High Liner Foods Reports 62.5% Improvement in Adjusted EBITDA in 2012 and Announces 36% Dividend Increase

- First full year of Icelandic USA very accretive to sales, Adjusted EBITDA and Adjusted Net Income -

LUNENBURG, NS, Feb. 20, 2013 /CNW/ - High Liner Foods Incorporated (TSX: HLF), the leading North American value-added frozen seafood company, today reported financial results for the thirteen-week period and fiscal year 2012 ended December 29, 2012.  All amounts are reported in U.S. dollars, as will future earnings releases, as the Company has now commenced reporting results in U.S. dollars.

Financial and operational highlights for the fourth quarter of 2012 include (all comparisons are relative to the fourth quarter of 2011, unless otherwise noted):

  • Completed the integration of Icelandic USA into High Liner's operations in November 2012;
  • Sales increased by 26.6% to $218.3 million from $172.5 million;
  • Net deferred financing costs of $8.7 million ($6.3 million after tax) were expensed in 2012 earnings as financing costs, relating to the favourable amendments on the Company's Term Loan B;
  • The Company reported a net loss of $2.7 million in 2012 (diluted loss per share of $0.18), compared with net loss of $2.9 million (diluted loss per share of $0.19) in the fourth quarter of 2011;
  • Adjusted EBITDA1 increased by 54.2% to $22.1 million from $14.3 million;
  • Adjusted Net Income2 of $10.6 million (Adjusted diluted earnings per share ("EPS")3 of $0.68), compared with $6.7 million (Adjusted diluted EPS of $0.44); and,
  • Synergies achieved during the quarter on the integration of Icelandic USA amounted to $3.7 million.

Financial and operational highlights for the 2012 fiscal year include (all comparisons are relative to fiscal year 2011, unless otherwise noted):

  • Sales increased by 39.5% to $942.6 million from $675.5 million; the Icelandic USA acquisition added $275.8 million to sales versus $8.5 million in 2011;
  • Reported net income of $2.2 million (diluted EPS of $0.14), compared with $18.7 million (diluted EPS of $1.22), in 2011, with the decrease attributable to costs related to the Icelandic USA acquisition and integration, higher stock compensation expense, higher financing costs, and the expensing of deferred financing costs in 2012 as mentioned above;
  • Adjusted EBITDA1 increased by 62.5% to $91.7 million from $56.5 million;
  • Adjusted Net Income2 of $38.1 million (Adjusted diluted EPS3 of $2.46), compared with $28.9 million (Adjusted diluted EPS3 of $1.88);
  • Sales volume increased by 37.5% to 276.2 million pounds; Icelandic USA contributed 85.0 million pounds to total sales volume in 2012; and,
  • Synergies achieved during the year on the integration of Icelandic USA totaled $9.4 million, consistent with the high end of our original annual guidance.

"We are very pleased to report another strong year, marked by the successful integration of Icelandic USA into High Liner Foods' operations," said Henry Demone, president and CEO.  "With the first full year of Icelandic USA included in our results, we recorded one of the highest levels of sales, Adjusted EBITDA, and Adjusted Net Income in the company's history.  Our Canadian operations delivered a 4.4% increase in sales volume and 4.6% increase in sales, driven by the retail business.  On a pro forma basis, that assumes Icelandic USA had been part of our operations for the full year in 2011, our total U.S. operations recorded a sales decline of 0.9%, with weakness coming from our non-Icelandic USA businesses during the second half of the year, resulting from reduced selling prices on commodity products, competitive activity, and soft restaurant sales. Despite this, we recorded a 12.9% growth in Adjusted EBITDA at our U.S. operations, which complements our 8.7% Adjusted EBITDA growth in Canada on a pro forma basis.  Our free cash flow increased to $66.4 million which allowed us to reduce leverage to 3.4x Adjusted EBITDA.  With the early completion of Icelandic USA's integration, we recorded $9.4 million in synergies during the year, and are on track to achieve annual projected synergies of at least $18 million beginning in 2013, the high end of our original estimate.  We are pleased to be able to unlock the value from this combination of businesses, and the Board of Directors has announced a 36% increase in dividends to reflect its continued confidence in High Liner's operations."

