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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
DATE OF REPORT: JULY 12, 1996
CONSOLIDATED GRAPHICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 76-0190827
(STATE OR OTHER JURISDICTION OF 0-24068 (I.R.S. EMPLOYER
INCORPORATION) (COMMISSION FILE NUMBER) IDENTIFICATION NO.)
2210 WEST DALLAS STREET
HOUSTON, TEXAS 77019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 529-4200
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The undersigned registrant hereby amends Item 2. Acquisition or Disposition
of Assets and Item 7. Financial Statements and Exhibits of its Current Report on
Form 8-K dated July 12, 1996, as originally filed, with respect to the
acquisition by Consolidated Graphics, Inc. (the "Company") of Eagle Press
("Eagle") on July 12, 1996 (the "Eagle Acquisition").
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 12, 1996 the Company acquired for $4.0 million all of the assets
and assumed certain of the liabilities of Eagle, a commercial printing operation
located in Sacramento, California. The funds used by the Company in completing
the acquisition of Eagle were obtained from borrowings on the Company's bank
revolving credit agreement. The Company expects to continue operating Eagle
without making any significant changes in its operations.
The Company has accounted for the Eagle Acquisition as a purchase. The
allocation of purchase price to the assets acquired was based on estimates of
fair market values and may be revised when additional information that the
Company is awaiting concerning asset and liability values is obtained.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) Financial statements of business acquired.
The information contained in Exhibit 6 hereto is incorporated herein by
reference.
(B) Pro forma financial information.
The following unaudited pro forma financial statements give effect to the
Company's acquisition of Eagle and include the effect of the Company's
acquisition of Garner Printing ("Garner") of Des Moines, Iowa earlier this
fiscal year (the "Garner Acquisition"). The unaudited pro forma financial
statements presented below were prepared utilizing the audited historical
financial statements of the Company, Eagle and Garner. The unaudited pro forma
financial statements should be read in conjunction with the audited historical
financial statements and notes thereto of Eagle for the year ended December 31,
1995 incorporated herein, the Company's audited historical financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1996, and the Company's pro forma financial
statements and notes thereto and the audited historical financial statements of
Garner for the year ended December 31, 1995 and notes thereto included in the
Company's Current Report on Form 8-K, as amended, dated July 3, 1996, pertaining
to the acquisition of Garner. None of the pro forma financial statements
included herein purport to be indicative of the Company's financial position or
results of operations that would have occurred had the transactions been
completed as of or at the beginning of the periods presented, nor do such
statements purport to indicate the Company's financial condition or results of
operations at any future date or for any future period.
2
CONSOLIDATED GRAPHICS, INC.
UNAUDITED PRO FORMA BALANCE SHEET
(IN THOUSANDS)
THE UNAUDITED PRO FORMA BALANCE SHEET PRESENTED BELOW REFLECTS THE
FINANCIAL POSITION OF THE COMPANY AS OF MARCH 31, 1996, TOGETHER
WITH THE FINANCIAL POSITION OF GARNER AND EAGLE AS OF DECEMBER 31, 1995.
<TABLE>
<CAPTION>
HISTORICAL
------------------------------- PRO FORMA COMPANY
COMPANY GARNER EAGLE ADJUSTMENTS PRO FORMA
------- --------- --------- ----------- ----------
(AUDITED) (AUDITED) (AUDITED)
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....... $ 3,086 $ 149 $ 50 $-- $ 3,285
Accounts receivable, net........ 19,317 2,022 878 -- 22,217
Inventories..................... 8,023 418 303 -- 8,744
Prepaid expenses................ 1,077 19 9 -- 1,105
------- ------- ------- ------- --------
Total current assets....... 31,503 2,608 1,240 -- 35,351
PROPERTY AND EQUIPMENT, net.......... 50,591 3,533 2,441 3,924(a) 60,489
GOODWILL, net........................ 5,015 -- -- 71(b) 5,086
OTHER ASSETS......................... 700 -- 4 -- 704
------- ------- ------- ------- --------
$87,809 $ 6,141 $ 3,685 $ 3,995 $101,630
======= ======= ======= ======= ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term
debt.......................... $ 1,221 $ 1,360 $ 150 $ (150)(c) $ 2,581
Accounts payable................ 5,719 829 273 -- 6,821
Accrued liabilities............. 5,648 544 27 200(d) 6,419
Income taxes payable............ 60 -- -- -- 60
------- ------- ------- ------- --------
Total current
liabilities............. 12,648 2,733 450 50 15,881
LONG-TERM DEBT, net of current
portion............................ 20,105 1,507 1,095 2,886(c) 25,593
DEFERRED INCOME TAXES................ 5,180 -- -- 967(e) 6,147
COMMITMENTS AND CONTINGENCIES
PROPRIETOR'S EQUITY.................. -- -- 2,140 (2,140)(f) --
SHAREHOLDERS' EQUITY:
Common stock.................... 59 15 -- (13)(f) 61
Additional paid-in capital...... 32,762 110 -- 4,021(f) 36,893
Retained earnings............... 17,055 1,776 -- (1,776)(f) 17,055
------- ------- ------- ------- ---------
Total shareholders'
equity.................. 49,876 1,901 -- 2,232 54,009
------- ------- ------- ------- --------
$87,809 $ 6,141 $ 3,685 $ 3,995 $101,630
======= ======= ======= ======= ========
</TABLE>
Note: Certain reclassifications were made to the historical financial statements
of Garner and Eagle for purposes of clear and consistent presentation.
