-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CSBoegb91dOJTPhFymny1HQc9/IpAoaUHLmySYJ5BDR7HRDrSZn6HO1eCr0yuD+W TjGJGVJPfQOt7oGnHLL4Pw== 0000912057-97-020453.txt : 19970617 0000912057-97-020453.hdr.sgml : 19970617 ACCESSION NUMBER: 0000912057-97-020453 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970616 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHAMPION INDUSTRIES INC CENTRAL INDEX KEY: 0000019149 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL PRINTING [2750] IRS NUMBER: 550717455 STATE OF INCORPORATION: WV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21084 FILM NUMBER: 97624806 BUSINESS ADDRESS: STREET 1: 2450 FIRST AVE STREET 2: P O BOX 2968 CITY: HUNTINGTON STATE: WV ZIP: 25728 BUSINESS PHONE: 3045282791 MAIL ADDRESS: STREET 1: 2450 FIRST AVENUE STREET 2: P O BOX 2968 CITY: HUNTINGTON STATE: WV ZIP: 25728 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Quarterly Report Pursuant to Section 13 or 15(D) of The Securities Exchange Act of 1934 For the quarterly period ended April 30, 1997 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 (I.R.S. Employer incorporation or organization) Identification No.
2450 First Avenue, P. O. Box 2968 Huntington, West Virginia 25728 (Address of principal executives offices) (Zip Code) (304) 528-2791 (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 /x/ No ----- ------ 8,104,714 shares of common stock of the Registrant were outstanding at April 30, 1997. CHAMPION INDUSTRIES, INC. INDEX Part I. Financial Information Item 1. Financial Statements Consolidated Income Statements............................................... 2 Consolidated Balance Sheets.................................................. 3 Consolidated Statements of Cash Flows........................................ 5 Notes to the Consolidated Financial Statements............................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................................................. 8 Part II. Other Information Item 2. Changes in Securities.................................................... 10 Item 4. Submission of Matters to a Vote of Security Holders...................... 10 Item 6. Exhibits and Reports on Form 8-K......................................... 11 Signatures......................................................................... 11 Exhibit Index...................................................................... 12
1 CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED APRIL 30, APRIL 30, ---------------------------- ---------------------------- 1997 1996 1997 1996 ------------- ------------- ------------- ------------- Revenues: Printing.......................................... $ 22,639,976 $ 10,818,151 $ 37,059,372 $ 20,728,022 Office products and office furniture.............. 5,173,271 3,791,901 10,151,741 7,981,566 ------------- ------------- ------------- ------------- Total revenues.................................. 27,813,247 14,610,052 47,211,113 28,709,588 Cost of sales: Printing.......................................... 15,274,091 7,155,575 26,071,001 14,088,054 Office products and office furniture.............. 3,230,329 2,360,795 6,562,628 5,203,852 ------------- ------------- ------------- ------------- Total cost of sales............................. 18,504,420 9,516,370 32,633,629 19,291,906 Selling, general and administrative expenses........ 7,491,468 3,490,007 11,760,628 6,687,873 ------------- ------------- ------------- ------------- Income from operations.............................. 1,817,359 1,603,675 2,816,856 2,729,809 Other income (expense): Interest income................................... 5,815 1,651 13,212 2,949 Interest expense.................................. (388,803) (83,545) (569,903) (144,321) Other............................................. 290,241 3,900 745,087 16,646 ------------- ------------- ------------- ------------- (92,747) (77,994) 188,396 (124,726) ------------- ------------- ------------- ------------- Income before income taxes.......................... 1,724,612 1,525,681 3,005,252 2,605,083 Income taxes...................................... (713,229) (625,000) (1,252,621) (1,068,000) ------------- ------------- ------------- ------------- Net income........................................ $ 1,011,383 $ 900,681 $ 1,752,631 $ 1,537,083 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Earnings per share................................ $ .12 $ .11 $ .21 $ .19 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Weighted average shares outstanding............... 8,163,336 8,051,659 8,162,220 8,045,449 ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
The accompanying notes are an integral part of these financial statements. 2 CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
