##### 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 September 30, 2008
 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
  þ o o o
  o þ




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##### 



CONSOLIDATED GRAPHICS, INC.
 FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008
 INDEX
 Part I  Financial Information
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets at September 30, 2008 and March 31, 2008
    
    
    3Condensed Consolidated Income Statements for the Three and Six Months Ended September 30, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Shareholders Equity for the Six Months Ended September 30, 2008
    
    
    5Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2008 and 2007
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Forward-Looking Statements
    
    
    18Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
    
    18Item 4. Controls and Procedures
    
    
    19Part II  Other Information
    
    
    20Item 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    20Item 3. Defaults upon Senior Securities
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    20Item 5. Other Information
    
    
    20Item 6. Exhibits
    
    
    20Signatures
    
    
    21Exhibit Index
    
    
    22Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I  FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 CONSOLIDATED GRAPHICS, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share data)
(Unaudited)
 September 30,
    
    
    March 31,2008
    
    
    2008ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    15,548
    
    
    $
    15,131Accounts receivable, net
    
    
    211,214
    
    
    
    209,000Inventories
    
    
    69,221
    
    
    
    61,511Prepaid expenses
    
    
    13,892
    
    
    
    7,127Deferred income taxes
    
    
    9,730
    
    
    
    9,353Total current assets
    
    
    319,605
    
    
    
    302,122PROPERTY AND EQUIPMENT, net
    
    
    438,603
    
    
    
    421,347GOODWILL AND OTHER INTANGIBLE ASSETS, net
    
    
    139,275
    
    
    
    141,381OTHER ASSETS
    
    
    8,181
    
    
    
    7,813$
    905,664
    
    
    $
    872,663LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    28,197
    
    
    $
    23,252Accounts payable
    
    
    66,770
    
    
    
    56,948Accrued liabilities
    
    
    83,371
    
    
    
    83,488Income taxes payable
    
    
    154
    
    
    
    184Total current liabilities
    
    
    178,492
    
    
    
    163,872LONG-TERM DEBT, net of current portion
    
    
    350,300
    
    
    
    362,448OTHER LIABILITIES
    
    
    15,478
    
    
    
    13,655DEFERRED INCOME TAXES
    
    
    55,344
    
    
    
    52,895COMMITMENTS AND CONTINGENICESSHAREHOLDERS EQUITYCommon stock, $.01 par value;
100,000,000 shares authorized;
11,147,250 and 11,079,011 issued and
outstanding
    
    
    111
    
    
    
    111Additional paid-in capital
    
    
    159,618
    
    
    
    153,204Retained earnings
    
    
    147,295
    
    
    
    127,376Accumulated other comprehensive loss
    
    
    (974
    )
    
    
    (898
    )Total shareholders equity
    
    
    306,050
    
    
    
    279,793$
    905,664
    
    
    $
    872,663
   3




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CONSOLIDATED GRAPHICS, INC.
 
 CONDENSED CONSOLIDATED INCOME STATEMENTS
 (In thousands, except per share data)
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedSeptember 30
    
    
    September 302008
    
    
    2007
    
    
    2008
    
    
    2007SALES
    
    $
    296,951
    
    
    $
    259,666
    
    
    $
    582,145
    
    
    $
    518,312COST OF SALES
    
    
    224,365
    
    
    
    193,402
    
    
    
    438,919
    
    
    
    383,871Gross profit
    
    
    72,586
    
    
    
    66,264
    
    
    
    143,226
    
    
    
    134,441SELLING EXPENSES
    
    
    26,779
    
    
    
    25,231
    
    
    
    55,183
    
    
    
    51,665GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    24,717
    
    
    
    19,084
    
    
    
    46,994
    
    
    
    38,396OTHER (INCOME) EXPENSE, net
    
    
    (257
    )
    
    
    (1,230
    )
    
    
    (252
    )
    
    
    (3,580
    )Operating income
    
    
    21,347
    
    
    
    23,179
    
    
    
