##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                      to
 Commission File Number 001-12631
 
 CONSOLIDATED GRAPHICS, INC.
  Texas
    
    76-0190827(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)5858 Westheimer Road, Suite 200
Houston, Texas
    
    77057(Address of principal executive offices)
    
    (Zip Code)
 (713) 787-0977
  þ o
  þ o o
  o þ




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##### 



CONSOLIDATED GRAPHICS, INC.
 FORM 10-Q FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2007
 INDEX
 Part I  Financial Information
    
    
    3Item 1. Financial Statements
    
    
    3Consolidated Balance Sheets at December 31, 2007 and March 31, 2007
    
    
    3Consolidated Income Statements for the Three and Nine Months Ended
December 31, 2007 and 2006
    
    
    4Consolidated Statements of Shareholders Equity for the Nine Months Ended
December 31, 2007
    
    
    5Consolidated Statements of Cash Flows for the Nine Months Ended December
31, 2007 and 2006
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
    
    20Item 4. Controls and Procedures
    
    
    20Part II  Other Information
    
    
    21Item 1. Legal Proceedings
    
    
    21Item 1A. Risk Factors
    
    
    21Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 3. Defaults upon Senior Securities
    
    
    21Item 4. Submission of Matters to a Vote of Security Holders
    
    
    21Item 5. Other Information
    
    
    21Item 6. Exhibits
    
    
    22Signatures
    
    
    23Exhibit Index
    
    
    24Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 CONSOLIDATED GRAPHICS, INC.
 
 CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
 December 31,
    
    
    March 31,2007
    
    
    2007(Unaudited)
    
    
    (Audited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    13,752
    
    
    $
    12,043Accounts receivable, net
    
    
    199,675
    
    
    
    185,722Inventories
    
    
    55,871
    
    
    
    46,951Prepaid expenses
    
    
    7,824
    
    
    
    7,532Deferred income taxes
    
    
    9,057
    
    
    
    8,479Total current assets
    
    
    286,179
    
    
    
    260,727PROPERTY AND EQUIPMENT, net
    
    
    394,803
    
    
    
    354,156GOODWILL AND OTHER INTANGIBLE ASSETS, net
    
    
    97,536
    
    
    
    101,768OTHER ASSETS
    
    
    7,634
    
    
    
    7,318$
    786,152
    
    
    $
    723,969LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    18,352
    
    
    $
    12,421Accounts payable
    
    
    61,742
    
    
    
    58,519Accrued liabilities
    
    
    84,184
    
    
    
    89,496Income taxes payable
    
    
    2,121
    
    
    
    138Total current liabilities
    
    
    166,399
    
    
    
    160,574LONG-TERM DEBT, net of current portion
    
    
    276,768
    
    
    
    142,144OTHER LIABILITIES
    
    
    15,100
    
    
    
    DEFERRED INCOME TAXES
    
    
    49,912
    
    
    
    55,715COMMITMENTS AND CONTINGENCIESSHAREHOLDERS EQUITYCommon stock, $.01 par value;
100,000,000 shares authorized; 

11,338,137 and 13,693,698 issued and
outstanding
    
    
    113
    
    
    
    137Additional paid-in capital
    
    
    156,339
    
    
    
    185,098Retained earnings
    
    
    122,545
    
    
    
    180,113Accumulated other comprehensive income
    
    
    (1,024
    )
    
    
    188Total shareholders equity
    
    
    277,973
    
    
    
    365,536$
    786,152
    
    
    $
    723,969
   3




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##### Table of Contents



CONSOLIDATED
GRAPHICS, INC.
 
 CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share data)
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedDecember 31
    
    
    December 312007
    
    
    2006
    
    
    2007
    
    
    2006SALES
    
    $
    289,538
    
    
    $
    269,611
    
    
    $
    807,850
    
    
    $
    742,272COST OF SALES
    
    
    214,140
    
    
    
    197,253
    
    
    
    598,011
    
    
    
    543,453Gross profit
    
    
    75,398
    
    
    
    72,358
    
    
    
    209,839
    
    
    
    198,819SELLING EXPENSES
    
    
    27,849
    
    
    
    26,487
    
    
    
    79,514
    
    
    
    74,387GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    20,489
    
    
    
    18,702
    
    
    
    58,885
    
    
    
    50,930OTHER (INCOME) EXPENSE, net
    
    
    (329
    )
    
    
    
    
    
