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Champion Reports Bigger Loss on Lower Revenues in Third Quarter

September 10, 2010
HUNTINGTON, WV—Sept. 10, 2010—Champion Industries, Inc. today announced results for the third quarter of 2010 of a $571,000 loss compared to a loss of $307,000 for the same period in 2009. The results were reflective of restructuring related charges of approximately $1.6 million, or $1.0 million after tax.

On a pro forma basis, adjusted for the restructuring charge, the company would have reported net income of approximately $0.4 million for the three months ended July 31, 2010, compared to a pro forma loss of $0.2 million for the three months ended July 31, 2009.

Net loss for the nine months ended July 31, 2010 was $450,000. This compares to a loss of $646,000 for the same period in 2009. On a pro forma basis, adjusted for the restructuring charge, the company would have reported net income of approximately $0.6 million for the nine months ended July 31, 2010, compared to a pro forma loss of $0.5 million for the nine months ended July 31, 2009.

Marshall T. Reynolds, Chairman of the Board and CEO of Champion, said, "Our year-to-date and third quarter income reflected a strong improvement over the prior year on a pro forma basis adjusting for the restructuring related charges. Our second quarter and year to date results were negatively impacted by costs related to the successful defense of a legal action and would have been even stronger without this event. Our third quarter was focused on continued implementation of our plant rationalization plan and a continued review of our operating cost structure."

Revenues for the three months ended July 31, 2010 were $31.9 million compared to $34.4 million in the same period in 2009. This change represented a decrease in revenues of $2.5 million or 7.2%.

Revenues for the nine months ended July 31, 2010 decreased to $98.0 million from $107.4 million in 2009. This change represented a decrease in revenues of $9.4 million or 8.7%.

The printing segment experienced a sales decrease of $6.6 million, or 9.8%, while the office products and office furniture segment experienced a decrease of $2.1 million, or 7.7%, and the newspaper segment recorded a decrease of $0.6 million, or 5.2%, on a year to date basis.

On a segment basis, printing sales were down $1.8 million, or 8.3%, office products and office furniture sales were down $383,000, or 4.2%, and the newspaper sales were down $314,000, or 8.0%, for the third quarter of 2010.

Toney K. Adkins, President and COO noted, "Our third quarter continued to see pressure on our top line which reflected the continued fragile state of the economy in relation to our core businesses. Even with the revenue constraints we were able to record an improvement in operating income for the third quarter of 2010 over the prior year after adjusting for the restructuring charge. We continue to review alternatives to stabilize sales while planning for cost rationalization actions in light of the fragile economy."
 

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