Champion Reports Net Losses for Second Quarter and First Six Months
HUNTINGTON, WV—June 14, 2012—Champion Industries announced a second quarter 2012 net loss of $21 million, compared to net income of $493,000 for the three months ended April 30, 2011. Its net loss for the six months ended April 30, 2012 was $21.1 million vs. net income of $566,000 for the six months ended April 30, 2011.
The losses for the second quarter and six months ended April 30, 2012 were reflective of pre-tax non-cash charges of $9.5 million associated with impairment of goodwill at the newspaper segment and an increase in the deferred tax asset valuation allowance of $15.2 million.
Marshall T. Reynolds, chairman of the board and CEO of Champion, said, “Our second quarter and first six months of 2012 was negatively impacted due to two charges associated with certain non-cash events. When we step back and look at the fundamental operations of the company, we have grown sales for the year to date period to $65.0 million from $62.9 million in the previous year or 3.4 percent and when we look at the second quarter of 2012 compared to the prior year we have grown sales 7.7 percent.
“We have been able to continue to successfully operate our businesses while devoting substantial efforts, funds and resources to identify an appropriate deleveraging path with our secured lenders. As a result of these actions we incurred approximately $1.1 million in increased professional fees primarily associated with actions associated with our credit facilities,” Reynolds continued. “The company continues to work diligently to implement a restructuring plan submitted to our secured lenders and we believe certain facets of this plan will improve overall productivity and efficiency of the company, which should result in enhanced results and benefit all interested parties.
“The key for us in 2012 will be to continue to focus on our cost structure while assuring we provide an adequate infrastructure to support our sales initiatives and address our secured lender initiatives. To accomplish this we must get better and more efficient in all components of our business.”
Revenues for the three months ended April 30, 2012 were $33.4 million, compared to $31.0 million in the same period in 2011. This change represented an increase in revenues of $2.4 million or 7.7 percent. The printing segment experienced an increase of $1.2 million or 6.1 percent while the office products and office furniture segment experienced an increase of $1.2 million or 14.6 percent. The newspaper revenues for the quarter increased $16,000 when compared to the prior period.
On a year to date basis for the six months ended April 30, 2012 revenues increased to $65.0 million from $62.9 million in the prior year or 3.4 percent. The printing segment experienced an increase of 3.0 percent from $39.2 million to $40.4 million. The office products and office furniture segment experienced an increase of 6.2 percent from $16.3 million to $17.3 million. The newspaper segment revenues decreased by less than 1 percent during this period and approximated $7.3 million for each period.
Reynolds concluded, “We have much to achieve in 2012 and we refuse to take our eye off the ball in terms of our core business. We are cognizant that we must address our debt situation and our pending line of credit maturity but we ultimately believe striving to improve our core business is a fundamental component of a solution for all parties in this regard.
“We are also aware that we may need to continue the exploration of additional strategic initiatives including asset sales that make reasonable sense to all parties. We also must diligently strive to complete certain initiatives, which are currently in process, but not yet completed as these actions should assist in accomplishing our long term goals. The company has many tasks to accomplish but we are committed to staying the course and persevering through the challenges ahead. ”
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 24,000 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); 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).