Central Canada Foods Corporation
TSX VENTURE : CDF.A

February 28, 2007 18:21 ET

Central Canada Foods Corporation: New Sales Records in 2006

MISSISSAUGA, ONTARIO--(CCNMatthews - Feb. 28, 2006) - Central Canada Foods Corporation (TSX VENTURE:CDF.A) increased sales for the sixth consecutive year with annual revenues reaching $34.4 million. The move to the Timberlea plant allowed the Company to reduce the negative impact of the industry wide pressures that resulted in lower pork prices and decreased margins. Increased production allowed the Company to significantly improve sales and maintain margins and return to profitability.

Despite the industry wide downward pressure on pork prices, the Company earned income of $387,000 before interest taxes and amortization, a increase of $586,000 from a loss of $(199,000) in 2005. Earnings per share increased three cents to $0.01 in 2006 from a loss per share of $(0.02) in 2005, reflecting the increase in net profit from a loss of $326,000 in 2005 to a profit of $66,000 in 2006. Throughout 2006, demand for the Company's products increased, which allowed the Company to increase production to offset lower market prices for pork products. Management has successfully increased its customer base and increased sales to existing customers, and processing its products at a rate more than 50% greater than at the same time in 2005.

Despite the pressures on raw material costs, increased productivity in the Timberlea plant resulted in a slight decrease in the cost of meat products and labour. These costs dropped slightly in fiscal 2006 as a percent of sales from 89.7% from to 89.3% in 2006, as a result of improved operating efficiencies.

In 2006, the company's selling, general and administration expenses increased by $798,000 to $3,300,000 in, an increase of 32% from $2,502,000 in the same period in 2005. This increase is due to the higher cost of renting and operating the Timberlea plant and increased costs of carrying higher inventory. As a percentage of sales, selling, general and administration expenses was 9.6 % of sales for the year ended October 31, 2006, from 11.2% in 2005.

Subsequent to year end, the Management team was strengthened with the addition of Zoran Konevic as Chief Executive Officer. As a result ,Management is exploring other means of increasing shareholder value and considering other higher margin opportunities in meat processing in Canada and Europe as well as other business opportunities in Canada and abroad.

The Company's annual financial statements are summarized as follows:



October 31
2006 2005
Consolidated Balance Sheets ($'000)

Current Assets 4,173,845 3,126,183
Capital Assets 1,228,692 1,266,913
Goodwill 554,753 554,753

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Total Assets 5,957,290 4,947,849
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Liabilities and Equity
Bank indebtedness 1,357,854 1,180,568
Other current liabilities 2,163,056 1,788,548
Non-current liabilities 782,887 391,724
Share capital 1,952,369 1,952,369
Deficit (298,876) (365,360)
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Total Liabilities and Equity 5,957,290 4,947,849
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Year ended
October 31
2006 2005
Consolidated Statements of Operations
($'000 except per share amounts)

Sales 34,445,159 22,462,012

Meat products and labour 30,757,498 20,123,120
Selling, general and administration 3,300,427 2,502,350
Other Costs 320,750 162,277

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Income (Loss) for the period 66,484 (325,735)
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Earnings (Loss) per share - basic and
fully diluted $ 0.01 $ (0.02)
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Year ended
October 31
2006 2005
Consolidated Statements of Cash Flows ($'000)

Cash (used in) operating activities (566,750) 122,704
Cash (used in) from financing activities
697,536 663,908
Cash provided by investing activities (130,786) (786,612)
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(Decrease) increase in cash and cash
equivalents - -
Cash and cash equivalents-beginning of
year - -
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Cash and cash equivalents-end of year - -
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About Central Canada Foods Corporation

Central Canada Foods Corporation is a meat processing company that converts wholesale cuts and produces fresh boxed and case ready products, mainly pork, hams and boneless picnic and loins. The Company's products are marketed and sold to Canadian national and regional grocery chains. In addition, the Company uses international food brokers to sell its products abroad, primarily into the Asian Pacific market.

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 "continue" 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, disease, 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.

The Toronto Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this News Release.

Contact Information

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