    
    (3,909
    )
    
    
    Operating income
    
    
    27,389
    
    
    
    27,169
    
    
    
    75,349
    
    
    
    73,502INTEREST EXPENSE, net
    
    
    3,630
    
    
    
    1,576
    
    
    
    7,973
    
    
    
    4,744Income before taxes
    
    
    23,759
    
    
    
    25,593
    
    
    
    67,376
    
    
    
    68,758INCOME TAXES
    
    
    4,397
    
    
    
    9,218
    
    
    
    21,171
    
    
    
    24,963Net income
    
    $
    19,362
    
    
    $
    16,375
    
    
    $
    46,205
    
    
    $
    43,795BASIC EARNINGS PER SHARE
    
    $
    1.63
    
    
    $
    1.21
    
    
    $
    3.58
    
    
    $
    3.22DILUTED EARNINGS PER SHARE
    
    $
    1.58
    
    
    $
    1.17
    
    
    $
    3.48
    
    
    $
    3.14SHARES USED TO COMPUTE EARNINGS
PER SHAREBasic
    
    
    11,905
    
    
    
    13,529
    
    
    
    12,910
    
    
    
    13,582Diluted
    
    
    12,225
    
    
    
    13,968
    
    
    
    13,295
    
    
    
    13,958
   4




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##### Table of Contents



CONSOLIDATED
GRAPHICS, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(In thousands)
(Unaudited, except March 31, 2007 balances)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    TotalBALANCE, March 31, 2007
    
    
    13,694
    
    
    $
    137
    
    
    $
    185,098
    
    
    $
    180,113
    
    
    $
    188
    
    
    $
    365,536Exercise of stock options,
including tax benefit
    
    
    60
    
    
    
    1
    
    
    
    2,618
    
    
    
    
    
    
    
    
    
    
    
    2,619Compensation expense
    
    
    
    
    
    
    
    
    
    
    1,760
    
    
    
    
    
    
    
    
    
    
    
    1,760Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,212
    )
    
    
    (1,212
    )Repurchase and retire common stock
    
    
    (2,416
    )
    
    
    (25
    )
    
    
    (33,137
    )
    
    
    (104,962
    )
    
    
    
    
    
    
    (138,124
    )Adoption of FIN 48 cumulative
effect adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,189
    
    
    
    
    
    
    
    1,189Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,205
    
    
    
    
    
    
    
    46,205BALANCE, December 31, 2007
    
    
    11,338
    
    
    $
    113
    
    
    $
    156,339
    
    
    $
    122,545
    
    
    $
    (1,024
    )
    
    $
    277,973
   5




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months EndedDecember 312007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    46,205
    
    
    $
    43,795Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation and amortization
    
    
    39,631
    
    
    
    32,480Deferred income tax provision
    
    
    3,413
    
    
    
    (2,029
    )Share-based compensation expense
    
    
    1,760
    
    
    
    2,245Non-cash currency gain
    
    
    (4,887
    )
    
    
    Changes in assets and liabilities, net of effects of acquisitionsAccounts receivable, net
    
    
    (7,615
    )
    
    
    (25,602
    )Inventories
    
    
    (6,426
    )
    
    
    (5,665
    )Prepaid expenses
    
    
    (178
    )
    
    
    928Other assets
    
    
    (293
    )
    
    
    (196
    )Accounts payable, accrued liabilities and other
    
    
    822
    
    
    
    14,226Income taxes payable
    
    
    1,983
    
    
    
    (393
    )Net cash provided by operating activities
    
    
    74,415
    
    
    
    59,789INVESTING ACTIVITIESAcquisitions of businesses, net of cash acquired
    
    
    (25,983
    )
    
    
    (4,757
    )Purchases of property and equipment
    
    
    (28,566
    )
    
    
    (24,245
    )Proceeds from asset dispositions
    
    
    1,774
    
    
    
    2,544Net cash used in investing activities
    
    
    (52,775
    )
    
    
    (26,458
    )FINANCING ACTIVITIESProceeds from bank credit facilities
    
    
    186,066
    
    
    
    98,548Payments on bank credit facilities
    
    
    (78,121
    )
    
    
    (112,138
    )Proceeds from issuance of term equipment notes
    
    
    18,718
    
    
    
    8,154Payments on term equipment notes and other debt
    
    
    (11,646
    )
    
    
    (6,681
    )Payments to repurchase and retire common stock
    
    
    (138,124
    )
    
