EX-99.3 5 exhibit993.htm PRO FORMA FINANCIAL INFORMATION exhibit993.htm
EXHIBIT 99.3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actual
April 30, 2007
Champion
 
 
Actual
June 30, 2007
HHD
 
 
Pro forma Adjustments
 
 
 
 
 
Pro Forma as Adjusted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current  assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
 
$
4,091,855
 
 
$
875,000
 
 
-
 
 
 
 
 
$
4,966,855
 
Accounts receivable, net
 
 
19,994,410
 
 
 
2,102,000
 
 
-
 
 
 
 
 
 
22,096,410
 
Inventories
 
 
10,909,049
 
 
 
689,000
 
 
-
 
 
 
 
 
 
11,598,049
 
Other assets
 
 
1,094,916
 
 
 
98,000
 
 
-
 
 
 
 
 
 
1,192,916
 
Deferred income tax asset
 
 
1,235,599
 
 
 
-
 
 
-
 
 
 
 
 
 
1,235,599
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Total  current assets
 
 
37,325,829
 
 
 
3,764,000
 
 
 
-
 
 
 
 
 
 
41,089,829
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, at cost:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Land
 
 
2,023,375
 
 
 
72,000
 
 
 
25,314
 
 
 
(5
)
 
 
2,120,689
 
   Building & improvements
 
 
9,005,022
 
 
 
1,508,000
 
 
 
1,407,027
 
 
 
(5
)
 
 
11,920,049
 
   Machinery & equipment
 
 
48,177,308
 
 
 
3,987,000
 
 
 
500,000
 
 
 
(5
)
 
 
52,664,308
 
   Furniture & fixtures
 
 
3,696,232
 
 
 
-
 
 
 
985,470
 
 
 
(5
)
 
 
4,681,702
 
   Vehicles & other
 
 
3,427,669
 
 
 
-
 
 
 
97,389
 
 
 
(5
)
 
 
3,525,058
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
66,329,606
 
 
 
5,567,000
 
 
 
3,015,200
 
 
 
 
 
 
 
74,911,806
 
   Less accumulated depreciation
 
 
(46,968,674
)
 
 
-
 
 
 
-
 
 
 
 
 
 
 
(46,968,674
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
19,360,932
 
 
 
5,567,000
 
 
 
3,015,200
 
 
 
(1
)
 
 
27,943,132
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash surrender value
 
 
1,202,696
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
1,202,696
 
Goodwill
 
 
3,411,511
 
 
 
36,813,000
 
 
 
(36,813,000
)
 
 
(3
)
 
 
38,735,190
 
 
 
 
 
 
 
 
 
 
 
 
35,323,679
 
 
 
(1
)
 
 
 
 
Other intangibles, net of accumulated amortization
 
 
2,950,969
 
 
 
33,536,000
 
 
 
32,556,568
 
 
 
(1
)
 
 
35,507,537
 
 
 
 
 
 
 
 
 
 
 
 
(33,536,000
)
 
 
(3
)
 
 
 
 
Other assets
 
 
327,027
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
327,027
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total other assets
 
 
7,892,203
 
 
 
70,349,000
 
 
 
(2,468,753
)
 
 
 
 
 
 
75,772,450
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
64,578,964
 
 
$
79,680,000
 
 
$
546,447
 
 
 
 
 
 
$
144,805,411
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current  liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Notes payable, line of credit
 
$
-
 
 
$
-
 
 
 
-
 
 
 
 
 
 
$
-
 
   Accounts payable
 
 
4,125,451
 
 
 
200,000
 
 
 
-
 
 
 
 
 
 
 
4,325,451
 
   Accrued payroll
 
 
1,760,766
 
 
 
398,000
 
 
 
-
 
 
 
 
 
 
 
2,158,766
 
   Taxes accrued & withheld
 
 
1,345,323
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
1,345,323
 
   Accrued income taxes
 
 
337,024
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
337,024
 
   Accrued expenses
 
 
962,704
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
962,704
 
   Deferred income
 
 
-
 
 
 
381,000
 
 
 
-
 
 
 
 
 
 
 
381,000
 
   Current portion of long-term debt:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Notes payable, term
 
 
1,560,468
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
1,560,468
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         Total current liabilities
 
 
10,091,736
 
 
 
979,000
 
 
 
-
 
 
 
 
 
 
 
11,070,736
 
Ex 99.3 - 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, net of current portion:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Notes payable, line of credit
 
 
213,000
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
213,000
 
   Notes payable, term
 
 
4,051,267
 
 
 
-
 
 
 
79,247,447
 
 
 
(7
)
 
 
83,298,714
 
Intercompany
 
 
-
 
 
 
78,045,000
 
 
 
(78,045,000
)
 
 
(4
)
 
