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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-K

|(Mark One)                                                    |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934   
|For the fiscal year ended September 27, 2003                 
|OR                                                           
|o                                                             | 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 ý    No o

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. o

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Exchange Act
Rule 12b-2). Yes ý    No o

State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business
day of the registrant's most recently completed second fiscal quarter.

Common
Stock, $1 par value$172,551,513

Indicate
the number of shares outstanding of each of the registrant's classes of common stock as of December 8, 2003 (reflects three-for-two stock split effected in the form of a 50% stock
dividend, except for treasury shares, which was announced by the registrant on November 6, 2003, was payable to shareholders of record on November 17, 2003, and was distributed on
December 5, 2003)

Common
Stock, $1 par value7,932,164

DOCUMENTS INCORPORATED BY REFERENCE

Portions
of the registrant's proxy statement for the annual meeting of stockholders scheduled to be held on January 15, 2004 (Part III).

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PART I

Item 1. Business.

INTRODUCTION

Courier Corporation and its subsidiaries ("Courier" or the "Company") are among America's leading book manufacturers and specialty publishers. Courier
Corporation, founded in 1824, was incorporated under the laws of Massachusetts on June 30, 1972. The Company has two business segments: full-service book manufacturing and specialty
book publishing. In fiscal 2003, Courier sold all of the assets of Courier Custom Publishing, Inc. which comprised all of the remaining activities of the customized education segment.

The
book manufacturing segment focuses on streamlining and enhancing the process of bringing books from the point of creation to the point of use. Based on sales, Courier is the fifth
largest book manufacturer in the United States and largest in the Northeast, offering services from content management, prepress and production through storage and distribution. Courier's principal
book manufacturing markets are religious, educational and specialty trade books with products including Bibles, educational texts and consumer books. Revenues from this segment accounted for
approximately 85% of Courier's consolidated revenues in 2003.

The
specialty publishing segment consists of Dover Publications, Inc. ("Dover"), acquired by Courier on September 22, 2000. Dover publishes over 8,000 titles in more than
30 specialty categories ranging from literature and poetry classics to paper dolls, and from musical scores to typographical fonts. Revenues in this segment were approximately 18% of consolidated
sales in 2003. The combination of Dover's publishing, sales and distribution skills with Courier's book manufacturing, digital content conversion,
and e-commerce skills are providing a powerful end-to-end publishing solution for Courier.

Sales by segment (in thousands)

2003

2002

2001Book Manufacturing

$
171,858

$
170,382

$
181,233Specialty Publishing


36,391


36,004


33,259Customized Education








368Intersegment sales


(6,247
)

(5,362
)

(4,037
)Total

$
202,002

$
201,024

$
210,823


Additional
segment information, including the amounts of 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-18 and F-19 included in this Annual Report on Form 10-K.

On
December 17, 2002, the Company sold the assets of its wholly owned subsidiary, Courier Custom Publishing, Inc. Courier Custom Publishing provided customized coursepacks
and textbooks. The disposition was accounted for as a discontinued operation. Additional information is contained in Note H in the Notes to Consolidated Financial Statements on pages
F-16 and F-17 included in this Annual Report on Form 10-K. In March 2001, Courier sold substantially all of the assets of The Home School and ceased
operating this business. The Company had purchased the assets of The Home School Books & Supplies in September 1997. The Home School was a direct marketer of educational materials to
families engaged in educating children at home and had been included in the customized education segment prior to its sale.

1

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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. Each of Courier's six
facilities have 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 and consumer books.

Courier's
book manufacturing sales force of 18 people is responsible for all of the Company's sales to over 500 book-manufacturing customers. Courier's salespeople operate
out of sales offices located in New York, New York, Chicago, Illinois, Philadelphia, Pennsylvania, Hayward, California, North Chelmsford, Massachusetts and North Bergen and North Caldwell, New Jersey.

Sales
to The Gideons International aggregated approximately 27% of consolidated sales in 2003, 26% in 2002 and 25% in 2001. Sales to Pearson plc aggregated approximately 18% of 2003
consolidated sales, 15% in 2002 and 13% in 2001. The loss of either of these customers or a significant reduction in order volumes from them would have a material adverse effect on the Company. No
other customer accounted for more than 10% of consolidated sales. The Company distributes products around the world; export sales, as a percentage of consolidated sales, were approximately 22% in
2003, 21% in 2002 and 19% in 2001.

All
phases of Courier's business are highly competitive. The printing industry, exclusive of newspapers, includes approximately 45,000 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.

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. In 2002, a new line of scholarly hardcover books valuable to scientists and mathematicians was launched under the name of Dover Phoenix Editions.

Dover
sells its products through most American bookstore chains, independent booksellers, children's stores, craft stores and gift shops, as well as a diverse range of distributors
around the world. Dover has also sold its books directly to consumers for over 50 years through its specialty catalogs and, since 2001, over the Internet at www.doverpublications.com.Dover mails
its proprietary catalogs to over 500,000 consumers. In 2002, Dover launched www.DoverDirect.com, which is a business-to-business site for its retailers and distributors.

2

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The
publishing market is comprised of approximately 63,000 publishers, which is double the number in 1990. Many of these publishers are very small, but a few are much larger than Dover
or are part of organizations that are much larger. 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
electronic books. Dover distinguishes its products by offering an extremely wide variety of high quality books at modest prices.

MATERIALS AND SUPPLIES

Courier purchases its principal raw materials, primarily paper, but also plate materials, ink, adhesives, cover stock, casebinding materials and cartons, 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 Courier for
book production. Dover purchases a significant portion of its books from Courier's book manufacturing operations. During 2003, paper prices decreased slightly.

ENVIRONMENTAL REGULATIONS

The Company's operations are subject to federal, state and local environmental laws and regulations relating to, among other things: air emissions; waste
generation, handling, management and disposal; wastewater treatment and discharge; and remediation of soil and groundwater contamination. The Company periodically makes capital expenditures so that
its operations comply, in all material respects, with applicable environmental laws and regulations. No significant expenditures for this purpose are anticipated in 2004. 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 employed 1,420 persons at September 27, 2003 compared to 1,455 a year ago.

OTHER

Courier's overall business is not significantly seasonal in nature, although demand is normally highest in the Company's fourth quarter. Educational publishers in
the book manufacturing segment and Dover's business all contribute to this higher fourth quarter demand. There is no portion of Courier's business subject to cancellation of government contracts or
renegotiation of profits.

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.

The
Company makes available free of charge copies of its Annual Report on Form 10-K, as well as all other reports required to be filed by Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, via the Internet atwww.courier.comor upon written request to Robert P. Story, Jr., Senior Vice President and
Chief Financial Officer, Courier Corporation, 15 Wellman Avenue, North Chelmsford, MA 01863.

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Item 2. Properties.

REAL PROPERTIES

The following schedule lists the facilities owned or leased by Courier at September 27, 2003. Courier considers its plants and other facilities to be well
maintained and suitable for the purposes intended.

|Principal Activity and Location (Year Constructed) |                                                             | Owned/
Leased |        | Size in
Sq. Ft. |        
|-------------------------------------------------- | ----------------------------------------------------------- | ------------- | ------ | --------------- | -------
|Corporate headquarters and executive offices       |                                                             |               |        |                 |        
|                                                   | North Chelmsford, MA (1973, 1996)                           |               | Owned  |                 | 69,000 
|Book manufacturing and warehousing                 |                                                             |               |        |                 |        
|                                                   | Westford plant, Westford, MA (1900, 1968, 1969, 1981, 1990) |               | Owned  |                 | 593,000
|                                                   | Kendallville plant, Kendallville, IN (1978)                 |               | Owned  |                 | 155,000
|                                                   | National plant, Philadelphia, PA (1975, 1997)               |               | Owned  |                 | 229,000
|                                                   | 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 (1948-1981)                               |               | Leased |                 | 106,000
|                                                   | New Hyde Park, NY (1949-1969)                               |               | Leased |                 | 78,000 

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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 other electronic
prepress equipment which are subject to more rapid obsolescence. In addition, it leases two printing presses where the lessor holds title. Each lease contains an option to purchase the equipment upon
expiration of the lease at a price of $225,866 and $161,658 in 2004 and 2008, respectively. Capital expenditures amounted to approximately $10.9 million in 2003, $4.9 million in 2002 and
$12.8 million in 2001. Capital expenditures in 2003 were primarily for new equipment to increase productivity and lower costs in the book manufacturing segment. This amount also includes
$4.5 million of payments on a major new press scheduled for delivery next spring to expand the Company's four-color printing capacity. Fiscal 2004 capital expenditures are expected
to increase to $13 to $15 million. This includes approximately $9 million for the completion of the four-color press project including a related planned building expansion.
Courier considers its equipment to be in good operating condition and adequate for its present needs.

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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-11 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-12 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 27, 2003.

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-21 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-22 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-23 through
F-29 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 Notes A and L
of Notes to Consolidated Financial Statements, which appear on pages F-7 through F-9 and F-20 of this Annual Report on Form 10-K. The Company
engages neither in speculative nor derivative trading activities. The Company is exposed to market risk for changes in interest rates on invested funds as well as borrowed funds. The Company's
revolving bank credit facility bears interest at a floating rate. There were no borrowings under this facility at September 27, 2003.

Item 8. Financial Statements and Supplementary Data.

The information required by this Item is contained on pages F-1 through F-20 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

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Item 9A. Controls and Procedures

(a)   Evaluation of disclosure controls and procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this annual report, the Company
carried out an evaluation under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. The Company continually reviews its disclosure controls and
procedures, and its internal controls over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that its systems evolve with its business.
In designing and evaluating the disclosure controls and procedures, the Company's management recognized that any controls and procedures, no matter how well designed and operated, can provide only
reasonable assurances of achieving the desired control objectives, and management necessarily was required to apply its judgment in designing and evaluating the controls and procedures.

(b)   Changes in internal controls over financial reporting

There was no change in the Company's internal control over financial reporting that occurred during the fourth quarter of fiscal 2003 that has materially
affected, or that is reasonably likely to materially affect, the Company's internal control over financial reporting.

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  |  | 51 |  | Chairman, President and Chief Executive Officer                                                           
|-------------------- |  | -- |  | ----------------------------------------------------------------------------------------------------------
|George Q. Nichols    |  | 74 |  | Corporate Senior Vice President and Chairman of National Publishing Company                               
|Robert P. Story, Jr. |  | 52 |  | Senior Vice President and Chief Financial Officer                                                         
|Peter M. Folger      |  | 50 |  | Vice President and Controller                                                                             
|Peter D. Tobin       |  | 48 |  | Corporate Vice President and Executive Vice President of Courier Companies and National Publishing Company

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. He was elected a Director of the Company in March 1995 and became Senior Vice President of the
Company in November 1996. He

6

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became
Chairman of National Publishing Company in December 1999. He had previously been President of National Publishing Company since 1976.

