Consolidated Graphics 4Q Results, Expands Sales Force by 32
Press release from the issuing company
HOUSTON--April 24, 2002--Consolidated Graphics, Inc. today announced results for its fourth quarter and year ended March 31, 2002.
Revenues for the March quarter were $165.6 million compared to $153.8 million in the December quarter. Net income for the March quarter was $3.7 million, or $.28 per share, compared to $3.6 million, or $.27 per share, in the December quarter.
For the year ended March 31, 2002, revenues were $643.9 million compared to $683.4 million in 2001. Net income was $16.7 million, or $1.25 per share, versus $22.1 million, including special charges, or $1.68 per share, last year.
"Our fourth quarter results reflect a continuation of challenging market conditions for the commercial printing industry," commented Joe R. Davis, Chairman and Chief Executive Officer. "It is a testament to the strength of our business model and operating fundamentals that we continue to out-perform our competition and are able to strategically position the company to capitalize on the eventual improvement in market conditions. During the quarter, we announced the completion of three acquisitions which will improve our competitive position, broaden our geographic reach and strengthen our core business."
Also commenting on the announcement, Charles F. White, President and Chief Operating Officer stated, "The fourth quarter showed an 8% sequential increase in revenue, despite sustained weakness in the market. While the majority of this revenue growth can be attributed to acquisitions completed in the fourth quarter, we also saw modest sequential internal growth, reflecting our continued focus on growing market share. Gross profit and operating income margins showed sequential declines in the fourth quarter, as a result of the highly competitive industry environment and increased expenses related to salesforce expansion. Our recruiting program remains on target, hiring 32 new salespeople in the quarter, as we seek to build market share through hiring experienced sales professionals from weaker competitors. Additionally, we are pleased to see the continued progress of important growth initiatives such as our national accounts program and CGXMedia."
Joe R. Davis, Chairman and Chief Executive Officer, concluded, "Today our balance sheet remains strong. We focused on improving our financial strength during the year by significantly reducing debt while concurrently making appropriate investments in equipment and technology and completing three acquisitions. Although we also significantly adjusted our cost structure, our financial results do not yet fully reflect our progress, as commercial printing demand remains soft. As the outlook for improved market conditions is uncertain at this time, we will continue to provide cautious and conservative guidance for fiscal 2003. In the coming year, we will remain committed to strengthening our market position, controlling costs and capitalizing on strategic acquisition opportunities."
The company also announced that it has completed a preliminary assessment of existing goodwill for impairment in accordance with Statement of Financial Accounting Standards (SFAS) No. 142 "Goodwill and Other Intangible Assets" which the company intends to adopt in the June quarter. Based on this assessment, the company believes it will be required to record an after-tax impairment of up to $75 million as a change in accounting principle. Under SFAS No. 142, the company's remaining goodwill will not be subject to amortization but will be tested for impairment annually. The company's after-tax goodwill amortization expense in fiscal 2002 was $ 4.6 million, or $.34 per share.
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