UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
Quarterly
Report Pursuant to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
For the quarterly period ended April
30, 2005 |
|
Commission File No.
0-21084 |
Champion
Industries, Inc.
(Exact
name of Registrant as specified in its charter)
West
Virginia |
|
55-0717455 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(I.R.S.
Employer Identification No.) |
2450-90
1st
Avenue
P.O. Box
2968
Huntington,
WV 25728
(Address
of principal executive offices)
(Zip
Code)
(304)
528-2700
(Registrant’s
telephone number,
including
area code)
Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes ü
No
.
Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). Yes _____No ü
.
9,733,913 shares
of common stock of the Registrant were outstanding at April 30,
2005.
Champion
Industries, Inc.
INDEX
|
Page
No. |
Part
I. Financial Information |
|
Item
1. Financial Statements |
|
Consolidated
Balance Sheets (Unaudited) |
3 |
Consolidated
Statements of Operations (Unaudited) |
5 |
Consolidated
Statements of Cash Flows (Unaudited) |
6 |
Notes
to Consolidated Financial Statements |
7 |
Item
2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations |
13 |
Item 3a. Quantitative and Qualitative Disclosure About Market
Risk |
17 |
Item 4. Controls and Procedures |
18 |
Part
II. Other Information |
|
Item 1. Legal Proceedings |
18 |
Item 4. Submission of Matters to a Vote of Security Holders |
19 |
Item 6. Exhibits |
19 |
Signatures |
20 |
PART
I - FINANCIAL INFORMATION
Item
1. Financial Statements
Champion
Industries, Inc. and Subsidiaries
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
April
30, |
|
October
31, |
|
|
|
2005
(Unaudited) |
|
2004
(Audited) |
|
Current
assets: |
|
|
|
|
|
|
|
Cash
and cash equivalents |
|
$ |
2,722,829 |
|
$ |
1,745,457 |
|
Accounts
receivable, net of allowance of $1,453,000
and $1,422,000 |
|
|
18,604,035 |
|
|
21,318,016 |
|
Inventories |
|
|
10,859,367 |
|
|
11,269,514 |
|
Other
current assets |
|
|
1,184,752 |
|
|
973,832 |
|
Deferred income tax assets |
|
|
1,175,756 |
|
|
1,144,943 |
|
Total
current assets |
|
|
34,546,739 |
|
|
36,451,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, at cost: |
|
|
|
|
|
|
|
Land |
|
|
2,006,375 |
|
|
2,006,375 |
|
Buildings
and improvements |
|
|
8,415,312 |
|
|
8,253,573 |
|
Machinery
and equipment |
|
|
44,218,545 |
|
|
43,228,587 |
|
Equipment
under capital leases |
|
|
983,407 |
|
|
983,407 |
|
Furniture
and fixtures |
|
|
3,461,473 |
|
|
3,361,100 |
|
Vehicles
|
|
|
3,667,649 |
|
|
3,523,467 |
|
|
|
|
62,752,761 |
|
|
61,356,509 |
|
Less
accumulated depreciation |
|
|
(43,031,528 |
) |
|
(41,020,327 |
) |
|
|
|
19,721,233 |
|
|
20,336,182
|
|
|
|
|
|
|
|
|
|
Cash
surrender value of officers’ life insurance |
|
|
1,039,514 |
|
|
1,039,514 |
|
Goodwill
|
|
|
2,060,786 |
|
|
2,060,786 |
|
Other
intangibles, net of accumulated amortization |
|
|
3,641,093 |
|
|
3,812,051 |
|
Other
assets |
|
|
339,991 |
|
|
449,589 |
|
|
|
|
7,081,384 |
|
|
7,361,940 |
|
Total
assets |
|
$ |
61,349,356 |
|
$ |
64,149,884 |
|
See notes
to consolidated financial statements.
Champion
Industries, Inc. and Subsidiaries
Consolidated
Balance Sheets (continued)
LIABILITIES
AND SHAREHOLDERS’ EQUITY |
|
April
30, |
|
October
31, |
|
|
|
2005
(Unaudited) |
|
2004
(Audited) |
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
2,762,524 |
|
$ |
3,618,051 |
|
Accrued
payroll |
|
|
1,321,850 |
|
|
1,778,736 |
|
Taxes
accrued and withheld |
|
|
1,463,243 |
|
|
1,289,524 |
|
Accrued
income taxes |
|
|
72,716 |
|
|
135,556 |
|
Accrued
expenses |
|
|
1,694,611 |
|
|
1,028,246 |
|
Current
portion of long-term debt: |
|
|
|
|
|
|
|
Notes
payable |
|
|
1,586,951 |
|
|
1,555,911 |
|
Capital
lease obligations |
|
|
48,805 |
|
|
132,518 |
|
Total
current liabilities |
|
|
8,950,700 |
|
|
9,538,542 |
|
|
|
|
|
|
|
|
|
Long-term
debt, net of current portion: |
|
|
|
|
|
|
|
Notes
payable, line of credit |
|
|
1,800,000 |
|
|
2,300,000 |
|
Notes
payable, term |
|
|
5,154,080 |
|
|
5,940,323 |
|
Capital
lease obligations |
|
|
- |
|
|
16,484 |
|
Other
liabilities |
|
|
415,831 |
|
|
428,366 |
|
Deferred
income tax liability |
|
|
4,285,496 |
|
|
4,375,357 |
|
Total
liabilities |
|
|
20,606,107 |
|
|
22,599,072 |
|
|
|
|
|
|
|
|
|
Shareholders’
equity: |
|
|
|
|
|
|
|
Common
stock, $1 par value, 20,000,000 shares authorized;
9,733,913
shares issued and outstanding |
|
|
9,733,913 |
|
|
9,733,913 |
|
Additional
paid-in capital |
|
|
22,278,110 |
|
|
22,278,110 |
|
Retained
earnings |
|
|
8,731,226 |
|
|
9,538,789 |
|
Total
shareholders’ equity |
|
|
40,743,249 |
|
|
41,550,812 |
|
Total
liabilities and shareholders’ equity |
|
$ |
61,349,356 |
|
$ |
64,149,884 |
|
See notes
to consolidated financial statements.
