e8vk
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): AUGUST 2, 2006
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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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 August 2, 2006, the Company announced its fiscal 2007 first quarter 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 first quarter ended June 30, 2006. 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 EBITDA as our net income plus provision for income taxes, net interest
expense, share-based compensation expense, goodwill impairment charges 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 |
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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 from 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 from asset dispositions, 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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2004 |
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2005 |
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2006 |
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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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LTM |
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Sales |
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708.1 |
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779.0 |
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879.0 |
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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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907.5 |
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Net Income |
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19.9 |
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32.7 |
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38.5 |
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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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43.4 |
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Income taxes |
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12.8 |
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19.0 |
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23.2 |
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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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25.3 |
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Interest expense, net |
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7.2 |
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5.1 |
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5.5 |
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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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5.5 |
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Depreciation and amortization |
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33.8 |
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37.0 |
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41.3 |
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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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41.7 |
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Share-based compensation expense |
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1.2 |
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1.2 |
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Net loss from asset dispositions* |
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2.0 |
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5.1 |
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4.3 |
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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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4.3 |
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EBITDA |
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75.7 |
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98.9 |
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112.9 |
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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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121.4 |
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EBITDA Margin |
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10.7 |
% |
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12.7 |
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12.8 |
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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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13.4 |
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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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2004 |
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2005 |
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2006 |
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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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LTM |
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Net cash provided by operating activities |
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79.2 |
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75.2 |
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79.2 |
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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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85.5 |
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Capital expenditures* |
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19.8 |
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28.8 |
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32.9 |
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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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37.3 |
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Proceeds from asset dispositions |
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2.3 |
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1.8 |
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2.5 |
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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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2.8 |
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Free Cash Flow |
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61.7 |
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48.2 |
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48.9 |
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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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51.0 |
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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 removing
the impact of intangible asset amortization/impairment from the portion of our asset base resulting
solely from our acquisition transactions and 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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2004 |
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2005 |
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2006 |
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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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LTM |
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Sales |
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708.1 |
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779.0 |
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879.0 |
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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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907.5 |
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Operating income |
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39.9 |
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56.8 |
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67.2 |
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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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74.2 |
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Share-based compensation expense |
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1.2 |
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1.2 |
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Goodwill impairment /other intangible asset
amortization |
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1.3 |
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0.2 |
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0.3 |
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0.3 |
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0.5 |
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0.4 |
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1.5 |
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Adjusted Operating Income |
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39.9 |
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56.8 |
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68.5 |
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15.6 |
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16.7 |
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17.6 |
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18.5 |
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24.1 |
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76.9 |
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Adjusted Operating Margin |
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5.6 |
% |
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7.3 |
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7.8 |
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7.4 |
% |
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7.6 |
% |
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7.8 |
% |
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8.3 |
% |
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10.1 |
% |
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8.5 |
% |
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
The following exhibit is filed herewith:
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99.1 |
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Press release of the Company dated August 2, 2006, related to the
announcement of the Companys fiscal 2007 first 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: |
G. Christopher Colville
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G. Christopher Colville |
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Executive Vice President,
Chief Financial and Accounting
Officer And Secretary |
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Date: August 2, 2006
EXHIBIT INDEX
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Exhibit |
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No. |
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Description |
99.1
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Press release of the Company dated August 2, 2006, related to the
announcement of the Companys fiscal 2007 first quarter results. |