    41,301
    
    
    
    47,960INTEREST EXPENSE, net
    
    
    3,852
    
    
    
    2,449
    
    
    
    8,063
    
    
    
    4,343Income before taxes
    
    
    17,495
    
    
    
    20,730
    
    
    
    33,238
    
    
    
    43,617INCOME TAXES
    
    
    7,192
    
    
    
    7,444
    
    
    
    13,319
    
    
    
    16,774Net income
    
    $
    10,303
    
    
    $
    13,286
    
    
    $
    19,919
    
    
    $
    26,843BASIC EARNINGS PER SHARE
    
    $
    .92
    
    
    $
    1.01
    
    
    $
    1.79
    
    
    $
    2.00DILUTED EARNINGS PER SHARE
    
    $
    .90
    
    
    $
    .98
    
    
    $
    1.74
    
    
    $
    1.94SHARES USED TO COMPUTE EARNINGS
PER SHAREBasic
    
    
    11,147
    
    
    
    13,110
    
    
    
    11,129
    
    
    
    13,413Diluted
    
    
    11,430
    
    
    
    13,502
    
    
    
    11,445
    
    
    
    13,826
   4




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(In thousands)
(Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Loss
    
    
    TotalBALANCE, March 31, 2008
    
    
    11,079
    
    
    $
    111
    
    
    $
    153,204
    
    
    $
    127,376
    
    
    $
    (898
    )
    
    $
    279,793Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,919
    
    
    
    
    
    
    
    19,919Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76
    )
    
    
    (76
    )Total Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,843Exercise of stock options,
including tax benefit
    
    
    68
    
    
    
    
    
    
    
    3,019
    
    
    
    
    
    
    
    
    
    
    
    3,019Compensation expense
    
    
    
    
    
    
    
    
    
    
    3,395
    
    
    
    
    
    
    
    
    
    
    
    3,395BALANCE, September 30, 2008
    
    
    11,147
    
    
    $
    111
    
    
    $
    159,618
    
    
    $
    147,295
    
    
    $
    (974
    )
    
    $
    306,050
   5




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CONSOLIDATED GRAPHICS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Six Months EndedSeptember 302008
    
    
    2007OPERATING ACTIVITIESNet income
    
    $
    19,919
    
    
    $
    26,843Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation and amortization
    
    
    32,477
    
    
    
    26,011Deferred income taxes
    
    
    2,004
    
    
    
    (657
    )Share-based compensation expense
    
    
    3,395
    
    
    
    1,520Non-cash currency gain
    
    
    9
    
    
    
    (4,447
    )Changes in assets and liabilities, net of effects of acquisitionsAccounts receivable, net
    
    
    (2,303
    )
    
    
    (1,845
    )Inventories
    
    
    (7,726
    )
    
    
    (6,697
    )Prepaid expenses
    
    
    (7,005
    )
    
    
    672Other assets
    
    
    (369
    )
    
    
    (52
    )Accounts payable and accrued liabilities
    
    
    2,085
    
    
    
    476Other liabilities
    
    
    1,823
    
    
    
    Income taxes payable
    
    
    (30
    )
    
    
    (129
    )Net cash provided by operating activities
    
    
    44,279
    
    
    
    41,695INVESTING ACTIVITIESAcquisitions of businesses, net of cash acquired
    
    
    (6,718
    )
    
    
    (6,256
    )Purchases of property and equipment
    
    
    (27,290
    )
    
    
    (15,818
    )Proceeds from asset dispositions
    
    
    1,188
    
    
    
    1,458Net cash used in investing activities
    
    
    (32,820
    )
    
    
    (20,616
    )FINANCING ACTIVITIESProceeds from bank credit facilities
    
    
    86,146
    
    
    
    123,175Payments on bank credit facilities
    
    
    (90,991
    )
    
    
    (53,567
    )Proceeds from issuance of term equipment notes
    
    
    1,926
    
    
    
    12,373Payments on term equipment notes and other debt
    
    
    (11,181
    )
    
