| x | ANNUAL                  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 |
|---|-----------------------------------------------------------------------------------------------------------------------------------------|

| o | TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 |
|---|---------------------------------------------------------------------------------------------------------------------------------------------|

| West                  Virginia                                                                             |   | 55-0717455                                            |
|------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|
| (State                  or other jurisdiction of  incorporation                  or organization)     |   | (I.R.S.                  Employer Identification No.) |
|                                                                                                       |   |                                                  |
| 2450                  First AvenueP.O.                  Box 2968Huntington,                  West Virginia |   |   25728                                     |
| (Address                  of Principal Executive Offices)                                                  |   | (Zip                  Code)                           |

|   | Yes                  o                  No                  x |
|--------|---------------------------------------------------------------|

----

|   | Yes                  o                  No                  x |
|--------|---------------------------------------------------------------|

|   | Yes                  x                  No                  o |
|--------|---------------------------------------------------------------|

|   |  o |
|--------|---------|

| Large                  accelerated filer o | Accelerated                  filer o | Non-accelerated                  filer x |
|--------------------------------------------|--------------------------------------|------------------------------------------|

|   | Yes                  o                  No                  x |
|--------|---------------------------------------------------------------|

----

**SPECIAL        NOTE REGARDING FORWARD-LOOKING STATEMENTS**

**PART        I**

**ITEM        1 - BUSINESS**

**HISTORY**

----

----

----

----

**BUSINESS**

----

**ORGANIZATION**

----

**PRODUCTS        AND SERVICES**

----

|  Division                                                             |   | Sales                  & Customer Service |    |  Pre-Press |    |  Sheet                  Printing |  Rotary                  Printing |    |  Full                  Color |    |  High                  Volume Full Color |  Mailing                  Center |
|----------------------------------------------------------------------------|--------|-----------------------------------------------|--------------|-----------------|--------------|---------------------------------------|----------------------------------------|--------------|-----------------------------------|--------------|-----------------------------------------------|---------------------------------------|
|                                                                       |   |                                          |         |            |         |                                  |                                   |         |                              |         |                                          |                                  |
|  Huntington                                                           |   |  *                                       |         |  *         |         |  *                               |  *                                |         |                              |         |                                          |                                  |
|  Charleston                                                           |   |  *                                       |         |  *         |         |  *                               |                                   |         |                              |         |                                          |                    *             |
|  Parkersburg                                                          |   |  *                                       |         |  *         |         |  *                               |                                   |         |  *                           |         |                                          |                                  |
|  Lexington                                                            |   |  *                                       |         |  *         |         |                                  |                                   |         |                              |         |                                          |                                  |
|  Consolidated                  Graphics(Baton                  Rouge) |   |  *                                       |         |  *         |         |  *                               |                                   |         |  *                           |         |                                          |                                  |
|  Consolidated                  Graphics(New                  Orleans) |   |  *                                       |         |                 |         |                                  |                                   |         |                              |         |                                          |                                  |
|  Carolina                  Cut Sheets, Inc.                           |   |  *                                       |         |            |         |                                  |                                   |         |                              |         |                                          |                                  |
|  U.S.                  Tag & Ticket Company, Inc.                 |   |  *                                       |         |  *         |         |                                  | *                                      |         |                              |         |                                          |                                  |
|  Donihe                  Graphics, Inc.                               |   |  *                                       |         |  *         |         |  *                               |  *                                |         |  *                           |         |  *                                       |                                  |
|  The                  Merten Company                                  |   | *                                             |         | *               |         | *                                     |                                   |         | *                                 |         |                                          |                                  |
|  Interform                  Corporation                               |   |  *                                       |         |  *         |         |                                  |  *                                |         |  *                           |         |                                          |                                  |
|  Consolidated                  Graphic Communications                 |   | *                                             |         | *               |         |                                  |                                   |         |                              |         |                                          |                                  |
|  Blue                  Ridge Printing Co., Inc.                       |   | *                                             |         | *               |         | *                                     |                                   |         | *                                 |         |                                          |                                  |

**MANUFACTURING        AND DISTRIBUTION**

----

**CUSTOMERS**

----

**SUPPLIERS**

**COMPETITION**

**ENVIRONMENTAL        REGULATION**

**GEOGRAPHIC        CONCENTRATION AND ECONOMIC CONDITIONS**

----

**SEASONALITY**

**EMPLOYEES**

----

**EXECUTIVE        OFFICERS OF CHAMPION**

|                                         |           | **Position                  and offices with Champion;**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|----------------------------------------------|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                         |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **Name****     **   | **Age**        | **Principal                  occupation or employment last five years**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Marshall                  T. Reynolds        | 69             | Chief                  Executive Officer and Chairman of the Board of Directors of the                  Company                  from December 1992 to present; President of the Company December                  1992 to                  September 2000; President and General Manager of Harrah and Reynolds,                  predecessor of the Company from 1964 (and sole shareholder from                  1972 to                  present) to 1993; Chairman of the Board of Directors of River City                  Associates Inc. (owner of the Radisson Hotel Huntington) since                  1989;                  Chairman of the Board of Directors of Broughton Foods Company from                  November 1996 to June 1999; Director (from 1983 to November 1993)                  and                  Chairman of the Board of Directors (from 1983 to November 1993)                  of Banc                  One West Virginia Corporation (formerly Key Centurion Bancshares,                  Inc.).  |
| Toney                  K. Adkins   | 56   | President                  and Chief Operating Officer of the Company since January 2005;                  Vice                  President-Administration of the Company from November 1995 to January                  2005; President, KYOWVA Corrugated Container Company, Inc. from                  1991 to                  1996.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|  J. Mac                Aldridge         | 64             |  Senior Vice President of the Company and Division                  Manager - Stationers since January 2005; Vice President and Division                  Manager - Stationers from December 1992 to January 2005; Vice President                  of                  Company and Division Manager - Huntington from September 1995 to                  October                  1997; President and General Manager of Stationers since November                  1989;                  Sales Representative of Huntington Division of Harrah and Reynolds                  from                  July 1983 to October 1989.                                                                                                                                                                                                                                                                                                                                                                                                     |
|  Gary                A. Blackshire      | 53             |  Vice                President of the Company since December 1992; Division Manager -                Merten                September 1998 to April 2001; Division Manager - Charleston                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

|                            |   | December                  1992 to April 2001; Division Manager - Charleston of Harrah and                  Reynolds                  from April 1992 to December 1992; Sales Representative of Charleston                  Division of Harrah and Reynolds from 1975 until April                  1992.                                                                                                                                                                                                                                                                                                                                              |
|-------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| R.                  Douglas McElwain      | 58     | Senior                  Vice President and Division Manager - Consolidated Graphics Division                  of                  the Company since January 2005; Vice President and Division Manager                  -                  Bourque Printing division of the Company from December 1993 to                  January                  2005; General Manager of Bourque Printing from June 1993 to December                  1993;                  Sales Representative of Charleston Division of Harrah and Reynolds                  and                  Company from 1986 until June 1993.                                     |
| Todd                  R. Fry              | 40     | Senior                  Vice President and Chief Financial Officer of the Company since                  January                  2005; Vice President and Chief Financial Officer of the Company                  from                  November 1999 to January 2005; Treasurer and Chief Financial Officer                  of                  Broughton Foods Company from September 1997 to June 1999; Coopers&                  Lybrand L.L.P. from 1991 to September 1997.                                                                                                                                                          |
| Walter                  R. Sansom         | 76     | Secretary                  of the Company since December 1992; Production Coordinator of the                  Company                  since December 1992 and of Harrah and Reynolds from August 1968                  to                  December 1992.                                                                                                                                                                                                                                                                                                                                                                                      |
| James                  A. Rhodes          | 49     | Senior                  Vice President of the Company since January 2005; Vice President                  of the                  Company from March 1999 to January 2005; President of Interform                  since                  October 2004; President of Consolidated Graphic Communications                  Division of                  Interform since February 1999; Vice President of Sales of Consolidated                  Graphic Communications from 1996 to 1999; General Sales Manager                  - Eastern                  Division of Consolidated Graphic Communications from 1995 to                  1996.  |
| William                  G. Williams, Jr. | 49     | Senior                  Vice President of the Company since January 2005; Vice President                  of the                  Company from September 2004 to January 2005; President of Syscan                  Corporation since December 1984.                                                                                                                                                                                                                                                                                                                                                                                                 |

----

**ITEM        2 - PROPERTIES**

|  **Property**                                                                                                   |   |  **Division                      Occupying Property**                 |   |  **Square                      Feet** |   |  **Annual                      Rental** |   |  **Expiration                      Of Term** |
|----------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|--------------------------------------------|--------|----------------------------------------------|--------|---------------------------------------------------|
|  2450                      1st                      AvenueHuntington,                      West Virginia (1)    |   |  Chapman                      Printing- Huntington                    |   |  85,000                               |   |  $116,400                               |   |  2008                                        |
|  1945                      5th                      AvenueHuntington,                      West Virginia (1)    |   |  Stationers                                                           |   |  37,025                               |   |  30,000                                 |   |  2007                                        |
|  615-619                      4th                      AvenueHuntington,                      West Virginia (1) |   |  Stationers                                                           |   |  59,641                               |   |  21,600                                 |   |  2008                                        |
|  405                      Ann StreetParkersburg,                      West Virginia (1)                         |   |  Chapman                      Printing - Parkersburg                  |   |  36,614                               |   |  57,600                                 |   |  2008                                        |
|  890                      Russell Cave RoadLexington,                      Kentucky (1)                         |   |  Chapman                      Printing - Lexington                    |   |  20,135                               |   |  57,600                                 |   |  2007                                        |
|  2800                      Lynch RoadEvansville,                      Indiana (1)                               |   |  Smith                      & Butterfield                         |   |  42,375                               |   |  121,640                                |   |  2009                                        |
|  1901                      Mayview RoadBridgeville,                      Pennsylvania (1)                       |   |  Interform                      Corporation                           |   |  120,000                              |   |  293,503                                |   |  2008                                        |
|  736                      Carondelet StreetNew                      Orleans, Louisiana (4)                      |   |  Upton                      Printing                                  |   |  15,000                               |   |  72,120                                 |   |  2008                                        |
|  1515                      Central ParkwayCincinnati,                      Ohio (1)                             |   |  The                      Merten Company                              |   |  40,000                               |   |  102,060                                |   |  2006                                        |
|  1214                      Main StreetWheeling,                      West Virginia                              |   |  CBI                      - Wheeling                                  |   |  22,000                               |   |  36,000                                 |   |  2009                                        |
|  3000                      Washington St.Charleston,                      West Virginia (2)                     |   |  Chapman                      Printing-Charleston                     |   |  37,710                               |   |  150,840                                |   | 2009                                              |
|                      2800                      Seventh AvenueCharleston,                      West Virginia (3) |   |  Chapman                      Printing-Charleston                     |   |  5,000                                |   | 20,000                                       |   |  2006                                        |
|                      951                      Point Marion Rd.Morgantown,                      West Virginia    |   |                      Chapman                      Printing-Charleston |   |  5,850                           |   |  42,000                            |   |  2010                                   |

----

| Kirk                    and Chestnut StreetsMorgantown,                    West Virginia |   |                  Chapman                    Printing-Charleston |   |  6,000  |   |  5,400  |   |  Monthly |
|------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|-------------------|--------|-------------------|--------|---------------|

----

**ITEM        3 - LEGAL PROCEEDINGS**

**ITEM        4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

----

**PART        II**

**ITEM        5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND        ISSUER PURCHASES OF EQUITY SECURITIES**

|   |                                  |  Fiscal                  Year 2005 |                              |  Fiscal                  Year 2004 |                              |
|--------|---------------------------------------|-----------------------------------------|-----------------------------------|-----------------------------------------|-----------------------------------|
|   |                                  | **High**                                | Low                               |                                    | **High**                          | Low |   |
|   |  First                  quarter  |  **$                  3.89**       |  **$                  3.47** |                                    |  **$                  4.94** |  **$                  4.11** |   |
|   |  Second                  quarter | **4.38**                                | **3.85**                          |                                    | **5.40**                          | **4.46** |   |
|   |  Third                  quarter  |  **4.35**                          |  **3.85**                    |                                    |  **4.70**                    |  **3.94** |   |
|   |  Fourth                  quarter |  **4.48**                          |  **4.12**                    |                                    |  **4.12**                    |  **3.50** |   |
|   |                                  |                                    |                              |                                    |                              |   |   |

----

|   |                                  |   |  **Fiscal                  Year 2006** |   |  **Fiscal                  Year 2005** |   |  **Fiscal                  Year 2004** |   |
|--------|---------------------------------------|--------|---------------------------------------------|--------|---------------------------------------------|--------|---------------------------------------------|--------|
|   |  First                  quarter  |   |  **$0.05**                             |   |  **$0.05**                             |   |  **$0.05**                             |   |
|   |  Second                  quarter |   | **-**                                       |   |  **0.05**                              |   |  **0.05**                              |   |
|   |  Third                  quarter  |   | **-**                                       |   |  **0.05**                              |   |  **0.05**                              |   |
|   |  Fourth                  quarter |   | **-**                                       |   |  **0.05**                              |   |  **0.05**                              |   |

