Centennial Specialty Foods Reports First Quarter Results DENVER,
May 20 /PRNewswire-FirstCall/ -- Centennial Specialty Foods
Corporation (Nasdaq: CHLE; Boston Stock Exchange: CSJ) reported a
net loss of $118,821, or $0.02 per share, for its three months
ended March 31, 2005 compared to a net loss of $94,376, or $0.02
per share for the same period in the prior year. Loss per common
share, after giving effect to the undeclared preferred stock
dividends in arrears, was $0.07 for the three months ended March
31, 2005 compared to $0.07 for the same period in the prior year.
Gross sales of the Company's products for the three months ended
March 31, 2005 decreased $61,465 or 4.7% over the same period last
year, due to a decrease of $90,678 or 22.6% in gross sales of the
Ellis line of products which was offset by an increase of $29,213
or 3.3% in gross sales of the premium Stokes line of green chile
sauces. Centennial continues to struggle in the California
expansion market. Its products have been discontinued by three
retailers in the California market, representing approximately 550
stores. Sales to its remaining six customers, representing
approximately 1,200 stores, continue to be slow, but the Company's
products have not been discontinued at this point. "We are very
disappointed with the difficulty of introducing our products to
consumers in California," stated Robert Beckwith, Jr., Centennial's
Chief Marketing Officer. "We received favorable responses to our
products, but have not been able to reach enough consumers to
sustain retail sales at a level required by some retail customers."
During the first quarter of 2005, the Company incurred certain
additional costs associated with the California expansion. Such
costs included $86,000 in slotting fees charged by a retailer in
the California market. The Company is pursuing repayment of these
slotting fees which were deducted by the retailer from the
retailer's normal payment to the Company, but it cannot be certain
that repayment efforts will be successful. In addition, an increase
in reserves related to the potential return of discontinued
products by California retailers was also recorded, further
reducing the first quarter results. Earlier this year, Centennial
announced that its board had authorized management to explore a
wide range of strategic alternatives to enhance shareholder value.
The Company is continuing to evaluate these strategic alternatives
and has had a number of discussions with various parties on
potential transactions; however, no definitive plans or agreements
have been reached. 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 Annual Report on
Form 10-KSB for the year ended December 31, 2004 and in other
documents that are on file with the Securities and Exchange
Commission. The Company makes no assurance that it will update the
matters discussed in this release. For further information please
contact Jeffrey Nieder, CEO or Doug Evans, CFO at (303) 292-4018.
Stokes and Ellis are registered trademarks of Centennial Specialty
Foods Corporation. CENTENNIAL SPECIALTY FOODS CORPORATION AND
SUBSIDIARY Consolidated Unaudited Statements of Operations For the
Three Months Ended March 31, 2005 2004 Net sales $948,955
$1,127,483 Cost of goods sold 714,133 746,175 Gross profit 234,822
381,308 Selling, general and administrative expenses 535,097
577,688 Loss from operations (300,275) (196,380) Other income
(expense) Interest expense (46,916) (112,005) Rent income 158,581
158,581 Total other income 111,665 46,576 Loss before income taxes
(188,610) (149,804) Income tax benefit - deferred 69,789 55,428
Total income tax benefit 69,789 55,428 Net loss $(118,821)
$(94,376) Net loss before preferred stock dividends $(118,821)
$(94,376) Preferred stock dividends - paid -- (250,000) Preferred
stock dividends - arrears (250,000) -- Total preferred stock
dividends (250,000) (250,000) Net loss available to common
shareholders $(368,821) $(344,376) Basic and diluted net loss per
common share $(0.07) $(0.07) Basic and diluted weighted average
common shares outstanding 5,050,000 5,050,000 CENTENNIAL SPECIALTY
FOODS CORPORATION AND SUBSIDIARY Consolidated Balance Sheets March
31, December 31, 2005 2004 ASSETS (unaudited) Current assets Cash
and cash equivalents $157,411 $415,597 Accounts receivable, net of
allowance for doubtful accounts of $25,483 232,595 341,671 Income
taxes receivable 14,478 14,478 Inventory, net 1,903,418 1,894,927
Prepaid expenses 138,332 153,219 Total current assets 2,446,234
2,819,892 Non-current assets Property, plant and equipment, net
5,862,646 5,914,186 Goodwill, net 1,634,079 1,634,079 Other assets
49,427 56,488 Total non-current assets 7,546,152 7,604,753 Total
assets $9,992,386 $10,424,645 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable - trade $226,143 $394,830
Accrued liabilities 683,178 800,473 Total current liabilities
909,321 1,195,303 Long-term debt 2,478,720 2,436,387 Deferred tax
liability 7,226 77,015 Total long-term liabilities 2,485,946
2,513,402 Total liabilities 3,395,267 3,708,705 Commitments and
contingencies Stockholders' equity Preferred stock (liquidation
preference $11,000,000 and $10,750,000, respectively), 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, 20,000,000 shares authorized, 5,050,000 shares
issued and outstanding 505 505 Additional paid-in capital 5,794,036
5,794,036 Accumulated deficit (1,532,207) (1,413,386) Total
stockholders' equity 6,597,119 6,715,940 Total liabilities and
stockholders' equity $9,992,386 $10,424,645 DATASOURCE: Centennial
Specialty Foods Corporation CONTACT: Jeffrey Nieder, CEO, or Doug
Evans, CFO, both of Centennial Specialty Foods Corporation,
+1-303-292-4018 Web site: http://www.centennialspecialtyfoods.com/
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