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Champion Industries Returns to Profitability on Lower Sales

January 27, 2011
HUNTINGTON, WV—Jan. 27, 2011—Champion Industries posted net income of $0.5 million on a basic and diluted basis for the year ended Oct. 31, 2010 compared to a net loss of $27.5 million for the year ended Oct. 31, 2009. The company reported net income of $0.9 million for the quarter ended Oct. 31, 2010 compared to a net loss of $26.9 million for the same quarter in 2009.

Marshall T. Reynolds, chairman of the board and CEO, said, “2010 represented the positive outcome of our cost reduction initiatives implemented over the last two years. We believe our operating model has been adjusted to allow the company to react to a continued period of economic uncertainty without relinquishing our capacity for growth with the advent of an economic recovery. If necessary, we have additional options to reduce our cost structure and still provide best-in-class products and services to our customers.

“Our core operations continued to be impacted by the global economic crisis through 2010, but we were able to report substantially improved results, primarily due to our cost rationalization plan.  As we prepare for 2011, we are adhering to the guidance of our country’s financial leaders and therefore continue with no illusions about the fragile state of the economy. We are prepared, if necessary, to take actions in 2011 to address any continued economic downturn.”

Champion experienced a decrease in sales for the year of $11.3 million, or 8 percent, from $141.3 million in 2009 to $129.9 million in 2010.

The printing segment of the business reflected a sales decrease of $8 million, or 9.0 percent, with the office products and office furniture segment showing an overall sales decrease of $2.4 million, or 6.8 percent.

The newspaper segment reported sales of $15.5 million in 2010 compared to $16.4 million in 2009, a decrease of $0.9 million or 5.3 percent.

The sales compression experienced by the company was primarily attributable to the overall global economic crisis and the related impact on the core business segments in which the company operates, and is reflective of a continued difficult operating environment.

Toney K. Adkins, president and COO, noted, “We have seen some signs of improvement in certain areas but we are certainly not back to historic levels. We intend to continue to be prepared to adjust our cost structure to reflect the economic realities we are facing in this operating environment.”

At Oct. 31, 2010, the company had approximately $57.8 million of interest bearing debt. This debt has been reduced by approximately $26.6 million since October 31, 2007, which represents a reduction of over 31.5 percent in a three-year period.

Reynolds concluded, "During the Great Recession we managed to pay down over $26 million of interest bearing debt. This is a testimony to the ability of our various business units to generate cash flow in times of absolute economic duress. We entered 2011 hopeful of the opportunities an economic recovery may bring to our stakeholders and cautious of the need to prepare for prolonged economic uncertainty. Our company is not without challenges in 2011, but I am confident the men and women of Champion Industries will rise to any future challenges and prepare us for better days ahead."

About Champion
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.

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