See footnotes on page 4.
3
CONSOLIDATED GRAPHICS, INC.
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(a) Reflects the additional value assigned, pursuant to purchase accounting
rules, to the property and equipment of Garner and Eagle.
(b) Reflects the value assigned, pursuant to purchase accounting rules, to
goodwill in connection with the Garner Acquisition.
(c) Reflects the elimination of Eagle's debt, which was not assumed by the
Company, and an increase in the Company's debt to finance the Eagle
Acquisition.
(d) Reflects the estimated costs incurred by the Company to complete both the
Garner Acquisition and the Eagle Acquisition.
(e) Reflects the amount of additional deferred taxes to be recorded in
connection with the Garner Acquisition pursuant to purchase accounting rules
and Statement of Financial Accounting Standards No. 109 "Accounting for
Income Taxes."
(f) Reflects the elimination of the historical shareholders' equity of Garner
and the historical proprietor's equity of Eagle pursuant to purchase
accounting rules, and the issuance of 177,780 shares of the Company's common
stock, valued at $23.25 per share, as consideration in the Garner
Acquisition.
4
CONSOLIDATED GRAPHICS, INC.
UNAUDITED PRO FORMA INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE YEAR ENDED MARCH 31, 1996 OF THE COMPANY
TOGETHER WITH THE YEAR ENDED DECEMBER 31, 1995 OF GARNER AND EAGLE,
ASSUMING BOTH THE GARNER ACQUISITION AND THE EAGLE ACQUISITION OCCURRED
AS OF THE BEGINNING OF EACH ENTITY'S FISCAL YEAR.
<TABLE>
<CAPTION>
HISTORICAL
----------------------------------- PRO FORMA COMPANY
COMPANY GARNER EAGLE ADJUSTMENTS PRO FORMA
--------- --------- --------- ----------- ---------
(AUDITED) (AUDITED) (AUDITED)
<S> <C> <C> <C> <C> <C>
SALES................................ $ 85,133 $ 12,673 $ 6,597 $ -- $ 104,403
COST OF SALES........................ 61,237 9,756 4,316 (195)(a) 75,114
-------- -------- ------- --------- ---------
Gross profit.................... 23,896 2,917 2,281 195 29,289
SELLING EXPENSES..................... 8,532 1,016 336 -- 9,884
GENERAL AND ADMINISTRATIVE
EXPENSES........................... 6,873 1,008 457 (53)(b) 8,285
RESTRUCTURING CHARGE................. 1,500 -- -- -- 1,500
-------- -------- ------- --------- ---------
Operating income................ 6,991 893 1,488 248 9,620
INTEREST EXPENSE..................... 876 273 133 167(c) 1,449
INTEREST INCOME...................... (16) -- (2) -- (18)
-------- -------- ------- --------- ---------
Income before provision for
income taxes.................. 6,131 620 1,357 81 8,189
PROVISION FOR INCOME TAXES........... 2,146 -- (d) -- (d) 781(d) 2,927
-------- -------- ------- --------- ---------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS....................... $ 3,985 $ 620 $ 1,357 $ (700) $ 5,262
======== ======== ======= ========= =========
EARNINGS PER SHARE OF COMMON STOCK... $ .72 $ .92(e)
======== =========
</TABLE>
Note: Certain reclassifications were made to the historical financial statements
of Garner and Eagle for purposes of clear and consistent presentation.
See footnotes on page 6.
5
CONSOLIDATED GRAPHICS, INC.
NOTES TO UNAUDITED PRO FORMA INCOME STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(a) Reflects a net reduction in depreciation and amortization expense of $206
attributable to the Garner Acquisition, offset by a net increase in
depreciation expense of $11 attributable to the Eagle Acquisition. Pro forma
depreciation and amortization expense was determined based on a preliminary
allocation of the purchase price to the operating assets acquired based on
estimates of fair values and an estimate of useful lives ranging generally
from 3 to 15 years.
