CHARLESTON, W.Va. - Champion Industries Inc. on Friday reported a second quarter net loss, but the Huntington-based parent company of Champion Printing, Capitol Business Interiors and The Herald-Dispatch newspaper said it is seeing "substantial improvement" in its finances.
Champion has been financially strained in recent years as it has dealt with hefty debt payments left from its 2007 purchase of The Herald-Dispatch. The company bought the newspaper for $77 million that year, financing much of the purchase with debt.
On Friday, the company reported a second-quarter net loss of $700,000, or 6 cents per share, based on continuing operations. While still a loss, the quarterly results improved from the $21 million loss the company experienced over the same time period last year.
"The results for fiscal year to date 2013 over 2012 reflected a substantial improvement," the company said in a press release announcing the earnings.
Chairman and CEO Marshall T. Reynolds said in a statement the company is generating positive cash flow from its operating businesses.
"In the second quarter of 2013, there were no non-cash charges and it can be seen that we generated positive income from operations across all three business segments," Reynolds said. "We believe this is indicative of the resilience of our dedicated employees under a difficult credit environment and the core value of our Company to our customer base."
Earlier this year, the company received a notice of default from Fifth Third Bank of Huntington, which, along with several other banks, has provided the company with a revolving credit facility and term loan.
While the company has made all of its required principal and interest payments to the banks, Champion failed to meet minimum earnings before interest, taxes, depreciation and amortization requirements spelled out in the debt covenants.
In response to the default notification, the company retained Timothy Boates of RAS Management Advisors LLC to serve as its chief restructuring officer.