Stock Name: HLF
Amount: CAD 0.11
Announcement Date: 08/11/2012
Record Date: 29/11/2012
Dividend Detail:
- High Liner and Icelandic USA Acquisition now operating under single
ERP platform; debt reduced by $47.8 million in first three quarters of
2012 -
LUNENBURG, NS, Nov. 8, 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 and thirty-nine weeks ended
September 29, 2012.�� All amounts are reported in Canadian dollars.
Financial and operational highlights for the third quarter and first
thirty-nine weeks of 2012 include (all comparisons are relative to the
third quarter and first thirty-nine weeks of 2011, unless otherwise
noted):
Sales for the third quarter increased by 35.3% to $218.8 million from
$161.7 million;
Reported net income for the third quarter, including one-time costs of
the Icelandic USA Acquisition, of $2.2 million (diluted earnings per
share ("EPS") of $0.14) compared with $6.7 million (diluted EPS of
$0.44); $5.0 million (diluted EPS of $0.32) for the first thirty-nine
weeks of 2012 compared with $21.2 million (diluted EPS of $1.38);
Adjusted EBITDA1 for the third quarter increased by 78.3% to $21.6 million from $12.1
million; $69.7 million for the first thirty-nine weeks of 2012 compared
with $41.3 million;
Adjusted Net Income2 of $7.9 million (Adjusted diluted EPS3 of $0.51) for the third quarter compared with $6.3 million (Adjusted
diluted EPS of $0.41); $27.4 million (Adjusted diluted EPS of $1.78)
for the first thirty-nine weeks of 2012 compared with $21.7 million
(Adjusted diluted EPS of $1.41);
Interest-bearing debt reduced by $47.8 million in the first thirty-nine
weeks of 2012;
The integration of Icelandic USA Acquisition continues to progress ahead
of schedule.
"As we continue the process of integrating the Icelandic USA Acquisition
operations with ours, we are pleased to report another strong quarter
that saw sales and Adjusted EBITDA grow by 35.3% and 78.3%,
respectively," said Henry Demone, president and CEO.�� "The increases
were largely due to the addition of the Icelandic USA Acquisition,
which had a robust 5.9% year-over-year sales growth on a pro forma
basis that assumes the Icelandic USA Acquisition had been part of our
operations for the same quarter in 2011.�� Our non-Icelandic USA sales
declined by 4.8% due to a variety of reasons. �� Overall, Adjusted
EBITDA growth remained strong at 18.4% on a pro forma basis.�� EBITDA
growth was also positively affected by lower seafood input costs, which
we previously forecasted would begin to show a favourable contribution
to profitability in the third quarter.�� With regard to the Icelandic
USA Acquisition integration, we are pleased that we have maintained our
pace ahead of plan, and that High Liner is now operating under one
enterprise resource planning (ERP) system. We now project synergies
from the Icelandic USA acquisition of at least $18 million, the high
end of our original estimate of $16 - $18 million."
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 Sept. 29, 2012 | Thirteen weeks ended�� Oct. 1, 2011 | Thirty-nine weeks ended Sept. 29, 2012 | Thirty-nine weeks ended Oct. 1, 2011 |
Sales in million pounds | 64.3 | 47.8 | 212.4 | 149.4 |
Sales in domestic currency | $219,496 | $163,298 | $724,780 | $498,085 |
Foreign exchange impact | $(741) | $(1,581) | $723 | $(5,975) |
Sales in Canadian dollars | $218,755 | $161,717 | $725,503 | $492,110 |
Adjusted EBITDA | $21,609 | $12,120 | $69,683 | $41,332 |
Net income | $2,186 | $6,695 | $4,959 | $21,200 |
Adjusted net income | $7,918 | $6,261 | $27449 | $21,702 |
EPS (Diluted) | $0.14 | $0.44 | $0.32 | $1.38 |
Adjusted EPS (Diluted) | $0.51 | $0.41 | $1.78 | $1.41 |
Average Shares Outstanding (Diluted) | 15,441 | 15,312 | 15,426 | 15,358 |
�� | �� | �� | �� | �� |
Sales for the third quarter increased to $218.8 million from $161.7
million for the same period a year ago.�� The 35.3% increase in sales
was achieved as a result of the Icelandic USA Acquisition.�� The weaker
Canadian dollar relative to the same periods last year resulted in an
increase in the value of reported sales. Sales in domestic currency,
which excludes the impact of currency translation, were $219.5 million
compared with $163.3 million for the third quarter of 2011.�� Total
sales volume increased by 34.6% to 64.3 million pounds.�� The Icelandic
USA Acquisition accounted for 39.4% of volume growth, offset by a 4.8%
decline in pre-Icelandic USA volume.�� For comparison purposes, assuming
that the acquired Icelandic USA operations had been part of High
Liner's operations in the comparable period in 2011, total sales
declined by 1.9% while total sales pounds declined by 3.5%; however,
year to date, total sales increased by 4.1% while total sales volume
was flat.�� The decline during the third quarter for the pre-Icelandic
USA operations was due to a variety of reasons, not related to the
Icelandic USA acquisition.
