Election drives Consolidated Graphics Q3 revenue rise

By David Ward, San Diego, Thursday 07 February 2013

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Consolidated Graphics (CGX) cited an increase in both digital and election year print spending as it reported Q3 net income up 32.4% to $16.9m on a 4% revenue rise to $295.3m.

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CGX ceo/chairman Joe Davis

During a conference call with analysts to discuss the results, CGX CEO/Chairman Joe Davis noted: "We achieved this improvement due to growth in digital print which was up 3.6% and election related print sales as well.

"Election related print sales for the quarter totaled $25.2m and were $37.5m for the nine months ending December 31, both exceeding our expectations."

In comparison, Davis added election-related spending the previous fiscal year - when there were no presidential or Congressional elections - was $8.1m for the full 12 months.

During the analyst call CGX noted it now has more than 250 high-end digital presses on three continents, including high-speed inkjet web technology.

"We utilize our digital print and technology solutions to serve industries such as financial services, insurance, healthcare, entertainment and custom photo products," Davis explained.

"Although, we have seen higher digital growth in some prior quarters, the silver lining is the fact that these sales are now made up by a more diverse group of customers. We expect growth in customer demand digital print for years to come."

Davis also cited a surge in demand for large and grand format printed materials and said CGX will continue to invest in equipment necessary to meet demands.

He was sanguine about the potential impact of an end to Saturday US Postal Delivery on the company’s direct mail business, noting: "I’d always think personally that whether it’s delivered on Saturday or Friday or Monday isn’t going to make much difference quite frankly."

During his commentary with analysts, CGX Executive VP and CFO John Biro expressed some optimism about the current quarter if the current macro-economic trends continue and suggested that CGX diverse customer base and focus of shorter run work means it doesn’t face the same challenges as other large public-traded commercial printing entities.

"Our average sheetfed job is a probably $3,000 or $4,000 project and we serve into some million dollar projects," Biro continued. "But we do a lot of smaller projects and with digital some are one-off.

"Market materials, collectible cards, photo books, personalized insurance compliance documents and even our specialty packaging business is not long run specialty packaging, we’re not doing Kellogg’s cereal boxes, that’s not our business. We’re doing more short-run specialty packaging for our customers and I will also say where service is a big element."

Headquartered in Houston, CGX has 70 printing businesses strategically located across 27 states—as well as Toronto, Prague, and Gero, Japan.


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