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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-K
 (MARK ONE)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 FOR THE FISCAL YEAR ENDED MARCH 31, 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
(STATE OR OTHER JURISDICTION 
OF INCORPORATION OR ORGANIZATION)
    
    76-0190827
(IRS EMPLOYER IDENTIFICATION NO.)5858 WESTHEIMER, SUITE 200HOUSTON, TEXAS
    
    77057(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
    
    (ZIP CODE)
 (713) 787-0977
 Securities registered pursuant to Section 12(b) of the Act:COMMON STOCK, PAR VALUE $.01 PER SHARE
    
    NEW YORK STOCK EXCHANGE(TITLE OF CLASS)
    
    (NAME OF EACH EXCHANGEON WHICH REGISTERED)Securities registered pursuant to Section 12(g) of the Act:NONE
 
 þ o
 o þ
 þ o
 o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o
 o þ
  COMMON STOCK, $.01 PAR VALUE$744,320,446
  COMMON STOCK, $.01 PAR VALUE11,081,158
 DOCUMENTS INCORPORATED BY REFERENCE




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##### 



CONSOLIDATED GRAPHICS, INC.
FORM 10-K
FOR THE YEAR ENDED MARCH 31, 2008
 INDEX
 Forward Looking Statements
    
    
    3PART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    9Item 1B. Unresolved Staff Comments
    
    
    12Item 2. Properties
    
    
    12Item 3. Legal Proceedings
    
    
    12Item 4. Submission of Matters to a Vote of Security Holders
    
    
    12PART IIItem 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
    
    
    13Item 6. Selected Consolidated Financial Data
    
    
    14Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 7A. Quantitative and Qualitative Disclosure About Market Risk
    
    
    22Item 8. Financial Statements and Supplementary Data
    
    
    23Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    43Item 9A. Controls and Procedures
    
    
    43Item 9B. Other Information
    
    
    43PART IIIItem 10. Directors and Executive Officers of the Registrant
    
    
    44Item 11. Executive Compensation
    
    
    44Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
    
    
    44Item 13. Certain Relationships and Related Transactions
    
    
    44Item 14. Principal Accountant Fees and Services
    
    
    44PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    44Signatures
    
    
    47Exhibit Index
    
    
    48Exhibit 10.1Exhibit 10.8Exhibit 10.13Exhibit 10.14Exhibit 10.15Exhibit 21Exhibit 23Exhibit 24Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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Forward Looking Statements
 This Annual Report on Form 10-K 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 Annual Report on Form 10-K for a variety of reasons, which
include, stability in the economy and reasonable growth in the demand for its products, the
continued availability of raw materials at affordable prices and 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, as well as other risks described under the heading Risk Factors of
this Annual Report on Form 10-K . You should pay particular attention to and review the important
risk factors and cautionary statements described in the Risk Factors section, as well as 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 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.
 
 PART I
 
 Item 1. Business
 In this annual report, the words Consolidated Graphics, CGX, the Company, we, our
and us refer to Consolidated Graphics, Inc, including our consolidated subsidiaries, unless the
context indicates otherwise. Our fiscal year ends on March 31st.
 Company Overview
     3




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www.cgx.com
 Industry Background
       4




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Competition
   
    
    Extent and quality of customer service, including ability to meet customer
deadlines
    
    Quality of finished materials
    
    Cost structure and sales pricing strategy
    
    Financial strength
  Business Strategy
  Internal Sales Growth
 
    
    Aggressively pursuing new business opportunities and experienced sales
professionals to gain market share and strengthen our competitive position going
forward.
    
    Continuing to invest in new equipment and technology that enables us to provide
increasingly higher levels of service and a broader range of capabilities.
    
    Capitalizing on our national presence and wide range of capabilities, including
our technology related offerings (see Printing OperationsPrint-Related Services
below) to pursue sole or preferred-source opportunities with national accounts.
    
    Providing information and training to our sales professionals (688 currently)
to ensure they are knowledgeable about the complete range of services and capabilities
we offer.
 Disciplined Acquisition Program
 Cost Savings
  5




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Best Practices/Benchmarking
 Leadership Development
 Printing Operations
  Commercial Printing Services
      6




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Print-related Services
   
    
    StoreFrontA fully customizable online system with an array of tools that streamline the
purchase, management and distribution of the customers entire range of marketing
materials
    
    CrossMediaA unique capability that enables the customer to create highly engaging personalized
one-to-one direct mail campaigns designed to increase response rates
    
    Digital asset managementA powerful online system that provides the customer limitless means to organize,
protect and facilitate proper use of their vast library of digital assets
    
    Digital print solutionsProvides print on demand capabilities giving the customer the flexibility to respond
to market changes and manage inventories more efficiently. Our distribute and print
system receives orders electronically, prepares them for production and distributes
them across our network of digital presses across the U.S., reducing time to market
and delivering product more efficiently.
   Sales and Marketing
    7




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Customers
   Suppliers
    8




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Employees
  Government Regulation and Environmental Matters
  
 Item 1A. Risk Factors
  Fluctuations in the costs of paper, ink, energy, postage and other raw materials may adversely
impact us .
  We may be adversely affected by a decline in the availability of raw materials.
  The financial condition of our customers may deteriorate and could affect payment of amounts owed
to us.
   9




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We may not be able to improve our operating efficiencies rapidly enough to meet market conditions.
  We may be unable to successfully integrate the operations of acquired businesses and may not
achieve the cost savings and increased revenues anticipated as a result of these acquisitions.
  We may be unable to hire and retain talented employees, including senior management.
  Costs to provide health care and certain other benefits to our employees may increase.
  Declines in general economic conditions or acts of war and terrorism may adversely impact our
business.
  The highly competitive market for our services may create adverse pricing pressures.
  Decline in preference for using or receiving printed materials in lieu of alternative mediums may
adversely affect our business.
   10