Adjusted EBITDA for the third quarter increased by 78.3% to $21.6
million, or 9.9% of sales, from $12.1 million, or 7.5% of sales, for
the same period in 2011.�� The increase in Adjusted EBITDA was due to
higher sales volumes resulting from the Icelandic USA Acquisition and
lower seafood and other input costs. For comparison purposes, assuming
that the acquired business had been part of High Liner's U.S.
operations in the third quarter of 2011, Adjusted EBITDA increased by
18.4% year over year. Synergies achieved in the quarter were $2.6
million and year to date total $5.6 million.
Net income for the quarter was $2.2 million (diluted EPS of $0.14)
compared with net income of $6.7 million (diluted EPS of $0.44) for the
third quarter of 2011.�� As in the previous two quarters, net income was
negatively impacted by after-tax one-time integration costs related to
the Icelandic USA acquisition expensed during the quarter as well as
additional depreciation on property to be disposed of as part of the
acquisition.�� As well, the significant increase in the value of High
Liner's stock increased stock compensation expense in the quarter by
$3.3 million ($5.3 million higher for the first thirty-nine weeks of
2012). Excluding the one-time integration costs, the additional
depreciation, the non-cash expense from revaluing an embedded
derivative and interest rate swap associated with the long-term debt,
and stock-based compensation expense, Adjusted net income was $7.9
million (Adjusted diluted EPS of $0.51) compared with $6.3 million
(Adjusted diluted EPS of $0.41) for the same quarter in 2011.
Free cash flow4 was $40.9 million for the rolling four quarters ended September 29,
2012.�� Cash flow generated from operations, as well as the seasonal
reduction in working capital, allowed the Company to reduce
interest-bearing debt by $47.8 million.�� This, combined with a stronger
Canadian dollar, decreased total interest-bearing debt from $379.9
million at December 31, 2011 to $320.9 million at September 29, 2012.
Dividends
Today, the Board of Directors of the Company approved a quarterly
dividend of $0.11 per Common and Non-Voting Equity Share payable on
December 15, 2012 to shareholders of record on December 1, 2012.��
Outlook
"The Icelandic USA Acquisition was accretive on an adjusted basis for
both the third quarter and year to date, and we continue to expect it
to be accretive for the full year," said Mr. Demone.�� "As we have
maintained an accelerated pace of integrating our U.S. operations with
Icelandic USA's, we expect to benefit from the synergies earlier than
anticipated and further solidify our leadership position in the North
American frozen seafood food service market.�� Our Canadian retail
operations continue to remain strong and we expect this performance to
be sustained into next year.�� We began to see the benefits of lower
seafood input costs during the third quarter, which we project to
continue into the fourth, quarter and into 2013, as seafood costs are
expected to remain favorable.�� Lower seafood costs will reduce our
commodity sales as we pass on some of these lower product costs to
customers.�� Lower commodity product costs should increase margins and
profitability. All these factors considered, we are optimistic about
our operating performance for the full year and beyond."
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 Third 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, November 9, at 10:30
a.m. ET (11:30 a.m. AT) to discuss its third 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, November 16,
2012 at midnight.�� To access the archived conference call, dial
1-855-859-2056 and enter the reservation number 48345826.
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 the Icelandic USA acquisition; 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 third quarter momentum throughout 2012;
continued implementation of strategic initiatives; cost improvements;
lower raw material costs in the last quarter of 2012 and into 2013; 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; 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, Adjusted Earnings
per Share and Free Cash Flow.
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.
��______________________________________________________________ | |
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 the Icelandic USA and Viking Acquisitions, above its historical cost, 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 the Icelandic USA and Viking Acquisitions, non-cash expense from revaluing an embedded derivative associated with the long-term debt, as the interest rate is not less than LIBOR of 1.5%, which is currently greater than prevailing interest rates, marking to market an interest rate swap related to the embedded derivative 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 | 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. |
��
SOURCE: High Liner Foods Incorporated
For further information:
K.L. Nelson
Executive Vice President and Chief Financial Officer
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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