##### 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, 2009
 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 200Houston, Texas
    
    77057(Address of principal executive offices)
    
    (Zip Code)
 713) 787-0977
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 o þ




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##### 



CONSOLIDATED GRAPHICS, INC.
 FORM 10-Q FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2009
 INDEX
 Part I  Financial Information
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets at December 31, 2009 and March 31, 2009
    
    
    3Condensed Consolidated Income Statements for the Three and Nine Months Ended
December 31, 2009 and 2008
    
    
    4Condensed Consolidated Statement of Shareholders Equity for the Nine Months
Ended December 31, 2009
    
    
    5Condensed Consolidated Statements of Cash Flows for the Nine Months Ended
December 31, 2009 and 2008
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Forward-Looking Statements
    
    
    20Item 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
    
    
    21Signatures
    
    
    22Exhibit Index
    
    
    23Exhibit 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.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share data)
 (Unaudited)
 December 31,
    
    
    March 31,2009
    
    
    2009ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    8,070
    
    
    $
    9,762Accounts receivable, net
    
    
    193,269
    
    
    
    173,501Inventories
    
    
    49,782
    
    
    
    52,737Prepaid expenses
    
    
    11,399
    
    
    
    17,340Deferred income taxes
    
    
    17,861
    
    
    
    18,909Total current assets
    
    
    280,381
    
    
    
    272,249PROPERTY AND EQUIPMENT, net
    
    
    395,551
    
    
    
    430,519GOODWILL
    
    
    29,436
    
    
    
    29,436OTHER INTANGIBLE ASSETS, net
    
    
    22,636
    
    
    
    24,691OTHER ASSETS
    
    
    7,552
    
    
    
    8,313$
    735,556
    
    
    $
    765,208LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    22,505
    
    
    $
    27,026Accounts payable
    
    
    94,602
    
    
    
    48,519Accrued liabilities
    
    
    90,229
    
    
    
    86,718Income taxes payable
    
    
    385
    
    
    
    553Total current liabilities
    
    
    207,721
    
    
    
    162,816LONG-TERM DEBT, net of current portion
    
    
    198,564
    
    
    
    287,164OTHER LIABILITIES
    
    
    14,254
    
    
    
    14,794DEFERRED INCOME TAXES, net
    
    
    50,273
    
    
    
    49,970Total liabilities
    
    
    470,812
    
    
    
    514,744COMMITMENTS AND CONTINGENCIESSHAREHOLDERS EQUITYCommon stock, $.01 par value;
100,000,000 shares authorized;
11,167,667 and 11,152,875 issued
and outstanding
    
    
    111
    
    
    
    111Additional paid-in capital
    
    
    163,813
    
    
    
    163,131Retained earnings
    
    
    101,013
    
    
    
    87,806Accumulated other comprehensive loss
    
    
    (193
    )
    
    
    (584
    )Total shareholders equity
    
    
    264,744
    
    
    
    250,464$
    735,556
    
    
    $
    765,208
   3




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 CONDENSED CONSOLIDATED INCOME STATEMENTS
 (In thousands, except per share data)
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008SALES
    
    $
    276,374
    
    
    $
    315,815
    
    
    $
    753,861
    
    
    $
    897,960COST OF SALES
    
    
    209,770
    
    
    
    241,055
    
    
    
    586,985
    
    
    
    679,974Gross profit
    
    
    66,604
    
    
    
    74,760
    
    
    
    166,876
    
    
    
    217,986SELLING EXPENSES
    
    
    22,678
    
    
    
    26,153
    
    
    
    69,053
    
    
    
    81,336GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    22,117
    
    
    
    24,981
    
    
    
    65,756
    
    
    
    71,975GOODWILL IMPAIRMENT CHARGE
    
    
    
    
    
    
    62,524
    
    
    
    
    
    
    
    62,524LITIGATION AND OTHER CHARGES
    
    
    3,138
    
    
    
    17,000
    
    
    
    5,771
    
    
    
    17,000OTHER (INCOME) EXPENSE, net
    
    
    48
    
    
    
    (386
    )
    
    
    212
    
    
    
    (638
    )Operating income (loss)
    
    
    18,623
    
    
    
    (55,512
    )
    
    
    26,084
    
    
    
    (14,211
    )INTEREST EXPENSE, net
    
    
    2,616
    
    
    
    4,108
    
    
    
    7,447
    
    
    
    12,171Income (loss) before taxes
    
    
    16,007
    
    
    
