West Virginia
|
|
55-0717455
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company þ |
(Do not check if a smaller reporting company)
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Class
|
|
Outstanding at April 30, 2011
|
Common stock, $1.00 par value per share
|
|
9,987,913 shares
|
|
Page No.
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Part I. Financial Information
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|
Item 1. Financial Statements
|
|
Consolidated Balance Sheets (Unaudited)
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3
|
Consolidated Statements of Operations (Unaudited)
|
5
|
Consolidated Statements of Shareholders' Equity (Unaudited)
|
6 |
Consolidated Statements of Cash Flows (Unaudited)
|
7
|
Notes to Consolidated Financial Statements
|
8
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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17
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Item 3. Quantitative and Qualitative Disclosure About Market Risk
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21
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Item 4. Controls and Procedures
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21
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Part II. Other Information
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Item 1A. Risk Factors | 22 |
Item 6. Exhibits
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22
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Signatures
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23
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ASSETS
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|
April 30,
|
|
|
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October 31,
|
|
|
|
2011
(Unaudited)
|
|
|
|
2010
|
|
Current assets:
|
|
|
|
|
|
|
|
Accounts receivable, net of allowance of $1,062,000 and $1,297,000
|
$
|
16,958,041 |
|
|
$
|
18,133,748
|
|
Inventories
|
|
9,235,250 |
|
|
|
9,690,333
|
|
Income tax refund
|
- | 36,293 | |||||
Other current assets
|
|
709,158 |
|
|
|
652,178
|
|
Deferred income tax assets
|
|
1,085,658
|
|
|
|
1,144,519
|
|
Total current assets
|
|
27,988,107
|
|
|
|
29,657,071
|
|
|
|
|
|
|
|
|
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Property and equipment, at cost:
|
|
|
|
|
|
|
|
Land
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|
2,016,148 |
|
|
|
2,016,148
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|
Buildings and improvements
|
|
11,846,843
|
|
|
|
11,843,376
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|
Machinery and equipment
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|
55,230,222 |
|
|
|
55,025,237
|
|
Furniture and fixtures
|
|
4,226,651
|
|
|
|
4,171,194
|
|
Vehicles
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|
3,301,165 |
|
|
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3,266,898
|
|
|
|
76,621,029
|
|
|
|
76,322,853
|
|
Less accumulated depreciation
|
|
(55,491,486 |
)
|
|
|
(53,949,280
|
) |
|
|
21,129,543 |
|
|
|
22,373,573
|
|
|
|
|
|
|
|
||
Goodwill
|
|
15,332,283 |
|
|
|
15,332,283
|
|
Deferred financing costs
|
1,056,113 | 1,267,174 | |||||
Other intangibles, net of accumulated amortization
|
|
4,974,803 |
|
|
|
5,195,361
|
|
Trademark and masthead | 10,001,812 | 10,001,812 | |||||
Deferred tax asset, net of current portion |
8,009,971
|
8,370,151 | |||||
Other assets
|
|
33,978 |
|
|
|
36,561
|
|
|
|
39,408,960 |
|
|
|
40,203,342
|
|
Total assets
|
$
|
88,526,610 |
|
|
$
|
92,233,986
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
April 30,
|
|
October 31,
|
|||
|
2011
(Unaudited)
|
|
2010
|
|||
Current liabilities:
|
|
|
|
|
|
|
Negative book cash balances | $ | 2,276,776 | $ | 1,013,713 | ||
Accounts payable
|
|
