##### 



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, 2003 |  | Commission File No. 0-21084



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

|                                                                             |  |                                                
|---------------------------------------------------------------------------- |  | -----------------------------------------------
|West Virginia
(State or other jurisdiction of
incorporation or organization) |  | 55-0717455
(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
þ   No o.

9,713,913 shares of common stock of the Registrant were outstanding at
January 31, 2003.





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##### 



Champion Industries, Inc.

INDEX

|                              |                                                                                               |                                            |    |          |   | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ | -- | -------- | - | 
|                              |                                                                                               |                                            |    | Page No.
|Part I. Financial Information |                                                                                               |                                            |    |         
|                             
|                              | Item 1. Financial Statements                                                                  |                                            |    |          |  
|                             
|                              |                                                                                               | Consolidated Balance Sheets                |    |          | 3 | 
|                             
|                              |                                                                                               | Consolidated Statements of Operations      |    |          | 5 | 
|                             
|                              |                                                                                               | Consolidated Statements of Cash Flows      |    |          | 6 | 
|                             
|                              |                                                                                               | Notes to Consolidated Financial Statements |    |          | 7 | 
|                             
|                              | Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations |                                            |    | 14       |  
|                             
|                              | Item 3a. Quantitative and Qualitative Disclosure About Market Risk                            |                                            |    | 17       |  
|                             
|                              | Item 4. Controls and Procedures                                                               |                                            |    | 17       |  
|                             
|Part II. Other Information    |                                                                                               |                                            |    |         
|                             
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      |                                            |    | 18       |  
|                             
|Signatures                    |                                                                                               |                                            | 19 |         

2



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##### 



PART I  FINANCIAL INFORMATION

Item 1.  Financial Statements

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

|                                                 |                                                                    |                                |                               |             |            |             |            |            |            |             |  
|------------------------------------------------ | ------------------------------------------------------------------ | ------------------------------ | ----------------------------- | ----------- | ---------- | ----------- | ---------- | ---------- | ---------- | ----------- | -
|ASSETS                                           |                                                                    | January 31,                    |                               | October 31,
|                                                 |                                                                    | 2003                           |                               | 2002       
|                                                 |                                                                    |                                |                               |             |           
|Current assets:                                  |                                                                    |                                |                               |             |            |             |            |           
|                                                 | Cash and cash equivalents                                          |                                | $                             | 2,951,405   |            |             | $          | 4,507,139  |           
|                                                 | Accounts receivable, net of allowance of $1,309,000 and $1,397,000 |                                |                               | 17,431,047  |            |             |            | 18,546,989 |           
|                                                 | Inventories                                                        |                                |                               | 11,511,567  |            |             |            | 11,427,581 |           
|                                                 | Income tax refund                                                  |                                |                               |            |            |             |            |           |           
|                                                 | Other current assets                                               |                                |                               | 2,209,541   |            |             |            | 1,745,563  |           
|                                                 | Deferred income tax assets                                         |                                |                               | 1,027,059   |            |             |            | 1,027,059  |           
|                                                 |                                                                    |                                |                               |             |           
|                                                 |                                                                    |                                | Total current assets          |             |            | 35,130,619  |            |            |            | 37,254,331  |  
|                                                
|Property and equipment, at cost:                 |                                                                    |                                |                               |             |            |             |            |           
|                                                 |                                                                    | Land                           |                               |             | 1,028,372  |             |            |            | 1,028,372  |            
|                                                 |                                                                    | Buildings and improvements     |                               |             | 6,156,753  |             |            |            | 6,120,122  |            
|                                                 |                                                                    | Machinery and equipment        |                               |             | 36,663,861 |             |            |            | 36,362,178 |            
|                                                 |                                                                    | Equipment under capital leases |                               |             | 983,407    |             |            |            | 983,407    |            
|                                                 |                                                                    | Furniture and fixtures         |                               |             | 2,882,492  |             |            |            | 2,872,212  |            
|                                                 |                                                                    | Vehicles                       |                               |             | 3,176,141  |             |            |            | 3,082,258  |            
|                                                 |                                                                    |                                |                               |             |           
|                                                 |                                                                    |                                | 50,891,026                    |             |            |             | 50,448,549 |           
|                                                 |                                                                    |                                | Less accumulated depreciation |             |            | (32,358,555 | )          |            |            | (31,442,360 | )
|                                                 |                                                                    |                                |                               |             |           
|                                                 |                                                                    |                                | 18,532,471                    |             |            |             | 19,006,189 |           
|                                                
|Cash surrender value of officers life insurance |                                                                    |                                | 924,534                       |             |            |             | 947,955    |           
|Goodwill                                         |                                                                    |                                | 1,725,941                     |             |            |             | 1,725,941  |           
|Other assets                                     |                                                                    |                                | 548,803                       |             |            |             | 573,087    |           
|                                                 |                                                                    |                                |                               |             |           
|                                                 |                                                                    |                                | 3,199,278                     |             |            |             | 3,246,983  |           
|                                                 |                                                                    |                                |                               |             |           
|                                                 |                                                                    |                                | Total assets                  |             | $          | 56,862,368  |            |            | $          | 59,507,503  |  
|                                                 |                                                                    |                                |                               |             |           

See notes to consolidated financial statements.