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.

Mr. Tobin
became Vice President of Courier Corporation and Executive Vice President of Courier Companies in October 2000, and Executive Vice President of National
Publishing Company in March 2002. He joined Courier Companies as National Sales Manager in 1994 and became Vice President of Sales and Marketing in 1997.

The
Company has adopted a code of ethics entitled "Courier Corporation Business Conduct Guidelines," which is applicable to the Company's directors, officers, and employees. These
Business Conduct Guidelines are available on the Company's Internet website, located atwww.courier.com.

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 15, 2004. Such information is incorporated herein by reference.

Item 11. Executive Compensation.

Information called for by Item 11 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 15, 2004. Such information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The following equity compensation plan information is as of September 27, 2003:

|Plan category                                              |  | Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights |  | Weighted-average
exercise price of
outstanding
options, warrants
and rights |       | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)) (1)
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------
|
|Equity compensation plans approved by security holders     |  | 561,343                                                                                     |  | $                                                                           | 18.09 |                                                                                                                                                
|Equity compensation plans not approved by security holders |  |                                                                                            |  |                                                                             |      |                                                                                                                                                
|                                                           |  |                                                                                             |  |                                                                             |       |                                                                                                                                                
|Total                                                      |  | 561,343                                                                                     |  | $                                                                           | 18.09 |                                                                                                                                                

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All
other information called for by Item 12 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 15, 2004. Such information is incorporated herein by reference.

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Item 13. Certain Relationships and Related Transactions.

Information called for by Item 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 15, 2004. Such information is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services

Information called for by Item 14 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 15, 2004. Such information is incorporated herein by reference.

8

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PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a)   Documents filed as part of this report

|   |                                                            |                                                                                                                               |     | Page(s)    
|-- | ---------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | --- | -----------
|1. | Financial statements                                       |                                                                                                                               |    
|   |                                                           | Independent Auditors' Report                                                                                                  |     | F-1        
|   |                                                           | Consolidated Statements of Income for each of the three years in the period ended September 27, 2003                          |     | F-2        
|   |                                                           | Consolidated Balance Sheets as of September 27, 2003 and September 28, 2002                                                   |     | F-3 to F-4 
|   |                                                           | Consolidated Statements of Cash Flows for each of the three years in the period ended September 27, 2003                      |     | F-5        
|   |                                                           | Consolidated Statements of Changes in Stockholders' Equity for each of the three years in the period ended September 27, 2003 |     | F-6        
|   |                                                           | Notes to Consolidated Financial Statements                                                                                    |     | F-7 to F-20
|2. | Financial statement schedule                               |                                                                                                                               |    
|   | Schedule IIConsolidated Valuation and Qualifying Accounts |                                                                                                                               | S-1
|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).
|            |  |                                                                                                                                                                                                                                                                                                                                

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|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).                                                                                                      
|3A-9   |  | Articles of Amendment of Courier Corporation (increasing number of shares of authorized Common Stock), as of January 17, 2002 (filed as Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the period ended March 30, 2002,
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).                                                                                                                                                                 
|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).                                                                                                
|       |  |                                                                                                                                                                                                                                                                                                                                                                           

10

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|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).                                                                                                                                                                                      
|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+   |  | 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).                                                                                                                                                                                                  
|10I-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).                                                                                                            
|10I-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).                                                                                                                                                       
|10I-3+ |  | Amendment, as of November 9, 2000, to supplemental retirement benefit agreement with George Q. Nichols (filed as Exhibit 10I-3 to the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2001, and
incorporated herein by reference).                                                                                                                                                     
|10J    |  | Amended and Restated Revolving Credit Agreement, dated as of March 31, 2003, between Courier Corporation, Fleet National Bank, KeyBank National Association, Citizens Bank of Massachusetts and Sovereign Bank, providing for a $60 million
revolving credit facility (filed as Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the period ended June 28, 2003, and incorporated herein by reference).
|10K    |  | 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).                                                                                                                                                
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                     

11

---

|10L-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).                                                                                                                                                                                         
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10L-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).                                                                                                                                                                                       
|10L-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).                                                                                                                                                                                       
|10L-4+ |  | Amendment, effective January 18, 2001, to the Courier Corporation 1993 Stock Incentive Plan (described in Item 3 of the Company's Proxy Statement for the Annual Meeting of Stockholders held January 18, 2001, and incorporated herein by
reference).                                                                                                                                                                                       
|10M    |  | 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).                                                                                                                                                                             
|10N+   |  | 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).                                                                                                                                                                 
|10O    |  | 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).                                                                                                                                                   
|10P    |  | 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).
|10Q    |  | Master Lease Finance Agreement, dated as of September 25, 2000 between Courier Corporation and Eastern Bank (filed as Exhibit 10T to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2000, and
incorporated herein by reference).                                                                                                                                                                           
|21*    |  | Schedule of Subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                    
|23*    |  | Consent of Deloitte & Touche LLP, independent auditors.                                                                                                                                                                                                                                                                                                                                                                                      
|31.1*  |  | Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                            
|31.2*  |  | Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                            
|32.1*  |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                           
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                              

12

---

|32.2* |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------

---

(b)   Reports on Form 8-K

Filed July 17, 2003, reporting under Item 12 a press release dated July 17, 2003 reporting financial results for the quarter ended June 28,
2003.

Filed
August 12, 2003, reporting under Item 11 a notice to employees dated August 8, 2003 regarding a change in investment, trustee and record keeping services for the
Courier Profit Sharing and Savings Plan.

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 4, 2003.

| |  | COURIER CORPORATION
| |  | -------------------
| |  | By:                
| |  | By:                
| |  | By:                

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 4, 2003.

|/s/JAMES F. CONWAY IIIJames F. Conway III Chairman,
President and Chief Executive Officer |  | /s/GEORGE Q. NICHOLSGeorge Q. Nichols Director        
|----------------------------------------------------------------------------------------- |  | ------------------------------------------------------
|/s/KATHLEEN FOLEY CURLEYKathleen Foley Curley Director                                    |  | /s/RONALD L. SKATESRonald L. Skates Director          
|/s/RICHARD K. DONAHUERichard K. Donahue Director                                          |  | /s/ROBERT P. STORY, JR.Robert P. Story, Jr. Director  
|/s/EDWARD J. HOFFEdward J. Hoff Director                                                  |  | /s/W. NICHOLAS THORNDIKEW. Nicholas Thorndike Director
|/s/ARNOLD S. LERNERArnold S. Lerner Director                                              |  |                                                       

14

---

INDEPENDENT AUDITORS' REPORT

To
the Board of Directors and Stockholders of Courier Corporation, North Chelmsford, MA:

We
have audited the accompanying consolidated balance sheets of Courier Corporation and subsidiaries (the "Company") as of September 27, 2003 and September 28, 2002, 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 27, 2003. Our audits also included the
financial statement schedule listed in the Index at Item 15. 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 27, 2003 and
September 28, 2002, and the results of its operations and its cash flows for each of the three years in the period ended September 28, 2003 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 17, 2003

F-1

---



COURIER CORPORATION        CONSOLIDATED STATEMENTS OF INCOME

|                                          |                                   | For the Years Ended  |            
|----------------------------------------- | --------------------------------- | -------------------- | -----------
|
|Net sales (Note A)                        |                                   | $                    | 202,002,000
|Cost of sales                             |                                   |                      | 134,630,000
|                                          |                                   |                      |            
|                                          | Gross profit                      |                      |            
|Selling and administrative expenses       |                                   |                      | 37,794,000 
|Amortization of goodwill (Note A)         |                                   |                      |           
|Interest expense, net                     |                                   |                      | 52,000     
|Other income (Note J)                     |                                   |                      |           
|                                          |                                   |                      |            
|                                          | Pretax income                     |                      |            
|Provision for income taxes (Note C)       |                                   |                      | 10,254,000 
|                                          |                                   |                      |            
|Income from continuing operations         |                                   | $                    | 19,272,000 
|                                          |                                   |                      |            
|Discontinued operations:                  |                                   |                      |            
|                                          | Loss from operations, net of tax  |                      |            
|                                          | Gain on disposal, net of tax      |                      |            
|                                          |                                   |                      |            
|Net income                                |                                   | $                    | 20,120,000 
|                                          |                                   |                      |            
|Income per basic share (Notes A and K):   |                                   |                      |            
|                                          | Continuing operations             |                      | $          
|                                          | Discontinued operations (Note H): |                      |            
|                                          |                                   | Loss from operations |            
|                                          |                                   | Gain on disposal     |            
|                                          |                                   |                      |            
|Net income per basic share                |                                   | $                    | 2.56       
|                                          |                                   |                      |            
|Income per diluted share (Notes A and K): |                                   |                      |            
|                                          | Continuing operations             |                      | $          
|                                          | Discontinued operations (Note H): |                      |            
|                                          |                                   | Loss from operations |            
|                                          |                                   | Gain on disposal     |            
|                                          |                                   |                      |            
|Net income per diluted share              |                                   | $                    | 2.48       
|                                          |                                   |                      |            
|Cash dividends declared per share         |                                   | $                    | 0.30       
|                                          |                                   |                      |            

