High Liner Foods reports fourth quarter and year end results for 2009
- Recession-resistant business achieves higher profits for the quarter and fiscal year -
LUNENBURG, NS, Feb. 24 /CNW/ - High Liner Foods Incorporated (TSX: HLF; HLF.A), a leading North American value-added frozen seafood company, today reported financial results for the thirteen week period and fiscal year ended January 2, 2010. All amounts are reported in Canadian dollars.
Financial and operational highlights for the fourth quarter include:
- Adjusted EBITDA(1) increased 20.1% to $11.0 million despite lower
sales and volume (measured in pounds) compared to the fourth quarter
of 2008;
- Net income of $3.8 million, or fully diluted earnings per share
("EPS") of $0.21, up from $2.4 million, or fully diluted EPS of
$0.13, in the fourth quarter of 2008.
Financial and operational highlights for the fiscal year include:
- Annual sales increased 1.8% to $627.2 million;
- Adjusted EBITDA increased 15.0% to $43.6 million;
- Net income of $19.7 million, or fully diluted EPS of $1.07, up from
$14.2 million, or fully diluted EPS of $0.77, in 2008; and,
- Net interest bearing debt reduced to 33.6% of total capitalization
from 39.5% at end of fiscal 2008.
"Despite the difficult economic environment, 2009 was another strong, successful year for High Liner," said Henry Demone President and Chief Executive Officer. "We continued to execute against well-defined business objectives throughout the year and we were profitable in all key sales channels. As a result, we generated strong operating cash flow, which we used to reinvest in our business, return more to our shareholders in the form of twice increased dividends, and reduce net interest bearing debt."
Financial Results
Fourth quarter sales were $148.8 million, down from $177.4 million in the fourth quarter of 2008, as sales volume fell 11.3% to 42.8 million pounds. A stronger Canadian dollar in the fourth quarter of fiscal 2009 and the inclusion of a fourteenth week of results in the fourth quarter of fiscal 2008 (compared to thirteen weeks in fiscal 2009) accounted for most of the difference in reported sales for the quarter. The stronger Canadian dollar in the fourth quarter of 2009 decreased the value of reported U.S. sales by approximately $12.8 million.
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(Amounts in thousands of Canadian $)
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Thirteen Fourteen
weeks ended weeks ended
Jan. 2, 2010 Jan. 3, 2009
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Sales as reported $148,827 $177,441
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Less FX effect ($3,858) ($16,661)
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Less estimated sales for 14th week N/A ($10,000)
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Adjusted sales $144,969 $150,780
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Sales were also impacted by continued uncertainty in the economy resulting in a more price-conscious consumer mindset. In particular, sales of higher priced, but lower margin, crab and lobster were significantly lower in both the Canadian and U.S. food service channels.
The Company's continued focus on improving its inventory management and controlling costs contributed to a 20.1% increase in Adjusted EBITDA for the quarter. Adjusted EBITDA was $11.0 million compared to $9.2 million in the fourth quarter of 2008.
Excluding the effect of converting U.S. results to Canadian dollars, in domestic currency Adjusted EBITDA for the quarter was $10.6 million compared with $8.1 million for the fourth quarter of 2008.
Net income for the quarter increased to $3.8 million, or $0.21 per diluted share, from $2.4 million, or $0.13 per diluted share, for the same quarter the year before. Income for the quarter was impacted by an increase of $0.6 million in deferred income tax liability resulting from a review of income taxes, as the Company's U.S. subsidiary became taxable for accounting purposes earlier than expected.
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(Amounts in thousands of Canadian $ except per share amounts)
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Thirteen Fourteen Fifty-two Fifty-three
weeks ended weeks ended weeks ended weeks ended
Jan. 2, 2010 Jan. 3, 2009 Jan. 2, 2010 Jan. 3, 2009
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Sales $148,827 $177,441 $627,186 $615,993
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Adjusted EBITDA $11,039 $9,188 $43,573 $37,917
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Net income $3,798 $2,376 $19,747 $14,192
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Adjusted net income(1) $4,374 $4,036 $20,889 $18,348
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Diluted earnings per
Common Share:
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Net income $0.21 $0.13 $1.07 $0.77
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Adjusted net income(1) $0.24 $0.22 $1.14 $1.00
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(1) Net income excluding one-time integration costs and non-operating
items.
Dividends
The Company paid a $0.075 per share quarterly dividend on December 15, 2009 to Common and Non-Voting Equity shareholders of record on December 1, 2009.
Today, the Board of Directors of the Company resolved to pay a quarterly dividend in the amount of $0.075 per Common and Non-Voting Equity Share payable on March 15, 2010 to shareholders of record on March 5, 2010.
Outlook
"We have every confidence that 2010 will be another strong year for High Liner," said Mr. Demone. "We continue to see lower raw material costs and a strengthening in the Canadian dollar, both of which benefit our business. Our well diversified offering of value and premium products continue to be a strength as many consumers are still looking for value, as well as quality. Price decreases on commodity products along with greater promotional activity on value-added products should drive volume growth going forward."