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Changes in the laws and regulations to which we are subject may increase our costs.
  Advances in technology may reduce barriers to entry and may result in increased competition.
  We rely on our information technology infrastructure and our management information systems for
many enterprise-critical functions. If our information systems fail to adequately perform these
functions or if we experience an interruption in their operation, our business and results of
operations could be adversely affected.
  We generally do not have long-term customer agreements.
  We depend on good labor relations.
  We rely on the ability to borrow cash to make acquisitions, fund capital expenditures and provide
working capital to the extent such cash needs exceed our internally generated cash flow.
  A decline in expected profitability of the Company or individual reporting units of the Company
could result in the impairment of assets, including goodwill, other long-lived assets and deferred
tax assets.
   11




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
   12




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
  Fiscal 2008Quarter Ended:
    
    High
    
    
    LowJune 30, 2007
    
    
    80.58
    
    
    
    67.75September 30, 2007
    
    
    75.11
    
    
    
    48.65December 31, 2007
    
    
    71.53
    
    
    
    45.60March 31, 2008
    
    
    58.18
    
    
    
    38.49
 Fiscal 2007Quarter Ended:
    
    High
    
    
    LowJune 30, 2006
    
    
    57.44
    
    
    
    48.20September 30, 2006
    
    
    64.50
    
    
    
    47.53December 31, 2006
    
    
    64.17
    
    
    
    55.39March 31, 2007
    
    
    77.00
    
    
    
    57.26
   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  January 1, 2008
through 
January
31, 2008
    
    
    268,501
    
    
    $
    44.60
    
    
    
    268,501
    
    
    
    Repurchases from
February 1, 2008
through February
29, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repurchases from March 1, 2008
through 
March
31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Quarterly Total
    
    
    268,501
    
    
    $
    44.60
    
    
    
    268,501Fiscal 2008 Total
    
    
    2,684,167
    
    
    $
    55.92
    
    
    
    2,684,167
    
    
    
    
    13




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Item 6. Selected Consolidated Financial Data
 Item 8. Financial Statements and Supplementary Data
 Year Ended March 312008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands, except per share data)Income Statement DataSales
    
    $
    1,095,388
    
    
    $
    1,006,186
    
    
    $
    879,023
    
    
    $
    779,016
    
    
    $
    708,060Cost of sales
    
    
    812,401
    
    
    
    736,996
    
    
    
    661,560
    
    
    
    586,615
    
    
    
    540,080Gross profit
    
    
    282,987
    
    
    
    269,190
    
    
    
    217,463
    
    
    
    192,401
    
    
    
    167,980Selling expenses
    
    
    106,952
    
    
    
    101,649
    
    
    
    91,266
    
    
    
    81,456
    
    
    
    76,189General and administrative expenses
    
    
    78,804
    
    
    
    69,223
    
    
    
    58,993
    
    
    
    54,116
    
    
    
    51,887Other (income) expense, net
    
    
    (3,064
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Goodwill impairment(1)
    
    
    
    
    
    
    11,533
    
    
    
    
    
    
    
    
    
    
    
    Operating income
    
    
    100,295
    
    
    
    86,785
    
    
    
    67,204
    
    
    
    56,829
    
    
    
    39,904Interest expense, net
    
    
    12,020
    
    
    
    6,702
    
    
    
    5,514
    
    
    
    5,107
    
    
    
    7,216Income before income taxes
    
    
    88,275
    
    
    
    80,083
    
    
    
    61,690
    
    
    
    51,722
    
    
    
    32,688Income taxes
    
    
    28,951
    
    
    
    29,342
    
    
    
    23,192
    
    
    
    19,000
    
    
    
    12,691Net income
    
    $
    59,324
    
    
    $
    50,741
    
    
    $
    38,498
    
    
    $
    32,722
    
    
    $
    19,997Earnings per shareBasic
    
    $
    4.76
    
    
    $
    3.74
    
    
    $
    2.81
    
    
    $
    2.40
    
    
    $
    1.49Diluted
    
    $
    4.63
    
    
    $
    3.65
    
    
    $
    2.73
    
    
    $
    2.31
    
    
    $
    1.44
 March 312008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands)Balance Sheet DataWorking capital
    
    $
    138,250
    
    
    $
    100,153
    
    
    $
    67,474
    
    
    $
    64,225
    
    
    $
    47,488Property and equipment, net
    
    
    421,347
    
    
    
    354,156
    
    
    
    297,308
    
    
    
    297,600
    
    
    
    272,801Total assets
    
    
    872,663
    
    
    
    723,969
    
    
    
    611,313
    
    
    
    590,229
    
    
    
    526,209Long-term debt, net of current portion
    
    
    362,448
    
    
    
    142,144
    
    
    
    90,678
    
    
    
    111,895
    
    
    
    98,265Total shareholders equity
    
    
    279,793
    
    
    
    365,536
    
    
    
    318,946
    
    
    
    283,332
    
    
    
    245,612
 
 (1)
    
    Reflects the impairment of goodwill value as of March 31, 2007 under Statement of Financial
Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets.  14




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Item 7. 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 historical consolidated financial statements and
their notes included elsewhere in this Annual Report on Form 10-K . 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 Forward
Looking Statements.
 Overview
   
    
    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.
     15




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Results of Operations
  As a Percentage of SalesYear Ended March 31
    
    
    Year Ended March 312008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006(In millions)Sales
    
    $
    1,095.4
    
    
    $
    1,006.2
    
    
    $
    879.0
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    812.4
    
    
    
    737.0
    
    
    
    661.5
    
    
    
    74.2
    
    
    
    73.2
    
    
    
    75.3Gross profit
    
    
    283.0
    
    
    
    269.2
    
    
    
    217.5
    
    
    
    25.8
    
    
    
    26.8
    
    
    
    24.7Selling expenses
    
    
    107.0
    
    
    
    101.7
    
    
    
    91.3
    
    
    
    9.8
    
    
    
    10.1
    
    
    
    10.4General and administrative expenses
    
    
    78.8
    
    
    
    69.2
    
    
    
    59.0
    
    
    
    7.2
    
    
    
    6.9
    
    
    
    6.7Other (income) expense, net
    
    
    (3.1
    )
    
    
    
    
    
    
    
    
    
    
    (0.3
    )
    
    
    
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    11.5
    
    
    
    
    
    
    
    
    
    
    
    1.2
    
    
    
    Operating income
    
    
    100.3
    
    
    