    (59,620
    )
    
    
    18,637
    
    
    
    (26,382
    )INCOME TAX EXPENSE (BENEFIT)
    
    
    4,568
    
    
    
    (16,054
    )
    
    
    5,430
    
    
    
    (2,735
    )Net income (loss)
    
    $
    11,439
    
    
    $
    (43,566
    )
    
    $
    13,207
    
    
    $
    (23,647
    )BASIC EARNINGS (LOSS) PER SHARE
    
    $
    1.02
    
    
    $
    (3.91
    )
    
    $
    1.18
    
    
    $
    (2.12
    )DILUTED EARNINGS (LOSS) PER SHARE
    
    $
    1.00
    
    
    $
    (3.91
    )
    
    $
    1.16
    
    
    $
    (2.12
    )SHARES USED TO COMPUTE EARNINGS (LOSS)
PER SHAREBasic
    
    
    11,164
    
    
    
    11,147
    
    
    
    11,162
    
    
    
    11,135Diluted
    
    
    11,458
    
    
    
    11,147
    
    
    
    11,390
    
    
    
    11,135
   4




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CONSOLIDATED GRAPHICS, INC.
 
 CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
 (In thousands)
 (Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Loss
    
    
    TotalBALANCE, March 31, 2009
    
    
    11,153
    
    
    $
    111
    
    
    $
    163,131
    
    
    $
    87,806
    
    
    $
    (584
    )
    
    $
    250,464Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,207
    
    
    
    
    
    
    
    13,207Other comprehensive income -
currency translation adjustment, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    391
    
    
    
    391Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,598Exercise of stock options, including
tax benefit
    
    
    15
    
    
    
    
    
    
    
    111
    
    
    
    
    
    
    
    
    
    
    
    111Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    3,949
    
    
    
    
    
    
    
    
    
    
    
    3,949Purchase of remaining interest in a
consolidated subsidiary, net of tax
    
    
    
    
    
    
    
    
    
    
    (3,378
    )
    
    
    
    
    
    
    
    
    
    
    (3,378
    )BALANCE, December 31, 2009
    
    
    11,168
    
    
    $
    111
    
    
    $
    163,813
    
    
    $
    101,013
    
    
    $
    (193
    )
    
    $
    264,744
   5




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Nine Months EndedDecember 31,2009
    
    
    2008OPERATING ACTIVITIESNet income (loss)
    
    $
    13,207
    
    
    $
    (23,647
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activitiesDepreciation
    
    
    51,806
    
    
    
    46,380Amortization
    
    
    2,832
    
    
    
    3,176Bad debt expense
    
    
    488
    
    
    
    3,040Foreign currency (gain) loss
    
    
    (360
    )
    
    
    518Goodwill impairment charge
    
    
    
    
    
    
    62,524Litigation and other charges
    
    
    5,771
    
    
    
    17,000Deferred income taxes
    
    
    3,997
    
    
    
    (17,724
    )Share-based compensation expense
    
    
    3,949
    
    
    
    5,120Changes in assets and liabilitiesAccounts receivable
    
    
    (19,225
    )
    
    
    (2,651
    )Inventories
    
    
    3,733
    
    
    
    1,882Prepaid expenses
    
    
    5,968
    
    
    
    (3,111
    )Other assets
    
    
    766
    
    
    
    (446
    )Accounts payable and accrued liabilities
    
    
    48,006
    
    
    
    (3,977
    )Other liabilities
    
    
    (540
    )
    
    
    1,131Income taxes payable
    
    
    (144
    )
    
    
    (52
    )Net cash provided by operating activities
    
    
    120,254
    
    
    
    89,163INVESTING ACTIVITIESAcquisitions of businesses, net of cash acquired
    
    
    (2,289
    )
    
    
    (6,684
    )Purchases of property and equipment
    
    
    (21,686
    )
    
    
    (48,725
    )Proceeds from asset dispositions
    
    
    3,106
    
    
    
    1,284Net cash used in investing activities
    
    
    (20,869
    )
    
    
    (54,125
    )FINANCING ACTIVITIESProceeds from bank credit facilities
    
    
    94,462
    
    
    
    184,266Payments on bank credit facilities
    
    
    (164,511
    )
    
    
    (202,197
    )Proceeds from issuance of term equipment notes
    
    
    
    
    
    
    1,926Payments on term equipment notes and other debt
    
    
    (25,952
    )
    
    
    (17,696
    )Purchase of remaining interest in a consolidated subsidiary
    
    
    (5,500
    )
    
