High Liner Foods

- First full year of Icelandic USA very accretive to sales, Adjusted EBITDA and Adjusted Net Income -

LUNENBURG, NS, Feb. 20, 2013 /CNW/ - High Liner Foods Incorporated (TSX: HLF), the leading North American value-added frozen seafood company, today reported financial results for the thirteen-week period and fiscal year 2012 ended December 29, 2012.  All amounts are reported in U.S. dollars, as will future earnings releases, as the Company has now commenced reporting results in U.S. dollars.

Financial and operational highlights for the fourth quarter of 2012 include (all comparisons are relative to the fourth quarter of 2011, unless otherwise noted):

• Completed the integration of Icelandic USA into High Liner's operations in November 2012;
• Sales increased by 26.6% to $218.3 million from $172.5 million;
• Net deferred financing costs of $8.7 million ($6.3 million after tax) were expensed in 2012 earnings as financing costs, relating to the favourable amendments on the Company's Term Loan B;
• The Company reported a net loss of $2.7 million in 2012 (diluted loss per share of $0.18), compared with net loss of $2.9 million (diluted loss per share of $0.19) in the fourth quarter of 2011;
• Adjusted EBITDA¹ increased by 54.2% to $22.1 million from $14.3 million;
• Adjusted Net Income² of $10.6 million (Adjusted diluted earnings per share ("EPS")³ of $0.68), compared with $6.7 million (Adjusted diluted EPS of $0.44); and,
• Synergies achieved during the quarter on the integration of Icelandic USA amounted to $3.7 million.

Financial and operational highlights for the 2012 fiscal year include (all comparisons are relative to fiscal year 2011, unless otherwise noted):

• Sales increased by 39.5% to $942.6 million from $675.5 million; the Icelandic USA acquisition added $275.8 million to sales versus $8.5 million in 2011;
• Reported net income of $2.2 million (diluted EPS of $0.14), compared with $18.7 million (diluted EPS of $1.22), in 2011, with the decrease attributable to costs related to the Icelandic USA acquisition and integration, higher stock compensation expense, higher financing costs, and the expensing of deferred financing costs in 2012 as mentioned above;
• Adjusted EBITDA¹ increased by 62.5% to $91.7 million from $56.5 million;
• Adjusted Net Income² of $38.1 million (Adjusted diluted EPS³ of $2.46), compared with $28.9 million (Adjusted diluted EPS³ of $1.88);
• Sales volume increased by 37.5% to 276.2 million pounds; Icelandic USA contributed 85.0 million pounds to total sales volume in 2012; and,
• Synergies achieved during the year on the integration of Icelandic USA totaled $9.4 million, consistent with the high end of our original annual guidance.

"We are very pleased to report another strong year, marked by the successful integration of Icelandic USA into High Liner Foods' operations," said Henry Demone, president and CEO.  "With the first full year of Icelandic USA included in our results, we recorded one of the highest levels of sales, Adjusted EBITDA, and Adjusted Net Income in the company's history.  Our Canadian operations delivered a 4.4% increase in sales volume and 4.6% increase in sales, driven by the retail business.  On a pro forma basis, that assumes Icelandic USA had been part of our operations for the full year in 2011, our total U.S. operations recorded a sales decline of 0.9%, with weakness coming from our non-Icelandic USA businesses during the second half of the year, resulting from reduced selling prices on commodity products, competitive activity, and soft restaurant sales. Despite this, we recorded a 12.9% growth in Adjusted EBITDA at our U.S. operations, which complements our 8.7% Adjusted EBITDA growth in Canada on a pro forma basis.  Our free cash flow increased to $66.4 million which allowed us to reduce leverage to 3.4x Adjusted EBITDA.  With the early completion of Icelandic USA's integration, we recorded $9.4 million in synergies during the year, and are on track to achieve annual projected synergies of at least $18 million beginning in 2013, the high end of our original estimate.  We are pleased to be able to unlock the value from this combination of businesses, and the Board of Directors has announced a 36% increase in dividends to reflect its continued confidence in High Liner's operations."

