Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MAY 9, 2007
CONSOLIDATED GRAPHICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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TEXAS
(STATE OR OTHER JURISDICTION
OF INCORPORATION)
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001-12631
(COMMISSION FILE NUMBER)
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76-0190827
(I.R.S. EMPLOYER
IDENTIFICATION NO.) |
5858 WESTHEIMER, SUITE 200
HOUSTON, TEXAS 77057
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 787-0977
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The information in this Current Report is being furnished pursuant to Item 2.02 of Form
8-K and, according to general instruction B.2. thereunder, shall not be deemed filed with the
Securities and Exchange Commission (the SEC) for the purposes of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in
this Current Report shall not be incorporated by reference into any registration statement filed by
Consolidated Graphics, Inc. (the Company) under the Securities Act of 1933, as amended, and will
not be so incorporated by reference into any future registration statement unless specifically
identified as being incorporated by reference.
On May 9, 2007, the Company announced its fiscal 2007 fourth quarter and year-end results. A
copy of the press release is attached hereto as Exhibit 99.1. The attached press release may
contain forward-looking information. Readers are cautioned that such information involves known
and unknown risks, uncertainties and other factors that could cause actual results to materially
differ from the results, performance or other expectations implied by these forward looking
statements.
The Company will hold a conference call today at 10:00 a.m. Central Time/11:00 a.m. Eastern
Time to discuss the Companys financial results for the fourth quarter and year-ended March 31,
2007. A live webcast and subsequent archive of the conference call, as well as a copy of this
Current Report and attached press release, can be accessed at www.cgx.com under the Investor
Relations page.
During todays conference call, managements discussion of the Companys financial results may
include references to certain non-GAAP financial measures. Generally, a non-GAAP financial measure
is a numerical measure of a companys performance, financial position, or cash flows that either
excludes or includes amounts that are not normally excluded or included in the most directly
comparable measure calculated and presented in accordance with United States generally accepted
accounting principles, or (GAAP). Pursuant to the rules adopted by the SEC relating to the use of
such financial measures in filings with the SEC, other disclosures of financial information and
press releases, the Company provides the following qualitative and quantitative reconciliations
regarding the non-GAAP financial measures to which management may refer. In addition, the sum of
quarterly amounts in the accompanying tables may not equal full year amounts due to rounding
differences.
The Company defines Net Income Excluding Goodwill Impairment as our net income plus any
goodwill impairment less the tax effect of such impairment. Because goodwill derives from
acquisition transactions and goodwill impairment is the result of an annual evaluation, the Company
believes this non-GAAP financial measure may help investors better understand our sequential period
and year-over-year operating results and trends by eliminating this acquisition-based component
used to determine net income under GAAP.
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Fiscal |
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Fiscal 2006 |
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Fiscal 2007 |
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($MM) |
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2005 |
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2006 |
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2007 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Net Income |
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32.7 |
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38.5 |
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50.7 |
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8.7 |
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9.3 |
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9.9 |
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10.5 |
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13.7 |
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13.7 |
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16.4 |
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6.9 |
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Goodwill impairment |
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11.5 |
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11.5 |
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Tax effect of goodwill impairment |
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(3.7 |
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(3.7 |
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Net Income Excluding Goodwill Impairment |
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32.7 |
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38.5 |
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58.5 |
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8.7 |
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9.3 |
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9.9 |
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10.5 |
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13.7 |
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13.7 |
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16.4 |
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14.7 |
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The Company defines Diluted Earnings Per Share Excluding Goodwill Impairment as Net Income
Excluding Goodwill Impairment divided by diluted shares outstanding.
