Central Industries Corporation Inc.
TSX VENTURE : CND.A

September 21, 2007 19:47 ET

Central Industries Reaches Sales High, Earnings Up Exceeds Annual Profit Objective in 3rd Quarter 5th Consecutive Quarter of Sales Greater Than $9 Million

MISSISSAUGA, ONTARIO--(Marketwire - Sept. 21, 2007) - Central Industries Corporation Inc. (TSX VENTURE:CND.A) reached a 9 month sales high of $28.4 million for the period ended July 31, 2007 (2006: $25.2 million) and generated earnings before interest, taxes and amortization of $577,000 (2006: $301,000), exceeding its annual target of $560,000 in only 9 months (all amounts in C$). Net income for the period was $242,000 up 134% from $139,000 for the same period in 2006.

For the fifth consecutive quarter, Central Industries Corporation Inc. has recorded sales in excess of $9 million, reaching $9.3 million for the third quarter of fiscal 2007, down 2% from $9.5 million in 2006.

Year-to-date sales increases are attributed to increased plant capacity that has allowed the Company to increased shipments in the domestic market as well as in Russia, Asia and Australia. Management expects to reach annual sales of $38 million as previously reported.

For the 3 months ended July 31, 2007, earnings before interest, taxes and amortization were $183,000, up from a loss of $(141,000) from the same period in 2006.

For the 9 months ended July 31, 2007, the Company was able to generate a net profit per share of $0.02 versus $0.01 per share for the same period in 2006.

For the three months ended July 31, 2007, the cost of meat products and labour decreased by $597,000 from $8.8 million in the second quarter of 2006 to $8.2 million. This increase is directly stable raw material costs; meat products and labour as a percentage of sales improved to 87.6% in the current quarter from 92.0% in 2006. Year to date, higher sales resulted in higher cost of meat and labour for the period which rose to $24.8 million in 2007 from $22.5 million in the first nine months of fiscal 2006. As a percentage of sales, the cost of meat products and labour fell to 87.5% from 89.5% for the same period in 2006.

For the quarter ended July 31, 2007, the company's selling, general and administration expenses increased by 6% from $903,000 in the third quarter of 2006 to $956,000 as a result of higher wages and increased inventory carrying costs. As a percentage of sales, selling, general and administration increased to 10.3% of sales from 9.5%. Year to date, the company's selling, general and administration expenses increased by $608,000 to $2,959,000 in the first nine months of fiscal 2007, an increase of 26% from $2,350,000 in the same period in 2006, due to higher plant costs associated with higher sales.

The company's bank indebtedness as at July 31, 2007 was $2.5 million, an increase of $1.1 million from $1.4 million at year-end, October 31, 2006 largely to fund inventory and receivables due to higher sales.



Consolidated Balance Sheet
July 31, October 31,
2007 2006
C$ C$

Current Assets 5,483,655 4,173,845
Capital Assets 1,194,341 1,228,692
Goodwill and Other 554,753 554,753

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Total Assets 7,232,749 5,957,290
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Liabilities and Equity
Bank indebtedness 2,453,736 1,357,854
Other current liabilities 2,078,639 2,163,056
Non-current liabilities 805,311 782,887
Share capital 1,952,369 1,952,369
Retained Earnings (Deficit) (57,306) (298,876)
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Total Liabilities and Equity 7,232,749 5,957,290
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Consolidated Statements of
Operations 3 months ended 9 months ended
July 31, July 31,
2007 2006 2007 2006
C$ C$ C$ C$

Sales 9,323,0939 9,543,364 28,358,837 25,182,909

Meat products and labour 8,183,304 8,780,612 24,823,561 22,532,085
Selling, general and
administration 956,254 903,499 2,958,567 2,350,270
Interest and bank charges 42,559 34,400 110,439 99,899
Amortization 47,262 41,771 137,086 122,495
Taxes 31,958 (71,431) 87,614 (25,226)
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Income (loss) for the period 61,702 (145,487) 241,570 103,386
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Earnings per share - basic
and fully diluted $0.01 $ - $0.02 $0.01
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Consolidated Statements of
Cash Flows 3 months ended 9 months ended
July 31, July 31,
2007 2006 2007 2006
C$ C$ C$ C$

Cash (used in)
operating activities (392,633) (614,311) (927,957) (849,863)
Cash from financing
activities 455,328 645,120 1,030,692 914,810
Cash (used in) provided by
investing activities (62,695) (30,809) (102,735) (64,947)
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(Decrease) increase in cash
and cash equivalents - - - -
Cash and cash equivalents
-beginning of period - - - -
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Cash and cash equivalents
-end of period - - - -
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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. In addition, it is aggressively looking to expand into profitable niche businesses in food processing and other industries.

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
    President
    (905) 272-3133