Consolidated Graphics Inc. (CGX, Financial) filed Quarterly Report for the period ended 2010-12-31.
Consol Graphics has a market cap of $590.8 million; its shares were traded at around $51.06 with a P/E ratio of 18.7 and P/S ratio of 0.6. Consol Graphics had an annual average earning growth of 4% over the past 10 years.Hedge Fund Gurus that owns CGX: Private Capital of Private Capital Management, Jim Simons of Renaissance Technologies LLC.
Gross profit during the three months ended December 31, 2010 increased $10.2 million, or 15%, to $76.8 million, compared to $66.6 million for the same period in the prior year. The increase in gross profit was due to the 8% increase in sales and an increase in the gross profit margin. Gross profit margin (gross profit divided by revenues) increased from 24.1% in the December 2009 quarter to 25.7% in the December 2010 quarter primarily as a result of lower labor costs, higher scrap paper recycling income and fixed costs, such as depreciation, decreasing or not increasing as much as sales.
Selling expense during the three months ended December 31, 2010 increased $0.8 million, or 3%, to $23.5 million from $22.7 million for the same period in the prior year. The increase was primarily due to the increase in sales. Selling expense as a percentage of sales declined from 8.2%, in the prior year to 7.9% this year due to lower compensation expense, partially resulting from a change in the sales mix.
Gross profit during the nine months ended December 31, 2010 increased $26.5 million, or 16%, to $193.4 million compared to $166.9 million for the same period in the prior year. The increase in gross profit was due to the 6% increase in sales and an increase in the gross profit margin. Gross profit margin (gross profit divided by revenues) increased to 24.3% during the nine months ended December 31, 2010 from 22.1% for the same period in the prior year as a result of lower labor costs, higher scrap paper recycling income, and fixed costs, such as depreciation, decreasing or not increasing as much as sales.
General and administrative expenses during the nine months ended December 31, 2010 increased $4.3 million, or 7%, to $70.1 million from $65.8 million for the same period in the prior year. This increase primarily resulted from increased investments in staff within our information technology group, new software licenses and higher bad debt expense. As a percentage of sales, general and administrative expenses increased to 8.8% in the current period compared to 8.7% for the same period in the prior year.
Under the terms of the Credit Agreement the proceeds from borrowings may be used to repay certain indebtedness, finance certain acquisitions, provide for working capital and general corporate purposes and, subject to certain restrictions, repurchase our common stock. In order to repurchase our common stock under the terms of the Credit Agreement, we must (1) demonstrate compliance on a proforma basis, giving effect to such repurchase with the financial covenants set forth in the Credit Agreement, and (2) have a Leverage Ratio (Debt divided by EBITDA, as defined in the Credit Agreement) not exceeding 2.50 to 1.00 on a proforma basis after giving effect to such repurchase. Borrowings outstanding under the Credit Agreement are secured by substantially all of our assets other than real estate and certain equipment subject to term equipment notes and other financings. The collateral also secures, on a pari passu basis, the obligations under the A&B Credit Facility and the Auxiliary Bank Facilities described below. Borrowings under the Credit Agreement accrue interest, at our option, at either LIBOR plus a margin of 1.375% to 2.75%, or an alternate base rate (based upon the greater of (i) the administrative agent banks prime lending rate, (ii) the sum of the LIBOR rate for a one-month interest period plus 1.50% or (iii) the sum of the Federal Funds effective rate plus 0.5% per annum) plus a margin of 0.0% to 1.25%. We are also required to pay an annual commitment fee ranging from 0.25% to 0.5% on available but unused amounts under the Credit Agreement. The interest rate margin and the commitment fee are based upon certain financial performance measures set forth in the Credit Agreement and are redetermined quarterly. At December 31, 2010, the applicable margin on LIBOR based loans was 1.625%, the applicable margin on alternative base rate loans was 0.125% and the applicable commitment fee was 0.25%.
