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,
+1-720-488-5409, for Centennial Specialty Foods Corporation; or
Jeffrey Nieder of Centennial Specialty Foods Corporation,
+1-303-414-4613 Web site: http://www.centennialspecialtyfoods.com/
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