(b) Reflects the elimination of certain payments of $173 to and on behalf of the
selling shareholders of Garner which will not be incurred prospectively
pursuant to agreement and the addition of salary expense of $120 to be paid
to the management of Eagle pursuant to agreement. Previously, the owner of
Eagle did not have a salary as Eagle was operated as a sole proprietorship.
(c) Reflects additional interest expense attributable to the increase in the
Company's outstanding pro forma long-term debt as a result of the Eagle
Acquisition.
(d) Garner operated under S-corporation status and Eagle operated under sole
proprietorship status for federal and state income tax purposes prior to the
acquisition. Accordingly, no provision for income tax expense is reflected
in each entity's historical financial statements and an adjustment for pro
forma federal and state income tax expense has been made.
(e) Pro forma earnings per share was calculated based on the historical weighted
average shares of the Company outstanding for the year ended March 31, 1996
of 5,534,180 plus 177,780 shares issued in connection with the Garner
Acquisition.
6
(C) Exhibits.
The following additional exhibits to the report are furnished with this
amendment:
5 -- Consent of KPMG Peat Marwick LLP
6 -- Financial Statements of Eagle Press, including independent auditors'
report.
7
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONSOLIDATED GRAPHICS, INC.
(REGISTRANT)
By /s/ G. CHRISTOPHER COLVILLE
G. CHRISTOPHER COLVILLE
VICE PRESIDENT -- MERGERS AND ACQUISITIONS
CHIEF FINANCIAL AND ACCOUNTING OFFICER
Date: August 14, 1996
8
EXHIBIT 5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in registration statements No.
33-87192 on Form S-8 and No. 333-06097 on Form S-3 of Consolidated Graphics,
Inc. of our report dated May 30, 1996, with respect to the balance sheets of
Eagle Press as of April 30, 1996 and December 31, 1995, and the related
statements of income, proprietor's equity, and cash flows for the four months
ended April 30, 1996, and for the year ended December 31, 1996, which report
appears in the Form 8-K/A of Consolidated Graphics, Inc. dated July 12, 1996.
Houston, Texas
August 14, 1996
EXHIBIT 6
EAGLE PRESS
FINANCIAL STATEMENTS
APRIL 30, 1996 AND DECEMBER 31, 1995
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
INDEPENDENT AUDITORS' REPORT
The Sole Proprietor
Eagle Press:
We have audited the accompanying balance sheets of Eagle Press as of April
30, 1996 and December 31, 1995, and the related statements of income,
proprietor's equity, and cash flows for the four months ended April 30, 1996,
and for the year ended December 31, 1995. The financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Eagle Press as of April 30,
1996 and December 31, 1995, and the results of its operations and its cash flows
for the four months ended April 30, 1996 and for the year ended December 31,
1995 in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
May 30, 1996
2
EAGLE PRESS
BALANCE SHEETS
APRIL 30, DECEMBER 31,
1996 1995
---------- ------------
ASSETS
Current assets:
Cash...................................... $ 115,965 50,177
Accounts receivable:
Trade.................................. 1,192,624 878,303
Other.................................. -- 110
---------- ---------
1,192,624 878,413
Inventories............................... 197,272 302,460
Prepaid expenses.......................... 13,265 8,450
---------- ---------
Total current assets.............. 1,519,126 1,239,500
Property and equipment (note 2)............. 3,510,289 3,264,630
Less accumulated depreciation............. 895,486 823,341
---------- ---------
2,614,803 2,441,289
Other assets:
Deposits.................................. 3,149 3,149
Loan fees................................. 237 1,194
---------- ---------
3,386 4,343
---------- ---------
$4,137,315 3,685,132
========== =========
LIABILITIES AND PROPRIETOR'S EQUITY
Current liabilities:
Accounts payable.......................... $ 119,273 272,967
Accounts payable to related
parties................................ 34,859 --
Accrued expenses.......................... 30,133 11,024
Capitalized lease obligations (note 3).... 6,633 16,446
Current maturities of long-term
debt (note 4).......................... 146,827 150,243
---------- ---------
Total current liabilities......... 337,725 450,680
Noncurrent portion of long-term debt
(note 4).................................. 1,068,599 1,094,625
---------- ---------
Total liabilities................. 1,406,324 1,545,305
Proprietor's equity......................... 2,730,991 2,139,827
Commitments and contingencies (note 6)......
---------- ---------
$4,137,315 3,685,132
========== =========
See accompanying notes to financial statements.
