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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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.
HISTORICAL
------------------------------- PRO FORMA COMPANY
COMPANY GARNER EAGLE ADJUSTMENTS PRO FORMA
------- --------- --------- ----------- ----------
(AUDITED) (AUDITED) (AUDITED)
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
======= ======= ======= ======= ========
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.
HISTORICAL
----------------------------------- PRO FORMA COMPANY
COMPANY GARNER EAGLE ADJUSTMENTS PRO FORMA
--------- --------- --------- ----------- ---------
(AUDITED) (AUDITED) (AUDITED)
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)
======== =========
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.
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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
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