**ITEM        6 - SELECTED FINANCIAL DATA**

**SELECTED        CONSOLIDATED FINANCIAL DATA**

----

|                                                               |   | **Year                    Ended October 31,**                                              |
|--------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------|
|                                                               |   |                                                                                            | **2005                    (2)**  |   |   | **2004** |   |   | **2003** |   |   | **2002** |   |   | **2001                    (1)** |   |
|                                                               |   | **(In                    thousands, except share and per share                    data)**  |
| **OPERATING                    STATEMENT DATA:**                   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Revenues:**                                                      |   |                                                                                            |  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Printing                                                           |   | **$**                                                                                           | **98,458** |   | $ | 95,325 |   | $ | 96,537 |   | $ | 95,194 |   | $ | 98,146 |   |
| Office                    products and office furniture            |   |                                                                                            | **36,467** |   |   | 29,077 |   |   | 25,646 |   |   | 27,690 |   |   | 26,998 |   |
| Total                    revenues                                  |   |                                                                                            | **134,925** |   |   | 124,402 |   |   | 122,183 |   |   | 122,884 |   |   | 125,144 |   |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Cost                    of sales:**                              |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Printing                                                           |   |                                                                                            | **70,978** |   |   | 69,746 |   |   | 69,889 |   |   | 68,337 |   |   | 71,390 |   |
| Office                    products and office furniture            |   |                                                                                            | **25,694** |   |   | 20,260 |   |   | 17,963 |   |   | 19,855 |   |   | 18,958 |   |
| Total                    cost of sales                             |   |                                                                                            | **96,672** |   |   | 90,006 |   |   | 87,852 |   |   | 88,192 |   |   | 90,348 |   |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Gross                    profit**                                |   |                                                                                            | **38,253** |   |   | 34,396 |   |   | 34,331 |   |   | 34,692 |   |   | 34,796 |   |
| Selling,                    general and administrative expense     |   |                                                                                            | **34,797** |   |   | 33,058 |   |   | 31,175 |   |   | 30,619 |   |   | 31,929 |   |
| Hurricane                    and relocation costs                  |   |                                                                                            | **1,021** |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Restructuring                    costs                             |   |                                                                                            | **-** |   |   | - |   |   | - |   |   | - |   |   | 2,052 |   |
| Asset                    impairment costs                          |   |                                                                                            | **-** |   |   | - |   |   | - |   |   | - |   |   | 3,061 |   |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                    (loss) from operations**               |   |                                                                                            | **2,435** |   |   | 1,338 |   |   | 3,156 |   |   | 4,073 |   |   | (2,246 | ) |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                    income                                 |   |                                                                                            | **18** |   |   | 7 |   |   | 4 |   |   | 14 |   |   | 64 |   |
| Interest                    expense                                |   |                                                                                            | **(610** | **)** |   | (301 | ) |   | (167 | ) |   | (386 | ) |   | (891 | ) |
| Other                    income                                    |   |                                                                                            | **120** |   |   | 288 |   |   | 10 |   |   | 73 |   |   | 528 |   |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                    (loss) before income taxes**           |   |                                                                                            | **1,963** |   |   | 1,332 |   |   | 3,003 |   |   | 3,774 |   |   | (2,545 | ) |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                    tax (expense) benefit                    |   |                                                                                            | **(846** | **)** |   | (582 | ) |   | (1,235 | ) |   | (1,566 | ) |   | 363 |   |
| Net                    income (loss)                               |   | **$**                                                                                           | **1,117** |   | $ | 750 |   | $ | 1,768 |   | $ | 2,208 |   | $ | (2,182 | ) |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Earnings                    (loss) per share:**                  |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                              |   | **$**                                                                                           | **0.11** |   | $ | 0.08 |   | $ | 0.18 |   | $ | 0.23 |   | $ | (0.22 | ) |
| Diluted                                                            |   |                                                                                            | **0.11** |   |   | 0.08 |   |   | 0.18 |   |   | 0.23 |   |   | (0.22 | ) |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Dividends                    per share**                         |   | **$**                                                                                           | **0.20** |   | $ | 0.20 |   | $ | 0.20 |   | $ | 0.20 |   | $ | 0.20 |   |
| **Weighted                    average common shares outstanding:** |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                              |   |                                                                                            | **9,735,000** |   |   | 9,729,000 |   |   | 9,714,000 |   |   | 9,714,000 |   |   | 9,714,000 |   |
| Diluted                                                            |   |                                                                                            | **9,809,000** |   |   | 9,825,000 |   |   | 9,761,000 |   |   | 9,726,000 |   |   | 9,714,000 |   |
|                                                               |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | **(1)** | The                    Company initiated a corporate-wide restructuring and profitability                    enhancement plan in the third quarter 2001. As a result of this                    plan, the                    Company recorded a pre-tax charge of $6.1 million or $4.3 million                    net of                    tax or $0.44 per share on a basic and diluted                    basis. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **(2)** | During                    the fourth quarter of 2005, the Company incurred various charges                    resulting                    from Hurricane Katrina. As a result of the hurricane the Company                    recorded                    a pre-tax charge of $1.0 million or $580,000 net of tax or $0.06                    per share                    on a basic and diluted basis. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                  |   | **At                    October 31,**  |
|----------------------------------------------------------------------|--------|---------------------------------------------|
|                                                                 |   |                                        | **2005** |   |   | **2004** |   |   | **2003** |   |   | **2002** |   |  **2001** |
|                                                                 |   | **(In                    thousands)**  |
|  **BALANCE                    SHEET DATA:**                     |   |
|  Cash                    and cash equivalents                   |   | **$**                                       | **3,662** |   | $ | 1,745 |   | $ | 2,172 |   | $ | 4,507 |   |  $                    5,765 |
|  Working                    capital                             |   |                                        | **26,081** |   |   | 26,913 |   |   | 26,977 |   |   | 26,072 |   |  26,041 |
|  Total                    assets                                |   |                                        | **61,645** |   |   | 64,150 |   |   | 58,469 |   |   | 59,508 |   |  63,950 |
|  Long-term                    debt (net of current portion) (1) |   |                                        | **6,761** |   |   | 8,257 |   |   | 3,966 |   |   | 1,805 |   |  4,549 |
|  Shareholders'                    equity                        |   |                                        | **40,752** |   |   | 41,551 |   |   | 42,691 |   |   | 42,866 |   |  42,601 |

**ITEM          7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS          OF          OPERATIONS**

**OVERVIEW**

----

**CRITICAL          ACCOUNTING POLICIES INVOLVING SIGNIFICANT ESTIMATES**

*Asset          Impairment: *
*Accounting          for the Impairment or Disposal of Long-Lived Assets*

*Goodwill          and Other Intangible Assets*

----

*Allowance          for Doubtful Accounts: *

----

**RESULTS          OF OPERATIONS**

|                                                    |   | **Year                    Ended October 31,** |        |
|---------------------------------------------------------|--------|-----------------------------------------------|-------------|
|                                                    |   | **($                    In thousands)**       |        |
|                                                    |   | **2005**                                      |        |   | 2004 |   |   | 2003 |   |
| **Revenues:**                                           |   |                                          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Printing                                                |   | **$**                                         | **98,458**  |   |   | **73.0** | **%** |   | $ | 95,325 |   |   | 76.6 | % |   | $ | 96,537 |   |   | 79.0 | % |
| Office                    products and office furniture |   |                                          | **36,467**  |   |   | **27.0** | **%** |   |   | 29,077 |   |   | 23.4 | % |   |   | 25,646 |   |   | 21.0 | % |
| Total                    revenues                       |   |                                          | **134,925** |   |   | **100.0** | **%** |   |   | 124,402 |   |   | 100.0 | % |   |   | 122,183 |   |   | 100.0 | % |
| **Cost                    of sales:**                   |   |                                          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Printing                                                |   |                                          | **70,978**  |   |   | **52.6** | **%** |   |   | 69,746 |   |   | 56.1 | % |   |   | 69,889 |   |   | 57.2 | % |
| Office                    products and office furniture |   |                                          | **25,694**  |   |   | **19.0** | **%** |   |   | 20,260 |   |   | 16.2 | % |   |   | 17,963 |   |   | 14.7 | % |
| Total                    cost of sales                  |   |                                          | **96,672**  |   |   | **71.6** | **%** |   |   | 90,006 |   |   | 72.3 | % |   |   | 87,852 |   |   | 71.9 | % |
| **Gross                    profit**                     |   |                                          | **38,253**  |   |   | **28.4** | **%** |   |   | 34,396 |   |   | 27.7 | % |   |   | 34,331 |   |   | 28.1 | % |
| Selling,                    general and administrative  |   |                                          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| expenses                                                |   |                                          | **34,797**  |   |   | **25.8** | **%** |   |   | 33,058 |   |   | 26.6 | % |   |   | 31,175 |   |   | 25.6 | % |
| Hurricane                    and relocation costs       |   |                                          | **1,021**   |   |   | **0.8** | **%** |   |   | - |   |   | 0.0 | % |   |   | - |   |   | 0.0 | % |
| Income                    from operations               |   |                                          | **2,435**   |   |   | **1.8** | **%** |   |   | 1,338 |   |   | 1.1 | % |   |   | 3,156 |   |   | 2.5 | % |
| **Other                    income (expense):**          |   |                                          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                    income                      |   |                                          | **18**      |   |   | **0.0** | **%** |   |   | 7 |   |   | 0.0 | % |   |   | 4 |   |   | 0.0 | % |
| Interest                    expense                     |   |                                          | **(610**    | **)** |   | **-0.4** | **%** |   |   | (301 | ) |   | -0.2 | % |   |   | (167 | ) |   | -0.1 | % |
| Other                    income                         |   |                                          | **120**     |   |   | **0.1** | **%** |   |   | 288 |   |   | 0.2 | % |   |   | 10 |   |   | 0.0 | % |
| Income                    before income taxes           |   |                                          | **1,963**   |   |   | **1.5** | **%** |   |   | 1,332 |   |   | 1.1 | % |   |   | 3,003 |   |   | 2.4 | % |
| Income                    tax expense                   |   |                                          | **(846**    | **)** |   | **-0.7** | **%** |   |   | (582 | ) |   | -0.5 | % |   |   | (1,235 | ) |   | -1.0 | % |
| **Net                    income**                       |   | **$**                                         | **1,117**   |   |   | **0.8** | **%** |   | $ | 750 |   |   | 0.6 | % |   | $ | 1,768 |   |   | 1.4 | % |
|                                                    |   |                                          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Year          Ended October 31, 2005 Compared to Year Ended October 31,          2004**

----

**Year          Ended October 31, 2004 Compared to Year Ended October 31,          2003**

----

** **

----

**LIQUIDITY          AND CAPITAL RESOURCES**

----

**Payments          Due by Fiscal Year**

| **Contractual                    Obligations**        |   | **2006** |      | **2007** |   | **2008**  |   | **2009** |      | **2010** |   | **Residual** |   | **Total** |      |
|-------------------------------------------------------|--------|----------|-----------|----------|--------|-----------|--------|----------|-----------|----------|--------|--------------|--------|-----------|-----------|
|                                                  |   |     |      |     |   |      |   |     |      |     |   |         |   |      |      |
| Non-cancelable                      operating leases  |   | $        | 1,051,709 |     | $      | 869,883   |   | $        | 679,224   |     | $      | 295,340      |   | $         | 42,000    |   | $ | - |   | $ | 2,938,156 |   |
|                                                  |   |     |      |     |   |      |   |     |      |     |   |         |   |      |      |   |   |   |   |   |   |   |
| Revolving                    line of credit           |   |     | -         |     |   | -         |   |     | 1,612,000 |     |   | -            |   |      | -         |   |   | - |   |   | 1,612,000 |   |
|                                                  |   |     |      |     |   |      |   |     |      |     |   |         |   |      |      |   |   |   |   |   |   |   |
| Term                    debt                          |   |     | 1,667,797 |     |   | 1,691,871 |   |     | 1,786,081 |     |   | 494,065      |   |      | 1,176,486 |   |   | - |   |   | 6,816,300 |   |
|                                                  |   |     |      |     |   |      |   |     |      |     |   |         |   |      |      |   |   |   |   |   |   |   |
| Obligations                      under capital leases |   |     | 16,483    |     |   | -         |   |     | -         |     |   | -            |   |      | -         |   |   | - |   |   | 16,483 |   |
|                                                  |   |     |      |     |   |      |   |     |      |     |   |         |   |      |      |   |   |   |   |   |   |   |
|                                                  |   | $        | 2,735,989 |     | $      | 2,561,754 |   | $        | 4,077,305 |     | $      | 789,405      |   | $         | 1,218,486 |   | $ | - |   | $ | 11,382,939 |   |

----

**INFLATION            AND ECONOMIC CONDITIONS**

**SEASONALITY**

**NEWLY            ISSUED ACCOUNTING STANDARDS**

*Share-Based            Payment*
*Accounting            for Stock-Based Compensation*

*Inventory            Costs*

----

**ITEM            7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET            RISK**

**ITEM            8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

**ITEM            9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL            DISCLOSURE**

**ITEM            9A - CONTROLS AND PROCEDURES**

----

**PART            III**

**ITEM            10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT**

**ITEM            11 - EXECUTIVE COMPENSATION**

**ITEM            12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND            RELATED            STOCKHOLDER MATTERS**

