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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 April 30, 2005 
 
  Commission File No. 0-21084
 
 


Champion Industries, Inc.
(Exact name of Registrant as specified in its charter)


West Virginia
  
55-0717455
(State or other jurisdiction of
incorporation or organization)
  
(I.R.S. Employer Identification No.)


2450-90 1st Avenue
P.O. Box 2968
Huntington, WV 25728
(Address of principal executive offices)
(Zip Code)


(304) 528-2700
(Registrant’s telephone number,
including area code)

 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ü  No      .

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes _____No ü  ..

9,733,913 shares of common stock of the Registrant were outstanding at April 30, 2005.





Champion Industries, Inc.

INDEX


 
 
 Page No.
 Part I.   Financial Information
 
 Item 1.    Financial Statements
 
         Consolidated Balance Sheets (Unaudited)
 3
         Consolidated Statements of Operations (Unaudited)
 5
         Consolidated Statements of Cash Flows (Unaudited)
 6
         Notes to Consolidated Financial Statements
 7
     Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
13
      Item 3a.  Quantitative and Qualitative Disclosure About Market Risk
17
      Item 4. Controls and Procedures
18
 Part II. Other Information
 
     Item 1. Legal Proceedings 18
     Item 4. Submission of Matters to a Vote of Security Holders 19
     Item 6. Exhibits
19
 Signatures
20
 


 
2

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Champion Industries, Inc. and Subsidiaries
Consolidated Balance Sheets



           
           
ASSETS
  
April 30,
  
October 31,
  
   
2005
(Unaudited)
  
2004
(Audited)
  
Current assets:
              
Cash and cash equivalents
  
$
2,722,829
  
$
1,745,457
  
Accounts receivable, net of allowance of $1,453,000 and $1,422,000
    
18,604,035
    
21,318,016
  
Inventories
    
10,859,367
    
11,269,514
  
Other current assets
    
1,184,752
    
973,832
  
        Deferred income tax assets
    
1,175,756
    
1,144,943
  
Total current assets
    
34,546,739
    
36,451,762
  
               
               
Property and equipment, at cost:
              
Land
    
2,006,375
    
2,006,375
  
Buildings and improvements
    
8,415,312
    
8,253,573
  
Machinery and equipment
    
44,218,545
    
43,228,587
  
Equipment under capital leases
    
983,407
    
983,407
  
Furniture and fixtures
    
3,461,473
    
3,361,100
  
Vehicles
   
3,667,649
    
3,523,467
  
     
62,752,761
    
61,356,509
  
Less accumulated depreciation
    
(43,031,528
)
  
(41,020,327
)
     
19,721,233
    
20,336,182
 
               
Cash surrender value of officers’ life insurance
    
1,039,514
    
1,039,514
  
Goodwill
   
2,060,786
    
2,060,786
  
Other intangibles, net of accumulated amortization
   
3,641,093
    
3,812,051
  
Other assets
    
339,991
    
449,589
  
     
7,081,384
    
7,361,940
  
Total assets
  
$
61,349,356
  
$
64,149,884
  





See notes to consolidated financial statements.

3
 
Champion Industries, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
 

LIABILITIES AND SHAREHOLDERS’ EQUITY
  
April 30,
  
October 31,
  
   
2005
(Unaudited)
  
2004
(Audited)
  
Current liabilities:
              
Accounts payable
  
$
2,762,524
  
$
3,618,051
  
Accrued payroll
    
1,321,850
    
1,778,736
  
Taxes accrued and withheld
    
1,463,243
    
1,289,524
  
Accrued income taxes
    
72,716
    
135,556
  
Accrued expenses
    
1,694,611
    
1,028,246
  
Current portion of long-term debt:
              
Notes payable
    
1,586,951
    
1,555,911
  
Capital lease obligations
    
48,805
    
132,518
  
Total current liabilities
    
8,950,700
    
9,538,542
  
               
Long-term debt, net of current portion:
              
Notes payable, line of credit
    
1,800,000
    
2,300,000
  
Notes payable, term
    
5,154,080
    
5,940,323
  
Capital lease obligations
    
-
    
16,484
  
Other liabilities
    
415,831
    
428,366
  
Deferred income tax liability
    
4,285,496
    
4,375,357
  
Total liabilities
    
20,606,107
    
22,599,072
  
               
Shareholders’ equity:
              
Common stock, $1 par value, 20,000,000 shares authorized;
9,733,913 shares issued and outstanding
    
9,733,913
    
9,733,913
  
Additional paid-in capital
    
22,278,110
    
22,278,110
  
Retained earnings
    
8,731,226
    
9,538,789
  
Total shareholders’ equity
    
40,743,249
    
41,550,812
  
Total liabilities and shareholders’ equity
  
$
61,349,356
  
$
64,149,884
  





See notes to consolidated financial statements.

4

Champion Industries, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
 

   
Three Months Ended
April 30,
  
Six Months Ended
April 30,
  
     
2005
 
 
2004
 
 
2005
 
 
2004
  
Revenues:
                          
Printing
  
$
24,384,970
  
$
24,137,454
  
$
48,821,591
  
$
47,135,346
  
Office products and office furniture
    
9,167,312
    
6,363,445
    
19,170,682
    
12,679,026
  
Total revenues
    
33,552,282
    
30,500,899
    
67,992,273
    
59,814,372
  
                           
Cost of sales:
                          
Printing
    
17,972,110
    
17,483,303
    
35,849,374
    
34,506,803