Champion
Industries, Inc. and Subsidiaries
Consolidated
Statements of Operations
(Unaudited)
|
|
Three
Months Ended
April
30, |
|
Six
Months Ended
April
30, |
|
|
|
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing |
|
$ |
24,384,970 |
|
$ |
24,137,454 |
|
$ |
48,821,591 |
|
$ |
47,135,346 |
|
Office
products and office furniture |
|
|
9,167,312 |
|
|
6,363,445 |
|
|
19,170,682 |
|
|
12,679,026 |
|
Total
revenues |
|
|
33,552,282 |
|
|
30,500,899 |
|
|
67,992,273 |
|
|
59,814,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing |
|
|
17,972,110 |
|
|
17,483,303 |
|
|
35,849,374 |
|
|
34,506,803 |
|
Office
products and office furniture |
|
|
6,269,754 |
|
|
4,129,793 |
|
|
13,274,017 |
|
|
8,453,894 |
|
Total
cost of sales |
|
|
24,241,864 |
|
|
21,613,096 |
|
|
49,123,391 |
|
|
42,960,697 |
|
Gross
profit |
|
|
9,310,418 |
|
|
8,887,803 |
|
|
18,868,882 |
|
|
16,853,675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses |
|
|
9,362,857 |
|
|
8,611,461 |
|
|
18,388,229 |
|
|
16,532,515 |
|
Income
(loss) from operations |
|
|
(52,439 |
) |
|
276,342 |
|
|
480,653 |
|
|
321,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
4,574 |
|
|
1,180 |
|
|
9,640 |
|
|
2,798 |
|
Interest
expense |
|
|
(133,938 |
) |
|
(56,590 |
) |
|
(271,303 |
) |
|
(103,269 |
) |
Other |
|
|
13,011 |
|
|
50,045 |
|
|
75,685 |
|
|
73,079 |
|
|
|
|
(116,353 |
) |
|
(5,365 |
) |
|
(185,978 |
) |
|
(27,392 |
) |
Income
(loss) before income taxes |
|
|
(168,792 |
) |
|
270,977 |
|
|
294,675 |
|
|
293,768 |
|
Income
tax (expense) benefit |
|
|
71,493 |
|
|
(109,822 |
) |
|
(128,848 |
) |
|
(119,000 |
) |
Net
income (loss) |
|
$ |
(97,299 |
) |
$ |
161,155 |
|
$ |
165,827 |
|
$ |
174,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.01 |
) |
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.02 |
|
Diluted |
|
$ |
(0.01 |
) |
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
9,734,000 |
|
|
9,731,000 |
|
|
9,734,000 |
|
|
9,724,000 |
|
Diluted |
|
|
9,734,000 |
|
|
9,864,000 |
|
|
9,803,000 |
|
|
9,845,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
per share |
|
$ |
0.05 |
|
$ |
0.05 |
|
$ |
0.10 |
|
$ |
0.10 |
|
See notes
to consolidated financial statements.
Champion
Industries, Inc. and Subsidiaries
Consolidated
Statements of Cash Flows
(Unaudited)
|
|
Six
Months Ended
April
30, |
|
|
|
2005 |
|
2004 |
|
Cash
flows from operating activities: |
|
|
|
|
|
Net
income |
|
$ |
165,827 |
|
$ |
174,768 |
|
Adjustments
to reconcile net income to cash
provided
by operating activities: |
|
|
|
|
|
|
|
Depreciation
and amortization |
|
|
2,359,886 |
|
|
2,123,338 |
|
Gain
on sale of assets |
|
|
(3,997 |
) |
|
(5,133 |
) |
Deferred
income taxes |
|
|
(120,674 |
) |
|
- |
|
Increase
in deferred compensation |
|
|
3,575 |
|
|
5,362 |
|
Bad
debt expense |
|
|
296,381 |
|
|
216,181 |
|
Changes
in assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
|
|
2,417,600 |
|
|
2,279,278 |
|
Inventories |
|
|
410,147 |
|
|
639,593 |
|
Other
current assets |
|
|
(210,920 |
) |
|
(715,348 |
) |
Accounts
payable |
|
|
(855,526 |
) |
|
(829,645 |
) |
Accrued
payroll |
|
|
(456,886 |
) |
|
(407,059 |
) |
Taxes
accrued and withheld |
|
|
173,719 |
|
|
40,625 |
|
Accrued
income taxes |
|
|
(62,840 |
) |
|
(700,970 |
) |
Accrued
expenses |
|
|
666,365 |
|
|
(49,691 |
) |
Other
liabilities |
|
|
(16,110 |
) |
|
(4,686 |
) |
Net
cash provided by operating activities |
|
|
4,766,547 |
|
|
2,766,613 |
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities: |
|
|
|
|
|
|
|
Purchases
of property and equipment |
|
|
(1,588,388 |
) |
|
(3,708,225 |
) |
Proceeds
from sales of property and equipment |
|
|
51,174 |
|
|
83,614 |
|
Decrease
(increase) in other assets |
|
|
76,830 |
|
|
(154,742 |
) |
Decrease
in cash surrender value life insurance |
|
|
- |
|
|
32,661 |
|
Net
cash used in investing activities |
|
|
(1,460,384 |
) |
|
(3,746,692 |
) |
|
|
|
|
|
|
|
|
Cash
flows from financing activities: |
|
|
|
|
|
|
|
Borrowings
on line of credit |
|
|
2,217,000 |
|
|
2,745,000 |
|
Payments
on line of credit |
|
|
(2,717,000 |
) |
|
(1,436,688 |
) |
Proceeds
from term debt and leases |
|
|
- |
|
|
1,000,000 |
|
Principal
payments on long-term debt |
|
|
(855,400 |
) |
|
(542,857 |
) |
Proceeds
from exercise of stock options |
|
|
- |
|
|
56,063 |
|
Dividends
paid |
|
|
(973,391 |
) |
|
(972,389 |
) |
Net
cash provided by (used in) financing activities |
|
|
(2,328,791 |
) |
|
849,129 |
|
Net
increase (decrease) in cash and cash equivalents |
|
|
977,372 |
|
|
(130,950 |
) |
Cash
and cash equivalents, beginning of period |
|
|
1,745,457 |
|
|
2,171,713 |
|
Cash
and cash equivalents, end of period |
|
$ |
2,722,829 |
|
$ |
2,040,763 |
|
See notes
to consolidated financial statements.