3



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##### 



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

|                                        |                                                                                                   |                           |                                            |             |           |            |            |            |           |            | 
|--------------------------------------- | ------------------------------------------------------------------------------------------------- | ------------------------- | ------------------------------------------ | ----------- | --------- | ---------- | ---------- | ---------- | --------- | ---------- | 
|LIABILITIES
AND SHAREHOLDERS EQUITY    |                                                                                                   | January 31,               |                                            | October 31,
|                                        |                                                                                                   | 2003                      |                                            | 2002       
|                                        |                                                                                                   |                           |                                            |             |          
|Current liabilities:                    |                                                                                                   |                           |                                            |             |           |            |            |           
|                                        | Accounts payable                                                                                  |                           | $                                          | 2,829,707   |           |            | $          | 3,258,095  |          
|                                        | Accrued payroll                                                                                   |                           |                                            | 1,375,770   |           |            |            | 2,004,046  |          
|                                        | Taxes accrued and withheld                                                                        |                           |                                            | 1,167,373   |           |            |            | 1,416,900  |          
|                                        | Accrued income taxes                                                                              |                           |                                            | 344,938     |           |            |            | 873,136    |          
|                                        | Accrued expenses                                                                                  |                           |                                            | 788,303     |           |            |            | 819,234    |          
|                                        | Current portion of long-term debt:                                                                |                           |                                            |             |           |            |            |            |          
|                                        |                                                                                                   | Notes payable             |                                            |             | 2,657,571 |            |            |            | 2,615,422 |           
|                                        |                                                                                                   | Capital lease obligations |                                            |             | 198,678   |            |            |            | 195,035   |           
|                                        |                                                                                                   |                           |                                            |             |          
|                                        |                                                                                                   |                           | Total current liabilities                  |             |           | 9,362,340  |            |            |           | 11,181,868 | 
|Long-term debt, net of current portion: |                                                                                                   |                           |                                            |             |           |            |            |           
|                                        | Notes payable, term                                                                               |                           |                                            | 904,063     |           |            |            | 1,445,837  |          
|                                        | Capital lease obligations                                                                         |                           |                                            | 307,970     |           |            |            | 359,027    |          
|Other liabilities                       |                                                                                                   |                           | 428,441                                    |             |           |            | 429,842    |           
|Deferred income tax liability           |                                                                                                   |                           | 3,225,119                                  |             |           |            | 3,225,119  |           
|                                        |                                                                                                   |                           |                                            |             |          
|                                        |                                                                                                   |                           | Total liabilities                          |             |           | 14,227,933 |            |            |           | 16,641,693 | 
|                                        |                                                                                                   |                           |                                            |             |          
|Shareholders equity:                   |                                                                                                   |                           |                                            |             |           |            |            |           
|                                        | Common stock, $1 par value, 20,000,000 shares authorized;
9,713,913 shares issued and outstanding |                           |                                            | 9,713,913   |           |            |            | 9,713,913  |          
|                                        | Additional paid-in capital                                                                        |                           |                                            | 22,242,047  |           |            |            | 22,242,047 |          
|                                        | Retained earnings                                                                                 |                           |                                            | 10,678,475  |           |            |            | 10,909,850 |          
|                                        |                                                                                                   |                           |                                            |             |          
|Total shareholders equity              |                                                                                                   |                           | 42,634,435                                 |             |           |            | 42,865,810 |           
|                                        |                                                                                                   |                           |                                            |             |          
|                                        |                                                                                                   |                           | Total liabilities and shareholders equity |             | $         | 56,862,368 |            |            | $         | 59,507,503 | 
|                                        |                                                                                                   |                           |                                            |             |          

See notes to consolidated financial statements.

4



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##### 



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

|                                             |                                      |                     |           |                    |            |      |           |            |            | 
|-------------------------------------------- | ------------------------------------ | ------------------- | --------- | ------------------ | ---------- | ---- | --------- | ---------- | ---------- | 
|                                             |                                      |                     |           | Three Months Ended
|                                             |                                      |                     |           | January 31,       
|                                             |                                      |                     |           | 2003               |            | 2002
|                                             |                                      |                     |           |                   
|Revenues:                                    |                                      |                     |           |                    |            |      |           |           
|                                             | Printing                             |                     | $         | 22,606,647         |            |      | $         | 22,857,609 |           
|                                             | Office products and office furniture |                     |           | 6,012,294          |            |      |           | 6,932,933  |           
|                                             |                                      |                     |           |                   
|                                             |                                      | Total revenues      |           |                    | 28,618,941 |      |           |            | 29,790,542 | 
|                                            
|Cost of sales:                               |                                      |                     |           |                    |            |      |           |           
|                                             | Printing                             |                     |           | 16,533,926         |            |      |           | 16,527,470 |           
|                                             | Office products and office furniture |                     |           | 4,167,266          |            |      |           | 4,959,980  |           
|                                             |                                      |                     |           |                   
|                                             |                                      | Total cost of sales |           |                    | 20,701,192 |      |           |            | 21,487,450 | 
|                                             |                                      |                     |           |                   
|Gross profit                                 |                                      |                     | 7,917,749 |                    |            |      | 8,303,092 |           
|                                            
|Selling, general and administrative expenses |                                      |                     | 7,455,685 |                    |            |      | 7,784,287 |           
|                                             |                                      |                     |           |                   
|Income from operations                       |                                      |                     | 462,064   |                    |            |      | 518,805   |           
|Other income (expense):                      |                                      |                     |           |                    |            |      |           |           
|                                             | Interest income                      |                     |           | 1,452              |            |      |           | 6,513      |           
|                                             | Interest expense                     |                     |           | (52,024            | )          |      |           | (112,454   | )         
|                                             | Other                                |                     |           | 25,524             |            |      |           | 30,120     |           
|                                             |                                      |                     |           |                   
|                                             |                                      |                     | (25,048   | )                  |            |      | (75,821   | )         
|                                             |                                      |                     |           |                   
|Income before income taxes                   |                                      |                     | 437,016   |                    |            |      | 442,984   |           
|                                             | Income tax expense                   |                     |           | (182,700           | )          |      |           | (185,354   | )         
|                                             |                                      |                     |           |                   
|Net income                                   |                                      | $                   | 254,316   |                    |            | $    | 257,630   |           
|                                             |                                      |                     |           |                   
|                                            
|Earnings per share                           |                                      |                     |           |                    |            |      |           |           
|                                             | Basic                                |                     | $         | 0.03               |            |      | $         | 0.03       |           
|                                             |                                      |                     |           |                   
|                                             | Diluted                              |                     | $         | 0.03               |            |      | $         | 0.03       |           
|                                             |                                      |                     |           |                   
|                                            
|Weighted average shares outstanding:         |                                      |                     |           |                    |            |      |           |           
|                                            
|                                             | Basic                                |                     |           | 9,714,000          |            |      |           | 9,714,000  |           
|                                             |                                      |                     |           |                   
|                                             | Diluted                              |                     |           | 9,730,000          |            |      |           | 9,725,000  |           
|                                             |                                      |                     |           |                   
|                                            
|Dividends per share                          |                                      | $                   | 0.05      |                    |            | $    | 0.05      |           
|                                             |                                      |                     |           |                   

See notes to consolidated financial statements.