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Fiscal |
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Fiscal 2006 |
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Fiscal 2007 |
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($MM, except per share amounts) |
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2005 |
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2006 |
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2007 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Net Income Excluding Goodwill Impairment |
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32.7 |
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38.5 |
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58.5 |
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8.7 |
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9.3 |
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9.9 |
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10.5 |
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13.7 |
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13.7 |
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16.4 |
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14.7 |
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Diluted shares outstanding |
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14.2 |
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14.1 |
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13.9 |
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14.3 |
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14.2 |
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14.0 |
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14.1 |
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14.2 |
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14.0 |
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14.0 |
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14.0 |
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Diluted Earnings Per Share Excluding Goodwill Impairment |
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2.31 |
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2.73 |
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4.21 |
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0.61 |
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0.66 |
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0.71 |
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0.74 |
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0.97 |
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0.98 |
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1.17 |
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1.06 |
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Diluted Earnings Per Share Per GAAP |
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2.31 |
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2.73 |
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3.65 |
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0.61 |
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0.66 |
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0.71 |
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0.74 |
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0.97 |
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0.98 |
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1.17 |
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0.50 |
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Net Impact of Goodwill Impairment |
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0.56 |
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0.56 |
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The Company defines EBITDA as our net income plus provision for income taxes, net interest
expense, share-based compensation expense, goodwill impairment charges, net gain or loss from asset
dispositions and depreciation and amortization expense. We define EBITDA margin as EBITDA divided
by sales. The Company uses EBITDA and EBITDA margin both as a liquidity and performance measure
when evaluating its business and operations. We believe EBITDA and EBITDA margin may be useful to
an investor in evaluating our liquidity and/or operating performance because:
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it is widely used by investors in our industry to measure a companys operating
performance without regard to items such as interest, depreciation and
amortization expenses and long-term non-cash share-based compensation expense,
which can vary substantially from company to company depending upon accounting
policies and book value of assets, capital structure and the method by which
assets were acquired; |
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it helps investors more meaningfully evaluate and compare the results of our
operations from period to period by removing the impact of our capital structure
(primarily interest charges on our outstanding debt); asset base (primarily
depreciation and amortization expense and goodwill impairment charges) and
long-term non-cash share-based incentive plans from our operating results; and |
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it helps investors to assess compliance with financial ratios and covenants
included in our primary bank facility. |
EBITDA should not be considered as an alternative to any measure of operating results as
promulgated under GAAP (such as operating income, net income or cash flow from operating
activities), nor should it be considered as an indicator of our overall financial performance or
our ability to satisfy current or future obligations and fund or finance future business
opportunities. EBITDA does not fully consider the impact of investing or financing transactions as
it specifically excludes depreciation and interest expense, amortization and impairment of
intangible assets, including goodwill, as well as long-term share-based compensation expense and
the net loss/(gain) from asset dispositions, all of which should also be considered in the overall
evaluation of the Companys results and liquidity.
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Fiscal |
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Fiscal 2006 |
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Fiscal 2007 |
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($MM) |
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2005 |
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2006 |
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2007 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Sales |
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779.0 |
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879.0 |
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1006.1 |
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209.9 |
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221.0 |
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226.2 |
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221.9 |
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238.4 |
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234.2 |
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269.6 |
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263.9 |
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Net Income |
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32.7 |
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38.5 |
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50.7 |
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8.7 |
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9.3 |
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9.9 |
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10.5 |
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13.7 |
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13.7 |
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16.4 |
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6.9 |
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Income taxes |
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19.0 |
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23.2 |
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29.4 |
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5.3 |
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5.7 |
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6.0 |
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6.3 |
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7.3 |
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8.4 |
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9.2 |
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4.4 |
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Interest expense, net |
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5.1 |
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5.5 |
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6.7 |
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1.4 |
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1.4 |
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1.4 |
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1.3 |
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1.4 |
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1.8 |
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1.6 |
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2.0 |
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Depreciation and amortization |
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37.0 |
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41.3 |
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44.0 |
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10.2 |
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10.2 |
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10.5 |
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10.5 |
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10.6 |
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10.7 |
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10.8 |
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12.0 |
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Goodwill impairment |
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11.5 |
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11.5 |
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Share-based compensation expense |
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2.8 |
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1.2 |
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0.5 |
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0.5 |
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0.5 |
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Net loss (gain) from asset dispositions* |
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5.1 |
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4.3 |
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1.3 |
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0.3 |
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1.7 |
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2.1 |
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0.2 |
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0.3 |
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(0.2 |
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0.3 |
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0.8 |
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EBITDA |
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98.9 |
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112.9 |
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146.4 |
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25.9 |
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28.3 |
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29.9 |
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28.7 |
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34.5 |
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34.9 |
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38.8 |
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38.1 |
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EBITDA Margin |
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12.7 |
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12.8 |
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14.5 |
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12.3 |
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12.8 |
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13.2 |
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12.9 |
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14.5 |
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14.9 |
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14.4 |
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14.4 |
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* Included in depreciation and amortization in the Consolidated Statements of Cash Flows
The Company defines Free Cash Flow as net cash provided by operating activities less capital
expenditures for property and equipment, including capital expenditures which are directly financed
and those accrued as a current liability, plus proceeds from asset dispositions. The Company
considers Free Cash Flow to be an important indicator of our operating flexibility and is a
representative measure of our ability to satisfy current and future obligations and fund or finance
future business opportunities and believes it may be similarly useful to investors.
