---

---

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 28, 2002
|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 CorporationA 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$129,579,285

Indicate
the number of shares outstanding of each of the registrant's classes of common stock as of November 22, 2002

Common
Stock, $1 par value5,213,867

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's proxy statement for the annual meeting of stockholders scheduled to be held on January 16, 2003 (Part III).

---

---

---



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 three business segments: full-service book manufacturing, customized
education and specialty publishing.

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
markets are religious, educational and specialty trade books with products including Bibles, educational texts and consumer books. Revenues from this segment accounted for approximately 84% of
Courier's consolidated revenues in fiscal 2002.

The
customized education segment responds to the need for greater choice in education. Courier Custom Publishing offers solutions that enable educators to provide students with
customized teaching materials including multi-publisher custom books as well as out-of-print book reproductions and books authored by professors. Revenues in this segment
accounted for less than 1% of consolidated revenues in fiscal 2002.

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 fiscal 2002.

Additional
segment information, including the amounts of net sales, earnings or loss before taxes, and total assets, for each of the last three fiscal years, is contained in the Notes to
Consolidated Financial Statements on pages F-17 and F-18 included in this Annual Report on Form 10-K.

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 atwww.doverpublications.com.
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.

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. Results of The Home School were included in the customized education segment prior to its sale.

1

---

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 almost 500 book-manufacturing customers. Courier's salespeople operate
out of sales offices located in New York, Chicago, Philadelphia, Hayward, California, North Chelmsford, Massachusetts and North Bergen and North Caldwell, New Jersey.

Sales
to The Gideons International aggregated approximately 26% of consolidated sales in fiscal 2002, 25% in fiscal 2001 and 26% in fiscal 2000. Sales to Pearson plc aggregated
approximately 15% of fiscal 2002 consolidated sales, 13% in fiscal 2001 and 17% in fiscal 2000. The loss of either of these customers would have a material adverse effect on the Company. No other
customer accounted for more than 10% of fiscal 2002 consolidated sales. The Company distributes products around the world; export sales, as a percentage of consolidated sales, were approximately 21%
in fiscal 2002, 19% in fiscal 2001 and 18% in fiscal 2000.

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.

CUSTOMIZED EDUCATION SEGMENT

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

Courier
Custom Publishing markets its custom book services directly to professors nationwide as well as to college bookstores and campus print shops. It utilizes direct marketing
techniques to professors, including mailings and e-mail, backed up by a series of highly targeted web sites. The

2

---

web
sites includewww.custombook.com, www.anthologypro.com, www.ceopress.com, www.eruditionbooks.com, www.bookhound.com,and www.coursepack.com. Direct
marketing efforts to professors are supported by an internal direct response staff located in North Chelmsford,
Massachusetts. Student purchases of custom books from Courier Custom Publishing are made over the web atwww.custombookstore.comor by phone. Sales to
college bookstores and campus print shops are made through direct marketing and a supporting web site,www.coursepackconnection.com.

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

The
Home School, which Courier sold in March 2001, was a direct marketer of educational materials to families engaged in educating children at home and was included in the
customized education segment prior to its sale.

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.

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.

3

---

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 fiscal year 2002, 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 fiscal 2003. 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 1,455 persons at September 28, 2002 compared to 1,504 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, the customized education segment's products and services, 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.

4

---



Item 2.    Properties.

REAL PROPERTIES

The following schedule lists the facilities owned or leased by Courier at September 28, 2002. 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 |        | 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 

---

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. Capital expenditures amounted to approximately
$4.9 million in 2002, $12.8 million in 2001 and $16.3 million in 2000. Capital expenditures in fiscal 2002 were primarily for factory automation equipment to improve productivity.
Fiscal 2003 capital expenditures are expected to be approximately $10 to $12 million. Courier considers its equipment to be in good operating condition and adequate for its present needs.

ENCUMBRANCES AND RENTAL OBLIGATIONS

For a description of encumbrances on certain properties and equipment, see Note D of Notes to Consolidated Financial Statements on
pages F-10 and 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-11 of this Annual Report on Form 10-K.

5

---

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 28, 2002.

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-20
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-21 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-22 through
F-27 of this Annual Report on Form 10-K.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.

The Company does not hold any derivative financial instruments, derivative commodity instruments or other financial instruments except as noted in Note A
of Notes to Consolidated Financial Statements, which appears on pages F-7 through F-9 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 28, 2002.

Item 8.    Financial Statements and Supplementary Data.

The information required by this Item is contained on pages F-1 through F-19 of this Annual Report on Form 10-K.

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

None.

6

---



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  |  | 50 |  | Chairman, President and Chief Executive Officer                                                           
|-------------------- |  | -- |  | ----------------------------------------------------------------------------------------------------------
|George Q. Nichols    |  | 73 |  | Corporate Senior Vice President and Chairman of National Publishing Company                               
|Robert P. Story, Jr. |  | 51 |  | Senior Vice President and Chief Financial Officer                                                         
|Peter M. Folger      |  | 49 |  | Vice President and Controller                                                                             
|Peter D. Tobin       |  | 47 |  | 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 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.

7

---

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 16, 2003. 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 16, 2003. 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 28, 2002:

|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     |  | 360,559                                                                                     |  | $                                                                           | 20.01 |                                                                                                                                               
|Equity compensation plans not approved by security holders |  |                                                                                            |  |                                                                             |      |                                                                                                                                               
|Total                                                      |  | 360,559                                                                                     |  | $                                                                           | 20.01 |                                                                                                                                               

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 16, 2003. Such information is incorporated herein by reference.

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 16, 2003. Such information is incorporated herein by reference.

8

---



Item 14.    Controls and Procedures

(a)  Evaluation of disclosure controls and procedures

As required by new Rule 13a-15 under the Securities Exchange Act of 1934, within the 90 days prior to the date of this 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. In connection with the new rules, we currently are in the process of
further reviewing and documenting our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and may from time to time make changes aimed at
enhancing their effectiveness and to ensure that our systems evolve with our business.

(b)  Changes in internal controls

There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of
their most recent evaluation.

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 28, 2002                          |  | F-2        
| |  |    |  |                             |  | Consolidated Balance Sheets as of September 28, 2002 and September 29, 2001                                                   |  | F-3 to F-4 
| |  |    |  |                             |  | Consolidated Statements of Cash Flows for each of the three years in the period ended September 28, 2002                      |  | F-5        
| |  |    |  |                             |  | Consolidated Statements of Changes in Stockholders' Equity for each of the three years in the period ended September 28, 2002 |  | F-6        
| |  |    |  |                             |  | Notes to Consolidated Financial Statements                                                                                    |  | F-7 to F-19
| |  | 2. |  | Financial statement schedule |  |                                                                                                                              
| |  |    |  |                              |  | Schedule IIConsolidated Valuation and Qualifying Accounts                                                                    |  | S-1        

9

---

| |  | 3. |  | Exhibits |  | 
| |  | -- |  | -------- |  | 

|Exhibit No. |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                    
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3A-1        |  | Articles of Organization of Courier Corporation, as of June 29, 1972 (filed as Exhibit 3A-1 to the Company's Annual Report on Form 10-K for the fiscal year ended September 26, 1981, and incorporated herein
by reference).                                                                                                                                              
|3A-2        |  | Articles of Amendment of Courier Corporation (changing stockholder vote required for merger or consolidation), as of January 20, 1977 (filed as Exhibit 3A-2 to the Company's Annual Report on Form 10-K for the fiscal year ended
September 26, 1981, and incorporated herein by reference).                                                                             
|3A-3        |  | Articles of Amendment of Courier Corporation (providing for staggered election of directors), as of January 20, 1977 (filed as Exhibit 3A-3 to the Company's Annual Report on Form 10-K for the fiscal year ended September 26, 1981,
and incorporated herein by reference).                                                                                              
|3A-4        |  | Articles of Amendment of Courier Corporation (authorizing class of Preferred Stock), as of February 15, 1978 (filed as Exhibit 3A-4 to the Company's Annual Report on Form 10-K for the fiscal year ended September 26, 1981, and
incorporated herein by reference).                                                                                                      
|3A-5        |  | Articles of Amendment of Courier Corporation (increasing number of shares of authorized Common Stock), as of January 16, 1986 (described in item #2 of the Company's Proxy Statement for the Annual Meeting of Stockholders held on January 16,
1986, and incorporated herein by reference).                                                                              
|3A-6        |  | Articles of Amendment of Courier Corporation (providing for fair pricing procedures for stock to be sold in certain business combinations), as of January 16, 1986 (filed as Exhibit A to the Company's Proxy Statement for the Annual Meeting
of Stockholders held on January 16, 1986, and incorporated herein by reference).                                           
|3A-7        |  | Articles of Amendment of Courier Corporation (limiting personal liability of directors to the Corporation or to any of its stockholders for monetary damages for breach of fiduciary duty), as of January 28, 1988 (filed as Exhibit 3A-7 to the
Company's Annual Report on Form 10-K for the fiscal year ended September 24, 1988, and incorporated herein by reference).
|3A-8        |  | Articles of Amendment of Courier Corporation (establishing Series A Preferred Stock), as of November 8, 1988 (filed as Exhibit 3A-8 to the Company's Annual Report on Form 10-K for the fiscal year ended September 24, 1988, and
incorporated herein by reference).                                                                                                      
|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).                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                                                           

