Champion Announces Improved First Quarter Results For 2010 And Restatement
HUNTINGTON, W.Va., March 5 /PRNewswire-FirstCall/ -- Champion Industries, Inc. (Nasdaq: CHMP) today announced a net loss of $(213,000) or $(0.02) per share on a basic and diluted basis. This compares to a net loss of $(634,000) or $(0.06) per share for the three months ended January 31, 2009. Income from operations improved to $890,000 in the first three months of 2010 from $2,000 in 2009 resulting in part from improved gross margin percent which partially offset a sales decline and lower selling, general and administrative costs.
Marshall T. Reynolds, Chairman of the Board and Chief Executive Officer of Champion, said, "Our first quarter represented a strong increase in income from operations over the previous year. This is indicative of the results of our cost reduction initiatives. We are continuing to implement our cost reduction and process improvement strategies and are aware that the first quarter 2010 sales compression is another strong indicator that our efforts to reduce costs and streamline operations are critical to future success. It appears that the operating environment will remain volatile for at least the next several quarters so we will drive forward on our internal profit enhancement plans to achieve targeted operating profit improvement. We are also cognizant of the changing print landscape and have made critical investments over the last several years in digital, postal optimization and output solution related assets."
Revenues for the three months ended January 31, 2010 were $32.4 million compared to $36.9 million in the same period in 2009. This change represented a decrease in revenues of $4.5 million or 12.2%. The printing segment experienced a sales decrease of $3.4 million or 14.7% while the office products and office furniture segment experienced a decrease of $1.0 million or 10.6%. The newspaper revenues for the quarter were approximately $4.4 million compared to $4.5 million in the first quarter of 2009. Toney K. Adkins, President and Chief Operating Officer, noted, "Our operating segments continue to see top line revenue constraints but even with these limitations we are beginning to move the Company back towards profitability. Our newspaper operations essentially reported only a slight decrease in revenue of less than $150,000; therefore on relatively flat revenue, our cost reductions are enhancing profitability."
The 2009 results are reflective of a restatement of earnings associated with approximately $0.3 million 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.Mr. Reynolds concluded, "I believe the first quarter is evidence that the Company has made strides to improve operations and reduce costs. We have improved operating profitability in what continues to be a very difficult environment for top line increases. We believe if we are able to achieve a modest level of sales growth that our operations should rebound quickly. We will continue to manage our Company through this global economic crisis in anticipation of the recovery to come."
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