    
    (24,656
    )Proceeds from exercise of stock options
    
    
    2,619
    
    
    
    11,091Net cash used in financing activities
    
    
    (20,488
    )
    
    
    (25,682
    )Effect of exchange rate changes on cash
    
    
    557
    
    
    
    NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    1,709
    
    
    
    7,649CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    12,043
    
    
    
    4,993CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    13,752
    
    
    $
    12,642
   6




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates
 Revenue Recognition
 Earnings Per Share
 Inventories
 December 31,
    
    
    March 31,2007
    
    
    2007Raw materials
    
    $
    22,267
    
    
    $
    15,608Work in progress
    
    
    27,817
    
    
    
    26,659Finished goods
    
    
    5,787
    
    
    
    4,684$
    55,871
    
    
    $
    46,951
 Goodwill and Other Intangible Assets, net Goodwill and Other Intangible Assets,
  7




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
 Supplemental Cash Flow Information
 Foreign Currency
 Accumulated Other Comprehensive Income
 2. ACQUISITIONS
  3. LONG-TERM DEBT
  December 31,
    
    
    March 31,2007
    
    
    2007Bank credit facilities
    
    $
    202,459
    
    
    $
    94,143Term equipment notes
    
    
    82,343
    
    
    
    48,144Other
    
    
    10,318
    
    
    
    12,278295,120
    
    
    
    154,565Less: current portion
    
    
    (18,352
    )
    
    
    (12,421
    )$
    276,768
    
    
    $
    142,144
    8




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
        9




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
 4. SHARE-BASED COMPENSATION
  Share-Based Payment,
    Weighted-Average ExerciseStock Options
    
    Shares
    
    
    PriceOutstanding at March 31, 2007
    
    
    1,534,234
    
    
    $
    36.66Granted
    
    
    10,612
    
    
    
    65.91Exercised
    
    
    (60,105
    )
    
    
    29.11Forfeited or expired
    
    
    (65,197
    )
    
    
    44.44Outstanding at December 31, 2007 (a)
    
    
    1,419,544
    
    
    
    36.84Exercisable at December 31, 2007 (a)
    
    
    1,206,173
    
    
    
    35.55
 
 (a)
    
    Stock options outstanding as of December 31, 2007 have a weighted average remaining
contractual term of 4.3 years. Based on the market value of the Companys common stock on
December 31, 2007, outstanding stock options have an aggregate intrinsic value of $15,587 and
exercisable stock options have an aggregate intrinsic value of $14,800.  Restricted Stock Unit Awards
    
    SharesOutstanding at March 31, 2007
    
    
    12,500Granted
    
    
    12,500Exercised
    
    
    Forfeited or expired
    
    
    Outstanding at December 31, 2007 (a)
    
    
    25,000Exercisable at December 31, 2007 (a)
    
    
    2,500
 
 (a)
    
    Restricted stock units outstanding as of December 31, 2007 have a weighted average remaining
contractual term of 2.4 years and a total intrinsic value of $1,196.  10




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
 5. INCOME TAXES
 Accounting for Uncertainty in Income Taxes  an Interpretation of
FASB Statement No. 109
       11




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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion contains forward-looking information. Readers are cautioned that such
information involves known and unknown risks and uncertainties, including those created by general
market conditions, competition and the possibility that events may occur beyond our control, which
may limit our ability to maintain or improve our operating results or financial condition or
acquire additional printing businesses. When you consider our forward-looking information, you
should keep in mind the Risk Factors described in this Quarterly Report on Form 10-Q and in our
most recently filed Annual Report on Form 10-K for the fiscal year ended March 31, 2007. Although
management believes that the assumptions underlying the forward-looking statements are reasonable,
any of the assumptions could be inaccurate and there can be no assurance that any or all of the
assumptions underlying the forward-looking statements will prove to be accurate. The inclusion of
such information should not be regarded as a representation by us or any other person that our
objectives and plans will be achieved. We expressly disclaim any duty to provide updates to these
forward-looking statements, assumptions or other factors after the date of this Quarterly Report on
Form 10-Q to reflect the occurrence of events or changes in circumstances or expectations.
 The following discussion of the financial condition and performance of our Company should be
read in conjunction with the consolidated financial statements included herein and the consolidated
financial statements and related notes and other detailed information regarding our Company
included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2007 and other
reports filed by us with the Securities and Exchange Commission (SEC). Operating results for the
nine months ended December 31, 2007 are not necessarily indicative of the results to be expected
for the entire fiscal year ending March 31, 2008 or any periods thereafter.
 Overview
 Our Organization
   Nature of Our Services
    12




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Our Strategy
  
    
    Internal Sales GrowthWe seek to use our competitive advantages to expand
market share. We continually seek to hire additional experienced sales professionals,
invest in new equipment and technology, expand our national accounts program, develop
new and expanded digital technology-based print-related services and provide sales
training and education about our breadth of capabilities and services to our sales
professionals.
    
