Central Canada Foods Corporation
TSX VENTURE : CDF.A

September 21, 2005 15:08 ET

Central Canada Foods Corporation: Record Sales In Third Quarter

MISSISSAUGA, ONTARIO--(CCNMatthews - Sept. 21, 2005) - Central Canada Foods Corporation (TSX VENTURE:CDF.A) generated record sales of $7,054,000 for the third quarter ended July 31, 2005, up from $5,369,000 for the same period in 2004, an increase of $1,685,000. Third Quarter revenues were up by more than $1.7 million from the second quarter of 2005, due to higher sales to domestic retailers which offset anticipated slower growth in export sales in the Asia Pacific market. Year to date, the Company's sales declined 2% to $16,504,000 from $16,887,000, due to a drop in sales in the first quarter of 2005 attributed to lower unit sales prices.

For the 3 months ended July 31, 2005, the Company generated earnings before interest, taxes and amortization of $120,000 in this period, up $60,000 for the same period in 2004. The Company earned a profit of $31,000 ($0.00 per share), a decline of $16,000 from the same period in fiscal 2004 when the Company earned $47,000 ($0.00 per share) due to higher interest and income taxes.

Year to date, the Company generated earnings before interest, taxes and amortization $362,000 in the first nine months of 2005, up from $335,000 in 2004, The Company was able to generate a net profit of $144,000 ($0.01 per share), a decline of $45,000 or 24% over the same period in previous fiscal year when the Company earned $189,000 ($0.01 per share), due to higher taxes, interest and amortization costs.

In the third quarter, the cost of meat products and labour increased by $1,401,000 to $6,289,000 from $4,889,000 in 2004 due to increased sales. Lower raw material costs and increased productivity in the new Timberlea plant resulted in the decrease in meat products and labour as a percentage of sales to 89.2% in the current period, from 91.0% for the same period in 2004, despite industry wide higher costs of raw material in Canada. Year to date, lower sales resulted in lower cost of meat and labour for the period which fell $806,000 to $14,284,000 from $15,090,000 in the first nine months of fiscal 2004. As a percentage of sales, the cost meat products and labour improved to 86.6% of sales from 89.4% for the same period in 2004, reflecting improved productivity in the new plant.

Although the company's selling, general and administration expenses increased this quarter by $225,000 from $420,000 in the third quarter of 2004 to $645,000, as a percentage of sales, these expenses declined from 12.2% in the second quarter and are down from 14% in the first quarter of 2005.

The company's bank indebtedness as at April 30, 2005 was $1,498,000, an increase of $325,000 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 $685,000 as productivity increased in the new Timberlea plant. During the quarter, stock options that were granted at an exercise price of $0.45 per share were re-priced to $0.48 per share. The Company's financial statements (in Canadian funds) are summarized as follows:



July 31, October 31,
2005 2004
C$ C$
Consolidated Balance Sheet

Current Assets 3,551,713 2,535,458
Capital Assets 813,333 589,039
Goodwill 554,753 554,753
Other non-current assets 125 500
---------------------------------

Total Assets 4,919,924 3,679,750
---------------------------------
---------------------------------

Liabilities and Equity
Bank indebtedness 1,498,027 1,173,280
Other current liabilities 1,340,957 847,045
Non-current liabilities 24,664 31,801
Share capital 1,952,369 1,667,249
Retained Earnings (Deficit) 103,907 (39,625)
---------------------------------

Total Liabilities and Equity 4,919,924 3,679,750
---------------------------------
---------------------------------



3 months ended 9 months ended
July 31, July 31,
2005 2004 2005 2004
C$ C$ C$ C$
Consolidated Statements of
Operations

Sales 7,053,681 5,368,610 16,503,766 16,886,856

Meat products and labour 6,288,691 4,887,889 14,284,150 15,090,473
Selling, general and
administration 645,085 420,405 1,857,467 1,461,872
Interest 31,088 3,960 65,905 36,967
Amortization 19,843 14,846 58,082 43,136
Taxes 37,819 (5,426) 94,630 65,517
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Income for the period 31,155 46,936 143,532 188,891
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-------------------------------------------

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



3 months ended 9 months ended
July 31, July 31,
2005 2004 2005 2004
C$ C$ C$ C$

Consolidated Statements of
Cash Flows

Cash (used in) operating
activities (58,736) (68,270) (343,900) (117,690)
Cash from financing
activities 76,034 87,527 598,901 161,816
Cash (used in) provided by
investing activities (17,298) (19,257) (281,571) (44,126)
------------------------------------------
(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 and smaller cuts from a hog carcass and smaller 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
    President
    (905) 272-3133