Champion Reports Bigger Loss on Lower Revenues in Third QuarterSeptember 10, 2010
The 2009 results are reflective of a restatement of earnings associated with
approximately $0.3 million per quarter of non-cash related adjustments reflected as deferred tax expense associated with deferred tax liability attributes related to goodwill, trade name and masthead of The Herald-Dispatch. This was recorded in the fourth quarter of 2009 and therefore the interim periods for 2009 have been restated accordingly to reflect such adjustment.
In the three months ended January 31, 2010, the company recorded as a component of other income a hedging arrangement of approximately $0.3 million or $0.2 million net of tax. The Company also recorded charges related to restructuring primarily associated with occupancy related costs and costs incurred to streamline production, personnel and other related costs as well as a charge for inventory related to these actions. The Company believes that additional costs will be incurred in the future to address the impact of the global economic crisis.
Reynolds concluded, "We are working on the cost side of the business but have also initiated actions to streamline sales territories in certain core markets. We are cognizant of the fragile state of the economy and are planning accordingly."
At July 31, 2010 the company had approximately $58.2 million of interest bearing debt. Our interest bearing debt has been reduced by approximately $26.2 million since October 31, 2007 through utilization of our earnings, cash flow and working capital management. As a result of the Second Amendment to Credit Agreement 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.
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 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).