Financial Results

The fourth quarter and fiscal year 2012 is the first period in which High Liner reports its financial results in U.S. dollars.  With approximately two-thirds of the Company's operations and a substantial portion of the assets and liabilities denominated in U.S. dollars, reporting in U.S. dollars is expected to result in less volatility in sales and earnings from Canadian/U.S. dollar exchange rate fluctuations.

(In thousands except per share amounts, unless otherwise noted)
  Thirteen weeks
ended Dec. 29,
2012
Thirteen weeks
ended Dec. 31,
2011
Fifty-two weeks
ended Dec. 29,
2012
Fifty-two weeks
ended  Dec. 31,
2011
Sales in million pounds 63.4 51.4 276.2 200.8
Sales in domestic currency $217,569 $174,309 $942,348 $672,293
Foreign exchange impact $711 $(1,834) $283 $3,246
Sales in United States dollars $218,280 $172,475 $942,631 $675,539
Adjusted EBITDA $22,072 $14,308 $91,726 $56,458
Net (loss) income $(2,683) $(2,941) $2,203 $18,660
Adjusted net income $10,636 $6,738 $38,071 $28,854
EPS (Diluted) $(0.18) $(0.19) $0.14 $1.22
Adjusted EPS (Diluted)4 $0.68 $0.44 $2.46 $1.88
Average Shares Outstanding (Diluted) 15,562 15,290 15,460 15,341
 

Sales for the fourth quarter increased by 26.6% to $218.3 million from $172.5 million for the same period a year ago.  Sales in domestic currency, which excludes the impact of currency translation, were $217.6 million compared with $174.3 million for fourth quarter of 2011.  The strong growth in sales for the period resulted from an increase in High Liner's Canadian business, as well as the addition of the Icelandic USA operations, which accounted for $59.5 million of the quarter's sales.  Total sales volume increased by 23.3% to 63.4 million pounds, with Icelandic USA accounting for 29.8 percentage points of the increase offset by 12 percentage points in volume decrease for the pre-Icelandic USA business.   For comparison purposes, assuming that the acquired Icelandic USA operations had been part of High Liner's operations for the full comparable period in 2011, total sales declined by 1.8% while total sales pounds declined by 5.6%.  The decline during the fourth quarter was exclusively in the U.S. and was due to reduced selling prices on commodity products, competitive activity, and soft restaurant sales.

Adjusted EBITDA for the fourth quarter increased by 54.2% to $22.1 million, or 10.1% of sales, from $14.3 million, or 8.3% of sales, for the same period in 2011.  Adjusted EBITDA is reconciled to Net Income in the table below. The increase in Adjusted EBITDA resulted from higher sales volumes with the addition of Icelandic USA and synergies.  Icelandic USA contributed $1.0 million to Adjusted EBITDA during the fourth quarter of 2011. For comparison purposes, assuming that Icelandic USA had been part of High Liner's operations for the full fourth quarter of 2011, Adjusted EBITDA increased by 11.6% year over year. Synergies achieved during the quarter were $3.7 million and for the year were $9.4 million.

Net loss for the quarter was $2.7 million (diluted loss per share of $0.18), compared with net loss of $2.9 million (diluted loss per share of $0.19) for the fourth quarter of 2011.  As in the first three quarters, net income was negatively impacted by after-tax one-time integration costs related to the Icelandic USA acquisition expensed during the quarter.  Additionally, the substantial increase in the value of High Liner's stock increased stock compensation expense in the quarter to $5.1 million.  The accelerated expensing of net financing costs on amendments to the term loan, to reduce future interest costs, also negatively affected results.  Excluding the one-time integration costs, the non-cash accelerated expensing of net deferred financing costs, and stock-based compensation expense, Adjusted Net Income increased by 57.8% to $10.6 million (Adjusted diluted EPS of $0.68) from $6.7 million (Adjusted diluted EPS of $0.44) for the same quarter in 2011.

