Centennial Specialty Foods Reports First Quarter Results

Centennial Specialty Foods Reports First Quarter Results 


DENVER, May 17  /PRNewswire-FirstCall/ -- Centennial Specialty Foods
Corporation (Nasdaq: CHLE; Boston Stock Exchange: CSJ) reported that gross
sales of our premium Stokes Green Chile Sauces increased 6.8% over the same
period last year, even with the delayed introduction into new markets due to
the California strike.  Net sales for the three months ended March 31, 2004
were 5.7% lower than the same period in 2003, totaling $1,127,483.  This
reflects the Company's concentration on our premium, higher profit margin
products, while eliminating or deemphasizing lower margin products in our
product mix.  Centennial reported a net loss of $94,376 for its three months
ended March 31, 2004 compared to net income of $60,059 for the same period in
the prior year.  The decrease in net income is primarily due to a 49.6%
increase in selling, general and administrative costs associated with
Centennial's planned expansion.  Much of this increase is attributable to
advertising and consumer marketing associated with Centennial's expansion into
new markets.  Loss per share was $.07 for the three months ended March 31,
2004.

Centennial is continuing to expand its products in to new markets, including: 
Los Angeles, San Diego, San Francisco, Sacramento, Albuquerque, Phoenix and
Reno.  These markets provide opportunities for Centennial to increase its
distribution to over 2,500 new stores during 2004.  Centennial is working with
all of the major retailers and many regional chains in each of those markets to
introduce its unique product line.  Centennial currently works with Albertsons,
Kroger, Safeway, Wal-mart, Sam's Club and Costco, and is using this customer
base as a launching platform for new markets.  Since Centennial began its
market roll-out at the end of 2003, it has started shipping its premium Stokes
Green Chile Sauce products for distribution into over 1,000 new stores. 
Centennial has been successful in laying the groundwork for its expansion plans
for sales of premium Stokes Green Chile Sauces.  "We continue to be excited
about the opportunities ahead for Centennial.  We believe that our unique,
premium quality Southwestern sauces give us a strong competitive advantage as
we try to enter into new markets," stated Jeffrey Nieder, CEO.  Centennial
expects further increases in distribution of its products during the remainder
of 2004.

Centennial also reported that their tenant and sole supplier has not paid rent
for April and May 2004, and such tenant and sole supplier has informed
Centennial that they are not in a position to pay these amounts at this time
and are in informal discussions with certain creditors concerning their
financial obligations.  An unfavorable resolution of this situation may
materially adversely impact production of Centennial's products or its
financial condition and operating results.  Centennial is reviewing all
alternatives in order to mitigate any potential adverse consequences of this
situation.

Centennial Specialty Foods Corporation is a distributor of ethnic Southwestern
food products.  Its products are sold under the Stokes and Ellis labels, two
well-known Southwestern brands that date back almost 100 years. Principal
channels of distribution for Centennial's products are grocery retailers,
superstores and club stores in Colorado and, to a lesser extent, several major
metropolitan markets in adjoining states.  More information about Centennial
can be found on its website at http://www.centennialspecialtyfoods.com/

Note Regarding Forward Looking Statements:

Certain matters discussed in this press release could contain forward- looking
information that involves risks and uncertainties that could cause actual
results to differ materially from current trends or expected results. We
identify forward looking statements through our use of words such as "expect,"
"believe," "project," "anticipate," and similar expressions.  These risks that
may affect our ability to achieve forward-looking statements are discussed in
our final prospectus in the section entitled "Risk Factors" and other documents
that are on file with the Securities and Exchange Commission.

             CENTENNIAL SPECIALTY FOODS CORPORATION AND SUBSIDIARY

                     Consolidated Statements of Operations

                                               For the Three Months Ended
                                                        March 31,
                                                   2004           2003

   Net sales                                    $1,127,483     $1,196,062

   Cost of goods sold                              746,175        746,069

   Gross profit                                    381,308        449,993

   Selling, general and administrative expenses    577,688        386,230

   Income (loss) from operations                  (196,380)        63,763

   Other income (expense)
     Interest expense                             (112,005)      (127,013)
     Rent income                                   158,581        158,581
       Total other income                           46,576         31,568

   Income (loss) before income taxes              (149,804)        95,331

     Income tax benefit - current                       --             --
     Income tax expense - deferred                  55,428             --

     Income tax expense - proforma                      --        (35,272)

       Total income tax benefit (expense)           55,428        (35,272)

   Net income (loss)                              $(94,376)       $60,059


   Net income (loss) before preferred
    stock dividend                                $(94,376)       $60,059

   Preferred stock dividend                       (250,000)            --

   Net income (loss) available to
    common shareholders                           (344,376)        60,059

   Basic and diluted net income (loss)
    per common share                               $(0.07)         $0.02

   Basic and diluted weighted average
    common shares outstanding                    5,050,000      3,500,000



                          Consolidated Balance Sheets

                                                 March 31,    December 31,
                                                   2004           2003
                     Assets
   Current assets
     Cash and cash equivalents                  $1,064,275     $6,076,479
     Accounts receivable, net of
      allowance for doubtful accounts
      of $25,483 and $25,483, respectively         238,844        303,848
     Inventory, net                              1,909,786      1,043,540
     Prepaid expenses                              164,091        186,086
        Total current assets                     3,376,996      7,609,953

   Non-current assets
     Property, plant and equipment, net          6,074,807      6,112,215
     Goodwill, net                               1,634,079      1,634,079
     Other assets                                   77,671         70,000
     Other long-term receivable                         --        170,000
        Total non-current assets                 7,786,557      7,986,294

   Total assets                                $11,163,553    $15,596,247

       Liabilities and Stockholders' Equity

   Current liabilities
     Accounts payable - trade                     $617,367     $1,022,268
     Accrued liabilities                           306,172        556,652
     Accrued dividends payable                     250,000        172,603
     Related party payable                          20,394        365,394
     Current portion of long-term debt                  --        750,250
     Note payable - stockholder                         --        908,900
     Income taxes payable                           21,482         21,482
        Total current liabilities                1,215,415      3,797,549

   Long-term debt                                2,052,698      3,503,454
   Deferred tax liability                          475,234        530,662
        Total long-term liabilities              2,527,932      4,034,116
        Total liabilities                        3,743,347      7,831,665

   Commitments and contingencies

   Stockholders' equity
     Preferred stock (liquidation
      preference $10,000,000),
      3,000,000 shares authorized,
      2,000,000 shares issued and
      outstanding, $5 stated value,
      10% dividend                               2,334,785      2,334,785
     Common stock, $0.0001 par value,
      47,000,000 shares authorized,
      5,050,000 shares issued and outstanding          505            505
     Additional paid-in capital                  5,794,036      5,794,036
     Accumulated deficit                          (709,120)      (364,744)
        Total stockholders' equity               7,420,206      7,764,582

   Total liabilities and
    stockholders' equity                       $11,163,553    $15,596,247




Stokes and Ellis are registered trademarks of Centennial Specialty Foods
Corporation. 

DATASOURCE: Centennial Specialty Foods Corporation



CONTACT:  Stephanie Hinkle of Preserve Communications, [phone],

for Centennial Specialty Foods Corporation; or Jeffrey Nieder of Centennial

Specialty Foods Corporation, [phone]



Web site:  http://www.centennialspecialtyfoods.com/ 

Copyright