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Consolidated Graphics revenue drops 12.5%, reports profit

Friday, February 05, 2010

Press release from the issuing company

Houston - Consolidated Graphics, Inc. today announced financial results for the quarter ended December 31, 2009.

Revenue for the December quarter was $276.4 million, down 12.5% compared to the same quarter last year. The decline was due to lower election-related business and, as a result of the current economic environment, lower same-store sales of 6.8%.

Adjusted Operating Income for the December 2009 quarter was $23.0 million or 8.3% of revenue compared to $25.4 million or 8.0% of revenue for the same quarter last year. Despite the impact of lower revenues, continued cost reduction efforts in 2009 allowed for a modest improvement in Adjusted Operating Margin. Adjusted Net Income for the December 2009 quarter was $14.1 million, or $1.23 Adjusted Diluted Earnings Per Share compared to Adjusted Net Income of $13.7 million, or $1.21 Adjusted Diluted Earnings Per Share for the prior year quarter.

Operating income of $18.6 million in the December 2009 quarter included charges of $3.1 million primarily related to the impairment of certain production equipment and lease termination charges. The $55.5 million operating loss in the December 2008 quarter included charges totaling $79.5 million for the impairment of goodwill, the impairment of certain production equipment and litigation. Net income for the December 2009 quarter was $11.4 million, or $1.00 diluted earnings per share.

The Company generated $16.0 million in Free Cash Flow for the current quarter, compared to $23.5 million for the same quarter in the prior year. Adjusted EBITDA was $41.8 million for the December 2009 quarter, compared to $42.4 million for the same quarter in the prior year. For the nine months ended December 31, 2009, the Company produced Free Cash Flow of $101.7 million and Adjusted EBITDA of $90.7 million. As of December 31, 2009, total debt was $221.1 million; $93.1 million or 30% lower than the debt balance at March 31, 2009.

Joe R. Davis, Chairman and Chief Executive Officer of Consolidated Graphics, commented, "We are pleased with our performance in the December 2009 quarter in what continues to be a challenging environment. Even though quarterly same-store revenues declined 6.8% from last year, the rate of decline has slowed in each of the last three quarters as customer demand in many of our markets appears to have stabilized. During the quarter, we continued to focus on delivering an industry-leading offering that meets the changing needs of our customers, and on aggressively managing our costs, which ultimately allowed us to improve profitability over both the year ago and September 2009 quarters. We were able to achieve these results despite an $18 million decline in election-related business compared to the prior year quarter. Going forward, we will continue to monitor and appropriately manage our costs while at the same time investing in the future, building on our best-in-class capabilities and leveraging our advantages of technology, scale and financial strength to take advantage of the opportunities we see in the marketplace."

Mr. Davis added, "While the economy and our market appear to be stabilizing, it remains difficult to project our future revenues and earnings. Nevertheless, based on current market conditions, we expect the March quarter revenue to be in the range of $245 - $260 million representing same-store sales growth of up to 5%, excluding election-related revenue. This should allow us to achieve Adjusted Net Income growth in the March 2010 quarter compared to the prior year period."

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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