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Champion Announces 2002 Year End and Fourth Quarter Increases

Press release from the issuing company

HUNTINGTON, W.Va., Dec. 23 -- Champion Industries, Inc. today announced net income for the year and quarter ended October 31, 2002. The Company reported net income of $947,000 for the quarter ended October 31, 2002 compared with net income of $847,000 for the quarter ended October 31, 2001. The Company recorded net income for the year ended October 31, 2002 of $2,208,000 compared with a net loss of ($2,182,000) for the year ended October 31, 2001. The loss for 2001 was attributable to the Company recording restructuring, asset impairment and other special charges of $4,300,000 net of tax or $0.44 per share on a basic and diluted basis during the third quarter of 2001. Champion's balance sheet, the cornerstone of the Company, continued to reflect a strong position with total interest bearing debt to equity at approximately eleven percent, book value per share of $4.41, cash of $4.5 million, working capital of $26.2 million and shareholders' equity of $42.9 million. Marshall T. Reynolds, Chairman of the Board and Chief Executive Officer of Champion, said, "Our fourth quarter reflected a continued increase in earnings from the fourth quarter of 2001 and represented our strongest fourth quarter results in four years. While the overall economic picture remained unfavorable for the country as a whole we were able to post a modest increase to prior year earnings during the fourth quarter and a significant improvement for full year earnings due to the prior year's restructuring charge comparisons. Our printing sales were impacted by the weakened economy, however, we feel this will be short lived and anticipate an improving sales picture going forward. We are proud of the fact that even in periods of challenging earnings we are able to generate sufficient cash to pay dividends, reduce debt and maintain strong working capital and cash positions. Our Company is well positioned to capitalize on the benefits that will ultimately accrue from an economic recovery based on our current financial position. Champion has a proud history, a fortress present and a promising future." The previously stated net income and loss figures resulted in basic and diluted earnings per share of $0.10 for the quarter ended October 31, 2002 compared with $0.09 for the quarter ended October 31, 2001. The Company recorded net income per share on a basic and diluted basis of $0.23 per share for the year ended October 31, 2002 compared with a net loss per share of $0.22 in the year ended October 31, 2001. The Company experienced a slight decrease in sales for the year. The printing segment of the business reflected a sales decrease of $3.0 million or 3.0%, with the office products and office furniture segment showing an overall sales increase of $0.7 million or 2.6% primarily due to higher furniture sales. Kirby J. Taylor, president and chief operating officer, noted, "We are continuing to review our internal operating models and feel that significant cost savings can be achieved through cross production utilization within our existing plant profile. This should ultimately accrue to an enhanced pricing model for our customer base and increased margins due to production efficiencies at the plant level. In addition, our SG&A as a percentage of sales saw a slight improvement on a year to year basis even in a period of declining overall sales. This is an indication that our cost controls are functioning as implemented." Mr. Reynolds concluded, "We have structured our balance sheet in a fashion so that we are prepared to pursue strategic opportunities as they are identified. Our infrastructure is in place to service our current customer base and to add additional customers and sales. Our management team and employees are focused and committed to the long-term success of the Company. Champion is uniquely positioned to have a bright future and I am excited about our Company as I look beyond 2002." Champion is a commercial printer, business forms manufacturer and office products and office furniture supplier in regional markets east of the Mississippi. 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 and Champion Morgantown (West Virginia), The Merten Company (Ohio), Smith & Butterfield (Indiana and Kentucky), Bourque Printing, Upton Printing, Transdata Systems and Diez Business Machines (Louisiana),Dallas Printing (Mississippi), U.S. Tag (Maryland), Interform Solutions and Consolidated Graphic Communications (Pennsylvania, New York and New Jersey), Donihe Graphics (Tennessee) and Blue Ridge Printing (North Carolina and Tennessee).