    Disciplined Acquisition ProgramWe selectively pursue opportunities to acquire
additional printing businesses at reasonable prices. Some of these acquisitions may
include smaller and/or distressed printing businesses for merger into one of our
existing businesses.
    
    Cost SavingsBecause of our size and extensive geographic footprint, we
leverage our economies of scale to purchase supplies and equipment at preferential
prices, and centralize various administrative services to generate cost savings.
    
    Best Practices/BenchmarkingWe provide a forum for our printing businesses to
share their knowledge of technical processes and their best practices with one another,
as well as benchmark financial and operational data to help our printing businesses
identify and respond to changes in operating trends.
    
    Leadership DevelopmentThrough our unique Leadership Development Program, we
develop talent for future sales and management positions at our printing businesses.
  13




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Results of Operations
  Three Months
    
    
    
    
    
    
    
    
    
    
    Nine MonthsEnded December 31
    
    
    
    
    
    
    
    
    
    
    Ended December 312007
    
    
    2006
    
    
    Change
    
    
    %
    
    2007
    
    
    2006
    
    
    Change
    
    
    %(In millions)
    
    
    
    
    
    
    
    
    
    
    
    (In millions)Sales
    
    $
    289.5
    
    
    $
    269.6
    
    
    $
    19.9
    
    
    
    7
    %
    
    $
    807.9
    
    
    $
    742.3
    
    
    $
    65.6
    
    
    
    9
    %Cost of sales
    
    
    214.1
    
    
    
    197.2
    
    
    
    16.9
    
    
    
    9
    
    
    
    598.0
    
    
    
    543.5
    
    
    
    54.5
    
    
    
    10Gross profit
    
    
    75.4
    
    
    
    72.4
    
    
    
    3.0
    
    
    
    4
    
    
    
    209.9
    
    
    
    198.8
    
    
    
    11.1
    
    
    
    6Selling expenses
    
    
    27.8
    
    
    
    26.5
    
    
    
    1.3
    
    
    
    5
    
    
    
    79.5
    
    
    
    74.4
    
    
    
    5.1
    
    
    
    7General and administrative expenses
    
    
    20.5
    
    
    
    18.7
    
    
    
    1.8
    
    
    
    10
    
    
    
    58.9
    
    
    
    50.9
    
    
    
    8.0
    
    
    
    16Other (income) expense, net
    
    
    (.3
    )
    
    
    
    
    
    
    (.3
    )
    
    nm
    *
    
    
    (3.9
    )
    
    
    
    
    
    
    (3.9
    )
    
    nm
    *Operating income
    
    
    27.4
    
    
    
    27.2
    
    
    
    .2
    
    
    
    1
    
    
    
    75.4
    
    
    
    73.5
    
    
    
    1.9
    
    
    
    3Interest expense, net
    
    
    3.6
    
    
    
    1.6
    
    
    
    2.0
    
    
    
    130
    
    
    
    8.0
    
    
    
    4.7
    
    
    
    3.3
    
    
    
    68Income before taxes
    
    
    23.8
    
    
    
    25.6
    
    
    
    (1.8
    )
    
    
    (7
    )
    
    
    67.4
    
    
    
    68.8
    
    
    
    (1.4
    )
    
    
    (2
    )Income taxes
    
    
    4.4
    
    
    
    9.2
    
    
    
    4.8
    
    
    
    52
    
    
    
    21.2
    
    
    
    25.0
    
    
    
    3.8
    
    
    
    15Net Income
    
    $
    19.4
    
    
    $
    16.4
    
    
    $
    3.0
    
    
    
    18
    %
    
    $
    46.2
    
    
    $
    43.8
    
    
    $
    2.4
    
    
    
    6
    %
 
 * nm  not meaningful  As a Percentage
    
    
    
    
    
    
    As a Percentageof Sales
    
    
    