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

F-2

---



COURIER CORPORATION        CONSOLIDATED BALANCE SHEETS

|                                               |                                                                                                                      | September 27,
2003   |              | September 28,
2002 |            
|---------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | -------------------- | ------------ | ------------------ | -----------
|ASSETS                                         |                                                                                                                      |                      |              |                    |            
|Current assets:                                |                                                                                                                      |                      |              |                    |            
|                                               | Cash and cash equivalents (Note A)                                                                                   |                      | $            | 23,824,000         |            
|                                               | Accounts receivable, less allowance for uncollectible accounts of $1,741,000 in 2003 and $2,292,000 in 2002 (Note A) |                      |              | 29,174,000         |            
|                                               | Inventories (Note B)                                                                                                 |                      |              | 20,681,000         |            
|                                               | Deferred income taxes (Note C)                                                                                       |                      |              | 3,164,000          |            
|                                               | Other current assets                                                                                                 |                      |              | 830,000            |            
|                                               |                                                                                                                      |                      |              |                    |            
|                                               |                                                                                                                      | Total current assets |              |                    | 77,673,000 
|Property, plant and equipment (Note A):        |                                                                                                                      |                      |              |                    |            
|                                               | Land                                                                                                                 |                      |              | 1,059,000          |            
|                                               | Buildings and improvements                                                                                           |                      |              | 22,349,000         |            
|                                               | Machinery and equipment                                                                                              |                      |              | 114,728,000        |            
|                                               | Furniture and fixtures                                                                                               |                      |              | 1,468,000          |            
|                                               | Construction in progress                                                                                             |                      |              | 5,094,000          |            
|                                               |                                                                                                                      |                      |              |                    |            
|                                               |                                                                                                                      |                      | 144,698,000  |                    |            
|Less-Accumulated depreciation and amortization |                                                                                                                      |                      | (101,356,000 | )                  |            
|                                               |                                                                                                                      |                      |              |                    |            
|                                               | Property, plant and equipment, net                                                                                   |                      |              | 43,342,000         |            
|Goodwill (Notes A and I)                       |                                                                                                                      |                      | 24,847,000   |                    |            
|Prepublication costs (Note A)                  |                                                                                                                      |                      | 3,810,000    |                    |            
|Other assets                                   |                                                                                                                      |                      | 1,429,000    |                    |            
|                                               |                                                                                                                      |                      |              |                    |            
|                                               |                                                                                                                      | Total assets         |              | $                  | 151,101,000
|                                               |                                                                                                                      |                      |              |                    |            

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

F-3

---

|                                                                           |                                                                                                                                                       | September 27,
2003                         |             | September 28,
2002 |            
|-------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------- | ------------------ | -----------
|LIABILITIES AND STOCKHOLDERS' EQUITY                                       |                                                                                                                                                       |                                            |             |                    |            
|Current liabilities:                                                       |                                                                                                                                                       |                                            |             |                    |            
|                                                                           | Current maturities of long-term debt                                                                                                                  |                                            | $           | 81,000             |            
|                                                                           | Accounts payable (Note A)                                                                                                                             |                                            |             | 6,494,000          |            
|                                                                           | Accrued payroll                                                                                                                                       |                                            |             | 8,031,000          |            
|                                                                           | Accrued taxes                                                                                                                                         |                                            |             | 6,521,000          |            
|                                                                           | Other current liabilities                                                                                                                             |                                            |             | 5,686,000          |            
|                                                                           |                                                                                                                                                       |                                            |             |                    |            
|                                                                           |                                                                                                                                                       | Total current liabilities                  |             |                    | 26,813,000 
|Long-term debt (Notes A and D)                                             |                                                                                                                                                       |                                            | 593,000     |                    |            
|Deferred income taxes (Note C)                                             |                                                                                                                                                       |                                            | 5,597,000   |                    |            
|Other liabilities                                                          |                                                                                                                                                       |                                            | 2,678,000   |                    |            
|                                                                           |                                                                                                                                                       |                                            |             |                    |            
|                                                                           |                                                                                                                                                       | Total liabilities                          |             |                    | 35,681,000 
|                                                                           |                                                                                                                                                       |                                            |             |                    |            
|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 18,000,000 shares; issued 8,088,000 shares; outstanding 7,931,000 shares in 2003 and 5,215,000 shares in 2002 |                                            |             | 8,088,000          |            
|Additional paid-in capital                                                 |                                                                                                                                                       |                                            | 650,000     |                    |            
|Retained earnings                                                          |                                                                                                                                                       |                                            | 108,827,000 |                    |            
|Unearned compensation                                                      |                                                                                                                                                       |                                            | (350,000    | )                  |            
|Treasury stock, at cost: 157,000 shares in 2003 and 230,000 shares in 2002 |                                                                                                                                                       |                                            | (1,795,000  | )                  |            
|                                                                           |                                                                                                                                                       |                                            |             |                    |            
|                                                                           |                                                                                                                                                       | Total stockholders' equity                 |             |                    | 115,420,000
|                                                                           |                                                                                                                                                       |                                            |             |                    |            
|                                                                           |                                                                                                                                                       | Total liabilities and stockholders' equity |             | $                  | 151,101,000
|                                                                           |                                                                                                                                                       |                                            |             |                    |            

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

F-4

---



COURIER CORPORATION        CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                         |                                                                                 | For the Years Ended                |                                       
|-------------------------------------------------------- | ------------------------------------------------------------------------------- | ---------------------------------- | --------------------------------------
|
|Operating Activities:                                    |                                                                                 |                                    |                                       
|                                                         | Net income                                                                      |                                    | $                                     
|                                                         | Adjustments to reconcile net income to cash provided from operating activities: |                                    |                                       
|                                                         |                                                                                 | Depreciation and amortization      |                                       
|                                                         |                                                                                 | Deferred income taxes (Note C)     |                                       
|                                                         |                                                                                 | Changes in assets and liabilities: |                                       
|                                                         |                                                                                 |                                    | Accounts receivable                   
|                                                         |                                                                                 |                                    | Inventory                             
|                                                         |                                                                                 |                                    | Accounts payable                      
|                                                         |                                                                                 |                                    | Accrued taxes                         
|                                                         |                                                                                 |                                    | Gain on sale of assets (Notes H and J)
|                                                         |                                                                                 |                                    | Other elements of working capital     
|                                                         |                                                                                 |                                    | Other, net                            
|                                                         |                                                                                 |                                    |                                       
|Cash provided from operating activities                  |                                                                                 |                                    | 31,137,000                            
|                                                         |                                                                                 |                                    |                                       
|Investment Activities:                                   |                                                                                 |                                    |                                       
|                                                         | Capital expenditures                                                            |                                    |                                       
|                                                         | Prepublication costs (Note A)                                                   |                                    |                                       
|                                                         | Proceeds from sale of assets (Notes H and J)                                    |                                    |                                       
|                                                         |                                                                                 |                                    |                                       
|Cash used for investment activities                      |                                                                                 |                                    | (11,617,000                           
|                                                         |                                                                                 |                                    |                                       
|Financing Activities:                                    |                                                                                 |                                    |                                       
|                                                         | Scheduled long-term debt repayments                                             |                                    |                                       
|                                                         | Repayments of revolving credit facility, net                                    |                                    |                                       
|                                                         | Cash dividends                                                                  |                                    |                                       
|                                                         | Proceeds from stock plans                                                       |                                    |                                       
|                                                         |                                                                                 |                                    |                                       
|Cash used for financing activities                       |                                                                                 |                                    | (1,326,000                            
|                                                         |                                                                                 |                                    |                                       
|Increase (decrease) in cash and cash equivalents         |                                                                                 |                                    | 18,194,000                            
|Cash and cash equivalents at the beginning of the period |                                                                                 |                                    | 5,630,000                             
|                                                         |                                                                                 |                                    |                                       
|Cash and cash equivalents at the end of the period       |                                                                                 | $                                  | 23,824,000                            
|                                                         |                                                                                 |                                    |                                       
|Supplemental cash flow information:                      |                                                                                 |                                    |                                       
|                                                         | Interest paid                                                                   |                                    | $                                     
|                                                         | Income taxes paid (net of receipts)                                             |                                    | $                                     

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'
Equity |             | Common
Stock |   | Additional
Paid-In Capital |           | Retained
Earnings |           | Unearned
Compensation |   | Treasury
Stock |           
|--------------------------- | ------------------------------------------------- | -------------------------- | ----------- | ------------ | - | -------------------------- | --------- | ----------------- | --------- | --------------------- | - | -------------- | ----------
|Balance, September 30, 2000 |                                                   | $                          | 67,771,000  |              | $ | 3,750,000                  |           | $                 | 2,283,000 |                       | $ | 65,551,000     |           
|                            | Net income                                        |                            |             | 13,217,000   |   |                            |          |                   |           |                      |   |                | 13,217,000
|                            | Cash dividends                                    |                            |             | (1,824,000   | ) |                            |          |                   |           |                      |   |                | (1,824,000
|                            | Stock dividend (Note A)                           |                            |             |             |   |                            | 1,695,000 |                   |           | (1,695,000            | ) |                |          
|                            | Restricted stock grant/amortization activity, net |                            |             | 111,000      |   |                            |          |                   |           | 64,000                |   |                |          
|                            | Other stock plan activity                         |                            |             | 1,050,000    |   |                            |          |                   |           | 802,000               |   |                |          
|                            |                                                   |                            |             |              |   |                            |           |                   |           |                       |   |                |           
|Balance, September 29, 2001 |                                                   |                            | 80,325,000  |              |   | 5,445,000                  |           |                   | 1,454,000 |                       |   | 76,944,000     |           
|                            |                                                   |                            |             |              |   |                            |           |                   |           |                       |   |                |           
|                            | Net income                                        |                            |             | 16,175,000   |   |                            |          |                   |           |                      |   |                | 16,175,000
|                            | Cash dividends                                    |                            |             | (2,058,000   | ) |                            |          |                   |           |                      |   |                | (2,058,000
|                            | Restricted stock grant/amortization activity, net |                            |             | 133,000      |   |                            |          |                   |           | 94,000                |   |                |          
|                            | Other stock plan activity                         |                            |             | 1,344,000    |   |                            |          |                   |           | 698,000               |   |                |          
|                            |                                                   |                            |             |              |   |                            |           |                   |           |                       |   |                |           
|Balance, September 28, 2002 |                                                   |                            | 95,919,000  |              |   | 5,445,000                  |           |                   | 2,246,000 |                       |   | 91,061,000     |           
|                            |                                                   |                            |             |              |   |                            |           |                   |           |                       |   |                |           
|                            | Net income                                        |                            |             | 20,120,000   |   |                            |          |                   |           |                      |   |                | 20,120,000
|                            | Cash dividends                                    |                            |             | (2,354,000   | ) |                            |          |                   |           |                      |   |                | (2,354,000
|                            | Stock dividend (Note A)                           |                            |             |             |   |                            | 2,643,000 |                   |           | (2,643,000            | ) |                |          
|                            | Restricted stock grant/amortization activity, net |                            |             | 159,000      |   |                            |          |                   |           |                      |   |                |          
|                            | Other stock plan activity                         |                            |             | 1,576,000    |   |                            |          |                   |           | 1,047,000             |   |                |          
|                            |                                                   |                            |             |              |   |                            |           |                   |           |                       |   |                |           
|Balance, September 27, 2003 |                                                   | $                          | 115,420,000 |              | $ | 8,088,000                  |           | $                 | 650,000   |                       | $ | 108,827,000    |           
|                            |                                                   |                            |             |              |   |                            |           |                   |           |                       |   |                |           

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") print, publish and sell books. Courier has
two business segments: full-service book manufacturing and specialty book publishing. On December 17, 2002, the Company sold the assets of Courier Custom Publishing, Inc.,
which comprised all of the activities of the customized education segment (see Note H).