Financial Results

The fourth quarter and fiscal year 2012 is the first period in which High Liner reports its financial results in U.S. dollars.  With approximately two-thirds of the Company's operations and a substantial portion of the assets and liabilities denominated in U.S. dollars, reporting in U.S. dollars is expected to result in less volatility in sales and earnings from Canadian/U.S. dollar exchange rate fluctuations.

(In thousands except per share amounts, unless otherwise noted)
	Thirteen weeks ended Dec. 29, 2012	Thirteen weeks ended Dec. 31, 2011	Fifty-two weeks ended Dec. 29, 2012	Fifty-two weeks ended  Dec. 31, 2011
Sales in million pounds	63.4	51.4	276.2	200.8
Sales in domestic currency	$217,569	$174,309	$942,348	$672,293
Foreign exchange impact	$711	$(1,834)	$283	$3,246
Sales in United States dollars	$218,280	$172,475	$942,631	$675,539
Adjusted EBITDA	$22,072	$14,308	$91,726	$56,458
Net (loss) income	$(2,683)	$(2,941)	$2,203	$18,660
Adjusted net income	$10,636	$6,738	$38,071	$28,854
EPS (Diluted)	$(0.18)	$(0.19)	$0.14	$1.22
Adjusted EPS (Diluted)4	$0.68	$0.44	$2.46	$1.88
Average Shares Outstanding (Diluted)	15,562	15,290	15,460	15,341

Sales for the fourth quarter increased by 26.6% to $218.3 million from $172.5 million for the same period a year ago.  Sales in domestic currency, which excludes the impact of currency translation, were $217.6 million compared with $174.3 million for fourth quarter of 2011.  The strong growth in sales for the period resulted from an increase in High Liner's Canadian business, as well as the addition of the Icelandic USA operations, which accounted for $59.5 million of the quarter's sales.  Total sales volume increased by 23.3% to 63.4 million pounds, with Icelandic USA accounting for 29.8 percentage points of the increase offset by 12 percentage points in volume decrease for the pre-Icelandic USA business.   For comparison purposes, assuming that the acquired Icelandic USA operations had been part of High Liner's operations for the full comparable period in 2011, total sales declined by 1.8% while total sales pounds declined by 5.6%.  The decline during the fourth quarter was exclusively in the U.S. and was due to reduced selling prices on commodity products, competitive activity, and soft restaurant sales.

Adjusted EBITDA for the fourth quarter increased by 54.2% to $22.1 million, or 10.1% of sales, from $14.3 million, or 8.3% of sales, for the same period in 2011.  Adjusted EBITDA is reconciled to Net Income in the table below. The increase in Adjusted EBITDA resulted from higher sales volumes with the addition of Icelandic USA and synergies.  Icelandic USA contributed $1.0 million to Adjusted EBITDA during the fourth quarter of 2011. For comparison purposes, assuming that Icelandic USA had been part of High Liner's operations for the full fourth quarter of 2011, Adjusted EBITDA increased by 11.6% year over year. Synergies achieved during the quarter were $3.7 million and for the year were $9.4 million.

Net loss for the quarter was $2.7 million (diluted loss per share of $0.18), compared with net loss of $2.9 million (diluted loss per share of $0.19) for the fourth quarter of 2011.  As in the first three quarters, net income was negatively impacted by after-tax one-time integration costs related to the Icelandic USA acquisition expensed during the quarter.  Additionally, the substantial increase in the value of High Liner's stock increased stock compensation expense in the quarter to $5.1 million.  The accelerated expensing of net financing costs on amendments to the term loan, to reduce future interest costs, also negatively affected results.  Excluding the one-time integration costs, the non-cash accelerated expensing of net deferred financing costs, and stock-based compensation expense, Adjusted Net Income increased by 57.8% to $10.6 million (Adjusted diluted EPS of $0.68) from $6.7 million (Adjusted diluted EPS of $0.44) for the same quarter in 2011.

The following table reconciles our reported earnings with our Adjusted EBITDA and Adjusted Net Income for the year and for the fourth quarter.

