Champion announces improved Q1 results for 2011
Monday, March 14, 2011
Press release from the issuing company
Huntington, W.Va. - Champion Industries, Inc. today announced first quarter 2011 net income of $73,000 or $0.01 per share on a basic and diluted basis. This compares to a net loss of $(213,000) or $(0.02) per share for the three months ended January 31, 2010. Income from operations improved to $1.1 million in the first three months of 2011 from $0.9 million in 2010, resulting primarily from lower selling, general and administrative costs partially offset by lower gross margin dollars and percentage, as well as charges related to a restructuring and profitability enhancement plan.
On a core net income (loss) basis the Company reported net income of $0.2 million in the first quarter of 2011, or $0.02 per share on a basic and diluted basis, compared with a core net loss of $(0.4) million or $(0.04) per share on a basic and diluted basis for the first quarter of 2010. Core net income (loss) is defined as net income (loss) as reported, adjusted for restructuring and other charges and interest rate swap.
Marshall T. Reynolds, Chairman of the Board and Chief Executive Officer of Champion, said, "Our first quarter represented a stabilization of overall revenues when compared to the first quarter of the prior year. We continue to benefit from our cost reduction initiatives, which continued into the first quarter of 2011. We incurred $250,000 in additional restructuring expenses, which would have otherwise improved our income from operations another 23% in the first quarter. We will continue to aggressively review our operations and maximize any additional cost initiatives we deem available that will not reduce long-term revenue prospects. In addition, we are working on new initiatives to expand our market share and drive additional volume through our plants."
Revenues for the three months ended January 31, 2011 were $31.9 million compared to $32.4 million in the same period in 2010. This change represented a decrease in revenues of $0.5 million or 1.5%. The printing segment experienced a sales decrease of $0.2 million or 1.0% while the office products and office furniture segment experienced an increase of $0.1 million or 0.9%. The newspaper revenues for the quarter were approximately $4.0 million compared to $4.4 million in the first quarter of 2010. Toney K. Adkins, President and Chief Operating Officer, noted, "Our operating segments saw revenue stabilize for both printing and office products and furniture during 2011 compared with 2010. The newspaper revenues declined from the prior year primarily from decreases in national accounts. In general, the first quarter of 2011 was a solid improvement over the comparable quarter of 2010 and with an overall stabilization of revenues our goal will be to build from these levels."
Mr. Reynolds concluded, "Our sales stabilization in two of our three revenue segments was a positive sign for the quarter. We must build from this level as well as continue to focus on cost controls and operational efficiencies. We have the horsepower to expand the business and we will focus additional energies in this direction in 2011."
At January 31, 2011, the Company had approximately $57.2 million of interest bearing debt. Our interest bearing debt has been reduced by approximately $27.2 million since October 31, 2007 through utilization of our earnings, cash flow and working capital management. The Company is subject to various restrictive financial covenants requiring the Company to maintain certain financial ratios. The Company was in compliance with these covenants as of January 31, 2011
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