Champion
Industries, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements (Unaudited)
April
30, 2005
1.
Basis of Presentation and Business Operations
The
foregoing financial information has been prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) and rules
and regulations of the Securities and Exchange Commission for interim financial
reporting. The preparation of the financial statements in accordance with GAAP
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from these estimates. In the opinion of management, the financial
information reflects all adjustments (consisting of items of a normal recurring
nature) necessary for a fair presentation of financial position, results of
operations and cash flows in conformity with GAAP. These interim financial
statements should be read in conjunction with the consolidated financial
statements for the year ended October 31, 2004, and related notes thereto
contained in Champion Industries, Inc.’s Form 10-K dated January 17, 2005. The
accompanying interim financial information is unaudited. The balance sheet
information as of October 31, 2004 was derived from our audited financial
statements.
2.
Earnings (Loss) per Share
Basic
earnings (loss) per share is computed by dividing net income by the
weighted average shares of common stock outstanding for the period and excludes
any dilutive effects of stock options. Diluted earnings per share is computed by
dividing net income by the weighted average shares of common stock outstanding
for the period plus the shares that would be outstanding assuming the exercise
of dilutive stock options. The dilutive effect of stock options was 0 and 69,000
shares for the three and six months ended April 30, 2005 and 133,000 and 121,000
shares for the three and six months ended April 30, 2004. Due to
the net loss incurred in the second quarter
of 2005, no outstanding options were included in the earnings per
share computation because they would automatically result in
anti-dilution.
3.
Inventories
Inventories
are principally stated at the lower of first-in, first-out cost or market.
Manufactured finished goods and work in process inventories include material,
direct labor and overhead based on standard costs, which approximate actual
costs. The Company utilizes an estimated gross profit method for determining
cost of sales in interim periods.
Inventories
consisted of the following:
|
|
April
30, |
|
October
31, |
|
|
|
2005 |
|
2004 |
|
Printing: |
|
|
|
|
|
Raw
materials |
|
$ |
2,365,368 |
|
$ |
2,326,821 |
|
Work
in process |
|
|
2,031,937 |
|
|
1,998,824 |
|
Finished
goods |
|
|
3,518,168 |
|
|
3,460,834 |
|
Office
products and office furniture |
|
|
2,943,894 |
|
|
3,483,035 |
|
|
|
$ |
10,859,367 |
|
$ |
11,269,514 |
|
Champion
Industries, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements (Unaudited)
(continued)
4.
Long-Term Debt
Long-term
debt consisted of the following:
|
|
April
30, |
|
October
31, |
|
|
|
2005 |
|
2004 |
|
|
|
|
|
|
|
|
|
Secured
term note payable |
|
$ |
3,474,651 |
|
$ |
3,920,000 |
|
Installment
notes payable to banks |
|
|
3,266,380 |
|
|
3,576,234 |
|
Capital
lease obligations |
|
|
48,805 |
|
|
149,002 |
|
|
|
|
6,789,836 |
|
|
7,645,236 |
|
Less
current portion |
|
|
1,635,756 |
|
|
1,688,429 |
|
Long-term
debt, net of current portion |
|
$ |
5,154,080 |
|
$ |
5,956,807 |
|
The
Company has an unsecured revolving line of credit with a bank for borrowings to
a maximum of $10,000,000 with interest payable monthly at the prime rate of
interest. This line of credit expires in July 2006 and contains certain
restrictive financial covenants. There was $1,800,000 and $2,300,000 outstanding
under this facility at April 30,
2005 and October 31, 2004.
The
Company has an unsecured revolving line of credit with a bank for borrowings to
a maximum of $1,000,000 with interest payable monthly at the Wall Street Journal
prime rate. The line of credit expires in October 2005 and contains certain
financial covenants. There were no borrowings outstanding under this facility at
April 30, 2005.
There
were no non-cash financing activities for the three and six months ended April
30, 2005 and 2004.
5.
Shareholders’ Equity
The
Company paid a dividend of five cents per share on
March 28, 2005 to
stockholders of record on March
11, 2005. Also,
the Company declared a dividend of five cents per share to be paid on June 24,
2005 to stockholders of record on June 3, 2005.
6.
Commitments and Contingencies
As
reported in Form 8-K filed May 11, 2005, on May 6, 2005, the Company entered
into an agreement to settle all claims in a Mississippi lawsuit asserting that
the Company and its Dallas Printing Company, Inc. subsidiary had engaged in
unfair competition and other wrongful acts in hiring certain employees of
National Forms & Systems Group, Inc.
Following
trial of this matter, titled National Forms & Systems Group, Inc. v. Timothy
V. Ross; Todd Ross and Champion Industries, Inc.; and Timothy V. Ross v.
National Forms & Systems Group, Inc. and Mickey McCardle; in the Circuit
Court of the First Judicial District of Hinds County, Mississippi; Case No.
