In the news release, Consolidated Graphics Reports Financial
Results For The Quarter Ended September 2009, issued 04-Nov-2009 by
Consolidated Graphics, Inc. over PR Newswire, the Sales for 2009 in
the Condensed Consolidated Income Statements table should read
"$251,626" rather than "51,626" as incorrectly transmitted by PR
Newswire. The complete, corrected release follows: HOUSTON, Nov. 4
/PRNewswire-FirstCall/ -- Consolidated Graphics, Inc. (NYSE:CGX)
today announced financial results for the quarter ended September
30, 2009. Revenue for the September quarter was $251.6 million,
down 15% compared to the same quarter last year. The revenue
decline was primarily due to a year-over-year same-store revenue
decline caused by the current economic environment and lower
election-related business. Operating income for the September 2009
quarter of $6.6 million included charges of $2.6 million related to
litigation and the impairment of certain production equipment.
Adjusted operating income was $9.4 million or 3.7% of revenue
compared to $21.1 million or 7.1% of revenue for the September 2008
quarter. Adjusted operating margin declined due to lower sales
which caused certain costs, such as depreciation and various
overhead expenses, to increase as a percentage of revenues.
Adjusted net income for the September 2009 quarter was $3.8
million, or $.34 diluted earnings per share compared to adjusted
net income of $10.1 million, or $.88 diluted earnings per share for
the prior year quarter. Net income during the quarter ended
September 30, 2009 was $2.1 million or $.18 diluted earnings per
share. On a sequential basis revenue increased 11.4% compared to
the first quarter of 2009 and operating income and earnings per
share also improved significantly. The Company continued its strong
cash flow performance in the September 2009 quarter, generating
free cash flow of $55.8 million, compared to free cash flow of
$29.8 million in the June 2009 quarter. Adjusted EBITDA for the
September 2009 quarter was $28.7 million compared to $39.3 million
for the same quarter of the prior year. As of September 30, 2009
total debt was $232.7 million, a reduction of $81.5 million, or
26%, from March 31, 2009. Joe R. Davis, Chairman and Chief
Executive Officer of Consolidated Graphics, commented, "During the
quarter, demand remained soft across our markets, and while the
economy continued to adversely impact our business and affect our
profitability, we continued our focus on managing costs. In
addition, we benefited from our strategic sales and from our
position as the leader in digital print services, as digital print
sales declined only slightly despite overall market conditions. The
quarter also saw us continue to improve our balance sheet, as we
utilized our strong free cash flow to further reduce our debt
levels." Mr. Davis added, "Going forward, we remain focused on
building upon our leadership position in the market place, prudent
management of our cost structure, and leveraging our strong
financial position to invest in our business for our future.
Visibility remains very limited, but based on current market
conditions we expect the December quarter revenue to be in the
range of $250-265 million representing a same store sales decline
of 10-15%, excluding election-related business. Achieving revenues
within this range should allow us to at least generate break-even
Adjusted Net Income for the quarter ending in December." A
reconciliation of the non-GAAP financial measures, Adjusted EBITDA,
Adjusted Operating Income, Adjusted Operating Margin, Adjusted Net
Income and Free Cash Flow is included in the attached tables and in
the Current Report on Form 8-K filed today, as well as the basis
for management's use of the non-GAAP financial measures.
Consolidated Graphics, Inc. will host a conference call today,
Wednesday, November 4, 2009, at 11:00 a.m. Eastern Time, to discuss
its second quarter fiscal 2010 results. The conference call will be
simultaneously broadcast live over the Internet on our website
(http://www.cgx.com/) and a subsequent archive of such call will
also be available on our website. Consolidated Graphics, Inc.
(CGX), headquartered in Houston, Texas, is one of North America's
leading general commercial printing companies. With 70 printing
businesses strategically located across 27 states, Canada, and in
Prague, we offer an unmatched geographic footprint, unsurpassed
capabilities, and unparalleled levels of convenience, efficiency
and service. With locations in or near virtually every major U.S.
