8-K

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 1, 2007

CONSOLIDATED GRAPHICS, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

TEXAS
(STATE OR OTHER JURISDICTION
OF INCORPORATION) 001-12631
(COMMISSION FILE NUMBER) 76-0190827
(I.R.S. EMPLOYER
IDENTIFICATION NO.)

5858 WESTHEIMER, SUITE 200
HOUSTON, TEXAS 77057
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)

REGISTRANT’S 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)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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 1, 2007, the Company announced its fiscal 2008 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 Company’s financial results for the first quarter ended June 30, 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.

During today’s conference call, management’s discussion of the Company’s financial results may include references to certain non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s 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:

• it is widely used by investors in our industry to measure a company’s 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;

• 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

• 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 Company’s results and liquidity.

	Fiscal									Fiscal 2007												Fiscal 2008
($MM)	2005			2006			2007			Q1			Q2			Q3			Q4			Q1			LTM
Sales		779.0			879.0			1,006.1			238.4			234.2			269.6			263.9			258.6			1,026.3
Net income		32.7			38.5			50.7			13.7			13.7			16.4			6.9			13.6			50.6
Income taxes		19.0			23.2			29.4			7.3			8.4			9.2			4.4			9.3			31.3
Interest expense, net		5.1			5.5			6.7			1.4			1.8			1.6			2.0			1.9			7.3
Depreciation and amortization		37.0			41.3			44.0			10.6			10.7			10.8			12.0			12.3			45.7
Goodwill impairment		—			—			11.5			—			—			—			11.5			—			11.5
Non-cash foreign currency transaction net gain		—			—			—			—			—			—			—			(2.8	)		(2.8	)
Share-based compensation expense		—			—			2.8			1.2			0.5			0.5			0.5			1.2			2.7
Net loss (gain) from asset dispositions*		5.1			4.3			1.3			0.3			(0.2	)		0.3			0.8			0.4			1.4
EBITDA		98.9			112.9			146.3			34.5			34.9			38.8			38.1			35.9			147.7
EBITDA Margin		12.7	%		12.8	%		14.5	%		14.5	%		14.9	%		14.4	%		14.4	%		13.9	%		14.4	%

* 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.

	Fiscal									Fiscal 2007												Fiscal 2008
($MM)	2005			2006			2007			Q1			Q2			Q3			Q4			Q1			LTM
Net cash provided by operating activities		75.2			79.2			72.8			22.4			(5.6	)		42.9			13.0			33.2			83.6
Capital expenditures*		(28.8	)		(32.9	)		(46.4	)		(8.4	)		(8.0	)		(10.9	)		(19.0	)		(9.3	)		(47.3	)
Proceeds from asset dispositions		1.8			2.5			4.1			1.2			0.6			0.7			1.6			0.6			3.5
Free Cash Flow		48.2			48.9			30.5			15.2			(13.0	)		32.7			(4.4	)		24.5			39.8

* 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 Company’s 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 Company’s reporting units functional currency.

	Fiscal									Fiscal 2007												Fiscal 2008
($MM)	2005			2006			2007			Q1			Q2			Q3			Q4			Q1			LTM
Sales		779.0			879.0			1,006.1			238.4			234.2			269.6			263.9			258.6			1,026.3
Operating income		56.8			67.2			86.8			22.4			23.9			27.2			13.3			24.8			89.2
Share-based compensation expense		—			—			2.8			1.2			0.5			0.5			0.5			1.2			2.7
Non-cash foreign currency transaction net gain		—			—			—			—			—			—			—			(2.8	)		(2.8	)
Goodwill impairment /other intangible asset amortization		—			1.3			13.1			0.4			0.3			0.5			11.9			0.6			13.3
Adjusted Operating Income		56.8			68.5			102.7			24.0			24.7			28.2			25.7			23.8			102.4
Adjusted Operating Margin		7.3	%		7.8	%		10.2	%		10.0	%		10.6	%		10.5	%		9.7	%		9.2	%		10.0	%

ITEM — 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c) EXHIBITS

The following exhibit is filed herewith:

99.1 Press release of the Company dated August 1, 2007, regarding the announcement of the Company’s fiscal 2008 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.

