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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 30, 1998
CONSOLIDATED GRAPHICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 0-24068 76-0190827
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
5858 WESTHEIMER, SUITE 200
HOUSTON, TEXAS 77057
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 787-0977
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ITEM 5. OTHER EVENTS
On November 3, 1998, Consolidated Graphics, Inc. ("CGX") announced the
completion of the acquisition of Metropolitan Printing Service, Inc. of
Bloomington, Indiana. A copy of the press release is attached hereto as Exhibit
99.
The attached press release may contain forward-looking information. Readers
are cautioned that such information involves risks and uncertainties, including
the possibility that events may occur which preclude completion of pending or
future acquisitions by CGX.
Additionally, CGX included the following discussion of its Year 2000 issues
in a recent filing on Form S-4 ("Registration Statement") dated October 30,
1998.
The following information may contain forward-looking statements. Such
statements can be identified by the use of forward-looking terminology such as
"may," "will," "expect," "anticipate," "estimate," "continue" or other similar
words. These statements discuss future expectations, make various assumptions,
contain projections of results of operations or of financial condition or state
other "forward-looking" information. When considering such forward-looking
statements, you should keep in mind the risk factors and other cautionary
statements included in CGX's filings with the Securities and Exchange
Commission. The risk factors and other matters discussed below could cause CGX's
actual results to differ materially from those contained in any forward- looking
statement.
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RISK FACTORS
YEAR 2000 COMPLIANCE
CGX has undertaken a Year 2000 compliance program to ensure that it will be
Year 2000 compliant by December 31, 1999. While CGX believes substantially all
of the equipment utilized in its printing operations will not be affected by the
Year 2000 issue, certain of its management information systems and associated
computer equipment are not currently Year 2000 compliant. While CGX is
scheduling upgrades to its hardware and software where necessary to address this
issue and anticipates that substantially all such systems will be made Year 2000
compliant, there can be no assurance that this will be accomplished on a timely
basis. The ability of third parties with which CGX transacts business to address
their Year 2000 issues is outside CGX's control. Although Year 2000 problems
with any one customer or supplier should not have a material adverse effect on
CGX, the disruption of a significant number of businesses could materially and
adversely affect CGX.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
YEAR 2000
The Year 2000 issue results from the historical use in computer software
programs of a two-digit abbreviation in date fields to represent the year.
Certain computer programs, including programs embedded in various equipment, may
fail to properly function when confronted with dates which contain the two-
digit year "00". These processing errors have the potential to cause system
failures or disrupt normal operations.
CGX has reviewed and is continuing to review its business risks associated
with the Year 2000 issue. CGX believes that substantially all of the equipment
used in its printing operations, including its pre-press and press equipment and
its equipment used to finish and deliver its products, will not be materially
affected by the Year 2000 issue. Certain of CGX's management information systems
and associated computer equipment are not currently Year 2000 compliant. The
majority of these management information systems are maintained by third-party
vendors and employ software that is specifically designed for the printing
industry. Substantially all of these vendors have recently released software
versions which are Year 2000 compliant. CGX is scheduling upgrades of its
hardware and software to implement the Year 2000 compliant versions and
presently anticipates that substantially all such systems will be Year 2000
compliant as early as Summer 1999 but in any event no later than December 31,
1999. While the upgrades may be implemented at an accelerated pace as a result
of the Year 2000 issue, the cost of implementing these software upgrades is not
expected to be materially in excess of CGX's recurring investment in management
information systems.
In addition, CGX is in the process of assessing its exposure to business
disruptions as a result of the Year 2000 issues of its suppliers and customers.
CGX has communicated with many of its suppliers to assess each such supplier's
Year 2000 readiness. Based on responses received to date, and because there are
many suppliers of paper, ink and other materials used in printing operations,
CGX does not believe that it is materially dependent on any one supplier and
that it will be able to obtain materials to continue its operations without
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significant disruption after the Year 2000.
CGX has a large and diversified customer base comprised of thousands of
customers in locations throughout the United States and is not dependent on any
one customer or group of customers for its revenues. As such, CGX does not
anticipate that the demand for its commercial printing services would be
materially adversely affected as a result of Year 2000 issues unless such issues
had a widespread effect on its customer base.
Like many manufacturing companies, the operation of CGX's businesses is
dependent upon the operation of many other businesses, the disruption of any one
or even a number of which as a result of the Year 2000 issue would not have a
material effect on the business of CGX. However, should a significant number of
such businesses suffer disruptions as a result of the Year 2000 issue, CGX's
operations could be adversely affected.
As part of its ongoing review of the Year 2000 issue, CGX evaluates and
addresses Year 2000 issues for its acquisition targets and implements
appropriate remedial action as necessary for acquired companies.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) EXHIBITS
The following exhibit is filed herewith:
99 Press release of Consolidated Graphics, Inc. dated November 3, 1998,
related to the announcement of the acquisition of Metropolitan
Printing Service, Inc. of Bloomington, Indiana.
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.
CONSOLIDATED GRAPHICS, INC.
(Registrant)
By: /s/ Randall D. Keys
Randall D. Keys
Vice President-Finance and
Chief Financial Officer
Date: November 4, 1998
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EXHIBIT 99
FOR: Consolidated Graphics, Inc.
APPROVED BY: Ronald E. Hale, Jr.
Vice President & Treasurer
(713) 787-0977
CONTACT: Betsy Brod/Jonathan Schaffer
Media: Eileen King
Morgen-Walke Associates, Inc.
(212) 850-5600
FOR IMMEDIATE RELEASE
CONSOLIDATED GRAPHICS COMPLETES ACQUISITION OF
METROPOLITAN PRINTING OF BLOOMINGTON, INDIANA
HOUSTON, TEXAS - November 3, 1998 - Consolidated Graphics, Inc. (NYSE:CGX)
today announced that it has completed the acquisition of Metropolitan Printing
Service, Inc., a high quality commercial printer located in Bloomington,
Indiana. Metropolitan, a market leader for over 30 years, will continue to be
led by Tad Wilson and Charles Neumeyer. Other terms of the transaction were not
disclosed.
Joe R. Davis, Chairman and Chief Executive Officer of Consolidated Graphics
said, "Tad Wilson, Charles Neumeyer and their highly skilled employees have
worked hard and earned an excellent reputation with their customers. They share
our service-oriented philosophy, which when coupled with greater resources,
should produce future growth and improved operating results. We are pleased to
have them join Consolidated Graphics."
Consolidated Graphics, Inc. is the fastest growing printing company in the
United States. A consolidator in a highly fragmented industry, the Company adds
value to its acquisitions through managerial and operational expertise,
financial strength and economies of scale. Upon completion of pending
acquisitions, Consolidated Graphics will have 50 companies with annualized
revenues in excess of $580 million.
This press release contains forward-looking statements which involve known
and unknown risks, uncertainties or other factors that could cause actual
results to materially differ from the results, performance or other expectations
implied by these forward-looking statements. Consolidated Graphics' expectations
regarding run-rate revenues assume, among other things, completion of pending
acquisitions, general economic conditions, continued demand for its product, the
availability of raw materials, retention of its key management and operating
personnel, as well as other factors detailed in Consolidated Graphics' filings
with the Securities and Exchange Commission.
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