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Fiscal |
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Fiscal 2006 |
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Fiscal 2007 |
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($MM) |
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2005 |
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2006 |
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2007 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Net cash provided by operating activities |
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75.2 |
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79.2 |
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72.8 |
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16.2 |
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15.1 |
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28.9 |
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19.1 |
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22.4 |
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(5.6 |
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42.9 |
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13.0 |
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Capital expenditures* |
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(28.8 |
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(32.9 |
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(46.4 |
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(3.9 |
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(9.1 |
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(4.2 |
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(15.6 |
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(8.4 |
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(8.0 |
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(10.9 |
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(19.0 |
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Proceeds from asset dispositions |
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1.8 |
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2.5 |
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4.1 |
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0.8 |
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0.4 |
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0.7 |
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0.5 |
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1.2 |
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0.6 |
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0.7 |
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1.6 |
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Free Cash Flow |
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48.2 |
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48.9 |
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30.5 |
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13.1 |
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6.4 |
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25.4 |
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4.0 |
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15.2 |
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(13.0 |
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32.7 |
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(4.4 |
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* |
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Capital expenditures for property, plant and equipment, including capital expenditures
which are directly financed and those accrued as a current liability |
The Company defines Adjusted Operating Margin as Adjusted Operating Income divided by Sales.
We define Adjusted Operating Income as Operating Income plus share-based compensation expense and
amortization and impairment of intangible assets including goodwill. Adjusted Operating Income is
an important performance measure used by the Company to analyze and compare post-acquisition
financial trends and results of its various operations. The Company believes this non-GAAP
financial measure may help investors better understand our operating results by eliminating (i) the
impact of intangible asset amortization/impairment which results solely from our acquisition
transactions and (ii) long-term non-cash share-based compensation expense pursuant to the Companys
long-term incentive plans.
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Fiscal |
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Fiscal 2006 |
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Fiscal 2007 |
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($MM) |
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2005 |
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2006 |
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2007 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Sales |
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779.0 |
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879.0 |
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1,006.1 |
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209.9 |
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221.0 |
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226.2 |
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221.9 |
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238.4 |
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234.2 |
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269.6 |
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263.9 |
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Operating income |
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56.8 |
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67.2 |
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86.8 |
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15.4 |
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16.4 |
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17.3 |
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18.0 |
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22.4 |
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23.9 |
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27.2 |
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|
|
13.3 |
|
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
|
2.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.2 |
|
|
|
0.5 |
|
|
|
0.5 |
|
|
|
0.5 |
|
Goodwill impairment /other intangible asset amortization |
|
|
|
|
|
|
1.3 |
|
|
|
13.1 |
|
|
|
0.2 |
|
|
|
0.3 |
|
|
|
0.3 |
|
|
|
0.5 |
|
|
|
0.4 |
|
|
|
0.3 |
|
|
|
0.5 |
|
|
|
11.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income |
|
|
56.8 |
|
|
|
68.5 |
|
|
|
102.7 |
|
|
|
15.6 |
|
|
|
16.7 |
|
|
|
17.6 |
|
|
|
18.5 |
|
|
|
24.0 |
|
|
|
24.7 |
|
|
|
28.2 |
|
|
|
25.7 |
|
Adjusted Operating Margin |
|
|
7.3 |
% |
|
|
7.8 |
% |
|
|
10.2 |
% |
|
|
7.4 |
% |
|
|
7.6 |
% |
|
|
7.8 |
% |
|
|
8.3 |
% |
|
|
10.0 |
% |
|
|
10.6 |
% |
|
|
10.5 |
% |
|
|
9.7 |
% |
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
The following exhibit is filed herewith:
|
99.1 |
|
Press release of the Company dated May 9, 2007, regarding the announcement
of the Companys fiscal 2007 fourth quarter and year-end results. |
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED HEREUNTO DULY AUTHORIZED.
|
|
|
|
|
|
CONSOLIDATED GRAPHICS, INC.
(Registrant)
|
|
|
By: |
G. Christopher Colville
|
|
|
|
|
|
|
|
G. Christopher Colville
Executive Vice President,
Chief Financial and Accounting
Officer And Secretary |
|
|
Date: May 9, 2007
Exhibit Index
|
|
|
Exhibit |
|
|
Number |
|
Description |
99.1
|
|
Press release of the Company dated May 9, 2007,
regarding the announcement of the Companys fiscal 2007
fourth quarter and year-end results. |