Conference Call
The Company will host a conference call on Thursday, February 25, 2010 at 10:30 a.m. ET (11:30 a.m. AT) to discuss its fourth quarter and year end financial results. To access the conference call by telephone, dial 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, March 4, 2010 at midnight. To access the archived conference call, dial 1-800-642-1687 and enter the reservation number 54468773.
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 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®, Fisher Boy®, Mirabel® and Sea Cuisine™ labels, and are available in most grocery and club stores. The Company also sells its High Liner®, FPI® and Mirabel® 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 statements, including sales, earnings, marketing, and profitability comments for 2010 and beyond. These statements contain words such as "anticipate", "expect", "could", "should", "may", "plans", "will", or similar expressions that are based on and arise out of our experience, our perception of trends, current conditions and expected future developments as well as other factors. 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 a number of important factors, as discussed herein and in our other continuous disclosure documents, could cause actual results to 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 thorough discussion of the risk factors that can cause anticipated outcomes to differ from actual outcomes. We disclaim any intention or obligation to update or revise forward-looking statements.
For further information about the Company, please visit our website at www.highlinerfoods.com or send an e-mail to investor@highlinerfoodinc.com.
Financial Statements
For convenience, this news release includes the Company's Fiscal Fourth Quarter Balance Sheets and Statements of Income, Statements of Comprehensive Income, Statements of Retained Earnings and Statements of Cash Flows.
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(1) Adjusted earnings before interest, taxes, depreciation and amortization, business acquisition costs, other income and non-operating transactions as disclosed on the consolidated statements of income. The calculation of Adjusted EBITDA follows the recently issued general principles and guidance for reporting EBITDA issued by the Canadian Institute of Chartered Accountants.
HIGH LINER FOODS INCORPORATED
As at January 2, 2010
(with comparative figures as at January 3, 2009)
CONSOLIDATED BALANCE SHEETS
(in thousands of Canadian dollars)
January 2, January 3,
2010 2009
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ASSETS
Current:
Cash and cash equivalents $ 1,953 7,032
Accounts receivable 59,553 63,873
Income tax receivable 1,288 45
Inventories 119,586 146,863
Prepaid expenses 2,024 1,782
Future income taxes 3,846 1,533
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Total current assets 188,250 221,128
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Property, plant and equipment 59,528 59,016
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Other:
Future income taxes 349 833
Other receivables and sundry investments 243 133
Employee future benefits 7,391 3,477
Intangible assets 19,785 24,065
Goodwill 28,701 30,767
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56,469 59,275
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304,247 339,419
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current:
Bank loans 22,786 39,931
Accounts payable and accrued liabilities 54,876 73,611
Income taxes payable 29 2,443
Current portion of long-term debt 4,582 -
Current portion of capital lease obligations 864 458
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Total current liabilities 83,137 116,443
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Long-term debt 50,848 63,939
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Long-term capital lease obligations 2,700 513
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Other long-term liabilities 1,254 2,112
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Future income taxes 4,688 -
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Employee future benefits 4,540 563
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Shareholders' Equity:
Common shares 108,804 109,787
Contributed surplus 364 364
Retained earnings 64,690 49,897
Accumulated other comprehensive loss (16,778) (4,199)
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157,080 155,849
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304,247 339,419
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HIGH LINER FOODS INCORPORATED
For the thirteen and fifty-two weeks ended January 2, 2010
(with comparative figures for the fourteen and fifty-three weeks
ended January 3, 2009)
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of Canadian dollars, except per share amounts)
For the For the For the For the
thirteen fourteen fifty-two fifty-three
weeks weeks weeks weeks
ended, ended, ended, ended,
January 2, January 3, January 2, January 3,
2010 2009 2010 2009
------------------------------------------------- ----------------------
Sales $ 148,827 $ 177,441 $ 627,186 $ 615,993
Cost of sales 114,455 138,913 492,564 482,454
Distribution expenses 7,561 10,358 32,352 36,997
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Gross profit 26,811 28,170 102,270 96,542
Foreign exchange gain
(loss) 64 (847) 264 (1,234)
Selling, general and
administrative expenses (17,435) (20,000) (65,571) (63,860)
Business acquisition
integration costs - (1,862) (460) (4,879)
Amortization of
intangibles assets (436) (477) (1,499) (1,383)
Interest expense:
Short-term (353) (744) (1,680) (2,695)
Long-term (932) (1,167) (3,765) (3,768)
Loss on asset disposal (40) (276) (492) (402)
Non-operating transactions (922) (84) (922) (84)
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Income before income taxes 6,757 2,713 28,145 18,237
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Income taxes
Current (206) 135 (2,548) (3,002)
Future (2,753) (472) (5,850) (1,043)
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Total income taxes (2,959) (337) (8,398) (4,045)
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Net income 3,798 2,376 19,747 14,192