2,602,117 |
|
|
4,116,087
|
|
Deferred revenue | 834,302 | 720,549 | ||||
Accrued payroll and commissions
|
|
1,360,398 |
|
|
2,115,922
|
|
Taxes accrued and withheld
|
|
1,066,343 |
|
|
1,125,726
|
|
Accrued expenses
|
|
1,525,247
|
|
|
1,930,327
|
|
Current portion of long-term debt:
|
|
|
|
|||
Notes payable
|
5,584,155 | 5,484,842 | ||||
Total current liabilities
|
|
15,249,338 |
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|
16,507,166
|
|
|
|
|
|
|
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|
Long-term debt, net of current portion:
|
|
|
|
|
||
Line of credit | 9,941,742 | 10,425,496 | ||||
Notes payable
|
|
39,342,673 |
|
|
41,873,500
|
|
Other liabilities
|
|
4,650 |
|
|
5,550
|
|
Total liabilities
|
|
64,538,403 |
|
|
68,811,712
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
Common stock, $1 par value, 20,000,000 shares authorized;
9,987,913 shares issued and outstanding
|
|
9,987,913 |
|
|
9,987,913
|
|
Additional paid-in capital
|
|
22,768,610 |
|
|
22,768,610
|
|
Retained deficit
|
|
(8,768,316 |
)
|
|
(9,334,249
|
) |
Total shareholders’ equity
|
|
23,988,207
|
|
|
23,422,274
|
|
Total liabilities and shareholders’ equity
|
$
|
88,526,610
|
|
$
|
92,233,986
|
|
|
Three Months Ended
April 30,
|
Six Months Ended
April 30,
|
||||||||||
|
|
|
2011
|
|
|
2010
|
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|
2011
|
|
|
2010
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing
|
|
$
|
19,659,905 |
|
$
|
21,716,395
|
|
$
|
39,218,084 |
|
$
|
41,465,866
|
|
Office products and office furniture
|
|
|
7,960,866
|
|
|
8,352,579
|
|
|
16,300,167 |
|
|
16,614,293
|
|
Newspaper | 3,469,820 | 3,670,371 | 7,477,495 | 8,046,432 | |||||||||
Total revenues
|
|
|
31,090,591
|
|
|
33,739,345
|
|
|
62,995,746 |
|
|
66,126,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales & newspaper operating costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing
|
|
|
14,559,862 |
|
|
15,494,951
|
|
|
29,680,704 |
|
|
30,216,325
|
|
Office products and office furniture
|
|
|
5,492,742 |
|
|
5,817,480
|
|
|
11,592,228
|
|
|
11,748,501
|
|
Newspaper cost of sales & operating costs | 2,074,576 | 2,022,702 | 4,249,798 | 4,151,308 | |||||||||
Total cost of sales & newspaper operating costs
|
|
|
22,127,180 |
|
|
23,335,133
|
|
|
45,522,730 |
|
|
46,116,134
|
|
Gross profit
|
|
|
8,963,411 |
|
|
10,404,212
|
|
|
17,473,016 |
|
|
20,010,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
7,164,326 |
|
|
8,327,677
|
|
|
14,380,988
|
|
|
17,044,322 | |
Restructuring charges
|
|
|
-
|
|
|
139,084
|
|
|
220,658 |
|
|
139,084
|
|
7,164,326 | 8,466,761 | 14,601,646 | 17,183,406 | ||||||||||
Income from operations
|
|
|
1,799,085
|
|
|
1,937,451
|
|
2,871,370
|
|
|
2,827,051
|
||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest income
|
|
|
- |
|
- |
|
|
-
|
|
|
-
|
||
Interest expense
|
|
|
(945,776
|
)
|
|
(1,362,639
|
)
|
|
(1,914,598 |
)
|
|
(2,932,450
|
)
|
Other
|
|
|
28,832 |
|
|
7,085
|
|
|
45,513 |
|
|
311,666
|
|
|
|
|
(916,944 |
)
|
|
(1,355,554
|
)
|
|
(1,869,085 |
)
|
|
(2,620,784
|
)
|
Income before income taxes
|
|
|
882,141 |
|
|
581,897
|
|
1,002,285 |
|
|
206,267
|
||
Income tax expense
|
|
|
(389,429 |
)
|
|
(248,436
|
)
|
|
(436,352 |
)
|
|
(85,492
|
)
|
Net income
|
|
$
|
492,712 |
|
$
|
333,461
|
$
|
565,933 |
|
$
|
120,775
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.05 |
|
$
|
0.03
|
$
|
0.06 |
|
$
|
0.01
|
||
Diluted
|
|
$
|
0.05 |
|
$
|
0.03
|
|
$
|
0.06 |
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
9,988,000
|
|
|
9,988,000
|
|
|
9,988,000 |
|
|
9,988,000
|
|
Diluted
|
|
|
9,988,000 |
|
|
9,988,000
|
|
|
9,988,000
|
|
|
9,988,000
|
|
Dividends per share
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
- |
Additional
|
Other
|
|||||||||||||||||