APRIL 30, OCTOBER 31, 1997 1996 -------------- ------------- Assets Current assets: Cash and cash equivalents........................................................ $ 2,204,361 $ 2,336,764 Accounts receivable, net of allowance of $939,000 and $514,000................... 17,218,736 11,037,897 Inventories...................................................................... 9,722,799 7,156,466 Other current assets............................................................. 734,573 383,282 Deferred tax assets.............................................................. 822,657 340,334 -------------- ------------- Total current assets........................................................... 30,703,126 21,254,743 Property and equipment, at cost: Land............................................................................. 647,340 647,340 Buildings and improvements....................................................... 3,230,784 3,125,873 Machinery and equipment.......................................................... 19,084,068 13,802,972 Equipment under capital leases................................................... 3,125,873 2,801,928 Furniture and fixtures........................................................... 1,464,672 1,311,368 Vehicles......................................................................... 1,620,823 1,246,624 -------------- ------------- 29,173,560 22,936,105 Less accumulated depreciation.................................................. (10,177,947) (8,917,373) -------------- ------------- 18,995,613 14,018,732 Asset held for sale................................................................ 300,000 -- Cash surrender value of officer's life insurance................................... 436,307 425,507 Goodwill, net of accumulated amortization.......................................... 3,115,575 2,565,287 Other assets....................................................................... 576,928 318,233 -------------- ------------- 4,428,810 3,309,027 -------------- ------------- Total assets................................................................... $ 54,127,549 $ 38,582,502 -------------- ------------- -------------- -------------
The accompanying notes are an integral part of these financial statements. Champion Industries, Inc. and Subsidiaries 3 CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
APRIL 30, OCTOBER 31, 1997 1996 ------------- ------------- Liabilities And Shareholders' Equity Current liabilities: Notes payable.................................................................... $ 2,000,000 $ 1,300,000 Accounts payable................................................................. 2,624,766 1,542,102 Accrued payroll.................................................................. 2,140,723 1,030,523 Taxes accrued and withheld....................................................... 662,253 725,614 Accrued income taxes............................................................. 539,499 1,295,188 Accrued expenses................................................................. 1,319,293 336,314 Current portion of long-term debt Notes payable.................................................................. 2,607,475 1,238,423 Capital lease obligations...................................................... 536,487 724,615 ------------- ------------- Total current liabilities.................................................... 12,430,496 8,192,779 Long-term debt, net of current portion Notes payable.................................................................... 12,875,712 3,750,841 Capital lease obligations........................................................ 1,680,002 1,535,176 Deferred income tax liability...................................................... 3,029,852 1,677,624 Deferred gain...................................................................... -- 330,443 ------------- ------------- Total liabilities.............................................................. 30,016,062 15,486,863 Commitments and contingencies -- -- Shareholders' equity: Common stock, $1 par value, 20,000,000 shares authorized; 8,104,714 and 8,104,907 shares issued and outstanding.................................................. 8,104,714 8,104,907 Additional paid-in capital....................................................... 7,711,294 7,714,777 Retained earnings................................................................ 8,295,479 7,275,955 ------------- ------------- Total shareholders' equity......................................................... 24,111,487 23,095,639 ------------- ------------- Total liabilities and shareholders' equity................................... $ 54,127,549 $ 38,582,502 ------------- ------------- ------------- -------------
The accompanying notes are an integral part of these financial statements. 4 CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (UNAUDITED)
SIX MONTHS ENDED APRIL 30, ----------------------------- 1997 1996 -------------- ------------- Cash flows from operating activities: Net income......................................................................... $ 1,752,632 $ 1,537,083 Adjustments to reconcile net income to cash provided by operating activities: Depreciation, amortization and accretion......................................... 1,844,910 757,057 Deferred gain on sale of assets.................................................. (330,443) (9,000) Changes in assets and liabilities: Accounts receivable............................................................ (1,749,839) (841,179) Inventories.................................................................... (511,333) 465,612 Other current assets........................................................... (342,386) (141,749) Accounts payable............................................................... 197,664 (376,183) Accrued payroll................................................................ 