		Thirteen weeks ended				Fifty-two weeks ended
		December 29, 2012		December 31, 2011		December 29, 2012		December 31, 2011
Amounts in US$000s
Net income		(2,683)		(2,941)		2,203		18,660
Add back:
	Depreciation	3,916		2,095		13,830		7,981
	Amortization	201		707		5,551		1,840
	Financing costs	14,349		2,169		36,624		6,019
	Income taxes	(1,681)		865		(1,667)		9,470
Standardized EBITDA		14,102		2,895		56,541		43,970
Add back (deduct):
	Business acqusition, integration and other expenses	3,410		10,036		10,741		11,049
	Impairment of property, plant and equipment	(495)		-		13,230		-
	Increase in cost of sales	-		235		1,149		510
	Loss (gain) on disposal of assets	(88)		147		(190)		192
Adjusted EBITDA, including stock option expense		16,929		13,313		81,471		55,721
Non-cash stock option expense		5,143		995		10,255		737
Adjusted EBITDA		22,072		14,308		91,726		56,458

 

		2012				2011
		Diluted Earnings Per Share Based on:				Diluted Earnings Per Share Based on:
		$000		Average Shares Outstanding		$000		Average Shares Outstanding
Net Income		$	2,203		0.14	$	18,660		1.22
Add back
	After-tax business acquisition, integration, and other costs		6,895		0.45		8,397		0.55
	Impairment of property, plant and equipment		8,654		0.56		-		-
	Additional depreciation on property that is to be disposed as part of the acquisition		1,127		0.07		-		-
	Increase in cost of sales due purchase price allocation to inventory		761		0.05		312		0.02
	Revaluation of embedded derivative on debt		1,899		0.12		-		-
	Accelerated amortization of deferred financing charges		6,380		0.41
	Interest rate swap on embedded derivative		529		0.03		-		-
	Intercompany dividend withholdng tax		(402)		(0.03)		782		0.05
		$	28,046	$	1.81	$	28,151	$	1.84
	Stock compensation expense	$	10,025	$	0.65	$	703	$	0.05
Adjusted Net Income		$	38,071	$	2.46	$	28,854	$	1.88
Average shares for the period					15,460				15,341
		Q4 2012				Q4 2011
		Diluted Loss Per Share Based on:				Diluted Loss Per Share Based on:
		$000		Average Shares Outstanding		$000		Average Shares Outstanding
Net Loss		$	(2,683)	$	(0.18)	$	(2,941)	$	(0.19)
Add back
	Business acquisition, integration, and other costs		2,215		0.14		7,775		0.51
	Impairment of property, plant and equipment		(355)		(0.02)		-		-
	Additional depreciation on property that is to be disposed as part of the acquisition		376		0.02		-		-
	Increase in cost of sales				-		144		0.01
	Embedded derivative		(377)		(0.02)		-		-
	Interest rate swap on embedded derivative		8		0.00		-		-
	Accelerated amortization of deferred financing costs		6,380		0.41		-		-
	Intercompany dividend withholdng tax		-		-		781		0.05
			5,564		0.36		5,759		0.38
	Stock compensation expense		5,072		0.33		979		0.06
Adjusted Net Income			10,636		0.68		6,738		0.44
Average Shares for the period					15,562				15,290

 

Free cash flow⁵ was $66.4 million for the year ended December 29, 2012.  Cash flow generated from operations allowed the Company to reduce interest-bearing debt by $58.5 million.  This brought net interest-bearing debt from $370.3 million at December 31, 2011 to $311.8 million at December 29, 2012.

The table below shows the Company's net debt at the end of fiscal 2012 and 2011.  The debt is interest-bearing debt, and as a result, excludes deferred financing charges.

		December 29		December 31
Amounts in ($000s)		2012		2011
Current bank loans		$	60,530	$	119,936
Current portion of long-term debt and finance leases obligations			35,276		3,546
Long-term debt and finance leases obligations			216,069		250,055
Less: cash and cash equivalents			(65)		(3,205)
	Total funded debt		311,810		370,332

 

Dividends

Today, the Board of Directors of the Company approved a quarterly dividend of $0.15 per Common Share payable on March 15, 2013 to shareholders of record on March 1, 2013.  This represents an 36% increase from the $0.11-per-share quarterly dividend paid on December 15, 2012, reflecting the Board's continued confidence in the Company's operations, and the fourth dividend increase over the last 10 quarters.