251-00-942-CIV, on February 16, 2002, a jury had awarded plaintiff $1,745,000 in
actual damages and $750,000 in punitive damages. Additionally, the trial court
had granted plaintiff $645,119 in attorney
Champion
Industries, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements (Unaudited)
(continued)
fees and
expenses, and ordered that interest on the amount of the jury award accrue from
February 22, 2002.
The
Company successfully appealed the jury award and attorney fee and expense award
in both the Court of Appeals of the State of Mississippi and the Supreme Court
of Mississippi, with the appellate courts’ rulings having the effect of
reversing the jury’s award of damages and the trial court’s award of attorney
fees and expenses, and granting a new trial on plaintiff’s claims.
Terms of
the settlement call for all parties’ claims to be dismissed with prejudice, as
fully compromised and released. The Company has paid plaintiff $440,000 cash and
will forego collection of and release its $60,276 cost judgment awarded as a
result of the reversal on appeal.
As of
April 30, 2005 the Company had contractual obligations in the form of leases and
debt as follows:
|
|
Payments
Due by Fiscal Year |
|
Contractual
Obligations |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
2009 |
|
Residual |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cancelable
operating leases |
|
$ |
705,247 |
|
$ |
1,231,948 |
|
$ |
945,183 |
|
$ |
701,474 |
|
$ |
253,340 |
|
$ |
- |
|
$ |
3,837,192 |
|
Revolving
line of credit |
|
|
-
|
|
|
1,800,000 |
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,800,000
|
|
Term
debt |
|
|
1,586,951
|
|
|
1,543,150 |
|
|
1,615,269
|
|
|
966,250
|
|
|
1,029,411
|
|
|
-
|
|
|
6,741,031
|
|
Obligations
under capital leases |
|
|
48,805
|
|
|
- |
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
48,805
|
|
|
|
$ |
2,341,003 |
|
$ |
4,575,098 |
|
$ |
2,560,452 |
|
$ |
1,667,724 |
|
$ |
1,282,751 |
|
$ |
- |
|
$ |
12,427,028 |
|
7.
Accounting for Stock-Based Compensation
In
December 2004, the SFAS issued SFAS No. 123R (revised 2004), “Share-Based
Payment”. This statement revises SFAS No. 123, “Accounting for Stock-Based
Compensation”, and requires companies to expense the value of employee stock
options and similar awards. The effective date of this standard for the Company
is November 1, 2005.
The
Company has elected to follow the intrinsic value method in accounting for its
employee stock options. Accordingly, because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant, no compensation expense is recognized.
The fair
value of these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions for 2004,
risk-free interest rates of 4.03%; dividend yields of 4.21%; volatility factors
of the expected market price of the Company's common stock of 54.0%; and a
weighted-average expected life of the option of 4 years.
The
following pro forma information has been determined as if the Company had
accounted for its employee stock options under the fair value method. For
purposes of pro forma disclosures, the estimated fair value of the options is
expensed in the year granted since the options vest immediately. The Company's
pro forma information for the quarters and six months ended April 30 are as
follows:
Champion
Industries, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements (Unaudited)
(continued)
|
|
Three
Months Ended
April
30, |
|
Six
Months Ended
April
30, |
|
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss), as reported |
|
$ |
(97,299 |
) |
$ |
161,155 |
|
$ |
165,827 |
|
$ |
174,768 |
|
Deduct:
Total stock-based employee compensation expense determined under fair
value method for all awards, net of related tax effects |
|
|
— |
|
|
— |
|
|
— |
|
|
109,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
forma net income (loss) |
|
$ |
(97,299 |
) |
$ |
161,155 |
|
$ |
165,827 |
|
$ |
64,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic,
as reported |
|
$ |
(0.01 |
) |
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.02 |
|
Basic,
pro forma |
|
|
(0.01 |
) |
|
0.02 |
|
|
0.02 |
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted,
as reported |
|
$ |
(0.01 |
) |
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.02 |
|
Diluted,
pro forma |
|
|
(0.01 |
) |
|
0.02 |
|
|
0.02 |
|
|
0.01 |
|
8.
Acquisitions
On
September 7, 2004 the Company acquired all the issued and outstanding capital
stock of Syscan Corporation (“Syscan”), a West Virginia corporation, for a cash
price of $3,500,000 and a contingent purchase price, dependent upon satisfaction
of certain conditions, not to exceed the amount of $1,500,000.
The
Williams Land Corporation has the option to put the 3000 Washington Street
building, occupied by Syscan, to the Company for a price of $1.5 million and the
Company has the option to purchase the building for $1.5 million at the
conclusion of the five year lease term commencing September 1, 2009. This option
may be exercised no later than 60 days prior to the end of the lease and closing
of said purchase cannot exceed 45 days from the end of the lease.
9.
Industry Segment Information
The
Company operates principally in two industry segments organized on the basis of
product lines: the production, printing and sale, principally to commercial
customers, of printed materials (including brochures, pamphlets, reports, tags,
continuous and other forms) and the sale of office products and office furniture
including interior design services.
