Champion’s Printing and Newspaper Segments Drag Revenues Down

HUNTINGTON, WV—March 11, 2011—Champion Industries announced first quarter 2011 net income of $73,000 on a basic and diluted basis. This compares to a net loss of $213,000 for the three months ended Jan. 31, 2010. Income from operations improved to $1.1 million in the first three months of 2011 from $0.9 million in 2010, resulting primarily from lower selling, general and administrative costs partially offset by lower gross margin dollars and percentage, as well as charges related to a restructuring and profitability enhancement plan.

On a core net income basis, the company reported net income of $0.2 million in the first quarter of 2011, compared with a core net loss of $0.4 million for the first quarter of 2010.

Marshall T. Reynolds, chairman and CEO, said, “Our first quarter represented a stabilization of overall revenues when compared to the first quarter of the prior year. We continue to benefit from our cost reduction initiatives, which continued into the first quarter of 2011. We incurred $250,000 in additional restructuring expenses, which would have otherwise improved our income from operations another 23 percent in the first quarter.

“We will continue to aggressively review our operations and maximize any additional cost initiatives we deem available that will not reduce long-term revenue prospects. In addition, we are working on new initiatives to expand our market share and drive additional volume through our plants.”

Revenues for the three months ended Jan. 31, 2011 were $31.9 million vs. $32.4 million in the same period in 2010. This change represented a decrease in revenues of $0.5 million or 1.5 percent.

The printing segment experienced a sales decrease of $0.2 million, or 1.0 percent, while the office products and office furniture segment experienced an increase of $0.1 million, or 0.9 percent. The newspaper revenues for the quarter were approximately $4.0 million vs. $4.4 million in the first quarter of 2010.

Toney K. Adkins, president and chief operating officer, noted, “Our operating segments saw revenue stabilize for both printing and office products and furniture during 2011 compared with 2010. The newspaper revenues declined from the prior year primarily from decreases in national accounts. In general, the first quarter of 2011 was a solid improvement over the comparable quarter of 2010 and with an overall stabilization of revenues our goal will be to build from these levels.”

Reynolds continued, “Our sales stabilization in two of our three revenue segments was a positive sign for the quarter. We must build from this level as well as continue to focus on cost controls and operational efficiencies. We have the horsepower to expand the business and we will focus additional energies in this direction in 2011.”

As of Jan. 31, 2011, the company had approximately $57.2 million of interest bearing debt. Its interest bearing debt has been reduced by approximately $27.2 million since Oct. 31, 2007 through utilization of earnings, cash flow and working capital management.

About Champion Industries:
Champion is a commercial printer, business forms manufacturer and office products and office furniture supplier in regional markets east of the Mississippi. Champion also publishes The Herald-Dispatch daily newspaper in Huntington, WV with a total daily and Sunday circulation of approximately 23,000 and 29,000, respectively. Champion serves its customers through the following companies/divisions: Chapman Printing (West Virginia and Kentucky); Stationers, Champion Clarksburg, Capitol Business Interiors, Garrison Brewer, Carolina Cut Sheets, U.S. Tag and Champion Morgantown (West Virginia); Champion Output Solutions (West Virginia); The Merten Company (Ohio); Smith & Butterfield (Indiana and Kentucky); Champion Graphic Communications (Louisiana); Interform Solutions and Consolidated Graphic Communications (Pennsylvania, New York and New Jersey); Donihe Graphics (Tennessee); Blue Ridge Printing (North Carolina) and Champion Publishing (West Virginia, Kentucky and Ohio).

Source: Financial release.