**ITEM            13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**

**ITEM            14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES**

----

**PART            IV**

**ITEM            15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM            8-K**

| (2)        |   | Plan                        of Acquisition                                                                               | Stock                        Purchase Agreement between Company and William G. Williams,                        Jr., sole                        shareholder of Syscan Corporation, dated September 7, 2004                        filed as                        Exhibit 2.1 to Form 8-K dated September 7, 2004, filed September                        10, 2004,                        is incorporated herein by reference. |
|------------|--------|--------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (3)        | 3.1    | Articles                        of Incorporation                                                                         | Filed                        as Exhibit 3.1 to Form 10-Q dated June 16, 1997, filed on                        June 16, 1997,                        incorporated herein by reference.                                                                                                                                                                                                                                            |
|       |   |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                             |
|       | 3.2    | Bylaws                                                                                                                   | Filed                        as Exhibit 3.2 to Registration Statement on Form S-1, File                        No. 33-54454,                        filed on November 10, 1992, incorporated herein by                        reference.                                                                                                                                                                                         |
|       |   |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (4)        |   | Instruments                        defining the rights of security holders, including                        debentures. | See                        Exhibit 3.1 above.                                                                                                                                                                                                                                                                                                                                                                                    |
|       |   |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10)  |   | Material                      Contracts                                                                                  | Realty                        Lease dated January 28, 1993 between ADJ Corp. and Company                        regarding 2450                        1st Avenue, Huntington, West Virginia, filed as Exhibit 10.1                        to Form 10-K                        dated January 27, 1994, filed January 31, 1994, is incorporated                        herein by                        reference.                 |

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|   |   |   | Realty                        Lease dated January 28, 1993 between The Harrah and Reynolds                        Corporation                        and Company regarding 615 4th Avenue, Huntington, West Virginia,                        filed as                        Exhibit 10.2 to Form 10-K dated January 27, 1994, filed January                        31, 1994,                        is incorporated herein by reference.Realty                          Lease dated January 28, 1993 between ADJ Corp. and Company                          regarding                          617-619 4th Avenue, Huntington, West Virginia, filed as                          Exhibit 10.3 to                          Form 10-K dated January 27, 1994, filed January 31, 1994,                          is incorporated                          herein by reference.Realty                            Lease dated January 28, 1993 between The Harrah and Reynolds                            Corporation                            and Company regarding 1945 5th Avenue, Huntington, West                            Virginia, filed as                            Exhibit 10.4 to Form 10-K dated January 27, 1994, filed                            January 31, 1994,                            is incorporated herein by reference.Realty                            Lease dated January 28, 1993 between Printing Property                            Corp. and Company                            regarding 405 Ann Street, Parkersburg, West Virginia,                            filed as Exhibit                            10.5 to Form 10-K dated January 27, 1994, filed January                            31, 1994, is                            incorporated herein by reference.Realty                            Lease dated January 28, 1993 between Printing Property                            Corp. and Company                            regarding 890 Russell Cave Road, Lexington, filed as                            Exhibit 10.6 to Form                            10-K dated January 27, 1994, filed January 31, 1994,                            is incorporated                            herein by reference. Lease                            dated April 11, 1994 between Terry and Anis Wyatt and                            Stationers Inc.                            regarding 214 Stone Road, Belpre, Ohio, filed as Exhibit                            10.1 to Form 10-K                            dated January 26, 1995, filed January 27, 1995, is incorporated                            herein by                            reference. Form                              of Indemnification Agreement between Company and all                              directors and                              executive officers, filed as Exhibit 10.4 to Registration                              Statement on                              Form S-1, File No. 33-54454, filed on November 10,                              1992, is incorporated                              herein by reference.  |
|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |   | Executive                              Compensation Plans and Arrangements |     Company's                              1993                              Stock Option Plan, effective March 22, 1994, filed                              as Exhibit 10.14 to                              Form 10- K dated January 27, 1994, filed January 31,                              1994, is incorporated                              herein by reference.     Company’s                              2003                              Stock Option Plan, filed as Exhibit A to proxy statement                              dated February                              12, 2004, filed February 13, 2004, is incorporated                              herein by                              reference.     Form                              of                              Stock Option Agreement pursuant to Company’s 2003 stock option plan filed                              as Exhibit 10.2 to form 10-Q dated September 10, 2004                              filed September 13,                              2004, is incorporated herein by reference.     Employment                              Agreement dated September 7, 2004 among William G.                              Williams, Jr., Syscan                              Corporation and the Company, filed as Exhibit 10.1                              to Form 8-K dated                              September 7, 2004, filed September 10, 2004, is incorporated                              herein by                              reference.     Confidentiality                              and Non-Competition Agreement dated September 7, 2004                              among William G.                              Williams, Jr., Syscan Corporation and the Company,                              filed as Exhibit 10.2                              to Form 8-K dated September 7, 2004, filed September                              10, 2004, is                              incorporated herein by reference.  $10,000,000                              revolving                              credit agreement by and among the Company and its subsidiaries                              and                              National City Bank dated as of April 1, 1999, filed                              as Exhibit 10.2 to                              Form 10-K dated January 25, 2000, filed January 28,                              2000, is incorporated                              herein by reference.Lease                              Agreement dated November 1, 1999 between Randall M.                              Schulz, successor                              trustee of The Butterfield Family Trust No. 2 and Smith& Butterfield                              Co., Inc. regarding 2800 Lynch Road, Evansville, Indiana,                              filed as Exhibit                              10.3 to Form 10-K                              dated January 25, 2000, filed January 28, 2000, is                              incorporated herein by                              reference. |
|--------|--------|----------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |   |   | Agreement                                of Lease dated September 25, 1998 between Ronald                                H. Scott and Frank J.                                Scott dba St. Clair Leasing Co. and Interform Corporation,                                regarding 1901                                Mayview Road, Bridgeville, Penn-sylvania, filed as                                Exhibit 10.4 to Form                                10-K dated January 25, 2000, filed January 28, 2000,                                is incorporated                                herein by reference. First                                  Amendment of Real Estate Lease Agreement dated                                  May 6, 2003 by and between                                  Ronald H. Scott and Frank J. Scott dba St. Clair                                  Leasing Company and                                  Interform Corporation, filed as Exhibit 10.1 to                                  Form 8-K filed October 4,                                  2004, is incorporated herein by reference. $2,690,938                                  Business Loan agreement by and among the Company                                  and One Valley Bank                                  National Association (BB&T), dated as of May 6, 1999, together with                                  Promissory Note and Commercial Security Agreement,                                  filed as Exhibit 10.4                                  to form 10-K dated January 22, 2001, filed January                                  26, 2001 is                                  incorporated herein by reference. $618,720                                    Promissory Note by and among the Company and                                    Bank One, West Virginia, N.A.                                    dated as of June 6, 2000 together with commercial                                    security agreement,                                    filed as Exhibit 10.5 to form 10-K dated January                                    22, 2001, filed January                                    26, 2001, is incorporated herein by reference. $550,000                                      Promissory Note by and among the Company and                                      Bank One, West Virginia, N.A.                                      dated as of August 4, 2000 together with Commercial                                      Security Agreement and                                      Letter of Understanding, filed as Exhibit 10.6                                      to form 10-K dated January                                      22, 2001, filed January 26, 2001, is incorporated                                      herein by                                      reference. Agreement                                        of Lease dated September 1, 2002 between                                        Marion B. and Harold A. Merten,                                        Jr. and The Merten Company regarding 1515                                        Central Parkway, Cincinnati,                                        Ohio, Filed as Exhibit (10.1) to form 10-K                                        dated January 21, 2002, Filed                                        January 25, 2002 is incorporated herein by                                        reference. $415,000                                        Commercial Lease Agreement |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |   |   | by                                    and among the company and Firstar Equipment Finance                                    dated as of January                                    12, 2001, Filed as Exhibit (10.2) to form 10-K                                    dated January 21, 2002,                                    Filed January 25, 2002 is incorporated herein                                    by reference. $450,000                                    Commercial Lease Agreement by and among the Company                                    and Leasing One Corporation dated as of April                                    19, 2001, Filed                                    as Exhibit (10.3) to form 10-K dated January                                    21, 2002, Filed January 25,                                    2002 is incorporated herein by reference. $315,665                                    Promissory Note by and among the Company and                                    Community Trust Bank, N.A. as                                    of April 27, 2001, Filed as Exhibit (10.4) to                                    form 10-K dated January 21,                                    2002, Filed January 25, 2002 is incorporated                                    herein by                                    reference. Lease                                  Agreement dated February 27, 1991 between the Alfred                                  J. Moran Trust and                                  Docutec of Louisiana, Inc. regarding 7868 Anselmo                                  Lane, Baton Rouge,                                  Louisiana, Filed as Exhibit (10.6) to form 10-K                                  dated January 21, 2002,                                  Filed January 25, 2002 is incorporated herein by                                  reference. Amendment                                  No. 2 to Credit Agreement by and among the Company                                  and its subsidiaries                                  and National City Bank dated as of April 1, 2002                                  along with Amended and                                  Restated Subsidiaries Guaranty. Filed as Exhibit                                  (10.1) to form 10-K dated                                  January 20, 2003, Filed January 24, 2003 is incorporated                                  herein by                                  reference. Agreement                                  Amending and Extending term of lease dated May                                  24, 2002 between Earl H.                                  and Elaine D. Seibert and Smith and Butterfield                                  Co., Inc. Filed as Exhibit                                  (10.2) to form 10-K dated January 20, 2003, Filed                                  January 24, 2003 is                                  incorporated herein by reference. Business                                  Loan Agreement, $1,440,000 commercial loan between                                  Bourque Printing                                  Company and Hibernia National Bank together with                                  promissory note dated as                                  of March 19, 2003,filed as Exhibit 10.1 to form                                  10-K dated January 19,                                  2004 filed January 26, 2004, is                                    |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   |   | incorporated                                    herein by reference. Commercial                                    Security Agreement, $450,050 commercial loan                                    between Champion Industries,                                    Inc. and First Century Bank dated as of March                                    2, 2003,filed as Exhibit                                    10.2 to form 10-K dated January 19, 2004 filed                                    January 26, 2004,                                    is                                    incorporated herein by reference. Business                                    Loan Agreement, $351,000 commercial loan between                                    Champion Industries, Inc.                                    and City National Bank together with promissory                                    note dated as of August                                    14, 2003,filed as Exhibit 10.3 to form 10-K dated                                    January 19, 2004 filed                                    January 26, 2004, is                                    incorporated herein by reference. Revolving                                    Credit Agreement, $10,000,000 revolving line                                    of credit between Champion                                    Industries, Inc. and United Bank, Inc. dated                                    as of August 1, 2003,filed as                                    Exhibit 10.4 to form 10-K dated January 19, 2004                                    filed January 26, 2004,                                    is                                    incorporated herein by reference. Agreement                                    Amending and Extending term of lease dated May                                    9, 2003 between Champion                                    Industries, Inc. DBA, Upton Printing and AMB                                    Property, L.P,filed as                                    Exhibit 10.5 to form 10-K dated January 19, 2004                                    filed January 26, 2004,                                    is                                    incorporated herein by reference. Agreement                                    Amending and Extending term of lease dated October                                    1, 2003 between Bourque                                    Printing DBA, Upton Printing and M. Field Gomila                                    Et. Al. ,filed as Exhibit                                    10.6 to form 10-K dated January 19, 2004 filed                                    January 26, 2004,                                    is                                    incorporated herein by reference. Promissory                                    Note, $122,500 between Champion Industries, Inc.                                    and Community Trust Bank                                    dated as of January 9, 2003,filed as Exhibit                                    10.7 to form 10-K dated                                    January 19, 2004 filed January 26, 2004, is                                    incorporated herein by reference. |
|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   |   | Agreement                                      of Lease dated as of September 1, 2004, between                                      Williams Land Corporation                                      and Syscan Corporation regarding North Hills                                      Drive and Washington Street,                                      Charleston, West Virginia, filed as Exhibit                                      10.3 to Form 8-K dated                                      September 7, 2004, filed September 10, 2004,                                      is incorporated herein by                                      reference.  Agreement                                      of Lease dated as of September 1, 2004, between                                      Williams Land Corporation                                      and Syscan Corporation regarding 2800 Seventh                                      Avenue, Charleston, West                                      Virginia, filed as Exhibit 10.4 to Form 8-K                                      dated September 7, 2004, filed                                      September 10, 2004, is incorporated herein                                      by reference. Agreement                                      of Purchase and Sale dated September 7, 2004,                                      between Syscan Corporation                                      and Williams Properties, LLC regarding 811                                      Virginia Street, East,                                      Charleston, West Virginia, filed                                      as                                      Exhibit 10.5 to Form 8-K dated September 7,                                      2004, filed September 10,                                      2004, is incorporated herein by reference. Exercise                                      of Lease renewal option for 2800 Lynch Road                                      Evansville, Indiana dated as                                      of September 22, 2003, filed as Exhibit 10.1                                      to form 10-K dated January                                      17, 2005 filed January 31, 2005, is incorporated                                      herein by                                      reference. $1,000,000                                      Business Loan Agreement and promissory note                                      by and between the Company and                                      Community Trust Bank, N.A. as of March 19,                                      2004, filed as Exhibit 10.2 to                                      form 10-K dated January 17, 2005 filed January                                      31, 2005, is incorporated                                      herein by reference. $1,000,000                                      revolving line of credit between Stationers,                                      Inc. and First Sentry Bank                                      dated as of April 7, 2004, filed as Exhibit                                      10.3 to form 10-K dated                                      January 17, 2005 filed January 31, 2005, is                                      incorporated herein by                                      reference. $600,075                                      term note between Bourque Printing, Inc. and                                      First Century Bank dated as                                      of September 9, 2004, filed as Exhibit 10.4                                      to form 10-K dated January 17,                                      2005 filed January 31, 2005, is |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |   |   | incorporated                                    herein by reference. $3,920,000                                      promissory note and security agreement between                                      Champion Industries, Inc.                                      and United Bank, Inc. dated as of October 26,                                      2004, filed as Exhibit 10.5                                      to form 10-K dated January 17, 2005 filed January                                      31, 2005, is                                      incorporated herein by reference. Modification                                      letter to promissory note between Bourque Printing                                      and Hibernia National                                      Bank, Inc. dated December 28, 2004, filed as                                      Exhibit 10.6 to form 10-K                                      dated January 17, 2005 filed January 31, 2005,                                      is incorporated herein by                                      reference. First                                      Amendment to Revolving Credit Agreement between                                      Champion Industries, Inc.                                      and United Bank, Inc. Filed as Exhibit 10.1                                      to form 8-K dated February 15,                                      2005, filed February 16, 2005, is incorporated                                      herein by                                      reference. Release                                      of Claims and Settlement Agreement between                                      Defendants Champion Industries,                                      Inc., Timothy V. Ross and Todd Ross and Plaintiff                                      National Forms and                                      Systems Group, Inc. dated May 6, 2005 filed                                      as Exhibit 10.1 to form 8-K                                      dated May 11, 2005, filed May 11, 2005, is                                      incorporated herein by                                      reference. Second                                      Amendment to Revolving Credit Agreement between                                      Champion Industries, Inc.                                      and United Bank, Inc. Filed as Exhibit 10.1                                      to form 8-K dated July 11,                                      2005, filed July 11, 2005, is incorporated                                      herein by                                      reference. $605,095                                        term note between Champion Industries, Inc.                                        and First Century Bank dated                                        as of July 27, 2005.  Filed as Exhibit 10.1 to form 10-Q dated                                        September 9, 2005, filed September 9, 2005,                                        is incorporated herein by                                        reference. |
|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (10.1) |   |  $1,000,000                              revolving line of credit between Stationers, Inc. and                              First Sentry Bank                              dated as of October 7, 2005.                                                                                                                                                                                   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |  Page                              Exhibit (10.1)-p1                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| (10.2) |   | Lease                                Agreement dated October 31, 2005, between SANS LLC                                and Champion                                Industries, Inc. DBA Chapman Printing Company regarding                                951 Point Marion                                Road Morgantown, West Virginia.Page                                Exhibit (10.2)-p1 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| (14)   |   | Code                                of Ethics                                                                                                                                                                                                                                                                                                                                                  | Code                                of Ethics for the Chief Executive Officer, Chief                                Operating Officer and                                Chief Accounting Officer, filed as Exhibit 14 to                                form 10-K dated January                                19, 2004 filed January 26, 2004, is incorporated                                herein by                                reference. Code                                of Business Conduct and Ethics, filed as Exhibit                                14.2 to Form 10-K dated                                January 19, 2004 filed January 26, 2004, is incorporated                                herein by                                reference. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |
| (16)   |   |                                                                                                                                                                                                                                                                                                                                                                                           | Letter                                of Ernst & Young dated February 6, 2004, filed as Exhibit 16                                to Form                                8-K dated February 9, 2004, filed February 9, 2004,                                is incorporated herein                                by reference |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |
| (21)   |   | Subsidiaries                                of the Registrant                                                                                                                                                                                                                                                                                                                                  |   | Exhibit                                21 |   | Page                                Exhibit 21-p1 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |
| (23.1) |   | Consent                                of BKD, LLP                                                                                                                                                                                                                                                                                                                                             |   | Exhibit                                23.1 |   | Page                                Exhibit 23.1-p1 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |
| (23.2) |   | Consent                                of Ernst & Young LLP                                                                                                                                                                                                                                                                                                                                |   | Exhibit                                23.2 |   | Page                                Exhibit 23.2-p1 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |
| (31.1) |   | Principal                                Executive Officer Certification Pursuant to Section                                302 of the                                Sarbanes-Oxley act of 2002 - Marshall T. Reynolds                                                                                                                                                                        |   | Exhibit                                31.1 |   | Page                                Exhibit 31.1-p1 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |
| (31.2) |   | Principal                                Financial Officer Certification Pursuant to Section                                302 of the                                Sarbanes-Oxley act of 2002 - Todd R. Fry                                                                                                                                                                                 |   | Exhibit                                31.2 |   | Page                                Exhibit 31.2-p1 |