The following table reconciles our reported earnings with our Adjusted EBITDA and Adjusted Net Income for the year and for the fourth quarter.

  Thirteen weeks ended   Fifty-two weeks ended
  December 29,
2012
  December 31,
2011
  December 29,
2012
  December 31,
2011
Amounts in US$000s              
Net income (2,683)   (2,941)   2,203   18,660
Add back:              
  Depreciation 3,916   2,095   13,830   7,981
  Amortization 201   707   5,551   1,840
  Financing costs 14,349   2,169   36,624   6,019
  Income taxes (1,681)   865   (1,667)   9,470
Standardized EBITDA 14,102   2,895   56,541   43,970
Add back (deduct):              
  Business acqusition, integration
and other expenses
3,410   10,036   10,741   11,049
  Impairment of property, plant and equipment (495)   -   13,230   -
  Increase in cost of sales -   235   1,149   510
  Loss (gain) on disposal of assets (88)   147   (190)   192
Adjusted EBITDA, including stock option expense 16,929   13,313   81,471   55,721
Non-cash stock option expense 5,143   995   10,255   737
Adjusted EBITDA 22,072   14,308   91,726   56,458
               

 

         
  2012 2011
  Diluted Earnings Per Share
Based on:
Diluted Earnings Per
Share Based on:
   $000  Average
Shares
Outstanding
 $000  Average
Shares
Outstanding
                 
Net Income  $ 2,203   0.14  $ 18,660   1.22
Add back                 
  After-tax business acquisition, integration, and other costs   6,895   0.45   8,397   0.55
  Impairment of property, plant and equipment   8,654   0.56   -   -
  Additional depreciation on property that is to be disposed as part of the acquisition   1,127   0.07   -   -
  Increase in cost of sales due purchase price allocation to inventory   761   0.05   312   0.02
  Revaluation of embedded derivative on debt   1,899   0.12   -   -
  Accelerated amortization of deferred financing charges   6,380   0.41        
  Interest rate swap on embedded derivative   529   0.03   -   -
  Intercompany dividend withholdng tax    (402)   (0.03)   782   0.05
   $  28,046  $ 1.81  $ 28,151  $ 1.84
  Stock compensation expense  $  10,025  $ 0.65  $ 703  $ 0.05
Adjusted Net Income  $  38,071  $ 2.46  $ 28,854  $ 1.88
                 
Average shares for the period       15,460       15,341
                   
                   
         
  Q4 2012 Q4 2011
  Diluted Loss Per Share
Based on:
Diluted Loss Per Share
Based on:
   $000  Average
Shares
Outstanding
 $000  Average
Shares
Outstanding
                 
Net Loss  $ (2,683)  $ (0.18)  $ (2,941)  $ (0.19)
Add back                 
  Business acquisition, integration, and other costs   2,215   0.14   7,775   0.51
  Impairment of property, plant and equipment   (355)   (0.02)   -   -
  Additional depreciation on property that is to be disposed as part of the acquisition   376   0.02   -   -
  Increase in cost of sales       -   144   0.01
  Embedded derivative   (377)   (0.02)   -   -
  Interest rate swap on embedded derivative   8   0.00   -   -
  Accelerated amortization of deferred financing costs   6,380   0.41   -   -
  Intercompany dividend withholdng tax    -   -   781   0.05
    5,564   0.36   5,759   0.38
  Stock compensation expense   5,072   0.33   979   0.06
Adjusted Net Income   10,636   0.68   6,738   0.44
                 
Average Shares for the period       15,562       15,290
                   

 

Free cash flow5 was $66.4 million for the year ended December 29, 2012.  Cash flow generated from operations allowed the Company to reduce interest-bearing debt by $58.5 million.  This brought net interest-bearing debt from $370.3 million at December 31, 2011 to $311.8 million at December 29, 2012.

