By Trevor Shackelford November 29, 2006 -- November 30, 2006 -- Consolidated Graphics, Inc. (NYSE: CGX) recently announced financial results for its second quarter ended September 30, 2006. Revenue for the quarter was $234.2 million, up 6% compared to $221.0 million a year ago. Net income for the quarter was $13.7 million compared to net income of $9.3 million a year ago, resulting in a 48% increase in diluted earnings per share to a record $0.98 from $0.66 a year ago. For the six months ended September 30, 2006, total revenue was $472.7 million, up 10% compared to $430.9 million for the same period a year ago. Net income for the first six months of this year was $27.4 million compared to net income of $18.1 million a year ago, resulting in a 54% increase in diluted earnings per share to $1.96 from $1.27 a year ago. Contents of this Summary • Quarter Highlights • Segment Performance • Guidance • Raine Radar • Q & A Quarter Highlights • SG&A expenses for the second quarter were $15.0 million, relatively flat, compared to $15.1 million in the second quarter of 2005. • Cost of sales was in the second quarter were $171.8 million, up 2.9%, compared to $166.9 million in the same quarter a year ago. • The company reported gross profit of $62.4 million, up 15.5%, compared to $54 million in the year ago quarter. • Joe R. Davis, chairman and CEO of Consolidated Graphics, stated, "We continue to capitalize on our many strategic advantages to grow sales and profits. I am particularly pleased with our 38% increase in operating margins to 10.2% in the September quarter, up from 7.4% last year and 9.4% in the June quarter, which reflects our ability to leverage sales growth as well as incremental purchasing and operating efficiencies.” • The company announced second quarter diluted earnings per share of $.98, up 48% for the quarter. • Operating income for the quarter was up 45% to $46.3 million, while operating margin was 9.8% versus 7.4% in the same quarter a year ago. • EBITDA for the quarter was $34.9 million, up 23% or $6.6 million compared to the same quarter a year ago. The company reported an EBITDA margin of 14.9%. Guidance Davis stated, "I expect the momentum from our revenue and profit growth initiatives to continue and drive more record results. For the December quarter, we project a 45% increase in diluted earnings per share to $1.03 on an 8% increase in revenues to $244 million, with each representing a projected quarterly record for Consolidated Graphics." Raine Radar What a great quarter for Consolidated. Their sales training initiatives to generate larger “national accounts” appear to have been successful, acquisitions have been performing well, and the company is showing no signs of slowing down its purchases. There is no reason to expect this performance to stop next quarter. Q & A 1. The company stated that of the 6% increase in revenues, 2% has come from internal business and 4% has come from acquisitions. 2. CGX is continuing to capitalize on market opportunities stemming from the strategic growth initiatives set forth. CGX experienced a 22% growth rate in the second quarter where 13% of sales came from CGX solutions. 3. Total debt in the third quarter was $120.7 million, which is 26.4% of total capitalization. 3. Commenting further on the quarterly results, Davis stated, "I am also pleased with our revenue growth of 6% in the September quarter and 10% year to date, which reflects strong contributions from our strategic sales initiatives and previously completed acquisitions." 4. CGX’s acquisition pipeline has grown to opportunities totaling $500 million in annual revenues in addition to the two companies currently under letters of intent. CGX has a strong balance sheet which enables the execution of the share repurchase program to which they have acquired 276,800 shares for $14.7 million in the September quarter.