1,110,200 (455,824) Taxes accrued and withheld..................................................... 24,639 (222,564) Accrued income taxes........................................................... (755,689) 248,500 Accrued expenses............................................................... (2,070,722) 99,286 -------------- ------------- Net cash (used in) provided by operations.......................................... (830,367) 1,061,039 Cash flows from investing activities: Purchase of property and equipment................................................. (1,098,455) (867,638) Business acquisitions, net of cash received........................................ 305,000 (648,676) Cash surrender value of officer's life insurance................................... (10,800) 11,100 Other assets....................................................................... 236,007 768 -------------- ------------- Net cash (used in) provided by investing activities................................ (568,248) (1,504,446) Cash flows from financing activities: Net borrowings (payments) of notes payable......................................... 700,000 900,000 Proceeds from term debt and leases................................................. 1,614,355 1,700,000 Principal payments on long term debt............................................... (315,034) (1,391,763) Dividends paid..................................................................... (733,109) (580,296) Net cash (used in) provided by financing activities................................ 1,266,212 627,941 -------------- ------------- Net (decrease) increase in cash.................................................... (132,403) 184,534 Cash and cash equivalents, beginning of period..................................... 2,336,764 1,350,807 -------------- ------------- Cash and cash equivalents, end of period........................................... $ 2,204,361 $ 1,535,341 -------------- ------------- -------------- ------------- -------------- -------------
The accompanying notes are an integral part of these financial statements. 5 CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BUSINESS OPERATIONS AND BASIS OF PRESENTATION The foregoing financial information is unaudited and has been prepared from the records of Champion Industries, Inc., ("Champion" or the "Company"). 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 generally accepted accounting principles. These interim financial statements should be read in conjunction with the financial statements for the year ended October 31, 1996 and related notes thereto contained in the Company's Form 10-K dated January 28, 1997. The accompanying unaudited financial statements are presented in accordance with generally accepted accounting principles and instructions to the Securities and Exchange Commission Form 10-Q. The accompanying consolidated financial statements of Champion Industries, Inc. and Subsidiaries (the "Company") include the accounts of The Chapman Printing Company, Inc., Stationers, Inc., Bourque Printing, Inc., Dallas Printing Company, Inc., Carolina Cut Sheets, Inc., U.S. Tag & Ticket Company, Inc., Donihe Graphics, Inc., The Merten Company, Smith & Butterfield Co., Inc. and Interform Corporation. 2. INVENTORIES Inventories are 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, 1997 1996 ------------ ------------ Printing: Raw materials................................................... $ 3,550,643 $ 2,276,070 Work in process................................................. 2,297,896 1,473,021 Finished goods.................................................. 892,669 572,228 Office products and office furniture.............................. 2,981,591 2,835,147 ------------ ------------ $ 9,722,799 $ 7,156,466 ------------ ------------ ------------ ------------
3. EARNINGS PER SHARE Earnings per share were computed based upon 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 Company had 8,163,336, 8,051,659, 8,162,220 and 8,045,449 weighted average shares issued and outstanding for the three and six months ended April 30, 1997 and 1996, as adjusted for a 25% stock dividend (see Note 4). 6 CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 4. SHAREHOLDERS' EQUITY The Company paid a 25% stock dividend, accounted for as a 5 for 4 stock split, on January 27, 1997 to stockholders of record on January 6, 1997. 1,620,981 shares were issued in the split of which 193 fractional shares were repurchased. The Company declared a dividend of five cents to be paid on June 27, 1997, to stockholders of record on June 6, 1997. 5. ACQUISITIONS On December 31, 1996, the Company acquired all the issued and outstanding common shares of Interform Corporation ("Interform"), a business forms printer located in Bridgeville, Pennsylvania, for $2.5 million. Champion utilized the proceeds of a loan from a bank to provide the cash consideration and to refinance the existing long term debt of Interform. The transaction was accounted for under the purchase method. As of September 30, 1996, Interform had total assets of $14.9 million and total liabilities of $9.6 million. The following summarizes the unaudited consolidated pro forma results of operations for the three and six months ended April 30, 1997 and 1996, assuming the acquisition had been consummated at the beginning of the periods presented.