The table below shows the Company's net debt at the end of fiscal 2012 and 2011.  The debt is interest-bearing debt, and as a result, excludes deferred financing charges.

  December 29 December 31
Amounts in ($000s) 2012 2011
Current bank loans  $ 60,530  $ 119,936
Current portion of long-term debt and finance
leases obligations
  35,276   3,546
Long-term debt and finance leases obligations   216,069   250,055
Less: cash and cash equivalents   (65)   (3,205)
  Total funded debt   311,810   370,332

 

Dividends

Today, the Board of Directors of the Company approved a quarterly dividend of $0.15 per Common Share payable on March 15, 2013 to shareholders of record on March 1, 2013.  This represents an 36% increase from the $0.11-per-share quarterly dividend paid on December 15, 2012, reflecting the Board's continued confidence in the Company's operations, and the fourth dividend increase over the last 10 quarters.

Outlook

"During 2012, much of our attention was focused on integrating Icelandic USA into High Liner's operations," added Mr. Demone.  "Going forward, we can now focus on capitalizing on our combined strengths and operations to continue to maximize synergies and further solidify our leadership position in the North American frozen seafood market.  We have begun a TV and radio advertising campaign in the first quarter of 2013 for our Sea Cuisine product line, which should help increase sales volume but will also increase expenses during the quarter by an estimated $3.3 million followed by an additional $1.0 million in the second quarter of 2013.  In Canada, we expect to continue the momentum of positive overall growth in both sales and profitability, by developing new products and promotional campaigns. In general, we believe that seafood input costs have stabilized at late-2012 levels, lower than the average for 2012.

With the amendments to the Term Loan B announced on February 8, which included a reduction in applicable interest rates, we estimate a $6.2-million reduction in financing costs in 2013 and an approximately $33-million reduction over the remaining term of the loan.

Our primary strategic objective in 2012 was profitable growth.  We successfully achieved this as the Icelandic USA Acquisition was accretive to our 2012 results on an adjusted basis.  We look to identify future opportunities for profitable growth, while continuing to make our operations more efficient, to continue to create value for our shareholders," concluded Mr. Demone.

Supplemental Financial Information

For convenience, this news release includes the Company's Fiscal Fourth Quarter Statements of Financial Position, Income, Cash Flows and Segment Information which can also be found on the Company's website at www.highlinerfoods.com under the Miscellaneous Financial Information section found under Investor 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 audited consolidated financial statements for the year ended December 29, 2012 will be issued and filed on SEDAR on or before March 28, 2013. Management's Discussion and Analysis for the year ended December 29, 2012, including further discussion and analysis of fourth quarter events or items that affected results of operations, financial position, and cash flows, will also be issued and filed on or before March 28, 2013. Both documents will also be available in the Investor Information section of the Company's website at www.highlinerfoods.com.

Conference Call

The Company will host a conference call on Thursday, February 21, at 10:30 a.m. ET (11:30 a.m. AT) to discuss its fourth quarter and full-year 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 Thursday, February 28, 2013 at midnight.  To access the archived conference call, dial 1-855-859-2056 and enter the reservation number 92513091.

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 symbol HLF 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,  lower interest costs in 2013, lower average raw material costs in 2013 relative to the average in 2012, increased operating efficiencies, expected volume increases, growth in both sales and profitability by developing new products and promotional campaigns, anticipated financial performance, and our market position.  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; our ability to attract and retain customers; our level of bank loans and  our operating costs.  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.

_____________________________________
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 business acquisitions, above its book value, 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 business acquisitions over its book value, non-cash expense from revaluing an embedded derivative associated with the long-term debt LIBOR floor, marking to market an interest rate swap related to the embedded derivative, the write off of deferred financing charges on the re-pricing of the Term Loan 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 Adjusted EPS is Adjusted Net Income, as defined, divided by the average diluted number of shares.
5 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.