5



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##### 



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

|                                                                              |                                    |                            |            |                    |           |      |            |           |            |  
|----------------------------------------------------------------------------- | ---------------------------------- | -------------------------- | ---------- | ------------------ | --------- | ---- | ---------- | --------- | ---------- | -
|                                                                              |                                    |                            |            | Three Months Ended
|                                                                              |                                    |                            |            | January 31,       
|                                                                              |                                    |                            |            | 2003               |           | 2002
|                                                                              |                                    |                            |            |                   
|Cash flows from operating activities:                                         |                                    |                            |            |                    |           |      |            |          
|Net income                                                                    |                                    | $                          | 254,316    |                    |           | $    | 257,630    |          
|Adjustments to reconcile net income to cash
provided by operating activities: |                                    |                            |            |                    |           |      |            |          
|                                                                              | Depreciation and amortization      |                            |            | 1,006,795          |           |      |            | 1,048,161 |           
|                                                                              | Gain on sale of assets             |                            |            | (1,677             | )         |      |            | (5,055    | )         
|                                                                              | Increase in deferred compensation  |                            |            | 3,575              |           |      |            | 4,468     |           
|                                                                              | Bad debt expense                   |                            |            | 66,700             |           |      |            | 187,415   |           
|                                                                              | Changes in assets and liabilities: |                            |            |                    |           |      |            |           |           
|                                                                              |                                    | Accounts receivable        |            |                    | 1,049,242 |      |            |           | 1,592,944  |  
|                                                                              |                                    | Inventories                |            |                    | (83,986   | )    |            |           | 283,443    |  
|                                                                              |                                    | Other current assets       |            |                    | (463,978  | )    |            |           | (1,311,963 | )
|                                                                              |                                    | Accounts payable           |            |                    | (428,386  | )    |            |           | (1,393,295 | )
|                                                                              |                                    | Accrued payroll            |            |                    | (628,276  | )    |            |           | (521,681   | )
|                                                                              |                                    | Taxes accrued and withheld |            |                    | (249,527  | )    |            |           | 87,062     |  
|                                                                              |                                    | Income taxes               |            |                    | (528,198  | )    |            |           | 156,382    |  
|                                                                              |                                    | Accrued expenses           |            |                    | (30,931   | )    |            |           | (65,886    | )
|                                                                              |                                    | Other liabilities          |            |                    | (4,976    | )    |            |           | (5,727     | )
|                                                                              |                                    |                            |            |                   
|Net cash (used in) provided by operating activities                           |                                    |                            | (39,307    | )                  |           |      | 313,898    |          
|                                                                             
|Cash flows from investing activities:                                         |                                    |                            |            |                    |           |      |            |          
|Purchases of property and equipment                                           |                                    |                            | (472,462   | )                  |           |      | (762,352   | )        
|Proceeds from sales of property                                               |                                    |                            | 37,527     |                    |           |      | 20,764     |          
|Decrease in cash surrender value life insurance                               |                                    |                            | 24,284     |                    |           |      | 11,311     |          
|Other assets                                                                  |                                    |                            | 23,421     |                    |           |      | (6,269     | )        
|                                                                              |                                    |                            |            |                   
|Net cash used in investing activities                                         |                                    |                            | (387,230   | )                  |           |      | (736,546   | )        
|                                                                             
|Cash flows from financing activities:                                         |                                    |                            |            |                    |           |      |            |          
|Proceeds from term debt and leases                                            |                                    |                            | 122,500    |                    |           |      |           |          
|Principal payments on long-term debt                                          |                                    |                            | (766,004   | )                  |           |      | (940,543   | )        
|Dividends paid                                                                |                                    |                            | (485,693   | )                  |           |      | (485,694   | )        
|                                                                              |                                    |                            |            |                   
|Net cash used in financing activities                                         |                                    |                            | (1,129,197 | )                  |           |      | (1,426,237 | )        
|                                                                              |                                    |                            |            |                   
|Net increase (decrease) in cash                                               |                                    |                            | (1,555,734 | )                  |           |      | (1,848,885 | )        
|Cash and cash equivalents, beginning of period                                |                                    |                            | 4,507,139  |                    |           |      | 5,764,716  |          
|                                                                              |                                    |                            |            |                   
|Cash and cash equivalents, end of period                                      |                                    | $                          | 2,951,405  |                    |           | $    | 3,915,831  |          
|                                                                              |                                    |                            |            |                   

See notes to consolidated financial statements.

6



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##### 



Champion Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

1.  Basis of Presentation and Business Operations

The foregoing financial information has been prepared in accordance with
accounting principles generally accepted in the United States (GAAP) and
rules and regulations of the Securities and Exchange Commission for interim
financial reporting. The preparation of the financial statements in accordance
with GAAP requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from these estimates. 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 GAAP. These interim
financial statements should be read in conjunction with the consolidated
financial statements for the year ended October 31, 2002, and related notes
thereto contained in Champion Industries, Inc.s Form 10-K dated January 25,
2003. The accompanying interim financial information is unaudited. The balance
sheet information as of October 31, 2002 was derived from our audited financial
statements.

2.  Earnings per Share

Basic earnings per share is computed by dividing net income by the weighted
average shares of common stock outstanding for the period and excludes any
dilutive effects of stock options. Diluted earnings per share is computed by
dividing net income by 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 dilutive effect of stock options was 16,000 and
11,000 shares for the three months ended January 31, 2003 and 2002.