3
EAGLE PRESS
STATEMENTS OF INCOME
FOUR MONTHS
ENDED YEAR ENDED
APRIL 30, DECEMBER 31,
1996 1995
------------ -------------
Net sales............................ $3,434,702 6,596,819
Cost of sales........................ 2,035,379 4,348,599
---------- ---------
Gross profit............... 1,399,323 2,248,220
Selling, general and administrative
expenses........................... 531,151 782,792
---------- ---------
Income from operations..... 868,172 1,465,428
Other income and (expenses):
Interest income.................... 230 1,575
Miscellaneous income............... 5,611 34,335
Loss on sale of assets............. -- (1,700)
Bad debt expense................... -- (9,649)
Interest expense................... (47,936) (132,907)
---------- ---------
Total other income and
(expenses).............. (42,095) (108,346)
---------- ---------
Net income................. $ 826,077 1,357,082
========== =========
See accompanying notes to financial statements.
4
EAGLE PRESS
STATEMENTS OF PROPRIETOR'S EQUITY
FOR THE FOUR MONTHS ENDED APRIL 30, 1996 AND
FOR THE YEAR ENDED DECEMBER 31, 1995
Balance at December 31, 1994.................................... $1,493,283
Net income................................................. 1,357,082
Withdrawals................................................ (710,538)
----------
Balance at December 31, 1995.................................... 2,139,827
Net income................................................. 826,077
Withdrawals................................................ (234,913)
----------
Balance at April 30, 1996....................................... $2,730,991
==========
See accompanying notes to financial statements.
5
EAGLE PRESS
STATEMENTS OF CASH FLOWS
FOUR MONTHS
ENDED YEAR ENDED
APRIL 30, DECEMBER 31,
1996 1995
----------- ------------
Cash flows from operating activities:
Net income..................................... $ 826,077 1,357,082
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization............... 73,102 207,577
Loss on fixed asset
disposition................................. -- 1,700
(Increase) decrease in:
Accounts receivable....................... (314,211) (410,041)
Inventories............................... 105,188 (125,502)
Prepaid expense........................... (4,815) (1,821)
Increase (decrease) in:
Accounts payable.......................... (118,835) 135,583
Accrued expenses.......................... 19,109 (11,915)
--------- ----------
Net cash provided by operating
activities.................... 585,615 1,152,663
--------- ----------
Cash flows from investing activities:
Purchases of fixed assets...................... (245,659) (124,501)
Reduction of deposits.......................... -- 4,186
--------- ----------
Net cash (used by) investing
activities.................... (245,659) (120,315)
--------- ----------
Cash flows from financing activities:
Reductions of long-term debt and
capital lease obligations..................... (39,255) (321,102)
Loan fees paid................................. -- (3,650)
Borrowing from credit line..................... -- 924,000
Repayments to credit line...................... -- (924,000)
Withdrawals.................................... (234,913) (710,538)
--------- ----------
Net cash (used by) financing
activities.................... (274,168) (1,035,290)
--------- ----------
Net increase (decrease) in
cash.......................... 65,788 (2,942)
Cash at beginning of year........................ 50,177 53,119
--------- ----------
Cash at end of year.............................. $ 115,965 50,177
========== ==========
SUPPLEMENTARY INFORMATION:
Cash paid for interest........................... $ 47,936 132,907
========= ==========
See accompanying notes to financial statements.
6
EAGLE PRESS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 AND DECEMBER 31, 1995
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Eagle Press (the Company), a proprietorship, operates primarily as a
printing company with one plant located in Sacramento, California.
BASIS OF ACCOUNTING
The Company's financial statements are presented in accordance with
generally accepted accounting principles.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses during the reporting period. Actual results could differ from those
estimates applied in the preparation of the financial statements.
ACCOUNTS RECEIVABLE
The Company uses the specific write-off method of accounting for bad debts.
The proprietor considers all receivables to be collectible as of April 30, 1996
and December 31, 1995.
INVENTORIES
The Company's inventory, consisting of paper stocks and works in progress,
is valued at cost by specific identification.
PROPERTY AND EQUIPMENT
The Company's property and equipment are recorded at cost. Depreciation is
computed using the straight-line and declining balance methods over the
estimated useful lives of the assets, with appropriate provisions for salvage
value. The useful lives used in computing depreciation are as follows:
Machinery and equipment................................. 5-18 years
Vehicles................................................ 5 years
Office equipment and software........................... 6 years
Furniture and fixtures.................................. 10 years
Building, building improvements, and
leasehold improvements................................ 31 years
INCOME TAXES
Federal and state income taxes of the Company are computed on the
proprietor's total income from all sources; accordingly, no provision for income
taxes is made in these statements.
