Consolidated Graphics Reports Preliminary Q1 Results, Cuts Outlook
Press release from the issuing company
HOUSTON, July 23 -- Consolidated Graphics, Inc. today announced preliminary results for its quarter ended June 30, 2008.
The Company expects diluted earnings per share to be between $.80 - $.84. This compares with earnings of $.96 per diluted share in the same quarter a year ago and management's previous expectations of $1.10 - $1.20 per diluted share. Revenue in the June quarter is expected to be $285 million, compared to $259 million in the same quarter a year ago and management's previous expectations of $300 - $310 million. Operating income is expected to be between $19.1 - $20.0 million, or between 6.7% - 7.0% of sales, compared to $24.8 million or 9.6% of sales in the same quarter a year ago.
The Company attributes the lower than expected results to the weakness of the overall U.S. economy, a more competitive pricing environment and a slower than expected start in the new fiscal year for its two most recent acquisitions. The Company's same store sales (which excludes the two recently acquired businesses and election-related printing) are expected to decline 3.9% for the June quarter compared to management's previously expected decline of 0% - 2%. Partially offsetting this decline, the Company expects election- related business for the June quarter to be $ 5.9 million, in-line with its previous expectations, and to continue to strengthen through the election season. Including election related sales, same store sales declined year-over-year 2.1% during the quarter ended June 30, 2008.
"These results clearly reflect the impact of the weaker U.S. economy on our sales volumes as well as our selling prices," commented Joe R. Davis, Chairman and Chief Executive Officer of Consolidated Graphics. "During the first quarter, we continued our cost-control initiatives throughout the Company that we believe succeeded in managing our expenses, particularly labor costs, in-line with revenues. Despite the decline in same store sales of 2.1% during the quarter, we believe we performed better than the overall printing industry."
Mr. Davis continued, "Despite the current economic environment, we are very optimistic about the future of Consolidated Graphics and remain confident in our long-term growth strategy. We believe our recently acquired businesses are well-run companies with solid management and customer bases, and we anticipate great things from them going forward. We continue to operate from a position of financial strength and our recent acquisitions, investments in new equipment, state of the art technology and in our people, position us extremely well for the long-term. I am especially pleased with the growth of our digital print revenue, which represented 10% of total revenues in this first quarter, and grew over 150% compared to last year."
Based on ongoing market conditions, for the quarter ending September 30, 2008, management expects revenues of between $290 and $300 million and diluted earnings per share of $.85 to $.95. This forecast reflects a year-over-year 3%-5% same store sales decline, excluding election business, continued pricing pressure, higher share based compensation expense and a tax rate of approximately 40%.
Consolidated Graphics, Inc. will host a conference call today, Wednesday, July 23, 2008 at 5:15 p.m. Eastern Time, to discuss its preliminary results for the quarter ended June 30, 2008 and provide additional information related to the Company's business. In order to participate in the conference call, please dial 866-770-7051 or 617-213-8064 approximately 10 minutes before the scheduled time and enter the passcode "44219086". If you are unable to participate in the conference call, you may listen to a rebroadcast of the call by dialing 888-286-8010 or 617-801-6888 and entering the Conference ID "49474402". The rebroadcast will be available from July 23 until midnight July 30. The conference call will be simultaneously broadcast live over the Internet and a subsequent archive will be available. Listeners may access the live Web cast at the Company's homepage, http://www.cgx.com/.
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