Cunningham Graphics International Announces Record Third Quarter Results.JERSEY CITY, NJ--(BUSINESS WIRE)--Oct. 26, 1998--Cunningham Graphics International, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on NM: CGII CGII Canadian Government Information on the Internet CGII Capital Group International, Inc. ) today announced record financial results for the third quarter and nine months ended September 30, 1998. Net income for the third quarter increased 195% to $1.0 million, or $0.19 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income of $349,000, or $0.12 per diluted share, for the quarter ended September 30, 1997. Revenues for the third quarter increased 65% to $14.2 million compared to $8.6 million in the third quarter of 1997. Pro forma net income for the nine month period ended September 30, 1998, increased 148% to $2.4 million, or $0.54 per diluted share, compared to pro forma net income of $962,000, or $0.32 per diluted share, for the comparable period of 1997. Revenues for the nine months increased 48% to $38.1 million compared to $25.8 million for the nine months ended September 30, 1997. "During the third quarter we were able to post record financial results while making significant progress on our growth strategy," stated Michael R. Cunningham, Chairman and Chief Executive Officer. "Our initiatives to increase operating efficiencies have been successful as evidenced by a 396 basis point improvement in operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: over last year's third quarter. We also expanded our outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. services by assuming responsibility for the in-house printing operations of Schroder & Co. We continue to aggressively pursue strategic acquisitions within the fragmented printing industry and currently have a number of acquisition targets under consideration." Cunningham Graphics provides time-sensitive printing and distribution, commercial printing, and outsourcing services to a blue-chip client base in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , insurance and publishing industries. Cunningham Graphics currently operates in select international markets through its facilities in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the United Kingdom, and with a strategic partner in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. and Singapore. Graphic communications services provided by the Company include digital communications Transmitting text, voice and video in binary form. See communications. , document management, offset printing, digital printing, data output, bindery A NetWare file used for security and accounting in the early NetWare 2.x and 3.x versions. The bindery pertained only to the server it resided in and contained the names and passwords of users authorized to log in to that server. , fulfillment services, mailing services and outsource services. This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , 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. Factors which could cause or contribute to such differences include, but are not limited to, continued demand for its services, the availability of raw materials, the impact of competitive services and pricing, risks in technology development, changing economic conditions and other risk factors detailed in the Company's filings with the Securities and Exchange Commission. -0-
CUNNINGHAM GRAPHIC INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousand, except shares and per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Net Sales $14,191 $8,593 $38,118 $25,768
Operating expenses:
Costs of production 10,139 6,494 27,609 19,260
Selling, general & 2,070 1,274 5,565 4,199
administration
Depreciation & 370 189 837 515
amortization
12,579 7,957 34,011 23,974
Income from operations 1,612 636 4,107 1,794
Interest income (expense) 78 (59) 36 (196)
Other income (expense) 27 14 46 33
Income before income taxes 1,717 591 4,189 1,631
Provision for income taxes 687 33 1,483 95
Net Income $ 1,030 $ 558 $ 2,706 $ 1,536
Earnings per common share:
Basic $ 0.19
Diluted $ 0.19
Weighted average number of common shares:
Basic 5,295,000
Diluted 5,332,762
Pro Forma Data (unaudited)
Income before income taxes $ 591 $ 4,189 $1,631
Pro forma provision for 242 1,803(b) 669
income taxes (a)
Pro forma net income $ 349 $ 2,386 $ 962
Pro forma earning per
common share:
Basic $ 0.12 $ 0.55(c) $0.32
Diluted $ 0.12 $ 0.54(c) $0.32
Pro forma weighted average number
of common shares:
Basic 2,964,492(d) 4,347,431 2,964,492(d)
=====================================
Diluted 2,964,492(d) 4,407,190 2,964,492(d)
=====================================
(a) Utilizing an overall effective tax rate of 41% for domestic operations as if the Company had been a C corporation since January 1, 1997. (b) Includes a one-time $94,000 deferred tax charge. (c) After giving effect to a one-time deferred tax charge of $94,000 or $0.02 per share. (d) Reflects (i) the initial CGII founding share, (ii) 2,595,260 shares issued to stockholders in a reorganization of the Company prior to the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. , and (iii) 369,231 shares representing the number of shares having a value corresponding to the principal amount of the promissory notes promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. issued to stockholders in such reorganization. |
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