (see
Note H).

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements, prepared on
a fiscal year basis, include the accounts of Courier Corporation and its
subsidiaries after elimination of all significant intercompany transactions.
Such financial statements have been prepared in conformity with generally
accepted accounting principles, which require the use of certain estimates and
assumptions. Fiscal year 2000 was a 53-week period compared with fiscal years
1999 and 1998, which were 52-week periods.

FINANCIAL INSTRUMENTS: Financial instruments consist primarily of cash, accounts
receivable, accounts payable and debt obligations. The Company classifies as
cash and cash equivalents amounts on deposit in banks and cash invested
temporarily in various instruments with maturities of three months or less at
time of purchase. The Company estimates the fair value of financial instruments
based on interest rates available to the Company and by comparison to quoted
market prices. At September 30, 2000 and September 25, 1999, the fair market
value of the Company's financial instruments approximated their carrying values.

PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are recorded at
cost, including interest on funds borrowed to finance the acquisition or
construction of major capital additions. Interest of approximately $102,000 was
capitalized in fiscal 2000. No interest was capitalized in fiscal years 1999 and
1998. The Company provides for depreciation of property, plant and equipment on
a straight-line basis over periods ranging from 3 to 11 years, except for
depreciation on buildings and improvements which is based on estimated useful
lives ranging from 10 to 40 years.

Leasehold improvements and a favorable building lease are amortized on a
straight-line basis over the shorter of their useful life or the term of the
lease. Expenditures for maintenance and repairs are charged against income as
incurred; betterments that increase the value or materially extend the life of
the related assets are capitalized. When assets are sold or retired, the cost
and accumulated depreciation are removed from the accounts and any gain or loss
is included in income.

GOODWILL: Goodwill arising from business acquisitions is amortized using the
straight-line method over periods ranging from 5 to 20 years. Amortization
expense was approximately $596,000 for each of the fiscal years 2000, 1999 and
1998. The Company continues to carry goodwill of approximately $1.2 million
arising from the purchase of a company prior to October 31, 1970; such amount is
not being amortized because management believes that the value has not
diminished.


F-7


A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

LONG-LIVED ASSETS: Management periodically reviews long-lived assets for
impairment and does not believe that there is any material impairment of any
asset of the Company as measured in accordance with Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."

PREPUBLICATION COSTS: Prepublication costs acquired in the Dover acquisition
(see Note H) will be amortized using the straight-line method over an estimated
useful life of four years.

INCOME TAXES: Deferred income tax liabilities and assets are determined based
upon the differences between the financial statement and tax bases of assets and
liabilities, and are measured by applying enacted tax rates and laws for the
taxable years in which these differences are expected to reverse.

REVENUE RECOGNITION: Revenue is recognized upon shipment of goods to customers
or upon the transfer of ownership for those customers whom the Company provides
manufacturing and distribution services. Revenue for distribution services is
recognized as services are provided.

USE OF ESTIMATES: The process of preparing financial statements in conformity
with generally accepted accounting principles requires management to make
estimates that affect the reported amounts of assets and liabilities at the date
of the financial statements, as well as revenues and expenses during the
reporting period. Actual results may differ from these estimates.

NET INCOME PER SHARE: Basic net income per share is based on the weighted
average number of common shares outstanding each period. Diluted net income per
share also includes potentially dilutive items such as options (see Note K).

STOCK SPLIT: In June 1998, the Company distributed a three-for-two stock split
effected in the form of a 50% stock dividend. Per share amounts for periods
prior to June 1998 presented in the accompanying financial statements have been
restated to give effect to the stock split. In addition, related to this stock
split, the Company converted 2,000,000 shares of treasury stock to authorized
but unissued shares.

TREASURY STOCK: The Company has historically used treasury stock for stock
options and grants and intends to continue to use treasury stock for such
purposes.

NEW ACCOUNTING PRONOUNCEMENTS: The Financial Accounting Standards Board has
issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (as amended by SFAS No. 137 in June 1999 and SFAS No. 138 in June
2000), which will be effective at the beginning of the Company's fiscal year
ending September 29, 2001. The Company does not expect the adoption of this
standard to have a material effect on its consolidated financial statements. The
Securities and Exchange Commission has issued Staff Accounting Bulletin (SAB)
No. 101 ("Revenue Recognition in Financial Statements"), that will be required
to be implemented by the Company in the Company's fiscal year ending September
29, 2001. The Company is currently evaluating the impact, if any, that the
adoption of this will have on the consolidated financial statements.


F-8


B. INVENTORIES

Inventories are valued at the lower of cost or market. Cost is determined using
the last-in, first-out (LIFO) method for approximately 47% and 82% of the
Company's inventories at September 30, 2000 and September 25, 1999,
respectively. Other inventories are determined using the first-in, first-out
(FIFO) method with the exception of inventory relating to the acquisition of
Dover ($13.9 million) which, in accordance with purchase accounting requirements
(see Note H), is included at its estimated fair market value at September 30,
2000. Inventories at September 30, 2000 and September 25, 1999 consisted of the
following:



2000 1999
----------- -----------


Raw materials $ 3,619,000 $ 2,945,000
Work in process 8,018,000 5,899,000
Finished goods 15,784,000 3,388,000
----------- -----------
Total $27,421,000 $12,232,000
=========== ===========


On a FIFO basis, reported year-end inventories would have been higher by $5.9
million in fiscal 2000 and $5.5 million in fiscal 1999.

