Consolidated Graphics Sees Return to Sales Growth
HOUSTON—Aug. 4, 2010—Consolidated Graphics, Inc. (NYSE: CGX) today announced financial results for the quarter ended June 30, 2010. Revenue for the quarter was $236.7 million, a 4.8% increase compared to the prior year quarter. The increase was due to 2.3% growth in same-store sales combined with the impact of higher election-related sales and an acquisition.
Joe R. Davis, Chairman and CEO, commented, "After 12 quarters of year-over-year declines, we were pleased to achieve same-store sales growth this past quarter. While there has been some improvement in the economy, we continue to see weakness in demand from many of our customers, and our performance this quarter is a testament to the efforts we have made to develop customized solutions that meet our customers' most critical needs. We also continue to improve our capabilities by investing in people and technology, including in our CGXSolutions offerings. These sophisticated capabilities, combined with our cost containment efforts, and higher sales levels, allowed us to significantly improve our operating income and margins over last year."
As a result of the growth in sales and the benefit of prior year cost reductions, Adjusted Operating Income for the June 2010 quarter improved to $9.7 million, or 4.1% of revenue, from $2.4 million, or 1.0% of revenue, for the same quarter last year. Adjusted Net Income for the quarter was $4.9 million, compared to $.6 million for the prior year.
Operating income of $12.9 million in the quarter compared to operating income of $.9 million in the prior year quarter. It included a $5.2 million positive adjustment resulting from the settlement of litigation for an amount lower than previously recognized and $1.0 million in expenses related to the cost of withdrawing from a multi-employer pension plan.
Net income for the June 2010 quarter was $6.8 million, compared to a $.3 million net loss for the prior year quarter.
Adjusted EBITDA was $27.1 million for the June 2010 quarter, compared to $20.1 million for the same quarter in the prior year, an increase of 35%. The company generated $9.7 million in Free Cash Flow for the current quarter, compared to $29.8 million last year.
Davis added, "The economy is improving but it remains difficult to project our future revenues and earnings. Nevertheless, based on current market conditions, we expect September quarter's revenue to be in the range of $260 - $275 million representing year-over-year same store sales growth of up to 5% as well as the benefit of higher election-related business and the impact of a recent acquisition. This should enable us to again achieve Adjusted Net Income improvement in the September 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 these non-GAAP financial measures.
About Consolidated Graphics
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, Toronto, and 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 the 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 world's largest integrated digital footprint. By coupling North America's most comprehensive printing capabilities with strategically located fulfillment centers and industry-leading technology, CGX delivers end-to-end print production and management solutions that are based on the needs of our customers to improve their results. For more information, visit www.cgx.com.