 
-
 
Other liabilities
 
 
388,047
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
388,047
 
Deferred income tax liability
 
 
3,468,136
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
3,468,136
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Total liabilities
 
 
18,212,186
 
 
 
79,024,000
 
 
 
1,202,447
 
 
 
 
 
 
 
98,438,633
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Common stock
 
 
9,962,913
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
9,962,913
 
   Additional paid-in capital
 
 
22,722,680
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
22,722,680
 
   Retained earnings/Parent Equity
 
 
13,681,185
 
 
 
656,000
 
 
 
(656,000
)
 
 
(2
)
 
 
13,681,185
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shareholders' equity
 
 
46,366,778
 
 
 
656,000
 
 
 
(656,000
)
 
 
 
 
 
 
46,366,778
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
64,578,964
 
 
$
79,680,000
 
 
$
546,447
 
 
 
 
 
 
$
144,805,411
 

See accompanying notes to unaudited pro forma combined financial statements.
Ex 99.3 - 2
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actual for the
 
 
Actual for the
 
 
 
 
 
 
 
 
 
 
 
 
Year ended
 
 
Year ended
 
 
 
 
 
 
 
 
 
 
 
 
October 31, 2006
 
 
December 31, 2006
 
 
Pro Forma
 
 
 
 
 
Pro Forma
 
 
 
Champion
 
 
HHD
 
 
Adjustments
 
 
 
 
 
As Adjusted
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Printing
 
$
106,413,663
 
 
$
3,561,000
 
 
-
 
 
 
 
 
$
109,974,663
 
   Office products & office furniture
 
 
38,774,213
 
 
 
-
 
 
-
 
 
 
 
 
 
38,774,213
 
   Newspaper advertising
 
 
-
 
 
 
15,650,000
 
 
-
 
 
 
 
 
 
15,650,000
 
   Newspaper circulation
 
 
-
 
 
 
4,336,000
 
 
-
 
 
 
 
 
 
4,336,000
 
   Total revenues
 
 
145,187,876
 
 
 
23,547,000
 
 
 
-
 
 
 
 
 
 
168,734,876
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Printing
 
 
75,015,978
 
 
 
-
 
 
 
-
 
 
 
 
 
 
75,015,978
 
   Office products & office furniture
 
 
26,777,539
 
 
 
-
 
 
 
-
 
 
 
 
 
 
26,777,539
 
   HHD operating costs, exclusive of depreciation
 
 
-
 
 
 
13,702,000
 
 
 
-
 
 
 
 
 
 
13,702,000
 
   Total cost of sales
 
 
101,793,517
 
 
 
13,702,000
 
 
 
-
 
 
 
 
 
 
115,495,517
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit:
 
 
43,394,359
 
 
 
9,845,000
 
 
 
-
 
 
 
 
 
 
53,239,359
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general & administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   expenses:
 
 
34,018,288
 
 
 
4,366,000
 
 
 
702,063
 
 
 
(6
)
 
 
38,596,459
 
 
 
 
 
 
 
 
 
 
 
 
(851,000
)
 
 
(8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
361,108
 
 
 
(5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hurricane & relocation costs (income)
 
 
(377,276
)
 
 
-
 
 
 
-
 
 
 
 
 
 
 
(377,276
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations:
 
 
9,753,347
 
 
 
5,479,000
 
 
 
(212,171
)
 
 
 
 
 
 
15,020,176
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income (expenses):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Interest income
 
 
28,251
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
28,251
 
   Interest expense
 
 
(609,881
)
 
 
-
 
 
 
(6,327,769
)
 
 
(7
)
 
 
(7,270,236
)
 
 
 
 
 
 
 
  
 
 
 
(332,586
)
 
 
(7
)
 
 
 
 
   Other
 
 
31,694
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
31,694
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total other
 
 
(549,936
)
 
 
-
 
 
 
(6,660,355
)
 
 
 
 
 
 
(7,210,291
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
 
 
9,203,411
 
 
 
5,479,000
 
 
 
(6,872,526
)
 
 
 
 
 
 
7,809,885
 
Income taxes
 
 
(3,729,563
)
 
 
(2,197,000
)
 
 
4,184,717
 
 
 
(9
)
 
 
(1,741,846
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
5,473,848
 
 
$
3,282,000
 
 
$
(2,687,809
)
 
 
 
 
 
$
6,068,039
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.56
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
0.62
 
Diluted
 
$
0.55
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
0.61
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
9,818,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,818,000
 
Diluted
 
 
9,972,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,972,000
 
 
See accompanying notes to unaudited pro forma combined financial statements.
Ex 99.3 - 3
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actual for the six
 
 
Actual for the six
 
 
 
 
 
 
 
 
 
 
 
 
months ended
 
 
months ended
 
 
 
