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CGX Q2 profit rises

Thursday, November 04, 2010

Press release from the issuing company

Houston - Consolidated Graphics, Inc. today announced financial results for the quarter ended September 30, 2010.

Revenue grew 3.4% to $260.1 million for the September quarter, compared to the prior year. The increase was due to improved election-related sales and an acquisition, partially offset by a slight decline in same-store sales. Adjusted Operating Income for the September 2010 quarter improved to $17.0 million (6.5% of revenue), a 59% increase, compared to $10.6 million (4.2% of revenue) for the same quarter last year. Adjusted Net Income for the September 2010 quarter was $9.0 million, or $.77 Adjusted Diluted Earnings Per Share, compared to Adjusted Net Income of $4.6 million, or $.40 Adjusted Diluted Earnings Per Share for the prior year.

Operating income was $15.4 million in the September 2010 quarter, compared to operating income of $6.6 million in the prior year quarter, an improvement of $8.8 million or 134%. Net income for the September 2010 quarter was $8.1 million, or $.69 diluted earnings per share, compared to $2.1 million or $.18 diluted earnings per share for the prior year quarter.

Adjusted EBITDA was $33.8 million for the September 2010 quarter, compared to $28.7 million for the same quarter in the prior year, an increase of 18%.

Joe R. Davis, Chairman and Chief Executive Officer of Consolidated Graphics, commented, "We posted strong Adjusted Operating Margin and Adjusted Net Income this quarter, driven by the combination of sales improvement and effective cost management. Our best-in-class technology, printing and fulfillment solutions enable us to provide value to customers and grow our business. This, combined with the opportunity to grow through acquisition and our strong balance sheet, places Consolidated Graphics in an attractive competitive position. We remain very optimistic in our near-term and long-term prospects."

Mr. Davis added, "Based on current market conditions, we expect December quarter's revenue to be in the range of $290 - $305, million which assumes year-over-year same store sales growth of up to 5%, higher election-related business and incremental revenue from a recent acquisition. This should enable us to again achieve Adjusted Net Income improvement in the December 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 to the most directly comparable GAAP financial measures are included in the attached tables and in the Current Report on Form 8-K filed today with the Securities and Exchange Commission. The Form 8-K also includes the basis for management's use of these non-GAAP financial measures.

Stock Repurchase Program

On November 1, 2010, the Board of Directors authorized a new common share repurchase program for the purchase of the Company's issued and outstanding common shares up to an aggregate of $50 million. The new share repurchase program will expire on October 31, 2011 and allows 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 market conditions and other factors. The Board of Directors may modify, suspend, extend or terminate the program at any time.


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