Outlook

"During 2012, much of our attention was focused on integrating Icelandic USA into High Liner's operations," added Mr. Demone.  "Going forward, we can now focus on capitalizing on our combined strengths and operations to continue to maximize synergies and further solidify our leadership position in the North American frozen seafood market.  We have begun a TV and radio advertising campaign in the first quarter of 2013 for our Sea Cuisine product line, which should help increase sales volume but will also increase expenses during the quarter by an estimated $3.3 million followed by an additional $1.0 million in the second quarter of 2013.  In Canada, we expect to continue the momentum of positive overall growth in both sales and profitability, by developing new products and promotional campaigns. In general, we believe that seafood input costs have stabilized at late-2012 levels, lower than the average for 2012.

With the amendments to the Term Loan B announced on February 8, which included a reduction in applicable interest rates, we estimate a $6.2-million reduction in financing costs in 2013 and an approximately $33-million reduction over the remaining term of the loan.

Our primary strategic objective in 2012 was profitable growth.  We successfully achieved this as the Icelandic USA Acquisition was accretive to our 2012 results on an adjusted basis.  We look to identify future opportunities for profitable growth, while continuing to make our operations more efficient, to continue to create value for our shareholders," concluded Mr. Demone.

Supplemental Financial Information

For convenience, this news release includes the Company's Fiscal Fourth Quarter Statements of Financial Position, Income, Cash Flows and Segment Information which can also be found on the Company's website at www.highlinerfoods.com under the Miscellaneous Financial Information section found under Investor Information. This news release is not in any way a substitute for reading High Liner's financial statements, including notes to the financial statements, and Management's Discussion and Analysis.

The Company's audited consolidated financial statements for the year ended December 29, 2012 will be issued and filed on SEDAR on or before March 28, 2013. Management's Discussion and Analysis for the year ended December 29, 2012, including further discussion and analysis of fourth quarter events or items that affected results of operations, financial position, and cash flows, will also be issued and filed on or before March 28, 2013. Both documents will also be available in the Investor Information section of the Company's website at www.highlinerfoods.com.

Conference Call

The Company will host a conference call on Thursday, February 21, at 10:30 a.m. ET (11:30 a.m. AT) to discuss its fourth quarter and full-year 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 Thursday, February 28, 2013 at midnight.  To access the archived conference call, dial 1-855-859-2056 and enter the reservation number 92513091.

A live audio webcast of the conference call will be available at www.highlinerfoods.com.  Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.  The webcast will be archived at the above website for one year.

About High Liner Foods Incorporated

High Liner Foods Incorporated is the 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, Fisher Boy, Mirabel, Sea Cuisine and Royal Sea labels, and are available in most grocery and club stores.  The Company also sells its products under the High Liner, FPI, Mirabel, Viking, Icelandic Seafood, Samband of Iceland, Seastar, and Seaside brands to restaurants and institutions, and is the 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 symbol HLF on the Toronto Stock Exchange.

This document contains forward-looking statements. 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,  lower interest costs in 2013, lower average raw material costs in 2013 relative to the average in 2012, increased operating efficiencies, expected volume increases, growth in both sales and profitability by developing new products and promotional campaigns, anticipated financial performance, and our market position.  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; our ability to attract and retain customers; our level of bank loans and  our operating costs.  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.

The Company reports its financial results in accordance with IFRS. Included in this media release are certain non-IFRS financial measures as supplemental indicators of operating performance. These non-IFRS measures are Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Share.

The Company believes these non-IFRS financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company. These measures do not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to other financial measures determined in accordance with IFRS.

For further information about the Company, please visit our website at www.highlinerfoods.com or send an e-mail to investor@highlinerfoodinc.com.