    86.8
    
    
    
    67.2
    
    
    
    9.1
    
    
    
    8.6
    
    
    
    7.6Interest expense, net
    
    
    12.0
    
    
    
    6.7
    
    
    
    5.5
    
    
    
    1.1
    
    
    
    0.7
    
    
    
    0.6Income before taxes
    
    
    88.3
    
    
    
    80.1
    
    
    
    61.7
    
    
    
    8.0
    
    
    
    7.9
    
    
    
    7.0Income taxes
    
    
    29.0
    
    
    
    29.4
    
    
    
    23.2
    
    
    
    2.6
    
    
    
    2.9
    
    
    
    2.6Net income
    
    $
    59.3
    
    
    $
    50.7
    
    
    $
    38.5
    
    
    
    5.4
    %
    
    
    5.0
    %
    
    
    4.4
    %
  Analysis of Consolidated Income Statements for Fiscal 2008 as Compared to Fiscal 2007
     16




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Analysis of Consolidated Income Statements for Fiscal 2007 as Compared to Fiscal 2006
     2.
   17




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Liquidity and Capital Resources
 Sources and Uses of Cash
 Item 8. Financial
Statements and Supplementary Data:
 Year Ended March 312008
    
    
    2007
    
    
    2006(In millions)Net cash provided by operating activities
    
    $
    110.2
    
    
    $
    72.8
    
    
    $
    79.2Acquisitions of businesses
    
    
    (97.3
    )
    
    
    (67.6
    )
    
    
    (28.0
    )Capital expenditures, net of proceeds from asset dispositions(1)
    
    
    (39.4
    )
    
    
    (39.1
    )
    
    
    (13.9
    )Net proceeds (payments) under bank credit facilities
    
    
    177.4
    
    
    
    51.1
    
    
    
    (27.1
    )Net payments on term equipment notes and other debt
    
    
    (1.1
    )
    
    
    (3.1
    )
    
    
    (8.8
    )Payments to repurchase and retire common stock
    
    
    (150.0
    )
    
    
    (24.7
    )
    
    
    (6.7
    )Proceeds from exercise of stock options
    
    
    2.9
    
    
    
    17.6
    
    
    
    2.5
 
 (1)
    
    Excludes capital expenditures of $41 million in fiscal 2008, $5.1 million in
fiscal 2007, and $16.5 million in fiscal 2006, which were directly financed and/or
accrued as a current liability. Item 8. Financial Statements and Supplementary Data:
 March 312008
    
    
    2007
    
    
    2006(In millions)Cash and cash equivalents
    
    $
    15.1
    
    
    $
    12.0
    
    
    $
    5.0Working capital, inclusive of cash and cash equivalents
    
    
    138.3
    
    
    
    100.2
    
    
    
    67.5Total debt
    
    
    385.7
    
    
    
    154.6
    
    
    
    101.5
     18




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Debt Obligations
       19




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Contractual Obligations and Other Commitments
  Less Than
    
    
    1 - 3
    
    
    3 - 5
    
    
    More ThanTotal
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsDebt obligations
    
    $
    385.7
    
    
    $
    23.3
    
    
    $
    46.4
    
    
    $
    304.4
    
    
    $
    11.6Operating lease obligations
    
    
    97.9
    
    
    
    18.7
    
    
    
    27.6
    
    
    
    19.5
    
    
    
    32.1
 Operating leases
 Letters of credit
 Insurance programs
 Critical Accounting Policies
  Revenue Recognition
  20




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##### Table of Contents



Receivables, net of valuation allowance
 Goodwill and other intangible assets 
 Impairment of long-lived assets
 Insurance liabilities
 Accounting for income taxes Accounting for Uncertainty in Income Taxes  an Interpretation of FASB Statement No.109 Note 6. Income Taxes
 Accounting for acquisitions
 New Accounting Pronouncements
 Fair Value Measurement
 The Fair Value Option for Financial Assets and
Financial Liabilities,
  21




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Business Combinations
 Non-controlling Interests in Consolidated
Financial Statements
 
 Item 7A. Quantitative and Qualitative Disclosure About Market Risk
  EstimatedFair ValueAt March 31,2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    Total
    
    
    2008Fixed Rate Debt:Amount
    
    $
    22.7
    
    
    $
    24.4
    
    
    $
    21.1
    
    
    $
    15.2
    
    
    $
    14.2
    
    
    $
    11.6
    
    
    $
    109.2
    
    
    $
    98.2Average
interest rate
    
    
    5.72
    %
    
    
    6.21
    %
    
    
    5.71
    %
    
    
    5.84
    %
    
    
    5.68
    %
    
    
    6.03
    %
    
    
    5.87
    %Variable Rate Debt:Amount
    
    $
    .5
    
    
    $
    .5
    
    
    $
    0.4
    
    
    $
    272.1
    
    
    $
    3.0
    
    
    
    
    
    
    $
    276.5
    
    
    $
    276.5Average
interest rate
    
    
    2.61
    %
    
    
    2.25
    %
    
    
    2.25
    %
    
    
    5.27
    %
    
    
    2.25
    %
    
    
    
    
    
    
    5.23
    %
  22




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Item 8. Financial Statements and Supplementary Data
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Managements Annual Report on Internal Control Over Financial Reporting
    
    
    24Reports of Independent Registered Public Accounting Firm
    
    
    25Consolidated Balance Sheets at March 31, 2008 and 2007
    
    
    27Consolidated Income Statements for the Years Ended March 31, 2008, 2007 and 2006
    
    
    28Consolidated Statements of Shareholders Equity for the Years Ended March 31, 2008, 2007 and 2006
    
    
    29Consolidated Statements of Cash Flows for the Years Ended March 31, 2008, 2007 and 2006
    
    
    30Notes to Consolidated Financial Statements
    
    
    31
  23




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##### Table of Contents



MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    Internal Control Integrated Framework Internal Control  Integrated Framework,
  24




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Accounting for Uncertainty in Income Taxes
 Internal
Control-Integrated Framework
 /s/
KPMG LLPHouston, TexasMay 28, 2008
  25




