Champion Reports Net Loss for Quarter, Fiscal Year
HUNTINGTON, WV—Jan. 30, 2012—Champion Industries announced a net loss of $4 million for the year ended Oct. 31, 2011, compared to net income of $0.5 million for the year ended Oct. 31, 2010. The company reported a net loss of $5.4 million for the quarter ended Oct. 31, 2011, compared to net income of $0.9 million for the same quarter of 2010.
On a core net income basis, Champion reported net income of $1.0 million for the years ended Oct. 31, 2011 and 2010. Core net income is defined as net loss income as reported, adjusted for restructuring and other charges, non-cash impairment charges, gain on early extinguishment of debt from a related party and interest rate swap.
The results for 2011 over 2010 reflected a substantial decrease in earnings, primarily as a result of non-cash impairment related charges associated with goodwill, trade name and masthead in the amount of $8.7 million or $5.4 million net of tax on a basic and diluted basis. The impairments are a result of the acquisition of The Herald-Dispatch daily newspaper in 2007.
Champion also incurred restructuring related charges of $0.6 million or $0.3 million net of tax and other asset impairment charges of $0.1 million or $0.1 million net of tax. These charges were partially offset by a gain on early extinguishment of debt to a related party of $1.3 million, or $0.8 million net of tax. The 2010 results were impacted by restructuring related charges of $1.8 million or $1.1 million net of tax and by other income associated with an interest rate swap agreement of $1.0 million or $0.6 million net of tax.
Marshall T. Reynolds, chairman and CEO of Champion, said, “2011 is the year we believe we stabilized the top line of our revenue components. Our sales only decreased slightly over the prior year and our fourth quarter 2011 sales increased 5 percent over 2010 fourth quarter levels. We believe this was a key hurdle to pave the way to future improvements in core profitability.