    
    (6,556
    )Payments to repurchase and retire common stock
    
    
    
    
    
    
    (100,063
    )Proceeds from exercise of stock options, including excess tax benefit
    
    
    3,019
    
    
    
    2,367Net cash used in financing activities
    
    
    (11,081
    )
    
    
    (22,271
    )Effect of exchange rate changes on cash
    
    
    39
    
    
    
    298NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    417
    
    
    
    (894
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    15,131
    
    
    
    12,043CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    15,548
    
    
    $
    11,149
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CONSOLIDATED GRAPHICS, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (In thousands, except share, per share data and percentages)
(Unaudited)
 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates
 Revenue Recognition
 Earnings Per Share
 Inventories
 September 30,
    
    
    March 31,2008
    
    
    2008Raw materials
    
    $
    26,189
    
    
    $
    25,983Work in progress
    
    
    37,265
    
    
    
    29,447Finished goods
    
    
    5,767
    
    
    
    6,081$
    69,221
    
    
    $
    61,511
 Goodwill and Other Intangible Assets, net Business Combinations,
  7




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share, per share data and percentages)
(Unaudited)
 Supplemental Cash Flow Information
 Foreign Currency
 Accumulated Other Comprehensive Loss
 2. ACQUISITIONS
  3. LONG  TERM DEBT
  September 30,
    
    
    March 31,2008
    
    
    2008Bank credit facilities
    
    $
    266,659
    
    
    $
    271,868Term equipment notes
    
    
    102,673
    
    
    
    104,505Other
    
    
    9,165
    
    
    
    9,327378,497
    
    
    
    385,700Lesscurrent portion
    
    
    (28,197
    )
    
    
    (23,252
    )$
    350,300
    
    
    $
    362,448
     8




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share, per share data and percentages)
(Unaudited)
    4. SHARE  BASED COMPENSATION
  Share-Based Payment,
   9




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CONSOLIDATED GRAPHICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share, per share data and percentages)
(Unaudited)
  Weighted-Average ExerciseStock Options
    
    Shares
    
    
    PriceOutstanding at March 31, 2008
    
    
    1,457,477
    
    
    $
    36.93Granted
    
    
    522,500
    
    
    
    56.78Exercised
    
    
    (68,239
    )
    
    
    39.48Forfeited or expired
    
    
    (12,677
    )
    
    
    53.02Outstanding at September 30, 2008 (a)
    
    
    1,899,061Exercisable at September 30, 2008 (a)
    
    
    1,218,675
 
 (a)
    
    Stock options outstanding as of September 30, 2008 have a weighted average remaining
contractual life of 5.5 years. Based on the market value of the Companys common stock on September 30,
2008, outstanding stock options have an aggregate intrinsic value of $7,933 and
exercisable stock options have an aggregate intrinsic value of $7,933.  Restricted Stock Unit Awards
    
    SharesOutstanding at March 31, 2008
    
    
    22,500Granted
    
    
    12,500Vested and issued
    
    
    Forfeited or expired
    
    
    Outstanding at September 30, 2008 (a)
    
    
    35,000Vested but not issued at September 30, 2008 (a)
    
    
    5,625
 
 (a)
    
    Restricted stock units outstanding as of September 30, 2008 have a weighted average
remaining contractual term of 1.3 years and a total intrinsic value of $1,062. Pursuant to the terms of the applicable restricted
stock unit award agreements, restricted stock units covering
5,625 shares of Company common stock have vested but are not issuable to the participant until March 1, 2009. 5. INCOME TAXES
 Accounting for Uncertainty in
Income Taxes  an Interpretation of FASB Statement No. 109
     10




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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 as of and for the year ended March 31, 2008. 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
      11




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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 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 Ended
    
    
    Six Months EndedSeptember 30
    
    
    September 302008
    
    
    2007
    
    
    2008
    
    
    2007(In millions)
    