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 Internal ControlIntegrated
Framework
    Internal
ControlIntegrated Framework
   /s/ KPMG LLPHouston, TexasMay 28, 2008
  26




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
 March 312008
    
    
    2007ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    15,131
    
    
    $
    12,043Accounts receivable, net
    
    
    209,000
    
    
    
    185,722Inventories
    
    
    61,511
    
    
    
    46,951Prepaid expenses
    
    
    7,127
    
    
    
    7,532Deferred income taxes
    
    
    9,353
    
    
    
    8,479Total current assets
    
    
    302,122
    
    
    
    260,727PROPERTY AND EQUIPMENT, net
    
    
    421,347
    
    
    
    354,156GOODWILL AND INTANGIBLES, net
    
    
    141,381
    
    
    
    101,768OTHER ASSETS
    
    
    7,813
    
    
    
    7,318$
    872,663
    
    
    $
    723,969LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    23,252
    
    
    $
    12,421Accounts payable
    
    
    56,948
    
    
    
    58,519Accrued liabilities
    
    
    83,488
    
    
    
    89,496Income taxes payable
    
    
    184
    
    
    
    138Total current liabilities
    
    
    163,872
    
    
    
    160,574LONG-TERM DEBT, net of current portion
    
    
    362,448
    
    
    
    142,144OTHER LIABILITIES
    
    
    13,655
    
    
    
    DEFERRED INCOME TAXES
    
    
    52,895
    
    
    
    55,715COMMITMENTS AND CONTINGENCIESSHAREHOLDERS EQUITYCommon stock, $.01 par value; 100,000,000 shares authorized; 11,079,011
and 13,693,698 issued and outstanding
    
    
    111
    
    
    
    137Additional paid-in capital
    
    
    153,204
    
    
    
    185,098Retained earnings
    
    
    127,376
    
    
    
    180,113Other comprehensive income
    
    
    (898
    )
    
    
    188Total shareholders equity
    
    
    279,793
    
    
    
    365,536$
    872,663
    
    
    $
    723,969
   27




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share data)
 Year Ended March 312008
    
    
    2007
    
    
    2006SALES
    
    $
    1,095,388
    
    
    $
    1,006,186
    
    
    $
    879,023COST OF SALES
    
    
    812,401
    
    
    
    736,996
    
    
    
    661,560Gross profit
    
    
    282,987
    
    
    
    269,190
    
    
    
    217,463SELLING EXPENSES
    
    
    106,952
    
    
    
    101,649
    
    
    
    91,266GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    78,804
    
    
    
    69,223
    
    
    
    58,993OTHER INCOME, NET
    
    
    (3,064
    )
    
    
    
    
    
    
    GOODWILL IMPAIRMENT
    
    
    
    
    
    
    11,533
    
    
    
    Operating income
    
    
    100,295
    
    
    
    86,785
    
    
    
    67,204INTEREST EXPENSE
    
    
    12,366
    
    
    
    7,011
    
    
    
    5,692INTEREST INCOME
    
    
    (346
    )
    
    
    (309
    )
    
    
    (178
    )Income before taxes
    
    
    88,275
    
    
    
    80,083
    
    
    
    61,690INCOME TAXES
    
    
    28,951
    
    
    
    29,342
    
    
    
    23,192Net income
    
    $
    59,324
    
    
    $
    50,741
    
    
    $
    38,498BASIC EARNINGS PER SHARE
    
    $
    4.76
    
    
    $
    3.74
    
    
    $
    2.81DILUTED EARNINGS PER SHARE
    
    $
    4.63
    
    
    $
    3.65
    
    
    $
    2.73SHARES USED TO COMPUTE EARNINGS PER SHAREBasic
    
    
    12,463
    
    
    
    13,580
    
    
    
    13,719Diluted
    
    
    12,822
    
    
    
    13,905
    
    
    
    14,127
   28




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(In thousands)
 Additional
    
    
    
    
    
    
    Accumulated OtherCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    TotalBALANCE, March 31, 2005
    
    
    13,760
    
    
    $
    138
    
    
    $
    168,905
    
    
    $
    114,289
    
    
    $
    
    
    
    $
    283,332Exercise of stock options,
including tax benefit
    
    
    124
    
    
    
    1
    
    
    
    3,770
    
    
    
    
    
    
    
    
    
    
    
    3,771Repurchase and retire common stock
    
    
    (170
    )
    
    
    (1
    )
    
    
    (2,094
    )
    
    
    (4,560
    )
    
    
    
    
    
    
    (6,655
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,498
    
    
    
    
    
    
    
    38,498BALANCE, March 31, 2006
    
    
    13,714
    
    
    
    138
    
    
    
    170,581
    
    
    
    148,227
    
    
    
    
    
    
    
    318,946Exercise of stock options,
including tax benefit
    
    
    445
    
    
    
    3
    
    
    
    17,619
    
    
    
    
    
    
    
    
    
    
    
    17,622Compensation expense
    
    
    
    
    
    
    
    
    
    
    2,695
    
    
    
    
    
    
    
    
    
    
    
    2,695Repurchase and retire common stock
    
    
    (465
    )
    
    
    (4
    )
    
    
    (5,797
    )
    
    
    (18,855
    )
    
    
    
    
    
    
    (24,656
    )Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    188
    
    
    
    188Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,741
    
    
    
    
    
    
    
    50,741BALANCE, March 31, 2007
    
    
    13,694
    
    
    
    137
    
    
    
    185,098
    
    
    
    180,113
    
    
    
    188
    
    
    
    365,536Exercise of stock options,
including tax benefit
    
    
    67
    
    
    
    1
    
    
    
    2,869
    
    
    
    
    
    
    
    
    
    
    
    2,870Compensation expense
    
    
    
    
    
    
    
    
    
    
    2,057
    
    
    
    
    
    
    
    
    
    
    
    2,057Repurchase and retire common stock
    
    
    (2,682
    )
    
    
    (27
    )
    
    
    (36,820
    )
    
    
    (113,250
    )
    
    
    
    
    
    
    (150,097
    )Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,086
    )
    
    
    (1,086
    )FIN 48 cumulative adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,189
    
    
    
    
    
