Steven B. Lapin, president and chief operating officer, and Dean Johnson, senior vice president and chief financial officer, stated, “Revenues for your Company’s 2009 first quarter were negatively affected by the funding deterioration of state and local education budgets. Management anticipates that revenues will continue to be restricted so long as employment conditions remain unstable and until education-earmarked dollars from the 2009 stimulus package begin to flow meaningfully into state and local coffers. Your Company has been vigilant in controlling, where prudent, factors that influence earnings; for example, gross profit margin for the first quarter of 2009 increased 110 basis points to 40.6% compared to the first quarter of 2008 principally as a result of procurement action plans to control transportation costs. In addition, variable components of selling and administrative expenses, with particular focus on labor, were reduced in reaction to lower order volume. Management will continue to scrutinize operating costs in order to protect earnings potential during this period of economic disruption without negatively impacting the Company’s long term financial goals.”