HIGH LINER FOODS INCORPORATED
     
As at December 29, 2012
(with comparative figures as at December 31, 2011)
     
UNAUDITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in thousands of United States dollars)
    December 29, 2012 December 31, 2011
        (Restated)
ASSETS      
  Current:        
    Cash and cash equivalents $ 65 $ 3,205
    Accounts receivable   75,191   83,590
    Income taxes receivable   5,145   3,498
    Other financial assets   533   1,323
    Inventories   222,313   256,324
    Prepaid expenses   2,991   2,969
    Assets classified as held for sale   4,819   -
  Total current assets   311,057   350,909
  Non-current:        
    Property, plant and equipment    89,268   105,808
    Deferred income taxes   7,207   1,667
    Other receivables and miscellaneous assets   1,847   1,190
    Investment in equity accounted investee   96   271
    Employee future benefits   92   92
    Intangible assets   110,631   116,594
    Goodwill   111,085   110,816
  Total non-current assets   320,226   336,438
  Total assets   631,283   687,347
             
LIABILITIES AND SHAREHOLDERS' EQUITY        
  Current:        
    Bank loans   59,704   118,958
    Accounts payable and accrued liabilities   100,897   106,856
    Provisions   1,614   1,013
    Other current financial liabilities   550   780
    Income taxes payable   1,165   2,024
    Current portion of long-term debt   34,237   2,500
    Current portion of finance lease obligations   1,039   1,046
    Liabilities directly associated with the assets held for sale   1,604   -
  Total current liabilities   200,810   233,177
  Non-current:        
    Long-term debt   213,359   227,246
    Other long-term financial liabilities   2,662   6,466
    Long-term finance lease obligations    2,181   2,555
    Deferred income taxes   45,126   47,991
    Employee future benefits   13,791   11,085
  Total non-current liabilities   277,119   295,343
  Total liabilities   477,929   528,520
  Shareholders' Equity:        
    Common shares   75,169   73,931
    Contributed surplus   7,719   7,969
    Retained earnings   66,373   73,928
    Accumulated other comprehensive income   4,093   2,999
  Total Shareholders' equity   153,354   158,827
  Total liabilities and shareholders' equity   631,283   687,347
             

HIGH LINER FOODS INCORPORATED
 
For the thirteen and fifty-two weeks ended December 29, 2012
(with comparative figures for the thirteen and fifty-two weeks ended December 31, 2011)
       
UNAUDITED
CONSOLIDATED STATEMENT OF INCOME
(in thousands of United States dollars, except per share amounts)
 
    Thirteen weeks
ended,
  Thirteen weeks
ended,
    Fifty-two weeks
ended,
  Fifty-two weeks
ended,
    December 29,
2012
  December 31,
2011
    December 29,
2012
  December 31,
2011
        (Restated)         (Restated)
Revenues $ 218,280 $ 172,475   $ 942,631 $ 675,539
Cost of sales   168,693   135,581     733,105   522,009
Gross profit   49,587   36,894     209,526   153,530
Distribution expenses   11,735   9,216     46,308   35,382
Selling, general and administrative expenses   24,806   17,462     101,891   72,898
Impairment of property, plant and equipment   (493)   -     13,230   -
Business acquisition, integration and other expenses   3,409   10,036     10,741   11,049
Results from operating activities   10,130   180     37,356   34,201
Finance costs   14,349   2,169     36,624   6,019
Share of loss of equity accounted investee, net of income tax   145   87     196   52
Income before income taxes   (4,364)   (2,076)     536   28,130
Income taxes                   
  Current   908   751     5,442   5,762
  Deferred   (2,589)   114     (7,109)   3,708
Total income tax (recovery) expense   (1,681)   865     (1,667)   9,470
Net income $ (2,683) $ (2,941)   $ 2,203 $ 18,660
                   