C. INCOME TAXES

The statutory federal tax rate is 34%. The total provision differs from that
computed using the statutory federal income tax rate for the following reasons:



2000 1999 1998
---------- ---------- ----------


Federal taxes at statutory rate $5,401,000 $4,269,000 $3,997,000
State income taxes, net of federal income tax
benefit 474,000 397,000 428,000
Foreign sales corporation (FSC) export related
income (643,000) (499,000) (310,000)
Other 17,000 14,000 (85,000)
---------- ---------- ----------
Total $5,249,000 $4,181,000 $4,030,000
========== ========== ==========


The provision for income taxes consisted of the following:



2000 1999 1998
---------- ---------- ----------

Currently payable:
Federal $5,353,000 $3,972,000 $3,697,000
State 789,000 665,000 832,000
---------- ---------- ----------
6,142,000 4,637,000 4,529,000
---------- ---------- ----------
Deferred:
Federal (822,000) (392,000) (315,000)
State (71,000) (64,000) (184,000)
---------- ---------- ----------
(893,000) (456,000) (499,000)
---------- ---------- ----------
Total $5,249,000 $4,181,000 $4,030,000
========== ========== ==========



F-9




C. INCOME TAXES (CONTINUED)

The following is a summary of the significant components of the Company's
deferred tax assets and liabilities as of September 30, 2000 and September 25,
1999:



2000 1999
---------- ----------

Deferred tax assets:
Vacation accrual not currently deductible $ 589,000 $ 510,000
Other accruals not currently deductible 567,000 238,000
Non-deductible reserves 1,364,000 1,138,000
Other 23,000 29,000
---------- ----------
Classified as current 2,543,000 1,915,000
Deferred compensation arrangements 1,059,000 1,019,000
Other 232,000 133,000
---------- ----------
Total deferred tax assets $3,834,000 $3,067,000
========== ==========

Deferred tax liabilities:
Accelerated depreciation $3,719,000 $3,845,000
========== ==========


Non-current deferred tax assets have been netted against non-current deferred
tax liabilities for balance sheet classification purposes.


D. LONG-TERM DEBT

Long-term debt consisted of the following:



2000 1999
----------- -----------


Obligation under revolving bank credit facility
at 7.13% as of September 30, 2000 $30,500,000 $ --
Obligation under industrial development bond
arrangement at 3%, payable in
monthly installments through May 2011 901,000 972,000
9.5% secured promissory note, payable in monthly
installments through October 2001 292,000 559,000
----------- -----------
31,693,000 1,531,000
Less: Current maturities 366,000 338,000
----------- -----------
Total $31,327,000 $ 1,193,000
=========== ===========


Scheduled aggregate principal payments of long-term debt are $366,000 in fiscal
2001, $76,000 in fiscal 2002, $30,578,000 in fiscal 2003, $80,000 in fiscal
2004, $83,000 in fiscal 2005 and $510,000 thereafter.


F-10


D. LONG-TERM DEBT (CONTINUED)

In August 2000, the Company amended its long-term revolving credit facility
increasing the amount available under this facility from $30 million to $60
million in contemplation of the acquisition of Dover Publications, Inc. (see
Note H). Under this credit facility, the Company can borrow at a rate not to
exceed LIBOR plus 1.5%. The revolving credit facility matures in March 2003 and
borrowings of $30,500,000 are included in scheduled aggregate principal payments
due in 2003. The Company has not had any short-term borrowings during the three
fiscal years ended September 30, 2000.

The revolving credit facility contains restrictive covenants including
provisions relating to the maintenance of working capital, the level of capital
expenditures, the incurring of additional indebtedness and a quarterly test of
EBITDA to debt service. It also provides for a commitment fee not to exceed 3/8%
per annum on the unused portion. The industrial bond arrangement and the 9.5%
promissory note provide for a lien on the assets acquired with the proceeds.

E. COMMITMENTS AND CONTINGENCIES

The Company is committed under various operating leases to make annual rental
payments for certain buildings and equipment. Amounts charged to operations
under such leases approximated $3,956,000 in fiscal 2000, $3,553,000 in fiscal
1999 and $2,872,000 in fiscal 1998. As of September 30, 2000, minimum annual
rental commitments under the Company's long-term operating leases are
approximately $4,821,000 in fiscal 2001, $3,643,000 in fiscal 2002, $3,036,000
in fiscal 2003, $2,872,000 in fiscal 2004, $2,070,000 in fiscal 2005 and
$2,756,000 in the aggregate thereafter. The Company leases one of its facilities
from a corporation owned in part by an executive of the Company. The lease
agreement requires annual payments of approximately $216,000 over the initial
term of July 1997 through July 2002. At September 30, 2000 and September 25,
1999, the Company had letters of credit outstanding of $542,000 and $338,000,
respectively.

In the ordinary course of business, the Company is subject to various legal
proceedings and claims. The Company believes that the ultimate outcome of these
matters will not have a material adverse effect on its consolidated financial
statements.