10

---

|10A-2+ |  | Amendment, effective January 19, 1989, to the Courier Corporation Stock Grant Plan (described in Item 4 of the Company's Proxy Statement for the Annual Meeting of Stockholders held January 19, 1989, and incorporated herein by
reference).                                                                                   
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10B+   |  | Letter Agreement, dated February 8, 1990, of Courier Corporation relating to supplemental retirement benefit and consulting agreement with James F. Conway, Jr. (filed as Exhibit 10B to the Company's Annual Report on Form 10-K for the
fiscal year ended September 29, 1990, and incorporated herein by reference).          
|10C-1+ |  | Courier Corporation 1989 Deferred Income Stock Option Plan for Non-employee Directors, effective September 28, 1989 (filed as Exhibit A to the Company's Proxy Statement for the Annual Meeting of Stockholders held January 18, 1990, and
incorporated herein by reference).                                                   
|10C-2+ |  | Amendment, effective November 4, 1993, to the 1989 Deferred Income Stock Option Plan for Non-employee Directors (filed as Exhibit 10C-2 to the Company's Annual Report on Form 10-K for the fiscal year ended September 25, 1993, and
incorporated herein by reference).                                                        
|10C-3+ |  | Amendment, effective September 24, 1998, to the 1989 Deferred Income Stock Option Plan for Non-employee Directors (filed as Exhibit 10C-3 to the Company's Annual Report on Form 10-K for the fiscal year ended September 26, 1998,
and incorporated herein by reference).                                                      
|10C-4+ |  | Amendment, effective January 21, 1999, to the 1989 Deferred Income Stock Option Plan for Non-employee Directors (described in Item 3 of the Company's Proxy Statement for the Annual Meeting of Stockholders held January 21, 1999, and
incorporated herein by reference).                                                      
|10D-1+ |  | Courier Corporation 1983 Stock Option Plan (filed as Exhibit A to the Company's Proxy Statement for the Annual Meeting of Stockholders held on January 20, 1983, and incorporated herein by reference).                                                                                                                         
|10D-2+ |  | Amendment, effective January 17, 1985, to the Courier Corporation 1983 Stock Option Plan (described in Item 2 of the Company's Proxy Statement for the Annual Meeting of Stockholders held on January 17, 1985, and incorporated herein by
reference).                                                                          
|10D-3+ |  | Amendment, effective January 19, 1989, to the Courier Corporation 1983 Stock Option Plan (described in Item 3 of the Company's Proxy Statement for the Annual Meeting of Stockholders held January 19, 1989, and incorporated herein by
reference).                                                                             
|10E-1+ |  | The Courier Executive Compensation Program, effective October 4, 1993 (filed as Exhibit 10E-2 to the Company's Annual Report on Form 10-K for the fiscal year ended September 25, 1993, and incorporated herein by
reference).                                                                                                  
|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).
|       |  |                                                                                                                                                                                                                                                                                                                                 

11

---

|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-1  |  | Revolving Credit Agreement, dated as of March 18, 1997, between Courier Corporation, State Street Bank and Trust Company and BankBoston, N.A., providing for a $20 million revolving credit facility (filed as Exhibit 10 to the Company's
Quarterly Report on Form 10-Q for the period ended March 29, 1997, and incorporated herein by reference).                                                                                      
|10J-2  |  | Amendment, dated July 22, 1997, to Note Agreement between Courier Corporation, State Street Bank and Trust Company and BankBoston, N.A., providing for a $30 million revolving credit facility (filed as Exhibit 10L-2 to the Company's Annual
Report on Form 10-K for the fiscal year ended September 27, 1997, and incorporated herein by reference).                                                                                   
|10J-3  |  | Amendment, dated February 27, 1998, to Note Agreement between Courier Corporation, State Street Bank and Trust Company and BankBoston, N.A., providing for a $30 million revolving credit facility (filed as Exhibit 10 to the Company's
Quarterly Report on Form 10-Q for the period ended March 28, 1998, and incorporated herein by reference).                                                                                        
|10J-4  |  | Amendment, dated February 26, 1999, to Note Agreement between Courier Corporation, State Street Bank and Trust Company and BankBoston, N.A., providing for a $30 million revolving credit facility (filed as Exhibit 10 to the Company's
Quarterly Report on Form 10-Q for the period ended March 27, 1999, and incorporated herein by reference).                                                                                        
|10J-5  |  | Amendment, dated July 22, 1999, to Note Agreement between Courier Corporation, State Street Bank and Trust Company, BankBoston, N.A. and KeyBank National Association, providing for a $30 million revolving credit facility (filed as
Exhibit 10L-5 to the Company's Annual Report on Form 10-K for the fiscal year ended September 25, 1999, and incorporated herein by reference).                                                     
|10J-6  |  | Amendment, dated August 11, 2000, to Note Agreement between Courier Corporation, Citizens Bank of Massachusetts (successor to State Street Bank and Trust Company), Fleet National Bank (f/k/a BankBoston, N.A.) and KeyBank National Association,
providing for a $60 million revolving credit facility (filed as Exhibit 10 to the Company's Current Report on Form 8-K dated September 22, 2000, and incorporated herein by reference).
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                           

12

---

|10J-7  |  | Amendment, dated October 12, 2000, to Note Agreement between Courier Corporation, Citizens Bank of Massachusetts, Fleet National Bank, and KeyBank National Association, providing for a $60 million revolving credit facility (filed as
Exhibit 10L-7 to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2000, and incorporated herein by reference). 
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10J-8  |  | Amendment, dated March 31, 2001, to Note Agreement between Courier Corporation, Citizens Bank of Massachusetts, Fleet National Bank, and KeyBank National Association, providing for a $60 million revolving credit facility (filed as
Exhibit 10J-8 to the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2001, and incorporated herein by reference).   
|10J-9  |  | Amendment, dated May 20, 2002, to Note Agreement between Courier Corporation, Citizens Bank of Massachusetts, Fleet National Bank, KeyBank National Association 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 29, 2002, 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).                                                                                                                    
|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).                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                                                                                                         

13

---

|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.                                                                                                                                                                                                                                                                                                                                                                                      

---

(b)  Reports on Form 8-K

None.

14

---



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on December 5, 2002.

| |  | 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 5, 2002.

|/s/ JAMES F. CONWAY IIIJames F. Conway III
Chairman, President and
Chief Executive Officer |  | /s/ ARNOLD S. LERNERArnold S. Lerner
Director          
|------------------------------------------------------------------------------------------ |  | -------------------------------------------------------
|/s/ KATHLEEN FOLEY CURLEYKathleen Foley Curley
Director                                    |  | /s/ GEORGE Q. NICHOLSGeorge Q. Nichols
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

15

---



CERTIFICATION

I,
James F. Conway III, certify that:





|December 5, 2002Date |  | By: |  | /s/JAMES F. CONWAY IIIJames F. Conway III Chairman, President and
Chief Executive Officer
|-------------------- |  | --- |  | -----------------------------------------------------------------------------------------

16

---

CERTIFICATION

I,
Robert P. Story, Jr., certify that:





|December 5, 2002Date |  | By: |  | /s/ROBERT P. STORY, JR.Robert P. Story, Jr. Senior Vice President and
Chief Financial Officer
|-------------------- |  | --- |  | ---------------------------------------------------------------------------------------------

17

---



CERTIFICATIONS  Pursuant to 18 U.S.C. Section 1350,  As Adopted Pursuant to Section 906  Of the Sarbanes-Oxley Act of 2002

The
undersigned officer of Courier Corporation (the "Company") hereby certifies that the Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2002
(the "Report"), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities
Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This
certification is provided solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

|December 5, 2002Date |  | By: |  | /s/JAMES F. CONWAY IIIJames F. Conway III Chairman, President and
Chief Executive Officer
|-------------------- |  | --- |  | -----------------------------------------------------------------------------------------

The
undersigned officer of Courier Corporation (the "Company") hereby certifies that the Company's Annual Report on Form 10-K for the fiscal year ended
September 28, 2002 (the "Report"), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of section 13(a) or 15(d), as applicable,
of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company. This certification is provided solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

|December 5, 2002Date |  | By: |  | /s/ROBERT P. STORY, JR.Robert P. Story, Jr. Senior Vice President and
Chief Financial Officer
|-------------------- |  | --- |  | ---------------------------------------------------------------------------------------------