Common Stock
|
Paid-In
|
Retained |
Comprehensive
|
|||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit |
(Loss) Income
|
Total
|
|||||||||||||
Balance, October 31, 2010 | 9,987,913 | $ | 9,987,913 | $ | 22,768,610 | $ | (9,334,249 | ) | $ | - | $ |
23,422,274
|
||||||
Comprehensive income: | ||||||||||||||||||
Net Income
|
-
|
-
|
-
|
565,933 |
-
|
565,933
|
||||||||||||
Total comprehensive income | - | - | - | 565,933 | - | 565,933 | ||||||||||||
Balance, April 30, 2011
|
9,987,913
|
$
|
9,987,913
|
$
|
22,768,610
|
$
|
(8,768,316 | ) |
$
|
-
|
|
$
|
23,988,207
|
|
|
Six Months Ended April 30,
|
|
||||
|
|
2011
|
|
2010
|
|
||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
|
$
|
565,933 |
|
$
|
120,775
|
|
Adjustments to reconcile net income to
cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
2,017,602 |
|
|
2,188,029 |
|
(Gain) Loss on sale of assets
|
|
|
(13,901 |
)
|
|
10,686
|
|
Deferred income taxes
|
|
|
419,041 |
|
|
119,082 |
|
Deferred financing costs | 211,060 | 161,550 | |||||
Bad debt expense
|
|
|
10,367 |
|
|
201,298
|
|
Gain on hedging agreements | - | (284,079 | ) | ||||
Restructuring charges | 249,509 | - | |||||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
|
|
1,165,340 |
|
342,622
|
|
|
Inventories
|
|
|
455,083 |
|
665,562
|
|
|
Other current assets
|
|
|
(56,980 |
)
|
|
(383,997
|
)
|
Accounts payable
|
|
|
(1,698,531 |
)
|
|
131,517
|
|
Deferred revenue | 113,753 | 163,686 | |||||
Accrued payroll
|
|
|
(755,524 |
)
|
|
(307,805
|
)
|
Taxes accrued and withheld
|
|
|
(59,383 |
)
|
|
228,887
|
|
Income taxes
|
|
|
36,293 |
|
|
(63,280
|
) |
Accrued expenses
|
|
|
(470,027 |
)
|
|
(42,681
|
)
|
Other liabilities
|
|
|
(900 |
)
|
|
(900
|
)
|
Net cash provided by operating activities
|
|
|
2,188,735 |
|
|
3,250,952
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(263,911 |
)
|
|
(179,393
|
)
|
Proceeds from sales of property
|
|
|
75,765 |
|
|
20,192
|
|
Change in other assets
|
|
|
2,583 |
|
|
5,584
|
|
Net cash used in investing activities
|
|
|
(185,563 |
)
|
|
(153,617
|
)
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Borrowings on line of credit
|
|
|
25,880,000 |
|
|
20,440,000
|
|
Payments on line of credit
|
|
|
(26,340,000 |
)
|
|
(19,060,000
|
)
|
Increase in negative book cash balances | 1,263,063 |
1,298,725
|
|||||
Principal payments on long-term debt
|
|
|
(2,806,235
|
)
|
|
(6,663,527
|
)
|
Payments on debt amendment costs | - |
|
(271,815 | ) | |||
Net cash used in financing activities
|
|
|
(2,003,172 |
)
|
|
(4,256,617 |
)
|
Net decrease in cash and cash equivalents
|
|
|
- |
|
|
(1,159,282
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
- |
|
|
1,159,282
|
|
Cash and cash equivalents, end of period
|
|
$
|
-
|
|
$
|
-
|
|
April 30,
2011
|
October 31,
2010
|
||||
Printing and newspaper: | |||||
Raw materials | $ | 2,611,780 | $ | 2,897,036 | |
Work in process | 1,373,592 | 1,130,291 | |||
Finished goods | 3,005,932 | 3,451,815 | |||
Office products and office furniture | 2,243,946 | 2,211,191 | |||
$ | 9,235,250 | $ | 9,690,333 |
|
April 30,
|
|
October 31,
|
|
|||
|
|
2011
|
|
2010
|
|
||
Installment notes payable to banks & shareholder
|
|
$
|
4,318,850 |
|
$
|
4,300,364
|
|
Term loan facility with syndicate of banks
|
|
|
40,607,978
|
|
|
43,057,978
|
|
|
|
|
44,926,828 |
|
|
47,358,342
|
|
Less current portion
|
|
|
5,584,155 |
|
|
5,484,842
|
|
Long-term debt, net of current portion
|
|
$
|
39,342,673
|
|
$
|
41,873,500
|
|
·
|
a $17,000,000 revolving credit facility with a sublimit of up to $3,000,000 for letters of credit and $3,000,000 for swing line loans. Outstanding borrowings, thereunder, may not exceed the sum of (1) up to 85% of eligible receivable plus (b) up to the lesser of $6,000,000 or 50% of eligible inventory.