Champion
Industries, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements (Unaudited)
(continued)
The table
below presents information about reported segments for the three and six months
ended April 30:
|
|
|
|
Office
Products |
|
|
|
2005
Quarter 2 |
|
Printing |
|
&
Furniture |
|
Total |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
27,812,058 |
|
$ |
11,276,457 |
|
$ |
39,088,515 |
|
Elimination
of intersegment revenue |
|
|
(3,427,088 |
) |
|
(2,109,145 |
) |
|
(5,536,233 |
) |
Consolidated
revenues |
|
$ |
24,384,970 |
|
$ |
9,167,312 |
|
$ |
33,552,282 |
|
Operating
income (loss) |
|
|
(241,860 |
) |
|
189,421
|
|
|
(52,439 |
) |
Depreciation
& amortization |
|
|
1,132,788 |
|
|
74,987 |
|
|
1,207,775
|
|
Capital
expenditures |
|
|
684,085 |
|
|
48,768
|
|
|
732,853 |
|
Identifiable
assets |
|
|
51,415,546 |
|
|
9,933,810 |
|
|
61,349,356 |
|
Goodwill |
|
|
1,774,344 |
|
|
286,442 |
|
|
2,060,786 |
|
|
|
|
|
|
|
Office
Products |
|
|
|
|
2004
Quarter 2 |
|
|
Printing |
|
|
&
Furniture |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
27,068,780 |
|
$ |
7,908,579 |
|
$ |
34,977,359 |
|
Elimination
of intersegment revenue |
|
|
(2,931,326 |
) |
|
(1,545,134 |
) |
|
(4,476,460 |
) |
Consolidated
revenues |
|
$ |
24,137,454 |
|
$ |
6,363,445 |
|
$ |
30,500,899 |
|
Operating
income (loss) |
|
|
297,582
|
|
|
(21,240 |
) |
|
276,342
|
|
Depreciation
& amortization |
|
|
1,089,450 |
|
|
58,762 |
|
|
1,148,212
|
|
Capital
expenditures |
|
|
2,689,128 |
|
|
9,839
|
|
|
2,698,967 |
|
Identifiable
assets |
|
|
48,131,179 |
|
|
9,415,490 |
|
|
57,546,669 |
|
Goodwill |
|
|
1,774,344 |
|
|
286,442 |
|
|
2,060,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Office
Products |
|
|
|
2005
Year to date |
|
Printing |
|
&
Furniture |
|
Total |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
55,898,035 |
|
$ |
22,807,226 |
|
$ |
78,705,261 |
|
Elimination
of intersegment revenue |
|
|
(7,076,444 |
) |
|
(3,636,544 |
) |
|
(10,712,988 |
) |
Consolidated
revenues |
|
$ |
48,821,591 |
|
$ |
19,170,682 |
|
$ |
67,992,273 |
|
Operating
income |
|
|
29,868 |
|
|
450,785 |
|
|
480,653 |
|
Depreciation
& amortization |
|
|
2,205,242
|
|
|
154,644
|
|
|
2,359,886 |
|
Capital
expenditures |
|
|
1,466,833 |
|
|
121,555 |
|
|
1,588,388 |
|
Identifiable
assets |
|
|
51,415,546 |
|
|
9,933,810 |
|
|
61,349,356 |
|
Goodwill |
|
|
1,774,344 |
|
|
286,442 |
|
|
2,060,786 |
|
|
|
|
|
|
|
|
|
|
|
|
Champion
Industries, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements (Unaudited)
(continued)
|
|
|
|
Office
Products |
|
|
|
2004
Year to date |
|
Printing |
|
&
Furniture |
|
Total |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
52,598,800 |
|
$ |
15,598,533 |
|
$ |
68,197,333 |
|
Elimination
of intersegment revenue |
|
|
(5,463,454 |
) |
|
(2,919,507 |
) |
|
(8,382,961 |
) |
Consolidated
revenues |
|
$ |
47,135,346 |
|
$ |
12,679,026 |
|
$ |
59,814,372 |
|
Operating
income (loss) |
|
|
474,966 |
|
|
(153,806 |
) |
|
321,160 |
|
Depreciation
& amortization |
|
|
2,051,147
|
|
|
72,191
|
|
|
2,123,338 |
|
Capital
expenditures |
|
|
3,682,677 |
|
|
25,548 |
|
|
3,708,225 |
|
Identifiable
assets |
|
|
48,131,179 |
|
|
9,415,490 |
|
|
57,546,669 |
|
Goodwill |
|
|
1,774,344 |
|
|
286,442 |
|
|
2,060,786 |
|
A
reconciliation of total segment revenues and of total segment operating income
to income before income taxes, for the three and six months ended April 30, 2005
and 2004, is as follows:
|
|
Three
months |
|
Six
months |
|
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Total
segment revenues |
|
$ |
39,088,515 |
|
$ |
34,977,359 |
|
$ |
78,705,261 |
|
$ |
68,197,333 |
|
Elimination
of intersegment revenue |
|
|
(5,536,233 |
) |
|
(4,476,460 |
) |
|
(10,712,988 |
) |
|
(8,382,961 |
) |
Consolidated
revenue |
|
$ |
33,552,282 |
|
$ |
30,500,899 |
|
$ |
67,992,273 |
|
$ |
59,814,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
segment operating income (loss) |
|
$ |
(52,439 |
) |
$ |
276,342 |
|
$ |
480,653 |
|
$ |
321,160 |
|
Interest
income |
|
|
4,574 |
|
|
1,180 |
|
|
9,640 |
|
|
2,798 |
|
Interest
expense |
|
|
(133,938 |
) |
|
(56,590 |
) |
|
(271,303 |
) |
|
(103,269 |
) |
Other
income |
|
|
13,011 |
|
|
50,045 |
|
|
75,685 |
|
|
73,079 |
|
Consolidated
income (loss) before income taxes |
|
$ |
(168,792 |
) |
$ |
270,977 |
|
$ |
294,675 |
|
$ |
293,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Identifiable
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
segment identifiable assets |
|
$ |
61,349,356 |
|
$ |
57,546,669 |
|
$ |
61,349,356 |
|
$ |
57,546,669 |
|
Elimination
of intersegment assets |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total
consolidated assets |
|
$ |
61,349,356 |
|
$ |
57,546,669 |
|
$ |
61,349,356 |
|
$ |
57,546,669 |
|
Champion
Industries, Inc. and Subsidiaries
Item
2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
Results
of Operations
The
following table sets forth, for the periods indicated, information derived from
the Consolidated Statements of Operations as a percentage of total
revenues.