Principles of Consolidation and Presentation: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 accounting
principles generally accepted in the United States of America ("generally accepted accounting principles"), which require the use of certain estimates and assumptions. Certain amounts for fiscal years
2002 and 2001 have been reclassified in the accompanying financial statements in order to conform to the current year's classification.

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. At September 27, 2003 and September 28, 2002, the fair market value of the Company's financial instruments approximated their carrying values.

Interest
income from these instruments was $200,000 in 2003 and $12,000 in 2002 and is included in the caption "Interest Expense, net" in the accompanying Consolidated Statements of
Income.

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
capitalized in 2001 was approximately $170,000. No interest was capitalized in 2003 and 2002. The Company provides for depreciation of property, plant and equipment on a straight-line
basis over periods ranging from 10 to 40 years on buildings and improvements and from 3 to 11 years on equipment and furnishings.

Leasehold
improvements 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:At the beginning of fiscal 2002, the Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 142, "Goodwill and Other Intangible Assets," which changed the accounting for goodwill and certain other intangible assets from an amortization method to an impairment-only
approach. The transitional impairment test required by SFAS No. 142 was completed in 2002 resulting in no change to the nature or carrying amounts of its intangible assets. The Company
evaluates possible impairment annually or whenever events or circumstances indicate that the carrying value of the assets may not be recoverable.

Goodwill
has been allocated $9.2 million and $15.6 million, net of accumulated amortization of $2.1 million and $0.9 million, to the book manufacturing and
specialty publishing segments, respectively. There has been no change in the carrying amount of goodwill during the year or in the allocation of goodwill by reportable segment.

Prior
to 2002, goodwill arising from business acquisitions was amortized using the straight-line method over 20 years. Had the Company accounted for goodwill in
accordance with SFAS No. 142 in

F-7

---

2001,
net income would have increased by $1,050,000 to $14,267,000 from $13,217,000 and net income per diluted share would have increased by $0.13 from $1.70 to $1.83.

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 SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." The adoption of SFAS No. 144 in 2002 did not have a material effect on the Company's consolidated financial statements.

Prepublication Costs:Prepublication costs, associated with the specialty publishing segment, are amortized to cost of sales
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 for whom the Company provides manufacturing and distribution services. Revenue for distribution services is recognized as services are provided. Shipping and handling fees billed to
customers are classified as revenue.

Use of Estimates:The process of preparing financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions 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:On November 6, 2003, the Company announced a three-for-two stock split effected
in the form of a 50% stock dividend, except for treasury shares, which was distributed on December 5, 2003. Also, on August 31, 2001, the Company distributed a
three-for-two stock split effected in the form of a 50% stock dividend, except for treasury shares. Previously authorized but unissued shares were used to effect both of these
dividends. Weighted average shares outstanding and per share amounts presented in the accompanying financial statements for periods prior to the stock splits have been restated to give effect to these
stock splits.

Treasury Stock:The Company has historically used treasury stock for stock options exercised and stock grants and intends to
continue to use treasury stock for such purposes.

Stock-Based Compensation:Pursuant to SFAS No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS
No. 148, the Company applies the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations. Accordingly,
because the number of shares is fixed and the exercise price of the stock options equals the market price of the underlying stock on the date of grant, no compensation expense has been recognized. Had
compensation cost for grants under the ESPP and for stock options granted

F-8

---

after
1995 been determined under the provisions of SFAS No. 123, the Company's net income would have been as follows:

|                                                                                                   |         | 2003 |            | 2002 |   | 2001       |     
|-------------------------------------------------------------------------------------------------- | ------- | ---- | ---------- | ---- | - | ---------- | ----
|Net income as reported                                                                             |         | $    | 20,120,000 |      | $ | 16,175,000 |     
|Deduct: Stock-based compensation expense determined under SFAS No. 123, net of related tax effects |         |      | (965,000   | )    |   | (637,000   | )   
|                                                                                                   |         |      |            |      |   |            |     
|Pro forma net income                                                                               |         | $    | 19,155,000 |      | $ | 15,538,000 |     
|                                                                                                   |         |      |            |      |   |            |     
|Net income per share as reported:                                                                  |         |      |            |      |   |            |     
|                                                                                                   | Basic   |      | $          | 2.56 |   | $          | 2.09
|                                                                                                   | Diluted |      |            | 2.48 |   |            | 2.02
|Pro forma net income per share:                                                                    |         |      |            |      |   |            |     
|                                                                                                   | Basic   |      | $          | 2.44 |   | $          | 2.01
|                                                                                                   | Diluted |      |            | 2.36 |   |            | 1.94

The
pro forma effect on net income and net income per diluted share for 2002 and 2001 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. 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 (see Note F).

New Accounting Pronouncements:In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which
it is incurred. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002 and was adopted by the Company effective in fiscal 2003. Adoption of this standard did not have a
material effect on the Company's financial statements.

In
November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." This interpretation sets forth expanded disclosure requirements in the financial statements about a guarantor's obligations under certain guarantees that it has issued. It
also clarifies that, under certain circumstances, a guarantor is required to recognize a liability for the fair value of the obligation at the inception of the guarantee. The initial liability
recognition provisions were applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 were effective for financial
statements for interim or annual periods ending after December 15, 2002. The implementation of this interpretation did not have a material impact on the Company's consolidated financial
position or results of operations.

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 44%
and 46% of the Company's inventories at September 27, 2003

F-9

---

and
September 28, 2002, respectively. Other inventories are determined on a first-in, first-out (FIFO) basis.

2003

2002Raw materials

$
1,704,000

$
3,405,000Work in process


3,833,000


4,852,000Finished goods


15,144,000


13,155,000Total

$
20,681,000

$
21,412,000


On
a FIFO basis, reported year-end inventories would have been higher by $5.5 million in both fiscal 2003 and 2002.

C. Income Taxes

The provision for income taxes from continuing operations differs from that computed using the statutory federal income tax rates for the following reasons:

|                                                      |  | 2003 |            | 2002 |   | 2001      |  
|----------------------------------------------------- |  | ---- | ---------- | ---- | - | --------- | -
|Federal taxes at statutory rate                       |  | $    | 10,334,000 |      | $ | 8,457,000 |  
|State taxes, net of federal tax benefit               |  |      | 701,000    |      |   | 366,000   |  
|Goodwill amortization                                 |  |      |           |      |   |          |  
|Foreign sales corporation (FSC) export related income |  |      | (823,000   | )    |   | (868,000  | )
|Other                                                 |  |      | 42,000     |      |   | 52,000    |  
|                                                      |  |      |            |      |   |           |  
|Total                                                 |  | $    | 10,254,000 |      | $ | 8,007,000 |  
|                                                      |  |      |            |      |   |           |  

The
provision for income taxes from continuing operations consisted of the following:

|                   |         | 2003 |            | 2002      |   | 2001      |          
|------------------ | ------- | ---- | ---------- | --------- | - | --------- | ---------
|Currently payable: |         |      |            |           |   |           |          
|                   | Federal |      | $          | 8,238,000 |   | $         | 5,776,000
|                   | State   |      |            | 1,078,000 |   |           | 700,000  
|                   |         |      |            |           |   |           |          
|                   |         |      | 9,316,000  |           |   | 6,476,000 |          
|                   |         |      |            |           |   |           |          
|Deferred:          |         |      |            |           |   |           |          
|                   | Federal |      |            | 870,000   |   |           | 1,507,000
|                   | State   |      |            | 68,000    |   |           | 24,000   
|                   |         |      |            |           |   |           |          
|                   |         |      | 938,000    |           |   | 1,531,000 |          
|                   |         |      |            |           |   |           |          
|Total              |         | $    | 10,254,000 |           | $ | 8,007,000 |          
|                   |         |      |            |           |   |           |          

F-10

---

The
following is a summary of the significant components of the Company's deferred tax assets and liabilities as of September 27, 2003 and September 28, 2002:

2003

2002Deferred tax assets:Vacation accrual not currently deductible

$
682,000

$
610,000Other accruals not currently deductible


806,000


427,000Non-deductible reserves


1,620,000


1,982,000Other


56,000


144,000Classified as current


3,164,000


3,163,000Deferred compensation arrangements


1,023,000


1,143,000Other


171,000


152,000Total deferred tax assets

$
4,358,000

$
4,458,000Deferred tax liabilities:Accelerated depreciation


5,732,000


5,362,000Goodwill amortization


1,059,000


591,000Total deferred tax liabilities

$
6,791,000

$
5,953,000


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

D. Long-Term Debt

At September 27, 2003 and September 28, 2002, long-term debt consisted of an obligation under an industrial development bond arrangement
totaling $674,000 and $752,000, respectively, including current maturities of $81,000 and $78,000, respectively. This industrial bond arrangement bears interest at a 3% rate. Scheduled aggregate
principal payments of this obligation are $81,000 in 2004, $83,000 in 2005, $85,000 in 2006, $88,000 in 2007, $91,000 in fiscal 2008 and $246,000 thereafter. The industrial bond arrangement provides
for a lien on the assets acquired with the proceeds.

The
Company has a $60 million long-term revolving credit facility in place under which the Company can borrow at a rate not to exceed LIBOR plus 1.5%. The revolving
credit facility matures in March 2006. The revolving credit facility is used by the Company for both its long-term and short-term financing needs.

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. These fees are included
in the caption "Interest expense, net" in the accompanying Consolidated Statements of Income.

F-11

---



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 $4,103,000 in 2003, $4,256,000 in 2002 and $5,239,000 in 2001. As of September 27, 2003, minimum annual rental commitments under the Company's long-term
operating leases are approximately $3,679,000 in 2004, $2,728,000 in 2005, $1,305,000 in 2006, $1,249,000 in 2007 and $693,000 in the aggregate thereafter. The Company leases one of its facilities
from a corporation owned in part by an executive of one of the Company's subsidiaries. The lease agreement requires annual payments of approximately $276,000 through July 2007. At
September 27, 2003 and September 28, 2002, the Company had letters of credit outstanding of $1,007,000 and $773,000, 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 Incentive Plans:The Company's stock incentive plans provide for the granting of stock options and stock grants up to a
total of 1,226,250 shares. Under the plan provisions, 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 2002 and 2001, 3,750 and 7,500 shares, respectively, of restricted stock were granted which vest over a five-year period. Amortization expense relating to the 2003, 2002 and 2001
stock grants was $159,000, $133,000 and $111,000, respectively.

