Stock Name: HLF
Amount: CAD 0.10
Announcement Date: 10/05/2012
Record Date: 30/05/2012
Dividend Detail:
- Overall strength in both U.S. and Canada; Icelandic USA integration
ahead of schedule -
LUNENBURG, NS, May 10, 2012 /CNW/ - High Liner Foods Incorporated (TSX: HLF; HLF.A), the leading North American value-added frozen seafood company, today
reported financial results for the thirteen-week period ended March 31,
2012.�� All amounts are reported in Canadian dollars.
Financial and operational highlights for the first quarter include (all comparisons are relative to the first quarter of 2011,
unless otherwise noted):
Sales increased by 62.4% to $287.7 million from $177.1 million;
Adjusted EBITDA1 increased by 72.0% to $31.5 million from $18.3 million;
Reported net income of $1.8 million, or diluted earnings per share
("EPS") of $0.12, compared with $9.7 million, or diluted EPS of $0.63,
in the first quarter of 2011;
Adjusted Net Income2 increased by 38.8% to $13.9 million, diluted EPS of $0.90, from $10.0
million, diluted EPS of $0.65, in the first quarter of 2011;
The integration of Icelandic USA is ahead of plan.
"We are pleased to report strong first quarter operating results and
that we delivered a 25.0% return on equity," said Henry Demone,
president and CEO.�� "Our robust results were attributable to both the
addition of Icelandic USA and the strength of our pre-Icelandic USA
businesses.�� On a pro forma basis, assuming Icelandic USA had been part
of our operations for the same period in 2011, our U.S. operations
experienced solid growth of 9.5% on sales and 13.7% on Adjusted
EBITDA.�� In addition, after a challenging Canadian retail market in
2011, we are pleased to say that our marketing initiatives and new
product launches have yielded results, as we recorded a 10.5% increase
in total Canadian dollar sales and an 18.7% growth in retail sales
volume."
"In January, we introduced 'Flame Savours' in Canada - thick, premium
fillets seared over an open flame for a delicious fire-roasted flavour
- and the market response has been very favourable.�� In the U.S., this
product is marketed as 'FireRoasters.'"
"We have made significant progress and are ahead of schedule in
integrating Icelandic USA into our operations.�� So far, we have
integrated our broker network, reorganized staffing, streamlined the
procurement process, repositioned our brands, and announced the
consolidation of our supply chain that will result in the closure of
two plants.�� The successful completion of this integration will help
solidify our leadership position in food service value-added frozen
seafood in North America," added Mr. Demone.
Financial Results
Nearly 70% of the Company's operations, assets, and liabilities, are
denominated in U.S. dollars or are impacted by the Canadian/U.S. dollar
exchange rate.�� As such, foreign currency fluctuations affect the
reported values of individual lines on the Company's balance sheet and
income statement.
(In thousands except per share amounts, unless otherwise noted) | Thirteen weeks ended March 31, 2012 | Thirteen weeks ended April 2, 2011 |
Sales in million pounds | 86.8 | 56.8 |
Sales in domestic currency | $287,618 | $178,833 |
Foreign exchange impact | $81 | ($1,725) |
Sales in Canadian dollars | $287,699 | $177,108 |
Adjusted EBITDA | $31,545 | $18,336 |
Net income | $1,778 | $9,729 |
Adjusted net income | $13,863 | $9,986 |
EPS (Diluted) | $0.12 | $0.63 |
Adjusted EPS (Diluted)3 | $0.90 | $0.65 |
Average Shares Outstanding (Diluted) | 15,389 | 15,423 |
Sales for the first quarter increased to $287.7 million from $177.1
million for the same period a year ago.�� The 62.4% increase in sales
was achieved as a result of the Icelandic USA acquisition and strong
organic sales growth from our pre-Icelandic USA business.�� This was the
first period that Icelandic USA, acquired in December 2011, had a
full-quarter contribution.�� Icelandic USA contributed $97.2 million in
sales.�� The weaker Canadian dollar resulted in an increase in the value
of reported sales by $1.8 million, or 1.6%. Sales in domestic currency,
which excludes the impact of currency translation, were $287.6 million
compared with $178.8 million for the first quarter of 2011.�� Total
sales volume increased by 52.6% to 86.8 million pounds, with Icelandic
USA accounting for 53.5% of the increase and offsetting the 0.9%
decline in pre-Icelandic USA volume.�� For comparison purposes, assuming
that Icelandic USA had been part of High Liner's U.S. operations in the
first quarter of 2011, U.S. sales increased by 9.5% to US$210.0 million
and U.S. sales volume increased by 1.6% to 67.9 million pounds.
Adjusted EBITDA for the first quarter increased by 72.0% to $31.5
million, or 11.0% of sales, from $18.3 million, or 10.4% of sales, for
the same period in 2011.�� Adjusted EBITDA excludes business acquisition
and integration expenses, and other non-operating transactions.