THREE MONTHS ENDED SIX MONTHS ENDED APRIL 30, APRIL 30, ---------------------------- ---------------------------- 1997 1996 1997 1996 ------------- ------------- ------------- ------------- Revenues........................ $ 27,813,000 $ 26,526,000 $ 52,935,000 $ 52,490,000 Net income...................... $ 1,011,000 $ 696,000 $ 1,668,000 $ 1,086,000 Net income per share............ $ .12 $ .09 $ .20 $ .13 Common shares outstanding....... 8,163,336 8,163,336 8,163,336 8,163,336
6. SUBSEQUENT EVENT On May 21, 1997, the Company acquired all the issued and outstanding common shares of Blue Ridge Printing Co., Inc., of Asheville, North Carolina and Knoxville, Tennessee ("Blue Ridge"), in exchange for 277,775 shares of the Company's Common Stock. The transaction has been accounted for as a pooling of interests. Total assets and liabilities of Blue Ridge at June 30, 1996 were $5.7 million and $4.2 million. Total revenues for the year ended June 30, 1996 were $6.5 million. 7. NEW ACCOUNTING PRONOUNCEMENT In February 1997, the FASB issued Statement No. 128, "Earnings Per Share" (FAS 128) which supersedes APB Opinion No. 15, "Earnings Per Share" (APB 15). FAS 128 is effective for financial statements for both interim and annual periods ending after December 15, 1997. The standard specifies the computation, presentation and disclosure of basic and diluted earnings per common share. Basic and diluted earnings per common share are not anticipated to be materially different from earnings per common share under APB 15. 7 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 Income Statements as a percentage of total revenues.
PERCENTAGE OF TOTAL REVENUES ------------------------------------------ THREE MONTHS ENDED SIX MONTHS ENDED APRIL 30, APRIL 30, -------------------- -------------------- 1997 1996 1997 1996 --------- --------- --------- --------- Revenues: Printing...................................................................... 81.4% 74.0% 78.5% 72.2% Office products and office furniture.......................................... 18.6 26.0 21.5 27.8 --------- --------- --------- --------- Total revenues.............................................................. 100.0 100.0 100.0 100.0 Cost of sales: Printing...................................................................... 54.9 49.0 55.2 49.1 Office products and office furniture.......................................... 11.6 16.0 13.9 18.1 --------- --------- --------- --------- Total cost of sales......................................................... 66.5 65.0 69.1 67.2 Selling, general and administrative expenses.................................... 26.9 23.9 24.9 23.3 --------- --------- --------- --------- Income from operations.......................................................... 6.6 11.1 6.0 9.5 Interest income............................................................... 0.0 0.0 0.0 0.0 Interest (expense)............................................................ (1.4) (0.6) (1.2) (0.5) Other income.................................................................. 1.0 0.0 1.6 0.1 --------- --------- --------- --------- Income before taxes............................................................. 6.2 10.5 6.4 9.1 Income tax expense............................................................ (2.6) (4.3) (2.7) (3.7) --------- --------- --------- --------- Net income...................................................................... 3.6% 6.2% 3.7% 5.4% --------- --------- --------- --------- --------- --------- --------- ---------
THREE MONTHS ENDED APRIL 30, 1997 COMPARED TO THREE MONTHS ENDED APRIL 30, 1996 Total revenues increased 90.4% in the second quarter 1997 to $27.8 million from $14.6 in the second quarter 1996. Printing revenue increased 109.3% in the second quarter 1997 to $22.6 million from $10.8 million in the second quarter 1996. Office products and office furniture revenue increased 36.4% in the second quarter 1997 to $5.2 million from $3.8 million in the second quarter 1996. These revenue increases were achieved through new acquisitions which accounted for increased printing sales of $10.5 million and increased office products and office furniture sales of $1.3 million. Revenues in existing printing divisions increased by approximately $1.3 million from the quarter ended in 1997 over 1996 due