High Liner Foods reports first quarter financial results
- Company reports higher earnings, strong cash flow for the quarter; Board of Directors approves 13.3% increase to quarterly dividend, reports www.megafishnet.com with reference to High Liner Foods.
High Liner Foods Incorporated (TSX: HLF; HLF.A), a leading North American value-added frozen seafood company, reported financial results for the thirteen week period ended April 3, 2010. All amounts are reported in Canadian dollars.
Financial and operational highlights for the quarter include:
- Adjusted EBITDA increased 7.4% to $14.1 million on lower reported
sales;
- Net income improved to $7.2 million, or $0.39 per share, compared to
$6.7 million, or $0.36 per share;
- Sales volume (measured in pounds) increased 3.0%, with increases in
both Canadian and U.S. operations.
"We are pleased with the improved profitability achieved for the quarter," said Henry Demone President and Chief Executive Officer. "While our reported sales in Canadian dollars were down, primarily due to currency fluctuations, our sales volume was up 3.0% for the quarter. Importantly, our U.S. food service business achieved a 7.1% increase in sales volume, representing the first quarter of growth since the recession began. We are hopeful that the growth in this channel is signaling that the worst of the recession is behind us."
Financial Results
Approximately half of the Company's operations and assets, and more than 50% of its liabilities, are located in the United States. As such, foreign currency fluctuations affect the reported values of individual lines on the Company's balance sheet and income statement.
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(Amounts in thousands of Canadian $ except per share amounts)
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Thirteen weeks Thirteen weeks
ended April 3, 2010 ended April 4, 2009
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Sales 165,113 183,276
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Adjusted EBITDA 14,075 13,105
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Net income 7,234 6,696
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Adjusted net income(1) 7,234 7,299
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Earnings per Common Share:
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Net income $0.39 $0.36
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Adjusted net income(1) $0.39 $0.40
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(1) Excluding one-time integration costs and non-operating items.
Sales for the quarter decreased to $165.1 million from $183.3 million a year ago, with the stronger Canadian dollar decreasing the value of reported U.S. sales by approximately $18.1 million. Sales in domestic currency were $161.5 million compared to $161.6 million for the first quarter of 2009. Higher sales volume (measured in pounds) for the quarter was essentially offset by lower selling prices and the cost of more promotional activities, which are netted against sales. Sales volume for the quarter increased 3.0% to 51.0 million pounds compared to 49.5 million pounds the previous year.
Adjusted EBITDA for the quarter was $14.1 million compared to $13.1 million for the first quarter of 2009. In domestic currency, Adjusted EBITDA increased 14.0% to $13.7 million from $12.1 million a year ago, benefiting from higher volume as well as lower seafood and other input costs.
Net income for the quarter improved to $7.2 million, or $0.39 per share, compared to $6.7 million, or $0.36 per share, for the same quarter last year, despite higher income taxes. The Company's U.S. subsidiary was taxable for accounting purposes in the first quarter of 2010, but was not in the first quarter of 2009.
Please visit the Investor Information section of the High Liner Foods website at http://www.highlinerfoods.com/inside.asp?cmPageID=102 to view the Company's Fiscal First Quarter Balance Sheets and Statements of Income, Statements of Comprehensive Income, Statements of Retained Earnings and Statements of Cash Flows.
Dividends
The Board of Directors of the Company resolved to pay a quarterly dividend in the amount of $0.085 per Common and Non-Voting Equity Share payable on June 15, 2010 to shareholders of record on June 1, 2010. This represents a 13.3% increase compared to the $0.075 per share quarterly dividend paid on March 15, 2010 to Common and Non-Voting Equity shareholders of record on March 5, 2010.
Outlook
"We're off to a good start in 2010 and our outlook for the rest of the year remains positive, despite the continued uncertainty in the economy," said Mr. Demone. "The lower raw material costs we have been experiencing benefit all our operations, and the stronger Canadian dollar benefits our Canadian business. Price decreases on commodity products along with greater promotional activity on value-added products should drive volume growth going forward. However, seafood costs in U.S. dollar terms have bottomed and we are beginning to see increases in isolated areas."
Conference Call
The Company will host a conference call on Wednesday, May 12, 2010 at 10:30 a.m. ET (11:30 a.m. AT) to discuss its first quarter financial results. To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191. Please connect approximately ten minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay by telephone until Tuesday, May 18, 2009 at midnight. To access the archived conference call, dial 1-800-642-1687 and enter the reservation number 71275920.
About High Liner Foods Incorporated
High Liner Foods Incorporated is a leading North American processor and marketer of prepared, value-added frozen seafood. High Liner's branded products are sold throughout the United States, Canada and Mexico under the High Liner(R), Fisher Boy(R), Mirabel(R) and Sea Cuisine(TM) labels, and are available in most grocery and club stores. The Company also sells its High Liner(R), FPI(R) and Mirabel(R) food service products to restaurants and institutions, and is a major supplier of private label seafood products to North American food retailers and food service distributors. High Liner Foods is a publicly traded Canadian company, trading under the symbols HLF and HLF.A on the Toronto Stock Exchange.
This document contains forward-looking statement. Forward-looking statements can generally be identified by the use of the conditional tense, the words "may", "should", "would", "believe", "plan", "expect", "intend", "anticipate", "estimate", "foresee", "objective" or "continue" or the negative of these terms or variations of them or words and expressions of similar nature., Specific forward-looking statements in this document include, but are not limited to expectations with respect to seafood and other costs, a strong Canadian dollar, planned volume growth, anticipated financial performance market forces and the state of the economy. These statements are based on a number of factors and assumptions including, but not limited to: availability, demand and prices of raw materials, energy and supplies; the condition of the Canadian and United States economies; product pricing; foreign exchange rates, especially the rate of exchange of the Canadian dollar to the U.S. dollar; our ability to attract and retain customers; our operating costs; interest rates; and continued access to capital. The statements are not a guarantee of future performance. By their nature, forward-looking statements involve uncertainties and risks that the forecasts and targets will not be achieved. Readers are cautioned not to place undue reliance on forward-looking statements, as actual results may differ materially from those expressed in such forward-looking statements. We include in publicly available documents filed from time to time with securities commissions and The Toronto Stock Exchange, a discussion of the risk factors that can cause anticipated outcomes to differ from actual outcomes. Except as required under applicable securities legislation, we do not undertake to update forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, whether as a result of new information, future events or otherwise.