Business News
Consolidated Graphics Announces Revised Guidance for Fourth Quarter 2009 Results
Friday 20. March 2009 - Consolidated Graphics, Inc. (NYSE:CGX) today announced revised guidance for its fourth quarter ending March 31, 2009.
Based on current market conditions, the Company now expects fiscal fourth quarter revenues of between $240 – $250 million and diluted earnings per share for the quarter of between $0.05 – $0.15, before any impairment of goodwill or other long-lived assets that may result from the Company’s year-end impairment testing. This compares to revenue of $288 million and earnings of $1.15 per diluted share in the same quarter a year ago. Management’s previous expectation for revenues was $255 – $275 million and earnings of between $0.35 – $0.55 per diluted share. The Company’s same store sales, excluding the effect of election related business, are expected to decline between 20% – 25% for the March quarter, compared to management’s previously expected decline of 12% – 18%. The Company attributes the lower than previously expected results to the deepening recession and an increasingly competitive pricing environment.
“While we are disappointed with the projected results for the fourth quarter, a new forecast was required due to the impact of unprecedented macroeconomic conditions on the marketplace we serve,” commented Joe R. Davis, Chairman and Chief Executive Officer. “We are presently experiencing the worst overall business environment in commercial printing since the Company was founded in 1985, and while we believe we are maintaining our market share, we are also facing unprecedented pressure on margins due to the decline in demand and an extremely competitive marketplace. Many of our major customers have further cut their print budgets in response to sustained economic weakness. As a result, while a handful of our companies are still growing, most are seeing significant declines in customer demand. These revenue declines and the resulting impact on profitability are difficult to overcome even though many of our operating companies are generating relatively good results in today’s very challenging environment.”
Mr. Davis continued, “We are pleased that we are maintaining a healthy balance sheet, and have reduced total debt, net of cash, by over $20 million so far during the March quarter. We have been and will continue to take steps to reduce our cost structure and in particular our labor expenses as a result of the decline in market demand. Over the longer-term we believe we are well positioned, with the leadership, financial strength and industry-leading product offerings necessary to manage through the current economic crisis and succeed in the recovery.”