3.  Inventories

Inventories are principally 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:

|                                     |                 |   |             |           |             |   |            |           | 
|------------------------------------ | --------------- | - | ----------- | --------- | ----------- | - | ---------- | --------- | 
|                                     |                 |   | January 31, |           | October 31,
|                                     |                 |   | 2003        |           | 2002       
|                                     |                 |   |             |           |            
|Printing:                            |                 |   |             |           |             |   |            |          
|                                     | Raw materials   |   | $           | 2,500,587 |             |   | $          | 2,421,973 | 
|                                     | Work in process |   |             | 1,854,085 |             |   |            | 1,795,796 | 
|                                     | Finished goods  |   |             | 4,070,487 |             |   |            | 3,942,518 | 
|Office products and office furniture |                 |   | 3,086,408   |           |             |   | 3,267,294  |          
|                                     |                 |   |             |           |             |   |            |          
|                                     |                 | $ | 11,511,567  |           |             | $ | 11,427,581 |          
|                                     |                 |   |             |           |             |   |            |          

7



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##### 



Champion Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited) (continued)

4.  Long-Term Debt

Long-term debt consisted of the following:

|                                       |  |             |           |             |  |   |           | 
|-------------------------------------- |  | ----------- | --------- | ----------- |  | - | --------- | 
|                                       |  | January 31, |           | October 31,
|                                       |  | 2003        |           | 2002       
|                                       |  |             |           |            
|Unsecured term note payable            |  | $           | 2,232,306 |             |  | $ | 2,678,733 | 
|Installment notes payable to banks     |  |             | 1,329,328 |             |  |   | 1,382,526 | 
|Capital lease obligations              |  |             | 506,648   |             |  |   | 554,062   | 
|                                       |  |            
|                                       |  |             | 4,068,282 |             |  |   | 4,615,321 | 
|Less current portion                   |  |             | 2,856,249 |             |  |   | 2,810,457 | 
|                                       |  |            
|Long-term debt, net of current portion |  | $           | 1,212,033 |             |  | $ | 1,804,864 | 
|                                       |  |            

The Company has an unsecured revolving line of credit with a bank for
borrowings to a maximum of $10,000,000 with interest payable monthly at
interest rates at LIBOR plus 1% to 1.5%. This line of credit expires in March
2005 and contains certain restrictive financial covenants. There were no
borrowings outstanding under this facility at January 31, 2003.

The Company has an unsecured revolving line of credit with a bank for
borrowings to a maximum of $1,000,000 with interest payable monthly at the Wall
Street Journal prime rate. The line of credit expires in April 2004 and
contains certain financial covenants. There were no borrowings outstanding
under this facility at January 31, 2003.

The Companys non-cash activities for the three months ended January 31, 2003
and 2002 included vehicle purchases of approximately $96,000 and $165,000 which
were financed by a bank.

5.  Shareholders Equity

The Company paid a dividend of five cents per share on December 28, 2002 to
stockholders of record on December 4, 2002. Also, the Company declared a
dividend of five cents per share to be paid on March 24, 2003 to stockholders
of record on March 7, 2003.

6.  Related Party Transaction

In the first quarter of 2002, the Company made a deposit to purchase a
fractional ownership in an aircraft from an entity controlled by its Chief
Executive Officer for approximately $1.2 million of which $875,000 had been
paid as of January 31, 2003.

The Company had previously anticipated the transaction to be completed during
the fourth quarter of 2002. The Companys Board of Directors further evaluated
the transaction, and prior to its completion determined that it would be in the
Companys best interests to rescind the transaction. Therefore, the
transaction has been terminated and a full refund of the deposit has been made.

8



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##### 



Champion Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited) (continued)

7.  Commitments and Contingencies

The Company entered into a Sale and Purchase Agreement in February 2003 to
purchase a building in Baton Rouge, Louisiana for an aggregate purchase price
of $1.8 million. The Company anticipates the transaction to close in the
second quarter of 2003 subject to normal and customary due diligence and
closing requirements.

On February 16, 2002, a jury verdict was rendered against the Company in a
civil action brought against the Company in state court in Jackson,
Mississippi.

The plaintiffs in this civil action asserted that the Company and its Dallas
Printing Company, Inc. subsidiary had engaged in unfair competition and other
wrongful acts in hiring certain of its employees. The jury awarded the
plaintiffs $1,745,000 in actual damages and $750,000 in punitive damages.

On March 1, 2002, the plaintiffs in the civil action filed a motion for
attorneys fees and costs in the amount of $889,401. On July 16, 2002, the
court entered an order granting plaintiff $645,119 in attorney fees and
expenses, and ordered that interest on the amount of the jury award accrue from
February 22, 2002.

On July 17, 2002, the Company filed a notice of appeal from the jury verdict.
The appeal involves both the jury award and the attorneys fee and expense
award. If the Company is not successful on appeal, Mississippi law provides
that it is liable for an additional 15% of the total award.

The Company has been advised that it has no insurance coverage for this award.
The Company under Mississippi law has a guaranteed right to appeal. The
Company has been advised by counsel that it has multiple grounds for an appeal
and a reasonable basis for believing that an appeal would be successful in
eliminating the jury award. However, there can be no assurance that the jury
award will be overturned upon appeal. If the verdict is not overturned, the
impact on the operating results of the Company could be material.

8.  New Accounting Pronouncements and Significant Accounting Policy Updates

In July 2002, the FASB issued SFAS No. 146 Accounting for Costs Associated
with Exit or Disposal Activities (Statement No. 146), which supercedes EITF
No. 94-3, Liability Recognition for Certain Employment Termination Benefits
and Other Costs to Exit an Activity. Statement 146 requires companies to
record liabilities for costs associated with exit or disposal activities to be
recognized only when the liability is incurred instead of at the date of
commitment to an exit or disposal activity. Adoption of this standard is
effective for exit or disposal activities that are initiated after December 31,
2002. The adoption of this standard will not have a significant impact on the
Companys financial statements.