F. STOCK ARRANGEMENTS

STOCK OPTION/INCENTIVE PLANS: The Courier Corporation 1993 Stock Incentive Plan,
as amended and restated, replaced the expiring 1983 Stock Option Plan. The 1993
Stock Incentive Plan, as amended, provides for the granting of stock options and
stock grants up to a total of 445,000 shares. Under the provisions of each plan,
both non-qualified and incentive stock options to purchase shares of the
Company's common stock may be granted to key employees. The option price per
share may not be less than the fair market value of stock at the time the option
is granted and incentive stock options must expire not later than ten years from
the date of grant. During fiscal 2000, 18,000 shares of restricted stock were
granted which vest over a four-year period. Amortization expense relating to
fiscal 2000 stock grants was $45,000.


F-11


F. STOCK ARRANGEMENTS (CONTINUED)

DIRECTORS' OPTION PLAN: A 1989 plan, as amended and restated, allows members of
the Company's Board of Directors to make an election to apply either 50% or 100%
of their annual retainer fee, including the committee chair retainer, toward the
annual grant of stock options to be offered at a price per share $5 below the
fair market value of the Company's common stock at the time the option is
granted. Retainer fees for fiscal 2000 amounted to $16,000 per director; in
addition, the two committee chair fees amounted to a total of $15,000 for fiscal
2000. The plan, as approved by stockholders, provides a total of 250,000 shares
for the issuance of such options.

The following is a summary of all option activity for these plans:



Stock Option/Incentive Plans Directors' Option Plan
---------------------------- ----------------------
Average Average
Exercise Exercise
Shares Price Shares Price
------------------ ----------------- --------------- ---------------

Outstanding at September 27, 1997 371,366 $ 10.13 42,900 $ 8.69
Issued 35,300 21.46 24,000 11.29
Exercised (137,510) 8.69 (22,500) 9.43
Cancelled (3,599) 10.11 - -
------------------ ------- --------- --------------- ----- ---------
Outstanding at September 26, 1998 265,557 $ 12.39 44,400 $ 9.72
Issued 5,000 23.75 18,000 15.75
Exercised (59,329) 10.63 (20,600) 10.47
------------------ ------- --------- --------------- ----- ---------
Outstanding at September 25, 1999 211,228 $ 13.15 41,800 $ 11.95
Issued 78,800 26.88 20,100 19.14
Exercised (70,082) 10.42 (12,700) 14.35
Cancelled (7,916) 21.35 - -
------------------ ------- --------- --------------- ----- ---------
Outstanding at September 30, 2000 212,030 $ 18.85 49,200 $ 14.26
================== ======= ========= =============== ===== =========

Exercisable at September 30, 2000 134,389 $ 14.42 49,200 $ 14.26
Available for future grants 70,653 90,400


The following tables present information with regards to stock options
outstanding at September 30, 2000:




Stock Option/Incentive Plans
------------------------------------------------------------
$4.67 - $9.50 - $15.58 - $23.75 -
Range of Exercise Prices $9.17 $14.17 $22.83 $31.49
- ------------------------ ------------- -------------- ---------------- --------------

Options outstanding 13,500 75,380 42,850 80,300
Weighted average exercise price of options
outstanding $7.67 $11.71 $19.84 $26.89
Weighted average remaining life 1.5 years 2.3 years 3.8 years 6.1 years
Options exercisable 13,500 75,380 31,918 13,591
Weighted average exercise price of options
exercisable $7.67 $11.71 $19.31 $24.64



F-12


F. STOCK ARRANGEMENTS (CONTINUED)




Directors' Option Plan
Range of Exercise Prices $7.46 - $19.21
- ------------------------ --------------

Options outstanding 49,200
Weighted average exercise price of options
outstanding $14.26
Weighted average remaining life 2.8 years
Options exercisable 49,200
Weighted average exercise price of options
exercisable $14.26


STOCK GRANT PLAN: The Company established a stock grant plan in 1977 entitling
key employees to receive shares of common stock of the Company. Shares granted
are either fully vested or vest over periods up to 5 years. The maximum number
of shares of common stock that may be awarded under the stock grant plan is
198,750 and no more than 33,750 shares may be awarded in any one fiscal year.
The numbers of shares granted under the plan were 4,000 in fiscal 2000, 100 in
fiscal 1999 and 2,000 in fiscal 1998. As of September 30, 2000, there were 828
shares available for future grants under the plan.

EMPLOYEE STOCK PURCHASE PLAN: The Company's 1999 Employee Stock Purchase Plan
("ESPP"), approved by stockholders in January 1999 to replace the expiring 1989
ESPP, covers an aggregate of 100,000 shares of Company common stock for issuance
under the plan. Eligible employees may purchase shares of Company common stock
at not less than 85% of fair market value at the beginning or end of the grant
period. During fiscal 2000, 11,560 shares were issued under the plan at an
average price of $20.67 per share. Since inception, 21,297 shares have been
issued. At September 30, 2000, an additional 78,703 shares were reserved for
future issuances.

STOCKHOLDERS' RIGHTS PLAN: In March 1999, the Board of Directors adopted a
ten-year stockholders' rights plan, replacing a plan which expired in October
1998. Under the plan, the Company's stockholders of record at March 19, 1999
received rights to purchase one one-thousandth of a share of preferred stock for
each share of common stock held on that date. The rights are not exercisable, or
transferable apart from the common stock, until certain events occur.