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PER SHARE INFORMATION
Earnings per Common Share
Basic 0.21 0.13 1.07 0.88
Diluted 0.21 0.13 1.07 0.77
Average shares outstanding
for the period
Basic 18,330,663 18,521,005 18,384,940 15,059,296
Diluted 18,350,378 18,521,784 18,396,067 18,203,100
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HIGH LINER FOODS INCORPORATED
For the thirteen and fifty-two weeks ended January 2, 2010
(with comparative figures for the fourteen and fifty-three weeks
ended January 3, 2009)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands of Canadian dollars)
For the For the For the For the
thirteen fourteen fifty-two fifty-three
weeks weeks weeks weeks
ended, ended, ended, ended,
January 2, January 3, January 2, January 3,
2010 2009 2010 2009
------------------------------------------------- ----------------------
Net income for the period 3,798 2,376 19,747 14,192
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Other comprehensive income,
net of future income taxes
Unrealized foreign
exchange gains (losses)
of self-sustaining foreign
operations net of $0.3
million income tax
recovery (2008; net of nil
income taxes) (1,846) 7,013 (6,586) 9,093
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Net (loss) gain on
derivative financial
instruments designated as
cash flow hedges net of
$2.1 million income tax
recovery (2008; $3.6
million income tax
expense) (885) 4,785 (5,358) 7,045
Net gain (loss) on
derivative financial
instruments designated
as cash flow hedges in
prior periods transferred
to net income in the
current period net of
$0.6 million income tax
recovery (2008; $0.8
million income tax
expense) 1,536 (1,490) (1,140) (1,536)
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Change in gains and
losses on derivatives
designated as cash
flow hedges 651 3,295 (6,498) 5,509
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Other comprehensive
(loss) income (1,195) 10,308 (13,084) 14,602
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Comprehensive income 2,603 12,684 6,663 28,794
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HIGH LINER FOODS INCORPORATED
For the thirteen and fifty-two weeks ended January 2, 2010
(with comparative figures for the fourteen and fifty-three weeks
ended January 3, 2009)
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(in thousands of Canadian dollars)
For the For the For the For the
thirteen fourteen fifty-two fifty-three
weeks weeks weeks weeks
ended, ended, ended, ended,
January 2, January 3, January 2, January 3,
2010 2009 2010 2009
------------------------------------------------- ----------------------
Balance, beginning of
period 62,267 48,633 49,897 40,112
Net income for the period 3,798 2,376 19,747 14,192
Dividends:
Common shares (1,375) (1,157) (4,959) (3,244)
Series A preference shares - - - (774)
Second preference shares - - - (166)
Share issuance expenses - 45 5 (223)
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Balance, end of period 64,690 49,897 64,690 49,897
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HIGH LINER FOODS INCORPORATED
For the thirteen and fifty-two weeks ended January 2, 2010
(with comparative figures for the fourteen and fifty-three weeks
ended January 3, 2009)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of Canadian dollars)
For the For the For the For the
thirteen fourteen fifty-two fifty-three
weeks weeks weeks weeks
ended, ended, ended, ended,
January 2, January 3, January 2, January 3,
2010 2009 2010 2009
------------------------------------------------- ----------------------
Cash provided by (used in)
operations:
Net income from
operations for the
period 3,798 2,376 19,747 14,192
Charges (credits) to
income not involving
cash from operations:
Depreciation and
amortization 2,268 2,482 9,048 8,311
Loss on disposal of
assets 56 356 517 448
Stock compensation
expense (recovery) 326 - 364 (81)
Payments of employee
future benefits less
than (in excess of)
expense 68 35 77 (523)
Unwound foreign exchange
contract gains
reclassed from
Accumulated Other
Comprehensive Income (451) - (7,245) -
Unrealized foreign
exchange (gain) loss (10) 263 700 475
Future income taxes 2,753 472 5,850 1,043
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Cash flow from operations
before changes in
non-cash working capital: 8,808 5,984 29,058 23,865
Net change in non-cash
working capital balances (5,293) 770 (4,471) 4,832
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3,515 6,754 24,587 28,697
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Cash provided by (used in)
financing activities:
Net change in current
bank loans 3,500 (5,614) (13,277) (29,254)
Proceeds from lease
financing 2,671 - 2,671 -
Repayment of capital
lease obligations (149) (99) (475) (519)
Dividends paid:
Second Preference - - - (166)
Series A Preference - - - (774)
Common (1,375) (1,157) (4,959) (3,244)
Share issuance expenses - (55) 5 (323)
Repurchase of capital
stock - (369) (983) (402)
Issue of equity shares - 2 - 993
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4,647 (7,292) (17,018) (33,689)
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Cash provided by (used in)
investing activities:
Purchase of property,
plant and equipment
(net of investment
tax credits) (7,995) (2,782) (12,153) (4,671)
Proceeds of unwound
foreign exchange
contracts - 7,436 - 7,436
Net proceeds
(expenditures) on
disposal of assets 13 4 25 (25)
Acquisition of business - - - 2,000
Business acquisition costs - (7) - (235)
Decrease in other
receivables (110) (67) (110) (67)
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(8,092) 4,584 (12,238) 4,438
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Foreign exchange impact on
cash and cash equivalents (41) 274 (410) 522
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Change in cash and cash
equivalents during the
period 70 4,046 (4,669) (554)
Cash and cash equivalents,
beginning of period 1,924 2,712 7,032 7,064
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Cash and cash equivalents,
end of period 1,953 7,032 1,953 7,032
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%SEDAR: 00001789E