Accounting for Stock-Based Compensation

In December 2002, the FASB issued SFAS No. 148 Accounting for Stock-Based
CompensationTransition and Disclosure. Statement 148 amends FASB Statement
No. 123,

9



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##### 



Champion Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited) (continued)

Accounting for Stock-Based Compensation, to provide alternative
methods of transition to Statement 123s fair value method of accounting for
stock-based employee compensation.

The Company has elected to follow the intrinsic value method in accounting
for its employee stock options. Accordingly, because the exercise price of the
Companys employee stock options equals the market price of the underlying
stock on the date of grant, no compensation expense is recognized.

The fair value of these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for 2003 and 2002, respectively: risk-free interest rates of 3.97%
and 3.91%; dividend yields of 7.22% and 8.03%; volatility factors of the
expected market price of the Companys common stock of 46.4% and 45.4%; and a
weighted-average expected life of the option of 4 years.

The following pro forma information has been determined as if the Company
had accounted for its employee stock options under the fair value method. For
purposes of pro forma disclosures, the estimated fair value of the options is
expensed in the year granted since the options vest immediately. The Companys
pro forma information for the quarters ended January 31 are as follows:

|                                                                                                                                      |  |                          |         |      |  |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------- | ---- |  | - | ------- | 
|                                                                                                                                      |  | Quarter Ended January 31
|                                                                                                                                      |  |                         
|                                                                                                                                      |  | 2003                     |         | 2002
|                                                                                                                                      |  |                          |         |     
|Net Income, as reported                                                                                                               |  | $                        | 254,316 |      |  | $ | 257,630 | 
|Deduct: Total stock-based employee
compensation expense determined under fair
value method for all awards, net of related
tax effects |  |                          | 47,200  |      |  |   | 38,704  | 
|                                                                                                                                      |  |                         
|Pro Forma net income                                                                                                                  |  | $                        | 207,116 |      |  | $ | 218,926 | 
|                                                                                                                                      |  |                         
|Earnings per share:                                                                                                                   |  |                          |         |      |  |   |         | 
|Basic, as reported                                                                                                                    |  | $                        | 0.03    |      |  | $ | 0.03    | 
|Basic, pro forma                                                                                                                      |  |                          | 0.02    |      |  |   | 0.02    | 
|Diluted, as reported                                                                                                                  |  | $                        | 0.03    |      |  | $ | 0.03    | 
|Diluted, pro forma                                                                                                                    |  |                          | 0.02    |      |  |   | 0.02    | 

9.  Restructuring Charge, Asset Impairment Charge and Other Charges

In the third quarter of 2001, the Company recorded charges related to a
restructuring and profitability enhancement plan. This plan was implemented to
effectuate certain key initiatives including plant and office consolidations,
headcount reductions, asset impairment issues and a general response to a
deteriorating economic environment. The third quarter of 2001 pre-tax charge
resulting from these actions was $6.1 million ($4.3 million after-tax or $0.44
per share on a basic and diluted basis.) The charge related to approximately
$3.1 million from asset impairments including goodwill, facility and equipment
write-downs. The Company recorded charges for restructuring and other special
charges of $3.0 million comprised primarily of severance payments, charge-offs
related to duplicative facility leases, increases in

10



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##### 



Champion Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited) (continued)

allowance for doubtful accounts and inventory obsolescence and valuation reserves, costs related to
the impairment of the Companys information systems hardware and software,
charges related to termination and related fees of a pension plan of an
acquired Company, and other charges and expenses related to plant
consolidations and restructuring.

As a result of the Companys restructuring plan, approximately 35 employees
were terminated from the Company primarily as a result of plant and office
consolidations at the Companys Carolina Cut Sheets operation, Chapman Printing
Lexington location and the Garrison Brewer division of Stationers. In
addition, the Company anticipates the elimination of additional positions
resulting from retirements and normal attrition within the next twelve to
eighteen months. As of October 31, 2001 35 employees were notified of their
termination and one retired position was eliminated.

The cash and non-cash elements of the Companys restructuring charge, asset
impairment charge, and other unusual charges approximated $1.5 million in cash
and $4.6 million non-cash. The printing segment charges approximated $3.5
million and the office products and furniture segment charges approximated
$2.6 million. Details of the approximated charges and the status of the
related obligations are as follows as of January 31, 2003:

|                                                 |  |                  |           |      |  |         |           |                  |  |   |           |  |  |               |         | 
|------------------------------------------------ |  | ---------------- | --------- | ---- |  | ------- | --------- | ---------------- |  | - | --------- |  |  | ------------- | ------- | 
|                                                 |  | Utilized        
|                                                 |  |                  |           |      |  |         |           |                  |  |   |           |  |  | Ended balance
|                                                 |  | Original accrual |           | Cash |  | Noncash |           | January 31, 2003
|                                                 |  |                  |           |      |  |         |           |                 
|Write-down of
goodwill,
facilities and
equipment |  | $                | 3,060,000 |      |  | $       | 168,000   |                  |  | $ | 2,892,000 |  |  | $             |        | 
|Employee severance
and termination
benefits      |  |                  | 55,000    |      |  |         | 25,000    |                  |  |   |          |  |  |               | 30,000  | 
|Inventory
obsolescence and
valuation reserves    |  |                  | 978,000   |      |  |         |          |                  |  |   | 978,000   |  |  |               |        | 
|Restructuring and
other charges                  |  |                  | 1,998,000 |      |  |         | 834,000   |                  |  |   | 768,000   |  |  |               | 396,000 | 
|                                                 |  |                 
|Total                                            |  | $                | 6,091,000 |      |  | $       | 1,027,000 |                  |  | $ | 4,638,000 |  |  | $             | 426,000 | 
|                                                 |  |                 

10.  Industry Segment Information

The Company operates principally in two industry segments organized on the
basis of product lines: the production, printing and sale, principally to
commercial customers, of printed materials (including brochures, pamphlets,
reports, tags, continuous and other forms), and the sale of office products and
office furniture including interior design services.