|
|
Percentage
of Total Revenues |
|
|
|
Three
Months Ended
April
30, |
|
Six
Months Ended
April
30, |
|
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing |
|
|
72.7 |
% |
|
79.1 |
% |
|
71.8 |
% |
|
78.8 |
% |
Office
products and office furniture |
|
|
27.3 |
|
|
20.9 |
|
|
28.2 |
|
|
21.2 |
|
Total
revenues |
|
|
100.0 |
|
|
100.0 |
|
|
100.0 |
|
|
100.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing |
|
|
53.6 |
|
|
57.3 |
|
|
52.7 |
|
|
57.7 |
|
Office
products and office furniture |
|
|
18.7 |
|
|
13.6 |
|
|
19.5 |
|
|
14.1 |
|
Total
cost of sales |
|
|
72.3 |
|
|
70.9 |
|
|
72.2 |
|
|
71.8 |
|
Gross
profit |
|
|
27.7 |
|
|
29.1 |
|
|
27.8 |
|
|
28.2 |
|
Selling,
general and administrative
expenses |
|
|
27.9 |
|
|
28.2 |
|
|
27.1 |
|
|
27.6 |
|
Income
(loss) from operations |
|
|
(0.2 |
) |
|
0.9 |
|
|
0.7 |
|
|
0.6 |
|
Interest
income |
|
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
Interest
(expense) |
|
|
(0.4 |
) |
|
(0.2 |
) |
|
(0.4 |
) |
|
(0.2 |
) |
Other
income |
|
|
0.1 |
|
|
0.2 |
|
|
0.1 |
|
|
0.1 |
|
Income
(loss) before taxes |
|
|
(0.5 |
) |
|
0.9 |
|
|
0.4 |
|
|
0.5 |
|
Income
tax (expense) benefit |
|
|
0.2 |
|
|
(0.4 |
) |
|
(0.2 |
) |
|
(0.2 |
) |
Net
income (loss) |
|
|
(0.3 |
)% |
|
0.5 |
% |
|
0.2 |
% |
|
0.3 |
% |
Three
Months Ended April 30, 2005 Compared to Three Months Ended April 30,
2004
Revenues
Total
revenues increased 10.0% in the second quarter of 2005 compared to the same
period in 2004 to $33.6 million from $30.5 million. Printing revenue increased
1.0% in the second quarter of 2005 to $24.4 million from $24.1 million in the
second quarter of 2004. Office products and office furniture revenue increased
44.1% in the second quarter of 2005 to $9.2 million from $6.4 million in the
second quarter of 2004. The increase in printing revenue was primarily due to
additional sales derived from the Syscan acquisition offset by quarterly print
sales reductions across several divisions. The revenue increase in the office
products and office furniture division was primarily related to the Syscan
acquisition coupled with increased furniture sales.
Cost
of Sales
Total
cost of sales increased 12.2% in the second quarter of 2005 to $24.2 million
from $21.6 million in the second quarter of 2004. Printing cost of sales in the
second quarter of 2005
increased
$489,000 and increased as a percentage of printing sales from 72.4% in 2004 to
73.7% in 2005. The increase in printing costs as a percent of printing sales was
primarily attributable to higher material and outside purchase costs as a
percent of printing sales. Office products and office furniture cost of sales
increased 51.8% or approximately $2.1 million in 2005 to $6.3 million from $4.1
million in 2004 and as a percent of sales increased to 68.4% in 2005 from 64.9%
in 2004. The increase in office products and office furniture cost of sales is
attributable to the higher sales discussed above. The increase in office
products and office furniture cost of sales as a percent of sales is reflective
of higher furniture costs as a percent of furniture sales and wholesale pricing
factors at Syscan for office supplies.
Operating
Expenses
In the
second quarter of 2005, selling, general, and administrative expenses increased
on a gross dollar basis to $9.4 million from $8.6 million in 2004, an increase
of $751,000 or 8.7%. Selling, general and administrative expenses as a
percentage of sales decreased to 27.9% in 2005 from 28.2% in 2004 as a result of
higher sales in 2005 over 2004.
The
increase in selling, general and administrative expenses is primarily due to
$777,000 of legal settlements, accruals and expenses including $440,000 to
settle a lawsuit in Mississippi and additional costs incurred as a result of the
acquisition of Syscan in September 2004. In the second quarter of 2004 the
Company incurred additional costs related to the consolidation of facilities,
higher payroll costs to support sales initiatives, and increased professional
fees for accounting and legal costs.
Income
(loss) from Operations and Other Income and Expenses
Income
(loss) from operations decreased 119.0% in the second quarter of 2005 to a loss
of ($52,000) from income of $276,000 in the second quarter of 2004. This
decrease is the result of increased selling, general and administrative expenses
partially offset by increased gross profit contributions resulting from the
sales increases discussed above.
Other
expense increased $111,000 due primarily to a $77,000 increase in interest
expense resulting from higher borrowings primarily related to the acquisition of
Syscan in September 2004 coupled with an increase in interest
rates.
Income
Taxes
The
Company’s effective income tax rate was 42.4% for the second quarter
of 2005 and 40.5% for the second quarter of 2004. The increase in income taxes
as a percentage of income before taxes is primarily related to the
nondeductibility of certain selling related expenses. The effective income tax
rate approximates the combined federal and state, net of federal benefit,
statutory income tax rate and is partially impacted by the geographic
profitability mix of our operations.
Net
Income (loss)
Net
income (loss) for the second quarter
of 2005 was a loss of ($97,000) compared to net income of $161,000 in the
second quarter
of 2004. Basic and diluted earnings (loss) per share for the three months ended
April 30, 2005 and 2004 were $(0.01) and $0.02.