PER SHARE EARNINGS                  
Earnings per common share                  
  Basic $ (0.18) $ (0.19)   $ 0.15 $ 1.24
  Diluted $ (0.18) $ (0.19)   $ 0.14 $ 1.22
Weighted average number of shares outstanding                  
Average shares outstanding for the period                  
  Basic   15,120,830   15,086,846     15,118,752   15,108,823
  Diluted   15,562,287   15,289,777     15,460,417   15,340,963

HIGH LINER FOODS INCORPORATED
For the thirteen and fifty-two weeks ended December 29, 2012
(with comparative figures for the thirteen and fifty-two weeks ended December 31, 2011)
 
UNAUDITED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of United States dollars)
             
    Thirteen
weeks
ended,
Thirteen
weeks
ended,
  Fifty-two
weeks
ended,
Fifty-two
weeks
ended,
    December 29,
2012
December 31,
2011
  December 29,
2012
December 31,
2011
      (Restated)     (Restated)
Cash provided by (used in) operations:            
  Net income for the period   (2,683) (2,941)   2,203 18,660
  Charges (credits) to income not involving
cash from operations:
           
    Depreciation and amortization   4,117 2,802   19,381 9,821
    Share based payment expense   5,142 995   10,255 737
    Loss on asset disposals, and impairment   (57) 96   13,589 273
    Payments of employee future benefits in excess of expense   (434) (307)   (1,728) (118)
    Finance costs   14,349 2,169   36,624 6,019
    Income tax expense (recovery)   (1,681) 865   (1,667) 9,470
    Share of loss of equity accounted investee, net of income taxes   145 87   196 52
    Movement in provisions   (6,873) (4,792)   904 412
    Unrealized foreign exchange (gain) loss   688 (263)   683 209
  Cash flow provided by operations before changes in non-cash working capital:   12,713 (1,289)   80,440 45,535
  Net change in non-cash working capital balances:            
    Accounts receivable   1,283 15,146   5,502 5,126
    Inventories   (3,539) (20,201)   35,258 (34,126)
    Prepaids   418 178   (423) (356)
    Accounts payables and accrued liabilities   17,955 1,070   (15,118) 4,336
    Net change in non-cash working capital balances   16,117 (3,807)   25,219 (25,020)
  Interest paid   (5,364) (1,577)   (19,145) (5,241)
  Income taxes paid   (2,342) (1,623)   (7,530) (10,865)
  Net cash flows provided by (used in) operating activities   21,124 (8,296)   78,984 4,409
Cash provided by (used in) financing activities:            
  Increase (decrease) in current working capital facilities   (14,205) 73,999   (59,673) 75,852
  Repayment of finance lease obligations   (252) (237)   (1,009) (903)
  Long-term debt deferred charges   - (14,721)   - (14,721)
  Proceeds from long-term debt   - 250,000   - 250,000
  Repayment of long-term debt   - (45,384)   (1,875) (48,627)
  Common share dividends paid   (1,687) (1,450)   (6,379) (5,912)
  Share Repurchase   - -   (497) (1,252)
  Stock options exercised   99 -   650 248
        (16,045) 262,207   (68,783) 254,685
Cash provided by (used in) investing activities:            
  Purchase of property, plant and equipment, net of investment tax credits   (5,852) (1,603)   (12,709) (7,047)
  Net proceeds on disposal of assets   12 13   232 146
  Acquisition of business, net of cash acquired   - (249,665)   - (249,665)
  Change in other receivables and miscellaneous assets   13 (220)   (247) (378)
          (5,827) (251,475)   (12,724) (256,944)
Foreign exchange increase on cash and cash equivalents   54 177   25 166
Change in cash during the period   (694) 2,613   (2,498) 2,316
Translation adjustment   1 276   63 288
Less: Cash directly associated with assets held for sale   (705) -   (705) -
Cash, beginning of period   1,463 316   3,205 601
Cash, end of period   65 3,205   65 3,205

 

 