11



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##### 



Champion Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited) (continued)

The table below presents information about reported segments for the three
months ended January 31:

|                                    |  |          |            |             |  |                 |            |   |  |   |            |  
|----------------------------------- |  | -------- | ---------- | ----------- |  | --------------- | ---------- | - |  | - | ---------- | -
|                                    |  |          |            |             |  | Office Products |            |   |  |  
|2003 Quarter 1                      |  | Printing |            | & Furniture |  | Total          
|                                    |  |         
|Revenues                            |  | $        | 25,234,276 |             |  | $               | 7,218,148  |   |  | $ | 32,452,424 |  
|Elimination of intersegment revenue |  |          | (2,627,629 | )           |  |                 | (1,205,854 | ) |  |   | (3,833,483 | )
|                                    |  |         
|Consolidated revenues               |  | $        | 22,606,647 |             |  | $               | 6,012,294  |   |  | $ | 28,618,941 |  
|                                    |  |         
|Operating income                    |  |          | 474,423    |             |  |                 | (12,359    | ) |  |   | 462,064    |  
|Depreciation & amortization         |  |          | 973,645    |             |  |                 | 33,150     |   |  |   | 1,006,795  |  
|Capital expenditures                |  |          | 534,537    |             |  |                 | 34,390     |   |  |   | 568,927    |  
|Identifiable assets                 |  |          | 47,381,901 |             |  |                 | 9,480,467  |   |  |   | 56,862,368 |  

|                                    |  |          |            |             |  |                 |           |   |  |   |            |  
|----------------------------------- |  | -------- | ---------- | ----------- |  | --------------- | --------- | - |  | - | ---------- | -
|                                    |  |          |            |             |  | Office Products |           |   |  |  
|2002 Quarter 1                      |  | Printing |            | & Furniture |  | Total          
|                                    |  |         
|Revenues                            |  | $        | 25,086,308 |             |  | $               | 7,730,357 |   |  | $ | 32,816,665 |  
|Elimination of intersegment revenue |  |          | (2,228,699 | )           |  |                 | (797,424  | ) |  |   | (3,026,123 | )
|                                    |  |         
|Consolidated revenues               |  | $        | 22,857,609 |             |  | $               | 6,932,933 |   |  | $ | 29,790,542 |  
|                                    |  |         
|Operating income                    |  |          | 418,746    |             |  |                 | 100,059   |   |  |   | 518,805    |  
|Depreciation & amortization         |  |          | 1,015,718  |             |  |                 | 32,443    |   |  |   | 1,048,161  |  
|Capital expenditures                |  |          | 1,786,469  |             |  |                 | 15,845    |   |  |   | 1,802,314  |  
|Identifiable assets                 |  |          | 52,875,180 |             |  |                 | 8,176,030 |   |  |   | 61,051,210 |  

12



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##### 



Champion Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited) (continued)

A reconciliation of total segment revenues and of total segment operating
income to income before income taxes, for the three months ended January 31,
2003 and 2002, is as follows:

|                                        |                                     |   |              |            |      |   |         |            |  
|--------------------------------------- | ----------------------------------- | - | ------------ | ---------- | ---- | - | ------- | ---------- | -
|                                        |                                     |   | Three months
|                                        |                                     |   | 2003         |            | 2002
|                                        |                                     |   |             
|Revenues:                               |                                     |   |              |            |      |   |         |           
|                                        | Total segment revenues              |   | $            | 32,452,424 |      |   | $       | 32,816,665 |  
|                                        | Elimination of intersegment revenue |   |              | (3,833,483 | )    |   |         | (3,026,123 | )
|                                        |                                     |   |             
|                                        | Consolidated revenue                |   | $            | 28,618,941 |      |   | $       | 29,790,542 |  
|                                        |                                     |   |             
|                                       
|Operating Income:                       |                                     |   |              |            |      |   |         |           
|                                        | Total segment operating income      |   | $            | 462,064    |      |   | $       | 518,805    |  
|                                       
|                                        | Interest income                     |   |              | 1,452      |      |   |         | 6,513      |  
|                                       
|                                        | Interest expense                    |   |              | (52,024    | )    |   |         | (112,454   | )
|                                       
|                                        | Other income                        |   |              | 25,524     |      |   |         | 30,120     |  
|                                        |                                     |   |             
|                                       
|Consolidated income before income taxes |                                     | $ | 437,016      |            |      | $ | 442,984 |           
|                                        |                                     |   |             
|                                       
|Identifiable assets:                    |                                     |   |              |            |      |   |         |           
|                                        | Total segment identifiable assets   |   | $            | 56,862,368 |      |   | $       | 61,051,210 |  
|                                        | Elimination of intersegment assets  |   |              |           |      |   |         |           |  
|                                        |                                     |   |             
|                                        | Total consolidated assets           |   | $            | 56,862,368 |      |   | $       | 61,051,210 |  
|                                        |                                     |   |             

13



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##### 



Champion Industries, Inc. and Subsidiaries

Item 2.  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.