_____________________________________
1	Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization, excluding impairment of property, plant and equipment, business acquisition and integration expenses, stock compensation expense, gains or losses on disposal of assets, and the increase in cost of goods sold relating to inventory acquired from business acquisitions, above its book value, as part of the fair value requirements of purchase price accounting.
2	Adjusted Net Income is net income excluding the after-tax impairment of property, plant and equipment, business acquisition and integration expenses, stock compensation expense, the increase in cost of goods sold relating to inventory acquired from business acquisitions over its book value, non-cash expense from revaluing an embedded derivative associated with the long-term debt LIBOR floor, marking to market an interest rate swap related to the embedded derivative, the write off of deferred financing charges on the re-pricing of the Term Loan and withholding tax related inter-company dividends.
3	Adjusted EPS is Adjusted Net Income, as defined, divided by the average diluted number of shares.
4	Adjusted EPS is Adjusted Net Income, as defined, divided by the average diluted number of shares.
5	The definition of Free cash flow follows the general principles and guidance for Standardized Cash Flow issued by the Canadian Institute of Chartered Accountants, which is cash flow from operating activities less purchase of property, plant and equipment (net of investment tax credits), as reported on the Consolidated Statement of Cash Flows.

HIGH LINER FOODS INCORPORATED
As at December 29, 2012
(with comparative figures as at December 31, 2011)
UNAUDITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in thousands of United States dollars)
			December 29, 2012		December 31, 2011
						(Restated)
ASSETS
	Current:
		Cash and cash equivalents	$	65	$	3,205
		Accounts receivable		75,191		83,590
		Income taxes receivable		5,145		3,498
		Other financial assets		533		1,323
		Inventories		222,313		256,324
		Prepaid expenses		2,991		2,969
		Assets classified as held for sale		4,819		-
	Total current assets			311,057		350,909
	Non-current:
		Property, plant and equipment		89,268		105,808
		Deferred income taxes		7,207		1,667
		Other receivables and miscellaneous assets		1,847		1,190
		Investment in equity accounted investee		96		271
		Employee future benefits		92		92
		Intangible assets		110,631		116,594
		Goodwill		111,085		110,816
	Total non-current assets			320,226		336,438
	Total assets			631,283		687,347
LIABILITIES AND SHAREHOLDERS' EQUITY
	Current:
		Bank loans		59,704		118,958
		Accounts payable and accrued liabilities		100,897		106,856
		Provisions		1,614		1,013
		Other current financial liabilities		550		780
		Income taxes payable		1,165		2,024
		Current portion of long-term debt		34,237		2,500
		Current portion of finance lease obligations		1,039		1,046
		Liabilities directly associated with the assets held for sale		1,604		-
	Total current liabilities			200,810		233,177
	Non-current:
		Long-term debt		213,359		227,246
		Other long-term financial liabilities		2,662		6,466
		Long-term finance lease obligations		2,181		2,555
		Deferred income taxes		45,126		47,991
		Employee future benefits		13,791		11,085
	Total non-current liabilities			277,119		295,343
	Total liabilities			477,929		528,520
	Shareholders' Equity:
		Common shares		75,169		73,931
		Contributed surplus		7,719		7,969
		Retained earnings		66,373		73,928
		Accumulated other comprehensive income		4,093		2,999
	Total Shareholders' equity			153,354		158,827
	Total liabilities and shareholders' equity			631,283		687,347