to sales generated from new sales personnel coupled with broadened product lines. Total cost of sales increased 94.5% in the second quarter 1997 to $18.5 million from $9.5 million in the second quarter 1996. Printing cost of sales increased 113.5% in the second quarter 1997 to $15.3 million from $7.2 million in the second quarter 1996, due primarily to sales volume and the addition of newly acquired divisions with lower sales margins than existing divisions. Office products and office furniture cost of sales increased 36.8% in the second quarter 1997 to $3.2 million from $2.4 million in the second 8 quarter 1996, primarily due to sales volume. Selling, general & administrative expenses increased as a percentage of sales in second quarter 1997 to 26.9% from 23.9% in the second quarter 1996 due to costs associated with acquisitions (professional fees, employee, sales and management training, and travel expenses) coupled with higher overhead percentages in recently acquired divisions. Income from operations increased 13.3% in the second quarter 1997 to $1.8 million from $1.6 million in the second quarter 1996. This increase is a result of sales volume increases moderated by lower margins and increased costs as described above. Interest expense on a comparative basis increased $305,000 as a result of increased debt incurred for acquisitions. Income taxes are 42% for the second quarter 1997, is up slightly from 41% in the second quarter 1996. Net income for the second quarter 1997 increased 12.3% to $1.0 million from $900,000 in the second quarter 1996. SIX MONTHS ENDED APRIL 30, 1997 COMPARED TO SIX MONTHS ENDED APRIL 30, 1996 Total revenues increased 64.4% in the first half 1997 to $47.2 million from $28.7 in the first quarter 1996. Printing revenue increased 78.8% in the first half 1997 to $37.1 million from $20.7 million in the first half 1996. Office products and office furniture revenue increased 27.2 % in the first half 1997 to $10.2 million from $8.0 million in the first half 1996. These revenue increases were achieved through new acquisitions which accounted for increased printing sales of $15.7 million and increased office products and office furniture sales of $2.5 million. Revenues at existing printing divisions were increased by approximately $600,000 due to sales generated from new sales personnel coupled with broadened product lines. The existing office products and office furniture divisions experienced a sales decline from the prior quarter reflecting a non-recurring furniture sale totaling $300,000 in the first half of 1996. Total cost of sales increased 69.2% in the first half 1997 to $32.6 million from $19.3 million in the first half 1996. Printing cost of sales increased 85.1% in the first half 1997 to $26.1 million from $14.1 million in the first half 1996, due primarily to sales volume and the addition of newly acquired divisions with lower sales margins. Office products and office furniture cost of sales increased 26.1% in the first half 1997 to $6.6 million from $5.2 million in the first half 1996, due to sales volume. Selling, general & administrative expenses increased as a percentage of sales in first half 1997 to 24.9% from 23.3% in the first half 1996 due to increased costs associated with acquisitions. Income from operations increased 3.2% in the first half 1997 to $2.8 million from $2.7 million in the first half 1996. Interest expense on a comparative basis increased $400,000 as a result of increased debt. Income taxes are 42% for the first half 1997 which is up slightly from 41% in the first half 1996. Net income for the first half 1997 increased 14.0% to $1.8 million from $1.5 million in the first half 1996. SEASONALITY Historically, the Company has experienced a greater portion of its annual sales and net income 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 Champion's primary sources of funding for the second quarter 1997 were net income and borrowings. Funds were used primarily for principal payments on debt, the purchase of equipment, the funding of increases in accounts receivable and inventories, the payment of income taxes and the payment of regular cash dividends. 