Central Canada Foods Corporation

March 29, 2005 16:02 ET

Central Canada Foods Corporation: Higher Margins, Cash Flow in First Quarter




MARCH 29, 2005 - 16:02 ET

Central Canada Foods Corporation: Higher Margins,
Cash Flow in First Quarter

MISSISSAUGA, ONTARIO--(CCNMatthews - March 29, 2005) - For the first
quarter ended January 31, 2005, Central Canada Foods Corporation (TSX
VENTURE:CDF.A) earned profits of $77,000 on sales of $4,132,000. (All
amounts in Canadian funds) Cash flow from operations was $301,000 for
the quarter.

Export sales demand in the Asia Pacific market continues to be strong,
particularly for the Company's Choice Pak brand.

Stable raw material prices and prudent purchasing led to profit margins
of 83% as compared to 88% in the first quarter of fiscal 2004 and
compare favourably to margins of 84% in the same period of fiscal 2003.

The company's selling, general and administration expenses increased 5%
to $579,000 in the first quarter of 2005, an increase of $26,000 from
$553,000 in the first quarter of 2004 as a result of the costs of
carrying two plants, while generating production from only one. The cost
of carrying the Timberlea plant while the leasehold improvements were
being completed was approximately $66,000.

Management expects better operating efficiencies in the second quarter
of fiscal 2005 as production from the Timberlea plant comes on stream.
Now in operation, the Timberlea plant is already producing 50% more than
the old plant, and because the Company generally produces to fill
customer orders, significant increases in sales and the benefits of the
economies of scale are expected to be realized in the second quarter.

The company's bank indebtedness as at January 31, 2005 was $1,071,000, a
decline of $102,000 from $1,173,000 at year-end, October 31, 2004. The
Company's operating line of credit was used to finance sales, inventory
and leasehold improvements. Inventory increased by $636,000 from
$965,000 at year end to $1,601,000 to fill customer orders which were
delivered in the second quarter.

The Company's financial statements (in Canadian funds) are summarized as

January 31, October 31,
2005 2004
C$ C$

Consolidated Balance Sheet

Current Assets 2,566,353 2,535,458
Capital Assets 768,343 589,039
Goodwill 554,753 554,753
Other non-current assets 375 500


Total Assets 3,889,824 3,679,750

Liabilities and Equity
Bank indebtedness 1,071,384 1,173,280
Other current liabilities 1,079,631 847,045
Non-current liabilities 33,915 31,801
Share capital 1,667,249 1,667,249
Retained Earnings (Deficit) 37,645 (39,625)

Total Liabilities and Equity 3,889,824 3,679,750

3 months ended
January 31
2005 2004
C$ C$

Consolidated Statements of Operations

Sales 4,132,099 6,351,801

Meat products and labour 3,418,078 5,572,508
Selling, general and administration 578,810 553,044
Other Costs 57,941 84,939


Income for the period 77,270 141,310

Earnings per share - basic and fully diluted $0.01 $0.01

3 months ended
January 31
2005 2004
C$ C$

Consolidated Statements of Cash Flows

Cash (used in) operating activities 301,237 (84,423)
Cash from financing activities (104,454) 98,293
Cash (used in) provided by investing
Activities (196,783) (13,870)
(Decrease) increase in cash and
cash equivalents - -
Cash and cash equivalents-beginning of period - -

Cash and cash equivalents-end of period - -

About Central Canada Foods Corporation

Central Canada Foods Corporation (CCFC) is a federally inspected, HACCP
approved, meat processing company that converts wholesale cuts from a
hog carcass or "primal meat cut" and converts smaller cuts derived from
the primal cuts or "sub primal meat cuts" into fresh-boxed pork and case
ready products, hams and boneless picnic loins for shipment to its
customers. CCFC's products are marketed and sold to Canadian national
and regional grocery chains, as well as in the Asian-Pacific market and
other international markets.

The Toronto Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of this News
Release. This News Release may contain certain forward-looking
statements, which statements can be identified by the use of
forward-looking terminology such as "may", "will", "expect",
"anticipate", "estimate", "predict", "plans", or "continues" or the
negative thereof or any other variations thereon or comparable
terminology referring to future events or results. Forward looking
statements are statements about the future and are inherently uncertain,
and the Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of numerous
factors, including without limitation, the need for regulatory approval,
marketing/manufacturing and partnership/strategic alliance risks, the
effect of competition, uncertainty of the size and existence of a market
opportunity for the Company's products, as well as a description of
other risks and uncertainties affecting the Company and its business, as
contained in news releases and filings with the Canadian Securities
Regulatory Authorities, any of which could cause actual results to vary
materially from current results or the Company's anticipated future
results. Forward-looking statements are based on the beliefs, opinions
and expectations of the Company's management at the time they are made,
and the Company does not assume any obligation to update its
forward-looking statement if those beliefs, opinions or expectations, or
other circumstances should change.


Contact Information

    Central Canada Foods Corporation
    George Michaels
    (905) 272-3133