HIGH LINER FOODS INCORPORATED
For the thirteen and fifty-two weeks ended December 29, 2012
(with comparative figures for the thirteen and fifty-two weeks ended December 31, 2011)
UNAUDITED
CONSOLIDATED STATEMENT OF INCOME
(in thousands of United States dollars, except per share amounts)
			Thirteen weeks ended,		Thirteen weeks ended,			Fifty-two weeks ended,		Fifty-two weeks ended,
			December 29, 2012		December 31, 2011			December 29, 2012		December 31, 2011
					(Restated)					(Restated)
Revenues		$	218,280	$	172,475		$	942,631	$	675,539
Cost of sales			168,693		135,581			733,105		522,009
Gross profit			49,587		36,894			209,526		153,530
Distribution expenses			11,735		9,216			46,308		35,382
Selling, general and administrative expenses			24,806		17,462			101,891		72,898
Impairment of property, plant and equipment			(493)		-			13,230		-
Business acquisition, integration and other expenses			3,409		10,036			10,741		11,049
Results from operating activities			10,130		180			37,356		34,201
Finance costs			14,349		2,169			36,624		6,019
Share of loss of equity accounted investee, net of income tax			145		87			196		52
Income before income taxes			(4,364)		(2,076)			536		28,130
Income taxes
	Current		908		751			5,442		5,762
	Deferred		(2,589)		114			(7,109)		3,708
Total income tax (recovery) expense			(1,681)		865			(1,667)		9,470
Net income		$	(2,683)	$	(2,941)		$	2,203	$	18,660
PER SHARE EARNINGS
Earnings per common share
	Basic	$	(0.18)	$	(0.19)		$	0.15	$	1.24
	Diluted	$	(0.18)	$	(0.19)		$	0.14	$	1.22
Weighted average number of shares outstanding
Average shares outstanding for the period
	Basic		15,120,830		15,086,846			15,118,752		15,108,823
	Diluted		15,562,287		15,289,777			15,460,417		15,340,963

HIGH LINER FOODS INCORPORATED
For the thirteen and fifty-two weeks ended December 29, 2012
(with comparative figures for the thirteen and fifty-two weeks ended December 31, 2011)
UNAUDITED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of United States dollars)
				Thirteen weeks ended,	Thirteen weeks ended,		Fifty-two weeks ended,	Fifty-two weeks ended,
				December 29, 2012	December 31, 2011		December 29, 2012	December 31, 2011
					(Restated)			(Restated)
Cash provided by (used in) operations:
	Net income for the period			(2,683)	(2,941)		2,203	18,660
	Charges (credits) to income not involving cash from operations:
		Depreciation and amortization		4,117	2,802		19,381	9,821
		Share based payment expense		5,142	995		10,255	737
		Loss on asset disposals, and impairment		(57)	96		13,589	273
		Payments of employee future benefits in excess of expense		(434)	(307)		(1,728)	(118)
		Finance costs		14,349	2,169		36,624	6,019
		Income tax expense (recovery)		(1,681)	865		(1,667)	9,470
		Share of loss of equity accounted investee, net of income taxes		145	87		196	52
		Movement in provisions		(6,873)	(4,792)		904	412
		Unrealized foreign exchange (gain) loss		688	(263)		683	209
	Cash flow provided by operations before changes in non-cash working capital:			12,713	(1,289)		80,440	45,535
	Net change in non-cash working capital balances:
		Accounts receivable		1,283	15,146		5,502	5,126
		Inventories		(3,539)	(20,201)		35,258	(34,126)
		Prepaids		418	178		(423)	(356)
		Accounts payables and accrued liabilities		17,955	1,070		(15,118)	4,336
		Net change in non-cash working capital balances		16,117	(3,807)		25,219	(25,020)
	Interest paid			(5,364)	(1,577)		(19,145)	(5,241)
	Income taxes paid			(2,342)	(1,623)		(7,530)	(10,865)
	Net cash flows provided by (used in) operating activities			21,124	(8,296)		78,984	4,409
Cash provided by (used in) financing activities:
	Increase (decrease) in current working capital facilities			(14,205)	73,999		(59,673)	75,852
	Repayment of finance lease obligations			(252)	(237)		(1,009)	(903)
	Long-term debt deferred charges			-	(14,721)		-	(14,721)
	Proceeds from long-term debt			-	250,000		-	250,000
	Repayment of long-term debt			-	(45,384)		(1,875)	(48,627)
	Common share dividends paid			(1,687)	(1,450)		(6,379)	(5,912)
	Share Repurchase			-	-		(497)	(1,252)
	Stock options exercised			99	-		650	248
				(16,045)	262,207		(68,783)	254,685
Cash provided by (used in) investing activities:
	Purchase of property, plant and equipment, net of investment tax credits			(5,852)	(1,603)		(12,709)	(7,047)
	Net proceeds on disposal of assets			12	13		232	146
	Acquisition of business, net of cash acquired			-	(249,665)		-	(249,665)
	Change in other receivables and miscellaneous assets			13	(220)		(247)	(378)
				(5,827)	(251,475)		(12,724)	(256,944)
Foreign exchange increase on cash and cash equivalents				54	177		25	166
Change in cash during the period				(694)	2,613		(2,498)	2,316
Translation adjustment				1	276		63	288
Less: Cash directly associated with assets held for sale				(705)	-		(705)	-
Cash, beginning of period				1,463	316		3,205	601
Cash, end of period				65	3,205		65	3,205

