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): JANUARY 30, 2008
CONSOLIDATED GRAPHICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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TEXAS
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001-12631
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76-0190827 |
(STATE OR OTHER JURISDICTION
OF INCORPORATION)
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(COMMISSION FILE NUMBER)
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(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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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 January 30, 2008, the Company announced its fiscal 2008 third quarter results. A copy of
the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. 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 expressed
or 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 third quarter ended December 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. A rebroadcast of the call will be available by dialing 888-286-8010 or 617-801-6888 and
entering the Conference ID 26751641. The rebroadcast will be available from January 30 until
midnight February 6, 2008.
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 EBITDA as our net income plus provision for income taxes, net interest
expense, share-based compensation expense, goodwill impairment charges, non-cash net gain or loss
from foreign currency transactions, 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, non-cash
currency transactions, impairments 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), non-cash
gains/losses from foreign currency transactions, 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 the net gain or loss from non-cash foreign
currency transactions, 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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($MM) |
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Fiscal |
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Fiscal 2007 |
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Fiscal 2008 |
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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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YTD |
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LTM |
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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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238.4 |
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234.2 |
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269.6 |
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263.9 |
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258.6 |
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259.7 |
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289.5 |
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807.8 |
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1071.7 |
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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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13.7 |
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13.7 |
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16.4 |
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6.9 |
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13.6 |
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13.3 |
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19.4 |
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46.3 |
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53.2 |
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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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7.3 |
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8.4 |
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9.2 |
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4.4 |
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9.3 |
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7.4 |
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4.4 |
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21.1 |
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25.5 |
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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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1.8 |
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1.6 |
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2.0 |
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1.9 |
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2.5 |
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3.6 |
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8.0 |
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10.0 |
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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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10.6 |
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10.7 |
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10.8 |
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12.0 |
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12.3 |
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12.7 |
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13.1 |
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38.1 |
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50.1 |
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Goodwill Impairment |
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11.5 |
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11.5 |
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11.5 |
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Non-Cash Foreign Currency Transaction Net Gain |
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(2.8 |
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(1.6 |
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(0.5 |
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(4.9 |
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(4.9 |
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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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1.2 |
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0.3 |
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0.3 |
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1.8 |
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2.3 |
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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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(0.2 |
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0.3 |
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0.8 |
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0.4 |
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0.6 |
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0.5 |
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1.5 |
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2.3 |
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EBITDA |
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98.9 |
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112.9 |
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146.3 |
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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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35.9 |
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35.2 |
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40.8 |
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111.9 |
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150.0 |
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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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14.5 |
% |
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14.9 |
% |
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14.4 |
% |
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14.4 |
% |
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13.9 |
% |
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13.6 |
% |
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14.1 |
% |
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13.9 |
% |
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14.0 |
% |
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* |
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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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($MM) |
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Fiscal |
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Fiscal 2007 |
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Fiscal 2008 |
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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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YTD |
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LTM |
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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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22.4 |
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(5.6 |
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42.9 |
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13.0 |
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33.2 |
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8.5 |
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32.7 |
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74.4 |
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87.4 |
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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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(8.4 |
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(8.0 |
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(10.9 |
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(19.0 |
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(9.3 |
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(21.3 |
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(23.4 |
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(54.0 |
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(73.0 |
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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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1.2 |
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0.6 |
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0.7 |
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1.6 |
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0.6 |
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0.9 |
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0.3 |
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1.8 |
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3.4 |
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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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15.2 |
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(13.0 |
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32.7 |
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(4.4 |
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24.5 |
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(11.9 |
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9.6 |
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22.2 |
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17.8 |
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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, less the net gain
from non-cash foreign currency transactions. 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,
(ii) long-term non-cash share-based compensation expense pursuant to the Companys long-term
incentive plans and (iii) non-cash net gain from foreign currency transactions pursuant to the
revaluation of certain transactions denominated in currencies outside of the Companys reporting
units functional currency.
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($MM) |
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Fiscal |
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Fiscal 2007 |
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Fiscal 2008 |
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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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YTD |
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LTM |
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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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238.4 |
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234.2 |
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269.6 |
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263.9 |
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258.6 |
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259.7 |
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289.5 |
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807.8 |
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1071.7 |
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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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22.4 |
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23.9 |
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27.2 |
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13.3 |
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24.8 |
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23.2 |
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27.4 |
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75.4 |
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88.7 |
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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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1.2 |
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0.3 |
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0.3 |
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1.8 |
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2.3 |
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Non-Cash Foreign Currency Transaction Net Gain |
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(2.8 |
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(1.6 |
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(0.5 |
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(4.9 |
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(4.9 |
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Goodwill impairment /other intangible asset |
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1.3 |
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13.1 |
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0.4 |
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0.3 |
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0.5 |
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11.9 |
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0.6 |
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0.6 |
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0.6 |
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1.8 |
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13.7 |
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Adjusted Operating Income |
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56.8 |
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68.5 |
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102.7 |
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24.0 |
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24.7 |
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28.2 |
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25.7 |
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23.8 |
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22.5 |
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27.8 |
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74.1 |
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99.8 |
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Adjusted Operating Margin |
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7.3 |
% |
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7.8 |
% |
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10.2 |
% |
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10.0 |
% |
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10.6 |
% |
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10.5 |
% |
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9.7 |
% |
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9.2 |
% |
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8.7 |
% |
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9.6 |
% |
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9.2 |
% |
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9.3 |
% |
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
The following exhibit is filed herewith:
|
99.1 |
|
Press release of the Company dated January 30, 2008, regarding the
announcement of the Companys fiscal 2008 third quarter 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.
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CONSOLIDATED GRAPHICS, INC.
(Registrant)
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By: |
/s/ Jon C. Biro
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Jon C. Biro |
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Executive Vice President and
Chief Financial and Accounting Officer |
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Date: January 30, 2008
Exhibit Index
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Exhibit |
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Number |
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Description |
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99.1 |
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Press release of the Company dated January 30, 2008,
regarding the announcement of the Companys fiscal 2008
third quarter results. |