18

---



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 28, 2002 and September 29, 2001, 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 28, 2002. 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 28, 2002 and
September 29, 2001, and the results of its operations and its cash flows for each of the three years in the period ended September 28, 2002 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 7, 2002

F-1

---



COURIER CORPORATION        CONSOLIDATED STATEMENTS OF INCOME

|                                      |                     | For the Years Ended |            
|------------------------------------- | ------------------- | ------------------- | -----------
|
|Net sales (Note A)                    |                     | $                   | 202,184,000
|Cost of sales                         |                     |                     | 137,991,000
|                                      |                     |                     |            
|                                      | Gross profit        |                     |            
|Selling and administrative expenses   |                     |                     | 39,602,000 
|Amortization of goodwill (Note A)     |                     |                     |           
|Interest expense                      |                     |                     | 480,000    
|Other income (Note J)                 |                     |                     |           
|                                      |                     |                     |            
|                                      | Income before taxes |                     |            
|Provision for income taxes (Note C)   |                     |                     | 7,936,000  
|                                      |                     |                     |            
|Net income                            |                     | $                   | 16,175,000 
|                                      |                     |                     |            
|Net income per share (Notes A and K): |                     |                     |            
|                                      | Basic               |                     | $          
|                                      | Diluted             |                     | $          
|Cash dividends declared per share     |                     | $                   | 0.40       
|                                      |                     |                     |            

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

F-2

---



COURIER CORPORATION        CONSOLIDATED BALANCE SHEETS

|                                                    |                                                                                                                      | September 28, 2002                 |             | September 29, 2001 |            
|--------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | ----------- | ------------------ | -----------
|ASSETS                                              |                                                                                                                      |                                    |             |                    |            
|Current assets:                                     |                                                                                                                      |                                    |             |                    |            
|                                                    | Cash and cash equivalents (Note A)                                                                                   |                                    | $           | 5,630,000          |            
|                                                    | Accounts receivable, less allowance for uncollectible accounts of $2,292,000 in 2002 and $1,964,000 in 2001 (Note A) |                                    |             | 30,892,000         |            
|                                                    | Inventories (Note B)                                                                                                 |                                    |             | 21,412,000         |            
|                                                    | Deferred income taxes (Note C)                                                                                       |                                    |             | 3,163,000          |            
|                                                    | Other current assets                                                                                                 |                                    |             | 625,000            |            
|                                                    |                                                                                                                      |                                    |             |                    |            
|                                                    |                                                                                                                      | Total current assets               |             |                    | 61,722,000 
|Property, plant and equipment (Note A):             |                                                                                                                      |                                    |             |                    |            
|                                                    | Land                                                                                                                 |                                    |             | 1,059,000          |            
|                                                    | Buildings and improvements                                                                                           |                                    |             | 22,338,000         |            
|                                                    | Favorable building lease                                                                                             |                                    |             | 2,816,000          |            
|                                                    | Machinery and equipment                                                                                              |                                    |             | 109,075,000        |            
|                                                    | Furniture and fixtures                                                                                               |                                    |             | 1,658,000          |            
|                                                    | Construction in progress                                                                                             |                                    |             | 487,000            |            
|                                                    |                                                                                                                      |                                    |             |                    |            
|                                                    |                                                                                                                      |                                    | 137,433,000 |                    |            
|                                                    | Less-Accumulated depreciation and amortization                                                                       |                                    |             | (96,813,000        | )          
|                                                    |                                                                                                                      |                                    |             |                    |            
|                                                    |                                                                                                                      | Property, plant and equipment, net |             |                    | 40,620,000 
|Goodwill and other intangibles, net (Notes A and H) |                                                                                                                      |                                    | 25,483,000  |                    |            
|Prepublication costs (Note A)                       |                                                                                                                      |                                    | 3,219,000   |                    |            
|Other assets                                        |                                                                                                                      |                                    | 614,000     |                    |            
|                                                    |                                                                                                                      |                                    |             |                    |            
|                                                    |                                                                                                                      | Total assets                       |             | $                  | 131,658,000
|                                                    |                                                                                                                      |                                    |             |                    |            

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

F-3

---



COURIER CORPORATION        CONSOLIDATED BALANCE SHEETS

|                                                                           |                                                                                                                                                     | September 28, 2002                         |            | September 29, 2001 |            
|-------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------- | ------------------ | -----------
|LIABILITIES AND STOCKHOLDERS' EQUITY                                       |                                                                                                                                                     |                                            |            |                    |            
|Current liabilities:                                                       |                                                                                                                                                     |                                            |            |                    |            
|                                                                           | Current maturities of long-term debt                                                                                                                |                                            | $          | 78,000             |            
|                                                                           | Accounts payable (Note A)                                                                                                                           |                                            |            | 6,708,000          |            
|                                                                           | Accrued payroll                                                                                                                                     |                                            |            | 7,642,000          |            
|                                                                           | Accrued taxes                                                                                                                                       |                                            |            | 6,965,000          |            
|                                                                           | Other current liabilities                                                                                                                           |                                            |            | 6,362,000          |            
|                                                                           |                                                                                                                                                     |                                            |            |                    |            
|                                                                           |                                                                                                                                                     | Total current liabilities                  |            |                    | 27,755,000 
|Long-term debt (Notes A and D)                                             |                                                                                                                                                     |                                            | 674,000    |                    |            
|Deferred income taxes (Note C)                                             |                                                                                                                                                     |                                            | 4,658,000  |                    |            
|Other liabilities                                                          |                                                                                                                                                     |                                            | 2,652,000  |                    |            
|                                                                           |                                                                                                                                                     |                                            |            |                    |            
|                                                                           |                                                                                                                                                     | Total liabilities                          |            |                    | 35,739,000 
|                                                                           |                                                                                                                                                     |                                            |            |                    |            
|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 5,445,000 shares; outstanding 5,215,000 shares in 2002 and 5,112,000 shares in 2001 |                                            |            | 5,445,000          |            
|Additional paid-in capital                                                 |                                                                                                                                                     |                                            | 2,246,000  |                    |            
|Retained earnings                                                          |                                                                                                                                                     |                                            | 91,061,000 |                    |            
|Unearned compensation                                                      |                                                                                                                                                     |                                            | (509,000   | )                  |            
|Treasury stock, at cost: 230,000 shares in 2002 and 333,000 shares in 2001 |                                                                                                                                                     |                                            | (2,324,000 | )                  |            
|                                                                           |                                                                                                                                                     |                                            |            |                    |            
|                                                                           |                                                                                                                                                     | Total stockholders' equity                 |            |                    | 95,919,000 
|                                                                           |                                                                                                                                                     |                                            |            |                    |            
|                                                                           |                                                                                                                                                     | Total liabilities and stockholders' equity |            | $                  | 131,658,000
|                                                                           |                                                                                                                                                     |                                            |            |                    |            

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, net of acquisitions: |            
|                                                         | Accounts receivable                                                             |                                                         |            
|                                                         | Inventory                                                                       |                                                         |            
|                                                         | Accounts payable                                                                |                                                         |            
|                                                         | Accrued taxes                                                                   |                                                         |            
|                                                         | Other elements of working capital                                               |                                                         |            
|                                                         | Other, net                                                                      |                                                         |            
|                                                         |                                                                                 |                                                         |            
|Cash provided from operating activities                  |                                                                                 |                                                         | 28,966,000 
|                                                         |                                                                                 |                                                         |            
|Investment Activities:                                   |                                                                                 |                                                         |            
|                                                         | Business acquisitions, net of cash (Note H)                                     |                                                         |            
|                                                         | Capital expenditures                                                            |                                                         |            
|                                                         | Prepublication costs (Note A)                                                   |                                                         |            
|                                                         | Proceeds from sale of assets (Note J)                                           |                                                         |            
|                                                         |                                                                                 |                                                         |            
|Cash used for investment activities                      |                                                                                 |                                                         | (6,739,000 
|                                                         |                                                                                 |                                                         |            
|Financing Activities:                                    |                                                                                 |                                                         |            
|                                                         | Scheduled long-term debt repayments                                             |                                                         |            
|                                                         | Borrowings (repayments) of revolving credit facility, net                       |                                                         |            
|                                                         | Cash dividends                                                                  |                                                         |            
|                                                         | Stock repurchases                                                               |                                                         |            
|                                                         | Proceeds from stock plans                                                       |                                                         |            
|                                                         |                                                                                 |                                                         |            
|Cash provided from (used for) financing activities       |                                                                                 |                                                         | (16,770,000
|                                                         |                                                                                 |                                                         |            
|Increase (decrease) in cash and cash equivalents         |                                                                                 |                                                         | 5,457,000  
|Cash and cash equivalents at the beginning of the period |                                                                                 |                                                         | 173,000    
|                                                         |                                                                                 |                                                         |            
|Cash and cash equivalents at the end of the period       |                                                                                 | $                                                       | 5,630,000  
|                                                         |                                                                                 |                                                         |            
|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 25, 1999 |                                                   | $                          | 57,559,000 |              | $ | 3,750,000                  |           | $                 | 1,258,000 |                       | $ | 56,486,000     |           
|                            | Net income                                        |                            |            | 10,637,000   |   |                            |          |                   |           |                      |   |                | 10,637,000
|                            | Cash dividends                                    |                            |            | (1,572,000   | ) |                            |          |                   |           |                      |   |                | (1,572,000
|                            | Stock repurchase                                  |                            |            | (114,000     | ) |                            |          |                   |           |                      |   |                |          
|                            | Restricted stock grant/amortization activity, net |                            |            | 45,000       |   |                            |          |                   |           | 386,000               |   |                |          
|                            | Other stock plan activity                         |                            |            | 1,216,000    |   |                            |          |                   |           | 639,000               |   |                |          
|                            |                                                   |                            |            |              |   |                            |           |                   |           |                       |   |                |           
|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     |           
|                            |                                                   |                            |            |              |   |                            |           |                   |           |                       |   |                |           