|
·
|
at the Company's option, interest at a LIBOR Rate, so long as no default exists.
|
·
|
post-default increase in interest rate of 2%.
|
·
|
amendment of various financial covenants.
|
·
|
fixed charge coverage ratio is required to be 1.0:1.0 through January 31, 2011; 1.1:1.0 through January 31, 2012 and 1.20:1.00 thereafter
|
·
|
leverage ratio shall not be greater then 6.5:1.00 at April 30, 2010 with 0.5:1.00 step-downs quarterly through April 30, 2011 and 0.25:1.00 quarterly step-downs through April 30, 2012.
|
·
|
minimum EBITDA pursuant to a quarterly build up commencing with the three months ended April 30, 2010 of $2,700,000, the six months ended July 31, 2010 of $5,400,000, the nine months ended October 31, 2010 of $8,900,000 and the twelve months ended January 31, 2011 of $11,800,000, thereafter varying quarterly step-ups culminating in twelve months trailing EBITDA of $14,300,000 at October 31, 2012.
|
·
|
maximum capital expenditures are limited to $2,000,000 per fiscal year for the years ended October 31, 2010 and 2011 and $2,500,000 thereafter.
|
·
|
enhanced reporting by the Company to Administrative Agent, including monthly reports and conference calls, quarterly reports by the Company's independent auditors of restructuring charges and organizational expense reductions.
|
·
|
application of the Company's income tax refunds applied to reduce indebtedness under the Credit Agreement.
|
·
|
Restrictions on payment of dividends based on various covenant compliance thresholds.
|
|
|
Payments Due by Fiscal Year
|
||||||||||||||||||||
Contractual Obligations
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
Residual |
Total
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-cancelable operating leases
|
|
$
|
660,319 |
|
$
|
1,212,050 |
|
$
|
1,119,892 |
|
$
|
441,655 |
|
$
|
51,640 | $ | - | $ | 3,485,556 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revolving line of credit
|
|
|
- |
|
|
9,941,742
|
|
|
-
|
|
|
-
|
|
|
-
|
- |
9,941,742
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Term debt
|
|
|
2,884,966
|
|
|
5,466,449
|
|
|
33,505,398
|
|
|
3,070,015
|
|
|
- | - | 44,926,828 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
$
|
3,545,285 |
|
$
|
16,620,241 |
|
$
|
34,625,290 |
|
$
|
3,511,670 |
|
$
|
51,640 | $ | - | $ | 58,354,126 |
2011 Quarter 2
|
Printing
|
Office Products & Furniture
|
Newspaper
|
Total
|
|||||||||
Revenues
|
$
|
20,854,240 |
$
|
9,571,166 |
$
|
3,469,820 |
$
|
33,895,226 | |||||
Elimination of intersegment revenue
|
(1,194,335 |
)
|
(1,610,300 |
)
|
- | (2,804,635 |
)
|
||||||
Consolidated revenues
|
$
|
19,659,905 |
$
|
7,960,866 |
$
|
3,469,820 |
$
|
31,090,591 | |||||
Operating income
|
937,625 | 473,211 | 388,249 | 1,799,085 | |||||||||
Depreciation & amortization
|
689,480 | 33,852 | 283,940 | 1,007,272 | |||||||||
Capital expenditures
|
278,018 | 37,900 | 12,218 | 328,136 | |||||||||
Identifiable assets
|
38,396,677 | 6,584,288 | 34,450,016 | 79,430,981 | |||||||||
Goodwill
|
2,226,837 | 1,230,485 | 11,874,961 | 15,332,283 | |||||||||
2010 Quarter 2
|
Printing
|
Office Products & Furniture
|
Newspaper
|
Total
|
|||||||||
Revenues
|
$
|
24,535,723
|
$
|
9,954,527
|
$
|
3,670,371
|
$
|
38,160,621
|
|||||
Elimination of intersegment revenue
|
(2,819,328
|
)
|
(1,601,948
|
)
|
-
|
(4,421,276
|
)
|
||||||
Consolidated revenues
|
$
|
21,716,395
|
$
|
8,352,579
|
$
|
3,670,371
|
$
|
33,739,345
|
|||||
Operating income