----

| (31.3) |   | Principal                              Operating Officer Certification Pursuant to Section                              302 of the                              Sarbanes-Oxley act of 2002 - Toney K. Adkins                                                                                                                 |   | Exhibit                              31.3 |   | Page                              Exhibit 31.3-p1 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|---------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                         |   |                                      |   |                                              |
| (32)   |   | Marshall                              T. Reynolds, Todd R. Fry and Toney K. Adkins Certification                              Pursuant to 18                              U.S.C. Section 1350 as Adopted Pursuant to Section                              906 of the                              Sarbanes-Oxley act of 2002 |   | Exhibit                              32   |   | Page                              Exhibit 32-p1   |

** **

----

**SIGNATURES**

| **Champion                      Industries, Inc.**                                                                                                                                                                                                                                                                                                                              |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                       |
| By                      /s/ Marshall T.                      Reynolds                                                                                                             |
| Marshall                      T. Reynolds                                                                                                                                                                                                                                                                                                                                       |
| Chief                      Executive Officer                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                       |
| By                      /s                      Toney K. Adkins                                                                                |
| Toney                      K. Adkins                                                                                                                                                                                                                                                                                                                                            |
| President                      and Chief Operating Officer                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                       |
| By                      /s/ Todd R. Fry                                                                          |
| Todd                      R. Fry                                                                                                                                                                                                                                                                                                                                                |
| Senior                      Vice President and Chief Financial Officer                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                       |
| Date:                       January 16, 2006                                                                                                                                                                                                                                                                                                                               |

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|  SIGNATURE                      AND TITLE                                                                                                                                                                                              |   |  DATE                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|
|                                                                                                                                                                                                                                        |   |                                        |
|  /s/                      Lou J. Akers                                                                                                                                                                                                 |   |  January                      16, 2006 |
| Lou                      J. Akers, Director                                                                                                                                                                                                 |   |                                        |
|                                                                                                                                                                                                                                        |   |                                        |
|  /s/                      Philip E.                      Cline                             |   |  January                      16, 2006 |
| Philip                      E. Cline, Director                                                                                                                                                                                              |   |                                        |
|                                                                                                                                                                                                                                        |   |                                        |
|  /s/                      Harley F. Mooney,                      Jr.                                                                    |   |  January                      16, 2006 |
| Harley                      F. Mooney, Jr., Director                                                                                                                                                                                        |   |                                        |
|                                                                                                                                                                                                                                        |   |                                        |
|  /s/                      A. Michael                      Perry                                           |   |  January                      16, 2006 |
| A.                      Michael Perry, Director                                                                                                                                                                                             |   |                                        |
|                                                                                                                                                                                                                                        |   |                                        |
|  /s/                      Marshall T.                      Reynolds                                                                |   |  January                      16, 2006 |
| Marshall                      T. Reynolds, Director                                                                                                                                                                                         |   |                                        |
|                                                                                                                                                                                                                                        |   |                                        |
|  /s/                      Neal W.                      Scaggs                                   |   |  January                      16, 2006 |
| Neal                      W. Scaggs, Director                                                                                                                                                                                               |   |                                        |
|                                                                                                                                                                                                                                        |   |                                        |
|  /s/                      Glenn W. Wilcox,                      Sr.                                                                |   |  January                      16, 2006 |
| Glenn                      W. Wilcox, Sr., Director                                                                                                                                                                                         |   |                                        |

----

**Champion            Industries, Inc.**

**Contents**

| Reports                      of Independent Registered Public Accounting Firms | F-2                                                                                                                                                      |
|--------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| Audited                      Consolidated Financial Statements:                |                                                                                                                                                     |
|                                                                           | Consolidated                      Balance Sheets as of October 31, 2005 and 2004                                                                         | F-4 |
|                                                                           | Consolidated                      Statements of Operations for the years ended October 31, 2005,                      2004 and                      2003 | F-6 |
|                                                                           | Consolidated                      Statements of Shareholders’ Equity for the years ended October 31, 2005,                      2004 and 2003      | F-7 |
|                                                                           | Consolidated                      Statements of Cash Flows for the years ended October 31, 2005,                      2004 and                      2003 | F-8 |
|                                                                           | Notes                      to Consolidated Financial Statements                                                                                          | F-9 |
| Schedule                      II - Valuation and Qualifying Accounts           | F-33                                                                                                                                                     |

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**Report            of Independent Registered Public Accounting Firm**

----

**Report            of Independent Registered Public Accounting Firm**

----

**Champion            Industries, Inc. and Subsidiaries**

|                                                                                    |   | **October                      31,** |            |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------|-----------------|
|                                                                                    |   | **2005**                             |            | 2004 |   |
| **Assets**                                                                              |   |                                 |            |   |   |
| Current                      assets:                                                    |   |                                 |            |   |   |   |   |
| Cash                      and cash equivalents                                          |   | **$**                                | **3,661,622**   |   | $ | 1,745,457 |   |
| Accounts                      receivable, net of allowance of $1,410,000 and $1,422,000 |   |                                 | 19,300,453      |   |   | 21,318,016 |   |
| Inventories                                                                             |   |                                 | **11,079,726**  |   |   | 11,269,514 |   |
| Other                      current assets                                               |   |                                 | **629,381**     |   |   | 973,832 |   |
| Deferred                      income tax assets                                         |   |                                 | **1,168,526**   |   |   | 1,144,943 |   |
| Total                      current assets                                               |   |                                 | **35,839,708**  |   |   | 36,451,762 |   |
|                                                                                    |   |                                 |            |   |   |   |   |
| Property                      and equipment, at cost:                                   |   |                                 |            |   |   |   |   |
| Land                                                                                    |   |                                 | **2,006,375**   |   |   | 2,006,375 |   |
| Buildings                      and improvements                                         |   |                                 | **8,368,720**   |   |   | 8,253,573 |   |
| Machinery                      and equipment                                            |   |                                 | **43,668,900**  |   |   | 43,228,587 |   |
| Equipment                      under capital leases                                     |   |                                 | **426,732**     |   |   | 983,407 |   |
| Furniture                      and fixtures                                             |   |                                 | **3,492,535**   |   |   | 3,361,100 |   |
| Vehicles                                                                                |   |                                 | **3,629,268**   |   |   | 3,523,467 |   |
|                                                                                    |   |                                 | **61,592,530**  |   |   | 61,356,509 |   |
| Less                      accumulated depreciation                                      |   |                                 | **(42,894,910** | **)** |   | (41,020,327 | ) |
|                                                                                    |   |                                 | **18,697,620**  |   |   | 20,336,182 |   |
|                                                                                    |   |                                 |            |   |   |   |   |
| Cash                      surrender value of officers’ life insurance             |   |                                 | **1,117,484**   |   |   | 1,039,514 |   |
| Goodwill                                                                                |   |                                 | **2,060,786**   |   |   | 2,060,786 |   |
| Other                      intangibles, net of accumulated amortization                 |   |                                 | **3,697,368**   |   |   | 3,812,051 |   |
| Other                      assets                                                       |   |                                 | **232,204**     |   |   | 449,589 |   |
|                                                                                    |   |                                 | **7,107,842**   |   |   | 7,361,940 |   |
| Total                      assets                                                       |   | **$**                                | **61,645,170**  |   | $ | 64,149,884 |   |
|                                                                                    |   |                                 |            |   |   |   |   |