7
(2) PROPERTY AND EQUIPMENT
Property and equipment recorded at cost as of April 30, 1996 and December
31, 1995 consists of:
1996 1995
------------ -----------
Land............................................. $ 91,750 91,750
Machinery and equipment.......................... 2,749,234 2,513,025
Building......................................... 341,510 341,510
Building improvements............................ 146,291 146,291
Office equipment and software.................... 108,686 106,740
Vehicles......................................... 42,312 42,312
Furniture and fixtures........................... 23,367 23,002
Leasehold improvements........................... 7,139 --
---------- -----------
3,510,289 3,264,630
Less accumulated depreciation and
amortization................................ 895,486 823,341
---------- -----------
$2,614,803 2,441,289
========== ===========
Depreciation and amortization charged to expense for the four months ended
April 30, 1996 and the year ended December 31, 1995 were $73,102 and $207,577,
respectively.
(3) LEASE OBLIGATIONS
The Company has entered into a noncancelable office lease. The three-year
operating lease continues through March 14, 1997, with an option to renew the
lease at that time. The Company also leases two pieces of equipment under
noncancelable capital leases with interest rates of 10% and 12.86%. The
following is a schedule of future minimum lease payments under noncancelable
leases in the aggregate:
YEAR ENDING
DECEMBER 31,
------------
1996..................................................... $ 48,638
1997..................................................... 7,200
After 1997............................................... --
---------
Total minimum lease payments............................. 55,838
Total imputed interest................................... 608
---------
$ 55,230
=========
(4) LONG-TERM DEBT
The Company financed the purchase of a printing press with Phoenixcor, Inc.
in 1994. The stated interest rate on the note is 9.38% due March 25, 2001. Fixed
payments of principal and interest in the amount of $21,722 are payable monthly
with a balloon payment of $295,254 due at maturity. If the note is prepaid in
full prior to the second anniversary date, a 4% premium must be paid. The
premium decreases by one percent for each year thereafter. Scheduled maturities
of long-term debt outstanding at December 31 of each of the years indicated are
as follows: 1996 -- $150,243; 1997 -- $164,958; 1998 -- $181,113; 1999 --
$198,852; 2000 -- $218,327; thereafter -- $331,376.
(5) RELATED PARTY
The Company paid job referral commissions to Richard Ross, brother of John
D. Ross, the sole proprietor, totaling $51,723 and $25,000 for the four months
ended April 30, 1996 and the year ended
8
December 31, 1995, respectively. These commissions were paid in the normal
course of business on the same terms as commissions paid to others.
(6) COMMITMENTS AND CONTINGENCIES
The Company has an agreement for a line of credit of $250,000 with
WestAmerica Bank, secured by trade accounts receivable, which provides for
working capital financing. Borrowings bear interest at the WestAmerica Bank
reference rate plus 2%. No balance was outstanding as of April 30, 1996 or
December 31, 1995. The line of credit was available to the Company until May 31,
1996, at which time management did not renew the line of credit.
(7) PENSION PLAN
All non-union employees are eligible for a simplified employee pension
plan. The Company contributes up to 6% of the participants' gross annual wages
to the plan. Total contributions paid to the plan were $10,163 and $21,541 for
the four months ended April 30, 1996 and the year ended December 31, 1995,
respectively.
(8) CONCENTRATION OF RISK
A substantial part of the Company's revenues comes from one customer, the
loss of which could have a material effect. Approximately $2,230,000, or 65%,
and $5,178,000, or 78%, of revenues for the four months ended April 30, 1996 and
the year ended December 31, 1995, respectively, were attributable to this
customer. Approximately $1,033,872 and $337,000 were included in receivables as
of April 30, 1996 and December 31, 1995, respectively.
(9) FAIR VALUE OF FINANCIAL INSTRUMENTS
The Statement of Financial Accounting Standards No. 107, DISCLOSURES ABOUT
FAIR VALUE OF FINANCIAL INSTRUMENTS, requires the disclosure of fair value
information about financial instruments, whether or not recognized in the
balance sheet, for which it is practicable to estimate that value.
Fair value methods and assumptions are set forth below for the Company's
financial instruments. As of April 30, 1996 and December 31, 1995, the estimated
fair values of cash, long-term debt and the line of credit approximated their
carrying amounts.
(10) SUBSEQUENT EVENT
On May 4, 1996, the Company and Consolidated Graphics, a commercial
printing company, entered into a letter of intent that would result in Eagle
Press becoming a subsidiary of Consolidated Graphics. The proposed acquisition
is subject to numerous conditions that must be finalized.
9