PRO FORMA DISCLOSURES: The Company accounts for its stock option plans under APB
Opinion No. 25, "Accounting for Stock Issued to Employees" and related
interpretations. Had compensation cost for grants under the ESPP and for stock
options granted after 1995 been determined under the provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," the Company's net income would have
been $10,145,000, or $3.01 per diluted share, for fiscal 2000; $8,026,000, or
$2.42 per diluted share, for fiscal 1999; and $7,511,000, or $2.31 per diluted
share, for fiscal 1998. The pro forma effect on net income and net income per
diluted share for fiscal 2000, fiscal 1999 and fiscal 1998 is not representative
of the pro forma effect on net income in future years, because it does not take
into consideration pro forma compensation expense related to options granted
prior to fiscal 1996.


F-13


F. STOCK ARRANGEMENTS (CONTINUED)

For purposes of pro forma disclosures, the fair value of each option grant was
estimated on the date of grant using the Black-Scholes option-pricing model. The
following key assumptions were used to value options issued:



2000 1999 1998
---- ---- ----

Risk-free interest rate 5.9% 6.3% 4.9%
Expected volatility 39% 42% 35%
Expected dividend yields 1.7% 1.7% 2.0%
Estimated life for grants under:
1993 Stock Incentive Plan 7 years 7 years 7 years
Directors' Option Plan 5 years 5 years 5 years
ESPP 0.5 years 0.5 years 0.5 years


For purposes of pro forma disclosure, following is a summary of the weighted
average fair value per share of options granted during each of the past three
fiscal years.



1993 Stock Incentive Plan Directors' Option Plan
------------------------- ----------------------
On grant date: 2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----

Exercise price was equal to stock price $11.44 $10.76 $7.74 - - -
Exercise price was in excess of
stock price $ 9.08 - $5.98 - - -
Exercise price was less than stock price - - - $10.38 $9.31 $5.79



G. RETIREMENT PLANS

The Company and its consolidated subsidiaries maintain various defined
contribution retirement plans covering substantially all of its employees,
except for Dover employees. Dover, acquired in September 2000 (see Note H),
provides retirement benefits through a defined benefit plan as described below.

Retirement costs of multi-employer union plans consist of defined contributions
determined in accordance with the respective collective bargaining agreements.
Retirement benefits for non-union employees are provided through the Courier
Profit Sharing and Savings Plan, which includes an Employee Stock Ownership Plan
(ESOP). Retirement costs included in the accompanying financial statements
amounted to approximately $2,500,000 in fiscal 2000, $2,330,000 in fiscal 1999
and $2,202,000 in fiscal 1998.

The Profit Sharing and Savings Plan is qualified under Section 401(k) of the
Internal Revenue Code. The plan allows eligible employees to contribute up to
16% of their compensation, with the Company matching 25% of the first 6% of
employee contributions. The Company also makes contributions to the plan
annually based on profits each year for the benefit of all eligible non-union
employees.


F-14


G. RETIREMENT PLANS (CONTINUED)

Shares of Company common stock may be allocated to participants' ESOP accounts
annually based on their compensation as defined in the plan. During fiscal years
2000, 1999 and 1998, no such shares were allocated to eligible participants. At
September 30, 2000, the ESOP held 167,243 shares on behalf of the participants.

Dover has a noncontributory, defined benefit pension plan covering substantially
all of its employees. The following table provides the plan's funded status and
the amounts recognized in the consolidated balance sheet as of September 30,
2000 for Dover's defined benefit pension plan, as well as the actuarial
assumptions used in the determination.



Projected benefit obligation $3,647,000
Fair value of plan assets 3,471,000
----------
Funded status and accrued pension obligation $(176,000)
==========

Weighted average assumptions:
Discount rate 7.0%
Expected return on plan assets 7.5%
Rate of compensation increase 5.0%



H. BUSINESS ACQUISITIONS

On September 22, 2000, the Company acquired all of the outstanding capital stock
of Dover Publications, Inc., a Mineola, New York publisher of special-interest
books. The Company paid approximately $39 million in cash to the former
stockholders of Dover for their shares of capital stock.

The acquisition was accounted for as a purchase and, accordingly, Dover's
financial results have been included in the consolidated financial statements
from the date of acquisition. The financial statements reflect the preliminary
allocation of the purchase price to the assets acquired and liabilities assumed,
based on their estimated fair value at the date of acquisition. Such estimates
are subject to final appraisals for certain assets acquired. The excess purchase
price over the fair value of net assets acquired amounted to approximately $16
million, which has been accounted for as goodwill and will be amortized on a
straight-line basis over twenty years.


F-15


H. BUSINESS ACQUISITIONS (CONTINUED)

The following unaudited pro forma information presents a summary of consolidated
results of operations of the Company and Dover as if the acquisition had
occurred at the beginning of fiscal 2000 and 1999, with pro forma adjustments to
give effect to amortization of goodwill, interest expense on acquisition debt
and certain other adjustments, together with related income tax effects.