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") are focused on streamlining and enhancing the
process by which printed books and digital content reach end-user markets, primarily for educational, religious, and specialty book publishers. Courier has three business segments:
full-service book manufacturing, customized education and, beginning in fiscal 2001 with the acquisition of Dover Publications, Inc. ("Dover"), specialty publishing (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. Fiscal years 2002 and 2001 were
52-week periods compared with fiscal year 2000 which was a 53-week period. Certain amounts for fiscal years 2001 and 2000 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. The Company estimates the fair value of financial instruments based on interest rates available to the Company and by comparison to quoted market prices. At September 28, 2002 and
September 29, 2001, the fair market value of the Company's financial instruments approximated their carrying values.

Property, Plant and Equipment:Property, plant and equipment are recorded at cost, including interest on funds borrowed to
finance the acquisition or construction of major capital additions. Interest capitalized in fiscal years 2001 and 2000 was approximately $170,000 and $102,000, respectively. No interest was
capitalized in fiscal year 2002. The Company provides for depreciation of property, plant and equipment on a straight-line basis over periods ranging from 3 to 11 years, except for
depreciation on buildings and improvements which is based on estimated useful lives ranging from 10 to 40 years.

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

Goodwill and Other Intangible Assets:Effective September 30, 2001, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets," which changes the accounting for goodwill and certain other intangible assets from an amortization method to an
impairment-only approach. The Company evaluates possible impairment annually or whenever events or circumstances indicate that the carrying value of the

F-7

---

assets
may not be recoverable. The Company completed the transitional impairment test and annual evaluation required by SFAS No. 142 resulting in no change to the nature or carrying amounts of
its intangible assets. Prior to fiscal year 2002, goodwill arising from business acquisitions was amortized using the straight-line method over 20 years.

At
September 28, 2002, goodwill and other intangible assets were comprised of $24.9 million of goodwill and $0.6 million of other intangible assets. Other intangible
assets includes approximately $0.1 million subject to amortization over a remaining seven-year life, as well as approximately $0.5 million of prepaid pension costs associated
with the curtailment of the Dover pension plan (see note G).

Had
the company accounted for goodwill in accordance with SFAS No. 142 in fiscal years 2001 and 2000, net income and net income per diluted share would have been as follows:

2002

2001

2000Reported net income

$
16,175,000

$
13,217,000

$
10,637,000Add back goodwill amortization, net of tax





1,050,000


565,000Adjusted net income

$
16,175,000

$
14,267,000

$
11,202,000Reported net income per diluted share

$
3.04

$
2.54

$
2.10Add back goodwill amortization, net of tax





0.20


0.11Adjusted net income per diluted share

$
3.04

$
2.74

$
2.21


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 fiscal 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 using the
straight-line method over an estimated useful life of four years.

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

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

F-8

---

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 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 this dividend. Weighted average shares outstanding and per share amounts
for periods prior to August 31, 2001 presented in the accompanying financial statements have been restated to give effect to the stock split.

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.

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
46%, and 45% of the Company's inventories at September 28, 2002 and September 29, 2001, respectively. Other inventories are determined on a first-in, first-out
(FIFO) basis.

2002

2001Raw materials

$
3,405,000

$
2,573,000Work in process


4,852,000


5,743,000Finished goods


13,155,000


13,824,000Total

$
21,412,000

$
22,140,000


On
a FIFO basis, reported year-end inventories would have been higher by $5.5 million in fiscal 2002 and $5.8 million in fiscal 2001.

C. Income Taxes

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

2002

2001

2000Federal taxes at statutory rate

$
8,386,000

$
6,942,000

$
5,430,000State taxes, net of federal tax benefit


366,000


316,000


423,000Goodwill amortization





173,000


173,000Foreign sales corporation (FSC) export related income


(868,000
)

(700,000
)

(710,000
)Other


52,000


86,000


(67,000
)Total

$
7,936,000

$
6,817,000

$
5,249,000


F-9

---

The
provision for income taxes consisted of the following:

2002

2001

2000Currently payable:Federal

$
5,705,000

$
6,017,000

$
5,353,000State


700,000


721,000


789,0006,405,000


6,738,000


6,142,000Deferred:Federal


1,507,000


193,000


(822,000
)State


24,000


(114,000
)

(71,000
)1,531,000


79,000


(893,000
)Total

$
7,936,000

$
6,817,000

$
5,249,000


The
following is a summary of the significant components of the Company's deferred tax assets and liabilities as of September 28, 2002 and September 29, 2001:

2002

2001Deferred tax assets:Vacation accrual not currently deductible

$
610,000

$
620,000Other accruals not currently deductible


427,000


489,000Non-deductible reserves


1,982,000


1,629,000Other


144,000


99,000Classified as current


3,163,000


2,837,000Deferred compensation arrangements


1,143,000


1,142,000Other


152,000


253,000Total deferred tax assets

$
4,458,000

$
4,232,000Deferred tax liabilities:Accelerated depreciation


5,362,000


4,088,000Goodwill amortization


591,000


108,000Total deferred tax liabilities

$
5,953,000

$
4,196,000


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

D. Long-Term Debt

Long-term debt consisted of the following:

2002

2001Obligation under revolving bank credit facility

$


$
15,750,000Obligation under industrial development bond arrangement at 3%, payable in monthly installments through May 2011


752,000


827,000752,000


16,577,000Less: Current maturities


78,000


76,000Total

$
674,000

$
16,501,000


F-10

---

Scheduled aggregate principal payments of long-term debt are $78,000 in fiscal 2003, $80,000 in fiscal 2004, $83,000 in fiscal 2005, $85,000 in fiscal 2006, $88,000 in fiscal
2007 and $338,000 thereafter.

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 2005.

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

E. Commitments and Contingencies

The Company is committed under various operating leases to make annual rental payments for certain buildings and equipment. Amounts charged to operations under
such leases approximated $4,256,000 in fiscal 2002, $5,239,000 in fiscal 2001 and $3,956,000 in fiscal 2000. As of September 28, 2002, minimum annual rental commitments under the Company's
long-term operating leases are approximately $3,869,000 in fiscal 2003, $3,478,000 in fiscal 2004, $2,537,000 in fiscal 2005, $1,234,000 in fiscal 2006 and $1,850,000 in the aggregate
thereafter. The Company leases one of its facilities from a corporation owned in part by an executive of the Company. The lease agreement requires annual payments of approximately $276,000 through
July 2007. At September 28, 2002 and September 29, 2001, the Company had letters of credit outstanding of $773,000 and $909,000, respectively.

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

F. Stock Arrangements

Stock Option/Incentive Plans:The Courier Corporation 1993 Stock Incentive Plan, as amended and restated, replaced the
expiring 1983 Stock Option Plan. The 1993 Stock Incentive Plan, as amended, provides for the granting of stock options and stock grants under the plan up to a total of 817,500 shares. Under the
provisions of each plan, both non-qualified and incentive stock options to purchase shares of the Company's common stock may be granted to key employees. The option price per share may not
be less than the fair market value of stock at the time the option is granted and incentive stock options must expire not later than ten years from the date of grant. During fiscal years 2002, 2001
and 2000, 2,500, 5,000 and 27,000 shares, respectively, of restricted stock were granted which vest over a five-year period. Amortization expense relating to the fiscal years 2002, 2001
and 2000 stock grants was $133,000, $111,000 and $45,000, respectively.