 

 

HIGH LINER FOODS INCORPORATED
For the thirteen weeks ended December 29, 2012
(with comparative figures for the thirteen weeks ended December 31, 2011)
UNAUDITED
SEGMENTED INFORMATION
(in thousands of United States Dollars)
			Thirteen weeks ended						Thirteen weeks ended
			December 29, 2012						December 31, 2011
												(Restated)
Amounts in ($000s)				Canada		U.S.		Total		Canada		U.S.		Total
Sales within geographic region*			$	80,059	$	136,732	$	216,791	$	74,745	$	96,975	$	171,720
Sales outside of geographic region*				3,444		4,185		7,629		2,397		3,389		5,786
				83,503		140,917		224,420		77,142		100,364		177,506
Intercompany sales outside of geographic region*				(3,444)		(2,696)		(6,140)		(2,397)		(2,635)		(5,032)
Revenue (excluding intercompany sales)				80,059		138,221		218,280		74,745		97,730		172,475
Cost of sales (excluding intercompany sales)				(61,282)		(107,411)		(168,693)		(59,135)		(76,446)		(135,581)
Gross profit				18,777		30,810		49,587		15,610		21,284		36,894
Distribution expenses				(3,690)		(8,045)		(11,735)		(3,757)		(5,459)		(9,216)
Selling, general and administrative expenses				(11,109)		(13,697)		(24,806)		(7,304)		(10,158)		(17,462)
Impairment of property plant and equipment				493		-		493		-		-		-
Business acquisition integration (costs) and other expenses				(1,107)		(2,302)		(3,409)		(1,192)		(8,844)		(10,036)
Financing costs				(547)		(13,802)		(14,349)		(443)		(1,726)		(2,169)
(Loss) gain from equity accounted investee				(72)		(73)		(145)		(43)		(44)		(87)
Income before income tax				2,745		(7,109)		(4,364)		2,871		(4,947)		(2,076)
Income taxes				(1,334)		3,015		1,681		(1,592)		727		(865)
Net income			$	1,411	$	(4,094)	$	(2,683)	$	1,279	$	(4,220)	$	(2,941)
Add back:						-						-
	Depreciation included in:			-		-				-		-
		Cost of sales		589		2,695		3,284		575		1,032		1,607
		Distribution		42		107		149		46		116		162
		Selling, general and administrative expenses		360		123		483		280		46		326
	Total depreciation			991		2,925		3,916		901		1,194		2,095
	Amortization included in:			-		-		-		-		-		-
		Selling, general and administrative expenses		28		173		201		52		655		707
	Total depreciation and amortization			1,019		3,098		4,117		953		1,849		2,802
	Financing costs			547		13,802		14,349		443		1,726		2,169
	Income taxes			1,334		(3,015)		(1,681)		1,592		(727)		865
Income before depreciation, amortization, financing and income taxes			$	4,311	$	9,791	$	14,102	$	4,267	$	(1,372)	$	2,895
*Geographic regions include Canada, US and Mexico

