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CGX Quarterly Results Down from Previous Year, Up from Previous Quarter

November 4, 2009
HOUSTON—Nov. 4, 2009—Consolidated Graphics, Inc. (NYSE: CGX) today announced financial results for the quarter ended September 30, 2009.

Revenue for the 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."

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 (www.cgx.com) and a subsequent archive of such call will also be available on our website.

Consolidated Graphics, Inc. (CGX), headquartered in Houston, TX, 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 www.cgx.com.
 

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