HIGH LINER FOODS INCORPORATED
For the thirteen weeks ended December 29, 2012
(with comparative figures for the thirteen weeks ended December 31, 2011)
             
UNAUDITED
SEGMENTED INFORMATION
(in thousands of United States Dollars)
                             
  Thirteen weeks ended Thirteen weeks ended
  December 29, 2012 December 31, 2011
                        (Restated)    
Amounts in ($000s)    Canada     U.S.     Total     Canada     U.S.     Total 
Sales within geographic region* $ 80,059 $ 136,732 $ 216,791 $ 74,745 $ 96,975 $ 171,720
Sales outside of geographic region*   3,444   4,185   7,629   2,397   3,389   5,786
        83,503   140,917   224,420   77,142   100,364   177,506
Intercompany sales outside of geographic region*   (3,444)   (2,696)   (6,140)   (2,397)   (2,635)   (5,032)
Revenue (excluding intercompany sales)   80,059   138,221   218,280   74,745   97,730   172,475
Cost of sales (excluding intercompany sales)   (61,282)   (107,411)   (168,693)   (59,135)   (76,446)   (135,581)
Gross profit   18,777   30,810   49,587   15,610   21,284   36,894
Distribution expenses   (3,690)   (8,045)   (11,735)   (3,757)   (5,459)   (9,216)
Selling, general and administrative expenses   (11,109)   (13,697)   (24,806)   (7,304)   (10,158)   (17,462)
Impairment of property plant and equipment   493   -   493   -   -   -
Business acquisition integration (costs) and other expenses   (1,107)   (2,302)   (3,409)   (1,192)   (8,844)   (10,036)
Financing costs   (547)   (13,802)   (14,349)   (443)   (1,726)   (2,169)
(Loss) gain from equity accounted investee    (72)   (73)   (145)   (43)   (44)   (87)
Income before income tax    2,745   (7,109)   (4,364)   2,871   (4,947)   (2,076)
Income taxes   (1,334)   3,015   1,681   (1,592)   727   (865)
Net income $ 1,411 $ (4,094) $ (2,683) $ 1,279 $ (4,220) $ (2,941)
Add back:       -           -    
  Depreciation included in:   -   -       -   -    
    Cost of sales   589   2,695   3,284   575   1,032   1,607
    Distribution   42   107   149   46   116   162
    Selling, general and administrative expenses   360   123   483   280   46   326
  Total depreciation    991   2,925   3,916   901   1,194   2,095
  Amortization included in:   -   -   -   -   -   -
    Selling, general and administrative expenses   28   173   201   52   655   707
  Total depreciation and amortization   1,019   3,098   4,117   953   1,849   2,802
  Financing costs   547   13,802   14,349   443   1,726   2,169
  Income taxes   1,334   (3,015)   (1,681)   1,592   (727)   865
Income before depreciation, amortization, financing and income taxes $ 4,311 $ 9,791 $ 14,102 $ 4,267 $ (1,372) $ 2,895
*Geographic regions include Canada, US and Mexico                      

HIGH LINER FOODS INCORPORATED
For the fifty-two weeks ended December 29, 2012
(with comparative figures for the fifty-two weeks ended December 31, 2011)
             
UNAUDITED
SEGMENTED INFORMATION
(in thousands of United States Dollars)
             