|
646,608
|
582,585
|
708,258
|
1,937,451
|
|||||||||
Depreciation & amortization
|
766,334
|
31,103
|
172,951
|
970,388
|
|||||||||
Capital expenditures
|
141,388
|
5,442
|
18,088
|
164,918
|
|||||||||
Identifiable assets
|
42,584,807 | 7,140,092 | 35,861,620 | 85,586,519 | |||||||||
Goodwill
|
2,226,837 | 1,230,485 | 11,874,961 | 15,332,283 |
2011 Year to Date
|
|
Printing
|
|
Office Products
& Furniture
|
|
Newspaper
|
Total
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
41,936,821
|
|
$
|
19,564,168 |
|
$ | 7,477,495 |
$
|
68,978,484 |
|
|
Elimination of intersegment revenue
|
|
|
(2,718,737 |
)
|
|
(3,264,001 |
)
|
- |
|
(5,982,738 |
)
|
||
Consolidated revenues
|
|
$
|
39,218,084 |
|
$
|
16,300,167 |
|
$ | 7,477,495 |
$
|
62,995,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating income
|
|
|
827,973 |
|
|
818,939 |
|
1,224,458 |
|
2,871,370 |
|
||
Depreciation & amortization
|
|
|
1,381,809 |
|
|
67,724 |
|
568,069 |
|
2,017,602 |
|
||
Capital expenditures
|
|
|
530,230 |
|
|
55,457 |
|
29,191 |
|
614,878 |
|
||
Identifiable assets
|
|
|
38,396,677 |
|
|
6,584,288 |
|
34,450,016 |
|
79,430,981 |
|
||
Goodwill
|
|
|
2,226,837 |
|
|
1,230,485 |
|
11,874,961 |
|
15,332,283 |
|
2010 Year to Date
|
|
Printing
|
|
Office Products
& Furniture
|
|
Newspaper
|
Total
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||
Revenues
|
|
$
|
46,931,754
|
|
$
|
19,846,919
|
|
$ |
8,046,432
|
$
|
74,825,105
|
|
|
Elimination of intersegment revenue
|
|
|
(5,465,888
|
)
|
|
(3,232,626
|
)
|
-
|
|
(8,698,514
|
)
|
||
Consolidated revenues
|
|
$
|
41,465,866
|
|
$
|
16,614,293
|
|
$ |
8,046,432
|
$
|
66,126,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating income
|
|
|
152,045 |
|
|
951,837 |
|
1,723,169 |
|
2,827,051
|
|
||
Depreciation & amortization
|
|
|
1,552,524
|
|
|
68,936 |
|
566,569
|
|
2,188,029 |
|
||
Capital expenditures
|
|
|
322,467 |
|
|
9,488 |
|
43,429 |
|
375,384 |
|
||
Identifiable assets
|
|
|
42,584,807 |
|
|
7,140,092 |
|
35,861,620 |
|
85,586,519 |
|
||
Goodwill
|
|
|
2,226,837 |
|
|
1,230,485 |
|
11,874,961 |
|
15,332,283 |
|
|
|
Three months
|
Six months
|
||||||||||
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment revenues
|
|
$
|
33,895,226 |
|
$
|
38,160,621
|
|
$
|
68,978,484 |
|
$
|
74,825,105
|
|
Elimination of intersegment revenue
|
|
|
(2,804,635 |
)
|
|
(4,421,276
|
)
|
|
(5,982,738 |
)
|
|
(8,698,514
|
)
|
Consolidated revenue
|
|
$
|
31,090,591 |
|
$
|
33,739,345
|
|
$
|
62,995,746 |
|
$
|
66,126,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment operating income
|
|
$
|
1,799,085 |
|
$
|
1,937,451
|
|
$
|
2,871,370 |
|
$
|
2,827,051
|
|
Interest income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
- |
|
Interest expense
|
|
|
(945,776 |
)
|
|
(1,362,639
|
)
|
|
(1,914,598 |
)
|
|
(2,932,450
|
)
|
Other income
|
|
|
28,832 |
|
|
7,085
|
|
|
45,513 |
|
|
311,666
|
|
Consolidated income before income taxes
|
|
$
|
882,141 |
|
$
|
581,897
|
$
|
1,002,285 |
|
$
|
206,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Identifiable assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment identifiable assets
|
|
$
|
79,430,981 |
|
$
|
85,586,519
|
|
$
|
79,430,981 |
|
$
|
85,586,519
|
|
Assets not allocated to a segment
|
|
|
9,095,629 |
|
|
11,561,459
|
|
|
9,095,629 |
|
|
11,561,459
|
|
Total consolidated assets
|
|
$
|
88,526,610 |
|
$
|
97,147,978
|
|
$
|
88,526,610 |
|
$
|
97,147,978
|
|