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Consol Graphics has a market cap of $590.8 million; its shares were traded at around $51.06 with a P/E ratio of 18.7 and P/S ratio of 0.6. Consol Graphics had an annual average earning growth of 4% over the past 10 years.Hedge Fund Gurus that owns CGX: Private Capital of Private Capital Management, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Consolidated Graphics is a leading U.S. and Canadian provider of commercial printing and print-related services with 70 printing businesses in 27 U.S. states, Toronto, and Prague. In connection with our traditional print services, we also provide our customers with fulfillment and mailing services, digital technology solutions and e-commerce capabilities. Generally, each facility substantially relies on locally-based customers; accordingly, we have over 20,000 individual customers with a broad diversification by industry-type and geographic orientation. No individual facility accounts for more than 10% of our total revenues. No individual customer accounts for more than 8% of our total revenues.Gross profit during the three months ended December 31, 2010 increased $10.2 million, or 15%, to $76.8 million, compared to $66.6 million for the same period in the prior year. The increase in gross profit was due to the 8% increase in sales and an increase in the gross profit margin. Gross profit margin (gross profit divided by revenues) increased from 24.1% in the December 2009 quarter to 25.7% in the December 2010 quarter primarily as a result of lower labor costs, higher scrap paper recycling income and fixed costs, such as depreciation, decreasing or not increasing as much as sales.
Selling expense during the three months ended December 31, 2010 increased $0.8 million, or 3%, to $23.5 million from $22.7 million for the same period in the prior year. The increase was primarily due to the increase in sales. Selling expense as a percentage of sales declined from 8.2%, in the prior year to 7.9% this year due to lower compensation expense, partially resulting from a change in the sales mix.
Gross profit during the nine months ended December 31, 2010 increased $26.5 million, or 16%, to $193.4 million compared to $166.9 million for the same period in the prior year. The increase in gross profit was due to the 6% increase in sales and an increase in the gross profit margin. Gross profit margin (gross profit divided by revenues) increased to 24.3% during the nine months ended December 31, 2010 from 22.1% for the same period in the prior year as a result of lower labor costs, higher scrap paper recycling income, and fixed costs, such as depreciation, decreasing or not increasing as much as sales.
General and administrative expenses during the nine months ended December 31, 2010 increased $4.3 million, or 7%, to $70.1 million from $65.8 million for the same period in the prior year. This increase primarily resulted from increased investments in staff within our information technology group, new software licenses and higher bad debt expense. As a percentage of sales, general and administrative expenses increased to 8.8% in the current period compared to 8.7% for the same period in the prior year.
Under the terms of the Credit Agreement the proceeds from borrowings may be used to repay certain indebtedness, finance certain acquisitions, provide for working capital and general corporate purposes and, subject to certain restrictions, repurchase our common stock. In order to repurchase our common stock under the terms of the Credit Agreement, we must (1) demonstrate compliance on a proforma basis, giving effect to such repurchase with the financial covenants set forth in the Credit Agreement, and (2) have a Leverage Ratio (Debt divided by EBITDA, as defined in the Credit Agreement) not exceeding 2.50 to 1.00 on a proforma basis after giving effect to such repurchase. Borrowings outstanding under the Credit Agreement are secured by substantially all of our assets other than real estate and certain equipment subject to term equipment notes and other financings. The collateral also secures, on a pari passu basis, the obligations under the A&B Credit Facility and the Auxiliary Bank Facilities described below. Borrowings under the Credit Agreement accrue interest, at our option, at either LIBOR plus a margin of 1.375% to 2.75%, or an alternate base rate (based upon the greater of (i) the administrative agent banks prime lending rate, (ii) the sum of the LIBOR rate for a one-month interest period plus 1.50% or (iii) the sum of the Federal Funds effective rate plus 0.5% per annum) plus a margin of 0.0% to 1.25%. We are also required to pay an annual commitment fee ranging from 0.25% to 0.5% on available but unused amounts under the Credit Agreement. The interest rate margin and the commitment fee are based upon certain financial performance measures set forth in the Credit Agreement and are redetermined quarterly. At December 31, 2010, the applicable margin on LIBOR based loans was 1.625%, the applicable margin on alternative base rate loans was 0.125% and the applicable commitment fee was 0.25%.
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