Six
Months Ended April 30, 2005 Compared to Six Months Ended April 30,
2004
Revenues
Total
revenues increased 13.7% in the first six months of 2005 compared to the same
period in 2004 to $68.0 million from $59.8 million. Printing revenue increased
3.6% in the six month period ended April 30, 2005 to $48.8 million from $47.1
million in the same period in 2004. Office products and office furniture revenue
increased 51.2% in the six month period ended April 30, 2005 to $19.2 million
from $12.7 million in the same period in 2004. The revenue increase for the
office products and office furniture segment was attributable to an increase in
furniture sales in 2005 due in part to the additional sales derived from the
purchase of Syscan coupled with organic growth and additional office product
sales resulting from the Syscan acquisition. The increase in printing sales was
primarily due to additional sales derived from the Syscan acquisition offset by
print sales reductions across several divisions.
Cost
of Sales
Total
cost of sales increased 14.3% in the six months ended April 30, 2005 to $49.1
million from $43.0 million in the six months ended April 30, 2004. Printing cost
of sales increased 3.9% in the six months ended April 30, 2005 to $35.8 million
from $34.5 million in the six months ended April 30, 2004. The increase in
printing cost of sales was primarily due to the increase in printing sales noted
above and gross margin compression resulting from increased labor costs related
in part to the Syscan acquisition. Office products and office furniture cost of
sales increased 57.0% in the six months ended April 30, 2005 to $13.3 million
from $8.5 million in the six months ended April 30, 2004 and increased as a
percent of sales from 66.7% in 2004 to 69.2% in 2005. The increase in office
products and office furniture cost of sales is attributable to an increase in
office products and office furniture sales. The increase in office products and
office furniture cost of sales as a percent of sales is reflective of higher
furniture costs as a percent of furniture sales and wholesale pricing factors at
Syscan for office supplies.
Operating
Expenses
During
the six months ended April 30, 2005 compared to the same period in 2004,
selling, general and administrative expenses decreased as a percentage of sales
to 27.1% from 27.6%. Total selling, general and administrative expenses
increased $1.9 million. The
increase in selling, general and administrative expenses is primarily due to
additional costs associated with the acquisition of Syscan in September 2004 and
approximately $800,000 in legal related costs associated with various legal
settlements, accruals, and expenses including a $440,000 settlement related to a
Mississippi lawsuit.
Income
from Operations and Other Income and Expenses
Income
from operations increased 49.7% in the six month period ended April 30, 2005 to
$481,000 from $321,000 in the same period of 2004. This
increase is the result of increased gross profit contribution due to increased
sales discussed above partially offset by increased selling, general and
administrative expenses to support such sales growth coupled with approximately
$800,000 in legal related costs on a year to date basis. Other expense increased
$159,000 to $186,000 in 2005 from $27,000 in 2004, this increase is primarily
due to a $168,000
increase
in interest expense resulting from higher borrowings primarily related to the
acquisition of Syscan in September 2004 coupled with an increase in interest
rates.
Income
Taxes
The
Company’s effective income tax rate was 43.7% for the six months ended April 30,
2005, up from 40.5% in the same period of 2004. The
increase in income taxes as a percentage of income before taxes is primarily
related to the nondeductibility of certain selling related expenses.
The
effective income tax rate approximates the combined federal and state, net of
federal benefit, statutory income tax rate and is partially impacted by the
geographic profitability mix of our operations.
Net
Income
Net
income for the first six months of 2005 decreased 5.1% to $166,000 from $175,000
in the same period of 2004 due to the reasons discussed above. Basic and diluted
earnings per share for the six months ended April 30, 2005 and 2004, were
$0.02.
Inflation
and Economic Conditions
Management
believes that the effect of inflation on the Company’s operations has not been
material and will continue to be immaterial for the foreseeable future. The
Company does not have long-term sales and purchase contracts; therefore, to the
extent permitted by competition, it has the ability to pass through to the
customer most cost increases resulting from inflation, if any.
Seasonality
Historically,
the Company has experienced a greater portion of its profitability in the second
and fourth quarters than in the first and third quarters. The second quarter
generally reflects increased orders for printing of corporate annual reports and
proxy statements. A post-Labor Day increase in demand for printing services and
office products coincides with the Company’s fourth quarter.
Liquidity
and Capital Resources
Net cash
provided by operations for the six months ended April 30, 2005, was $4.8 million
compared to net cash provided by operations of $2.8 million during the same
period in 2004. This change in net cash from operations is due primarily to
timing changes in assets and liabilities including an increase in accrued
expenses resulting from various legal related settlements, accruals and
expenses. In addition, accrued income taxes reflected a reduction in the
utilization of cash due to higher earnings for the fiscal year ended October 31,
2003 compared to 2004.
Net cash
used in investing activities for the six months ended April 30, 2005 was $1.5
million compared to $3.7 million during the same period in 2004. The net cash
used in investing activities during the first six months of 2005 primarily
related to vehicle and equipment additions including pre-press expenditures at
two of the Company’s sheetfed plants and print on demand expenditures. The 2004
expenditures primarily related to equipment purchases and expenditures for
buildings and improvements including the purchase of new sheetfed
presses.
Net cash
used in financing activities for the six months ended April 30, 2005 was $2.3
million compared to net cash provided by financing activities of $849,000 during
the same period in 2004. This change is primarily due to $1.8 million in net
changes on the Company’s line of credit, and net payments on term debt of
$855,000 in 2005 compared to net borrowings on term debt of $457,000 in
2004.
Working
capital on April 30, 2005 was $25.6 million, a decrease of $1.3 million from
October 31, 2004. Management believes that working capital and operating ratios
remain at acceptable levels.
The
Company expects that the combination of funds available from working capital,
borrowings available under the Company’s credit facilities and anticipated cash
flows from operations will provide sufficient capital resources for the
foreseeable future. In the event the Company seeks to accelerate internal growth
or make acquisitions beyond these sources, additional financing would be
necessary.
