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Consolidated Graphics Inc. (CGX) filed Quarterly Report for the period ended 2011-06-30.
Consolidated Graphics Inc. has a market cap of $448 million; its shares were traded at around $40.49 with a P/E ratio of 11.8 and P/S ratio of 0.4. Consolidated Graphics Inc. had an annual average earning growth of 7.1% over the past 10 years.
This is the annual revenues and earnings per share of CGX over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CGX.
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 across 27 states, Toronto and Prague, and a presence in Asia. In connection with our traditional print services, we also provide our customers fulfillment and mailing services and digital technology solutions and e-commerce capabilities. Generally, each facility substantially relies on locally-based customers; accordingly, we have approximately 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 7% of our total revenues.
Gross profit during the three months ended June 30, 2011 increased $1.4 million, or 2%, to $55.8 million, compared to $54.4 million for the same period in the prior year. The increase in gross profit was due to the 2.8% increase in sales. Gross profit margin (gross profit divided by revenues) decreased slightly from 23.0% in the June 2010 quarter to 22.9% in June 2011.
Selling expense during the three months ended June 30, 2011 declined $0.7 million, or 3%, to $22.6 million from $23.3 million for the same period in the prior year. Selling expense as a percentage of sales declined from 9.8% in the prior year quarter to 9.3% this year due to lower compensation expenses.
General and administrative expenses during the three months ended June 30, 2011 increased $2.5 million, or 11%, to $24.9 million, from $22.4 million for the same period in the prior year. This increase primarily resulted from the impact of acquisitions, an increase in staff within our information technology group and Leadership Development Program, higher bad debt expense, and higher software license and maintenance fees. As a percentage of sales, general and administrative expenses increased from 9.5% in the prior year quarter to 10.2% this 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 bank’s 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 June 30, 2011, 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%.
At June 30, 2011, outstanding borrowings under term equipment notes totaled $58.9 million and carried interest rates between 3.3% and 4.1%. The term equipment notes provide for principal payments plus interest for defined periods of up to five years from the date of issuance, and are secured by certain equipment of the Company. We are not subject to any significant financial covenants in connection with any of the term equipment notes. Most of the term equipment notes cross-default to the events of default set forth in the Credit Agreement.
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