CONSOLIDATED GRAPHICS, INC. (Registrant)
By:	/s/ Joe R. Davis
	Joe R. Davis
	Chief Executive Officer and Principal Financial Officer

Date: August 1, 2007

Exhibit Index

Exhibit
Number	Description
99.1	Press release of the Company dated August 1, 2007, regarding the announcement of the Company’s fiscal 2008 first quarter results.

EX-99.1

Exhibit 99.1

FOR:	Consolidated Graphics, Inc.
CONTACT:	Joe R. Davis
	Chairman and Chief Executive Officer
	Consolidated Graphics, Inc.
	(713) 787-0977
	Christine Mohrmann/Alexandra Tramont
	FD
	(212) 850-5600

For Immediate Release

CONSOLIDATED GRAPHICS REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS
— First Quarter Revenues Up 8% to $258.6 Million —

HOUSTON, TEXAS — August 1, 2007 — Consolidated Graphics, Inc. (NYSE: CGX) today announced financial results for its first quarter ended June 30, 2007.

Revenue for the June quarter was $258.6 million, up 8% compared to $238.4 million a year ago. Net income for the June quarter was $13.6 million, down 1% compared to $13.7 million a year ago, largely as a result of a substantially higher effective income tax rate that went into effect during the quarter. As a result of the higher effective tax rate and other factors, diluted earnings per share was $.96 compared to $.97 in the first quarter last year. Had last year’s first quarter effective tax rate been in effect for the current quarter, diluted earnings per share would have been higher by approximately 10 cents. See further discussion below regarding the change in the Company’s effective tax rate.

Commenting on the results, Joe R. Davis, Chairman and Chief Executive Officer of Consolidated Graphics stated, “Overall, we are pleased with the results of the quarter. While our sales were slightly lower than we had projected for the quarter, we believe that sales will accelerate throughout the remainder of the year.”

EBITDA for the June quarter was $35.9 million, up 4% from a year ago. Free cash flow for the quarter was $24.5 million compared to $15.2 million in the previous year.

Mr. Davis added, “As we continue to target larger retail and health care customers with significant summer and fall printing budgets through our national sales efforts, and as election related printing ramps up, I expect that our sales in subsequent quarters will grow at an even faster rate than they did in the first quarter. I am confident that we will continue to successfully execute on our strategy, expand our industry leading position and further leverage our competitive advantages for continued growth.”

Included in operating income for the June quarter was a foreign currency transaction net gain of $2.3 million, which is primarily the result of certain transactions at our Canadian subsidiary which are denominated in U.S. dollars. Partially offsetting this gain during the quarter, and also included in operating income, was a non-cash charge of $.9 million related to restricted stock unit awards granted during the quarter and approximately $.7 million related to charges for relocating and retiring underutilized equipment and certain costs related to terminated letters of intent.

- MORE -

CONSOLIDATED GRAPHICS REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS PAGE -2-

Net income for the quarter was impacted by a higher effective tax rate (40.8% compared to 34.8% a year ago) that was largely the result of the Company’s adoption of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), which became effective for the Company in the first quarter. Also, for the quarter ended June 30 a year ago, the Company realized some one-time income tax benefits as a result of changes to certain state income tax laws. The Company expects that its second quarter effective tax rate will remain at approximately 40.8% and should be significantly lower in the third and fourth quarters.

Mr. Davis concluded, “For the September quarter, we expect solid revenue and profit growth over the prior year. We project quarterly revenues of $267-$275 million and diluted earnings per share of $1.01 to $1.07, inclusive of the increase in the effective tax rate from the prior year. These projected results do not include any contribution from prospective acquisitions.”

A reconciliation and basis for management’s use of the non-GAAP financial results referred to above was included in a filing made today by the Company with the Securities and Exchange Commission.

Consolidated Graphics will host a conference call today, August 1, 2007, at 11:00 a.m. Eastern Time, to discuss its first quarter 2008 results. The conference call will be simultaneously broadcast live over the Internet. Listeners may access the live Web cast at the Company’s homepage, www.cgx.com.