|                                             |                                      |                     |       |                                |        |      |      |      |       |   |       |        |        |  |      |      |       | 
|-------------------------------------------- | ------------------------------------ | ------------------- | ----- | ------------------------------ | ------ | ---- | ---- | ---- | ----- | - | ----- | ------ | ------ |  | ---- | ---- | ----- | 
|                                             |                                      |                     |       | Three Months Ended January 31,
|                                             |                                      |                     |       | 2003                           |        | 2002
|                                             |                                      |                     |       |                                |        |     
|                                             |                                      |                     |       | ($ in thousands)              
|Revenues:                                    |                                      |                     |       |                                |        |      |      |      |       |   |       |        |        |  |      |     
|                                             | Printing                             |                     | $     | 22,607                         |        |      |      | 79.0 | %     |   | $     | 22,858 |        |  |      | 76.7 | %    
|                                             | Office products and office furniture |                     |       | 6,012                          |        |      |      | 21.0 |       |   |       | 6,933  |        |  |      | 23.3 |      
|                                             |                                      |                     |       |                               
|                                             |                                      | Total revenues      |       |                                | 28,619 |      |      |      | 100.0 |   |       |        | 29,791 |  |      |      | 100.0 | 
|                                            
|Cost of sales:                               |                                      |                     |       |                                |        |      |      |      |       |   |       |        |        |  |      |     
|                                             | Printing                             |                     |       | 16,534                         |        |      |      | 57.8 |       |   |       | 16,528 |        |  |      | 55.5 |      
|                                             | Office products and office furniture |                     |       | 4,167                          |        |      |      | 14.5 |       |   |       | 4,960  |        |  |      | 16.6 |      
|                                             |                                      |                     |       |                               
|                                             |                                      | Total cost of sales |       |                                | 20,701 |      |      |      | 72.3  |   |       |        | 21,488 |  |      |      | 72.1  | 
|                                             |                                      |                     |       |                               
|Gross profit                                 |                                      |                     | 7,918 |                                |        |      | 27.7 |      |       |   | 8,303 |        |        |  | 27.9 |     
|Selling, general and administrative
expenses |                                      |                     | 7,456 |                                |        |      | 26.1 |      |       |   | 7,784 |        |        |  | 26.1 |     
|                                             |                                      |                     |       |                               
|Income from operations                       |                                      |                     | 462   |                                |        |      | 1.6  |      |       |   | 519   |        |        |  | 1.8  |     
|                                             |                                      |                     |       |                               
|                                             | Interest income                      |                     |       | 1                              |        |      |      | 0.0  |       |   |       | 6      |        |  |      | 0.0  |      
|                                             | Interest expense                     |                     |       | (52                            | )      |      |      | (0.2 | )     |   |       | (112   | )      |  |      | (0.4 | )    
|                                             | Other income                         |                     |       | 26                             |        |      |      | 0.1  |       |   |       | 30     |        |  |      | 0.1  |      
|                                             |                                      |                     |       |                               
|Income before taxes                          |                                      |                     | 437   |                                |        |      | 1.5  |      |       |   | 443   |        |        |  | 1.5  |     
|                                             | Income taxes                         |                     |       | (183                           | )      |      |      | (0.6 | )     |   |       | (185   | )      |  |      | (0.6 | )    
|                                             |                                      |                     |       |                               
|Net income                                   |                                      | $                   | 254   |                                |        |      | 0.9  | %    |       | $ | 258   |        |        |  | 0.9  | %   
|                                             |                                      |                     |       |                               

Three Months Ended January 31, 2003 Compared to Three Months Ended January 31, 2002

Revenues

Total revenues decreased 3.9% in the first quarter of 2003 compared to the same
period in 2002 from $29.8 million to $28.6 million. Printing revenue decreased
1.1% in the first quarter of 2003 to $22.6 million from $22.9 million in the
first quarter of 2002. Office products and office furniture revenue decreased
13.3% in the first quarter of 2003 to $6.0 million from $6.9 million in the
first quarter of 2002. The revenue decrease was primarily attributable to an
industry-wide slow down in office furniture sales, with office furniture sales
down approximately $1.0 million.

Cost of Sales

Total cost of sales decreased 3.7% in the first quarter of 2003 to $20.7
million from $21.5 million in the first quarter of 2002. Printing cost of sales
in the first quarter of 2003 were flat with the prior year but increased as a
percentage of printing sales from 72.3% in 2002 to 73.1% in 2003 primarily due
to increased labor costs. Office products and office furniture cost of sales
decreased 16.0% or approximately $793,000 in 2003 to $4.2 million from $5.0
million in 2002. The decrease in office

14



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##### 



Champion Industries, Inc. and Subsidiaries

Managements Discussion and Analysis of Financial Condition
and Results of Operations (continued)

products and office furniture cost of
sales is attributable to the lower sales discussed above and the product sales
mix which enhanced gross margins for the office product & office furniture
segment.

Operating Expenses

In the first quarter of 2003, selling, general and administrative expenses
decreased on a gross dollar basis to $7.5 million from $7.8 million in 2002 a
decrease of $329,000 or 4.2%. As a percentage of sales the expenses were flat
on a quarter to quarter basis at 26.1% of total sales.

The reduction in selling, general and administrative expenses is primarily the
result of personnel reductions in the office products and office furniture
segment, lower bonus expense, a decrease in bad debt expense partially offset
by increased insurance and information systems related costs.

Income from Operations and Other Income and Expenses

Income from operations decreased 10.9% in the first quarter of 2003 to $462,000
from $519,000 in the first quarter of 2002. This decrease is primarily the
result of decreased sales partially offset by a reduction in selling, general
and administrative expenses. Other expense (net), decreased approximately
$51,000 due to lower total interest expense resulting from a decrease in total
interest bearing debt and interest rates.

Income Taxes

The Companys effective income tax rate was 41.8% for the first quarter of 2003
and 2002. The effective income tax rate approximates the combined federal and
state, net of federal benefit, statutory income tax rate.

Net Income

Net income for the first quarter of 2003 was $254,000 compared to net income of
$258,000 in the first quarter of 2002. Basic and diluted earnings per share
for the three months ended January 31, 2003 and 2002 were $0.03.

Inflation and Economic Conditions

Management believes that the effect of inflation on the Companys operations
has not been material and will continue to be immaterial for the foreseeable
future. The Company does not have long-term sales and purchase contracts;
therefore, to the extent permitted by competition, it has the ability to pass
through to the customer most cost increases resulting from inflation, if any.

Seasonality

Historically, the Company has experienced a greater portion of its
profitability 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.

15



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##### 



Champion Industries, Inc. and Subsidiaries

Managements Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Liquidity and Capital Resources

Net cash used in operations for the three months ended January 31, 2003, was
$39,000 compared to net cash provided by operations of $314,000 during the same
period in 2002. This change in net cash from operations is due primarily to
timing changes in assets and liabilities including tax payments in 2003
compared to tax refunds in 2002 and a reduction of certain non-cash charges to
net income including depreciation and bad debt expense.