F-11

---

Directors' Option Plan:A 1989 plan, as amended and restated, allows members of the Company's Board of Directors to make an
election to apply either 50% or 100% of their annual retainer fee, including the committee chair retainer, toward the annual grant of stock options to be offered at a price per share $5 below the fair
market value of the Company's common stock at the time the option is granted. Retainer fees for fiscal 2002 amounted to $16,000 for each of the five outside directors; in addition, the three committee
chair fees amounted to a total of $22,500 for fiscal 2002. The plan, as approved by stockholders, provides a total of 375,000 shares for the issuance of such options.

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

Stock Option/Incentive Plans

Directors' Option PlanShares

Average
Exercise
Price

Shares

Average
Exercise
PriceOutstanding at September 25, 1999

316,842

$
8.77

62,700

$
7.96Issued

118,200


17.92

30,150


12.76Exercised

(105,123
)

6.95

(19,050
)

9.57Cancelled

(11,874
)

14.24




Outstanding at September 30, 2000

318,045

$
12.56

73,800

$
9.51Issued

61,225


21.92

30,099


15.89Exercised

(70,393
)

7.49

(12,450
)

6.58Cancelled

(8,880
)

17.55

(17,499
)

10.57Outstanding at September 29, 2001

299,997

$
15.52

73,950

$
12.35Issued

64,075


37.76

19,500


16.82Exercised

(65,212
)

11.12

(26,500
)

10.87Cancelled

(5,251
)

16.60




Outstanding at September 28, 2002

293,609

$
21.33

66,950

$
14.24Exercisable at September 28, 2002

157,419

$
15.16

66,950

$
14.24Available for future grants

137,319




103,500


The
following tables present information with regards to stock options outstanding at September 28, 2002:

Stock Option/Incentive PlansRange of Exercise Prices

$3.11 -
$11.28

$13.83 -
$20.99

$21.57 -
$30.95

$38.04 -
$41.84Options outstanding


39,260


130,549


65,225


58,575Weighted average exercise price of options outstanding

$
7.98

$
16.99

$
22.73

$
38.40Weighted average remaining life


1.6 years


3.6 years


5.7 years


6.8 yearsOptions exercisable


39,260


98,249


19,910


Weighted average exercise price of options exercisable

$
7.98

$
16.65

$
21.97





F-12

---

Directors' Option PlanRange of Exercise Prices

$10.11 - $16.28

$37.45Options outstanding


66,450


500Weighted average exercise price of options outstanding

$
14.06

$
37.45Weighted average remaining life


2.6 years


4.6 yearsOptions exercisable


66,450


500Weighted average exercise price of options exercisable

$
14.06

$
37.45


Stock Grant Plan:The Company established a stock grant plan in 1977 entitling key employees to receive shares of common
stock of the Company. Shares granted are either fully vested or vest over periods up to 5 years. The maximum number of shares of common stock that may be awarded under the stock grant plan is
298,125 and no more than 50,625 shares may be awarded in any one fiscal year. The numbers of shares granted under the plan were 1,100 in fiscal 2002 and 6,000 in fiscal 2000. No shares were granted
under this plan in fiscal 2001. As of September 28, 2002, there were 142 shares available for future grants under the plan.

Employee Stock Purchase Plan:The Company's 1999 Employee Stock Purchase Plan ("ESPP"), approved by stockholders in
January 1999, covers an aggregate of 150,000 shares of Company common stock for issuance under the plan. Eligible employees may purchase shares of Company common stock at not less than 85% of
fair market value at the beginning or end of the grant period. During fiscal 2002, 14,622 shares were issued under the plan at an average price of $24.48 per share. Since inception, 63,459 shares have
been issued. At September 28, 2002, an additional 86,541 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 rights to purchase one one-thousandth of a share of preferred stock for each share of common
stock held on that date. The rights are not exercisable, or transferable apart from the common stock, until certain events occur.

Pro forma Disclosures:The Company accounts for its stock option plans under APB Opinion No. 25, "Accounting for Stock
Issued to Employees" and related interpretations. Had compensation cost for grants under the ESPP and for stock options granted after 1995 been determined under the provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," the Company's net income would have been $15,534,000, or $2.92 per diluted share, for fiscal 2002; $12,653,000, or $2.43 per diluted share, for fiscal 2001;
and $10,210,000, or $2.02 per diluted share, for fiscal 2000. These pro forma earnings were $.12 per diluted share, $.11 per diluted share and $.08 per diluted share lower than reported results for
fiscal 2002, 2001 and 2000, respectively. The pro forma effect on net income and net income per diluted share for fiscal 2002, fiscal 2001 and fiscal 2000 is not representative of the pro forma effect
on net income in future years, because it does not take into consideration pro forma compensation expense related to options granted prior to fiscal 1996.

F-13

---

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

2002

2001

2000Risk-free interest rate

3.4
%
4.5
%
5.9
%Expected volatility

32
%
34
%
39
%Expected dividend yields

1.1
%
1.7
%
1.7
%Estimated life for grants under:1993 Stock Incentive Plan

5 - 7 years

5 - 7 years

5 - 7 yearsDirectors' Option Plan

5 years

5 years

5 yearsESPP

0.5 years

0.5 years

0.5 years


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

|                                            |  | 1993 Stock Incentive Plan |       | Directors' Option Plan
|------------------------------------------- |  | ------------------------- | ----- | ----------------------
|
|
|Exercise price was equal to stock price     |  | $                         | 13.46 |                       
|Exercise price was in excess of stock price |  | $                         | 10.04 |                       
|Exercise price was less than stock price    |  |                           |      |                       

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 (see Note H), also provides retirement benefits through a defined benefit plan as described below.

Retirement
costs of multi-employer union plans consist of defined contributions determined in accordance with the respective collective bargaining agreements. Retirement benefits for
non-union employees are provided through the Courier Profit Sharing and Savings Plan, which includes an Employee Stock Ownership Plan (ESOP). Retirement costs included in the accompanying
financial statements amounted to approximately$3,000,000 in fiscal 2002, $2,600,000 in fiscal 2001 and $2,500,000 in fiscal 2000.

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 fiscal years 2002, 2001 and 2000, no
such shares were allocated to eligible participants. At September 28, 2002, the ESOP held 227,190 shares on behalf of the participants.

F-14

---

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 plan for the years ended September 28, 2002 and September 29, 2001.

Change
in projected benefit obligation:

2002

2001Obligation at beginning of year

$
3,610,000

$
3,647,000Service cost


48,000


149,000Interest cost


219,000


234,000Actuarial (gain) loss


89,000


(177,000
)Curtailment gain


(505,000
)

Benefits paid


(286,000
)

(243,000
)Obligation at end of year

$
3,175,000

$
3,610,000


Change
in plan assets:

2002

2001Fair value of plan assets at beginning of year

$
3,716,000

$
3,471,000Actual return on plan assets


293,000


406,000Employer contributions


175,000


82,000Benefits paid


(286,000
)

(243,000
)Fair value of plan assets at end of year

$
3,898,000

$
3,716,000


Reconciliation
of funded status:

2002

2001Funded status at end of year

$
724,000

$
106,000Unrecognized net actuarial (gain) and other


(193,000
)

(260,000
)Prepaid (accrued) pension cost

$
531,000

$
(154,000
)


Components
of the net periodic benefit cost:

2002

2001Service cost

$
48,000

$
149,000Interest cost


219,000


234,000Expected return on plan assets


(270,000
)

(254,000
)Amortization of prior service cost


3,000


14,000Net periodic benefit cost




$
143,000


F-15

---

Actuarial
assumptions used to determine costs and benefit obligations:

2002

2001Discount rate

6.5
%
7.0
%Compensation increases

5.0
%
5.0
%Return on assets for the year

7.0
%
7.5
%


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. The associated
prepaid pension cost of $531,000 at September 28, 2002 is included in the accompanying consolidated balance sheet under the caption "Goodwill and other intangible assets, net" (see
Note A).

H. Business Acquisitions

On September 22, 2000, the Company acquired all of the outstanding capital stock of Dover Publications, Inc., a Mineola, New York publisher of
special-interest books. The Company paid approximately $39 million in cash to the former stockholders of Dover for their shares of capital stock. The acquisition was accounted for as a purchase
and, accordingly, Dover's financial results have been included in the consolidated financial statements from the date of acquisition. The financial statements
reflect the allocation of the purchase price to the assets acquired and liabilities assumed, based on their appraised fair value at the date of acquisition. The excess purchase price over the fair
value of the net assets acquired has been accounted for as goodwill (deductible for tax purposes).