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 2003 amounted to a total of $110,000 for the six outside directors; in addition, the three committee
chair fees amounted to a total of $25,000 for 2003. The plan, as approved by stockholders, provides a total of 562,500 shares for the issuance of such options.

F-12

---

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

|                                  |           | Stock Option/Incentive Plans |          | Directors' Option Plan
|--------------------------------- | --------- | ---------------------------- | -------- | ----------------------
|
|Outstanding at September 30, 2000 |           | 477,067                      |          | $                     
|                                  | Issued    |                              | 91,837   |                       
|                                  | Exercised |                              | (105,589 | )                     
|                                  | Cancelled |                              | (13,320  | )                     
|                                  |           |                              |          |                       
|Outstanding at September 29, 2001 |           | 449,995                      |          | $                     
|                                  | Issued    |                              | 96,112   |                       
|                                  | Exercised |                              | (97,818  | )                     
|                                  | Cancelled |                              | (7,876   | )                     
|                                  |           |                              |          |                       
|Outstanding at September 28, 2002 |           | 440,413                      |          | $                     
|                                  | Issued    |                              | 86,662   |                       
|                                  | Exercised |                              | (70,408  | )                     
|                                  | Cancelled |                              | (1,749   | )                     
|                                  |           |                              |          |                       
|Outstanding at September 27, 2003 |           | 454,918                      |          | $                     
|                                  |           |                              |          |                       
|Exercisable at September 27, 2003 |           | 249,739                      |          | $                     
|Available for future grants       |           | 121,065                      |          |                       

The
following tables present information with regards to stock options outstanding at September 27, 2003:

|                                                       |  | Stock Incentive Plan
|------------------------------------------------------ |  | --------------------
|
|
|Options outstanding                                    |  |                     
|Weighted average exercise price of options outstanding |  | $                   
|Weighted average remaining life                        |  |                     
|Options exercisable                                    |  |                     
|Weighted average exercise price of options exercisable |  | $                   

|                                                       |  | Directors' Option Plan
|------------------------------------------------------ |  | ----------------------
|
|
|Options outstanding                                    |  |                       
|Weighted average exercise price of options outstanding |  | $                     
|Weighted average remaining life                        |  |                       
|Options exercisable                                    |  |                       
|Weighted average exercise price of options exercisable |  | $                     

Employee Stock Purchase Plan:The Company's 1999 Employee Stock Purchase Plan ("ESPP"), approved by stockholders in
January 1999, covers an aggregate of 225,000 shares of Company common

F-13

---

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 2003,
18,324 shares were issued under the plan at an average price of $24.01 per share. Since inception, 113,513 shares have been issued. At September 27, 2003, an additional 111,487 shares were
reserved for future issuances.

Stockholders' Rights Plan:In March 1999, the Board of Directors adopted a ten-year stockholders' rights
plan. Under the plan, the Company's stockholders of record at March 19, 1999 received a right to purchase a unit ("Unit") consisting of one one-thousandth of a share of preferred
stock for each share of common stock held on that date with an exercise price of $100, subject to adjustment. Until such rights become exercisable, one such right will also attach to subsequently
issued shares of common stock. The rights become exercisable if (1) a person or group acquires 15% or more of the Company's common stock, (2) upon commencement of a tender or exchange
offer which would result in a person or group beneficially owning 15% or more of the
Company's common stock, or (3) upon the Company's Board of Directors determining that a person is an "adverse person" (as that term is defined in the plan). When exercisable, under certain
conditions, each right entitles the holder thereof to purchase Units of the Company's preferred stock or shares of common stock of the acquirer, in each case having a market value at that time of
twice the right's exercise price. The Board of Directors will be entitled to redeem the rights at one cent per right, under certain circumstances. The rights expire in 2009.

Stock-Based Compensation:For purposes of pro forma disclosures presented in Note A, the fair value of each option
grant was estimated on the date of the grant using the Black-Scholes option-pricing model.

The
following key assumptions were used to value options issued:

|                                 |                        | 2003 |           | 2002 |           | 2001 |          
|-------------------------------- | ---------------------- | ---- | --------- | ---- | --------- | ---- | ---------
|Risk-free interest rate          |                        | 3.9  | %         | 3.4  | %         | 4.5  | %        
|Expected volatility              |                        | 32   | %         | 32   | %         | 34   | %        
|Expected dividend yields         |                        | 0.8  | %         | 1.1  | %         | 1.7  | %        
|Estimated life for grants under: |                        |      |           |      |           |      |          
|                                 | Stock Incentive Plans  |      | 57 years |      | 57 years |      | 57 years
|                                 | Directors' Option Plan |      | 5 years   |      | 5 years   |      | 5 years  
|                                 | ESPP                   |      | 0.5 years |      | 0.5 years |      | 0.5 years

The
following is a summary of the weighted average fair value per share of options granted during each of the past three fiscal years, based on the Black-Scholes option-pricing model.

|                                            |  | Stock Incentive Plan |       | Directors' Option Plan
|------------------------------------------- |  | -------------------- | ----- | ----------------------
|
|
|Exercise price was equal to stock price     |  | $                    | 13.37 |                       
|Exercise price was in excess of stock price |  | $                    | 9.71  |                       
|Exercise price was less than stock price    |  |                      |      |                       

F-14

---

G. Retirement Plans

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

Retirement
costs of multi-employer union plans consist of 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 $3,200,000 in 2003, $3,000,000 in 2002 and $2,600,000 in 2001.

The
Courier Profit Sharing and Savings Plan ("PSSP") is qualified under Section 401(k) of the Internal Revenue Code. The plan allows eligible employees to contribute up to 100% of
their compensation, subject to IRS limitations, with the Company matching 25% of the first 6% of pay contributed by the employee. The Company also makes contributions to the plan annually based on
profits each year for the benefit of all eligible non-union employees.

Shares
of Company common stock may be allocated to participants' ESOP accounts annually based on their compensation as defined in the plan. During 2003, 2002 and 2001, no such shares
were allocated to eligible participants. At September 27, 2003, the ESOP held 321,705 shares on behalf of the participants.

Dover
has a noncontributory, defined benefit pension plan covering substantially all of its employees. The Company's funding policy for the plan is to contribute amounts sufficient to
meet minimum funding requirements as set forth in employee benefit and tax laws plus such additional amounts as the Company may determine to be appropriate. As of December 31, 2001, Dover
employees became eligible to participate in the Courier PSSP. As such, plan benefits under the Dover defined benefit plan were frozen as of that date.

The
following tables provide information regarding the Dover plan for the years ended September 27, 2003 and September 28, 2002.

Change
in projected benefit obligation:

2003

2002Obligation at beginning of year

$
3,175,000

$
3,610,000Service cost


8,000


48,000Interest cost


196,000


219,000Actuarial loss


118,000


89,000Curtailment gain





(505,000
)Benefits paid


(370,000
)

(286,000
)Obligation at end of year

$
3,127,000

$
3,175,000


F-15

---

Change
in plan assets:

2003

2002Fair value of plan assets at beginning of year

$
3,898,000

$
3,716,000Actual return on plan assets


180,000


293,000Employer contributions





175,000Benefits paid


(370,000
)

(286,000
)Fair value of plan assets at end of year

$
3,708,000

$
3,898,000


Reconciliation
of funded status:

2003

2002Funded status at end of year

$
581,000

$
724,000Unrecognized net actuarial (gain) loss and other


5,000


(193,000
)Prepaid pension cost

$
586,000

$
531,000


Components
of the net periodic benefit cost:

2003

2002Service cost

$
8,000

$
48,000Interest cost


196,000


219,000Expected return on plan assets


(259,000
)

(270,000
)Amortization of prior service cost





3,000Net periodic benefit expense (income)

$
(55,000
)




Actuarial
assumptions used to determine costs and benefit obligations:

2003

2002Discount rate

6.3
%
6.5
%Compensation increases

5.0
%
5.0
%Return on assets for the year

7.0
%
7.0
%


The
curtailment gain was accounted for in the allocation of Dover's purchase price. Accordingly, no gain was recognized in the curtailment of the Dover pension plan. Prepaid pension cost
at September 27, 2003 and September 28, 2002 is included in the accompanying consolidated balance sheet under the caption "Other Assets."

H. Discontinued Operations

On December 17, 2002, the Company sold the assets of its wholly owned subsidiary, Courier Custom Publishing, Inc., which comprised all of the
activities of the customized education segment. In accordance with the provisions of SFAS No. 144, the disposition was accounted for as a discontinued operation in the accompanying financial
statements. The customized education segment provided

F-16

---

customized
coursepacks and textbooks. Financial results of this discontinued operation for the periods presented are:

|                                      |  | 2003 |           | 2002 |   | 2001      |  
|------------------------------------- |  | ---- | --------- | ---- | - | --------- | -
|Net sales                             |  | $    | 142,000   |      | $ | 1,160,000 |  
|                                      |  |      |           |      |   |           |  
|Pretax loss                           |  | $    | (100,000  | )    | $ | (191,000  | )
|Income tax benefit                    |  |      | (35,000   | )    |   | (71,000   | )
|                                      |  |      |           |      |   |           |  
|Loss after tax                        |  | $    | (65,000   | )    | $ | (120,000  | )
|                                      |  |      |           |      |   |           |  
|Proceeds from sale                    |  | $    | 1,500,000 |      |   |           |  
|Net assets sold and costs of disposal |  |      | 68,000    |      |   |           |  
|                                      |  |      |           |      |   |           |  
|Pretax gain                           |  | $    | 1,432,000 |      |   |           |  
|Income tax provision                  |  |      | 519,000   |      |   |           |  
|                                      |  |      |           |      |   |           |  
|Gain on disposal, net of tax          |  | $    | 913,000   |      |   |           |  
|                                      |  |      |           |      |   |           |  

F-17

---



I. Business Segments

The Company has two business segments: full-service book manufacturing and specialty publishing. The book manufacturing segment offers a full range of
services from production through storage and distribution for religious, educational and specialty trade book publishers. The 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 specialty publishing
segment consists of Dover Publications, Inc.

On
December 17, 2002, the Company sold the assets of Courier Custom Publishing, Inc., a provider of customized college coursepacks and textbooks, which comprised all of the
activities of the customized education segment in 2003 and 2002 (see Note H). Information related to this discontinued operation is not included in the segment table below for 2003, 2002 and
2001. The Customized Education segment in 2001 also included The Home School, which ceased operations in March 2001 when substantially all of its assets were sold. The results of the Home
School for 2001 prior to its sale are reflected in the "unallocated" caption in the following table.