(Unaudited) 2000 1999
- -------------------------------------------------------------------------

Net sales $216,282,000 $192,071,000
Net income 10,881,000 9,150,000
Net income per diluted share 3.23 2.76


These pro forma results have been prepared for comparative purposes only and do
not purport to be indicative of the results of operations which actually would
have resulted had the business combination been in effect at the beginning of
the fiscal 2000 and 1999 or of future results of operations of the consolidated
entities.

On September 30, 1997, the Company purchased The Home School Books & Supplies
("The Home School") based in Arlington, Washington. The Home School is a direct
marketer of educational materials to families engaged in educating children at
home. The purchase price was approximately $0.5 million.

I. BUSINESS SEGMENTS

The Company has operated in one primary business segment, book manufacturing,
with a second smaller business segment in customized education. On September 22,
2000, the Company acquired Dover Publications, Inc. (see Note H) which operates
in a third segment, specialized publishing. The specialized publishing segment
is not included in the segment information table below because the results of
operations for the period prior to September 30, 2000 were not significant.
Dover's assets of $41.5 million at September 30, 2000 are included in
"unallocated" assets.

The Company has aggregated its book manufacturing business into one segment
because of strong similarities in the economic characteristics, the nature of
products and services, production processes, class of customer and distribution
methods used. The book-manufacturing segment offers a full range of services
from production through storage and distribution for education, religious and
specialty book publishers. The customized education segment responds to the
demand for increased choice in the way educational information is received and
used. Operations include The Home School, a direct marketer of educational
materials to families engaged in home-based learning, and Copyright Management
Services, a provider of customized college coursepacks and textbooks.

The accounting policies of the segments are the same as those described in Note
A. Intersegment sales are not significant. In evaluating segment performance,
management primarily focuses on income or loss before taxes and other income.
Other income is reflected as "unallocated" in the following table. Corporate
expenses that are allocated to the segments


F-16


I. BUSINESS SEGMENTS (CONTINUED)

include various support functions such as information technology services,
finance, human resources and engineering, and include depreciation and
amortization expense related to corporate assets. The corresponding corporate
asset balances are not allocated to the segments. Unallocated corporate assets
consist primarily of cash and cash equivalents and fixed assets used by the
corporate support functions. For fiscal 2000, such assets also include the
assets of Dover.

The following table provides segment information as required under SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information."



Book Manu- Customized Unallo- Total
facturing Education cated Company
--------------- -------------- -------------- ---------------

Fiscal 2000
- -----------
Net sales $ 184,959,000 $ 3,361,000 $ - $ 188,320,000
Earnings (loss) before income
taxes 19,066,000 (3,299,000) 119,000 15,886,000
Assets 88,748,000 848,000 52,645,000 142,241,000
Depreciation and amortization 7,844,000 218,000 - 8,062,000
Capital expenditures 15,665,000 13,000 669,000 16,347,000
Interest expense 272,000 53,000 - 325,000
- ------------------------------------------------------------------------------------------------------------------

Fiscal 1999
- -----------
Net sales $ 161,186,000 $ 2,805,000 $ - $ 163,991,000
Earnings (loss) before income
taxes 15,155,000 (2,598,000) - 12,557,000
Assets 74,900,000 1,470,000 15,142,000 91,512,000
Depreciation and amortization 7,988,000 294,000 - 8,282,000
Capital expenditures 3,848,000 107,000 1,044,000 4,999,000
Interest expense 445,000 79,000 - 524,000
- ------------------------------------------------------------------------------------------------------------------

Fiscal 1998
- -----------
Net sales $ 149,546,000 $ 2,045,000 $ - $ 151,591,000
Earnings (loss) before income
taxes 12,769,000 (3,057,000) 2,043,000 11,755,000
Assets 72,939,000 2,167,000 12,524,000 87,630,000
Depreciation and amortization 8,328,000 213,000 - 8,541,000
Capital expenditures 3,239,000 307,000 601,000 4,147,000
Interest expense 1,221,000 82,000 - 1,303,000
- ------------------------------------------------------------------------------------------------------------------



Export sales as a percentage of consolidated sales were approximately 18% in
both fiscal 2000 and fiscal 1999 and 17% in fiscal 1998. Sales to the Company's
largest customer amounted to approximately 26% of consolidated sales in fiscal
2000, 27% in fiscal 1999 and 26% in fiscal 1998. In addition, sales to another
customer amounted to 17% of consolidated sales in fiscal 2000, 15% in fiscal
1999 and 12% in fiscal 1998. No other customer accounted for more than 10% of
consolidated sales. Customers are granted credit on an unsecured basis.


F-17


J. OTHER INCOME (EXPENSE)

Other income (expense) in fiscal 2000 reflects net rental income from the
Company's Raymond, New Hampshire facility; such facility comprises the September
30, 2000 balance sheet caption "Real estate held for sale or lease, net." In
February 2000, the Company entered into a five-year lease agreement for this
facility, which had been vacant. The lease provided for a purchase option at a
price of $1.3 million. The option was exercised in August 2000 and closed in
October 2000, resulting in an after-tax gain of approximately $0.6 million, or
$0.16 per diluted share, which will be included in the Company's fiscal 2001
first quarter results.

