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Consolidated Graphics Reports Revenue Decline, Positive Income

May 5, 2010
HOUSTON—May 5, 2010—Consolidated Graphics, Inc. (CGX) today announced financial results for its fourth quarter and year-ended March 31, 2010.

Revenue for the March quarter was $237.0 million, a 4.1% decline compared to the prior year quarter. Adjusted Operating Income for the March 2010 quarter was $10.3 million, or 4.4% of revenue, compared to $6.6 million, or 2.7% of revenue, for the same quarter last year. Adjusted Net Income for the March 2010 quarter was $6.2 million compared to $2.5 million for the prior year quarter.

Operating income of $1.5 million in the March 2010 quarter compared to an operating loss of $16.2 million in the prior year quarter. It included charges totaling $7.6 million for the impairment of goodwill and certain equipment and litigation. The $16.2 million operating loss for the March 2009 quarter included charges totaling $21.1 million for the impairment of goodwill and certain equipment. Net income for the March 2010 quarter was $.9 million,  compared to a $15.9 million net loss or $1.43 diluted loss per share for the prior year quarter.

The company generated $38.1 million in Free Cash Flow for the current quarter, compared to $31.2 million for the same quarter in the prior year. Adjusted EBITDA was $27.0 million for the March 2010 quarter, compared to $24.2 million for the same quarter in the prior year, an increase of 12%. For the year ended March 31, 2010, the Company produced Free Cash Flow of $139.8 million and Adjusted EBITDA of $117.7 million. As of March 31, 2010, total debt was $181.6 million, a decline of $132.6 million or 42%, compared to the prior year end balance.

Joe R. Davis, Chairman CEO of Consolidated Graphics, commented, "While this was a challenging year for Consolidated Graphics, we made the difficult decisions and took the steps necessary to maintain profitability in a tough economy. We continued to invest in our future while substantially reducing our debt. We believe our best-in-class capabilities combined with our financial strength provide us a clear competitive advantage that we will leverage as the economy and our markets continue to improve."

Davis added, "While we continue to see evidence of improving economic conditions, it remains difficult to project our future revenues and earnings. Nevertheless, based on current market conditions, we expect the June quarter's revenue to be in the range of $226 - $236 million representing sales growth of up to 5%. This should allow us to achieve Adjusted Net Income improvement in the June 2010 quarter compared to the prior year."

A reconciliation of the non-GAAP financial measures, Adjusted EBITDA, Free Cash Flow, Adjusted Operating Income, Adjusted Operating Margin, Adjusted Net Income and Adjusted Diluted Earnings Per Share are included in the attached tables and in the Current Report on Form 8-K filed today. The Form 8-K also includes the basis for management's use of the non-GAAP financial measures.
 

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