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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 January 31, 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 January 31, 2005.
 
 
Champion Industries, Inc.

INDEX
 

 
 
 Page No.
 Part I.   Financial Information  
      Item 1.    Financial Statements  
         Consolidated Balance Sheets (Unaudited)
 3
         Consolidated Statements of Income (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
 16
     Item 4. Controls and Procedures
16
 Part II. Other Information  
     Item 6. Exhibits
17
 Signatures
18
 
2
 
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Champion Industries, Inc. and Subsidiaries
Consolidated Balance Sheets

 
             
 
             
 
ASSETS
  
January 31,
      
October 31,
   
2005
(Unaudited)
      
2004
(Audited)
  
Current assets:
            
Cash and cash equivalents
 
$ 4,340,042
    
 
$ 1,745,457
Accounts receivable, net of allowance of $1,437,000 and $1,422,000
  
17,965,402
      
21,318,016
Inventories
  
11,098,798
      
11,269,514
Other current assets
  
1,432,573
      
973,832
Deferred income tax assets
  
1,144,943
      
1,144,943
Total current assets
  
35,981,758
      
36,451,762
             
             
Property and equipment, at cost:
            
Land
  
2,006,375
      
2,006,375
Buildings and improvements
  
8,319,543
      
8,253,573
Machinery and equipment
  
43,770,959
      
43,228,587
Equipment under capital leases
  
983,407
      
983,407
Furniture and fixtures
  
3,431,688
      
3,361,100
Vehicles
 
3,581,435
      
3,523,467
  
   
62,093,407
      
61,356,509
Less accumulated depreciation
  
(41,978,613
)
    
(41,020,327
)
   
20,114,794
      
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
 
3,726,571
      
3,812,051
  
Other assets
  
333,064
      
449,589
  
   
7,159,935
      
7,361,940
  
Total assets
 
$ 63,256,487
    
 
$ 64,149,884
  
See notes to consolidated financial statements.
 
3
 
Champion Industries, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)




LIABILITIES AND SHAREHOLDERS’ EQUITY
January 31,
  
October 31,
  
 
2005
(Unaudited)
  
2004
(Audited)
  
Current liabilities:
            
Accounts payable
 
$ 3,926,215
  
 
$ 3,618,051
  
Accrued payroll
  
1,374,739
    
1,778,736
  
Taxes accrued and withheld
  
1,408,691
    
1,289,524
  
Accrued income taxes
  
310,897
    
135,556
  
Accrued expenses
  
1,097,807
    
1,028,246
  
Current portion of long-term debt:
            
Notes payable
  
1,567,630
    
1,555,911
  
Capital lease obligations
  
94,020
    
132,518
  
Total current liabilities
  
9,779,999
    
9,538,542
  
             
Long-term debt, net of current portion:
            
Notes payable, line of credit
  
1,800,000
    
2,300,000
  
Notes payable, term
  
5,544,696
    
5,940,323
  
Capital lease obligations
  
-
    
16,484
  
Other liabilities
  
429,192
    
428,366
  
Deferred income tax liabilities
  
4,375,357
    
4,375,357
  
Total liabilities
  
21,929,244
    
22,599,072
  
 
Commitments and contingencies
 
            
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
  
9,315,220
    
9,538,789
  
Total shareholders’ equity
  
41,327,243
    
41,550,812
  
Total liabilities and shareholders’ equity
 
$ 63,256,487
  
 
$ 64,149,884
  

 


See notes to consolidated financial statements.
 
4
 
Champion Industries, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)

 
   
Three Months Ended January 31,
  
   
2005
 
 
2004
  
Revenues:
            
Printing
 
$ 24,436,621
  
 
$ 22,997,892
  
Office products and office furniture
  
10,003,370
    
6,315,581
  
Total revenues
  
34,439,991
    
29,313,473
  
             
Cost of sales:
            
Printing
  
17,877,263
    
17,023,500
  
Office products and office furniture
  
7,004,263
    
4,324,101
  
Total cost of sales
  
24,881,526
    
21,347,601
  
             
Gross profit
  
9,558,465
    
7,965,872
  
             
Selling, general and administrative expenses
  
9,025,372
    
7,921,054
  
             
Income from operations
  
533,093
    
44,818
  
Other income (expense):
            
Interest income
  
5,066
    
1,618
  
Interest expense
  
(137,365
)
  
(46,679
)
Other
  
62,673
    
23,034
  
   
(69,626
)
  
(22,027
)
Income before income taxes
 
463,467
    
22,791
  
Income tax expense
  
(200,341
)