In June 1998, the Company completed the sale of a former manufacturing
facility in Philadelphia that had been vacant. During fiscal 1997, the
Company had consolidated its operations in Philadelphia from this older,
multistory facility to a recently expanded, more efficient manufacturing
facility also in Philadelphia. The selling price of the property was $4.6
million, resulting in a pretax gain of approximately $2.0 million. The
after-tax gain of approximately $1.1 million, or $.34 per diluted share,
generated approximately $3.2 million of cash after taxes.

K. NET INCOME PER SHARE

Following is a reconciliation of the shares used in the calculation of basic
and diluted net income per share. Potentially dilutive shares, calculated
using the treasury stock method, consist of shares issued under the Company's
stock option plans.



2000 1999 1998
-----------------------------------------------

Average shares outstanding for basic 3,277,000 3,204,000 3,100,000
Effect of potentially dilutive shares 96,000 115,000 154,000
===============================================
Average shares outstanding for dilutive 3,373,000 3,319,000 3,254,000
===============================================



F-18


COURIER CORPORATION
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)



FISCAL 2000
(Dollars in thousands except per share amounts) First Second Third Fourth
- ------------------------------------------------------------------------------------------------------------------

Operating Results:
Net sales $45,143 $44,489 $47,215 $51,473
Gross profit 11,084 11,543 12,159 13,308
Net income 2,169 2,351 2,517 3,600
Net income per diluted share 0.65 0.70 0.75 1.06
Dividends declared per share 0.12 0.12 0.12 0.12
Stock price:
Highest 24 5/8 25 26 3/4 30 3/4
Lowest 21 3/8 22 1/4 23 1/8 27

FISCAL 1999
(Dollars in thousands except per share amounts) First Second Third Fourth
- ------------------------------------------------------------------------------------------------------------------
Operating Results:
Net sales $39,301 $40,480 $40,731 $43,479
Gross profit 9,338 10,224 9,806 11,439
Net income 1,420 1,867 1,826 3,263
Net income per diluted share 0.43 0.56 0.55 0.98
Dividends declared per share 0.105 0.105 0.105 0.105
Stock price:
Highest 31 26 23 3/8 25 3/4
Lowest 18 9/16 19 5/8 18 22 3/4


COMMON SHARES OF THE COMPANY ARE TRADED OVER-THE-COUNTER ON THE NASDAQ NATIONAL
MARKET - SYMBOL "CRRC."

THERE WERE APPROXIMATELY 700 STOCKHOLDERS OF RECORD AS OF SEPTEMBER 30, 2000.


F-19



COURIER CORPORATION
FIVE-YEAR FINANCIAL SUMMARY



(Dollar amounts in millions
except per share amounts) 2000* 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------------------

Net sales $188.3 $164.0 $151.6 $131.4 $125.2
Gross profit 48.1 40.8 37.7 28.1 22.6
Net income 10.6 8.4 7.7 4.3 2.6
Net income per diluted share 3.15 2.52 2.37 1.41 0.82
Dividends per share 0.48 0.42 0.385 0.32 0.32
Working capital 33.3 21.9 16.5 14.1 13.7
LIFO reserve 5.9 5.5 5.3 5.7 6.0
Current ratio (FIFO basis) 2.0 2.0 1.9 1.8 1.9
Total assets 142.2 91.5 87.6 89.6 74.8
Long-term debt 31.3 1.2 6.8 18.6 9.3
Long-term debt as a percentage
of capitalization 31.6% 2.0% 12.0% 30.8% 19.3%
Depreciation and amortization 8.1 8.3 8.5 7.2 6.5
Capital expenditures 16.3 5.0 4.1 6.7 7.3
Stockholders' equity 67.8 57.6 49.8 41.7 38.8
Return on stockholders' equity 17.0% 15.6% 16.9% 10.7% 6.7%
Stockholders' equity per share 20.27 17.80 15.70 13.87 12.74
Shares outstanding (in 000's) 3,344 3,233 3,172 3,011 3,044
Number of employees 1,535 1,320 1,254 1,202 1,050


NET INCOME PER SHARE IS BASED ON WEIGHTED AVERAGE SHARES OUTSTANDING;
STOCKHOLDERS' EQUITY PER SHARE IS BASED ON SHARES OUTSTANDING AT YEAR END.
SHARES OUTSTANDING AND PER SHARE AMOUNTS HAVE BEEN RETROACTIVELY ADJUSTED TO
REFLECT A THREE-FOR-TWO STOCK SPLIT EFFECTED ON JUNE 1, 1998 (SEE NOTE A).

* FISCAL 2000 INCLUDED 53 WEEKS.


F-20




MANAGEMENT'S DISCUSSION AND ANALYSIS


RESULTS OF OPERATIONS

Sales in fiscal 2000 increased 15% to $188.3 million compared to $164.0 million
in fiscal 1999. Fiscal 2000 included 53 weeks compared to 52 weeks in fiscal
1999. Sales from the Company's book manufacturing segment were also up 15% for
the year reflecting increased sales in education, religion and specialized
publishing markets. Revenues from the Company's customized education segment,
which consists of Copyright Management Services and The Home School, grew by 20%
in fiscal 2000 to $3.4 million. Total sales in fiscal 1999 increased 8% to
$164.0 million compared to $151.6 million in fiscal 1998. Sales from the
Company's book manufacturing segment also increased 8% over fiscal 1998 due to
increased sales across all of the Company's major publishing markets. Revenues
from the Company's customized education segment grew by 37% in fiscal 1999 to
$2.8 million.