Consolidated Graphics (CGX), headquartered in Houston, Texas, is one of North America’s leading general commercial printing companies. With 68 printing facilities strategically located across 27 states and Canada, CGX offers an unmatched geographic footprint with extensive capabilities supported by an unparalleled level of convenience, efficiency and service. With locations in or near virtually every major U.S. market, as well as Toronto, CGX offers highly responsive service and convenient access to a vast capabilities network through a single point of contact at the local level.

CGX has the largest and most technologically advanced sheetfed printing capability in North America, a sizeable and strategically important web printing capability, industry-leading digital printing services, a rapidly growing number of fulfillment centers and proprietary Internet-based technology solutions. CGX offers the unique ability to respond to all printing-related needs no matter how large, small, specialized or complex. For more information, visit the Consolidated Graphics Web site at www.cgx.com.

This press release contains forward-looking statements, which involve known and unknown risks, uncertainties or other factors that could cause actual results to materially differ from the results, performance or other expectations implied by these forward-looking statements. Consolidated Graphics’ expectations regarding future sales and profitability assume, among other things, stability in the economy and reasonable growth in the demand for its products, the continued availability of raw materials at affordable prices, retention of its key management and operating personnel, as well as other factors detailed in Consolidated Graphics’ filings with the Securities and Exchange Commission. The forward-looking statements, assumptions and factors stated or referred to in this press release are based on information available to Consolidated Graphics today. Consolidated Graphics expressly disclaims any duty to provide updates to these forward-looking statements, assumptions and other factors after the day of this release to reflect the occurrence of events or circumstances or changes in expectations.

(Tables to follow)

CONSOLIDATED GRAPHICS REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS PAGE -3-

CONSOLIDATED GRAPHICS, INC.
Consolidated Income Statements
(In thousands, except per share amounts)

	Three Months Ended
	June 30
	2007			2006
Sales	$	258,646		$	238,425
Cost of Sales		190,469			174,420
Gross Profit		68,177			64,005
Selling Expenses		26,434			24,357
General and Administrative and Other Expenses		16,962			17,215
Operating Income		24,781			22,433
Interest Expense, net		1,894			1,385
Income before Taxes		22,887			21,048
Income Taxes		9,330			7,318
Net Income	$	13,557		$	13,730
Earnings Per Share
Basic	$	.99		$	1.00
Diluted	$	.96		$	.97
Weighted Average Shares Outstanding
Basic		13,716			13,705
Diluted		14,162			14,188
Effective Income Tax Rate		40.8	%		34.8	%

CONSOLIDATED GRAPHICS REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS PAGE -4-

CONSOLIDATED GRAPHICS, INC.
Reconciliations of Non-GAAP Performance Measures
(In thousands, except per share amounts)
(unaudited)

	Three Months Ended
	June 30,
	2007			2006
Net Income per GAAP	$	13,557		$	13,730
Income taxes		9,330			7,318
Interest expense, net		1,894			1,385
Depreciation and amortization		12,337			10,557
Share-based compensation expense		1,233			1,226
Non-cash foreign currency transaction net gain		(2,781	)		—
Net loss from asset dispositions		378			286
EBITDA	$	35,948		$	34,502
Net cash provided by operating activities	$	33,234		$	22,418
Capital expenditures*		(9,339	)		(8,379	)
Proceeds from asset dispositions		633			1,163
Free Cash Flow	$	24,528		$	15,202
* Capital expenditures for property, plant and equipment, including capital expenditures which are directly financed and those accrued as a current liability.
Quarter Ended June 30, 2007
Income before taxes per GAAP	$	22,887
Income taxes @ 34.8% — June 30, 2006 rate		7,965
Net Income non-GAAP	$	14,922
Diluted earnings per share per GAAP	$	.96
Diluted earnings per share non-GAAP	$	1.05
Increase in Diluted Earnings per Share**	$	.10

**Table does not sum due to rounding.

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