NCTW Nascent Wine Co Inc (CE)

Nascent Wine Co. Inc. (OTCBB: NCTW) (dba Nascent Foodservice), announced today fourth quarter and full year ended December 31, 2007 results and 2008 growth opportunities. Fourth Quarter 2007 Financial Highlights: Net sales increased 5-times to $17 million compared to the same period in 2006. Gross profit improved by $2.0 million to 14.6%. Full Year 2007 Business Highlights: Expanded branded product lines over 50% to approximately 2,000 brand name items at December 31, 2007 from 1,300 brand name items at December 31, 2006. Increased private label / proprietary product line to more than 200 private label items. Added more than 6,800 new retail accounts in 2007 including Wal-Mart, Sam�s Club, Costco, HEB, Soriana, Gigante, Smart and Final. Increased distribution centers to 21 from 4, improving efficiencies and proximity to customers. Expanded transportation fleet approximately 800% to 48 trucks from 6. Added 4,700 employees. Increased long-term exclusive distribution contracts by 100% from three to six. Completed three major acquisitions. �We entered 2007 with a goal of expanding our platform to market and distribute food and food related products throughout Mexico and based on our record fourth quarter and full year 2007 revenue growth and infrastructure expansion, we achieved this goal,� stated Sandro Piancone, Chief Executive Officer of Nascent Foodservice. �During the full year of 2007, we expanded the portfolio of products we distribute (branded and private label/propriety items) by over 50%, increased our distribution centers from 4 to 21 and expanded our service footprint to cover all of Mexico�s major metropolitan areas, making Nascent the first and only nationwide distributor in Mexico.� �We are the first nationwide food distributor in Mexico, working with all the leading accounts like Wal-Mart, Costco, Soriana, Comercial Mexicana, AM/PM and 7-ELEVEN. Because of our position and expertise in the Mexican market we are able to attract leading brands such as Miller Beer, Nestle, Haagen-Dazs and General Mills that have entrusted us to distribute and market their products.� Mr. Piancone continued, �In 2008, we expect to improve gross and operating margins throughout the year by leveraging our infrastructure, continued organic growth in branded and private label products and potential strategic acquisitions. The foodservice industry in Mexico is highly fragmented with over 25,000 regional food distributors addressing the $46 billion foodservice market. Because of our first mover advantage, management team and distribution and marketing platform we have created, we are in a very strong position to exploit this tremendous growth opportunity for many years to come.� Fourth Quarter 2007 Versus Fourth Quarter 2006 Sales Net sales in the fourth quarter of 2007 were $17.0 million compared with net sales of $3.5 million in the fourth quarter of 2006. The fourth quarter sales increase was driven primarily by three major acquisitions and overall organic growth. Gross Profit For the fourth quarter of 2007, gross profit increased $2 million to 14.6% compared with 14.0% in the prior year. The increase during the period was due increased sales and higher sales of private label products. Selling, General and Administrative Expenses Selling, general and administrative expenses were $2.8 million in the fourth quarter of 2007, or 16.7% of revenue, compared with $1.3 million, or 36.4% of revenue, in the prior year. The company expects continued improvement in selling, general and administrative expenses as a percent of sales in 2008 due to additional leverage in operating investments in 2007. Operating loss was $2.0 million in the fourth quarter of 2007 compared to $0.9 million in the fourth quarter of 2006. Net Loss was $3.0 million, or $0.58 per diluted share, in the fourth quarter of 2007 compared with $0.8 million, or $1.42 million per diluted share, in the prior year period. Full Year 2007 Versus Full Year 2006 Sales Net sales were $42.4 million for the full year of 2007, a 9-times increase compared with net sales of $4.7 million for the full year of 2006. This increase was primarily due to the following acquisitions: 2007 Acquisition Highlights: Acquired Pasani, S.A.de C.V., a distributor of European and Asian food products in Mexico, in May 2007. Through the acquisition of Pasani, Nascent Foodservice added more than 200 private label and trademarked items under the Bonet and Mitsuki brand names. Also received exclusive distribution agreements for Reese Brand and Lee Kum Kee. Additionally, the acquisition grew Nascent�s distribution facilities from 7 distribution facilities to 11 distribution facilities, allowing Nascent to service all of Mexico�s major metropolitan areas. Acquired Grupo Sur Promociones de Mexico, S.A. de C. V. (Grupo Sur), a leading field marketing and below the line marketing (BTL) organization in Mexico, in July 2007. Through the acquisition of Grupo Sur, Nascent Foodservice added 4,500 employees that service every single supermarket and 240,000 retail convenience stores to its customer base. Acquired Comercial Targa S.A de C.V (Targa), a leading imported cheese distributor in Baja California, Mexico, in October 2007. With the acquisition of Targa, Nascent Foodservice added 30 new product lines under the brand names Nery�s and Nery�s Choice to its product portfolio. Gross Profit Gross profit increased 10-times to $6.8 million for the full year of 2007 compared with $0.7 million for the full year of 2006. Gross margin was 16.1% in 2007 compared to 14.9% in 2006. Selling, General and Administrative Expenses Selling, general and administrative expenses were $10.7 million, or 25.2% of net sales, for the full year of 2007 compared with $2.3 million, or 50.1% of net sales, in 2006. Selling, general