High Liner Foods reports second quarter financial results
- Company reports continued growth in profitability in 2010 -
LUNENBURG, NS, Aug. 10 /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 ended July 3, 2010. All amounts are reported in Canadian dollars.
Financial and operational highlights for the quarter include (all percentage changes are relative to the second quarter of 2009):
- Adjusted EBITDA increased 4.2% to $9.5 million on lower reported
sales;
- Net income increased 6.5% to $4.4 million, or $0.28 per share,
compared to $4.1 million, or $0.22 per share;
- Sales for the quarter were $134.7 million with the stronger Canadian
dollar decreasing the value of reported sales by approximately $8.9
million;
- Sales in pounds were relatively unchanged at 39.5 million.
"Our second quarter results were highlighted by growth in profitability across all key measures," said Henry Demone, president and CEO, High Liner Foods Incorporated. "Our bottom line continued to benefit from lower input costs and a stronger Canadian dollar, as well as our ongoing commitment to cost management. We remain focused on executing against well-defined business objectives, which during the second quarter, allowed us to maintain strong profitability despite lower dollar sales resulting from a stronger Canadian dollar, lower prices on commodity products in a low raw material cost environment, and higher promotional spending which is netted against sales, to drive volume."
Financial Results
Approximately half of the Company's operations and assets, and more than 50% of its liabilities, are denominated in U.S. dollars. As such, foreign currency fluctuations affect the reported values of individual lines on the Company's balance sheet and income statement.
-------------------------------------------------------------------------
(Amounts in thousands of Canadian $ except per share amounts,
unless otherwise noted)
-------------------------------------------------------------------------
Thirteen Thirteen Twenty-six Twenty-six
weeks ended weeks ended weeks ended weeks ended
July 3, 2010 July 4, 2009 July 3, 2010 July 4, 2009
-------------------------------------------------------------------------
Sales in domestic
currency $132,837 $140,675 $294,364 $302,234
-------------------------------------------------------------------------
Foreign exchange
on sales $1,824 $10,699 $5,410 $32,416
-------------------------------------------------------------------------
Sales in Canadian
dollars $134,661 $151,374 $299,774 $334,650
-------------------------------------------------------------------------
Adjusted EBITDA $9,450 $9,070 $23,525 $22,175
-------------------------------------------------------------------------
Net income $4,391 $4,124 $11,625 $10,820
-------------------------------------------------------------------------
Adjusted net income(1) $4,281 $4,087 $11,515 $11,386
-------------------------------------------------------------------------
Earnings per
common share:
-------------------------------------------------------------------------
Net income 0.28 0.22 $0.68 $0.59
-------------------------------------------------------------------------
Adjusted net
income(1) 0.27 0.22 $0.67 $0.62
-------------------------------------------------------------------------
(1) Excluding one-time integration costs and non-operating items.
Sales for the quarter decreased to $134.7 million from $151.4 million compared to the same quarter last year, with the strong Canadian dollar decreasing the value of reported U.S. sales by approximately $8.9 million. Sales in domestic currency were $132.8 million compared with $140.7 million during the same period in 2009. Sales in pounds were similar to last year: 39.5 million pounds compared to 40.0 million the previous year. The decrease in domestic dollar sales was primarily the result of lower selling prices on commodity products and increased customer promotions.
Adjusted EBITDA for the quarter increased to $9.5 million from $9.1 million for the second quarter of 2009. In domestic currency, Adjusted EBITDA increased to $9.3 million compared with $8.5 million in the second quarter of 2009. The increases are primarily due to lower input costs, a stronger Canadian dollar, and operating efficiencies.
Net income for the quarter increased to $4.4 million, or $0.28 per share, from $4.1 million, or $0.22 per share during the second quarter of 2009. The Company's U.S. subsidiary was taxable for accounting purposes in the second quarter for 2010 but was not in the second quarter of 2009, reducing income in the second quarter of 2010 by $0.01 per share relative to last year. In addition, as a result of a retraction of non-voting equity shares in April 2010, the weighted average number of shares outstanding in the second quarter was 15,755,979 (17,043,387 for the first 6 months of 2010) compared with 18,404,139 (18,437,401 for the first 6 months) during the same period last year, increasing earnings per share by $0.04 per share.
Please visit the Investor Information section of the High Liner Foods website at http://www.highlinerfoods.com to view the Company's Second Quarter Balance Sheets and Statements of Income, Statements of Comprehensive Income, Statements of Retained Earnings and Statements of Cash Flows.
Dividends
Today, 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 September 15, 2010 to shareholders of record on September 1, 2010.
Outlook
"Our performance in the first half of 2010 leaves us well-positioned for the balance of the year," added Mr. Demone. "We continue to benefit from the strong Canadian dollar as well as our commitment to containing costs wherever possible. In addition, although market prices for raw materials are beginning to increase, our existing supply contracts will mitigate much of the impact for the remainder of the year. Although we have seen improvements in our business alongside the gradual North American economic recovery, we remain cautiously optimistic within the context of the current economic outlook."
Conference Call
The Company will host a conference call on Wednesday, August 11, 2010 at 10:30 a.m. ET (11:30 a.m. AT) to discuss its second 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 Wednesday, August 18, 2010 at midnight. To access the archived conference call, dial 1-800-642-1687 and enter the reservation number 89831696.
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 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.
For further information about the Company, please visit our website at www.highlinerfoods.com or send an e-mail to investor@highlinerfoods.com.
%SEDAR: 00001789E