Fair Value Measurements as of
April 30, 2011 and 2010
|
||||||||||||||||
Liabilities: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Interest rate swap at (2011) | $ | - | $ | - | $ | - | $ | - | ||||||||
Interest rate swap at (2010) | $ | - | $ | 442,560 | $ | - | $ | 442,560 |
Three Months Ended
April 30, 2011
|
Three Months Ended
April 30, 2010
|
Six Months Ended
April 30, 2011
|
Six Months Ended
April 30, 2010
|
Cumulative Total | ||||||
Occupancy and equipment related costs | $ | - | $ | - | $ |
123,553
|
$ | - | $ | 1,296,728 |
Costs incurred to streamline production, personnel and other | - | 139,084 | 97,105 | 139,084 | 564,726 | |||||
Inventory
|
- | - | 28,851 | - | 200,380 | |||||
Total | $ | - | $ | 139,084 | $ | 249,509 | $ | 139,084 | $ | 2,061,834 |
Occupancy and equipment related costs
|
Costs incurred to streamline production,
personnel and other
|
Total
|
||||
Balance at October 31, 2010 | $ | 1,037,548 | $ | 8,462 | $ | 1,046,010 |
2011 expenses | 123,553 | 97,105 | 220,658 | |||
Paid in 2011 | (254,403) | (154,559) | (408,962) | |||
Reclassifications | (139,503) | 139,503 | - | |||
Balance at April 30, 2011
|
$ | 767,195 | $ | 90,511 | $ | 857,706 |
|
|
Percentage of Total Revenues
|
|||||||||||
|
|
Three Months Ended
April 30,
|
Six Months Ended
April 30,
|
||||||||||
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing
|
|
|
63.2 |
%
|
|
64.4
|
%
|
|
62.2 |
%
|
|
62.7
|
%
|
Office products and office furniture | 25.6 |
24.8
|
25.9 | 25.1 | |||||||||
Newspaper
|
|
|
11.2
|
|
|
10.8
|
|
|
11.9 |
|
|
12.2
|
|
Total revenues
|
|
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales and newspaper operating costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing
|
|
|
46.8
|
|
|
45.9
|
|
|
47.2 |
|
|
45.7
|
|
Office products and office furniture | 17.7 |
17.3
|
18.4 | 17.7 | |||||||||
Newspaper cost of sales and operating costs | 6.7 |
6.0
|
6.7 | 6.3 | |||||||||
Total cost of sales and newspaper operating costs
|
|
|
71.2
|
|
|
69.2
|
|
|
72.3 |
|
|
69.7
|
|
Gross profit
|
|
|
28.8
|
|
|
30.8
|
|
|
27.7
|
|
|
30.3
|
|
S Selling, general and administrative expenses
|
|
|
23.0 |
|
|
24.7
|
|
|
22.8
|
|
|
25.8
|
|
Restructuring charge | 0.0 | 0.4 | 0.4 | 0.2 | |||||||||
Income from operations
|
|
|
5.8 |
|
|
5.7
|
|
4.5 |
|
|
4.3
|
|
|
Interest income
|
|
|
0.0 |
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Interest expense
|
|
|
(3.0 |
)
|
|
(4.0
|
)
|
|
(3.0 |
)
|
|
(4.4
|
)
|
Other income
|
|
|
0.1 |
|
|
0.0
|
|
|
0.1
|
|
|
0.4
|
|
|
|||||||||||||
Income before taxes
|
|
|
2.9 |
|
|
1.7
|
|
1.6 |
|
|
0.3
|
|
|
Income tax expense
|
|
|
(1.3
|
)
|
|
(0.7
|
)
|
|
(0.7 |
)
|
|
(0.1
|
)
|
Net income
|
|
|
1.6 |
%
|
|
1.0
|
%
|
|
0.9 |
%
|
|
0.2 |
%
|
a)
|
Exhibits:
|
||||
(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
|
Date: June 14, 2011
|
/s/ Marshall T. Reynolds
|
Marshall T. Reynolds
|
|
Chief Executive Officer
|
|
Date: June 14, 2011
|
/s/ Toney K. Adkins
|
Toney K. Adkins
|
|
President and Chief Operating Officer
|
|
Date: June 14, 2011
|
/s/ Todd R. Fry
|
Todd R. Fry
|
|
Senior Vice President and Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Champion Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Champion Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Champion Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
· |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
· |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|