Beginning with the first quarter results, the definition of Adjusted
EBITDA has been revised to also exclude stock-based compensation
expense; as such, Adjusted EBITDA for prior periods has been restated
to conform to this new definition.�� The significant increase in
Adjusted EBITDA was due to higher sales volumes largely from the
addition of Icelandic USA and higher selling prices, partially offset
by higher seafood and other input costs. For comparison purposes,
assuming that Icelandic USA had been part of High Liner's U.S.
operations in the first quarter of 2011, Adjusted EBITDA from our U.S.
operations increased by 13.7% to US$23.9 million in the first quarter
of 2012 from US$21.0 million for the same period last year.
Net income for the quarter was $1.8 million, diluted EPS of $0.12,
compared with net income of $9.7 million, diluted EPS of $0.63, for the
first quarter of 2011.�� Net income was primarily negatively impacted by
the write down of assets as part of the announcement last week
regarding supply chain consolidation and also by one-time integration
costs related to the Icelandic USA acquisition expensed during the
quarter.�� In addition, during the quarter, we recorded a reduction to a
non-deductible one-time withholding tax of $0.4 million related to the
inter-company dividends paid in connection with the financing of the
Viking acquisition in the fourth quarter of 2010.�� Excluding these
items, and excluding stock-based compensation expense, Adjusted net
income increased by 38.8% to $13.9 million, or Adjusted diluted EPS of
$0.90, from $10.0 million, or Adjusted diluted EPS of $0.65, in the
previous year.
Dividends
Today, the Board of Directors of the Company approved a quarterly
dividend of $0.10 per Common and Non-Voting Equity Share payable on
June 15, 2012 to shareholders of record on June 1, 2012.
Outlook
"We are proud to announce that all business purchased from Icelandic USA
has been retained and has contributed to a strong start to 2012," said
Mr. Demone. "Our ongoing focus is clearly to continue our early success
in integrating Icelandic USA.�� We are on track to realizing near-term
synergies of approximately $12 million and ongoing annual synergies of
$16-18 million from combining the operations."
"We expect the addition of Icelandic USA to further support the
operating strength of our High Liner, FPI, and Viking businesses in the
U.S.�� Both our food service and retail operations are poised for growth
in the U.S.�� In Canada, we are expecting our first quarter momentum to
continue throughout 2012.�� Our strategy to rejuvenate our Canadian
retail business after a challenging 2011 has shown positive results. We
expect to continue implementing these strategic initiatives, which
includes marketing programs to drive volume in stores, to support the
retail business and increase overall sales volume in Canada.�� In
particular, the launch of the 'Flame Savours' product in Canadian
retail during the first quarter has received very favourable market
response.�� Also, as we mentioned last quarter, prices for several key
raw materials have recently decreased but we do not expect to see cost
improvements until the second half of 2012 due to inventory and
contracts in place.�� As such, we expect second quarter raw material
costs to remain higher than the comparable period in 2011.��
Additionally, our enhanced purchasing power, expanded distribution, and
cost-reduction efforts should deliver further operating improvements
this year," concluded Mr. Demone.
Supplemental Financial 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
Fiscal First Quarter Interim Financial Statements, which includes the
Statements of Financial Position, Income, Comprehensive Income, Changes
in Shareholders' Equity, Cash Flows and notes, can be viewed in the
Investor Information section of the High Liner Foods website at
http://www.highlinerfoods.com/en/home/investorinformation/quarterlyreports.aspx
Conference Call
High Liner will host a conference call on Friday, May 11, 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 Friday, May 18, 2012 at
midnight.�� To access the archived conference call, dial 1-855-859-2056
and enter the reservation number 72848808.
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 symbols HLF and HLF.A 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: our market position; continued success in
integrating Icelandic USA; realization of near term and on-going annual
synergies from combining operations; continued operating strength in
the US; growth in our food service and retail operations; continuation
of first quarter momentum throughout 2012; continued implementation of
strategic initiatives; cost improvements in the second half of 2012;
second quarter raw material costs remaining higher than the comparable
period in 2011; and our enhanced purchasing power, expanded
distribution and cost reduction efforts delivering further operating
improvements this year.�� 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 and��
our operating costs; timing of plant closures and the amount and timing
of the related one-time cash expense; amount and timing of the
write-down of plant and equipment; amount and timing of the annual
ongoing reduction in operating costs resulting from the plant
consolidation; and amount and timing of the capital expenditures in
excess of normal requirements to allow the movement of production
between plants; and timing and final number of layoffs from plant
closures.�� 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@highlinerfoods.com.
____________________________________
1Adjusted 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 the Icelandic
USA and Viking Acquisitions, above its historical cost, as part of the
fair value requirements of purchase price accounting.
2Adjusted net income is net income excluding 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 the Icelandic USA and Viking Acquisitions,
and withholding tax related inter-company dividends.
3Adjusted EPS is Adjusted net income, as defined, divided by the average
diluted number of shares.
��
For further information:
K.L. Nelson
Executive Vice President,
Chief Financial Officer & Secretary
High Liner Foods Incorporated
Tel:�� (902) 634-6200
investor@highlinerfoods.com
Salvador Diaz
Investor Relations
TMX Equicom
Tel:�� (416) 815-0700 ext.242
sdiaz@equicomgroup.com
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