Consolidated Graphics Posts Revenue and Income Declines
HOUSTON—Feb. 7, 2012—Consolidated Graphics announced financial results for the quarter ended Dec. 31, 2011.
Revenue for the quarter was $283.9 million, a $15.2 million or 5.1 percent decrease compared to the prior-year quarter. The decline in revenue compared to the prior year quarter was due to an expected $11.3 million decline in election-related business, a 3.5 percent decline in same-store sales, partially offset by sales growth related to acquisitions.
Adjusted operating income for the quarter ended Dec. 31, 2011, was $20.6 million or 7.2 percent of revenue, compared to $30.2 million or 10.1 percent of revenue the previous year. Adjusted net income was $12.6 million, compared to $18.7 million for the prior-year quarter.
Operating income, which included a $2.0 million goodwill impairment charge, was $17.6 million for the quarter. Operating income for the prior year quarter was $28.2 million and included impairment charges of $1.0 million. Net income was $10.8 million, compared to $17.6 million last year.
Joe R. Davis, Chairman and CEO, commented, “Our financial performance in the current quarter was impacted by expected lower election-related business and lower than anticipated seasonal sales of both custom photo products and sales into the insurance industry. The lower sales into the insurance industry primarily related to one customer. We anticipate that the decline in business from this customer will be temporary.
”During the quarter, we also had non-recurring start-up expenses related to launching new hardware and platform software for certain customers, that adversely impacted the bottom line.”
Davis continued, “Our recent investments in technology, such as our WorkSmart Suite products are being well received by our customers and will continue to provide long-term profitable growth. We continue to differentiate our customer offerings through investments in state-of-the-art technology, printing, and fulfillment solutions. Supported by our strong balance sheet, we believe these actions will continue to drive growth over the long-term and further enhance our competitive position.
“Due to the seasonal nature of sales into the custom photo product and the insurance markets, we are optimistic that we will achieve year-over-year same-store sales growth in the March 2012 quarter. Based on current market conditions, we expect the March quarter’s revenue to be in the range of $265-$275 million which assumes year-over-year same-store sales growth of up to 5 percent,” Davis concluded,
Share Repurchase Program Update
During the quarter, the company purchased 239,456 shares of its common stock for $11.0 million pursuant to a share repurchase program authorizing the Company to purchase up to an aggregate of $100 million of the Company's common shares. Since beginning the share repurchase program in November 2010, CGX has purchased 1,531,549 shares of its common stock (13.0 percent of shares outstanding) for $69.1 million. As of December 31, 2011, the company had 10,242,578 common shares outstanding.
Additional Share Repurchase Authorization
On Feb. 6, 2012, the Board of Directors amended the share repurchase program by increasing the authorization to purchase the Company's common shares from $100 million to $170 million. Additionally, the expiration of the program was extended to Sept. 30, 2013. The amended share repurchase program enables the Company to repurchase shares of its common stock in open-market purchases as well as privately negotiated transactions, pursuant to applicable securities regulations, and subject to the terms of our bank facilities, market conditions and other factors. The board of directors may modify, suspend, extend or terminate the program at any time. Remaining authorization under the amended share repurchase program at Feb, 6, 2012, was $100.5 million.
Consolidated Graphics (CGX), headquartered in Houston, is one of North America's leading general commercial printing companies. With 70 printing businesses strategically located across 27 states, Toronto, and Prague, and a presence in Asia, CGX offers 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 the service and responsiveness of a local printer enhanced by the economic, geographic and technological advantages of a large national organization.