    
    
    1,189Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,324
    
    
    
    
    
    
    
    59,324BALANCE, March 31, 2008
    
    
    11,079
    
    
    $
    111
    
    
    $
    153,204
    
    
    $
    127,376
    
    
    $
    (898
    )
    
    $
    279,793
   29




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Year Ended March 312008
    
    
    2007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    59,324
    
    
    $
    50,741
    
    
    $
    38,498Adjustments to reconcile net income to net cash provided by
operating activitiesDepreciation and amortization
    
    
    53,886
    
    
    
    45,270
    
    
    
    45,663Non-cash currency gain
    
    
    (3,807
    )
    
    
    
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    11,533
    
    
    
    Deferred income tax provision
    
    
    6,029
    
    
    
    (6,554
    )
    
    
    137Share-based compensation expense
    
    
    2,057
    
    
    
    2,695
    
    
    
    Changes in assets and liabilities, net of effects of acquisitionsAccounts receivable, net
    
    
    1,419
    
    
    
    (24,727
    )
    
    
    (3,969
    )Inventories
    
    
    (32
    )
    
    
    (4,434
    )
    
    
    157Prepaid expenses
    
    
    1,232
    
    
    
    (394
    )
    
    
    (833
    )Other assets
    
    
    (258
    )
    
    
    (146
    )
    
    
    (279
    )Accounts payable and accrued liabilities
    
    
    (3,902
    )
    
    
    2,129
    
    
    
    (3,101
    )Other liabilities
    
    
    (5,812
    )
    
    
    
    
    
    
    Income taxes payable
    
    
    46
    
    
    
    (3,339
    )
    
    
    2,976Net cash provided by operating activities
    
    
    110,182
    
    
    
    72,774
    
    
    
    79,249INVESTING ACTIVITIESAcquisitions of businesses, net of cash acquired
    
    
    (97,258
    )
    
    
    (67,555
    )
    
    
    (27,983
    )Purchases of property and equipment
    
    
    (41,394
    )
    
    
    (43,217
    )
    
    
    (16,382
    )Proceeds from asset dispositions
    
    
    2,019
    
    
    
    4,095
    
    
    
    2,517Net cash used in investing activities
    
    
    (136,633
    )
    
    
    (106,677
    )
    
    
    (41,848
    )FINANCING ACTIVITIESProceeds from bank credit facilities
    
    
    289,377
    
    
    
    230,867
    
    
    
    52,916Payments on bank credit facilities
    
    
    (111,972
    )
    
    
    (179,773
    )
    
    
    (80,060
    )Proceeds from issuance of term equipment notes
    
    
    15,558
    
    
    
    8,154
    
    
    
    Payments on term equipment notes and other debt
    
    
    (16,645
    )
    
    
    (11,290
    )
    
    
    (8,820
    )Payments to repurchase and retire common stock
    
    
    (150,097
    )
    
    
    (24,656
    )
    
    
    (6,655
    )Proceeds from exercise of stock options, including tax benefit
    
    
    2,869
    
    
    
    17,622
    
    
    
    2,459Net cash provided by (used in) financing activities
    
    
    29,090
    
    
    
    40,924
    
    
    
    (40,160
    )Effect of exchange rate changes on cash
    
    
    449
    
    
    
    29
    
    
    
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    3,088
    
    
    
    7,050
    
    
    
    (2,759
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    12,043
    
    
    
    4,993
    
    
    
    7,752CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    15,131
    
    
    $
    12,043
    
    
    $
    4,993
   30




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
 1. BUSINESS
     2. SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
 Accounting Policies
  Principles of Consolidation
 Use of Estimates
 Reclassification
 Cash and Cash Equivalents
  31




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
 Revenue Recognition and Accounts Receivable
 Inventories
 March 312008
    
    
    2007Raw materials
    
    $
    25,983
    
    
    $
    15,608Work in progress
    
    
    29,447
    
    
    
    26,659Finished goods
    
    
    6,081
    
    
    
    4,684$
    61,511
    
    
    $
    46,951
 Long-Lived Assets Goodwill and Other Intangible Assets, Accounting for the Impairment or Disposal of Long-Lived Assets.
    32




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
 Accrued Liabilities
 March 312008
    
    
    2007Advances from customers
    
    $
    12,101
    
    
    $
    8,549Compensation and benefits
    
    
    35,473
    
    
    
    35,010Manufacturing materials and services
    
    
    9,809
    
    
    
    7,150Sales, property and other taxes
    
    
    5,463
    
    
    
    18,993Other(1)
    
    
    20,642
    
    
    
    19,794$
    83,488
    
    
    $
    89,496
 
 (1)
    
    Other accrued liabilities are principally comprised of contingent
transaction consideration associated with
certain of the Companys acquisitions and accrued self-insurance claims for certain
insurance programs. None
of the individual items in other accrued liabilities at March 31, 2008 and 2007 were
individually greater than
5% of total current liabilities in those years. Income Taxes
 Supplemental Cash Flow Information
 Recent Accounting Pronouncements
 Fair Value Measurement,
 The Fair Value Option for Financial Assets and
Financial Liabilities,
 Business Combinations
 Non-controlling Interests in
Consolidated Financial Statements
  33




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
 Other Information
 Earnings Per Share
 Related Party Transactions
 Fair Value of Financial Instruments
 Concentrations of Credit Risk
 Stock-Based Compensation Share-Based Payment
 Foreign Currency Translation
 Accumulated Other Comprehensive Income
 Geographic Information
 3. ACQUISITIONS
    34




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
   4. PROPERTY AND EQUIPMENT
   EstimatedMarch 31
    
    
    LifeDescription
    
    2008
    
    
    2007
    
    
    in YearsLand
    
    $
    15,137
    
    
    $
    13,909
    
    
    
    Buildings and leasehold improvements
    
    
    111,710
    
    
    
    96,236
    
    
    
    5-30Machinery and equipment
    
    
    535,227
    
    
    
    457,233
    
    
    
    5-20Computer equipment and software
    
    
    29,884
    
    
    
    24,171
    
    
    
    2-5Furniture, fixtures and other
    
    
    10,818
    
    
    