    
    (In millions)Sales
    
    $
    297.0
    
    
    $
    259.7
    
    
    $
    582.1
    
    
    $
    518.3Cost of sales
    
    
    224.4
    
    
    
    193.4
    
    
    
    438.9
    
    
    
    383.9Gross profit
    
    
    72.6
    
    
    
    66.3
    
    
    
    143.2
    
    
    
    134.4Selling expenses
    
    
    26.8
    
    
    
    25.2
    
    
    
    55.2
    
    
    
    51.7General and administrative expenses
    
    
    24.7
    
    
    
    19.1
    
    
    
    47.0
    
    
    
    38.4Other (income) expense, net
    
    
    (0.3
    )
    
    
    (1.2
    )
    
    
    (0.3
    )
    
    
    (3.6
    )Operating income
    
    
    21.4
    
    
    
    23.2
    
    
    
    41.3
    
    
    
    47.9Interest expense, net
    
    
    3.9
    
    
    
    2.5
    
    
    
    8.1
    
    
    
    4.3Income before taxes
    
    
    17.5
    
    
    
    20.7
    
    
    
    33.2
    
    
    
    43.6Income taxes
    
    
    7.2
    
    
    
    7.4
    
    
    
    13.3
    
    
    
    16.8Net Income
    
    $
    10.3
    
    
    $
    13.3
    
    
    $
    19.9
    
    
    $
    26.8
  12




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As a Percentage
    
    
    As a Percentageof Sales
    
    
    of SalesThree Months Ended
    
    
    Six Months EndedSeptember 30
    
    
    September 302008
    
    
    2007
    
    
    2008
    
    
    2007Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    75.6
    
    
    
    74.5
    
    
    
    75.4
    
    
    
    74.1Gross profit
    
    
    24.4
    
    
    
    25.5
    
    
    
    24.6
    
    
    
    25.9Selling expenses
    
    
    9.0
    
    
    
    9.7
    
    
    
    9.5
    
    
    
    10.0General and administrative expenses
    
    
    8.3
    
    
    
    7.4
    
    
    
    8.0
    
    
    
    7.4Other (income) expense, net
    
    
    (0.1
    )
    
    
    (0.5
    )
    
    
    
    
    
    
    (0.7
    )Operating income
    
    
    7.2
    
    
    
    8.9
    
    
    
    7.1
    
    
    
    9.2Interest expense, net
    
    
    1.3
    
    
    
    0.9
    
    
    
    1.4
    
    
    
    0.8Income before taxes
    
    
    5.9
    
    
    
    8.0
    
    
    
    5.7
    
    
    
    8.4Income taxes
    
    
    2.4
    
    
    
    2.9
    
    
    
    2.3
    
    
    
    3.2Net Income
    
    
    3.5
    %
    
    
    5.1
    %
    
    
    3.4
    %
    
    
    5.2
    %
   Three Months Ended
    
    
    Six Months EndedSeptember 30, 2008
    
    
    September 30, 2008$
    
    
    %
    
    
    $
    
    
    %(In millions)

    
    
    
    
    

    
    (In millions)Acquisitions(1)
    
    $
    34.7
    
    
    
    13.4
    %
    
    $
    66.6
    
    
    
    12.9
    %Election-related
    
    
    6.9
    
    
    
    2.7
    
    
    
    11.5
    
    
    
    2.2Other internal
    
    
    (4.3
    )
    
    
    (1.7
    )
    
    
    (14.3
    )
    
    
    (2.8
    )Total
    
    $
    37.3
    
    
    
    14.4
    %
    
    $
    63.8
    
    
    
    12.3
    %
 
 (1)
    
    Includes the acquisitions of The Pikes Peak Lithographing Company, The
Cyril-Scott Company and PBM Graphics, Inc. Comparative Analysis of Consolidated Income Statements for the Three Months Ended September 30,
2008 and 2007
     13




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Comparative Analysis of Consolidated Income Statements for the Six Months Ended September 30, 2008
and 2007
         14