9 Working capital on April 30, 1997 was $18.2 million, an increase of $6.1 million from a year ago. The Company's cash balance was $2.2 million on April 30 1997, a portion of which was invested in highly liquid instruments with maturities of 90 days or less. The Company has short term credit facilities with banks permitting aggregate borrowings of $2.8 million. On April 30, 1997, $2.0 million had been drawn under these facilities. The Company's president personally guarantees a credit facility of $800,000. There is no assurance that he will continue to do so. The Company expects that the combination of funds available from working capital, borrowings available under the Company's credit facilities (including leases as required) 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. PART II -- OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES On May 21, 1997, the Company acquired Blue Ridge. The Company issued 277,775 shares of common stock valued at Five Million Two Hundred Fifty Thousand Dollars ($5,250,000.00) in exchange for all of the issued and outstanding shares of common stock of Blue Ridge. The Company issued the shares without registration under the Securities Act of 1933 based on exemption from registration pursuant to Section 4(2) of said Act and Rule 506 promulgated thereunder, there being five purchases and all other provisions of said Rule being satisfied. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the annual meeting of shareholders held March 17, 1997, the following matters were voted upon: a) Fixing the number of directors at seven (7) and election of the following nominees as directors, with voting as follows:
DIRECTOR VOTES "FOR" VOTES "WITHHELD" BROKER NON-VOTES - ----------------------------------------------------------------- ----------- ----------------- --------------------- Robert H. Beymer................................................. 7,552,282 5,591 -0- Philip E. Cline.................................................. 7,554,127 3,746 -0- Harley F. Mooney, Jr............................................. 7,552,782 5,091 -0- Todd L. Parchman................................................. 7,553,641 4,232 -0- A. Michael Perry................................................. 7,552,907 4,966 -0- Marshall T. Reynolds............................................. 7,554,127 3,746 -0- Neal W. Scaggs................................................... 7,553,396 4,477 -0-
10 b) Approving an amendment to the Company's articles of incorporation to increase the number of authorized shares of Company Common Stock to 20,000,000 shares, with voting as follows:
VOTES "FOR" VOTES "AGAINST" ABSTENTIONS BROKER NON-VOTES - ----------- ----------------- ----------- --------------------- 7,531,922 9,217 16,734 -0-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) The exhibits listed on the Exhibit Index on page 13 of this Form 10-Q are filed herewith. b) The following reports on Form 8-K were filed during the quarter for which this report is filed: 1) Form 8-K dated April 3, 1997, filed April 3, 1997, describing the Company's definitive agreement of merger with Blue Ridge Printing Co., Inc., of Asheville, North Carolina. 2) Form 8-K dated May 21, 1997, filed May 27, 1997, describing the completion of the Company's definitive agreement of merger with Blue Ridge Printing Co., Inc., of Asheville, North Carolina. 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 16, 1997 /s/ Marshall T. Reynolds ------------------------------------ Marshall T. Reynolds President and Chief Executive Officer Date: June 16, 1997 /s/ Joseph C. Worth, III ------------------------------------ Joseph C. Worth, III Vice President and Chief Financial Officer
11 CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES EXHIBIT INDEX
EXHIBIT PAGE TITLE - ----------- ----------- -------------------------------------------------------------------------------------------- 3.1 13 Articles of Incorporation of Champion Industries, Inc. 11 15 Statement Re Computation of Per Share Earnings 27 electronic Financial Data Schedule