The
accounting policies of the segments are the same as those described in Note A. In evaluating segment performance, management primarily focuses on income or loss before taxes
and other income. The elimination of intersegment sales and related profit represents sales from the book manufacturing segment to the specialty publishing segment. Other income, discussed in
Note J, is reflected as "unallocated" in the following table. Corporate expenses that are allocated to the segments 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.

F-18

---

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

|                                              |  | Total
Company |             | Book
Manufacturing |   | Specialty
Publishing |   | Unallocated |            | Intersegment
Elimination |  
|--------------------------------------------- |  | ------------- | ----------- | ------------------ | - | -------------------- | - | ----------- | ---------- | ------------------------ | -
|Fiscal 2003                                   |  |               |             |                    |   |                      |   |             |            |                          |  
|Net sales                                     |  | $             | 202,002,000 |                    | $ | 171,858,000          |   | $           | 36,391,000 |                          |  
|Earnings before income taxes                  |  |               | 29,526,000  |                    |   | 24,171,000           |   |             | 5,855,000  |                          |  
|Total assets                                  |  |               | 151,101,000 |                    |   | 76,726,000           |   |             | 42,659,000 |                          | $
|Goodwill, net                                 |  |               | 24,847,000  |                    |   | 9,240,000            |   |             | 15,607,000 |                          |  
|Depreciation and amortization                 |  |               | 9,798,000   |                    |   | 7,863,000            |   |             | 1,935,000  |                          |  
|Capital expenditures and prepublication costs |  |               | 13,117,000  |                    |   | 10,641,000           |   |             | 2,372,000  |                          |  
|Interest (income)/ expense                    |  |               | 52,000      |                    |   | (281,000             | ) |             | 333,000    |                          |  
|                                              |  |               |             |                    |   |                      |   |             |            |                          |  
|Fiscal 2002                                   |  |               |             |                    |   |                      |   |             |            |                          |  
|Net sales                                     |  | $             | 201,024,000 |                    | $ | 170,382,000          |   | $           | 36,004,000 |                          |  
|Earnings before income taxes                  |  |               | 24,302,000  |                    |   | 19,817,000           |   |             | 4,890,000  |                          |  
|Total assets                                  |  |               | 131,658,000 |                    |   | 75,604,000           |   |             | 41,066,000 |                          | $
|Goodwill, net                                 |  |               | 24,847,000  |                    |   | 9,240,000            |   |             | 15,607,000 |                          |  
|Depreciation and amortization                 |  |               | 10,687,000  |                    |   | 8,750,000            |   |             | 1,913,000  |                          |  
|Capital expenditures and prepublication costs |  |               | 6,739,000   |                    |   | 4,408,000            |   |             | 1,940,000  |                          |  
|Interest (income)/ expense                    |  |               | 480,000     |                    |   | (253,000             | ) |             | 733,000    |                          |  
|                                              |  |               |             |                    |   |                      |   |             |            |                          |  
|Fiscal 2001                                   |  |               |             |                    |   |                      |   |             |            |                          |  
|Net sales                                     |  | $             | 210,823,000 |                    | $ | 181,233,000          |   | $           | 33,259,000 |                          | $
|Earnings before income taxes                  |  |               | 20,632,000  |                    |   | 18,691,000           |   |             | 1,425,000  |                          |  
|Total assets                                  |  |               | 133,615,000 |                    |   | 83,735,000           |   |             | 40,670,000 |                          |  
|Goodwill, net                                 |  |               | 24,847,000  |                    |   | 9,240,000            |   |             | 15,607,000 |                          |  
|Depreciation and amortization                 |  |               | 11,796,000  |                    |   | 8,990,000            |   |             | 2,690,000  |                          |  
|Capital expenditures and prepublication costs |  |               | 14,256,000  |                    |   | 12,149,000           |   |             | 1,640,000  |                          |  
|Interest (income)/ Expense                    |  |               | 1,899,000   |                    |   | (161,000             | ) |             | 2,060,000  |                          |  
|                                              |  |               |             |                    |   |                      |   |             |            |                          |  

Export sales as a percentage of consolidated sales were approximately 22% in 2003, 21% in 2002 and 19% in 2001. Sales to the Company's largest
customer amounted to approximately 27% of consolidated sales in 2003, 26% in 2002 and 25% in 2001. In addition, sales to another customer amounted to 18% of consolidated sales in 2003, 15% in 2002 and
13% in 2001. No other customer accounted for more than 10% of consolidated sales. Customers are granted credit on an unsecured basis.

J. Other Income

In March 2001, the Company sold substantially all of the assets of its subsidiary, The Home School, and ceased operating the business. The proceeds from
the sale were $0.8 million resulting in a pretax gain of approximately $0.3 million, and an after-tax gain of approximately $0.2 million, or $.03 per diluted share.

During
the first quarter of 2001, the Company completed the sale of its Raymond, New Hampshire facility resulting in a pretax gain of approximately $0.9 million and approximately
$0.6 million after tax, or $.07 per diluted share. Other income in 2001 also includes net rental income from this facility of $49,000 before the sale was completed.

F-19

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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. These shares have been adjusted to reflect the three-for-two stock splits effected in
the form of dividends distributed on December 5, 2003 and August 31, 2001 (see Note A).

|                                        |  | 2003      |  | 2002      |  | 2001     
|--------------------------------------- |  | --------- |  | --------- |  | ---------
|Average shares outstanding for basic    |  | 7,848,000 |  | 7,724,000 |  | 7,587,000
|Effect of potentially dilutive shares   |  | 272,000   |  | 268,000   |  | 210,000  
|                                        |  |           |  |           |  |          
|Average shares outstanding for dilutive |  | 8,120,000 |  | 7,992,000 |  | 7,797,000
|                                        |  |           |  |           |  |          

L.Derivative Financial Instruments

At September 27, 2003, the Company had two forward exchange contracts to purchase approximately 3,000,000 euros as a hedge against a foreign currency
equipment purchase commitment, designated as a fair value hedge. The equipment is scheduled for delivery in fiscal 2004, as is the completion of the forward exchange contracts. The Company does not
use financial instruments for trading or speculative purposes. The Company accounts for derivatives pursuant to SFAS No. 133, "Accounting for Derivative and Hedging Activities," as amended.
This standard requires that all derivative instruments be recognized in the financial statements and measured at fair value regardless of the purpose or intent for holding them. For derivatives
designated as a fair value hedge, the gain or loss is recognized in earnings in the period of change, together with the offsetting loss or gain on the hedged item attributable to the risk being
hedged. Accordingly, all derivatives are recognized as assets or liabilities and measured at fair value. The Company recorded a $180,000 addition to its property, plant and
machinery accounts with a corresponding $180,000 addition to long term liabilities, with no effect on current earnings.

F-20

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COURIER CORPORATION        SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

|Fiscal 2003                                         |         | First |        | Second |   | Third  |       | Fourth
|--------------------------------------------------- | ------- | ----- | ------ | ------ | - | ------ | ----- | ------
|
|Operating Results:                                  |         |       |        |        |   |        |       |       
|Net sales                                           |         | $     | 48,782 |        | $ | 48,605 |       | $     
|Gross profit                                        |         |       | 15,388 |        |   | 15,586 |       |       
|Income from continuing operations                   |         |       | 3,749  |        |   | 3,788  |       |       
|Income per diluted share from continuing operations |         |       | 0.46   |        |   | 0.47   |       |       
|Net income                                          |         |       | 4,512  |        |   | 3,821  |       |       
|Net income per diluted share                        |         |       | 0.56   |        |   | 0.47   |       |       
|Dividends declared per share                        |         |       | 0.075  |        |   | 0.075  |       |       
|Stock price:                                        |         |       |        |        |   |        |       |       
|                                                    | Highest |       |        | 31.05  |   |        | 33.14 |       
|                                                    | Lowest  |       |        | 23.61  |   |        | 29.00 |       



|Fiscal 2002                                         |         | First |        | Second |   | Third  |       | Fourth
|--------------------------------------------------- | ------- | ----- | ------ | ------ | - | ------ | ----- | ------
|
|Operating Results:                                  |         |       |        |        |   |        |       |       
|Net sales                                           |         | $     | 45,614 |        | $ | 48,102 |       | $     
|Gross profit                                        |         |       | 13,347 |        |   | 14,127 |       |       
|Income from continuing operations                   |         |       | 2,715  |        |   | 2,878  |       |       
|Income per diluted share from continuing operations |         |       | 0.34   |        |   | 0.36   |       |       
|Net income                                          |         |       | 2,621  |        |   | 2,865  |       |       
|Net income per diluted share                        |         |       | 0.33   |        |   | 0.36   |       |       
|Dividends declared per share                        |         |       | 0.067  |        |   | 0.067  |       |       
|Stock price:                                        |         |       |        |        |   |        |       |       
|                                                    | Highest |       |        | 22.83  |   |        | 26.30 |       
|                                                    | Lowest  |       |        | 14.00  |   |        | 21.60 |       

Diluted share amounts are based on weighted average shares outstanding. Per share amounts and stock prices have been retroactively adjusted to reflect a
three-for-two stock split distributed on December 5, 2003 (see Notes A and K).

Common shares of the Company are traded over-the-counter on the Nasdaq National Marketsymbol "CRRC."

There were approximately 930 stockholders of record as of September 27, 2003.

F-21

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COURIER CORPORATION        FIVE-YEAR FINANCIAL SUMMARY

|                                                    |  | 2003 |       | 2002 |   | 2001  |   | 2000* |       | 1999 |  
|--------------------------------------------------- |  | ---- | ----- | ---- | - | ----- | - | ----- | ----- | ---- | -
|
|Net sales                                           |  | $    | 202.0 |      | $ | 201.0 |   | $     | 210.8 |      | $
|Gross profit                                        |  |      | 67.4  |      |   | 62.6  |   |       | 60.1  |      |  
|Income from continuing operations                   |  |      | 19.3  |      |   | 16.3  |   |       | 13.6  |      |  
|Income per diluted share from continuing operations |  |      | 2.37  |      |   | 2.04  |   |       | 1.75  |      |  
|Dividends per share                                 |  |      | 0.30  |      |   | 0.27  |   |       | 0.24  |      |  
|Working capital                                     |  |      | 50.9  |      |   | 34.0  |   |       | 28.2  |      |  
|Current ratio                                       |  |      | 2.9   |      |   | 2.2   |   |       | 1.9   |      |  
|Capital expenditures                                |  |      | 10.9  |      |   | 4.9   |   |       | 12.8  |      |  
|Depreciation and amortization                       |  |      | 9.8   |      |   | 10.7  |   |       | 11.8  |      |  
|Total assets                                        |  |      | 151.1 |      |   | 131.7 |   |       | 133.6 |      |  
|Long-term debt                                      |  |      | 0.6   |      |   | 0.7   |   |       | 16.5  |      |  
|Long-term debt as a percentage of capitalization    |  |      | 0.5   | %    |   | 0.7   | % |       | 17.0  | %    |  
|Stockholders' equity                                |  |      | 115.4 |      |   | 95.9  |   |       | 80.3  |      |  
|Return on stockholders' equity                      |  |      | 19.0  | %    |   | 18.4  | % |       | 17.8  | %    |  
|Stockholders' equity per share                      |  |      | 14.55 |      |   | 12.26 |   |       | 10.48 |      |  
|Shares outstanding (in 000's)                       |  |      | 7,931 |      |   | 7,821 |   |       | 7,668 |      |  
|Number of employees                                 |  |      | 1,420 |      |   | 1,455 |   |       | 1,504 |      |  

Net sales, gross profit, income and income per diluted share reflect continuing operations (see Note H).