Gross profits in fiscal 2000 increased by $7.3 million or 18% and, as a
percentage of sales, increased to 26% from 25% in fiscal 1999. The improvement
in gross profits in fiscal 2000 resulted from increased sales volume combined
with productivity gains from investments in capital equipment and increased
recycling income. Gross profit increased to $40.8 million in fiscal 1999, up 8%
from $37.7 million in fiscal 1998. The increase in gross profit reflected the
impact of the increased sales volume. As a percentage of sales, gross profit for
fiscal 1999 was comparable to fiscal 1998 at 25% of sales. During the past three
years, inflation has not had a significant impact on the Company's gross
profits, or on its overall operations.

Selling and administrative expenses increased to $32.0 million in fiscal 2000
from $27.7 million in fiscal 1999, remaining at 17% as a percentage of sales.
The increase in selling and administrative expense resulted primarily from the
impact of the extra week in fiscal 2000 and from expenses that relate directly
to the increase in profitability. Selling and administrative expenses increased
to $27.7 million in fiscal 1999, up 4% from $26.7 million in fiscal 1998. The
increase was due to costs associated with improvements to the Company's
information systems and with expenses that relate directly to the increase in
profitability. As a percentage of sales, selling and administrative expenses
decreased to 17% in fiscal 1999 from 18% in fiscal 1998.

Interest expense in fiscal 2000 was $0.3 million compared to $0.5 million in
fiscal 1999 due to a reduction in average borrowings of approximately $1.3
million. In addition, interest of approximately $0.1 million related to new
equipment was capitalized in fiscal 2000. In fiscal 1999, interest expense was
$0.8 million lower than fiscal 1998 reflecting a reduction in average borrowings
of approximately $13 million due to cash generated from operations as well as a
slightly lower average interest rate in fiscal 1999.

Other income (expense) in fiscal 2000 is comprised of net rental income from the
Company's Raymond, New Hampshire facility. In February 2000, the Company entered
into a five-year lease agreement for this facility, which had been vacant. The
lease provided for a purchase option at a price of $1.3 million. The option was
exercised in August 2000 and the building was sold in October 2000. The
after-tax gain of approximately $0.6 million, or $.16 per diluted share, will be
included in the Company's fiscal 2001 first quarter results. Other income
(expense) in fiscal 1998 resulted from a gain on the sale of a former
manufacturing facility in Philadelphia that had been vacant. During fiscal 1997,
the Company had completed the consolidation of its operations in Philadelphia
from this older facility to a recently expanded, more efficient manufacturing
facility also in Philadelphia. The selling price of the facility was $4.6
million, resulting in a pretax gain of approximately $2.0 million and an
after-tax gain of approximately $1.1 million, or $.34 per diluted share.

The Company's effective tax rate for fiscal 2000 was comparable to the prior
year at 33%. In fiscal 1999, the effective tax rate was lower than the 34% rate
for fiscal 1998 due to higher state and local taxes in fiscal 1998 related to
the sale of the Philadelphia real estate, as well as an increased benefit from
export related income in fiscal 1999.


F-21



Net income for fiscal 2000 was $10.6 million, an increase of 27% over net income
in fiscal 1999 of $8.4 million. Net income per share on a diluted basis was up
25% to $3.15 per share from $2.52 per share in fiscal 1999. Pretax earnings from
the Company's book manufacturing segment increased 26% to $19.1 million from
$15.2 million in the prior year. In fiscal 2000, the customized education
segment incurred a pretax loss of $3.3 million, or $0.64 per diluted share
compared to a pretax loss of $2.6 million, or $0.52 per diluted share in fiscal
1999. Results for fiscal 2000 in the customized education segment include a
$350,000 pretax charge, or $.07 per diluted share, for the planned sale or
closure of The Home School's retail store. In fiscal 1999, net income was $8.4
million, up 27% over net income of approximately $6.6 million in fiscal 1998,
when adjusted to exclude the after-tax gain from the sale of real estate of
approximately $1.1 million. Net income per share on a diluted basis increased
24% to $2.52 per share compared to $2.03 per diluted share in fiscal 1998, after
adjusting to exclude the real estate gain of $.34 per share. Pretax earnings
from the Company's book manufacturing segment increased to $15.2 million, a 19%
increase over fiscal 1998, reflecting increased sales volume. The Company's
customized education segment in fiscal 1999 had a pretax loss of $2.6 million,
or $.52 per diluted share, compared to a pretax loss of $3.1 million, or $.62
per diluted share, in fiscal 1998.

For purposes of computing diluted net income per share, weighted average shares
outstanding increased by approximately 54,000 shares in fiscal 2000 and 65,000
shares in fiscal 1999. These increases were primarily due to shares exercised
and issued under the Company's stock plans and the impact of potentially
dilutive shares which increased primarily due to the increase in the price per
share of the Company's stock.