and administrative expenses as a percent of sales decreased by more that half as the Company leveraged its operating investments over a larger revenue base. EBITDA and Net (Loss) For the full year of 2007, EBITDA was a loss of $3.1 million compared with a loss of $0.5 million for the full year of 2006. Operating loss was $5.5 million for the full year of 2007 compared with a loss of $1.8 million for the full year of 2006. Net loss for the full year of 2007 was $9.4 million, or $0.14 per diluted share compared with net loss of $2.0 million, or $0.06 per diluted share, in 2006. Outlook: Mr. Piancone concluded, �Looking to 2008, we are very excited about our long term growth prospects and believe we are well positioned to build upon our position as the leading distributor of imported products in Mexico. We believe our gross and operating margins will continue to improve from our fourth quarter results as we leverage the platform we have created.� The Company expects to provide full year 2008 guidance in its first quarter 2008 earnings release during the latter half of May, 2008. Conference Call Nascent Foodservice will host a conference call to discuss its financial results on Monday, April 21, 2008 at 8am Pacific Time. The conference call may include forward-looking statements. To participate in the conference call, investors should dial 800-762-8779 ten minutes prior to the call. A telephone replay of the call will be available through 11:59 p.m. Eastern Time on May 12, 2008 by calling 800-406-7325 (passcode: 3869739). About Nascent Wine Company Inc. Nascent Wine Company Inc. dba Nascent Foodservice is the only nationwide distributor of imported products in Mexico, marketing and distributing over 2,000 national and proprietary brand food and non-food products. Nascent Foodservice also has the exclusive right to distribute Miller Beer in Baja California, Mexico. In addition, Nascent sells select products from Nestle, Haagen-Dazs, General Mills, Ferrarelle Water, Cora Italian Food Products, Bonafont Water, Avasoft Ice Cream, Mitsuki Asian products, Bonet European products, Kabbalah Energy Drink, and Jolly Rancher Soda, Spark�s energy drink, Nery�s cheese products, among others. Nascent is focused on acquiring the most profitable and well positioned distributors in Mexico with the best food and beverage portfolios in the country. Nascent is currently servicing over 240,000 sales points including supermarkets, convenience stores and foodservice accounts like Wal-Mart, Costco, Soriana, Comercial Mexicana, AM/PM, 7-ELEVEN, OXXO and many more. Nascent Foodservice trades on the OTC Bulletin Board as Nascent Wine Company, Inc., ticker symbol NCTW.OB. For more information about Nascent Foodservice, go to www.nascentfoodservice.com. Forward Looking Statements Statements made in this press release that express the Company's or management's intentions, plans, beliefs, expectations or predictions of future events, are forward-looking statements. Those statements are based on many assumptions and are subject to many known and unknown risks, uncertainties and other factors that could cause the Company's actual activities, results or performance to differ materially from those anticipated or projected in such forward-looking statements. In light of significant risks and uncertainties inherent in forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by the Company that it will achieve such forward-looking statements. For further details and a discussion of these and other risks and uncertainties, please see our most recent reports on Form 10-KSB and Form 10-QSB, as filed with the Securities and Exchange Commission, as they may be amended from time to time. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Nascent Wine Company, Inc., and Subsidiaries Consolidated Balance Sheet � � � DECEMBER 31, DECEMBER 31, ASSETS � 2007 � 2006 � Current assets: Cash $ 1,165,814 $ 476,376 Accounts receivable, net of allowance for uncollectibles ($638,363 and $50,000 at December 31, 2007 and December 31, 2006, respectively) � 7,763,114 1,327,153 Inventory 5,504,209 1,137,459 Investment, current 238,318 - Prepaid � 1,694,084 � 177,976 Total current assets 16,365,539 3,118,964 � Property and equipment, net 2,119,044 593,691 Amortizable intangible assets, net 17,251,375 8,110,000 Goodwill � 14,166,968 � 11,936,217 � TOTAL ASSETS $ 49,902,926 $ 23,758,872 � � LIABILITIES AND STOCKHOLDERS' EQUITY � Current liabilities: Accounts payable and accrued expenses $ 6,967,021 $ 2,858,645 Capital leases 737,222 - Acquisition loans 7,700,000 - Other loans � 1,490,592 � 4,069,220 Total current liabilities 16,894,835 6,927,865 � Long term debt � - � 186,672 � TOTAL LIABILITIES 16,894,835 7,114,537 � Total Stockholders' equity � 33,008,091 � 16,644,335 � TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 49,902,926 $ 23,758,872 Nascent Wine Company, Inc., and Subsidiaries Consolidated Statement of Operations � � � � � � For the Year For the Year For the Three For the Three Ended Ended Months Ended Months Ended December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006 � Revenues $ 42,397,534 $ 4,679,868 $ 16,981,795 $ 3,476,042 Cost of revenue � 35,574,092 � � 3,978,597 � � 14,500,069 � � 2,988,245 � � Total gross profit 6,823,442 701,271 2,481,726 487,797 � Operating expenses � 12,317,474 � � 2,455,561 � � 4,468,891 � � 1,379,408 � � Loss from operations (5,494,032 ) (1,754,290 ) (1,987,165 ) (891,611 ) � Other income and (expense) � (3,912,073 ) � (282,578 ) � (1,013,835 ) � 75,146 � � Net loss $ (9,406,105 ) $ (2,036,868 ) $ (3,001,000 ) $ (816,465 ) � Net loss per share - Basic and fully diluted $ (0.14 ) $ (0.06 ) $ (0.58 ) $ (1.42 ) � Weighted average number of common shares outstanding basic and fully diluted 68,466,011 31,538,493 5,199,562 576,955