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

(Unaudited)

2000Net sales

$
220,182,000Net income


10,881,000Net income per diluted share


2.15


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

F-16

---

I. Business Segments

The Company historically operated in one primary business segment, book manufacturing, with a second smaller business segment in customized education. On
September 22, 2000, the Company acquired Dover Publications, Inc. (see Note H) which operates in a third segment, specialty publishing. Operating results of the specialty
publishing segment are not included in the fiscal 2000 segment information because the results of operations for the period prior to September 30, 2000 were not significant.

The
Company has aggregated its book manufacturing business into one segment because of strong similarities in the economic characteristics, the nature of products and services,
production processes, class of customer and distribution methods used. The book-manufacturing segment offers a full range of services from production through storage and distribution for
religious, educational and specialty trade book publishers. The customized education segment is comprised of Courier Custom Publishing, a provider of customized college coursepacks and textbooks.
Prior years results for this segment also included The Home School, which ceased operations in March 2001 when substantially all of its assets were sold.

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-17

---

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

|                                              |  | Total
Company |             | Book
Manufacturing |   | Specialty
Publishing |   | Customized
Education |            | Unallocated |   | Intersegment
Elimination |  
|--------------------------------------------- |  | ------------- | ----------- | ------------------ | - | -------------------- | - | -------------------- | ---------- | ----------- | - | ------------------------ | -
|Fiscal 2002                                   |  |               |             |                    |   |                      |   |                      |            |             |   |                          |  
|Net sales                                     |  | $             | 202,184,000 |                    | $ | 170,382,000          |   | $                    | 36,004,000 |             | $ | 1,160,000                |  
|Earnings (loss) before income taxes           |  |               | 24,111,000  |                    |   | 19,817,000           |   |                      | 4,890,000  |             |   | (191,000                 | )
|Assets                                        |  |               | 131,658,000 |                    |   | 75,604,000           |   |                      | 41,066,000 |             |   | 227,000                  |  
|Depreciation and amortization                 |  |               | 10,687,000  |                    |   | 8,750,000            |   |                      | 1,913,000  |             |   | 24,000                   |  
|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                                     |  | $             | 211,943,000 |                    | $ | 181,233,000          |   | $                    | 33,259,000 |             | $ | 1,488,000                |  
|Earnings (loss) before income taxes           |  |               | 20,034,000  |                    |   | 18,691,000           |   |                      | 1,425,000  |             |   | (848,000                 | )
|Assets                                        |  |               | 133,615,000 |                    |   | 83,735,000           |   |                      | 40,670,000 |             |   | 341,000                  |  
|Depreciation and amortization                 |  |               | 11,796,000  |                    |   | 8,990,000            |   |                      | 2,690,000  |             |   | 116,000                  |  
|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  |             |   |                         |  
|                                              |  |               |             |                    |   |                      |   |                      |            |             |   |                          |  
|Fiscal 2000                                   |  |               |             |                    |   |                      |   |                      |            |             |   |                          |  
|Net sales                                     |  | $             | 192,226,000 |                    | $ | 188,865,000          |   |                      |            |             | $ | 3,361,000                |  
|Earnings (loss) before income taxes           |  |               | 15,886,000  |                    |   | 19,066,000           |   |                      |            |             |   | (3,299,000               | )
|Assets                                        |  |               | 141,766,000 |                    |   | 88,748,000           |   | $                    | 41,577,000 |             |   | 848,000                  |  
|Depreciation and amortization                 |  |               | 8,062,000   |                    |   | 7,844,000            |   |                      |            |             |   | 218,000                  |  
|Capital expenditures                          |  |               | 16,347,000  |                    |   | 15,665,000           |   |                      |            |             |   | 13,000                   |  
|Interest expense                              |  |               | 325,000     |                    |   | 272,000              |   |                      |            |             |   | 53,000                   |  
|                                              |  |               |             |                    |   |                      |   |                      |            |             |   |                          |  

Export
sales as a percentage of consolidated sales were approximately 21% in fiscal 2002, 19% in fiscal 2001 and 18% in fiscal 2000. Sales to the Company's largest customer amounted to
approximately 26% of consolidated sales in fiscal 2002, 25% in fiscal 2001 and 26% in fiscal 2000. In addition, sales to another customer amounted to 15% of consolidated sales in fiscal 2002, 13% in
fiscal 2001 and 17% in fiscal 2000. No other customer accounted for more than 10% of consolidated sales. Customers are granted credit on an unsecured basis.

F-18

---

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 $.04 per diluted share.

During
the first quarter of fiscal 2001, the Company completed the sale of its Raymond, New Hampshire facility. In February 2000, the Company entered into a five-year
lease agreement for this facility, which had been vacant. The lease provided for a purchase option at a price of $1.3 million. The option was exercised in August 2000 and the transaction
closed in October 2000, resulting in a pretax gain of approximately $0.9 million and approximately $0.6 million after tax, or $.10 per diluted share. Other income also includes
net rental income from this facility of $49,000 in fiscal 2001 and $119,000 in fiscal 2000.

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 a three-for-two stock split effected in the
form of a dividend distributed on August 31, 2001 (see Note A).

2002

2001

2000Average shares outstanding for basic

5,149,000

5,058,000

4,915,000Effect of potentially dilutive shares

179,000

140,000

144,000Average shares outstanding for dilutive

5,328,000

5,198,000

5,059,000


F-19

---



COURIER CORPORATION        SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Fiscal 2002

|(Dollars in thousands except per share amounts) |         | First |        | Second |   | Third  |       | Fourth
|----------------------------------------------- | ------- | ----- | ------ | ------ | - | ------ | ----- | ------
|Operating Results:                              |         |       |        |        |   |        |       |       
|Net sales                                       |         | $     | 45,704 |        | $ | 48,503 |       | $     
|Gross profit                                    |         |       | 13,655 |        |   | 14,526 |       |       
|Net income                                      |         |       | 2,621  |        |   | 2,865  |       |       
|Net income per diluted share                    |         |       | 0.50   |        |   | 0.54   |       |       
|Dividends declared per share                    |         |       | 0.10   |        |   | 0.10   |       |       
|Stock price:                                    |         |       |        |        |   |        |       |       
|                                                | Highest |       |        | 34.24  |   |        | 39.45 |       
|                                                | Lowest  |       |        | 21.00  |   |        | 32.40 |       

Fiscal 2001

|(Dollars in thousands except per share amounts) |         | First |        | Second |   | Third  |       | Fourth
|----------------------------------------------- | ------- | ----- | ------ | ------ | - | ------ | ----- | ------
|Operating Results:                              |         |       |        |        |   |        |       |       
|Net sales                                       |         | $     | 54,190 |        | $ | 49,954 |       | $     
|Gross profit                                    |         |       | 14,725 |        |   | 13,422 |       |       
|Net income                                      |         |       | 2,952  |        |   | 2,133  |       |       
|Net income per diluted share                    |         |       | 0.57   |        |   | 0.41   |       |       
|Dividends declared per share                    |         |       | 0.09   |        |   | 0.09   |       |       
|Stock price:                                    |         |       |        |        |   |        |       |       
|                                                | Highest |       |        | 20.50  |   |        | 21.17 |       
|                                                | Lowest  |       |        | 18.00  |   |        | 19.33 |       

Net income per share is based on weighted average shares outstanding.

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

There were approximately 875 stockholders of record as of September 28, 2002.

F-20

---



COURIER CORPORATION        FIVE-YEAR FINANCIAL SUMMARY

|(Dollar amounts in millions except per share data) |  | 2002 |       | 2001 |   | 2000* |   | 1999 |       | 1998 |  
|-------------------------------------------------- |  | ---- | ----- | ---- | - | ----- | - | ---- | ----- | ---- | -
|Net sales                                          |  | $    | 202.2 |      | $ | 211.9 |   | $    | 192.2 |      | $
|Gross profit                                       |  |      | 64.2  |      |   | 61.4  |   |      | 48.1  |      |  
|Net income                                         |  |      | 16.2  |      |   | 13.2  |   |      | 10.6  |      |  
|Net income per diluted share                       |  |      | 3.04  |      |   | 2.54  |   |      | 2.10  |      |  
|Dividends per share                                |  |      | 0.40  |      |   | 0.36  |   |      | 0.32  |      |  
|Working capital                                    |  |      | 34.0  |      |   | 28.2  |   |      | 33.3  |      |  
|LIFO reserve                                       |  |      | 5.5   |      |   | 5.8   |   |      | 5.9   |      |  
|Current ratio (FIFO basis)                         |  |      | 2.4   |      |   | 2.1   |   |      | 2.0   |      |  
|Total assets                                       |  |      | 131.7 |      |   | 133.6 |   |      | 141.8 |      |  
|Long-term debt                                     |  |      | 0.7   |      |   | 16.5  |   |      | 31.3  |      |  
|Long-term debt as a percentage of capitalization   |  |      | 0.7   | %    |   | 17.0  | % |      | 31.6  | %    |  
|Depreciation and amortization                      |  |      | 10.7  |      |   | 11.8  |   |      | 8.1   |      |  
|Capital expenditures                               |  |      | 4.9   |      |   | 12.8  |   |      | 16.3  |      |  
|Stockholders' equity                               |  |      | 95.9  |      |   | 80.3  |   |      | 67.8  |      |  
|Return on stockholders' equity                     |  |      | 18.4  | %    |   | 17.8  | % |      | 17.0  | %    |  
|Stockholders' equity per share                     |  |      | 18.40 |      |   | 15.71 |   |      | 13.52 |      |  
|Shares outstanding (in 000's)                      |  |      | 5,215 |      |   | 5,112 |   |      | 5,016 |      |  
|Number of employees                                |  |      | 1,455 |      |   | 1,504 |   |      | 1,535 |      |  

Net income per share is based on weighted average shares outstanding; stockholders' equity per share is based on shares outstanding at year end.