    
    Proceeds from exercise of stock options, including excess tax benefit
    
    
    111
    
    
    
    3,019Net cash used in financing activities
    
    
    (101,390
    )
    
    
    (30,682
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    313
    
    
    
    34NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (1,692
    )
    
    
    4,390CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    9,762
    
    
    
    15,131CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    8,070
    
    
    $
    19,521
   6




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CONSOLIDATED GRAPHICS, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (In thousands, except per share data and percentages)
 (Unaudited)
 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates
 Reclassification
 Cash and Cash Equivalents
 Revenue Recognition and Accounts Receivable
  7




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
 Earnings Per Share
 Three Months Ended
    
    
    Nine Months EndedDecember 31
    
    
    December  312009
    
    
    2008
    
    
    2009
    
    
    2008Numerator:Net income (loss)
    
    $
    11,439
    
    
    $
    (43,566
    )
    
    $
    13,207
    
    
    $
    (23,647
    )Denominator:Weighted average number of common shares outstanding
    
    
    11,164
    
    
    
    11,147
    
    
    
    11,162
    
    
    
    11,135Dilutive options and awards
    
    
    294
    
    
    
    
    
    
    
    228
    
    
    
    Diluted weighted average number of common shares
outstanding
    
    
    11,458
    
    
    
    11,147
    
    
    
    11,390
    
    
    
    11,135Net earnings (loss) per shareBasic
    
    $
    1.02
    
    
    $
    (3.91
    )
    
    $
    1.18
    
    
    $
    (2.12
    )Diluted
    
    $
    1.00
    
    
    $
    (3.91
    )
    
    $
    1.16
    
    
    $
    (2.12
    )
  Inventories
 December 31,
    
    
    March 31,2009
    
    
    2009Raw materials
    
    $
    19,654
    
    
    $
    22,587Work in progress
    
    
    24,554
    
    
    
    24,896Finished goods
    
    
    5,574
    
    
    
    5,254$
    49,782
    
    
    $
    52,737
 Goodwill and Long-Lived Assets
  8




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
    Litigation Charge
 Supplemental Cash Flow Information
  9




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
 Fair Value of Financial Instruments
 Foreign Currency
 Accumulated Other Comprehensive Loss
 Geographic Information
 Subsequent Events
 2. LONG  TERM DEBT
  December 31,
    
    
    March 31,2009
    
    
    2009Bank credit facilities
    
    $
    147,532
    
    
    $
    214,701Term equipment notes
    
    
    69,772
    
    
    
    90,980Other
    
    
    3,765
    
    
    
    8,509221,069
    
    
    
    314,190Lesscurrent portion
    
    
    (22,505
    )
    
    
    (27,026
    )$
    198,564
    
    
    $
    287,164
    10




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
      3. SHARE  BASED COMPENSATION
   11




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and percentages)
(Unaudited)
  Weighted-AverageStock Options
    
    Shares
    
    
    Exercise PriceOutstanding at March 31, 2009
    
    
    1,800
    
    
    $
    37.85Granted
    
    
    65
    
    
    
    17.38Exercised
    
    
    (5
    )
    
    
    17.16Forfeited or expired
    
    
    (10
    )
    
    
    27.08Outstanding at December 31, 2009 (a)
    
    
    1,850
    
    
    $
    37.24Exercisable at December 31, 2009 (a)
    
    
    1,141
    
    
    $
    33.40
 
 (a)
    
    Stock options outstanding as of December 31, 2009 have a weighted average
remaining contractual
life of 5.7 years. Based on the market value of the Companys common stock on
December 31, 2009, outstanding stock options have an aggregate intrinsic value of
$14,672 and exercisable stock options have an aggregate intrinsic value of
$10,811.  Restricted Stock Unit Awards
    
    SharesOutstanding at March 31, 2009
    
    
    30Granted
    
    
    25Vested and issued
    
    
    (10
    )Forfeited or expired
    
    
    Outstanding at December 31, 2009 (a)
    
    
    45
 
 (a)
    
    Restricted stock units outstanding as of December 31, 2009 have a weighted
average remaining
contractual term of 1.0 years and a total intrinsic value of $1,561.   12




