LUNENBURG, NS, May 11 – 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 April 3, 2010. All amounts are reported in Canadian dollars.
Financial and operational highlights for the quarter include:
– Adjusted EBITDA increased 7.4% to $14.1 million on lower reported
sales;
– Net income improved to $7.2 million, or $0.39 per share, compared to
$6.7 million, or $0.36 per share;
– Sales volume (measured in pounds) increased 3.0%, with increases in
both Canadian and U.S. operations.
"We are pleased with the improved profitability achieved for the quarter," said Henry Demone President and Chief Executive Officer. "While our reported sales in Canadian dollars were down, primarily due to currency fluctuations, our sales volume was up 3.0% for the quarter. Importantly, our U.S. food service business achieved a 7.1% increase in sales volume, representing the first quarter of growth since the recession began. We are hopeful that the growth in this channel is signaling that the worst of the recession is behind us."
Financial Results
Approximately half of the Company's operations and assets, and more than 50% of its liabilities, are located in the United States. As such, foreign currency fluctuations affect the reported values of individual lines on the Company's balance sheet and income statement.
Sales for the quarter decreased to $165.1 million from $183.3 million a year ago, with the stronger Canadian dollar decreasing the value of reported U.S. sales by approximately $18.1 million. Sales in domestic currency were $161.5 million compared to $161.6 million for the first quarter of 2009. Higher sales volume (measured in pounds) for the quarter was essentially offset by lower selling prices and the cost of more promotional activities, which are netted against sales. Sales volume for the quarter increased 3.0% to 51.0 million pounds compared to 49.5 million pounds the previous year.
Adjusted EBITDA for the quarter was $14.1 million compared to $13.1 million for the first quarter of 2009. In domestic currency, Adjusted EBITDA increased 14.0% to $13.7 million from $12.1 million a year ago, benefiting from higher volume as well as lower seafood and other input costs.
Net income for the quarter improved to $7.2 million, or $0.39 per share, compared to $6.7 million, or $0.36 per share, for the same quarter last year, despite higher income taxes. The Company's U.S. subsidiary was taxable for accounting purposes in the first quarter of 2010, but was not in the first quarter of 2009.
Please visit the Investor Information section of the High Liner Foods website at http://www.highlinerfoods.com/inside.asp?cmPageID=102 to view the Company's Fiscal First 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 June 15, 2010 to shareholders of record on June 1, 2010. This represents a 13.3% increase compared to the $0.075 per share quarterly dividend paid on March 15, 2010 to Common and Non-Voting Equity shareholders of record on March 5, 2010.
Outlook
"We're off to a good start in 2010 and our outlook for the rest of the year remains positive, despite the continued uncertainty in the economy," said Mr. Demone. "The lower raw material costs we have been experiencing benefit all our operations, and the stronger Canadian dollar benefits our Canadian business. Price decreases on commodity products along with greater promotional activity on value-added products should drive volume growth going forward. However, seafood costs in U.S. dollar terms have bottomed and we are beginning to see increases in isolated areas."
Conference Call
The Company will host a conference call on Wednesday, May 12, 2010 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 Tuesday, May 18, 2009 at midnight. To access the archived conference call, dial 1-800-642-1687 and enter the reservation number 71275920.
Source: High Liner Foods Inc.