HIGH LINER FOODS INCORPORATED
For the fifty-two weeks ended December 29, 2012
(with comparative figures for the fifty-two weeks ended December 31, 2011)
UNAUDITED
SEGMENTED INFORMATION
(in thousands of United States Dollars)
			Fifty-two weeks ended						Fifty-two weeks ended
			December 29, 2012						December 31, 2011
												(Restated)
Amounts in ($000s)				Canada		U.S.		Total		Canada		U.S.		Total
Sales within geographic region*			$	311,843	$	625,176	$	937,019	$	299,255	$	370,747	$	670,002
Sales outside of geographic region*				9,172		16,345		25,517		7,195		13,707		20,902
				321,015		641,521		962,536		306,450		384,454		690,904
Intercompany sales outside of geographic region*				(8,131)		(11,774)		(19,905)		(7,195)		(8,171)		(15,366)
Revenue (excluding intercompany sales)				312,884		629,747		942,631		299,255		376,284		675,539
Cost of sales (excluding intercompany sales)				(243,670)		(489,435)		(733,105)		(230,892)		(291,117)		(522,009)
Gross profit				69,214		140,312		209,526		68,363		85,167		153,530
Distribution expenses				(14,588)		(31,720)		(46,308)		(14,912)		(20,470)		(35,382)
Selling, general and administrative expenses				(38,354)		(63,537)		(101,891)		(31,640)		(41,258)		(72,898)
Impairment of property, plant and equipment				(4,407)		(8,823)		(13,230)		-		-		-
Business acquisition integration (costs) and other expenses				(2,321)		(8,420)		(10,741)		(1,238)		(9,811)		(11,049)
Financing costs				(1,512)		(35,112)		(36,624)		(1,095)		(4,924)		(6,019)
(Loss) gain from equity accounted investee				(98)		(98)		(196)		(26)		(26)		(52)
Income before income tax				7,934		(7,398)		536		19,452		8,678		28,130
Income taxes				(3,668)		5,335		1,667		(5,632)		(3,838)		(9,470)
Net income			$	4,266	$	(2,063)	$	2,203	$	13,820	$	4,840	$	18,660
Add back:						-						-
	Depreciation included in:					-						-
		Cost of sales		2,369		8,428		10,797		2,340		3,849		6,189
		Distribution		164		1,206		1,370		182		287		469
		Selling, general and administrative expenses		1,304		359		1,663		1,159		164		1,323
	Total depreciation			3,837		9,993		13,830		3,681		4,300		7,981
	Amortization included in:					-						-
		Selling, general and administrative expenses		190		5,361		5,551		232		1,608		1,840
	Total depreciation and amortization			4,027		15,354		19,381		3,913		5,908		9,821
	Financing costs			1,512		35,112		36,624		1,095		4,924		6,019
	Income taxes			3,668		(5,335)		(1,667)		5,632		3,838		9,470
Income before depreciation, amortization, financing and income taxes			$	13,473	$	43,068	$	56,541	$	24,460	$	19,510	$	43,970
*Geographic regions include Canada, US and Mexico

 

HIGH LINER FOODS INCORPORATED
For the thirteen and fifty-two weeks ended December 29, 2012
(with comparative figures for the thirteen and fifty-two weeks ended December 31, 2011)
UNAUDITED
SEGMENTED INFORMATION CONTINUED
(in thousands of United States dollars)
	Thirteen weeks						Thirteen weeks
	December 29, 2012						December 31, 2011
									(Restated)
Amounts in ($000s)	Canada		U.S.		Total		Canada		U.S.		Total
Capital Expenditures
Financed by operations		994		4,858		5,852		774		829		1,603
Financed by finance leases		154		-		154		156		-		156
Total capital expenditures	$	1,148	$	4,858	$	6,006	$	930	$	829	$	1,759
	Fifty-two weeks						Fifty-two weeks
	December 29, 2012						December 31, 2011
									(Restated)
Amounts in ($000s)	Canada		U.S.		Total		Canada		U.S.		Total
Capital Expenditures
Financed by operations		3,965		8,744		12,709		3,384		3,663		7,047
Financed by finance leases		738		-		738		628		-		628
Total capital expenditures	$	4,703	$	8,744	$	13,447	$	4,012	$	3,663	$	7,675
Total assets	$	147,286	$	483,997	$	631,283	$	157,596	$	529,751	$	687,347
Goodwill	$	12,534	$	98,551	$	111,085	$	12,265	$	98,551	$	110,816
Liabilities	$	307,825	$	170,104	$	477,929	$	312,311	$	216,209	$	528,520

 

 

 

SOURCE: High Liner Foods Incorporated

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