    9,926
    
    
    
    2-7702,776
    
    
    
    601,475Lessaccumulated depreciation
    
    
    (281,429
    )
    
    
    (247,319
    )$
    421,347
    
    
    $
    354,156
  5. LONG-TERM DEBT
  March 312008
    
    
    2007Bank credit facilities
    
    $
    271,868
    
    
    $
    94,143Term equipment notes
    
    
    104,505
    
    
    
    48,144Other
    
    
    9,327
    
    
    
    12,278385,700
    
    
    
    154,565Lesscurrent portion
    
    
    (23,252
    )
    
    
    (12,421
    )$
    362,448
    
    
    $
    142,144
  35




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
        36




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
   2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    ThereafterDebt obligations
    
    $
    23,252
    
    
    $
    24,906
    
    
    $
    21,493
    
    
    $
    287,225
    
    
    $
    17,177
    
    
    $
    11,647
 6. INCOME TAXES
  Year Ended March 312008
    
    
    2007
    
    
    2006Domestic
    
    
    78,330
    
    
    
    78,590
    
    
    
    61,690Foreign
    
    
    9,945
    
    
    
    1,493
    
    
    
    $
    88,275
    
    
    $
    80,083
    
    
    $
    61,690
  Year Ended March 312008
    
    
    2007
    
    
    2006CurrentFederal
    
    $
    17,927
    
    
    $
    32,519
    
    
    $
    21,162State
    
    
    3,001
    
    
    
    2,751
    
    
    
    1,893Foreign
    
    
    1,994
    
    
    
    626
    
    
    
    22,922
    
    
    
    35,896
    
    
    
    23,055DeferredFederal
    
    
    4,506
    
    
    
    (3,866
    )
    
    
    689State
    
    
    460
    
    
    
    (2,688
    )
    
    
    (552
    )Foreign
    
    
    1,063
    
    
    
    
    
    
    
    6,029
    
    
    
    (6,554
    )
    
    
    137$
    28,951
    
    
    $
    29,342
    
    
    $
    23,192
  37




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
  Year Ended March 312008
    
    
    2007
    
    
    2006Provision at the federal statutory rate
    
    $
    30,896
    
    
    $
    28,029
    
    
    $
    21,592State income taxes, net of federal income tax benefit
    
    
    3,103
    
    
    
    41
    
    
    
    872Non-deductible expenses
    
    
    1,569
    
    
    
    1,347
    
    
    
    1,314Benefit of domestic production deduction
    
    
    (1,446
    )
    
    
    (798
    )
    
    
    (586
    )Impairment of goodwill
    
    
    
    
    
    
    672
    
    
    
    Adjustment to contingency reserve
    
    
    (4,748
    )
    
    
    
    
    
    
    Foreign income taxed at other rates
    
    
    (423
    )
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    51
    
    
    
    $
    28,951
    
    
    $
    29,342
    
    
    $
    23,192
  March 312008
    
    
    2007Deferred income tax liabilities:Property and equipment
    
    $
    62,505
    
    
    $
    59,081Other
    
    
    2,712
    
    
    
    1,968Total deferred income tax liabilities
    
    $
    65,217
    
    
    $
    61,049Deferred income tax assets:Accounts receivable and inventories
    
    $
    1,031
    
    
    $
    1,040Accrued liabilities
    
    
    5,179
    
    
    
    5,700Goodwill and intangibles(1)
    
    
    9,031
    
    
    
    5,334Other liabilities(1)
    
    
    3,291
    
    
    
    Other
    
    
    3,143
    
    
    
    1,739Total deferred income tax assets
    
    $
    21,675
    
    
    $
    13,813
 
 (1)
    
    These deferred income tax assets are long-term in nature and
therefore are netted against total deferred income tax liabilities for
presentation in the accompanying consolidated balance sheets. Accounting for Income Taxes
   38




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
     Unrecognized tax benefit at April 1, 2007
    
    $
    19,334Additions for tax positions in prior periods
    
    
    278Decreases for tax positions in prior periods
    
    
    (317
    )Additions for tax positions in current periods
    
    
    2,911Settlement/audits
    
    
    (336
    )Lapse of statute of limitations
    
    
    (8,215
    )Unrecognized tax benefit at March 31, 2008
    
    $
    13,655
 7. COMMITMENTS AND CONTINGENCIES
 Operating Leases
  2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    ThereafterOperating lease obligations
    
    $
    18,706
    
    
    $
    15,155
    
    
    $
    12,386
    
    
    $
    10,776
    
    
    $
    8,744
    
    
    $
    32,120
 Letters of Credit
  39




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##### Table of Contents



CONSOLDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
 Insurance Programs
 Legal Matters
 Tax Matters
 8. SHARE-BASED COMPENSATION
   For the Years Ended March 312008
    
    
    2007
    
    
    2006Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding at April 1
    
    
    1,546,734
    
    
    $
    36.66
    
    
    
    1,974,459
    
    
    $
    33.88
    
    
    
    1,700,786
    
    
    $
    27.93Granted
    
    
    73,112
    
    
    
    45.35
    
    
    
    48,588
    
    
    
    52.62
    
    
    
    550,318
    
    
    
    48.13Exercised
    
    
    (69,480
    )
    
    
    29.25
    
    
    
    (445,221
    )
    
    
    27.32
    
    
    
    (123,035
    )
    
    
    19.74Forfeited or expired
    
    
    (70,389
    )
    
    
    45.58
    
    
    
    (31,092
    )
    
    
    40.10
    
    
    
    (153,610
    )
    
    
    26.71Outstanding at March 31
    
    
    1,479,977
    
    
    
    36.93
    
    
    
    1,546,734
    
    
    
    36.66
    
    
    
    1,974,459
    
    
    
    33.88Exercisable at March 31
    
    
    1,215,282
    
    
    
    35.61
    
    
    
    1,164,234
    
    
    
    35.21
    
    
    
    1,369,402
    
    
    
    32.92
   40




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##### Table of Contents



CONSOLDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
  Year Ended March 312008
    