market, CGX provides service and responsiveness of a local printer
enhanced by the economic, geographic and technological advantages
of a large national organization. Consolidated Graphics' vast and
technologically advanced sheetfed and web printing capabilities are
complemented by the largest integrated digital footprint of any
commercial printer in the U.S. By coupling North America's most
comprehensive printing capabilities with strategically located
fulfillment centers and industry-leading technology, CGX delivers
solutions that create a spectrum of value for customers. CGX offers
the unique ability to respond to all printing-related needs no
matter how large, small, specialized or complex. For more
information, visit http://www.cgx.com/. Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
in which the Company discusses factors it believes may affect its
performance or results in the future. Forward-looking statements
are all statements other than historical facts, such as statements
regarding assumptions, expectations, beliefs and projections about
future events or conditions. You can generally identify
forward-looking statements by the appearance in such a statement of
words like "anticipate," "believe," "continue," "could,"
"estimate," "expect," "intend," "may," "might," "plan,"
"potential," "predict," "forecast," "project," "should" or "will"
or other comparable words or the negative of such words. The
accuracy of the Company's assumptions, expectations, beliefs and
projections depend on events or conditions that change over time
and are thus susceptible to change based on actual experience, new
developments and known and unknown risks, including those created
by general market conditions, competition and the possibility that
events may occur beyond the Company's control, which may limit its
ability to maintain or improve its operating results or financial
condition or acquire additional printing businesses. The Company
gives no assurance that the forward-looking statements will prove
to be correct and does not undertake any duty to update them. The
Company's actual future results might differ from the
forward-looking statements made in this press release for a variety
of reasons, continuing weakness in the economy, the growth of its
digital printing business, seasonality of election-related
business, its ability to adequately manage expenses, including
labor costs, the unfavorable outcome of legal proceedings, the lack
of or adequacy of insurance coverage for its operations, the
continued availability of raw materials at affordable prices,
retention of its key management and operating personnel,
satisfactory labor relations, the potential for additional goodwill
impairment charges, its ability to identify new acquisition
opportunities, negotiate and finance such acquisitions on
acceptable terms and successfully absorb and manage such
acquisitions in a timely and efficient manner, as well as other
risks described under the heading "Risk Factors" of our Annual
Report on Form 10-K and the risk factors and cautionary statements
described in the other documents the Company files or furnishes
from time to time with the Securities and Exchange Commission,
including its Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K. Should one or more of the foregoing risks or
uncertainties materialize, or should the Company's underlying
assumptions, expectations, beliefs or projections prove incorrect,
the Company's actual results may vary materially from those
anticipated in its forward-looking statements, and its business,
financial condition and results of operations could be materially
and adversely affected. This press release also contains references
to the non-GAAP financial measures of earnings, or net income,
before interest, income taxes, depreciation and amortization,
share-based compensation expense, non-cash foreign currency
transaction gains and losses and net losses/gains from asset
dispositions, or Adjusted EBITDA, operating income before
litigation and other charges and non-cash foreign currency
translation net (gain)/loss, or Adjusted Operating Income, Adjusted
Operating Income divided by sales or Adjusted Operating Margin, net
income before litigation and other charges net of tax, non-cash
foreign currency transaction net (gain)/loss net of tax, or
Adjusted Net Income and net cash provided by operating activities
less capital expenditures plus proceeds from assets dispositions,
or Free Cash Flow. Reconciliations of these non-GAAP financial
measures are provided in the tables below. Management's opinion
regarding the usefulness of these non-GAAP financial measures to
investors and a description of the ways in which management used
such measures can be found in the Current Report on Form 8-K we
filed today with the Securities and Exchange Commission. (Tables to
follow) CONSOLIDATED GRAPHICS, INC. Condensed Consolidated Income
Statements (In thousands, except per share amounts and unaudited)
Three Months Ended Six Months Ended September 30, September 30,
