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Consolidated Graphics Reports Sharply Lower Results, Amended Credit Line

August 5, 2009
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HOUSTON—Aug. 5, 2009—Consolidated Graphics, Inc. (NYSE: CGX) today announced financial results for the quarter ended June 30, 2009.

Revenue for the June quarter was $225.9 million, down 21% compared to the same quarter last year. The revenue decline was primarily due to a year-over-year same-store revenue decline, and lower election-related business. Operating income declined to $.9 million in the June quarter compared to $20.0 million last year due to the lower revenues and a more difficult operating environment. Operating margins declined from 7.0% in the June 2008 quarter to .4% in the current quarter. Net loss for the June quarter was $.3 million or $.03 diluted loss per share. Net income for the June 2008 quarter was $9.6 million, or $.84 diluted earnings per share.

Despite the decline in results, the Company had strong free cash flow of $29.8 million for the June quarter compared to $29.5 million for the same quarter last year. Adjusted EBITDA for the June quarter was $20.1 million compared to $37.6 million a year ago. Additionally, total debt declined $29.1 million during the quarter to $285.1 million at the end of June.

Joe R. Davis, Chairman and Chief Executive Officer of Consolidated Graphics, commented, "The weak economy continued to reduce demand for print and pressure our profit margins during the June quarter. Our companies are working hard to maintain revenues and effectively manage costs during these tough times."

Davis continued, "On a positive note, these difficult times have created opportunities for Consolidated Graphics. Our cost structure and financial strength are a competitive advantage and will allow us to attract new customers and sales personnel and continue to acquire good printing companies."

On July 30, 2009, the Company entered into an amendment to its revolving bank credit agreement. The amendment increases the interest rate on borrowings and allows for additional financial covenant flexibility. Following the amendment, based on the Company's current leverage ratio, as defined, and current market interest rates, borrowings under the revolving credit agreement carry a variable interest rate of less than 3%. Both the commitment amount of $335 million and the maturity date of October 6, 2011 remain unchanged.

For the quarter ended September 30, 2009, the Company expects to generate revenues of between $225 - $240 million and at least break-even adjusted net income.

A reconciliation of the non-GAAP financial measures, Adjusted EBITDA, Free Cash Flow and Adjusted Net Income 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.
 

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Most Recent Comments:
rich ayres - Posted on August 11, 2009
Please tell me about the lawsuit you lost for up to 17million. Will you continue to fight or just pay and write it off?
anyone in the know at CGX would be appreciated to comment.
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Archived Comments:
rich ayres - Posted on August 11, 2009
Please tell me about the lawsuit you lost for up to 17million. Will you continue to fight or just pay and write it off?
anyone in the know at CGX would be appreciated to comment.