*See            notes to consolidated financial statements.*

----

**Champion            Industries, Inc. and Subsidiaries**

|                                                                           |   | **October                      31,** |           |
|--------------------------------------------------------------------------------|--------|--------------------------------------|----------------|
|                                                                           |   | **2005**                             |           | 2004 |   |
| **Liabilities                      and shareholders’ equity**            |   |                                 |           |   |   |
| Current                      liabilities:                                      |   |                                 |           |   |   |
| Accounts                      payable                                          |   | **$**                                | **3,584,323**  |   | $ | 3,618,051 |   |
| Accrued                      payroll and commissions                           |   |                                 | **1,714,078**  |   |   | 1,778,736 |   |
| Taxes                      accrued and withheld                                |   |                                 | **1,106,910**  |   |   | 1,289,524 |   |
| Accrued                      income taxes                                      |   |                                 | **681,763**    |   |   | 135,556 |   |
| Accrued                      expenses                                          |   |                                 | **987,228**    |   |   | 1,028,246 |   |
| Current                      portion of long-term debt:                        |   |                                 |                |   |   |  |   |
| Notes                      payable                                             |   |                                 | **1,667,797**  |   |   | 1,555,911 |   |
| Capital                      lease obligations                                 |   |                                 | **16,483**     |   |   | 132,518 |   |
| Total                      current liabilities                                 |   |                                 | **9,758,582**  |   |   | 9,538,542 |   |
|                                                                           |   |                                 |           |   |   |   |   |
| Long-term                      debt, net of current portion:                   |   |                                 |           |   |   |   |   |
| Line                      of credit                                            |   |                                 | **1,612,000**  |   |   | 2,300,000 |   |
| Notes                      payable                                             |   |                                 | **5,148,503**  |   |   | 5,940,323 |   |
| Capital                      lease obligations                                 |   |                                 | **-**          |   |   | 16,484 |   |
| Deferred                      income tax liabilities                           |   |                                 | **3,984,934**  |   |   | 4,375,357 |   |
| Other                      liabilities                                         |   |                                 | **388,930**    |   |   | 428,366 |   |
| Total                      liabilities                                         |   |                                 | **20,892,949** |   |   | 22,599,072 |   |
|                                                                           |   |                                 |           |   |   |   |   |
| Commitments                      and contingencies                             |   |                                 |           |   |   |   |   |
|                                                                           |   |                                 |           |   |   |   |   |
| Shareholders’                      equity:                               |   |                                 |           |   |   |   |   |
| Common                      stock, $1 par value, 20,000,000 shares authorized; |   |                                 |           |
| 9,745,913                      and 9,733,913 shares issued                     |   |                                 |           |   |   |   |   |
| and                      outstanding                                           |   |                                 | **9,745,913**  |   |   | 9,733,913 |   |
| Additional                      paid-in capital                                |   |                                 | **22,297,670** |   |   | 22,278,110 |   |
| Retained                      earnings                                         |   |                                 | **8,708,638**  |   |   | 9,538,789 |   |
| Total                      shareholders’ equity                          |   |                                 | **40,752,221** |   |   | 41,550,812 |   |
| Total                      liabilities and shareholders’ equity          |   | **$**                                | **61,645,170** |   | $ | 64,149,884 |   |
|                                                                           |   |                                 |           |   |   |   |   |

*See            notes to consolidated financial statements.*

----

**Champion            Industries, Inc. and Subsidiaries**

|                                                              |   | **Year                      Ended October 31,** |            |
|-------------------------------------------------------------------|--------|-------------------------------------------------|-----------------|
|                                                              |   |  **2005**                                  |            |  **2004** |   |  **2003** |   |
| Revenues:                                                         |   |                                            |            |   |   |   |   |   |   |   |
| Printing                                                          |   | **$**                                           | **98,458,017**  |   | $ | 95,324,314 |   | $ | 96,536,601 |   |
| Office                      products and office furniture         |   |                                            | **36,467,219**  |   |   | 29,077,258 |   |   | 25,646,031 |   |
| Total                      revenues                               |   |                                            | **134,925,236** |   |   | 124,401,572 |   |   | 122,182,632 |   |
|                                                              |   |                                            |            |   |   |   |   |   |   |   |
| Cost                      of sales:                               |   |                                            |            |   |   |   |   |   |   |   |
| Printing                                                          |   |                                            | **70,978,621**  |   |   | 69,746,212 |   |   | 69,888,496 |   |
| Office                      products and office furniture         |   |                                            | **25,693,958**  |   |   | 20,259,542 |   |   | 17,963,228 |   |
| Total                      cost of sales                          |   |                                            | **96,672,579**  |   |   | 90,005,754 |   |   | 87,851,724 |   |
|                                                              |   |                                            |            |   |   |   |   |   |   |   |
| Gross                      profit                                 |   |                                            | **38,252,657**  |   |   | 34,395,818 |   |   | 34,330,908 |   |
|                                                              |   |                                            |            |   |   |   |   |   |   |   |
| Selling,                      general and administrative expenses |   |                                            | **34,796,990**  |   |   | 33,057,699 |   |   | 31,174,692 |   |
| Hurricane                      and relocation costs               |   |                                            | **1,020,999**   |   |   | - |   |   | - |   |
| Income                      from operations                       |   |                                            | **2,434,668**   |   |   | 1,338,119 |   |   | 3,156,216 |   |
|                                                              |   |                                            |            |   |   |   |   |   |   |   |
| Other                      income (expense):                      |   |                                            |            |   |   |   |   |   |   |   |
| Interest                      income                              |   |                                            | **18,472**      |   |   | 6,663 |   |   | 3,899 |   |
| Interest                      expense                             |   |                                            | (610,787        | ) |   | (300,742 | ) |   | (167,442 | ) |
| Other                                                             |   |                                            | **120,436**     |   |   | 287,750 |   |   | 10,216 |   |
|                                                              |   |                                            | (471,879        | ) |   | (6,329 | ) |   | (153,327 | ) |
| Income                      before income taxes                   |   |                                            | **1,962,789**   |   |   | 1,331,790 |   |   | 3,002,889 |   |
| Income                      tax expense                           |   |                                            | (846,155        | ) |   | (582,092 | ) |   | (1,235,086 | ) |
| Net                      income                                   |   | **$**                                           | **1,116,634**   |   | $ | 749,698 |   | $ | 1,767,803 |   |
|                                                              |   |                                            |            |   |   |   |   |   |   |   |
| Earnings                      per share:                          |   |                                            |            |   |   |   |   |   |   |   |
| Basic                                                             |   | **$**                                           | **0.11**        |   | $ | 0.08 |   | $ | 0.18 |   |
| Diluted                                                           |   |                                            | **0.11**        |   |   | 0.08 |   |   | 0.18 |   |
|                                                              |   |                                            |            |   |   |   |   |   |   |   |
| Dividends                      paid per share                     |   |                                            | **0.20**        |   |   | 0.20 |   |   | 0.20 |   |
|                                                              |   |                                            |            |   |   |   |   |   |   |   |
| Weighted                      average shares outstanding:         |   |                                            |            |   |   |   |   |   |   |   |
| Basic                                                             |   |                                            | **9,735,000**   |   |   | 9,729,000 |   |   | 9,714,000 |   |
| Diluted                                                           |   |                                            | **9,809,000**   |   |   | 9,825,000 |   |   | 9,761,000 |   |

*See            notes to consolidated financial statements.*

----

**Champion            Industries, Inc. and Subsidiaries**

|                                                 |   |                                  |          |        |   | **Additional** |   |         |           |      |   |
|------------------------------------------------------|--------|---------------------------------------|---------------|-------------|--------|----------------|--------|--------------|----------------|-----------|--------|
|                                                 |   | **Common                      Stock** |          | **Paid-In** |   | **Retained**   |   |         |           |
|                                                 |   | **Shares**                            |          | **Amount**  |   | **Capital**    |   | **Earnings** |           | **Total** |   |
|                                                 |   |                                  |          |        |   |           |   |         |           |      |   |   |   |   |   |   |
| Balance,                      October 31, 2002       |   |                                  | 9,713,913     |        | $      | 9,713,913      |   | $            | 22,242,047     |      | $      | 10,909,850 |   | $ | 42,865,810 |   |
|                                                 |   |                                  |          |        |   |           |   |         |           |      |   |   |   |   |   |   |
| Net                      income for 2003             |   |                                  | -             |        |   | -              |   |         | -              |      |   | 1,767,803 |   |   | 1,767,803 |   |
| Dividends                      ($0.20 per share)     |   |                                  | -             |        |   | -              |   |         | -              |      |   | (1,942,779 | ) |   | (1,942,779 | ) |
|                                                 |   |                                  |          |        |   |           |   |         |           |      |   |   |   |   |   |   |
| Balance,                      October 31, 2003       |   |                                  | 9,713,913     |        |   | 9,713,913      |   |         | 22,242,047     |      |   | 10,734,874 |   |   | 42,690,834 |   |
|                                                 |   |                                  |          |        |   |           |   |         |           |      |   |   |   |   |   |   |
| Net                      income for 2004             |   |                                  | -             |        |   | -              |   |         | -              |      |   | 749,698 |   |   | 749,698 |   |
| Dividends                      ($0.20 per share)     |   |                                  | -             |        |   | -              |   |         | -              |      |   | (1,945,783 | ) |   | (1,945,783 | ) |
| Stock                      options exercised         |   |                                  | 20,000        |        |   | 20,000         |   |         | 36,063         |      |   | - |   |   | 56,063 |   |
|  Balance,                      October 31, 2004 |   |                                  | 9,733,913     |        |   | 9,733,913      |   |         | 22,278,110     |      |   | 9,538,789 |   |   | 41,550,812 |   |
|                                                 |   |                                  |          |        |   |           |   |         |           |      |   |   |   |   |   |   |
| **Net                      income for 2005**         |   |                                  | **-**         |        |   | **-**          |   |         | **-**          |      |   | **1,116,634** |   |   | **1,116,634** |   |
| **Dividends                      ($0.20 per share)** |   |                                  | **-**         |        |   | **-**          |   |         | **-**          |      |   | **(1,946,785** | **)** |   | **(1,946,785** | **)** |
| **Stock                      options exercised**     |   |                                  | **12,000**    |        |   | **12,000**     |   |         | **19,560**     |      |   | **-** |   |   | **31,560** |   |
|                                                 |   |                                  |          |        |   |           |   |         |           |      |   |   |   |   |   |   |
| **Balance,                      October 31, 2005**   |   |                                  | **9,745,913** |        | **$**  | **9,745,913**  |   | **$**        | **22,297,670** |      | **$**  | **8,708,638** |   | **$** | **40,752,221** |   |

*See            notes to consolidated financial statements.*

----

**Champion            Industries, Inc. and Subsidiaries**

|                                                                                                                            |   | **Year                      Ended October 31,** |          |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------------|
|                                                                                                                            |   | **2005**                                        |          | 2004 |   | 2003 |   |
| **Cash                      flows from operating activities:**                                                                  |   |                                            |          |   |   |   |   |
| Net                      income                                                                                                 |   | **$**                                           | **1,116,634** |   | $ | 749,698 |   | $ | 1,767,803 |   |
| * *Adjustments                      to reconcile net income to cash provided                      by operating activities: |   |                                            |          |   |   |   |   |   |   |   |
| Depreciation                      and amortization                                                                              |   |                                            | **4,696,105** |   |   | 4,389,758 |   |   | 4,288,407 |   |
| (Gain)                      loss on sale of assets                                                                              |   |                                            | (36,516       | ) |   | (91,420 | ) |   | 16,014 |   |
| Deferred                      income taxes                                                                                      |   |                                            | (461,308      | ) |   | (35,866 | ) |   | (356,773 | ) |
| Deferred                      compensation                                                                                      |   |                                            | **7,149**     |   |   | 10,723 |   |   | 14,297 |   |
| Bad                      debt expense                                                                                           |   |                                            | **420,673**   |   |   | 487,550 |   |   | 336,291 |   |
| Hurricane                      and relocation costs                                                                             |   |                                            | **1,020,999** |   |   | - |   |   | - |   |
| Changes                      in assets and liabilities:                                                                         |   |                                            |          |   |   |   |   |   |   |   |
| Accounts                      receivable                                                                                        |   |                                            | **1,413,579** |   |   | (268,690 | ) |   | (1,932,114 | ) |
| Inventories                                                                                                                     |   |                                            | **135,596**   |   |   | 473,586 |   |   | 315,535 |   |
| Other                      current assets                                                                                       |   |                                            | **344,451**   |   |   | (4,052 | ) |   | 1,006,003 |   |
| Accounts                      payable                                                                                           |   |                                            | (558,876      | ) |   | (616,230 | ) |   | 25,129 |   |
| Accrued                      payroll and commissions                                                                            |   |                                            | (64,658       | ) |   | 148,799 |   |   | (503,881 | ) |
| Taxes                      accrued and withheld                                                                                 |   |                                            | (182,614      | ) |   | (88,742 | ) |   | (157,047 | ) |
| Accrued                      income taxes                                                                                       |   |                                            | **546,207**   |   |   | (501,213 | ) |   | (166,017 | ) |
| Accrued                      expenses                                                                                           |   |                                            | (41,018       | ) |   | 166,236 |   |   | (73,277 | ) |
| Other                      liabilities                                                                                          |   |                                            | (46,585       | ) |   | (6,590 | ) |   | (19,906 | ) |
| Net                      cash provided by operating activities                                                                  |   |                                            | **8,309,818** |   |   | 4,813,547 |   |   | 4,560,464 |   |
| **Cash                      flows from investing activities:**                                                                  |   |                                            |          |   |   |   |   |   |   |   |
| Purchase                      of property and equipment                                                                         |   |                                            | (2,736,561    | ) |   | (4,973,834 | ) |   | (3,162,658 | ) |
| Proceeds                      from sale of fixed assets                                                                         |   |                                            | **301,559**   |   |   | 850,287 |   |   | 185,534 |   |
| Businesses                      acquired, net of cash received                                                                  |   |                                            | **-**         |   |   | (3,034,886 | ) |   | (426,429 | ) |
| Goodwill                      and other intangible additions                                                                    |   |                                            | (359,648      | ) |   | (227,161 | ) |   | (204,031 | ) |
| Change                      in other assets                                                                                     |   |                                            | **171,670**   |   |   | (76,437 | ) |   | (33,825 | ) |
| Cash                      surrender value                                                                                       |   |                                            | (77,970       | ) |   | (18,719 | ) |   | (72,840 | ) |
| Net                      cash used in investing activities                                                                      |   |                                            | (2,700,950    | ) |   | (7,480,750 | ) |   | (3,714,249 | ) |
| **Cash                      flows from financing activities:**                                                                  |   |                                            |          |   |   |   |   |   |   |   |
| Borrowings                      on line of credit                                                                               |   |                                            | **7,719,000** |   |   | 8,294,591 |   |   | 3,192,271 |   |
| Payments                      on line of credit                                                                                 |   |                                            | (8,407,000    | ) |   | (7,581,259 | ) |   | (1,500,000 | ) |
| Proceeds                      from long-term debt                                                                               |   |                                            | **605,000**   |   |   | 5,520,000 |   |   | 923,451 |   |
| Principal                      payments on long-term debt                                                                       |   |                                            | (1,694,478    | ) |   | (2,102,665 | ) |   | (3,854,584 | ) |
| Proceeds                      from exercise of stock options                                                                    |   |                                            | **31,560**    |   |   | 56,063 |   |   | - |   |
| Dividends                      paid                                                                                             |   |                                            | (1,946,785    | ) |   | (1,945,783 | ) |   | (1,942,779 | ) |
| Net                      cash (used in) provided by financing activities                                                        |   |                                            | (3,692,703    | ) |   | 2,240,947 |   |   | (3,181,641 | ) |
| Net                      increase (decrease) in cash and cash equivalents                                                       |   |                                            | **1,916,165** |   |   | (426,256 | ) |   | (2,335,426 | ) |
| Cash                      and cash equivalents at beginning of year                                                             |   |                                            | **1,745,457** |   |   | 2,171,713 |   |   | 4,507,139 |   |
| Cash                      and cash equivalents at end of year                                                                   |   | **$**                                           | **3,661,622** |   | $ | 1,745,457 |   | $ | 2,171,713 |   |

