Central Industries Corporation Inc.

January 28, 2008 08:52 ET

Central Industries Hits New Sales High in 2007, Earnings Up 400% for Year

MISSISSAUGA, ONTARIO--(Marketwire - Jan. 28, 2008) - Central Industries Corporation Inc. (TSX VENTURE:CND.A) increased sales for the seventh consecutive year, with annual revenues reaching $38 million up $3.6 million from 2006. Central had earnings of $804,000 before interest taxes and amortization, an increase of $417,000 over 2006. Earnings per share increased to $0.02 in 2007 from $0.00 in 2006, reflecting the increase in net profits to $340,000 from $66,000. Company was able to increase production for the year to meet demand attributed to growth of the Company's "Choice Pak" brand awareness, increased shipments to domestic retailers and new sales into Russia. This allowed it to improve sales and maintain profitability margins.

CICI generated record fourth quarter sales of $9.8 million for the 3 months ended October 31, 2007, up from $9.3 million for the same period in the previous fiscal year. The Company realized income before interest, taxes and amortization of $228,000, in this period, up $141,000 from $87,000 for the same period in 2006.

Despite the pressures on raw material costs, increased productivity in resulted in a decrease in the cost of meat products and labour as a percent of sales, from 89.7% in 2006 to 87.5% in 2007, as a result of improved operating efficiencies and reduced fluctuations in raw material costs.

In 2007, the company's selling, general and administration expenses increased by $648,000 to $3,948,000, an increase of 20% from $3,300,000 in the same period in 2006. This increase is due to the higher cost of operating the Timberlea plant due to increased output and increased costs of carrying higher inventory, including storage and material handling costs. Administrative salaries also increased. As a percentage of sales, selling, general and administration expenses was 10.4% of sales for the year ended October 31, 2006, from 9.6 % in 2006.

Management continues to consider 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 fourth quarter and annual financial statements are summarized as follows:

October 31
2007 2006

Consolidated Balance Sheets ($'000)

Current Assets 4,926 4,173
Capital Assets 1,149 1,229
Goodwill 555 555

Total Assets 6,630 5,957

Liabilities and Equity
Bank indebtedness 1,791 1,358
Other current liabilities 1,997 2,163
Non-current liabilities 849 783
Share capital 1,952 1,952
Retained Earnings (Deficit) 41 (299)

Total Liabilities and Equity 6,630 5,957

Year ended 3 months ended
October 31 October 31
2007 2006 2007 2006

Consolidated Statements of
($'000 except per share

Sales 38,123,023 34,445,159 9,764,186 9,262,250

Meat products and labour 33,339,103 30,757,498 8,515,542 $8,025,413
Selling, general and
administration 3,948,175 3,300,427 989,608 1,150,157
Loss on disposal of capital
assets 31,270 0 31,270 0

Income before interest
amortization & taxes 804,475 387,234 227,766 86,680

Bank charges & interest 160,873 140,881 50,434 40,982
Amortization 171,316 169,007 34,230 46,512

Taxes 132,147 10,862 44,533 36,088

Income (Loss) for the period 340,139 66,484 98,569 (36,902)

Earnings (Loss) per share -
basic and fully diluted $0.02 $0.00 $0.01 $0.00

Year ended 3 months ended
October 31 October 31
2007 2006 2007 2006

Consolidated Statements of Cash Flows

Cash (used in) operating activities (249,629) (566,750) 143,004 47,561
Cash (used in) from financing
activities 372,265 697,536 (83,063) 52,416
Cash provided by investing
activities (122,636) (130,786) (59,941) (99,977)
(Decrease) increase in cash and
cash equivalents - -
Cash and cash equivalents-beginning
of year - - - -

Cash and cash equivalents-end
of year - - - -

About Central Industries Corporation Inc.

Central Industries Corporation Inc. (CICI) operates 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. CICI'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.

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.

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 Industries Corporation Inc.
    George Michaels
    (905) 272-3133