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ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following managements discussion and analysis of financial condition and results of
operations should be read in conjunction with our unaudited condensed consolidated financial
statements and notes to unaudited condensed consolidated financial statements in this Quarterly
Report on Form 10-Q and our audited financial statements and notes thereto included in our Annual
Report on Form 10-K/A as of and for the year ended March 31, 2009. This discussion contains
forward-looking statements that reflect our current views with respect to future events and
financial performance. Our actual results may differ materially from those anticipated in these
forward-looking statements as a result of certain factors such as those referenced in the section
entitled Forward-Looking Statements below.
 Overview
 Our Organization
   Nature of Our Services
      13




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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 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 consolidation 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.
 Results of Operations
  Three Months
    
    
    Nine monthsEnded December 31
    
    
    Ended December 312009
    
    
    2008
    
    
    2009
    
    
    2008(In millions)
    
    
    (In millions)Sales
    
    $
    276.4
    
    
    $
    315.8
    
    
    $
    753.9
    
    
    $
    898.0Cost of sales
    
    
    209.8
    
    
    
    241.0
    
    
    
    587.0
    
    
    
    680.0Gross profit
    
    
    66.6
    
    
    
    74.8
    
    
    
    166.9
    
    
    
    218.0Selling expenses
    
    
    22.7
    
    
    
    26.2
    
    
    
    69.1
    
    
    
    81.3General and administrative expenses
    
    
    22.1
    
    
    
    25.0
    
    
    
    65.8
    
    
    
    72.0Goodwill impairment charge
    
    
    
    
    
    
    62.5
    
    
    
    
    
    
    
    62.5Litigation and other charges
    
    
    3.2
    
    
    
    17.0
    
    
    
    5.8
    
    
    
    17.0Other (income) expense, net
    
    
    
    
    
    
    (0.4
    )
    
    
    0.2
    
    
    
    (0.6
    )Operating income (loss)
    
    
    18.6
    
    
    
    (55.5
    )
    
    
    26.0
    
    
    
    (14.2
    )Interest expense, net
    
    
    2.6
    
    
    
    4.1
    
    
    
    7.4
    
    
    
    12.2Income (loss) before taxes
    
    
    16.0
    
    
    
    (59.6
    )
    
    
    18.6
    
    
    
    (26.4
    )Income tax expense (benefit)
    
    
    4.6
    
    
    
    (16.0
    )
    
    
    5.4
    
    
    
    (2.7
    )Net Income (loss)
    
    $
    11.4
    
    
    $
    (43.6
    )
    
    $
    13.2
    
    
    $
    (23.7
    )
  14




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As a Percentage
    
    
    As a Percentageof Sales
    
    
    of SalesThree Months
    
    
    Nine monthsEnded December 31
    
    
    Ended December 312009
    
    
    2008
    
    
    2009
    
    
    2008Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    75.9
    
    
    
    76.3
    
    
    
    77.9
    
    
    
    75.7Gross profit
    
    
    24.1
    
    
    
    23.7
    
    
    
    22.1
    
    
    
    24.3Selling expenses
    
    
    8.2
    
    
    
    8.3
    
    
    
    9.2
    
    
    
    9.1General and administrative expenses
    
    
    8.0
    
    
    
    7.9
    
    
    
    8.7
    
    
    
    8.0Goodwill impairment charge
    
    
    
    
    
    
    19.8
    
    
    
    
    
    
    
    7.0Litigation and other charges
    
    
    1.2
    
    
    
    5.4
    
    
    
    0.7
    
    
    
    1.9Other (income) expense, net
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )Operating income (loss)
    
    
    6.7
    
    
    
    (17.6
    )
    
    
    3.5
    
    
    
    (1.6
    )Interest expense, net
    
    
    0.9
    
    
    
    1.3
    
    
    
    1.0
    
    
    
    1.3Income (loss) before taxes
    
    
    5.8
    
    
    
    (18.9
    )
    
    
    2.5
    
    
    
    (2.9
    )Income tax expense (benefit)
    
    
    1.7
    
    
    
    (5.1
    )
    
    
    0.7
    
    
    
    (0.3
    )Net Income (loss)
    
    
    4.1
    %
    
    
    (13.8
    )%
    
    
    1.8
    %
    
    
    (2.6
    )%
 Comparative Analysis of Consolidated Income Statements for the Three Months Ended December 31, 2009
and 2008
         Comparative Analysis of Consolidated Income Statements for the Nine months Ended December 31, 2009
and 2008
   15




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##### Table of Contents



Liquidity and Capital Resources
 Sources and Uses of Cash
 :
 Nine months EndedDecember 312009
    