Environmental
Regulation
The
Company is subject to the environmental laws and regulations of the United
States, and the states in which it operates, concerning emissions into the air,
discharges into the waterways and the generation, handling and disposal of waste
materials. The Company’s past expenditures relating to environmental compliance
have not had a material effect on the Company. These laws and regulations are
constantly evolving, and it is impossible to predict accurately the effect they
may have upon the capital expenditures, earnings, and competitive position of
the Company in the future. Based upon information currently available,
management believes that expenditures relating to environmental compliance will
not have a material impact on the financial position of the
Company.
Special
Note Regarding Forward-Looking Statements
Certain
statements contained in this Form 10-Q, including without limitation statements
including the word “believes,” “anticipates,” “intends,” “expects” or words of
similar import, constitute “forward-looking statements” within the meaning of
section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements of the Company expressed or implied
by such forward-looking statements. Such factors include, among others, general
economic conditions, changes in business strategy or development plans, and
other factors referenced in this Form 10-Q. Given these uncertainties, readers
are cautioned not to place undue reliance on such forward-looking statements.
The Company disclaims any obligation to update any such factors or to publicly
announce the results of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
ITEM
3a. Quantitative and Qualitative Disclosure About Market
Risk
The
Company does not have any significant exposure relating to market
risk.
ITEM
4. Controls and Procedures
Company
management, including the Chief Executive Officer, Chief Operating Officer and
Chief Financial Officer, has conducted an evaluation of the effectiveness of
disclosure controls and procedures pursuant to Exchange Act Rule 13a-15c as of
the end of the period covered by this quarterly report. Based on that
evaluation, the Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer concluded that the disclosure controls and procedures are
effective in ensuring that all material information required to be filed in this
quarterly report has been made known to them in a timely fashion. There were no
changes in internal controls over financial reporting during the last fiscal
quarter that have materially affected or are reasonably likely to materially
affect the Company’s internal controls over financial reporting.
PART
II - OTHER INFORMATION
ITEM
1. Legal Proceedings
As
reported in Form 8-K filed May 11, 2005, on May 6, 2005, the Company entered
into an agreement to settle all claims in a Mississippi lawsuit asserting that
the Company and its Dallas Printing Company, Inc. subsidiary had engaged in
unfair competition and other wrongful acts in hiring certain employees of
National Forms & Systems Group, Inc.
Following
trial of this matter, titled National Forms & Systems Group, Inc. v. Timothy
V. Ross; Todd Ross and Champion Industries, Inc.; and Timothy V. Ross v.
National Forms & Systems Group, Inc. and Mickey McCardle; in the Circuit
Court of the First Judicial District of Hinds County, Mississippi; Case No.
251-00-942-CIV, on February 16, 2002, a jury had awarded plaintiff $1,745,000 in
actual damages and $750,000 in punitive damages. Additionally, the trial court
had granted plaintiff $645,119 in attorney fees and expenses, and ordered that
interest on the amount of the jury award accrue from February 22,
2002.
The
Company successfully appealed the jury award and attorney fee and expense award
in both the Court of Appeals of the State of Mississippi and the Supreme Court
of Mississippi, with the appellate courts’ rulings having the effect of
reversing the jury’s award of damages and the trial court’s award of attorney
fees and expenses, and granting a new trial on plaintiff’s claims.
Terms of
the settlement call for all parties’ claims to be dismissed with prejudice, as
fully compromised and released. The Company has paid plaintiff $440,000 cash and
will forego collection of and release its $60,276 cost judgment awarded as a
result of the reversal on appeal.
ITEM
4. Submission of Matters to a Vote of Security Holders
At the
annual meeting of shareholders held March 21, 2005, the following matters were
voted upon:
|
a) |
Fixing
the number of directors at seven (7) and election of the following
nominees as directors, with votes “for” and “withheld,” as well as broker
non-votes, as follows: |
Director |
Votes
“For” |
Votes
“Withheld” |
Broker
Non-votes |
Louis
J. Akers |
9,147,245 |
49,677 |
-0- |
Philip
E. Cline |
9,137,272 |
59,650 |
-0- |
Harley
F. Mooney, Jr. |
9,157,919 |
39,003 |
-0- |
A.
Michael Perry |
9,158,094 |
38,828 |
-0- |
Marshall
T. Reynolds |
9,154,994 |
41,928 |
-0- |
Neal
W. Scaggs |
9,158,094 |
38,828 |
-0- |
Glenn
W. Wilcox, Sr. |
9,158,094 |
38,828 |
-0- |
Item
6. Exhibits
a)
Exhibits: |
|
|
|
(10.1) |
Release
of Claims and Settlement Agreement among the Company and National Forms
and Systems Group, Inc. and others filed as Exhibit 10.1 to Form 8-K filed
May 11, 2005 is incorporated herein by reference.
|
(31.1) |
Principal
Executive Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley act of 2002 - Marshall T. Reynolds
|
Exhibit
31.1 |
Page
Exhibit 31.1-p1 |
(31.2) |
Principal
Financial Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley act of 2002 - Todd R. Fry
|
Exhibit
31.2 |
Page Exhibit
31.2-p1 |
(31.3) |
Principal
Operating Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley act of 2002 - Toney K. Adkins
|
Exhibit
31.3 |
Page Exhibit
31.3-p1 |
(32) |
Marshall
T. Reynolds, Todd R. Fry and Toney K. Adkins Certification Pursuant to 18
U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley act of 2002
|
Exhibit
32 |
Page Exhibit
32-p1 |
SIGNATURES
Pursuant
to the requirement of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
CHAMPION
INDUSTRIES, INC.
Date:
June 10,
2005 |
/s/
Marshall T. Reynolds |
|
Marshall
T. Reynolds |
|
Chief
Executive Officer |
|
|
|
|
Date:
June 10,
2005 |
/s/
Toney K. Adkins |
|
Toney
K. Adkins |
|
President
and Chief Operating Officer |
|
|
|
|
Date:
June 10,
2005 |
/s/
Todd R. Fry |
|
Todd
R. Fry |
|
Senior
Vice President and Chief Financial Officer |