    
    
    
    of SalesThree Months
    
    
    
    
    
    
    Nine MonthsEnded December 31
    
    
    
    
    
    
    Ended December 312007
    
    
    2006
    
    
    Change
    
    2007
    
    
    2006
    
    
    ChangeSales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    
    
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    74.0
    
    
    
    73.2
    
    
    
    .8
    
    
    
    74.0
    
    
    
    73.2
    
    
    
    .8Gross profit
    
    
    26.0
    
    
    
    26.8
    
    
    
    (.8
    )
    
    
    26.0
    
    
    
    26.8
    
    
    
    (.8
    )Selling expenses
    
    
    9.6
    
    
    
    9.8
    
    
    
    (.2
    )
    
    
    9.8
    
    
    
    10.0
    
    
    
    (.2
    )General and administrative expenses
    
    
    7.0
    
    
    
    6.9
    
    
    
    .1
    
    
    
    7.3
    
    
    
    6.9
    
    
    
    .4Other (income) expense, net
    
    
    (.1
    )
    
    
    
    
    
    
    (.1
    )
    
    
    (.4
    )
    
    
    
    
    
    
    (.4
    )Operating income
    
    
    9.5
    
    
    
    10.1
    
    
    
    (.6
    )
    
    
    9.3
    
    
    
    9.9
    
    
    
    (.6
    )Interest expense, net
    
    
    1.3
    
    
    
    .6
    
    
    
    .7
    
    
    
    1.0
    
    
    
    .6
    
    
    
    .4Income before taxes
    
    
    8.2
    
    
    
    9.5
    
    
    
    (1.3
    )
    
    
    8.3
    
    
    
    9.3
    
    
    
    (1.0
    )Income taxes
    
    
    1.5
    
    
    
    3.4
    
    
    
    (1.9
    )
    
    
    2.6
    
    
    
    3.4
    
    
    
    (.8
    )Net Income
    
    
    6.7
    %
    
    
    6.1
    %
    
    
    .6
    
    
    
    5.7
    %
    
    
    5.9
    %
    
    
    (.2
    )
   Three Months
    
    
    Nine MonthsEnded December 31, 2007
    
    
    Ended December 31, 2007$
    
    
    %
    
    
    $
    
    
    %(In millions)
    
    
    (In millions)Acquisitions
    
    $
    30.5
    
    
    
    11.3
    %
    
    $
    88.6
    
    
    
    11.9
    %Election-related
    
    
    (9.5
    )
    
    
    (3.5
    )
    
    
    (16.5
    )
    
    
    (2.2
    )Other internal
    
    
    (1.1
    )
    
    
    (.4
    )
    
    
    (6.5
    )
    
    
    (.9
    )Total
    
    $
    19.9
    
    
    
    7.4
    %
    
    $
    65.6
    
    
    
    8.8
    %
 Comparative Analysis of Consolidated Income Statements for the Three Months Ended December 31, 2007
and 2006
   14




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##### Table of Contents



Comparative Analysis of Consolidated Income Statements for the Nine Months Ended December 31, 2007
and 2006
       15




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##### Table of Contents



Liquidity and Capital Resources
 Sources and Uses of Cash
 Item 1. Financial
Statements:
 Nine Months EndedDecember 312007
    
    
    2006(In millions)Net cash provided by operating activities
    
    $
    74.4
    
    
    $
    59.8Acquisitions of businesses
    
    
    (26.0
    )
    
    
    (4.8
    )Capital expenditures, net of proceeds from asset dispositions (1)
    
    
    (26.8
    )
    
    
    (21.7
    )Net proceeds (payments) under bank credit facilities
    
    
    107.9
    
    
    
    (13.6
    )Net proceeds on term equipment notes and other debt
    
    
    7.1
    
    
    
    1.5Payments to repurchase and retire common stock
    
    
    (138.1
    )
    
    
    (24.7
    )Proceeds from exercise of stock options
    
    
    2.6
    
    
    
    11.1
 
 (1)
    
    Capital expenditures exclude those capital expenditures which were directly financed by
the Company. For the nine months ended December 31, 2007, directly financed capital expenditures
totaled $25.4 million compared to $5.1 million in the prior year. Item 1. Financial Statements:
 December 31,
    
    
    March 31,2007
    
    
    2007(In millions)Cash and cash equivalents
    
    $
    13.8
    
    
    $
    12.0Working capital, inclusive of cash and cash equivalents
    
    
    119.8
    
    
    