Net cash used in investing activities for the three months ended January 31,
2003 was $387,000 compared to $736,000 during the same period in 2002. The net
cash used in investing activities during the first three months of 2003 and
2002 primarily relates to equipment purchases.

Net cash used in financing activities for the three months ended January 31,
2003 was $1.1 million compared to $1.4 million during the same period in 2002.
This change is primarily due to $122,500 in term debt borrowings and lower
principal payments in 2003.

Working capital on January 31, 2003 was $25.8 million, a decrease of $300,000
from October 31, 2002. Management believes that working capital and operating
ratios remain at acceptable levels.

The Company entered into a Sale and Purchase Agreement in February 2003 to
purchase a building in Baton Rouge, Louisiana for an aggregate purchase price
of $1.8 million. The Company anticipates the transaction to close in the
second quarter of 2003 subject to normal and customary due diligence and
closing requirements.

The Company expects that the combination of funds available from working
capital, borrowings available under the Companys credit facilities 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.

Special Note Regarding Forward-Looking Statements

Certain statements contained in this Form 10-Q, including without limitation
statements including the word believes, anticipates, intends, expects
or words of similar import, constitute forward-looking statements within the
meaning of section 27A of the Securities Act of 1933, as amended (the
Securities Act), and section 21E of the Securities Exchange Act of 1934, as
amended (the Exchange Act). Such forward-looking statements involve known and
unknown risks, uncertainties and other

16



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##### 



Champion Industries, Inc. and Subsidiaries

Managements Discussion and Analysis of Financial Condition
and Results of Operations (continued)

factors that may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements of the Company expressed
or implied by such forward-looking statements. Such factors include, among
others, general economic conditions, changes in business strategy or
development plans, and other factors referenced in this Form 10-Q. Given these
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. The Company disclaims any obligation to update any
such factors or to publicly announce the results of any revisions to any of the
forward-looking statements contained herein to reflect future events or
developments.

ITEM 3a.  Quantitative and Qualitative Disclosure About Market Risk

The Registrant is currently financing primarily with equity capital.
Therefore, changes in interest rates do not have a material impact on the
Companys Financial Statements.

ITEM 4.  Controls and Procedures

Company management, including the Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer, has conducted an evaluation of the
effectiveness of disclosure controls and procedures pursuant to Exchange Act
Rule 13a-14 as of a date within 90 days of the filing of this quarterly report.
Based on that evaluation, the Chief Executive Officer, Chief Operating Officer
and Chief Financial Officer concluded that the disclosure controls and
procedures are effective in ensuring that all material information required to
be filed in this quarterly report has been made known to them in a timely
fashion. There have been no significant changes in internal controls, or in
factors that could significantly affect internal controls, subsequent to the
date the Chief Executive Officer, Chief Operating Officer and Chief Financial
Officer completed their evaluation.

17



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##### 



PART II  OTHER INFORMATION

Item 6.  Exhibits and reports on Form 8-K



| | a) | Exhibits:
| | -- | ---------



| | 99.1 |  | Certification pursuant to section 906 of the
Sarbanes-Oxley Act of 2002  Marshall T. Reynolds
| | ---- |  | ----------------------------------------------------------------------------------------------
|
| | 99.2 |  | Certification pursuant to section 906 of the
Sarbanes-Oxley Act of 2002  Todd R. Fry         



| | b) | The following reports on Form 8-K were filed during the quarter for
which this report is filed:
| | -- | -----------------------------------------------------------------------------------------------
|
| |    | None.                                                                                          

18



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##### 



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: March 14, 2003 |  | /s/ Marshall T. ReynoldsMarshall T. Reynolds
Chief Executive Officer    
|                    
|Date: March 14, 2003 |  | /s/ Kirby J. TaylorKirby J. Taylor
President and Chief Operating Officer
|                    
|Date: March 14, 2003 |  | /s/ Todd R. FryTodd R. Fry
Vice President and Chief Financial Officer   

19



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##### 



CERTIFICATIONS

I, Marshall T. Reynolds, Chairman of the Board of Directors and Chief
Executive Officer of Champion Industries, Inc., certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Champion
Industries, Inc.;

2.         Based on my knowledge, this quarterly 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
quarterly report;

3.         Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

a)        designed such disclosure controls and procedures 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 quarterly report is being prepared;

b)        evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c)         presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5.         The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a)        all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b)        any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.         The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                     |  |  |  |                                                                                                            
|-------------------- |  |  |  | -----------------------------------------------------------------------------------------------------------
|Date: March 14, 2003 |  |  |  | /s/ Marshall T. ReynoldsMarshall T. Reynolds
Chairman of the Board of Directors and
Chief Executive Officer

20



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##### 



CERTIFICATIONS

I, Todd R. Fry, Vice President and Chief Financial Officer of Champion
Industries, Inc., certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Champion
Industries, Inc.;

2.         Based on my knowledge, this quarterly 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
quarterly report;

3.         Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

a)         designed such disclosure controls and procedures 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 quarterly report is being prepared;

b)         evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c)         presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5.         The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a)         all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b)         any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.         The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                     |  |                                                                      
|-------------------- |  | ---------------------------------------------------------------------
|Date: March 14, 2003 |  | /s/ Todd R. FryTodd R. Fry
Vice President and Chief Financial Officer

21



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##### 



CERTIFICATIONS

I, Kirby J. Taylor, President and Chief Operating Officer of Champion
Industries, Inc., certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Champion
Industries, Inc.;

2.         Based on my knowledge, this quarterly 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
quarterly report;

3.         Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

a)         designed such disclosure controls and procedures 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 quarterly report is being prepared;

b)         evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c)         presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5.         The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a)         all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b)         any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.         The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                     |  |                                                                         
|-------------------- |  | ------------------------------------------------------------------------
|Date: March 14, 2003 |  | /s/ Kirby J. TaylorKirby J. Taylor
President and Chief Operating Officer

22