    
    2007
    
    
    2006Weighted average fair value of option grants during the year
    
    $
    19.42
    
    
    $
    19.94
    
    
    $
    17.92Assumptions:Expected option life in years
    
    
    6.1
    
    
    
    4.3
    
    
    
    5.0Risk-free interest rate
    
    
    3.7
    %
    
    
    5.0
    %
    
    
    4.2
    %Expected volatility
    
    
    38.8
    %
    
    
    37.9
    %
    
    
    33.8
    %Expected dividend yield
    
    
    
    
    
    
    
    
    
    
    
   Outstanding
    
    
    ExercisableWeighted
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    Remaining
    
    
    
    
    
    
    ExerciseRange of Exercise Prices
    
    Shares
    
    
    Price
    
    
    Years
    
    
    Shares
    
    
    PriceStock Options$10.37 - $20.00
    
    
    446,350
    
    
    $
    13.27
    
    
    
    2.9
    
    
    
    446,350
    
    
    $
    13.27$20.01 - $30.00
    
    
    63,409
    
    
    
    23.19
    
    
    
    4.7
    
    
    
    57,356
    
    
    
    23.10$30.01 - $40.00
    
    
    99,979
    
    
    
    38.05
    
    
    
    6.6
    
    
    
    17,395
    
    
    
    38.31$40.01 - $50.00
    
    
    171,020
    
    
    
    42.47
    
    
    
    6.1
    
    
    
    69,460
    
    
    
    42.03$50.01 - $60.00
    
    
    660,233
    
    
    
    51.97
    
    
    
    4.4
    
    
    
    623,201
    
    
    
    51.92$60.01 - $65.91
    
    
    16,486
    
    
    
    64.25
    
    
    
    4.6
    
    
    
    1,520
    
    
    
    62.001,457,477
    
    
    
    36.93
    
    
    
    4.3
    
    
    
    1,215,282
    
    
    
    35.61Restricted stock unit awards
    
    
    22,500
    
    
    
    
    
    
    
    1.7
    
    
    
    
    
    
    
    Outstanding at March 31,
2008
    
    
    1,479,977
    
    
    
    
    
    
    
    4.3
    
    
    
    1,215,282
    
    
    
    
  Share-Based Payment,
    41




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##### Table of Contents



CONSOLIDATED GRAPHICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data and percentages)
   2006Net income as reported
    
    $
    38,498Less pro forma compensation expense
    
    
    (5,936
    )Pro forma net income
    
    $
    32,562Basic Earnings Per Share:Net income as reported
    
    $
    2.81Less pro forma compensation
    
    
    (.40
    )Pro forma net income
    
    $
    2.41Diluted Earnings Per Share:Net income as reported
    
    $
    2.73Less pro forma compensation
    
    
    (.39
    )Pro forma net income
    
    $
    2.34
 9. SUPPLEMENTAL SELECTED UNAUDITED QUARTERLY FINANCIAL DATA
  1st
    
    
    2nd
    
    
    3rd
    
    
    4thQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterFiscal 2008:Sales
    
    $
    258,646
    
    
    $
    259,666
    
    
    $
    289,538
    
    
    $
    287,538Gross profit
    
    
    68,177
    
    
    
    66,264
    
    
    
    75,398
    
    
    
    73,148Net income
    
    
    13,557
    
    
    
    13,286
    
    
    
    19,362
    
    
    
    13,119Basic earnings per share
    
    
    .99
    
    
    
    1.01
    
    
    
    1.63
    
    
    
    1.18Diluted earnings per share
    
    
    .96
    
    
    
    .98
    
    
    
    1.58
    
    
    
    1.15Fiscal 2007:Sales
    
    $
    238,425
    
    
    $
    234,236
    
    
    $
    269,611
    
    
    $
    263,914Gross profit
    
    
    64,005
    
    
    
    62,456
    
    
    
    72,358
    
    
    
    70,371Net income
    
    
    13,730
    
    
    
    13,690
    
    
    
    16,375
    
    
    
    6,946
    (1)Basic earnings per share
    
    
    1.00
    
    
    
    1.01
    
    
    
    1.21
    
    
    
    .51Diluted earnings per share
    
    
    .97
    
    
    
    .98
    
    
    
    1.17
    
    
    
    .50
 
 (1)
    
    Includes $7,816 goodwill impairment charge, net of taxes.   42




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##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Managements Annual Report on Internal Control Over Financial Reporting
  Changes in Internal Controls Over Financial Reporting
  
 Item 9B. Other Information
 None.
  43




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##### Table of Contents



PART III
  
 PART IV
 
 Item 15 . Exhibits and Financial Statement Schedules
 (a)
    
    Index to Financial Statements(a)(1)
    
    Financial Statements:The index to the Financial Statements is included in Item 8 of this
Annual Report on Form 10-K on page 23 and is incorporated herein by
reference.(a)(2)
    
    Financial Statement Schedules:Schedule IIValuation and Qualifying Accounts.Report of Independent Registered Public Accounting Firm with
respect to Schedule II  Valuation and Qualifying Accounts is
included in Item 15 of this Annual Report on Form 10-K on page 46.
  (a)(3) 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 May 25, 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
    
    
    
    1994 Consolidated Graphics, Inc. Long-Term Incentive Plan, as amended through May 9, 2008. +* 10.2
    
    
    
    Employment Agreement between the Company and Joe R. Davis dated as of February 13, 2006
(Consolidated Graphics, Inc. Form 8-K (February 14, 2006), Exhibit 10.1).* 10.3
    
    
    
    Change in Control Agreement between the Company and Joe R. Davis dated as of July 25, 2000
(Consolidated Graphics, Inc. Form 10-K (March 31, 2001), Exhibit 10.8).* 10.4
    
    
    
    Amendment to Change in Control Agreement between the Company and Joe R. Davis dated as of
February 13, 2006 (Consolidated Graphics, Inc. Form 8-K (February 14, 2006), Exhibit 10.2).* 10.5
    
    
    
    Employment Agreement between the Company and Jon C. Biro dated as of December 17, 2007
(Consolidated
  44




---



##### Table of Contents



Graphics, Inc. Form 8-K (January 18, 2008), Exhibit 10.1).* 10.6
    
    
    