 
 
 
 
 
 
 
 
 
April 30, 2007
 
 
June 30, 2007
 
 
Pro Forma
 
 
 
 
 
Pro Forma
 
 
 
Champion
 
 
HHD
 
 
Adjustments
 
 
 
 
 
As Adjusted
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Printing
 
$
51,157,662
 
 
$
1,569,000
 
 
-
 
 
 
 
 
$
52,726,662
 
   Office products & office furniture
 
 
17,595,548
 
 
 
-
 
 
-
 
 
 
 
 
 
17,595,548
 
   Newspaper advertising
 
 
-
 
 
 
6,726,000
 
 
-
 
 
 
 
 
 
6,726,000
 
   Newspaper circulation
 
 
-
 
 
 
2,027,000
 
 
-
 
 
 
 
 
 
2,027,000
 
   Total revenues
 
 
68,753,210
 
 
 
10,322,000
 
 
 
-
 
 
 
 
 
 
79,075,210
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Printing
 
 
35,990,905
 
 
 
-
 
 
 
-
 
 
 
 
 
 
35,990,905
 
   Office products & office furniture
 
 
12,219,956
 
 
 
-
 
 
 
-
 
 
 
 
 
 
12,219,956
 
   HHD operating costs, exclusive of depreciation
 
 
-
 
 
 
5,933,000
 
 
 
-
 
 
 
 
 
 
5,933,000
 
   Total cost of sales
 
 
48,210,861
 
 
 
5,933,000
 
 
 
-
 
 
 
 
 
 
54,143,861
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit:
 
 
20,542,349
 
 
 
4,389,000
 
 
 
-
 
 
 
 
 
 
24,931,349
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general & administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   expenses:
 
 
15,899,643
 
 
 
1,889,000
 
 
 
351,031
 
 
 
(6
)
 
 
18,129,900
 
 
 
 
 
 
 
 
 
 
 
 
(267,000
)
 
 
(8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
257,226
 
 
 
(5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations:
 
 
4,642,706
 
 
 
2,500,000
 
 
 
(341,257
)
 
 
 
 
 
 
6,801,449
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income (expenses):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Interest income
 
 
18,073
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
18,073
 
   Interest expense
 
 
(286,066
)
 
 
-
 
 
 
(3,163,884
)
 
 
(7
)
 
 
(3,616,243
)
 
 
 
 
 
 
 
 
 
 
 
(166,293
)
 
 
(7
)
 
 
 
 
   Other
 
 
18,880
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
18,880
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total other
 
 
(249,113
)
 
 
-
 
 
 
(3,330,177
)
 
 
 
 
 
 
(3,579,290
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
 
 
4,393,593
 
 
 
2,500,000
 
 
 
(3,671,434
)
 
 
 
 
 
 
3,222,159
 
Income taxes
 
 
(1,735,691
)
 
 
(981,000
)
 
 
2,186,427
 
 
 
(9
)
 
 
(530,264
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
2,657,902
 
 
$
1,519,000
 
 
$
(1,485,007
)
 
 
 
 
 
$
2,691,895
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.27
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
0.27
 
Diluted
 
$
0.26
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
0.27
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
9,950,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,950,000
 
Diluted
 
 
10,121,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,121,000
 
 
See accompanying notes to unaudited pro forma combined financial statements.
Ex 99.3 - 4
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1. Champion acquired substantially all of the net assets of the Huntington Herald Dispatch (HHD) for a purchase price of $77.0 million consisting of cash. The acquisition will result in an excess of the purchase price over the historical net assets to be acquired, which will be allocated to the net assets as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase Price
 
$
79,247,447
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical carrying value of net assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total net assets
 
 
656,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less: net assets not assumed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and other intangibles
 
 
(70,349,000
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Add: net liabilities not assumed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Due to Gatehouse Media, Inc.
 
 
78,045,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical carrying value of net assets acquired
 
 
8,352,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Excess of net purchase price over net assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
acquired
 
$
70,895,447
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allocation of excess purchase price:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Excess fair value of property, plant and equipment
 
$
3,015,200
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
 
35,323,679
 
 
 
 
 
 
 
 
 
 
 
 
 
Other intangible assets
 
 
32,556,568
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total allocation of excess purchase price
 
$
70,895,447
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The purchase price on a pro forma basis as of June 30, 2007, includes a cash payment of $77.0 million plus acquisition costs of approximately $300,000 and a working capital adjustment of approximately $1,947,447 at the pro forma date. The purchase price was financed by Champion through a term debt facility and a revolving credit facility.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The final determination of the HHD purchase price will be based on the contractual payment of $77.0 million plus an amount to be paid for working capital pursuant to a predetermined working capital payment of $837,554 plus or minus any change in working capital from the index working capital base of $1,675,107 at the closing date of September 14, 2007.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2. To eliminiate the historical net book value of the HHD:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Parent Equity
 
