High Liner Foods reports fourth quarter and year end results for 2009

- Recession-resistant business achieves higher profits for the quarter and fiscal year -

LUNENBURG, NS, Feb. 24 /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 and fiscal year ended January 2, 2010. All amounts are reported in Canadian dollars.

    
    Financial and operational highlights for the fourth quarter include:

    -   Adjusted EBITDA(1) increased 20.1% to $11.0 million despite lower
        sales and volume (measured in pounds) compared to the fourth quarter
        of 2008;
    -   Net income of $3.8 million, or fully diluted earnings per share
        ("EPS") of $0.21, up from $2.4 million, or fully diluted EPS of
        $0.13, in the fourth quarter of 2008.

    Financial and operational highlights for the fiscal year include:

    -   Annual sales increased 1.8% to $627.2 million;
    -   Adjusted EBITDA increased 15.0% to $43.6 million;
    -   Net income of $19.7 million, or fully diluted EPS of $1.07, up from
        $14.2 million, or fully diluted EPS of $0.77, in 2008; and,
    -   Net interest bearing debt reduced to 33.6% of total capitalization
        from 39.5% at end of fiscal 2008.
    

"Despite the difficult economic environment, 2009 was another strong, successful year for High Liner," said Henry Demone President and Chief Executive Officer. "We continued to execute against well-defined business objectives throughout the year and we were profitable in all key sales channels. As a result, we generated strong operating cash flow, which we used to reinvest in our business, return more to our shareholders in the form of twice increased dividends, and reduce net interest bearing debt."

Financial Results

Fourth quarter sales were $148.8 million, down from $177.4 million in the fourth quarter of 2008, as sales volume fell 11.3% to 42.8 million pounds. A stronger Canadian dollar in the fourth quarter of fiscal 2009 and the inclusion of a fourteenth week of results in the fourth quarter of fiscal 2008 (compared to thirteen weeks in fiscal 2009) accounted for most of the difference in reported sales for the quarter. The stronger Canadian dollar in the fourth quarter of 2009 decreased the value of reported U.S. sales by approximately $12.8 million.

    
    -------------------------------------------------------------------------
    (Amounts in thousands of Canadian $)
    -------------------------------------------------------------------------
                                                   Thirteen       Fourteen
                                                weeks ended      weeks ended
                                               Jan. 2, 2010     Jan. 3, 2009
    -------------------------------------------------------------------------
    Sales as reported                              $148,827         $177,441
    -------------------------------------------------------------------------
       Less FX effect                               ($3,858)        ($16,661)
    -------------------------------------------------------------------------
       Less estimated sales for 14th week                N/A        ($10,000)
    -------------------------------------------------------------------------
    Adjusted sales                                  $144,969        $150,780
    -------------------------------------------------------------------------
    

Sales were also impacted by continued uncertainty in the economy resulting in a more price-conscious consumer mindset. In particular, sales of higher priced, but lower margin, crab and lobster were significantly lower in both the Canadian and U.S. food service channels.

The Company's continued focus on improving its inventory management and controlling costs contributed to a 20.1% increase in Adjusted EBITDA for the quarter. Adjusted EBITDA was $11.0 million compared to $9.2 million in the fourth quarter of 2008.

Excluding the effect of converting U.S. results to Canadian dollars, in domestic currency Adjusted EBITDA for the quarter was $10.6 million compared with $8.1 million for the fourth quarter of 2008.

Net income for the quarter increased to $3.8 million, or $0.21 per diluted share, from $2.4 million, or $0.13 per diluted share, for the same quarter the year before. Income for the quarter was impacted by an increase of $0.6 million in deferred income tax liability resulting from a review of income taxes, as the Company's U.S. subsidiary became taxable for accounting purposes earlier than expected.

    
    -------------------------------------------------------------------------
    (Amounts in thousands of Canadian $ except per share amounts)
    -------------------------------------------------------------------------
                         Thirteen     Fourteen      Fifty-two    Fifty-three
                       weeks ended   weeks ended   weeks ended   weeks ended
                      Jan. 2, 2010  Jan. 3, 2009  Jan. 2, 2010  Jan. 3, 2009
    -------------------------------------------------------------------------
    Sales                 $148,827      $177,441      $627,186      $615,993
    -------------------------------------------------------------------------
    Adjusted EBITDA        $11,039        $9,188       $43,573       $37,917
    -------------------------------------------------------------------------
    Net income              $3,798        $2,376       $19,747       $14,192
    -------------------------------------------------------------------------
    Adjusted net income(1)  $4,374        $4,036       $20,889       $18,348
    -------------------------------------------------------------------------
    Diluted earnings per
     Common Share:
    -------------------------------------------------------------------------
    Net income               $0.21         $0.13         $1.07         $0.77
    -------------------------------------------------------------------------
    Adjusted net income(1)   $0.24         $0.22         $1.14         $1.00
    -------------------------------------------------------------------------
    (1) Net income excluding one-time integration costs and non-operating
        items.
    

Dividends

The Company paid a $0.075 per share quarterly dividend on December 15, 2009 to Common and Non-Voting Equity shareholders of record on December 1, 2009.