------------------------------ --------------------------------
2009 2008 Change 2009 2008 Change ------- -------- -------------
-------- -------- -------------- $ % $ % ------- --- -------- ---
Sales $251,626 $296,951 (45,325) (15) $477,487 $582,145 (104,658)
(18) Cost of Sales 196,183 224,365 (28,182) (13) 377,215 438,919
(61,704) (14) ------- ------- ------- ------- ------- ------- Gross
Profit 55,443 72,586 (17,143) (24) 100,272 143,226 (42,954) (30)
Selling Expenses 23,584 26,779 (3,195) (12) 46,375 55,183 (8,808)
(16) General and Admin- istrative Expenses(1)22,426 24,717 (2,291)
(9) 43,639 46,994 (3,355) (7) Litigation and Other Charges 2,633 -
2,633 nm 2,633 - 2,633 nm Other (Income) Expense, net 218 (257) 475
nm 164 (252) 416 nm --- ---- --- --- ---- --- Operating Income
6,582 21,347 (14,765) (69) 7,461 41,301 (33,840) (82) Interest
Expense, net 2,347 3,852 (1,505) (39) 4,831 8,063 (3,232) (40)
----- ----- ------ ----- ----- ------ Income before Taxes 4,235
17,495 (13,260) (76) 2,630 33,238 (30,608) (92) Income Taxes 2,153
7,192 (5,039) (70) 862 13,319 (12,457) (94) ----- ------ -------
--- ------ ------- Net Income $2,082 $10,303 (8,221) (80) $1,768
$19,919 (18,151) (91) ====== ======= ====== ====== ======= =======
Earnings Per Share Basic $.19 $.92 $.16 $1.79 Diluted $.18 $.90
$.16 $1.74 Weighted Average Shares Outstanding Basic 11,163 11,147
11,161 11,129 Diluted 11,377 11,430 11,355 11,445 Effective Income
Tax Rate 50.8% 41.1% 32.8% 40.1% ------------ (1) Share based
compensation included in these expenses $1,209 $1,751 $2,753 $3,395
CONSOLIDATED GRAPHICS, INC. Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts and unaudited)
September 30, March 31, 2009 2009 ------------ ------------ ASSETS
CURRENT ASSETS Cash and cash equivalents $11,047 $9,762 Accounts
receivable, net 170,364 173,501 Inventories 53,002 52,737 Prepaid
expenses 12,912 17,340 Deferred income taxes 18,652 18,909 ------
------ Total current assets 265,977 272,249 PROPERTY AND EQUIPMENT,
net 407,157 430,519 GOODWILL 29,436 29,436 OTHER INTANGIBLE ASSETS,
net 23,521 24,691 OTHER ASSETS 7,757 8,313 ----- ----- $733,848
$765,208 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES Current portion of long-term debt $22,769
$27,026 Accounts payable 88,635 48,519 Accrued liabilities 90,420
86,718 Income taxes payable 166 553 --- --- Total current
liabilities 201,990 162,816 LONG-TERM DEBT, net of current portion
209,960 287,164 OTHER LIABILITIES 15,839 14,794 DEFERRED INCOME
TAXES 50,730 49,970 ------ ------ Total liabilities 478,519 514,744
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common stock,
$.01 par value; 100,000,000 shares authorized; 11,162,667 and
11,152,875 issued and outstanding 111 111 Additional paid-in
capital 165,884 163,131 Retained earnings 89,574 87,806 Accumulated
other comprehensive loss (240) (584) ---- ---- Total shareholders'
equity 255,329 250,464 ------- ------- $733,848 $765,208 ========
======== Total debt $232,729 $314,190 Debt-to-total capitalization
48% 56% CONSOLIDATED GRAPHICS, INC. Reconciliations of Non-GAAP
Performance Measures (In thousands and unaudited) Three Months
Ended September 30, ------------------- 2009 2008 ---- ---- Net
income $2,082 $10,303 Income taxes 2,153 7,192 Interest expense,
net 2,347 3,852 Depreciation and amortization 17,756 16,211
Litigation and other charges 2,633 - Share-based compensation
expense 1,209 1,751 Non-cash foreign currency transaction net
(gain)/loss 218 (257) Net loss from asset dispositions 341 256 ---
--- Adjusted EBITDA $28,739 $39,308 ======= ======= Net cash
provided by operating activities $62,543 $7,680 Capital
expenditures (6,904) (26,536) Proceeds from asset dispositions 180
213 --- --- Free Cash Flow $55,819 $(18,643) ======= ========
Operating income $6,582 $21,347 Litigation and other charges 2,633
- Non-cash foreign currency translation net (gain)/loss 218 (257)
--- ---- Adjusted Operating Income $9,433 $21,090 ====== =======
Adjusted Operating Margin 3.7% 7.1% === === Net income $2,082
$10,303 Litigation and other charges 2,633 - Tax benefit of
litigation and other charges (1,027) - Non-cash foreign currency
transaction net (gain)/loss net of taxes 133 (157) --- ----
Adjusted Net Income $3,821 $10,146 ====== ======= Diluted earnings
per share $.18 $.90 Litigation and other charges .23 - Tax benefit
of litigation and other charges (.09) - Non-cash foreign currency
transaction net (gain)/loss net of taxes .02 (.02) --- ----
Adjusted Diluted Earnings Per Share $.34 $.88 ---- ---- Three
Months Ended June 30, 2009 ------------------ Net cash provided by
operating activities $33,861 Capital expenditures (4,476) Proceeds
from asset dispositions 450 --- Free Cash Flow $29,835 =======
DATASOURCE: Consolidated Graphics, Inc. CONTACT: Jon C. Biro,
Executive Vice President/Chief Financial Officer, Consolidated
Graphics, Inc., +1-713-787-0977, or Christine Mohrmann or Alexandra
Tramont of FD, +1-212-850-5600 Web Site: http://www.cgx.com/
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