Champion Reports Net Loss for Quarter, Fiscal Year
“We have identified certain emphasis areas to improve gross margins and have actively begun to implement these initiatives as we move into 2012. In addition, we are evaluating our overall operations to strive for more improvements and to continue to rationalize our current cost structure in light of the continued impact of the global economic crisis on our business.”
The company experienced a decrease in sales for the year of $1.4 million, or 1.1 percent, from $129.9 million in 2010 to $128.5 million in 2011.
- The printing segment of the business reflected a sales decrease of $1.9 million, or 2.3 percent.
- The office products and office furniture segment showed an overall sales increase of $1.1 million, or 3.3 percent.
- The newspaper segment reported sales of $14.9 million in 2011 compared to $15.5 million in 2010, a decrease of $0.6 million or 4.1 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 as well as macro industry dynamics within the newspaper segment.
At Oct. 31, 2011, Champion had approximately $48.8 million of interest bearing debt of which $47.6 million is syndicated. The syndicated debt has been reduced by approximately $37.9 million since inception of the debt, which resulted primarily from the acquisition of The Herald-Dispatch in September 2007. This represents a reduction of over 44.3 percent in a period slightly over four years.
This debt was paid down during a significant economic downturn and severe secular decline within our printing and newspaper segments. The company has achieved this debt reduction through a combination of earnings, cash flow, equity additions and working capital management.
Reynolds concluded, “I am confident that with our sales stabilized we can renew our efforts to grow in certain strategic areas that have been identified by our management team. We continue to operate under the premise that the economy may not provide a substantial lift to our Company or our industry segments. Nevertheless, we believe there are opportunities for improvement and we are working diligently to identify, evaluate and implement these opportunities.”