Income per diluted share from continuing operations 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 three-for-two stock splits distributed on December 5, 2003
and August 31, 2001 (see Notes A and K).

F-22

---



MANAGEMENT'S DISCUSSION AND ANALYSIS

FORWARD-LOOKING INFORMATION

The Annual Report to shareholders includes forward-looking statements. Statements that describe future expectations, plans or strategies
are considered "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 and releases issued by the Securities and Exchange Commission. The words
"believe", "expect", "anticipate", "intend", "estimate" and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify
forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Factors that could affect
actual results include, among others, changes in customers' demand for the Company's products, including seasonal changes in customer orders, changes in raw material costs, pricing actions by
competitors, consolidation among customers and competitors, unanticipated changes in operating expenses, changes in technology, changes in tax policy including export credits, 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.

OVERVIEW

Courier Corporation, founded in 1824, is one of America's leading book manufacturers and specialty publishers. Courier's seven straight years of earnings growth
was achieved through a strong focus on growth markets, technological innovation and outstanding customer service.

The
Company has two business segments: full-service book manufacturing and specialty publishing. In 2003, the Company sold the assets of Courier Custom
Publishing, Inc., which comprised all of the activities of the customized education segment (see "Discontinued Operation" below).

Book Manufacturingstreamlines the process of bringing books from the point of creation to the point of use. Based on sales,
Courier is the fifth largest book manufacturer in the United States and largest in the Northeast, offering services from content management, prepress and production through storage and distribution.
Courier's principal markets include religious, educational and specialty trade books.

Specialty Publishingconsists of Dover Publications, Inc. (Dover), acquired by Courier on September 22, 2000.
Dover publishes over 8,000 titles in more than 30 specialty categories ranging from literature and poetry classics to paper dolls, and from musical scores to typographical fonts. Dover sells its
products through most American bookstore chains, independent booksellers, children's stores, craft stores and gift shops, as well as a diverse range of distributors around the world. Dover also sells
its books directly to customers through its specialty catalogs and over the Internet at www.doverpublications.com.

RESULTS OF OPERATIONS

The Company's income from continuing operations in 2003 was $19.3 million, or $2.37 per diluted share, an increase of 18% over corresponding 2002 results
of $16.3 million, or $2.04 per diluted share. Sales for 2003 from continuing operations were $202 million compared to $201 million in 2002. Gross profit increased to
$67.4 million in 2003 from $62.6 million in the prior year and, as a percentage of

F-23

---

sales,
increased to 33.4% compared to 31.1% in 2002. Selling and administrative expenses were $37.8 million in both 2003 and 2002.

|Continuing Operations    |  | 2003 |         | 2002 |   | 2001   
|------------------------ |  | ---- | ------- | ---- | - | -------
|
|Net sales                |  | $    | 202,002 |      | $ | 201,024
|Gross profit             |  |      | 67,372  |      |   | 62,573 
|Income                   |  |      | 19,272  |      |   | 16,295 
|Income per diluted share |  |      | 2.37    |      |   | 2.04   

In
2002, income from continuing operations increased by 20% over 2001 to $16.3 million, or $2.04 per diluted share, from $13.6 million, or $1.75 per diluted share, for the
prior year. Sales in 2002 decreased 5% to $201 million compared to $211 million in 2001. Gross profit in 2002 increased by $2.5 million, or 4%, and as a percentage of sales,
increased to 31.1% from 28.5% in 2001. Selling and administrative expenses increased to $37.8 million in 2002 from $37.4 million in 2001. Fiscal 2001 included amortization of goodwill of
$1.4 million. Goodwill amortization was discontinued in 2002, reflecting the Company's adoption of Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
Intangible Assets." This standard changed the accounting for goodwill and certain other intangible assets from an amortization method to an impairment-only approach. If these rules had
applied to goodwill for 2001, the result would have been to increase related pretax income by $1.4 million and income from continuing operations by approximately $1.0 million, or $.13
per diluted share.

For
each of the three years discussed above, the amounts do not include the results of a discontinued operation, Courier Custom Publishing, a provider of customized teaching materials
which was sold on December 17, 2002 (see "Discontinued Operation" below). Courier Custom Publishing comprised all of the activities of the customized education segment in 2003 and 2002. Fiscal
2001 results for this segment had also included The Home School, which ceased operations in March 2001 when substantially all of its assets were sold. Results for The Home School in 2001 for
the period prior to its sale are included in results from continuing operations.

Continuing Operations

|Sales by Segment     |       | 2003 |         | 2002    |   | 2001    |        
|-------------------- | ----- | ---- | ------- | ------- | - | ------- | -------
|
|Book Manufacturing   |       | $    | 171,858 |         | $ | 170,382 |        
|Specialty Publishing |       |      | 36,391  |         |   | 36,004  |        
|Customized Education |       |      |        |         |   |        |        
|Intersegment sales   |       |      | (6,247  | )       |   | (5,362  | )      
|                     |       |      |         |         |   |         |        
|                     | Total |      | $       | 202,002 |   | $       | 201,024



|Pretax Income(loss) by Segment |       | 2003 |        | 2002   |   | 2001   |       
|------------------------------ | ----- | ---- | ------ | ------ | - | ------ | ------
|
|Book Manufacturing             |       | $    | 24,171 |        | $ | 19,817 |       
|Specialty Publishing           |       |      | 5,855  |        |   | 4,890  |       
|Customized Education           |       |      |       |        |   |       |       
|Other income                   |       |      |       |        |   |       |       
|Intersegment profit            |       |      | (500   | )      |   | (405   | )     
|                               |       |      |        |        |   |        |       
|                               | Total |      | $      | 29,526 |   | $      | 24,302

F-24

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Book Manufacturing Segment

Sales from Courier's book manufacturing segment in 2003 were $171.9 million, an increase of 1% over 2002 sales. The Company focuses on three key publishing
markets in this segment: education, religious and specialty trade. Sales to educational publishers increased approximately 6% in 2003 with particular strength in four-color textbooks in
the college market. Sales to educational publishers of elementary and high school textbooks were down 3% as that market continued to be impacted by state
and local funding deficits. Sales to the religious market were down 2%, reflecting a shortfall in sales of religious trade books while sales to customers in the specialty trade market were up 4% in
2003. In 2002, sales were $170.4 million, down 6% from $181.2 million in 2001. Sales to educational publishers in 2002 were approximately 3% below the prior year, reflecting reductions
in inventory levels in the college market by publishers in the first half of the year. Sales to elementary and high school publishers were flat in 2002 compared to 2001. Sales to the religious market
were up 3% over 2001. Sales to customers in the specialty trade market were down 15%, reflecting a continued softness in consumer purchases, particularly of books on subjects such as technology,
computers and travel, as well as inventory reductions by retailers, distributors and publishers in reaction to the slowdown in the economy.

Gross
profit as a percent of sales in the Company's book manufacturing segment increased by 200 basis points to 29.5% in 2003 from 27.5% in 2002. The improvement reflects the continuing
benefits from tightly managing costs, continuing gains in productivity due to new equipment and increased employee training, as well as an improved sales mix. In 2002, gross profit increased by 170
basis points to 27.5% from 25.8% in 2001. The increase was the result of productivity improvements from investments in equipment and training, tight cost controls and a favorable shift in the sales
mix.

In
2003, selling and administrative expenses amounted to $26.8 million, or 16% of sales, down 2% from the prior year, reflecting reduced administrative costs in this segment.
Selling and administrative expenses in 2002 were $27.2 million, down 2% from 2001, but increased as a percentage of sales to 16% from 15% in 2001.

Pretax
income for the Company's book manufacturing segment increased 22% to $24.2 million, or, on an after-tax basis, $1.95 per diluted share, in 2003 compared to
$19.8 million, or $1.69 per diluted share, in 2002. As a percentage of sales, pretax income increased to 14% in 2003 from 12% in the prior year. Fiscal 2002 pretax income in this segment was
$19.8 million, up 6% compared to 2001, and net income per diluted share was $1.69, also an increase of 6% over the prior year. Fiscal 2001 included goodwill amortization in this segment of
approximately $0.5 million, or $.07 per diluted share.

Specialty Publishing Segment

Sales in fiscal 2003 for the Company's specialty publishing segment were $36.4 million, an increase of 1% over 2002.
Direct-to-consumer sales were up 13% in 2003 and international sales increased 15% over last year. In contrast, sales to domestic retailers were down 2% for the year as a
result of a 22% reduction in sales to the large bookstore chains. While sales to the bookstore chains dropped, sales to online booksellers and to non-bookstore retailers, such as craft
stores and gift shops, grew significantly. Fiscal 2002 sales of $36.0 million increased 8% over the prior year. Fiscal 2001 consisted of 53 weeks for Dover. Adjusting for the extra week, the
sales increase in 2002 was 11%, including a 19% increase in direct-to-consumer sales and a 7% increase in international sales.

Gross
profit as a percentage of sales in the specialty publishing segment increased 220 basis points to 47.2% in 2003 compared to 2002. The improvement in the gross profit percentage
reflects increased prices and a favorable mix of direct-to-consumer sales, as well as cost savings from shifting more manufacturing of Dover books to the Company's
manufacturing plants. Also, declining product costs related to the sale of inventory from the original acquisition added approximately 100 basis points. Amortization expense related to prepublication
costs was reclassified from selling and administrative

F-25

---

expense
to costs of sales in 2003. All prior periods have been reclassified to be consistent with this presentation. In 2002, Dover's gross profit increased by $2.2 million and, as a percentage
of sales, increased to 45.0% from 42.1% in 2001, reflecting higher prices and lower production costs.

