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Champion Announces Q1 Results: Sales of $28.6 million

Monday, February 24, 2003

Press release from the issuing company

HUNTINGTON, W.Va., Feb. 21-- Champion Industries, Inc. today announced net income of $254,000 or $0.03 per share for the three months ended January 31, 2003 compared to $258,000 or $0.03 per share for the same period in 2002. The Company's balance sheet reflected interest-bearing debt to equity at under 10.0 percent, book value per share of $4.39, working capital in excess of $25.0 million and total shareholders equity of $42.6 million. The Board of Directors announced the declaration of the Company's quarterly dividend of five cents per share. The cash dividend will be paid on March 24, 2003, to shareholders of record on March 7, 2003. Marshall T. Reynolds, Chairman of the Board and Chief Executive Officer of Champion, said, "Our fiscal first quarter continued to remain challenging and was flat compared to the prior year. Our sales drop led to lower gross margin dollars, but we were able to offset this with lower SG&A and borrowing costs. Champion's operations are not immune to the weak economy; however, we were able to hold our ground with the prior year. The office furniture industry continues to remain very difficult and was a large contributor to our overall sales decline." Revenues for the three months ended January 31, 2003 were $28.6 million compared to $29.8 million in the same period in 2002. This change represented a decrease in revenues of $1.2 million or 3.9%. The printing segment experienced a sales decrease of $250,000 or 1.1% while the office products and office furniture segment experienced a decrease of $920,000 or 13.3%. Kirby J. Taylor, president and chief operating officer, noted, "Our gross margin percentages were consistent year to year, however, our lower sales led to an overall compression of gross margin contribution. Our SG&A expenses were flat on a percentage of sales basis but the overall impact was lower due to the decrease in sales. Our cost structure reflected approximately $1.0 million in non-cash depreciation expense, income tax expense of approximately $180,000 and interest expense of $52,000 for the quarter. The net effect was a flat quarter on a year to year profit basis." Mr. Reynolds concluded, "In 2003 we will continue to position our Company for what we anticipate will be an improved overall economic situation at some point during the fiscal year. The uncertainties regarding the pending war with Iraq and an overall stagnant economy will make the year challenging but we will pick our spots and aggressively pursue new business and opportunities as they are identified." Champion is a commercial printer, business forms manufacturer and office products and office furniture supplier.




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