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Champion Records Profit Gain on Lower Sales

June 10, 2010

Reynolds concluded, "We continued our operating cost realignment strategy and were able to reduce additional costs during the second quarter and into the first few weeks of the third quarter of 2010. The second quarter was very productive from both an operational and strategic perspective. We continue to move the Company in the proper direction to enhance market competitiveness and improve operating results."

At April 30, 2010 the Company had approximately $61.6 million of interest bearing debt. Our interest bearing debt has been reduced by approximately $22.8 million since October 31, 2007 through utilization of our earnings, cash flow and working capital management. As a result of the Second Amendment entered into during the second quarter of 2010 the Company was able to achieve extensive covenant relief including higher leverage ratios, lower fixed charge coverage ratios, lower EBITDA thresholds, EBITDA definition modifications, a reinstitution of LIBOR borrowings and a reduction in minimum revolving loan availability thresholds. The Company is also subject to various new covenants as further described and defined in the Second Amendment.

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 25,000 and 30,000, 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).


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