*See            notes to consolidated financial statements.*

----

**Champion            Industries, Inc. and Subsidiaries**

**1.            Summary of Significant Accounting Policies**

**Principles            of Consolidation**

**Cash            and Cash Equivalents**

**Accounts            Receivable**

----

**Champion                Industries, Inc. and Subsidiaries**

**Inventories**

*Inventory            Costs*

**Property            and Equipment**

| Buildings                      and improvements          | 5                      -                      40 years |
|---------------------------------------------------------------|--------------------------------------------------------|
| Machinery                      and equipment             | 3                      -                      10 years |
| Furniture                      and fixtures    | 5                      -                      10 years |
| Vehicles              | 3                      -                      5 years  |

----

**Champion                Industries, Inc. and Subsidiaries**

**Goodwill                  and Other Intangibles**

**Income                Taxes**

----

**Champion                Industries, Inc. and Subsidiaries**

**Earnings                Per Share**

**Segment                Information**

**Accounting                for Web Site Development Costs**

**Revenue                Recognition**

**Accounting                for Costs Associated with Exit or Disposal Activities**

*Accounting                for Costs Associated with Exit or Disposal Activities*
*Liability                Recognition for Certain Employment Termination Benefits and Other                Costs to Exit                an Activity.*

----

**Champion                    Industries, Inc. and Subsidiaries**

**Accounting                for Stock-Based Compensation**

*Share-Based                Payment*
*Accounting                for Stock-Based Compensation*

----

**Champion                    Industries, Inc. and Subsidiaries**

|                                                                                                                                                                                                                 |   | **Year                          Ended October 31,** |          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|---------------|
|                                                                                                                                                                                                                 |   | **2005**                                            |          | 2004 |   | 2003 |   |
|                                                                                                                                                                                                                 |   |                                                |          |   |   |   |   |   |   |   |
| Net                          income as reported                                                                                                                                                                      |   | **$**                                               | **1,116,634** |   | $ | 749,698 |   | $ | 1,767,803 |   |
| Deduct:                          Total stock-based employee compensation expense determined                          under the fair                          value method for all awards, net of related tax effects |   |                                                | **296,400**   |   |   | 183,270 |   |   | 103,750 |   |
| Pro                          forma net income                                                                                                                                                                        |   | **$**                                               | **820,234**   |   | $ | 566,428 |   | $ | 1,664,053 |   |
| Earnings                          per share:                                                                                                                                                                         |   |                                                |          |   |   |   |   |   |   |   |
| Basic,                          as reported                                                                                                                                                                          |   | **$**                                               | **0.11**      |   | $ | 0.08 |   | $ | 0.18 |   |
| Basic,                          pro forma                                                                                                                                                                            |   | **$**                                               | **0.08**      |   | $ | 0.06 |   | $ | 0.17 |   |
|                                                                                                                                                                                                                 |   |                                                |          |   |   |   |   |   |   |   |
| Diluted,                          as reported                                                                                                                                                                        |   | **$**                                               | **0.11**      |   | $ | 0.08 |   | $ | 0.18 |   |
| Diluted,                          pro forma                                                                                                                                                                          |   | **$**                                               | **0.08**      |   | $ | 0.06 |   | $ | 0.17 |   |

**Reclassifications**

**2.                Inventories**

|                                                          |   | **October                          31,** |           |
|---------------------------------------------------------------|--------|------------------------------------------|----------------|
|                                                          |   | **2005**                                 |           | 2004 |   |
| Printing:                                                     |   |                                     |           |   |   |   |   |
| Raw                          materials                        |   | **$**                                    | **2,198,882**  |   | $ | 2,326,821 |   |
| Work                          in process                      |   |                                     | **1,766,862**  |   |   | 1,998,824 |   |
| Finished                          goods                       |   |                                     | **4,013,041**  |   |   | 3,460,834 |   |
| Office                          products and office furniture |   |                                     | **3,100,941**  |   |   | 3,483,035 |   |
|                                                          |   | **$**                                    | **11,079,726** |   | $ | 11,269,514 |   |

----

**Champion                    Industries, Inc. and Subsidiaries**

**3.                Long-term Debt**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **October                          31,** |          |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **2005**                                 |          | 2004 |   |
| Secured                          term note payable to a bank, due in monthly principal and                          interest                          installments approximating $93,279 at October 31, 2005                          and $89,950 at                          October 31, 2004 with interest at the Wall Street Journal                          prime rate                          maturing October 2008, collateralized by substantially                          all assets of the                          Syscan Corporation and the Chapman Printing Charleston                          division. |   | **$**                                    | **3,024,861** |   | $ | 3,920,000 |   |
| Installment                          notes payable to banks, due in monthly installments plus                          interest at rates                          approximating the bank’s prime rate maturing in various periods ranging                          from January 2006 - July 2010, collateralized by equipment,                          vehicles,                          inventory and accounts receivable.                                                                                                                                                                                       |   |                                     | **3,791,439** |   |   | 3,576,234 |   |
| Capital                          lease obligations, due in monthly installments totaling                          $19,116 through                          February 2005, with $8,322 due in monthly installments                          through December                          2005 at fixed rates of interest ranging from 7.0% to                          7.75%.                                                                                                                                                                                                                                                 |   |                                     | **16,483**    |   |   | 149,002 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                     | **6,832,783** |   |   | 7,645,236 |   |
| Less                          current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                     | **1,684,280** |   |   | 1,688,429 |   |
| Long-term                          debt, net of current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **$**                                    | **5,148,503** |   | $ | 5,956,807 |   |

|     |   | **Notes**   |      | **Capital** |   |      |   |
|----------|--------|-------------|-----------|-------------|--------|-----------|--------|
|     |   | **Payable** |      | **Leases**  |   | **Total** |   |
|     |   |        |      |        |   |      |   |
| **2006** |   | $           | 1,667,797 |        | $      | 16,483    |   | $ | 1,684,280 |   |
| **2007** |   |        | 1,691,871 |        |   | -         |   |   | 1,691,871 |   |
| **2008** |   |        | 1,786,081 |        |   | -         |   |   | 1,786,081 |   |
| **2009** |   |        | 494,065   |        |   | -         |   |   | 494,065 |   |
| **2010** |   |        | 1,176,486 |        |   | -         |   |   | 1,176,486 |   |
|     |   | $           | 6,816,300 |        | $      | 16,483    |   | $ | 6,832,783 |   |
|     |   |        |      |        |   |      |   |   |   |   |

----

**Champion                    Industries, Inc. and Subsidiaries**

**4.                Employee Benefit Plans**

----

**Champion                      Industries, Inc. and Subsidiaries**

|                                                                                    |   |     |        | **Weighted** |   |     |   | **Weighted** |    |     |   | **Weighted** |   |
|-----------------------------------------------------------------------------------------|--------|----------|-------------|--------------|--------|----------|--------|--------------|---------|----------|--------|--------------|--------|
|                                                                                    |   |     |        | **Average**  |   |     |   | **Average**  |    |     |   | **Average**  |   |
|                                                                                    |   |     |        | **Exercise** |   |     |   | **Exercise** |    |     |   | **Exercise** |   |
|                                                                                    |   | **2005** |        | **Price**    |   | **2004** |   | **Price**    |    | **2003** |   | **Price**    |   |
|                                                                                    |   |     |        |         |   |     |   |         |    |     |   |         |   |
| Outstanding-beginning                          of year                                  |   |     | **379,000** |         | **$**  | **3.33** |   |         | 312,000 |     | $      | 3.25         |   |   | 230,000 |   | $ | 5.41 |   |
| Granted                                                                                 |   |     | **247,000** |         |   | **4.26** |   |         | 123,000 |     |   | 4.29         |   |   | 125,000 |   |   | 2.77 |   |
| Exercised                                                                               |   |     | **(12,000** | **)**        |   | **2.63** |   |         | (20,000 | )        |   | 2.80         |   |   | - |   |   | - |   |
| Forfeited                          or expired                                           |   |     | **(44,000** | **)**        |   | **4.26** |   |         | (36,000 | )        |   | 6.26         |   |   | (43,000 | ) |   | 13.42 |   |
| Outstanding-end                          of year                                        |   |     | **570,000** |         |   | **3.67** |   |         | 379,000 |     |   | 3.33         |   |   | 312,000 |   |   | 3.25 |   |
| Weighted                          average fair value of options granted during the year |   | **$**    | **1.20**    |         |   |     |   | $            | 1.49    |     |   |         |   | $ | 0.83 |   |   |   |   |

| **Exercise** |   | **Number**      |    | **Remaining** |   |
|--------------|--------|-----------------|---------|---------------|--------|
| **Price**    |   | **Outstanding** |    | **Life**      |   |
| 2.49         |   |            | 102,000 |          |   | 1.05 |   |
| 2.77         |   |            | 104,000 |          |   | 2.12 |   |
| 4.29         |   |            | 117,000 |          |   | 3.13 |   |
| 4.26         |   |            | 247,000 |          |   | 4.96 |   |

----

**Champion                      Industries, Inc. and Subsidiaries**

**5.                Income Taxes**

|                                      |   | **Year                          Ended October 31,** |          |
|-------------------------------------------|--------|-----------------------------------------------------|---------------|
|                                      |   | **2005**                                            |          | 2004 |   | 2003 |   |
| Current                          expense: |   |                                                |          |   |   |   |   |
| Federal                                   |   | **$**                                               | **1,009,920** |   | $ | 461,383 |   | $ | 1,270,574 |   |
| State                                     |   |                                                | **297,543**   |   |   | 156,575 |   |   | 321,285 |   |
| Deferred                          benefit |   |                                                | **(461,308**  | **)** |   | (35,866 | ) |   | (356,773 | ) |
|                                      |   | **$**                                               | **846,155**   |   | $ | 582,092 |   | $ | 1,235,086 |   |

|                                                                               |   | **October                            31,** |          |
|------------------------------------------------------------------------------------|--------|--------------------------------------------|---------------|
|                                                                               |   | **2005**                                   |          | 2004 |   |
| Deferred                            tax assets:                                    |   |                                       |          |   |   |   |   |
| Allowance                            for doubtful accounts                         |   | **$**                                      | **574,083**   |   | $ | 568,729 |   |
| Deferred                            compensation                                   |   |                                       | **150,122**   |   |   | 147,260 |   |
| Net                            operating loss carryforward of acquired companies   |   |                                       | **649,074**   |   |   | 611,750 |   |
| Accrued                            vacation                                        |   |                                       | **270,946**   |   |   | 355,574 |   |
| Other                            accrued liabilities                               |   |                                       | **180,254**   |   |   | 186,858 |   |
| Other                            assets                                            |   |                                       | **172,576**   |   |   | 106,596 |   |
| Gross                            deferred tax assets                               |   |                                       | **1,997,055** |   |   | 1,976,767 |   |
|                                                                               |   |                                       |          |   |   |   |   |
| Deferred                            tax liabilities:                               |   |                                       |          |   |   |   |   |
| Property                            and equipment                                  |   |                                       | **3,074,502** |   |   | 3,537,653 |   |
| Intangible                            assets                                       |   |                                       | **1,435,644** |   |   | 1,384,278 |   |
| Gross                            deferred tax liability                            |   |                                       | **4,510,146** |   |   | 4,921,931 |   |
| Net                            deferred tax liabilities before valuation allowance |   |                                       | **2,513,091** |   |   | 2,945,164 |   |
|                                                                               |   |                                       |          |   |   |   |   |
| Valuation                            allowance:                                    |   |                                       |          |   |   |   |   |
| Beginning                            balance                                       |   |                                       | **285,250**   |   |   | 285,250 |   |
| Increase                            during the period                              |   |                                       | **18,067**    |   |   | - |   |
| Ending                            balance                                          |   |                                       | **303,317**   |   |   | 285,250 |   |
| Net                            deferred tax liabilities                            |   | **$**                                      | **2,816,408** |   | $ | 3,230,414 |   |

