HOUSTON -- Consolidated Graphics, Inc. today announced revised guidance for its fourth quarter ending March 31, 2009.
Based on current market conditions, the Company now expects fiscal fourth quarter revenues of between $240 - $250 million and diluted earnings per share for the quarter of between $0.05 - $0.15, before any impairment of goodwill or other long-lived assets that may result from the Company's year-end impairment testing. This compares to revenue of $288 million and earnings of $1.15 per diluted share in the same quarter a year ago. Management's previous expectation for revenues was $255 - $275 million and earnings of between $0.35 - $0.55 per diluted share. The Company's same store sales, excluding the effect of election related business, are expected to decline between 20% - 25% for the March quarter, compared to management's previously expected decline of 12% - 18%. The Company attributes the lower than previously expected results to the deepening recession and an increasingly competitive pricing environment.
"While we are disappointed with the projected results for the fourth quarter, a new forecast was required due to the impact of unprecedented macroeconomic conditions on the marketplace we serve," commented Joe R. Davis, Chairman and Chief Executive Officer. "We are presently experiencing the worst overall business environment in commercial printing since the Company was founded in 1985, and while we believe we are maintaining our market share, we are also facing unprecedented pressure on margins due to the decline in demand and an extremely competitive marketplace. Many of our major customers have further cut their print budgets in response to sustained economic weakness. As a result, while a handful of our companies are still growing, most are seeing significant declines in customer demand. These revenue declines and the resulting impact on profitability are difficult to overcome even though many of our operating companies are generating relatively good results in today's very challenging environment."
Mr. Davis continued, "We are pleased that we are maintaining a healthy balance sheet, and have reduced total debt, net of cash, by over $20 million so far during the March quarter. We have been and will continue to take steps to reduce our cost structure and in particular our labor expenses as a result of the decline in market demand. Over the longer-term we believe we are well positioned, with the leadership, financial strength and industry-leading product offerings necessary to manage through the current economic crisis and succeed in the recovery."
Consolidated Graphics will host a conference call today, Friday, March 20, 2009, at 11:00 a.m. Eastern Time, to discuss its revised guidance for fourth quarter fiscal 2009. The conference call will be simultaneously broadcast live over the Internet on our website (www.cgx.com) and a subsequent archive of such call will also be available on our website.
Consolidated Graphics, Inc. (CGX), headquartered in Houston, Texas, is one of North America's leading general commercial printing companies. With 70 printing businesses strategically located across 27 states, Canada, and in Prague, we offer an unmatched geographic footprint, unsurpassed capabilities, and unparalleled levels of convenience, efficiency and service. With locations in or near virtually every major U.S. market, CGX provides service and responsiveness of a local printer enhanced by the economic, geographic and technological advantages of a large national organization.
Consolidated Graphics' vast and technologically advanced sheetfed and web printing capabilities are complemented by the largest integrated digital footprint of any commercial printer in the U.S. By coupling North America's most comprehensive printing capabilities with strategically located fulfillment centers and industry-leading technology, CGX delivers solutions that create a spectrum of value for customers. CGX offers the unique ability to respond to all printing-related needs no matter how large, small, specialized or complex. For more information, visit www.cgx.com.
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