    100.2Total debt obligations
    
    
    295.1
    
    
    
    154.6
    16




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##### Table of Contents



Debt Obligations
     17




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##### Table of Contents



Contractual Obligations and Other Commitments
 Operating leases
 Letters of credit
  18




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##### Table of Contents



Insurance programs
 Critical Accounting Policies
  Revenue Recognition 
 Receivables, net of valuation allowance 
 Goodwill 
 Impairment of long-lived assets 
 Insurance liabilities 
 Accounting for income taxes  Note 5. Income Taxes
  19




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##### Table of Contents



Accounting for acquisitions 
 
 ITEM 3. Quantitative and Qualitative Disclosure About Market Risk
   
 ITEM 4. Controls and Procedures
 Disclosure Controls and Procedures
  Internal Control Over Financial Reporting
   20




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 PART II  OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM 1A. Risk Factors
  
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Total Number
    
    
    Maximumof Shares
    
    
    Dollar Value ofRepurchased
    
    
    Shares that Mayas Part of
    
    
    Yet BeTotal Number of
    
    
    Average
    
    
    Publicly
    
    
    RepurchasedShares
    
    
    Price Paid
    
    
    Announced
    
    
    Under thePeriod
    
    Repurchased (a)
    
    
    per Share
    
    
    Plans
    
    
    Announced PlansRepurchases from
October 1, 2007
through October
31, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    50,000,000Repurchases from
November 1, 2007
through November
30, 2007
    
    
    180,400
    
    
    
    51.19
    
    
    
    180,400
    
    
    $
    40,764,552Repurchases from
December 1, 2007
through December
31, 2007
    
    
    574,800
    
    
    $
    50.15
    
    
    
    574,800
    
    
    $
    11,939,932Total
    
    
    755,200
    
    
    $
    50.40
    
    
    
    755,200
 
 (a)
    
    All shares were purchased in open-market transactions. 
 ITEM 3. Defaults upon Senior Securities
  
 ITEM 4. Submission of Matters to a Vote of Security Holders
  
 ITEM 5. Other Information
 Creation of a Direct Financial Obligation
   21




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##### Table of Contents



ITEM 6. Exhibits
 *3.1
    
    
    Restated Articles of Incorporation of the Company filed with the Secretary of State of the State of
Texas on July 27, 1994 (Consolidated Graphics, Inc. Form 10-Q (June 30, 1994), Exhibit 4(a)).*3.2
    
    
    Articles of Amendment to the Restated Articles of Incorporation of the Company dated as of July 29,
1998 (Consolidated Graphics, Inc. Form 10-Q (June 30, 1998), Exhibit 3.1).*3.3
    
    
    Second Amended and Restated By-Laws of the Company adopted as of June 30, 2004 (Consolidated
Graphics, Inc. Form 10-Q (June 30, 2004), Exhibit 3.3).*3.4
    
    
    Amendment to the Second Amended and Restated By-Laws of the Company adopted as of December 21, 2007
(Consolidated Graphics, Inc. Form 8-K (December 26, 2007), Exhibit 1).*4.1
    
    
    Specimen Common Stock Certificate (Consolidated Graphics, Inc. Form 10-K (March 31, 1998), Exhibit 4.1).*4.2
    
    
    Rights Agreement dated as of December 15, 1999 between Consolidated Graphics, Inc. and American Stock
Transfer and Trust Company, as Rights Agent, which includes as Exhibit A the Certificate of
Designations of Series A Preferred Stock, as Exhibit B the form of Rights Certificate and as Exhibit C
the form of summary of Rights to Purchase Shares (Consolidated Graphics, Inc. Form 8-K (December 15,
1999), Exhibit 4.1).*4.3
    
    
    Amendment to Rights Agreement dated as of July 10, 2006 between Consolidated Graphics, Inc. and
American Stock Transfer and Trust Company and the related Summary of Rights to Purchase Stock, as
amended (Consolidated Graphics, Inc. Form 8-A/A (July 13, 2006), Exhibits 2 and 3).*4.4
    
    
    Second Amendment to Rights Agreement dated as of September 25, 2007 between Consolidated Graphics, Inc.
and American Stock Transfer and Trust Company and the related Summary of Rights to Purchase Stock, as
amended (Consolidated Graphics, Inc. Form 8-A/A (September 28, 2007), Exhibits 3 and 4).*10.1
    