---

F-21

---



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 which could cause actual results to differ materially from those currently anticipated. Factors that could affect
actual results include, among others, changes in customers' demand for the Company's products, changes in raw material costs and availability, seasonal changes in customer orders, pricing actions by
competitors, changes in copyright laws, changes in technology, consolidation among customers and competitors, success in the integration of acquired businesses, 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 industry-leading financial performance,
including six straight years of earnings growth, was achieved through a strong focus on growth markets, technological innovation and outstanding customer service.

The
Company has three business segments: full-service book manufacturing, customized education and specialty publishing.

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.

Customized Educationresponds to the need for greater choice in education. Courier Custom Publishing offers solutions that
enable educators to provide students with customized teaching materials from multi-publisher custom books to out-of-print book reproductions and self-published
books. The Home School, which Courier sold in March 2001, was a direct marketer of educational materials to families engaged in educating children at home and was included in the customized
education segment prior to its sale.

Specialty Publishingconsists of Dover Publications, 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 atwww.doverpublications.com.

F-22

---

|Sales by Segment: (in thousands) |       | 2002 |         | 2001    |   | 2000   
|-------------------------------- | ----- | ---- | ------- | ------- | - | -------
|Book Manufacturing               |       | $    | 170,382 |         | $ | 181,233
|Customized Education             |       |      | 1,160   |         |   | 1,488  
|Specialty Publishing             |       |      | 36,004  |         |   | 33,259 
|Intersegment sales               |       |      | (5,362  | )       |   | (4,037 
|                                 |       |      |         |         |   |        
|                                 | Total |      | $       | 202,184 |   | $      
|                                 |       |      |         |         |   |        

RESULTS OF OPERATIONS

Sales in fiscal 2002 decreased 5% to $202.2 million compared to $211.9 million in fiscal 2001. Sales from Courier's book manufacturing segment were
$170.4 million, down 6% from $181.2 million in 2001. Sales to customers in the specialty trade market were down approximately 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. Sales
to the religious market were up approximately 3% over 2001. Sales to educational publishers in 2002 were approximately 3% below last year, reflecting reductions in inventory levels in the college
market by publishers, distributors and retailers in the first half of the year. Sales to elementary and high school publishers were relatively flat in fiscal 2002 compared to fiscal 2001. Sales from
the Company's specialty publishing segment, which is comprised of Dover, were $36.0 million in fiscal 2002, an 8% increase over the prior year. Fiscal 2001 consisted of 53 weeks for Dover.
Adjusting for the extra week, the sales increase in fiscal 2002 was 11%. The Company's customized education segment, consisting of Courier Custom Publishing, had sales of approximately
$1.2 million in fiscal 2002. Fiscal 2001 sales of $1.5 million included revenues of approximately $0.4 million for The Home School, which the Company divested in
March 2001. The elimination of intersegment sales of $5.4 million in 2002 increased 33% over 2001 as Courier's book manufacturing operations took on more of Dover's production
requirements. Courier's sales in fiscal 2001 increased 10% to $211.9 million compared to $192.2 million in fiscal 2000. Fiscal 2000 included 53 weeks compared to 52 weeks in fiscal 2001.
The fiscal 2001 sales increase was 12% if fiscal 2000 is adjusted to a comparable 52-week period. The sales increase in fiscal 2001 was the result of the acquisition of Dover on
September 22, 2000. Dover's sales in 2001 were $33.3 million. Intersegment sales from the book manufacturing segment to Dover of $4 million in 2001 were eliminated from
consolidated sales. Book manufacturing sales in 2001 decreased 4% to $181.2 million from $188.9 million in 2000.Adjusting for the additional week in fiscal 2000, sales for the segment
decreased by approximately 2% in 2001. Sales to the specialty trade market fell 17% below fiscal 2000 due to weakness in consumer demand for books on subjects such as computer games, technology,
investing, and general business. Meanwhile, sales to educational publishers increased by 4% in 2001, particularly from strong sales of elementary and high school books, which offset softness in sales
of college texts. Sales in 2001 to the religious market increased 9% over the prior year. Customized education segment sales of $1.5 million in 2001 decreased by $1.9 million from fiscal
2000 due to the March 2001 sale of The Home School. Sales for Courier Custom Publishing, the Company's college coursepack business, increased 10% over fiscal 2000.

Gross
profit in fiscal 2002 increased by $2.8 million, or 5% and as a percentage of sales, increased to 32% from 29% in 2001. Gross profit as a percent of sales in the Company's
book manufacturing segment increased to approximately 27.5% in fiscal 2002 from 25.8% in 2001. The increase was the result of productivity improvements from investments in equipment and training,
tight cost controls

F-23

---

and
a favorable shift in the sales mix. Dover's gross profit in 2002 increased by $2.3 million and, as a percentage of sales, increased to 49% from 46% in 2001 reflecting higher prices and
lower production costs. Gross profit in fiscal 2001 increased by $13.3 million, or 28% and, as a percentage of sales, increased to 29% from 25% in fiscal 2000. The increases were primarily the
result of the acquisition of Dover. Dover's gross profit in 2001 was $15 million and, as a percentage of sales, was 46%, which was significantly higher than the Company's other segments. In
Courier's book manufacturing segment, the gross margin was comparable to the prior year, despite the drop in sales. Aggressive cost controls, increased productivity levels and lower paper costs offset
a drop in recycling income, as well as higher energy costs, health insurance and depreciation expense.

Selling
and administrative expenses in fiscal 2002 increased less than 1%, to $39.6 million from $39.3 million in fiscal 2001, and, as a percentage of sales, increased to
20% in 2002 from 19% in 2001. Dover's selling and administrative expenses were $12 million, or 34% of sales, up 9% from 2001 primarily from increased sales and marketing activities and the
write off of a receivable from its Canadian distributor who filed for bankruptcy. In the book manufacturing segment, selling and administrative expenses in 2002 were $27.2 million, down 2% from
2001. Fiscal 2001 selling and administrative expenses increased to $39.3 million from $31.4 million in fiscal 2000, and, as a percentage of sales, increased to 19% in 2001 from 16% in
2000. Dover's selling and administrative expenses were $11 million in 2001 or 33% of their sales, which is a much higher percentage than the rest of Courier's business, in part due to Dover's
consumer and retail catalog marketing operations. Selling and administrative expenses in the book manufacturing segment were down 3% in 2001 and, at 15% of sales, were comparable to fiscal 2000.
Selling and administrative expenses in the customized education segment were down $2.3 million in 2001 primarily from the disposition of The Home School in March 2001.

In
fiscal 2002, amortization of goodwill decreased by $1.4 million from fiscal 2001, reflecting the Company's adoption of Statement of Financial Accounting Standards ("SFAS")
No. 142, "Goodwill and Other Intangible Assets." This standard, adopted at the beginning of fiscal 2002, changes 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 fiscal 2001, the result would have been to increase related pretax income by
$1.4 million and net income by approximately $1.0 million, or $.20 per diluted share. Amortization of goodwill increased to $1.4 million in fiscal 2001 from $0.6 million in
fiscal 2000 due to additional goodwill amortization related to the acquisition of Dover in September 2000.

Interest
expense was $0.5 million in fiscal 2002 compared to $1.9 million in fiscal 2001, reflecting decreased average borrowings of approximately $21 million, as
well as a reduction in average interest rates from 6.1% in fiscal 2001 to 2.5% in fiscal 2002. Interest expense in fiscal 2001 was $1.9 million compared to $0.3 million in fiscal 2000
due to an increase in average borrowings of approximately $27 million, resulting from the acquisition of Dover for $39 million in cash financed by the Company's revolving credit
facility. Capitalized interest related to new equipment was approximately $0.2 million in fiscal 2001 and $0.1 million in fiscal 2000. No interest was capitalized in fiscal 2002.