$
656,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3. To reflect the write-off of HHD intangibles
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
$
36,813,000
 
 
 
 
 
 
 
 
 
 
 
 
 
Other intangibles
 
$
33,536,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4. To reflect the write-off of Intercompany liability
 
$
78,045,000
 
 
 
 
 
 
 
 
 
 
 
 
 
Ex 99.3 - 5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation
 
 
Depreciation
 
 
 
 
 
 
Fair value
 
 
Life
 
 
for the
 
 
for the
 
 
 
 
 
 
Adjustment
 
 
(Years)
 
 
Year ended
 
 
six Months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land
 
$
25,314
 
 
 
 
 
 
 
 
 
 
 
 
 
Building and improvements
 
 
1,407,027
 
 
 
20-39.5
 
 
$
14,048
 
 
$
16,453
 
 
 
 
Machinery and equipment
 
 
500,000
 
 
 
3-10
 
 
 
326,284
 
 
 
219,849
 
 
 
 
Furniture and fixtures
 
 
985,470
 
 
 
7
 
 
 
(16,232
)
 
 
2,420
 
 
 
 
Vehicles
 
 
97,389
 
 
 
5
 
 
 
37,008
 
 
 
18,504
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
3,015,200
 
 
 
 
 
 
$
361,108
 
 
$
257,226
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6. To reflect Pro forma adjustments for amortization of intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization
 
 
Amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the
 
 
For the six
 
 
 
 
 
 
Amount
 
 
Life
 
 
Year ended
 
 
Months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trademarks & Masthead
 
$
18,515,316
 
 
Indefinite
 
 
 
-
 
 
 
-
 
 
 
 
Subscriber Base asset
 
 
3,427,755
 
 
 
20
 
 
$
171,388
 
 
$
85,694
 
 
 
 
Advertiser Base asset
 
 
10,613,497
 
 
 
20
 
 
 
530,675
 
 
 
265,337
 
 
 
 
Goodwill
 
 
35,323,679
 
 
Indefinite
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total intangible based assets
 
$
67,880,247
 
 
 
 
 
 
$
702,063
 
 
$
351,031
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7. To reflect the purchase adjustments related to the utilization of debt to finance the acquisiton of HHD.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
Adjustment
 
 
 
Historical
 
 
Pro Forma
 
 
Pro Forma
 
 
For the
 
 
For the six
 
 
 
Amount
 
 
Adjustments
 
 
As adjusted
 
 
Year ended
 
 
Months Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total acquisition related debt
 
 
-
 
 
$
79,247,447
 
 
$
79,247,447
 
 
$
6,327,769
 
 
$
3,163,885
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred financing costs
 
 
-
 
 
$
1,853,495
 
 
$
1,853,495
 
 
 
332,586
 
 
 
166,293
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase in interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
$
6,660,355
 
 
$
3,330,178
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred financing costs consist of costs incurred in connection with debt financings. Such costs are amortized to interest expense on a straight-line basis over the remaining terms of the related debt. The weighted average life of of such costs is 5.74 years. The interest expense for the acquisition related debt utilized an average rate of 4.78% plus a margin of 2.75% this effectively converted a component of the borrowing to a fixed rate loan under a three year interest swap agreement for a notional amount of $25.0 million. The remaining components of the acquisition related debt are subject to floating interest rates of Libor plus a margin, the rate utilized for calculation purposes was Libor at June 30, 2007 plus 2.75%.  Champion also included interest costs associated with unused commitment fees based on $15.0 million of the revolving credit facility being unused with actual availability subject to borrowing base limitations.
 
 
Ex 99.3 - 6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8. To reflect the elimination of certain expenses associated with pension, other post retirement benefits not assumed by Champion and corporate overhead allocations from Gannett.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the
 
 
For the six
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended
 
 
Months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement Plans
 
 
 
 
 
$
288,000
 
 
$
100,000
 
 
 
 
 
 
 
Postretirement benefits other than pension
 
 
 
 
 
 
563,000
 
 
 
167,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
$
851,000
 
 
$
267,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9. To reflect the income tax provision based on applying the pro forma estimated effective tax rate of the combined companies.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10. Conforming adjustments to adjust the HHD Statements of Operations to the Champion's format for classification purposes.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the
 
 
For the six
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended
 
 
Months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
 
 
 
 
$
567
 
 
$
202
 
 
 
 
 
 
 
Depreciation
 
 
 
 
 
 
(567
)
 
 
(202
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net adjustment
 
 
 
 
 
$
-
 
 
$
-
 
 
 
 
 
 
 
 
 
Ex 99.3 - 7