Centennial Specialty Foods (GM) (USOTC:CHLE)
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Centennial Specialty Foods Reports Second Quarter Results
DENVER, Aug. 13 /PRNewswire-FirstCall/ -- Centennial Specialty Foods
Corporation (Nasdaq: CHLE; Boston Stock Exchange: CSJ) reported that gross
sales of its products for the three months ended June 30, 2004 increased 9.6 %
over the same period last year. This increase is made up of an increase of
$402,067 (48.6%) in gross sales of their premium Stokes line of green chile
sauces and a decrease of $248,930 (41.1%) in gross sales of the Ellis line of
products. This reflects the Company's concentration on its premium, higher
profit margin products, while eliminating or de-emphasizing lower margin
products in its product mix. The increase in gross sales of the Stokes Green
Chile Sauces was due to initial orders for product by new retail customers in
California and Arizona. Net sales, which are adjusted for discounts,
promotional allowances and slotting fees, totaled $947,064 for the three months
ended June 30, 2004 and were 22.3% lower than the same period in 2003. This
decrease resulted from $427,380 of slotting fees being charged against gross
sales. As a result, gross profit for the three months ended June 30, 2004
decreased $348,030 (82.6%) from the same period in 2003. Selling, general and
administrative expenses increased $307,782 for the three months ended June 30,
2004 compared to 2003. This increase was primarily attributable to advertising
and consumer marketing spending associated with Centennial's expansion into new
markets. Additionally, the Company incurred higher legal fees due to issues
with its tenant and sole supplier. Centennial reported a net loss of $344,090
for its three months ended June 30, 2004 compared to net income of $14,802 for
the same period in the prior year. Loss per common share, after giving effect
to preferred stock dividends in arrears, was $0.12 for the three months ended
June 30, 2004.
Centennial has been successful in laying the groundwork for expansion of its
premium Stokes Green Chile Sauces into new markets. Centennial currently sells
to Albertsons, Kroger, Safeway, Wal-Mart, Sam's Club and Costco, and is using
this customer base as a launching platform for new markets. It has added
nearly 1,700 new stores in California and Arizona since its expansion efforts
began with more store additions anticipated. Bob Beckwith, Chief Marketing
Officer for Centennial stated, "Getting distribution into additional retail
grocery customers has been, and will continue to be, a critical part of our
expansion plans." Centennial is rolling out its marketing campaign to drive
consumer purchases of its premium Stokes Green Chile Sauces. "Consumer
purchases of our products is the next step in executing our business plan.
Continued sales growth will be driven by consumer demand in our new markets,"
stated Mr. Beckwith. With three strong promotions planned through year end,
Centennial will gain significant feedback on consumer demand for its Stokes
Green Chile Sauces in the new markets.
Centennial is continuing to work with major retailers and regional chains as it
evaluates the next markets for future expansion. "These markets provide
opportunities for Centennial to further increase its distribution during 2004
and 2005. We continue to be excited about the opportunities ahead for
Centennial. We believe that our premium quality Southwestern sauces provide
consumers with a unique alternative to typical Mexican sauces," stated Jeffrey
Nieder, CEO.
As previously reported in the Company's Form 10-QSB for the three months ended
March 31, 2004, the Company's tenant and sole supplier had raised certain
claims. The parties entered into a non-binding Memorandum of Understanding
("MOU") that provides for, among other things, the release of all claims by
both parties and includes the sale of the Company's production plant and
equipment to the supplier. The closing of the transactions in the MOU are
subject to certain conditions, including satisfactory completion of due
diligence and execution of definitive documents. "We are pleased to be moving
toward resolution of all issues in a mutually beneficial manner," said Jeff
Nieder, CEO. Tad Ballantyne, CEO for the Company's supplier stated, "We look
forward to expanding our relationship as Centennial rolls out its business
plan."
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, Arizona, California 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 Unaudited Statements of Operations
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Net sales $947,064 $1,218,154 $2,074,547 $2,414,216
Cost of goods sold 873,715 796,775 1,619,890 1,542,844
Gross profit 73,349 421,379 454,657 871,372
Selling, general and
administrative
expenses 735,010 427,228 1,312,698 813,458
Income (loss) from
operations (661,661) (5,849) (858,041) 57,914
Other income
(expense)
Interest expense (31,223) (129,302) (143,228) (256,315)
Rent income 146,710 158,581 305,291 317,162
Total other
income 115,487 29,279 162,063 60,847
Income (loss) before
income taxes (546,174) 23,430 (695,978) 118,761
Income tax
benefit -
deferred 202,084 -- 257,512 --
Income tax
expense - pro
forma -- (8,628) -- (43,900)
Total income tax
benefit (expense) 202,084 (8,628) 257,512 (43,900)
Net income (loss) $(344,090) $14,802 $(438,466) $74,861
Net income (loss)
before preferred
stock dividends $(344,090) $14,802 $(438,466) $74,861
Preferred stock
dividends - paid -- -- (250,000) --
Preferred stock
dividends - arrears (250,000) -- (250,000) --
Total
preferred
stock
dividends (250,000) -- (500,000) --
Net income (loss)
available to
common
shareholders $(594,090) $14,802 $(938,466) $74,861
Basic and diluted
net income (loss)
per common share $(0.12) $0.00 $(0.19) $0.02
Basic and diluted
weighted average
common shares
outstanding 5,050,000 3,500,000 5,050,000 3,500,000
Consolidated Balance Sheets
June 30, December 31,
2004 2003
Assets (unaudited)
Current assets
Cash and cash equivalents $286,123 $6,076,479
Accounts receivable, net of allowance
for doubtful accounts of $25,483 and
$25,483, respectively 376,036 303,848
Other receivable 57,497 --
Inventory, net 1,759,651 1,043,540
Prepaid expenses 106,490 186,086
Total current assets 2,585,797 7,609,953
Non-current assets
Property, plant and equipment, net 6,020,536 6,112,215
Goodwill, net 1,634,079 1,634,079
Other assets 70,610 70,000
Other long-term receivable -- 170,000
Total non-current assets 7,725,225 7,986,294
Total assets $10,311,022 $15,596,247
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable - trade $273,904 $1,022,268
Accrued liabilities 602,102 578,134
Accrued dividends payable -- 172,603
Related party payable -- 365,394
Current portion of long-term debt -- 750,250
Note payable - stockholder -- 908,900
Total current liabilities 877,006 3,797,549
Long-term debt 2,084,750 3,503,454
Deferred tax liability 273,150 530,662
Total long-term liabilities 2,357,900 4,034,116
Total liabilities 3,234,906 7,831,665
Commitments and contingencies
Stockholders' equity
Preferred stock (liquidation preference
$10,250,000), 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 (1,053,210) (364,744)
Total stockholders' equity 7,076,116 7,764,582
Total liabilities and stockholders' equity $10,311,022 $15,596,247
Stokes and Ellis are registered trademarks of Centennial Specialty Foods
Corporation.
DATASOURCE: Centennial Specialty Foods Corporation
CONTACT: Doug Evans of Centennial Specialty Foods Corporation,
+1-303-292-4018
Web site: http://www.centennialspecialtyfoods.com/