    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).* 10.7
    
    
    
    Form of Indemnification Agreement for directors and officers (Consolidated Graphics, Inc.
Form 10-Q (June 30, 2004), Exhibit 10.1).10.8
    
    
    
    Amended Schedule identifying the directors and officers parties to Indemnification Agreements with
the Company.* 10.9
    
    
    
    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 October 6, 2006 (Consolidated
Graphics, Inc. Form 8-K (October 6, 2006), Exhibit 10.1).* 10.10
    
    
    
    First 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
January 2, 2007 (Consolidated Graphics, Inc. Form 8-K (January 2, 2007), Exhibit 99.1).* 10.11
    
    
    
    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).* 10.12
    
    
    
    Third 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
March 13, 2008 (Consolidated Graphics, Inc. Form 8-K (March 13, 2008), Exhibit 10.1).10.13
    
    
    
    Form of Non-Employee Director Non-Statutory Stock Option Agreement.+10.14
    
    
    
    Form of Employee Incentive Stock Option Agreement.+10.15
    
    
    
    Form of Employee Non- Statutory Stock Option Agreement.+* 10.16
    
    
    
    Form of Restricted Stock Unit Agreement (Consolidated Graphics, Inc. Form 8-K (June 14, 2007),
Exhibit 10.1).+21
    
    
    
    List of Subsidiaries.23
    
    
    
    Consent of KPMG LLP.24
    
    
    
    Powers of Attorney.31.1
    
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference.+
    
    Compensatory plan or arrangement under which executive officers or directors of the Company
may participate.  45




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##### Table of Contents



SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS
 UtilizationBalance at
    
    
    Amount
    
    
    of Reserve
    
    
    BalanceBeginning
    
    
    Charged
    
    
    (Net of
    
    
    at EndDescription
    
    of Year
    
    
    to Expense
    
    
    Recoveries)
    
    
    of YearAllowance for Doubtful AccountsYear Ended March 31, 2008
    
    $
    3,080
    
    
    $
    1,203
    
    
    $
    (708
    )
    
    $
    3,575Year Ended March 31, 2007
    
    
    2,514
    
    
    
    1,777
    
    
    
    (1,211
    )
    
    
    3,080
 Report of Independent Registered Public Accounting Firm
 
   /s/ KPMG LLP
 
  46




---



##### Table of Contents



SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunder duly authorized, in the City of Houston, State of Texas on the 28 th day of
May, 2008
 CONSOLIDATED GRAPHICS, INC.By:
    /s/ Joe R. DavisJoe R. DavisChief Executive
Officer and
Chairman of the Board of Directors Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.
 Signature
    
    Title
    
    Date/s/ Joe R. Davis

Joe R. Davis
    
    Chief Executive 
Officer and Director
(Principal Executive Officer)
    
    May 28, 2008/s/ Jon C. Biro

Jon C. Biro
    
    Executive Vice President, 
Chief Financial and Accounting Officer and Secretary
(Principal Financial and Accounting Officer)
    
    May 28, 2008/s/ LARRY J. ALEXANDER*

Larry J. Alexander
    
    Director/s/ BRADY F. CARRUTH*

Brady F. Carruth
    
    Director/s/ GARY L. FORBES*

Gary L. Forbes
    
    Director/s/ JAMES H. LIMMER*

James H. Limmer
    
    Director/s/ HUGH N. WEST*

Hugh N. West
    
    Director
 
 *By:
    
    /s/ Joe R. Davis

Joe R. Davis
    
    
    
    May 28, 2008Attorney-in-Fact
  47




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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 May 25, 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
    
    
    
    1994 Consolidated Graphics, Inc. Long-Term Incentive Plan, as amended through May 9, 2008. +* 10.2
    
    
    
    Employment Agreement between the Company and Joe R. Davis dated as of February 13, 2006
(Consolidated Graphics, Inc. Form 8-K (February 14, 2006), Exhibit 10.1).* 10.3
    
    
    
    Change in Control Agreement between the Company and Joe R. Davis dated as of July 25, 2000
(Consolidated Graphics, Inc. Form 10-K (March 31, 2001), Exhibit 10.8).* 10.4
    
    
    
    Amendment to Change in Control Agreement between the Company and Joe R. Davis dated as of
February 13, 2006 (Consolidated Graphics, Inc. Form 8-K (February 14, 2006), Exhibit 10.2).* 10.5
    
    
    
    Employment Agreement between the Company and Jon C. Biro dated as of December 17, 2007
(Consolidated Graphics, Inc. Form 8-K (January 18, 2008), Exhibit 10.1).* 10.6
    
    
    
    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).* 10.7
    
    
    
    Form of Indemnification Agreement for directors and officers (Consolidated Graphics, Inc.
Form 10-Q (June 30, 2004), Exhibit 10.1).10.8
    
    
    
    Amended Schedule identifying the directors and officers parties to Indemnification Agreements with
the Company.* 10.9
    
    
    
    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 October 6, 2006 (Consolidated
Graphics, Inc. Form 8-K (October 6, 2006), Exhibit 10.1).* 10.10
    
    
    
    First 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
January 2, 2007 (Consolidated Graphics, Inc. Form 8-K (January 2, 2007), Exhibit 99.1).* 10.11
    
    
    
    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).* 10.12
    
    
    
    Third 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
March 13, 2008 (Consolidated Graphics, Inc. Form 8-K (March 13, 2008), Exhibit 10.1).10.13
    
    
    
    Form of Non-Employee Director Non-Statutory Stock Option Agreement.+10.14
    
    
    
    Form of Employee Incentive Stock Option Agreement.+10.15
    
    
    
    Form of Employee Non- Statutory Stock Option Agreement.+* 10.16
    
    
    
    Form of Restricted Stock Unit Agreement (Consolidated Graphics, Inc. Form 8-K (June 14, 2007),
Exhibit 10.1).+21
    
    
    
    List of Subsidiaries.23
    
    
    
    Consent of KPMG LLP.24
    
    
    
    Powers of Attorney.31.1
    
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference.+
    
    Compensatory plan or arrangement under which executive officers or directors of the Company
may participate.  48