QualityStocks.net News – Nascent Foodservice Inc. (NCTW.OB) Announces Positive First Quarter 2008 Results – 5/23/08

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Nascent Wine Co. Inc. (OTCBB: NCTW) (dba Nascent Foodservice) is one of our highlighted companies this month. The company 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.

In our client’s news today,

Nascent Wine Company Inc. (NCTW.OB), dba Nascent Foodservice Company Inc., announced its financial results for the period ending March 31, 2008. Sandro Piancone, CEO of Nascent, said, “We made solid progress during the first quarter, as our financial results met plan, we further expanded our platform of leading brands and began to drive leverage in our infrastructure.”

Net Sales for the first quarter 2008 were reported at $16 million. The numbers reflect a 300 percent increase compared to the $5.1 million reported for the first quarter 2007. The company stated the increase was due mainly to the three acquisitions completed in 2007.

Gross profit improved from $1.9 million in the first quarter of 2007 to $2.8 million for the first quarter 2008. The increase of 191 percent is again due primarily to the three acquisitions. The ratio of gross profit to revenue has remained steady at 19 percent in the first quarter 2007 and 18 percent in the first quarter 2008.

Operating expenses were reported at $3.6 million for the first quarter of 2008, or 23 percent of revenue. Contributing factors to the increase in operating expenses are the improved infrastructure Nascent put in place after the three acquisitions were completed in 2007. The company added 17 distribution centers, leased 48 new trucks and distribution equipment, and increased its finance department. For the same period in 2007, the company’s operating expenses were $1.6 million, which was 30 percent of revenue. Even with the additional infrastructure costs, the company was able to decrease expenses by 7 percent compared to the same period last year.

The increased sales and decreased operating expenses contributed to the improvement in the company’s net loss which was reported at $0.3 million, or $0.01 per diluted share. For first quarter 2007, the company reported a net loss of $1.1 million, or $0.02 per diluted shared.

“During the first quarter we entered into two new distribution agreements including Fusion Energy Drink which is under exclusivity, and Rockstar Energy Drink. Our continued focus on securing distribution rights to desirable and recognizable products should enable us to secure increased gross margin dollars and command higher operating margins going forward. In addition, we focused our efforts on increasing efficiencies within our operations by consolidating warehouses, making delivery routes more profitable by eliminating redundant routes and adding more products to our trucks and leveraging our corporate infrastructure. With the majority of our infrastructure investments completed, we expect to further leverage our operating expenses over an expanded revenue base throughout 2008,” commented Piancone.

The company has about $7 million of trade receivable assets and believes that it has sufficient current assets to meet its cash needs for the remainder of the fiscal year. In the event that additional funds are needed, the company is speaking with several lending institutions regarding a working capital credit line and additional financing.

Piancone concluded, “Looking ahead to the remainder of 2008, we will continue to leverage our position as the first nationwide distributor in Mexico to attract additional leading brand names and increase our market share within the highly fragmented Mexican foodservice marketplace.”

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Forward-Looking Statement:

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.