    
    2008(In millions)Net cash provided by operating activities
    
    $
    120.3
    
    
    $
    89.2Acquisitions of businesses
    
    
    (2.3
    )
    
    
    (6.7
    )Capital expenditures, net of proceeds from asset
dispositions
    
    
    (18.6
    )
    
    
    (47.4
    )Net payments under bank credit facilities
    
    
    (70.1
    )
    
    
    (17.9
    )Net payments on term equipment notes and other debt
    
    
    (26.0
    )
    
    
    (15.8
    )
  16




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##### Table of Contents



:
 December 31,
    
    
    March 31,2009
    
    
    2009(In millions)Cash and cash equivalents
    
    $
    8.1
    
    
    $
    9.8Working capital
    
    
    72.7
    
    
    
    109.4Total debt
    
    
    221.1
    
    
    
    314.2
   Debt Obligations
       17




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##### Table of Contents



Commitment and Contingencies
 Operating leases
 Letters of credit
 Insurance programs
 Critical Accounting Policies
  Revenue Recognition 
 Receivables, net of valuation allowance 
  18




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##### Table of Contents



Impairment of Goodwill 
 Impairment of long-lived assets
 Insurance liabilities
 Accounting for income taxes
 Accounting for acquisitions
 New Accounting Pronouncements
 Business Combinations,
 Revenue
Recognition,
  19




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##### Table of Contents



Forward-Looking Statements
 This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, in which the Company discusses factors it believes may affect its
performance or results in the future. Forward-looking statements are all statements other than
historical facts, such as statements regarding assumptions, expectations, beliefs and projections
about future events or conditions. You can generally identify forward-looking statements by the
appearance in such a statement of words like anticipate, believe, continue, could,
estimate, expect, intend, may, might, plan, potential, predict, forecast,
project, should or will or other comparable words or the negative of such words. The accuracy
of the Companys assumptions, expectations, beliefs and projections depends on events or conditions
that change over time and are thus susceptible to change based on actual experience, new
developments and known and unknown risks, including those created by general market conditions,
competition and the possibility that events may occur beyond the Companys control, which may limit
its ability to maintain or improve its operating results or financial condition or acquire
additional printing businesses. The Company gives no assurance that the forward-looking statements
will prove to be correct and does not undertake any duty to update them. The Companys actual
future results might differ from the forward-looking statements made in this Quarterly Report on
Form 10-Q for a variety of reasons, which include, continuing weakness in the economy, financial
stability of its customers, the sustained growth of its digital printing business, seasonality of
election-related business, its ability to adequately manage business expenses, including labor
costs, the unfavorable outcome of legal proceedings, the lack of or adequacy of insurance coverage
for its operations, the continued availability of raw materials at affordable prices, retention of
its key management and operating personnel, satisfactory labor relations, the potential for
additional goodwill impairment charges, its ability to identify new acquisition opportunities,
negotiate and finance such acquisitions on acceptable terms and successfully absorb and manage such
acquisitions in a timely and efficient manner, as well as other risks
described under the heading Risk Factors of our Annual
Report on 10-K/A and the risk factors and cautionary statements described in the other documents the Company files or furnishes from time to time with the
Securities and Exchange Commission, including its Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Should one or more of the foregoing
risks or uncertainties materialize, or should the Companys underlying assumptions, expectations,
beliefs or projections prove incorrect, the Companys actual results may vary materially from
those anticipated in its forward-looking statements, and its business, financial condition and
results of operations could be materially and adversely affected.
 
 ITEM 3.
    
    Quantitative and Qualitative Disclosure About Market Risk
  
 ITEM 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in 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
  
 ITEM 3.
    
    Defaults upon Senior Securities
  
 ITEM 4.
    
    Submission of Matters to a Vote of Security Holders
  
 ITEM 5.
    
    Other Information
 .
 
 ITEM 6.
    
    Exhibits
 *3.1
    
    
    Third Amendment and Restated By-Laws of the Company adopted effective
as of January 1, 2010 (Consolidated Graphics, Inc. 8-K (November 2,
2009), Exhibit 99.1).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.  21




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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:  February 3, 2010
    By:
    /s/ Jon C. BiroJon C. BiroExecutive Vice President and
Chief Financial and Accounting Officer  22




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##### Table of Contents



Exhibit Index
 *3.1
    
    
    Third Amendment and Restated By-Laws of the Company adopted effective
as of January 1, 2010 (Consolidated Graphics, Inc. 8-K (November 2,
2009), Exhibit 99.1).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.  23