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Liquidity and Capital Resources
 Sources and Uses of Cash
 Item 1. Financial Statements:
 Six Months EndedSeptember 302008
    
    
    2007(In millions)Net cash provided by operating activities
    
    $
    29.2
    
    
    $
    41.7Acquisitions of businesses
    
    
    (6.7
    )
    
    
    (6.3
    )Capital expenditures, net of proceeds from asset dispositions
    
    
    (26.1
    )
    
    
    (14.4
    )Net proceeds (payments) under bank credit facilities
    
    
    (4.8
    )
    
    
    69.6Net proceeds (payments) on term equipment notes and other debt
    
    
    (9.3
    )
    
    
    5.8Payments to repurchase and retire common stock
    
    
    
    
    
    
    (100.1
    )Proceeds from exercise of stock options
    
    
    3.0
    
    
    
    2.4
 Item 1. Financial Statements:
 September 30,
    
    
    March 31,2008
    
    
    2008(In millions)Cash and cash equivalents
    
    $
    15.5
    
    
    $
    15.1Working capital, inclusive of cash and cash equivalents
    
    
    141.1
    
    
    
    138.3Total debt obligations
    
    
    378.5
    
    
    
    385.7
   Debt Obligations
     15




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Commitments and Contingenices
 Operating leases
 Letters of credit
 Insurance programs
 Critical Accounting Policies
   16




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##### Table of Contents



Revenue Recognition 
 Receivables, net of valuation allowance 
 Goodwill and other intangible assets 
 Impairment of long-lived assets
 Insurance liabilities 
 Accounting for income taxes
 Accounting for acquisitions 
  17




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##### Table of Contents



New Accounting Pronouncements
 Fair Value Measurement
 The Fair Value Option for Financial Assets and
Financial Liabilities,
 FAS No. 141 (revised 2007) Business Combinations
 
 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 depend 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, the growth
of its digital printing business, seasonality of election related business, its ability to adequately manage expenses,
including labor costs, the continued availability of raw materials at affordable prices, retention
of its key management and operating personnel, satisfactory labor relations, 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 this Quarterly Report on Form 10-Q 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 most
recently filed Annual Report on Form 10-K 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
   18




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ITEM 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
   19




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CONSOLIDATED GRAPHICS, INC.
 
 PART II  OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM
1A. Risk Factors
 Except for the risk factors below, there have been no material changes in our assessment of the risk factors
previously disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 in response to Item 1A
to Part 1 of Form 10-K. Please refer to the additional risk factors set forth in such Annual Report. Negative worldwide economic conditions could result in a decrease in demand for printing services and potentially
hinder our ability to collect amounts owed by customers, therefore, adversely impacting our business and results of
operations. If the current worldwide economic downturn continues, including the negative conditions in the global credit
markets, our customers may have difficulty obtaining credit to fund their operations. Additionally, many of our direct
and indirect customers may delay or reduce their purchases of printed materials. These conditions could cause a
reduction in our revenue, increased price competition and/or increased operating costs, which could adversely affect
our business, results of operations and financial condition. Additionally, we could suffer significant losses if the
economic downturn causes customers whom we have offered trade credit to fail or otherwise not have the ability to pay
us. A significant write-off of accounts receivable due to uncollectibility would have a negative impact on our
financial results. 
 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
    
    
    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
    
    
    Fourth Amendment to the Credit Agreement among the Company and JP Morgan Chase Bank, N.A., as
Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, dated as of August
4, 2008 (Consolidated Graphics, Inc. Form 8-K (August 8,
2008), Exhibit 10.1).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  20




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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:  November 5, 2008
    By:
    /s/ Jon C. BiroJon C. BiroExecutive Vice President and

Chief Financial and Accounting Officer  21




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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
    
    
    Fourth Amendment to the Credit Agreement among the Company and JP Morgan Chase Bank, N.A., as
Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, dated as of August
4, 2008 (Consolidated Graphics, Inc. Form 8-K (August 8,
2008), Exhibit 10.1).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  22