  Fifty-two weeks ended Fifty-two weeks ended
  December 29, 2012 December 31, 2011
                    (Restated)    
Amounts in ($000s)    Canada     U.S.     Total     Canada     U.S.     Total 
Sales within geographic region* $ 311,843 $ 625,176 $ 937,019 $ 299,255 $ 370,747 $ 670,002
Sales outside of geographic region*   9,172   16,345   25,517   7,195   13,707   20,902
    321,015   641,521   962,536   306,450   384,454   690,904
Intercompany sales outside of geographic region*   (8,131)   (11,774)   (19,905)   (7,195)   (8,171)   (15,366)
Revenue (excluding intercompany sales)   312,884   629,747   942,631   299,255   376,284   675,539
Cost of sales (excluding intercompany sales)   (243,670)   (489,435)   (733,105)   (230,892)   (291,117)   (522,009)
Gross profit   69,214   140,312   209,526   68,363   85,167   153,530
Distribution expenses   (14,588)   (31,720)   (46,308)   (14,912)   (20,470)   (35,382)
Selling, general and administrative expenses   (38,354)   (63,537)   (101,891)   (31,640)   (41,258)   (72,898)
Impairment of property, plant and equipment   (4,407)   (8,823)   (13,230)   -   -   -
Business acquisition integration (costs) and other
expenses
  (2,321)   (8,420)   (10,741)   (1,238)   (9,811)   (11,049)
Financing costs   (1,512)   (35,112)   (36,624)   (1,095)   (4,924)   (6,019)
(Loss) gain from equity accounted investee    (98)   (98)   (196)   (26)   (26)   (52)
Income before income tax    7,934   (7,398)   536   19,452   8,678   28,130
Income taxes   (3,668)   5,335   1,667   (5,632)   (3,838)   (9,470)
Net income $ 4,266 $ (2,063) $ 2,203 $ 13,820 $ 4,840 $ 18,660
Add back:       -           -    
  Depreciation included in:       -           -    
    Cost of sales   2,369   8,428   10,797   2,340   3,849   6,189
    Distribution   164   1,206   1,370   182   287   469
    Selling, general and administrative expenses   1,304   359   1,663   1,159   164   1,323
  Total depreciation    3,837   9,993   13,830   3,681   4,300   7,981
  Amortization included in:       -           -    
    Selling, general and administrative expenses   190   5,361   5,551   232   1,608   1,840
  Total depreciation and amortization   4,027   15,354   19,381   3,913   5,908   9,821
  Financing costs   1,512   35,112   36,624   1,095   4,924   6,019
  Income taxes   3,668   (5,335)   (1,667)   5,632   3,838   9,470
Income before depreciation, amortization, financing and income taxes $ 13,473 $ 43,068 $ 56,541 $ 24,460 $ 19,510 $ 43,970
*Geographic regions include Canada, US and Mexico                        

 

HIGH LINER FOODS INCORPORATED
For the thirteen and fifty-two weeks ended December 29, 2012
(with comparative figures for the thirteen and fifty-two weeks ended December 31, 2011)
             
UNAUDITED
SEGMENTED INFORMATION CONTINUED
(in thousands of United States dollars)
             
  Thirteen weeks Thirteen weeks
  December 29, 2012 December 31, 2011
          (Restated)  
Amounts in ($000s)  Canada   U.S.   Total   Canada   U.S.   Total 
Capital Expenditures                        
Financed by operations   994   4,858   5,852   774   829   1,603
Financed by finance leases   154   -   154   156   -   156
Total capital expenditures  $ 1,148  $ 4,858  $ 6,006  $ 930  $ 829  $ 1,759
                         
  Fifty-two weeks Fifty-two weeks
  December 29, 2012 December 31, 2011
          (Restated)  
Amounts in ($000s)  Canada   U.S.   Total   Canada   U.S.   Total 
Capital Expenditures                        
Financed by operations   3,965   8,744   12,709   3,384   3,663   7,047
Financed by finance leases   738   -   738   628   -   628
Total capital expenditures  $ 4,703  $ 8,744  $ 13,447  $ 4,012  $ 3,663  $ 7,675
                         
Total assets  $ 147,286  $ 483,997  $ 631,283  $ 157,596  $ 529,751  $ 687,347
Goodwill  $ 12,534  $ 98,551  $ 111,085  $ 12,265  $ 98,551  $ 110,816
Liabilities  $ 307,825  $ 170,104  $ 477,929  $ 312,311  $ 216,209  $ 528,520

 

 

 

SOURCE: High Liner Foods Incorporated

For further information:

K.L. Nelson
Executive Vice President, 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