Consolidated Graphics Expected to Report Lower Net Income
Press release from the issuing company
HOUSTON--Consolidated Graphics, Inc. (NYSE:CGX - news) announced today that while total revenues for the quarter ended December 31, 2000 are anticipated to increase approximately 8% over the prior year's comparable quarter to $171 million, operating income is expected to decline approximately 22% to between $13.8 and $14.3 million. Net income for the quarter is expected to be between $5.2 and $5.5 million, or between $.40 to $.42 per diluted share. The Company attributes the shortfall to the general slowdown in the economy and print markets in particular. The Company is also reducing its outlook for its fourth fiscal quarter and next fiscal year.
``In spite of record sales and earnings in October and acceptable performance in November, the slowdown in business we experienced in December was very disappointing. While our sales initiatives and growth strategies continue to yield positive results, these soft market conditions have forced us to become much more aggressive in pricing to protect market share,'' commented Joe R. Davis, Chairman and Chief Executive Officer. ``The Company is taking appropriate action to adjust to this softness in print demand that we have experienced during these past few weeks, and we remain confident in our strategic plans for continued growth and profit improvement. Given the current economic environment and in light of our initiatives currently underway, we believe that our financial results for the next few quarters will improve gradually over recent performance.''
``Although one-third of our companies increased profitability over their second quarter results, the softening economy reduced our overall margins,'' stated Charles F. White, President and Chief Operating Officer. ``We are reviewing each under-performing company and, where appropriate, will develop plans to rapidly adjust to the current economic environment. Additionally, consolidation within our organization may be required at certain of our companies, in a few of our markets, and we are developing plans to implement those actions where necessary. In the meantime, we will expand our strategies for national account sales, marketing of e-commerce products and services, and management development. We remain confident that these and other strategies already in place should improve growth and profitability for our shareholders.''
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