Other
income in fiscal 2001 is comprised of a pretax gain of approximately $0.3 million from the sale of The Home School. In addition, during fiscal 2001 the Company completed the
sale of a facility in Raymond, New Hampshire. In February 2000, the Company entered into a lease agreement for this facility, which had been vacant. The lease provided for a purchase option at
a price of $1.3 million. The option was exercised in August 2000 and the transaction closed in October 2000, resulting in a pretax gain of approximately $0.9 million. Other
income also includes net rental income from this facility of $49,000 in fiscal 2001 and $119,000 in fiscal 2000.

F-24

---

The
Company's effective tax rate for fiscal 2002 was 33% compared to 34% for fiscal 2001. The fiscal 2001 tax rate was higher than fiscal 2002 primarily due to nondeductible goodwill
amortization in 2001. In fiscal 2001, the effective tax rate was 34% which was higher than the 33% rate for fiscal 2000 due, in part, to increased profitability in fiscal 2001 taxed at a higher
statutory federal tax rate.

|Income (loss) by segment: (in thousands) |                     | 2002 |        | 2001   |   | 2000   |       
|---------------------------------------- | ------------------- | ---- | ------ | ------ | - | ------ | ------
|Book Manufacturing                       |                     | $    | 19,817 |        | $ | 18,691 |       
|Customized Education                     |                     |      | (191   | )      |   | (848   | )     
|Specialty Publishing                     |                     |      | 4,890  |        |   | 1,425  |       
|Other income                             |                     |      |       |        |   | 1,230  |       
|Intersegment eliminations                |                     |      | (405   | )      |   | (464   | )     
|                                         |                     |      |        |        |   |        |       
|                                         | Income before taxes |      |        | 24,111 |   |        | 20,034
|Provision for income taxes               |                     |      | 7,936  |        |   | 6,817  |       
|                                         |                     |      |        |        |   |        |       
|                                         | Net income          |      | $      | 16,175 |   | $      | 13,217
|                                         |                     |      |        |        |   |        |       

For
fiscal 2002, net income was $16.2 million, or $3.04 per diluted share, compared with $13.2 million, or $2.54 per diluted share, for fiscal 2001. Fiscal 2001 included
after-tax gains totaling $750,000 or $.14 per diluted share from the sale of real estate ($.10 per diluted share) and the sale of The Home School ($.04 per diluted share). Fiscal 2001 also
included goodwill amortization of approximately $1.4 million, or $.20 per diluted share. Fiscal 2002 pretax income for the Company's book manufacturing segment was $19.8 million, up 6%
compared to 2001, and net income per diluted share was $2.53, also an increase of 6% over the prior year. Fiscal 2001 included goodwill amortization in this segment of approximately
$0.5 million, or $.10 per diluted share. Pretax income in the specialty publishing segment was approximately $4.9 million, or $.58 per diluted share, compared to $1.4 million, or
$.17 per diluted share in fiscal 2001. Goodwill amortization in fiscal 2001 accounted for approximately $0.9 million, or $.10 per diluted share, of this improvement. Pretax losses in the
customized education segment were approximately $0.2 million, or $.02 per diluted share, in fiscal 2002 compared to a loss of approximately $0.8 million, or $.11 per diluted share in the
prior year. Net income for fiscal 2001 was $13.2 million, or $2.54 per diluted share, compared with $10.6 million, or $2.10 per diluted share, for fiscal 2000. Excluding the gains from
the sale of real estate and The Home School, net income in fiscal 2001 was $12.5 million, up 17% over the prior year, and net income per diluted share was $2.40, an increase of 14% over fiscal
2000. Pretax earnings from the Company's book manufacturing segment in 2001 decreased 2% to $18.7 million from $19.1 million in the prior year. Pretax earnings from the specialty
publishing segment, established in fiscal 2001 with the acquisition of Dover, were $1.4 million. The customized education segment reduced its pretax loss to $0.8 million, or $.11 per
diluted share in fiscal 2001, from a pretax loss of $3.3 million, or $.43 per diluted share, in fiscal 2000, primarily due to the disposition of The Home School in March 2001. Results
for fiscal 2000 in the customized education segment include a $350,000 pretax charge, or $.05 per diluted share, for the planned closure of The Home School's retail store.

For
purposes of computing net income per diluted share, weighted average shares outstanding increased by approximately 130,000 shares in fiscal 2002 and 139,000 shares in fiscal 2001.
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 August 31, 2001, the Company
distributed a three-for-two stock split effected in the form of a 50% dividend. Weighted average shares outstanding and net income per share amounts have been restated to give
effect to the stock split.

F-25

---

LIQUIDITY AND CAPITAL RESOURCES

Operating activities provided approximately $29.0 million of cash. Net income for the year was $16.2 million. Depreciation was $9.2 million
and amortization of prepublication costs was $1.5 million. Increases in deferred income taxes provided approximately $1.5 million of cash. Working capital did not change significantly.

Investment
activities used approximately $6.7 million of cash. Capital expenditures were $4.9 million, primarily for factory automation equipment to improve productivity.
Prepublication costs at Dover were approximately $1.8 million, reflecting increased investments in new title offerings. For fiscal 2003, capital expenditures are expected to increase to
approximately $10-$12 million and prepublication costs to increase modestly over 2002 levels.

Financing
activities used approximately $16.8 million of cash in 2002 principally for debt repayments, which amounted to $15.8 million. At September 28, 2002, there
were no borrowings under the Company's $60 million revolving credit facility. Dividends used $2.1 million of cash while proceeds from stock plans provided $1.1 million of cash,
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 fiscal 2003.

NEW ACCOUNTING PRONOUNCEMENTS

Effective September 30, 2001, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible
Assets," which changes the accounting for goodwill and certain other intangible assets from an amortization method to an impairment-only approach. The Company has completed the
transitional impairment test and annual evaluation required by SFAS No. 142 resulting in no change to the nature or carrying amounts of its intangible assets. Prior to fiscal year 2002,
goodwill arising from business acquisitions was amortized using the straight-line method over 20 years. Amortization expense was $1,410,000 and $596,000 for fiscal years 2001 and
2000, respectively. If SFAS No. 142 had applied to goodwill for fiscal years 2001 and 2000, the result would have been to increase related net income by approximately $1.0 million, or
$.20 per diluted share, and $0.6 million, or $.11 per diluted share, respectively.

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

RISKS

The Company derived approximately 41% of its fiscal 2002 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 taxable income and a reduction in its net income. The tax benefit of the FSC in fiscal 2002 increased net income by $0.9 million.

F-26

---

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.

GoodwillEffective September 30, 2001, the Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 142, "Goodwill and Other Intangible Assets," which changes the accounting for goodwill and certain other intangible assets from an amortization method to an impairment-only
approach. The Company evaluates possible impairment annually or whenever events or circumstances indicate that the carrying value of the assets may not be recoverable. The Company completed the
transitional impairment test and annual evaluation required by SFAS No. 142 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, consisting primarily of art and editorial costs incurred
in the creation of a book or other media. 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 TaxesIncome tax liabilities and assets are determined based upon the differences among the financial statement and
tax bases of assets and liabilities, and taxes reported on the Company's tax returns. Changes in the recoverability of the Company's tax assets or audits by tax authorities could result in future
charges or credits to income tax expense.

F-27

---



COURIER CORPORATION        SCHEDULE II        CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

|                                     |                                      | BALANCE AT
BEGINNING
OF PERIOD |   | ADDITIONS
CHARGED TO
COSTS AND
EXPENSES |  | DEDUCTIONS |           | OTHER
CHANGES (1) |   | BALANCE
AT END
OF PERIOD
|------------------------------------ | ------------------------------------ | ------------------------------ | - | --------------------------------------- |  | ---------- | --------- | ----------------- | - | ------------------------
|Fiscal year ended September 28, 2002 |                                      |                                |   |                                         |  |            |           |                   |   |                         
|                                     | Allowance for uncollectible accounts |                                | $ | 1,964,000                               |  | $          | 1,039,000 |                   | $ | 711,000                 
|Fiscal year ended September 29, 2001 |                                      |                                |   |                                         |  |            |           |                   |   |                         
|                                     | Allowance for uncollectible accounts |                                | $ | 1,391,000                               |  | $          | 718,000   |                   | $ | 145,000                 
|Fiscal year ended September 30, 2000 |                                      |                                |   |                                         |  |            |           |                   |   |                         
|                                     | Allowance for uncollectible accounts |                                | $ | 937,000                                 |  | $          | 345,000   |                   | $ | 141,000                 

---

S-1

---

QuickLinks