Central Canada Foods Corporation

June 27, 2005 16:01 ET

Central Canada Foods Corporation: Higher Sales Generate Profits In Second Quarter

MISSISSAUGA, ONTARIO--(CCNMatthews - June 27, 2005) - For the second quarter ended April 30, 2005, Central Canada Foods Corporation (TSX VENTURE:CDF.A) earned profits of $35,000, an increase of $34,000 from the same period in fiscal 2004 (All amounts in Canadian funds). Earnings before interest, taxes and amortization were $92,000 in this period, up $64,000 from $28,000 for the same period in 2004.

Sales for the quarter increased by 3% to $5,318,000 from $5,166,000 for the same period in 2004, an increase of $152,000. The increase in sales was due to higher export sales primarily in the Asia Pacific market. Nonetheless, the Company's pork sales growth into Japan stalled in the later part of the second quarter, which carried over into the third quarter, due to import tax evasion charges filed against Japanese importers. Management expects Japanese pork sales to recover by the fourth quarter of fiscal 2005. Year to date, the Company's sales declined 18% to $9,400,000 from $11,518,000, due to a drop in sales in the first quarter attributed to lower unit sales prices which was offset by a corresponding reduction in the raw material prices, and reduced sales of lower margin products.

Lower raw material costs and increased productivity in the Timberlea plant resulted in the decrease in meat products and labour as a percentage of sales to 86.1% in the current period, from 89.6% for the same period in 2004. Year to date, for the six months ended April 30,2005, as a percentage of sales, the cost meat products and labour improved to 84.6% of sales from 88.6% for the same period in 2004.

For the quarter ended April 30, 2005, the Company's selling, general and administration expenses increased by $141,000 from $508,000 in the second quarter of 2004 to $649,000, an increase of 28%, as a result of increased administration costs associated with moving to a new plant and higher inventory levels due to increased plant productivity which lead to higher external storage costs.

The company's bank indebtedness as at April 30, 2005 was $1,418,000, an increase of $245,000 from $1,173,000 at year-end, October 31, 2004 as funds were used to finance sales and inventory. Inventory increased from $965,000 at year end to $1,812,000 as at April 30, 2005, an increase of $847,000 as productivity increased in the new Timberlea plant. The Company's financial statements (in Canadian funds) are summarized as follows:

April 30, October 31,
2005 2004
C$ C$
Consolidated Balance Sheet

Current Assets 3,333,353 2,535,458
Capital Assets 815,751 589,039
Goodwill 554,753 554,753
Other non-current assets 250 500

Total Assets 4,704,107 3,679,750

Liabilities and Equity
Bank indebtedness 1,418,239 1,173,280
Other current liabilities 1,232,600 847,045
Non-current liabilities 28,147 31,801
Share capital 1,952,369 1,667,249
Retained Earnings (Deficit) 72,752 (39,625)

Total Liabilities and Equity 4,704,107 3,679,750

3 months ended 6 months ended
April 30, April 30,
2005 2004 2005 2004
C$ C$ C$ C$
Consolidated Statements
of Operations

Sales 5,317,986 5,166,445 9,450,085 11,518,246

Meat products and labour 4,577,381 4,630,076 7,995,459 10,202,584
Selling, general and
administration 648,779 508,179 1,212,382 1,041,467
Interest 19,610 13,251 34,817 33,007
Amortization 20,205 14,282 38,239 28,290
Taxes 16,904 12 56,811 70,943

Income for the period 35,107 645 112,377 141,955

Earnings per share -
basic and fully diluted $0.00 $0.00 $0.01 $0.01

3 months ended 6 months ended
April 30, April 30,
2005 2004 2005 2004
C$ C$ C$ C$
Consolidated Statements of
Cash Flows

Cash (used in) operating
activities (559,831) 35,002 (258,594) (49,421)
Cash from financing
activities 627,321 (24,004) 522,867 74,289
Cash (used in) provided by
investing activities (67,490) (10,998) (264,273) (24,868)
(Decrease) increase in cash
and cash equivalents - - - -
Cash and cash
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