Selling
and administrative expenses in this segment were $11.0 million in 2003, an increase of 4% over 2002, reflecting higher sales and marketing expenses. In 2002, Dover's
selling and administrative expenses were $10.6 million, up 10% from 2001 primarily from increased sales and marketing activities and the write off of a receivable from its Canadian distributor
who filed for bankruptcy.

Pretax
income in the specialty publishing segment increased 20% to $5.9 million, or, on an after-tax basis, $.46 per diluted share, in 2003 compared to
$4.9 million, or $.39 per diluted share in the previous year, reflecting the improvement in gross profit. In 2002, pretax income in this segment was approximately $4.9 million, or $.39
per diluted share, compared to $1.4 million, or $.11 per diluted share, in 2001. The increase in earnings in 2002 was the result of sales growth, improved gross profit margins and the
elimination of goodwill amortization which reduced 2001 pretax earnings by $0.9 million, or $.07 per diluted share.

Total Consolidated Company

Interest expense for 2003 was $52,000 compared to $480,000 in the prior year. During 2003, there were no borrowings under the Company's $60 million
revolving credit facility; however, interest expense includes commitment fees and other costs associated with maintaining this credit facility. Cash investments during 2003 averaged approximately
$17.5 million at a 1.2% annual investment rate generating interest income of approximately $200,000. In fiscal 2002, the Company's average borrowings on its credit facility were
$7.5 million at an average annual interest rate of 2.5%. Interest expense in 2002 was approximately $0.5 million compared to $1.9 million in 2001, when average borrowings were
approximately $28.9 million at an average annual interest rate of 6.1%. Capitalized interest related to new equipment was approximately $0.2 million in 2001. No interest was capitalized
in 2003 or 2002.

Other
income in 2001 is comprised of a pretax gain of approximately $0.3 million from the sale of The Home School. In addition, during 2001 the Company completed the sale of a
facility in Raymond, New
Hampshire resulting in a pretax gain of approximately $0.9 million. Other income also includes net rental income from this facility before its sale of $49,000 in 2001.

The
Company's effective tax rate for 2003 was 35% compared to 33% in 2002 reflecting a higher effective state tax rate and a reduced benefit from export related income. The 2001
effective tax rate of 34% was higher than 2002 primarily due to nondeductible goodwill amortization in 2001.

For
purposes of computing net income per diluted share, weighted average shares outstanding increased by approximately 128,000 shares in 2003 and 195,000 shares in 2002. These increases
were primarily due to options exercised and shares issued under the Company's stock plans and the impact of potentially dilutive shares. On November 6, 2003, the Company announced a
three-for-two stock split effected in the form of a 50% stock dividend, which was distributed on December 5, 2003 to stockholders of record on November 17, 2003.
Weighted average shares outstanding and net income per share amounts have been restated to give effect to the stock split.

Discontinued Operation

On December 17, 2002, the Company sold the assets of its wholly owned subsidiary, Courier Custom Publishing, Inc., which comprised all of the
activities of the customized education segment in 2003 and 2002. The customized education segment provided customized coursepacks and textbooks. Fiscal 2003 results for this operation was a loss, net
of tax, of $65,000 compared to losses, net of tax, of $120,000 and $395,000 in 2002 and 2001, respectively. Proceeds from the sale of Courier Custom Publishing were $1.5 million resulting in an
after-tax gain of approximately $0.9 million, or $.11 per diluted share. Courier Custom Publishing was accounted for as a discontinued operation in the accompanying financial
statements.

F-26

---

LIQUIDITY AND CAPITAL RESOURCES

Operating activities provided $31.1 million of cash. Income from continuing operations for the year was $19.3 million. Depreciation was
$8.2 million and amortization of prepublication costs was $1.6 million. Increases in deferred income taxes provided $0.9 million of cash. Working capital provided approximately
$1.3 million of cash, primarily from a reduction in accounts receivable.

Investment
activities used $11.6 million of cash. Proceeds from the sale of Courier Custom Publishing were $1.5 million. Capital expenditures were $10.9 million,
primarily for new equipment to increase productivity and lower costs in the book manufacturing segment. This amount also includes $4.5 million of payments on a major new press scheduled for
delivery next spring to expand the Company's four-color printing capacity. For fiscal 2004, capital expenditures are expected to increase to $13-$15 million. This
includes approximately $9 million for the completion of the four-color press project including a planned building expansion. Prepublication costs at Dover were approximately
$2.2 million, reflecting increased investments in new title offerings. These costs are expected to increase modestly in 2004 as Dover's publishing activity continues to grow.

In
March 2003, the Company announced an agreement to sell approximately 200,000 square feet of unoccupied and underutilized portions of its multi-building manufacturing complex in
Westford, Massachusetts for $1.7 million. The Company will continue its current levels of book manufacturing at the site. The agreement contains a number of significant contingencies. Assuming
these contingencies can be resolved, the sale is anticipated to close in fiscal 2004. Although the carrying value of the property is nominal, the agreement requires that the Company incur certain
costs to complete the transaction, such as separation of all utilities within the complex. Although these costs could be significant, if the transaction is completed, the Company anticipates realizing
a small gain on the sale.

Financing
activities used approximately $1.3 million of cash in 2003. During the year, there were no borrowings under the Company's $60 million revolving credit facility.
The Company uses this revolving credit facility for both its long-term and short-term financing needs. Dividend payments were $2.4 million while proceeds from stock
plans were $1.1 million, primarily from the exercise of stock options. The Company believes that its cash from operations and available credit facilities will be sufficient to meet its cash
requirements through 2004.

The
following table summarizes the Company's contractual obligations and commitments at September 27, 2003 to make future payments as well as its existing commercial commitments.

|                            |  |   |        | (000's omitted)
Payments due by period
|--------------------------- |  | - | ------ | --------------------------------------
|
|Long-Term Debt              |  | $ | 674    |                                       
|Operating Leases            |  |   | 9,654  |                                       
|Purchase Obligations (1)    |  |   | 4,827  |                                       
|Other Long-Term Liabilities |  |   | 2,678  |                                       
|                            |  |   |        |                                       
|Total                       |  | $ | 17,833 |                                       
|                            |  |   |        |                                       

---

NEW ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 143, "Accounting for Asset Retirement Obligations". SFAS
No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. SFAS No. 143 is

F-27

---

effective
for fiscal years beginning after June 15, 2002 and was adopted by the Company effective in 2003. Adoption of this standard did not have a material effect on the Company's financial
statements.

In
November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." This interpretation sets forth expanded disclosure requirements in the financial statements about a guarantor's obligations under certain guarantees that it has issued. It
also clarifies that, under certain circumstances, a guarantor is required to recognize a liability for the fair value of the obligation at the inception of the guarantee. The initial liability
recognition provisions were applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 were effective for financial
statements for interim or annual periods ending after December 15, 2002. The implementation of this interpretation did not have a material impact on the Company's consolidated financial
position or results of operations.

RISKS

The Company derived approximately 45% of its 2003 revenues from two major customers. The loss of either of these customers or a significant reduction in order
volumes from them would have a material adverse effect on the Company.

The
Company utilizes a Foreign Sales Corporation ("FSC"). Should the FSC provisions be repealed by Congress, and no alternative, or an alternative with a significantly different benefit,
is provided, the Company would experience an increase in its income tax rate and a reduction in its net income. The tax benefit of the FSC in 2003 increased net income by $0.8 million.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
The preparation of these financial statements requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. On an ongoing
basis, management evaluates its estimates and judgments, including those related to collectibility of accounts receivable, recovery of inventories, impairment of goodwill, prepublication costs and
income taxes. Management bases its estimates and judgments on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual
results may differ from these estimates. The significant accounting policies which management believes are most critical to aid in fully understanding and evaluating the Company's reported financial
results include the following:

Accounts ReceivableManagement performs ongoing credit evaluations of the Company's customers and adjusts credit limits based
upon payment history and the customer's current credit worthiness. Collections and payments from customers are continuously monitored. A provision for estimated credit losses is determined based upon
historical experience and any specific customer collection issues that have been identified. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required.

InventoriesManagement records reductions in the cost basis of inventory for excess and obsolete inventory based primarily
upon historical and forecasted product demand. If actual market conditions are less favorable than those projected by management, additional inventory charges may be required.

GoodwillThe Company accounts for goodwill in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets."
Accordingly, the Company evaluates possible impairment annually or

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whenever
events or circumstances indicate that the carrying value of the assets may not be recoverable. The Company completed the annual impairment test required by SFAS No. 142 at
September 27, 2003 resulting in no change to the nature or carrying amounts of its intangible assets. Changes in market conditions or poor operating results could result in a decline in value
thereby potentially requiring an impairment charge in the future.

Prepublication CostsThe Company capitalizes prepublication costs, which includes the cost of acquiring rights to publish a
work and costs associated with bringing a manuscript to publication such as artwork and editorial efforts. Prepublication costs are amortized on a straight-line basis over a
four-year period. Management regularly evaluates the sales and profitability of the
products based upon historical and forecasted demand. Based upon this evaluation, adjustments may be required to amortization expense.

Income TaxesThe income tax provision and related accrued taxes are based on amounts reported on the Company's tax returns
and changes in deferred taxes. Deferred income tax liabilities and assets are determined based upon the differences between the financial statement and tax bases of assets and liabilities. Changes in
the recoverability of the Company's deferred tax assets or audits by tax authorities could result in future charges or credits to income tax expense, and related accrued and deferred taxes.

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COURIER CORPORATION  SCHEDULE II  CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

|                                     |                                      | BALANCE AT BEGINNING OF PERIOD |   | ADDITIONS CHARGED TO COSTS AND EXPENSES |  | DEDUCTIONS |           | BALANCE AT END OF PERIOD
|------------------------------------ | ------------------------------------ | ------------------------------ | - | --------------------------------------- |  | ---------- | --------- | ------------------------
|Fiscal year ended September 27, 2003 |                                      |                                |   |                                         |  |            |           |                         
|                                     | Allowance for uncollectible accounts |                                | $ | 2,292,000                               |  | $          | 723,000   |                         
|Fiscal year ended September 28, 2002 |                                      |                                |   |                                         |  |            |           |                         
|                                     | Allowance for uncollectible accounts |                                | $ | 1,964,000                               |  | $          | 1,039,000 |                         
|Fiscal year ended September 29, 2001 |                                      |                                |   |                                         |  |            |           |                         
|                                     | Allowance for uncollectible accounts |                                | $ | 1,391,000                               |  | $          | 718,000   |                         

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