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities" (as amended by SFAS No. 137 in June 1999 and SFAS No. 138 in
June 2000), which will be effective at the beginning of the Company's fiscal
year ending September 29, 2001. The Company does not expect the adoption of this
standard to have a material effect on its consolidated financial statements. The
Securities and Exchange Commission has issued Staff Accounting Bulletin (SAB)
No. 101 ("Revenue Recognition in Financial Statements"), that will be required
to be implemented by the Company in the Company's fiscal year ending September
29, 2001. The Company is currently evaluating the impact, if any, that the
adoption of this SAB will have on the consolidated financial statements.

LIQUIDITY AND CAPITAL RESOURCES

In fiscal 2000, operating activities provided approximately $22.5 million of
cash. Net income for the year was $10.6 million and depreciation and
amortization was $8.1 million. Working capital provided approximately $4.2
million of cash, primarily from an increase in accounts payable related to
increased inventories and to capital equipment recently installed with final
payments due after September 30, 2000. Accounts receivable and inventories used
cash of approximately $3.9 million in fiscal 2000 related to the increase in
sales volume.

Investment activities in 2000 used $16.3 million in cash for capital
expenditures for new presses, binding lines, computer-to-plate equipment,
information system improvements and other equipment to automate work flows and
lower costs. Capital expenditures in fiscal 2001 are expected to be
approximately $15 million. On September 22, 2000 the Company acquired all of the
capital stock of Dover Publications, Inc. for approximately $39 million in cash.
The acquisition is expected to have a minimal effect on Courier's net income for
fiscal 2001 due to interest expense on acquisition debt, amortization of
goodwill of approximately $0.8 million and a required purchase accounting
inventory write up which will increase cost of sales when this inventory is
sold. Dover is expected to be accretive to earnings thereafter and to generate
substantial cash from operations from the outset.

In February 2000, the Company entered into a 5-year lease of its facility in
Raymond NH, which had been vacant and held for sale or lease. The lease provided
for a purchase option at a price of $1.3 million. The option was exercised in
August and the sale was closed in October 2000, resulting in after-tax cash
proceeds of approximately $0.8 million and an after-tax gain of approximately
$0.6 million, or $.16 per diluted share, which will be included in the Company's
first quarter fiscal 2001 results. In addition, the Company intends to sell the


F-22



unoccupied and underutilized portions of its multi-building manufacturing
complex in Westford, MA, which would result in reductions in building operating
costs while maintaining current levels of book manufacturing at the site. In
January 2000, the Company signed an agreement to sell this property, but a
number of significant contingencies exist. The prospective buyer has until
September 2001 to purchase the property.

Financing activities in fiscal 2000 provided approximately $29.5 million of
cash. Cash of $30.5 million was provided from an increase in long-term
borrowings related to the acquisition of Dover. Dividend payments were $1.6
million and proceeds from stock plans were $1.0 million, primarily from the
exercise of stock options. In August 2000, the Company amended its long-term
revolving bank credit facility, increasing the amount available under this
facility from $30 million to $60 million, in contemplation of the acquisition of
Dover. At September 30, 2000, borrowings under this credit facility were $30.5
million. This revolving credit facility matures in March 2003. The Company
intends to extend this credit facility an additional year during fiscal year
2001. The Company believes that its cash from operations and available credit
facilities will be sufficient to meet its cash requirements through 2001.

The Company does not hold any derivative financial instruments, derivative
commodity instruments or other financial instruments except as noted in Note A
to the financial statements. The Company engages neither in speculative nor
derivative trading activities.

FORWARD-LOOKING INFORMATION

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, CHANGES IN RAW
MATERIAL COSTS AND AVAILABILITY, SEASONAL CHANGES IN CUSTOMER ORDERS, PRICING
ACTIONS BY COMPETITORS, CHANGES IN COPYRIGHT LAWS, CONSOLIDATION AMONG CUSTOMERS
AND COMPETITORS, SUCCESS IN THE INTEGRATION OF ACQUIRED BUSINESSES, CHANGES IN
TECHNOLOGY, AND GENERAL CHANGES IN ECONOMIC CONDITIONS. ALTHOUGH THE COMPANY
BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS ARE
REASONABLE, ANY OF THE ASSUMPTIONS COULD BE INACCURATE, AND THEREFORE, THERE CAN
BE NO ASSURANCE THAT THE FORWARD-LOOKING STATEMENTS WILL PROVE TO BE ACCURATE.
THE FORWARD-LOOKING STATEMENTS INCLUDED HEREIN ARE MADE AS OF THE DATE HEREOF,
AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY SUCH STATEMENTS TO
REFLECT SUBSEQUENT EVENTS OR CIRCUMSTANCES.


F-23




COURIER CORPORATION

SCHEDULE II

CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS




ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END
OF PERIOD EXPENSES DEDUCTIONS CHANGES (1) OF PERIOD
---------- -------- ---------- ----------- ---------

Fiscal year ended September 30, 2000
Allowance for uncollectible accounts $ 937,000 $345,000 $141,000 $250,000 $1,391,000

Fiscal year ended September 25, 1999
Allowance for uncollectible accounts $1,078,000 $174,000 $315,000 $ -- $ 937,000

Fiscal year ended September 26, 1998
Allowance for uncollectible accounts $1,242,000 $178,000 $342,000 $ -- $1,078,000


(1) Other changes reflects amount related to a business acquisition.


S-1