12 EX-3.1 2 EXHIBIT 3.1 CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES EXHIBIT 3.1 ARTICLES OF INCORPORATION OF CHAMPION INDUSTRIES, INC. The undersigned, acting as incorporator of a corporation under the West Virginia Corporation Act, adopts the following Articles of Incorporation for such corporation: 1. The name of the corporation is Champion Industries, Inc. 2. The period of the corporation's duration is perpetual. 3. The purpose for which the corporation is organized is the transaction of any and all lawful business for which corporations may be incorporated under Article One, Chapter Thirty-One, of the West Virginia Code of 1931, as amended. 4. The address of the principal office of the corporation is P. O. Box 2968, Huntington, West Virginia 25728. 5. The number of directors constituting the initial board of directors of the corporation is one (1) and the name and address of the person who is to serve as director until the first annual meeting of shareholders or until his successors are elected and shall qualify are: Marshall T. Reynolds 28 Hamill Road Huntington, West Virginia 25701 6. The name and address of the incorporator is Marshall T. Reynolds, 28 Hamill Road, Huntington, West Virginia 25701. 7. The aggregate number of shares which the corporation shall have authority to issue is twenty million (20,000,000) common shares of the par value of $1.00 each. 8. Provisions limiting or denying preemptive rights are: No holder of any shares of the corporation shall have any preemptive right to purchase, subscribe for, or otherwise acquire any shares of the corporation of any class now or hereafter authorized, or any securities exchangeable for or convertible into such shares, or any warrants or other instruments evidencing rights or options to subscribe for, purchase, or otherwise acquire such shares. 9. Provisions for the regulation of the internal affairs of the corporation are: None. Dated: March 17, 1997 /s/ Marshall T. Reynolds This instrument prepared by: Thomas J. Murray HUDDLESTON, BOLEN, BEATTY, PORTER & COPEN Post Office Box 2185 Huntington, West Virginia 25722 EX-11 3 EXHIBIT 11 CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
THREE MONTHS ENDED SIX MONTHS ENDED APRIL 30, APRIL 30, -------------------------- -------------------------- 1997 1996 1997 1996 ------------ ------------ ------------ ------------ Primary: Average shares outstanding............................. 8,104,714 8,021,575 8,104,714 8,014,083 Net effect of dilutive stock options--based on treasury stock method using average market price.............. 58,622 30,084 57,506 31,366 ------------ ------------ ------------ ------------ Totals................................................. 8,163,336 8,051,659 8,162,220 8,045,449 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Net income............................................... $ 1,011,383 $ 900,681 $ 1,752,631 $ 1,537,083 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Per share amount......................................... $ 0.12 $ 0.11 $ 0.21 $ 0.19 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Fully diluted: Average shares outstanding............................. 8,104,714 8,021,575 8,104,714 8,014,083 Net effect of dilutive stock options--based on treasury stock method using period end market price, if greater than the average market price................ 58,622 30,084 57,506 31,366 ------------ ------------ ------------ ------------ Totals................................................. 8,163,336 8,051,659 8,162,220 8,045,449 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Net income............................................... $ 1,011,383 $ 900,681 $ 1,752,631 $ 1,537,083 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Per share amount......................................... $ 0.12 $ 0.11 $ 0.21 $ 0.19 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
EX-27 4 EX 27
5 This schedule contains summary financial information extracted from the unaudited consolidated financial statements of Champion Industries, Inc. and Subsidiaries for the three and six months periods ending April 30, 1997 and is qualified in its entirety by reference to such financial statements. 3-MOS 6-MOS OCT-31-1997 OCT-31-1997 FEB-01-1996 NOV-01-1996 APR-30-1997 APR-30-1997 2,204,361 2,204,361 0 0 18,157,736 18,157,736 939,000 939,000 9,722,799 9,722,799 30,703,126 30,703,126 29,173,560 29,173,560 10,177,947 10,177,947 54,127,549 54,127,549 12,430,496 12,430,496 0 0 0 0 0 0 8,104,714 8,104,714 16,006,773 16,006,773 54,127,549 54,127,549 0 0 27,813,247 47,211,113 0 0 18,504,420 32,633,629 7,195,412 11,002,329 0 0 388,803 569,903 1,724,612 3,005,252 713,229 1,752,631 0 0 0 0 0 0 0 0 1,011,383 1,752,631 .12 .21 .12 .21
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