    
    Second Amendment to the Credit Agreement among the Company and JPMorgan Chase Bank, N.A., as
Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, dated as of
November 9, 2007 (Consolidated Graphics, Inc. Form 8-K (November 14, 2007), Exhibit 10.1).*10.2
    
    
    Employment Agreement between the Company and Jon C. Biro dated as of December 17, 2007 (Consolidated
Graphics, Inc. Form 8-K (July 18, 2008), Exhibit 10.1)*10.3
    
    
    Change in Control Agreement between the Company and Jon C. Biro dated as of December 17, 2007
(Consolidated Graphics, Inc. Form 8-K (January 18, 2008), Exhibit 10.2).31.1
    
    
    Certification of Joe R. Davis, principal executive officer, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Jon C. Biro, principal financial and accounting officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Joe R. Davis, principal executive officer, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Jon C. Biro, principal financial and accounting officer, pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference  22




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##### Table of Contents



SIGNATURES
 Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant,
Consolidated Graphics, Inc., has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
 CONSOLIDATED GRAPHICS, INC.Dated:  January 30, 2008
    By:

/s/  Jon C. BiroJon C. BiroExecutive Vice President and
      Chief Financial and Accounting Officer  23




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##### Table of Contents



Exhibit Index
 *3.1
    
    
    Restated Articles of Incorporation of the Company filed with the Secretary of State of the State of
Texas on July 27, 1994 (Consolidated Graphics, Inc. Form 10-Q (June 30, 1994), Exhibit 4(a)).*3.2
    
    
    Articles of Amendment to the Restated Articles of Incorporation of the Company dated as of July 29,
1998 (Consolidated Graphics, Inc. Form 10-Q (June 30, 1998), Exhibit 3.1).*3.3
    
    
    Second Amended and Restated By-Laws of the Company adopted as of June 30, 2004 (Consolidated
Graphics, Inc. Form 10-Q (June 30, 2004), Exhibit 3.3).*3.4
    
    
    Amendment to the Second Amended and Restated By-Laws of the Company adopted as of December 21, 2007
(Consolidated Graphics, Inc. Form 8-K (December 26, 2007), Exhibit 1).*4.1
    
    
    Specimen Common Stock Certificate (Consolidated Graphics, Inc. Form 10-K (March 31, 1998), Exhibit 4.1).*4.2
    
    
    Rights Agreement dated as of December 15, 1999 between Consolidated Graphics, Inc. and American Stock
Transfer and Trust Company, as Rights Agent, which includes as Exhibit A the Certificate of
Designations of Series A Preferred Stock, as Exhibit B the form of Rights Certificate and as Exhibit C
the form of summary of Rights to Purchase Shares (Consolidated Graphics, Inc. Form 8-K (December 15,
1999), Exhibit 4.1).*4.3
    
    
    Amendment to Rights Agreement dated as of July 10, 2006 between Consolidated Graphics, Inc. and
American Stock Transfer and Trust Company and the related Summary of Rights to Purchase Stock, as
amended (Consolidated Graphics, Inc. Form 8-A/A (July 13, 2006), Exhibits 2 and 3).*4.4
    
    
    Second Amendment to Rights Agreement dated as of September 25, 2007 between Consolidated Graphics, Inc.
and American Stock Transfer and Trust Company and the related Summary of Rights to Purchase Stock, as
amended (Consolidated Graphics, Inc. Form 8-A/A (September 28, 2007), Exhibits 3 and 4).*10.1
    
    
    Second Amendment to the Credit Agreement among the Company and JPMorgan Chase Bank, N.A., as
Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, dated as of
November 9, 2007 (Consolidated Graphics, Inc. Form 8-K (November 14, 2007), Exhibit 10.1).*10.2
    
    
    Employment Agreement between the Company and Jon C. Biro dated as of December 17, 2007 (Consolidated
Graphics, Inc. Form 8-K (July 18, 2008), Exhibit 10.1)*10.3
    
    
    Change in Control Agreement between the Company and Jon C. Biro dated as of December 17, 2007
(Consolidated Graphics, Inc. Form 8-K (January 18, 2008), Exhibit 10.2).31.1
    
    
    Certification of Joe R. Davis, principal executive officer, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Jon C. Biro, principal financial and accounting officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Joe R. Davis, principal executive officer, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Jon C. Biro, principal financial and accounting officer, pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference  24