----

**Champion                      Industries, Inc. and Subsidiaries**

|                                                                                                                                                            |   |   |           |   |   |       |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------|--------|--------|------------|--------|
| The                            above net deferred tax asset is presented on the balance                            sheet as                            follows: |   |   |           |   |   |       |   |
|                                                                                                                                                            |   |   | **2005**       |   |   | 2004       |   |
| Deferred                            tax asset - current                                                                                                         |   | **$**  | **1,168,526**  |   | $      | 1,144,943  |   |
| Deferred                            tax liability - long-term                                                                                                   |   |   | **(3,984,934** | **)**  |   | (4,375,357 | )      |
|                                                                                                                                                            |   | **$**  | **(2,816,408** | **)**  | $      | (3,230,414 | )      |

|                                                                      |   | **Year                          Ended October 31,** |     |
|---------------------------------------------------------------------------|--------|-----------------------------------------------------|----------|
|                                                                      |   | **2005**                                            |     | 2004 |   | 2003 |   |
|                                                                      |   |                                                |     |   |   |   |   |
| Statutory                          federal income tax rate                |   | **34.0%**                                           |     | 34.0% |   | 34.0% |   |
| State                          taxes, net of federal benefit              |   | **6.5**                                             |     | 7.5 |   | 7.0 |   |
| Change                          in valuation allowance                    |   |                                                | **0.6**  |   |   | - |   |   | (7.8 | ) |
| Deferred                          tax adjustments                         |   |                                                | **-**    |   |   | - |   |   | 6.1 |   |
| Selling                          expenses                                 |   |                                                | **4.0**  |   |   | 5.7 |   |   | 2.5 |   |
| Cash                          surrender value of life insurance accretion |   |                                                | **(1.4** | **)** |   | (1.3 | ) |   | - |   |
| Other                                                                     |   |                                                | **(0.6** | **)** |   | (2.2 | ) |   | (0.7 | ) |
| Effective                          tax rate                               |   |                                                | **43.1** | **%** |   | 43.7 | % |   | 41.1 | % |

**6.                Related Party Transactions and Operating Lease Commitments**

----

**Champion                      Industries, Inc. and Subsidiaries**

|                                                                                                                                                               |   | **Year                          Ended October 31,** |          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|---------------|
|                                                                                                                                                               |   | **2005**                                            |          | 2004 |   | 2003 |   |
| Rent                          expense paid to affiliated entities for                                                                                              |   |                                                |          |   |   |   |   |   |   |   |
| for                            operating facilities                                                                                                                |   | **$**                                               | **519,000**   |   | $ | 394,000 |   | $ | 424,000 |   |
| Sales                          of office products, office furniture and printing services                          to affiliated                          entities |   |                                                | **1,030,000** |   |   | 1,066,000 |   |   | 590,000 |   |

|  2006 |   | $      | 1,051,709 |   |
|------------|--------|--------|-----------|--------|
| 2007       |   |   | 869,883   |   |
| 2008       |   |   | 679,224   |   |
| 2009       |   |   | 295,340   |   |
| 2010       |   |   | 42,000    |   |
|       |   | $      | 2,938,156 |   |

----

**Champion                      Industries, Inc. and Subsidiaries**

**7.                Commitments and Contingencies**

----

**Champion                    Industries, Inc. and Subsidiaries**

**8.                Acquisitions**

**Syscan                Acquisition**

|                                                            |   |       |       |
|-----------------------------------------------------------------|--------|------------|------------|
| Current                            assets, net of cash received |   | $1,846,000 |       |
| Property,                            plant, and equipment       |   |       | 782,000    |   |
| Non-compete                            agreement                |   |       | 1,000,000  |   |
| Customer                            relationships               |   |       | 2,461,000  |   |
| Other                            assets                         |   |       | 127,000    |   |
| Total                            assets acquired                |   |       | 6,216,000  |   |
| Current                            liabilities                  |   |       | (1,343,000 | ) |
| Long-term                            debt                       |   |       | (760,000   | ) |

----

**Champion                      Industries, Inc. and Subsidiaries**

| Deferred                            tax               |   |   | (1,425,000 | )      |
|-------------------------------------------------------|--------|--------|------------|--------|
| Total                            liabilities acquired |   |   | (3,528,000 | )      |
| Net                            assets acquired        |   | $      | 2,688,000  |   |

**9.                Industry Segment Information**

----

**Champion                        Industries, Inc. and Subsidiaries**

| 2005                                                               |   | **Printing** |            | **Office                            Products & Furniture** |                                                       | **Total**      |   |
|--------------------------------------------------------------------|--------|--------------|-----------------|----------------------------------------------------------------|------------------------------------------------------------|----------------|--------|
| **Revenues**                                                       |   | **$**        | **112,680,275** |                                                           | **$**                                                      | **44,931,089** |   | **$** | **157,611,364** |   |
| **Elimination                            of intersegment revenue** |   |         | **(14,222,258** | **)**                                                          |                                                       | **(8,463,870** | **)**  |   | **(22,686,128** | **)** |
| **Consolidated                            revenues**               |   | **$**        | **98,458,017**  |                                                           | **$**                                                      | **36,467,219** |   | **$** | **134,925,236** |   |
| **Operating                            income**                    |   |         | **779,790**     |                                                           |                                                       | **1,654,878**  |   |   | **2,434,668** |   |
| **Depreciation                            & amortization**     |   |         | **4,546,612**   |                                                           |                                                       | **149,493**    |   |   | **4,696,105** |   |
| **Capital                            expenditures**                |   |         | **2,821,379**   |                                                           |                                                       | **192,207**    |   |   | **3,013,586** |   |
| **Identifiable                            assets**                 |   |         | **51,014,174**  |                                                           |                                                       | **10,630,996** |   |   | **61,645,170** |   |
| **Goodwill**                                                       |   |         | **1,774,344**   |                                                           |                                                       | **286,442**    |   |   | **2,060,786** |   |
|                                                               |   |         |            |                                                           |                                                       |           |   |   |   |   |
| 2004                                                               |   |         | Printing        |                                                           | Office                            Products & Furniture |           |   | Total |   |
| Revenues                                                           |   | $            | 107,696,605     |                                                           | $                                                          | 34,919,102     |   | $ | 142,615,707 |   |
| Elimination                            of intersegment revenue     |   |         | (12,372,291     | )                                                              |                                                       | (5,841,844     | )      |   | (18,214,135 | ) |
| Consolidated                            revenues                   |   | $            | 95,324,314      |                                                           | $                                                          | 29,077,258     |   | $ | 124,401,572 |   |
| Operating                            income                        |   |         | 632,232         |                                                           |                                                       | 705,887        |   |   | 1,338,119 |   |
| Depreciation                            & amortization         |   |         | 4,247,164       |                                                           |                                                       | 142,594        |   |   | 4,389,758 |   |
| Capital                            expenditures                    |   |         | 4,912,115       |                                                           |                                                       | 61,719         |   |   | 4,973,834 |   |
| Identifiable                            assets                     |   |         | 54,378,626      |                                                           |                                                       | 9,771,258      |   |   | 64,149,884 |   |
| Goodwill                                                           |   |         | 1,774,344       |                                                           |                                                       | 286,442        |   |   | 2,060,786 |   |
|                                                               |   |         |            |                                                           |                                                       |           |   |   |   |   |
| 2003                                                               |   |         | Printing   |                                                           | Office                            Products & Furniture |           |   | Total |   |
| Revenues                                                           |   | $            | 106,540,961     |                                                           | $                                                          | 30,771,361     |   | $ | 137,312,322 |   |
| Elimination                            of intersegment revenue     |   |         | (10,004,360     | )                                                              |                                                       | (5,125,330     | )      |   | (15,129,690 | ) |
| Consolidated                            revenues                   |   | $            | 96,536,601      |                                                           | $                                                          | 25,646,031     |   | $ | 122,182,632 |   |
| Operating                            income (loss)                 |   |         | 3,262,418       |                                                           |                                                       | (106,202       | )      |   | 3,156,216 |   |
| Depreciation                            & amortization         |   |         | 4,145,286       |                                                           |                                                       | 143,121        |   |   | 4,288,407 |   |
| Capital                            expenditures                    |   |         | 4,572,890       |                                                           |                                                       | 126,233        |   |   | 4,699,123 |   |
| Identifiable                            assets                     |   |         | 48,387,601      |                                                           |                                                       | 10,081,234     |   |   | 58,468,835 |   |
| Goodwill                                                           |   |         | 1,643,530       |                                                           |                                                       | 286,442        |   |   | 1,929,972 |   |

----

**Champion                    Industries, Inc. and Subsidiaries**

|                                                             |   | **2005** |            | 2004   |   | 2003        |   |
|------------------------------------------------------------------|--------|----------|-----------------|--------|--------|-------------|--------|
| Revenues:                                                        |   |     |            |   |   |        |   |   |   |   |
| Total                          segment revenues                  |   | **$**    | **157,611,364** |   | $      | 142,615,707 |   | $ | 137,312,322 |   |
| Elimination                          of intersegment revenue     |   |     | **(22,686,128** | **)**  |   | (18,214,135 | )      |   | (15,129,690 | ) |
| Consolidated                          revenue                    |   | **$**    | **134,925,236** |   | $      | 124,401,572 |   | $ | 122,182,632 |   |
|                                                             |   |     |            |   |   |        |   |   |   |   |
| Operating                          income:                       |   |     |            |   |   |        |   |   |   |   |
| Total                          segment operating income          |   | **$**    | **2,434,668**   |   | $      | 1,338,119   |   | $ | 3,156,216 |   |
| Interest                          income                         |   |     | **18,472**      |   |   | 6,663       |   |   | 3,899 |   |
| Interest                          expense                        |   |     | **(610,787**    | **)**  |   | (300,742    | )      |   | (167,442 | ) |
| Other                          income                            |   |     | **120,436**     |   |   | 287,750     |   |   | 10,216 |   |
| Consolidated                          income before income taxes |   | **$**    | **1,962,789**   |   | $      | 1,331,790   |   | $ | 3,002,889 |   |
|                                                             |   |     |            |   |   |        |   |   |   |   |
| Identifiable                          assets:                    |   |     |            |   |   |        |   |   |   |   |
| Total                          segment identifiable assets       |   | **$**    | **61,645,170**  |   | $      | 64,149,884  |   | $ | 58,468,835 |   |
| Elimination                          of intersegment assets      |   |     | **-**           |   |   | -           |   |   | - |   |
| Total                          consolidated assets               |   | **$**    | **61,645,170**  |   | $      | 64,149,884  |   | $ | 58,468,835 |   |

**10.                **
**Accounting                for Costs Associated with Exit or Disposal Activities and Impact                of Hurricane                Katrina**

----

**Champion                    Industries, Inc. and Subsidiaries**

----

**Champion                    Industries, Inc. and Subsidiaries**

| Personnel                                                |   | $      | 88,423    |   |
|----------------------------------------------------------|--------|--------|-----------|--------|
| Plant                                                    |   |   | 545,077   |   |
| Allowance                          for doubtful accounts |   |   | 208,310   |   |
| Moving                          and relocation costs     |   |   | 179,189   |   |
|                                                     |   |   |      |   |
| Total                          pre-tax hurricane expense |   | $      | 1,020,999 |   |
|                                                     |   |   |      |   |

**11.                Fair Value of Financial Instruments**

**12.                Acquired Intangible Assets and Goodwill**

|                                                              |   | **2005**     |      | 2004             |   |
|-------------------------------------------------------------------|--------|--------------|-----------|------------------|--------|
|                                                              |   | **Gross**    |      |             |   | Gross |   |   |   |
|                                                              |   | **Carrying** |      | **Accumulated**  |   | Carrying |   | Accumulated |   |
|                                                              |   | **Amount**   |      | **Amortization** |   | Amount |   | Amortization |   |
| Amortizable                                                       |   |         |      |             |   |   |   |   |   |   |   |   |   |
| intangible                          assets                        |   |         |      |             |   |   |   |   |   |   |   |   |   |
| Non-compete                          agreement                    |   | $            | 1,000,000 |             | $      | 166,667 |   | $ | 1,000,000 |   | $ | 23,810 |   |
| Customer                          relationships                   |   |         | 2,661,610 |             |   | 160,554 |   |   | 2,460,696 |   |   | 23,631 |   |
| Other                                                             |   |         | 509,946   |             |   | 146,967 |   |   | 467,621 |   |   | 68,825 |   |
|                                                              |   |         | 4,171,556 |             |   | 474,188 |   |   | 3,928,317 |   |   | 116,266 |   |
|                                                              |   |         |      |             |   |   |   |   |   |   |   |   |   |
| Unamortizable                                                     |   |         |      |             |   |   |   |   |   |   |   |   |   |
| intangible                          assets                        |   |         |      |             |   |   |   |   |   |   |   |   |   |
| Goodwill                                                          |   |         | 2,568,064 |             |   | 507,278 |   |   | 2,568,064 |   |   | 507,278 |   |
|  Total                        goodwill and other intangibles |   | $            | 6,739,620 |             | $      | 981,466 |   | $ | 6,496,381 |   |  $ | 623,544 |   |
|                                                              |   |         |      |             |   |   |   |   |   |   |   |   |   |

----

**Champion                    Industries, Inc. and Subsidiaries**

| 2006       |   | $      | 361,141   |   |
|------------|--------|--------|-----------|--------|
| 2007       |   |   | 361,141   |   |
| 2008       |   |   | 356,034   |   |
| 2009       |   |   | 315,062   |   |
| 2010       |   |   | 294,151   |   |
| Thereafter |   |   | 2,009,839 |   |
|       |   | $      | 3,697,368 |   |

|                                                                   |   | **2005** |      | 2004   |   |
|------------------------------------------------------------------------|--------|----------|-----------|--------|--------|
| Balance                          as of November 1, 2004 and 2003       |   | $        | 2,060,786 |   | $      | 1,929,972 |   |
| Goodwill                            acquired during the year additions |   |     | -         |   |   | 130,814 |   |
|                                                                   |   |     |      |   |   |   |   |
| Balance                          as of October 31, 2005 and 2004       |   | $        | 2,060,786 |   | $      | 2,060,786 |   |

----

**Champion                    Industries, Inc. and Subsidiaries**

|  **GOODWILL**                                                           |   |   |                                                     |   |   |                                                |   |   |      |
|------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|-----------|
|                                                                         |   |   | **October                          31,****2004**         |   |   | **Amortization****Expense**                         |   |   | **Other** |   |   | **October                          31, 2005** |   |
| Printing                                                                     |   | $      | 1,774,344                                                |   | $      | -                                                   |   | $      | -         |   | $ | 1,774,344 |   |
| Office                          products & furniture                     |   |   | 286,442                                                  |   |   | -                                                   |   |   | -         |   |   | 286,442 |   |
|                                                                         |   |   |                                                     |   |   |                                                |   |   |      |   |   |   |   |
| Total                                                                        |   | $      | 2,060,786                                                |   | $      | -                                                   |   | $      | -         |   | $ | 2,060,786 |   |
|                                                                         |   |   |                                                     |   |   |                                                |   |   |      |   |   |   |   |
|                                                                         |   |   | October                          31, 2003                |   |   | **Amortization****Expense**                         |   |   | **Other** |   |   | **October                          31, 2004** |   |
| Printing                                                                     |   | $      | 1,643,530                                                |   | $      | -                                                   |   | $      | 130,814   |   | $ | 1,774,344 |   |
| Office                          products & furniture                     |   |   | 286,442                                                  |   |   | -                                                   |   |   | -         |   |   | 286,442 |   |
|                                                                         |   |   |                                                     |   |   |                                                |   |   |      |   |   |   |   |
| Total                                                                        |   | $      | 1,929,972                                                |   | $      | -                                                   |   | $      | 130,814   |   | $ | 2,060,786 |   |
|                                                                         |   |   |                                                     |   |   |                                                |   |   |      |   |   |   |   |
|                          **OTHER                          INTANGIBLES** |   |   |                                                     |   |   |                                                |   |   |      |   |   |   |   |
|                                                                         |   |   | **October                          31, 2004 ** |   |   | **Amortization**** Expense**                   |   |   | **Other** |   |   | **October                          31, 2005** |   |
| Printing                                                                     |   | $      | 1,498,323                                                |   | $      | 159,582                                             |   | $      | 109,601   |   | $ | 1,448,342 |   |
| Office                          products & furniture                     |   |   | 2,313,728                                                |   |   | 198,339                                             |   |   | 133,637   |   |   | 2,249,026 |   |
|                                                                         |   |   |                                                     |   |   |                                                |   |   |      |   |   |   |   |
| Total                                                                        |   | $      | 3,812,051                                                |   | $      | 357,921                                             |   | $      | 243,238   |   | $ | 3,697,368 |   |
|                                                                         |   |   |                                                     |   |   |                                                |   |   |      |   |   |   |   |
|                                                                         |   |   | **October                          31, 2003 ** |   |   | **Amortization                            Expense** |   |   | **Other** |   |   | **October                          31, 2004** |   |
| Printing                                                                     |   | $      | 128,250                                                  |   | $      | 60,607                                              |   | $      | 1,430,680 |   | $ | 1,498,323 |   |
| Office                          products & furniture                     |   |   | 56,168                                                   |   |   | 43,803                                              |   |   | 2,301,363 |   |   | 2,313,728 |   |
|                                                                         |   |   |                                                     |   |   |                                                |   |   |      |   |   |   |   |
| Total                                                                        |   | $      | 184,418                                                  |   | $      | 104,410                                             |   | $      | 3,732,043 |   | $ | 3,812,051 |   |

**13.                Certain Significant Estimates**

----

**Champion                  Industries, Inc. and Subsidiaries**

**Goodwill                and Intangible Assets**

**Allowance                for Doubtful Accounts **

*                 *

----

**Champion                  Industries, Inc. and Subsidiaries**

**14.                Earnings Per Share**

|                                                                                                                  |   | **Income** |      | **Weighted****Average**** Shares** |   | **Per****Share****Amount** |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------|-----------|-----------------------------------------|--------|----------------------------|--------|
| **Year                          Ended October 31, 2005**                                                              |   |       |      |                                    |   |                       |   |   |   |   |
| Net                          income                                                                                   |   | $          | 1,116,634 |                                    |   |                       |   |   |   |   |
| Basic                          earnings per share                                                                     |   |       |      |                                    |   |                       |   |   |   |   |
| Income                          available to common shareholders                                                      |   |       | 1,116,634 |                                    |   | 9,735,000                  |   | $ | 0.11 |   |
| Effect                          of dilutive securities stock                          options                         |   |       |      |                                    |   | 74,000                     |   |   |   |   |
| Diluted                          earnings per share                                                                   |   |       |      |                                    |   |                       |   |   |   |   |
| Income                            available to common shareholders and                            assumed conversions |   | $          | 1,116,634 |                                    |   | 9,809,000                  |   | $ | 0.11 |   |
|                                                                                                                  |   |       |      |                                    |   |                       |   |   |   |   |
| **Year                          Ended October 31, 2004**                                                              |   |       |      |                                    |   |                       |   |   |   |   |
| Net                          income                                                                                   |   | $          | 749,698   |                                    |   |                       |   |   |   |   |
| Basic                          earnings per share                                                                     |   |       |      |                                    |   |                       |   |   |   |   |
| Income                          available to common shareholders                                                      |   |       | 749,698   |                                    |   | 9,729,000                  |   | $ | 0.08 |   |
| Effect                            of dilutive securities stock options                                                |   |       |           |                                    |   | 96,000                     |   |   |   |   |
| Diluted                          earnings per share                                                                   |   |       |      |                                    |   |                       |   |   |   |   |
| Income                            available to common shareholders and                            assumed conversions |   | $          | 749,698   |                                    |   | 9,825,000                  |   | $ | 0.08 |   |
|                                                                                                                  |   |       |      |                                    |   |                       |   |   |   |   |
| **Year                          Ended October 31, 2003**                                                              |   |       |      |                                    |   |                       |   |   |   |   |
| Net                          income                                                                                   |   | $          | 1,767,803 |                                    |   |                       |   |   |   |   |
| Basic                          earnings per share                                                                     |   |       |           |                                    |   |                       |   |   |   |   |
| Income                          available to common shareholders                                                      |   |       | 1,767,803 |                                    |   | 9,714,000                  |   | $ | 0.18 |   |
| Effect                            of dilutive securities stock                            options                     |   |       |           |                                    |   | 47,000                     |   |   |   |   |
| Diluted                          earnings per share                                                                   |   |       |      |                                    |   |                       |   |   |   |   |
| Income                            available to common shareholders and assumed                            conversions |   | $          | 1,767,803 |                                    |   | 9,761,000                  |   | $ | 0.18 |   |

----

**Champion                  Industries, Inc. and Subsidiaries**

**15.                Quarterly Results of Operations (unaudited)**

|                                                             |   | **First****Quarter** | ** **     | **Second****Quarter (1)** | ** ** | **Third****Quarter** | ** ** | **Fourth****Quarter (2)** |           |
|------------------------------------------------------------------|--------|----------------------|----------------|---------------------------|------------|----------------------|------------|---------------------------|----------------|
| **Revenues**                                                     |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **2005**                                                         |   | **$**                | **34,440,000** |                      | **$**      | **33,552,000**       |       | **$**                     | **32,255,000** |   | **$** | **34,678,000** |   |
| 2004                                                             |   | $                    | 29,314,000     |                      | $          | 30,501,000           |       | $                         | 30,098,000     |   | $ | 34,489,000 |   |
|                                                             |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **Gross                          profit**                        |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **2005**                                                         |   | **$**                | **9,511,000**  |                      | **$**      | **9,207,000**        |       | **$**                     | **9,258,000**  |   | **$** | **10,276,000** |   |
| 2004                                                             |   | $                    | 7,945,000      |                      | $          | 8,861,000            |       | $                         | 8,305,000      |   | $ | 9,285,000 |   |
|                                                             |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **Net                          income**                          |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **2005**                                                         |   | **$**                | **263,000**    |                      | **$**      | **(97,000**          | **)**      | **$**                     | **382,000**    |   | **$** | **569,000** |   |
| 2004                                                             |   | $                    | 14,000         |                      | $          | 161,000              |       | $                         | 77,000         |   | $ | 498,000 |   |
|  **Earnings                          per share**            |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| Basic                                                            |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **2005**                                                         |   | **$**                | **0.03**       |                      | **$**      | **(0.01**            | **)**      | **$**                     | **0.04**       |   | **$** | **0.06** |   |
| 2004                                                             |   | $                    | 0.00           |                      | $          | 0.02                 |       | $                         | 0.01           |   | $ | 0.05 |   |
|                                                             |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| Diluted                                                          |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **2005**                                                         |   | **$**                | **0.03**       |                      | **$**      | **(0.01**            | **)**      | **$**                     | **0.04**       |   | **$** | **0.06** |   |
| 2004                                                             |   | $                    | 0.00           |                      | $          | 0.02                 |       | $                         | 0.01           |   | $ | 0.05 |   |
|                                                             |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **Weighted                          average shares outstanding** |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| Basic                                                            |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **2005**                                                         |   |                 | **9,734,000**  |                      |       | **9,734,000**        |       |                      | **9,734,000**  |   |   | **9,739,000** |   |
| 2004                                                             |   |                 | 9,717,000      |                      |       | 9,731,000            |       |                      | 9,734,000      |   |   | 9,734,000 |   |
|                                                             |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| Diluted                                                          |   |                 |           |                      |       |                 |       |                      |           |   |   |   |   |
| **2005**                                                         |   |                 | **9,802,000**  |                      |       | **9,734,000**        |       |                      | **9,812,000**  |   |   | **9,820,000** |   |
| 2004                                                             |   |                 | 9,826,000      |                      |       | 9,864,000            |       |                      | 9,832,000      |   |   | 9,802,000 |   |

----

**Champion                Industries, Inc. and                Subsidiaries**

| **Description**                                            |   | **Balance                            at****beginning****of                            period** |          | **Balances                            of****acquired****companies** |   | **Additions****charged                            to****costs                            and****expenses** |   | **Deductions                            (1)** |        | **Balance****at                            end****of                            period** |   |
|------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|---------------|---------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|-------------|------------------------------------------------------------------------------------------|--------|
| **2005**                                                   |   |                                                                                           |          |                                                                |   |                                                                                                       |   |                                          |        |                                                                                     |   |   |   |   |   |   |
| Allowance                            for doubtful accounts |   | **$**                                                                                          | **1,421,922** |                                                                | **$**  | **(25,000**                                                                                                | **)**  | **$**                                         | **420,673** |                                                                                     | **$**  | **(407,287** | **)** | **$** | **1,410,308** |   |
|                                                       |   |                                                                                           |          |                                                                |   |                                                                                                       |   |                                          |        |                                                                                     |   |   |   |   |   |   |
| 2004                                                       |   |                                                                                           |          |                                                                |   |                                                                                                       |   |                                          |        |                                                                                     |   |   |   |   |   |   |
| Allowance                            for doubtful accounts |   | $                                                                                              | 1,190,996     |                                                                | $      | 207,250                                                                                                    |   | $                                             | 487,550     |                                                                                     | $      | (463,874 | ) | $ | 1,421,922 |   |
|                                                       |   |                                                                                           |          |                                                                |   |                                                                                                       |   |                                          |        |                                                                                     |   |   |   |   |   |   |
| 2003                                                       |   |                                                                                           |          |                                                                |   |                                                                                                       |   |                                          |        |                                                                                     |   |   |   |   |   |   |
| Allowance                            for doubtful accounts |   | $                                                                                              | 1,397,491     |                                                                | $      | —                                                                                                    |   | $                                             | 336,291     |                                                                                     | $      | (542,786 | ) | $ | 1,190,996 |   |

| (1) | Uncollectible                          accounts written off, net of                          recoveries. |
|-----|----------------------------------------------------------------------------------------------------------|