Today, the Board of Directors of the Company resolved to pay a quarterly dividend in the amount of $0.075 per Common and Non-Voting Equity Share payable on March 15, 2010 to shareholders of record on March 5, 2010.

Outlook

"We have every confidence that 2010 will be another strong year for High Liner," said Mr. Demone. "We continue to see lower raw material costs and a strengthening in the Canadian dollar, both of which benefit our business. Our well diversified offering of value and premium products continue to be a strength as many consumers are still looking for value, as well as quality. Price decreases on commodity products along with greater promotional activity on value-added products should drive volume growth going forward."

Conference Call

The Company will host a conference call on Thursday, February 25, 2010 at 10:30 a.m. ET (11:30 a.m. AT) to discuss its fourth quarter and year end financial results. To access the conference call by telephone, dial 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, March 4, 2010 at midnight. To access the archived conference call, dial 1-800-642-1687 and enter the reservation number 54468773.

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(R), Fisher Boy(R), Mirabel(R) and Sea Cuisine(TM) labels, and are available in most grocery and club stores. The Company also sells its High Liner(R), FPI(R) and Mirabel(R) 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 statements, including sales, earnings, marketing, and profitability comments for 2010 and beyond. These statements contain words such as "anticipate", "expect", "could", "should", "may", "plans", "will", or similar expressions that are based on and arise out of our experience, our perception of trends, current conditions and expected future developments as well as other factors. 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 a number of important factors, as discussed herein and in our other continuous disclosure documents, could cause actual results to 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 thorough discussion of the risk factors that can cause anticipated outcomes to differ from actual outcomes. We disclaim any intention or obligation to update or revise forward-looking statements.

For further information about the Company, please visit our website at www.highlinerfoods.com or send an e-mail to investor@highlinerfoods.com.

Financial Statements

For convenience, this news release includes the Company's Fiscal Fourth Quarter Balance Sheets and Statements of Income, Statements of Comprehensive Income, Statements of Retained Earnings and Statements of Cash Flows.

-----------------

(1) Adjusted earnings before interest, taxes, depreciation and amortization, business acquisition costs, other income and non-operating transactions as disclosed on the consolidated statements of income. The calculation of Adjusted EBITDA follows the recently issued general principles and guidance for reporting EBITDA issued by the Canadian Institute of Chartered Accountants.

    
                        HIGH LINER FOODS INCORPORATED

                            As at January 2, 2010
               (with comparative figures as at January 3, 2009)

                         CONSOLIDATED BALANCE SHEETS
                     (in thousands of Canadian dollars)

                                                      January 2,   January 3,
                                                           2010         2009
    -------------------------------------------------------------------------
    ASSETS
    Current:
      Cash and cash equivalents                       $   1,953        7,032
      Accounts receivable                                59,553       63,873
      Income tax receivable                               1,288           45
      Inventories                                       119,586      146,863
      Prepaid expenses                                    2,024        1,782
      Future income taxes                                 3,846        1,533
    -------------------------------------------------------------------------
    Total current assets                                188,250      221,128
    -------------------------------------------------------------------------
    Property, plant and equipment                        59,528       59,016
    -------------------------------------------------------------------------
    Other:
      Future income taxes                                   349          833
      Other receivables and sundry investments              243          133
      Employee future benefits                            7,391        3,477
      Intangible assets                                  19,785       24,065
      Goodwill                                           28,701       30,767
    -------------------------------------------------------------------------
                                                         56,469       59,275
    -------------------------------------------------------------------------
                                                        304,247      339,419
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current:
      Bank loans                                         22,786       39,931
      Accounts payable and accrued liabilities           54,876       73,611
      Income taxes payable                                   29        2,443
      Current portion of long-term debt                   4,582            -
      Current portion of capital lease obligations          864          458
    -------------------------------------------------------------------------
    Total current liabilities                            83,137      116,443
    -------------------------------------------------------------------------
    Long-term debt                                       50,848       63,939
    -------------------------------------------------------------------------
    Long-term capital lease obligations                   2,700          513
    -------------------------------------------------------------------------
    Other long-term liabilities                           1,254        2,112
    -------------------------------------------------------------------------
    Future income taxes                                   4,688            -
    -------------------------------------------------------------------------
    Employee future benefits                              4,540          563
    -------------------------------------------------------------------------
    Shareholders' Equity:
      Common shares                                     108,804      109,787
      Contributed surplus                                   364          364
      Retained earnings                                  64,690       49,897
      Accumulated other comprehensive loss              (16,778)      (4,199)
    -------------------------------------------------------------------------
                                                        157,080      155,849
    -------------------------------------------------------------------------
                                                        304,247      339,419
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                        HIGH LINER FOODS INCORPORATED

         For the thirteen and fifty-two weeks ended January 2, 2010
        (with comparative figures for the fourteen and fifty-three weeks
                           ended January 3, 2009)

                      CONSOLIDATED STATEMENTS OF INCOME
         (in thousands of Canadian dollars, except per share amounts)

                                 For the     For the     For the     For the
                                thirteen    fourteen   fifty-two fifty-three
                                   weeks       weeks       weeks       weeks
                                   ended,      ended,      ended,      ended,
                               January 2,  January 3,  January 2,  January 3,
                                    2010        2009        2010        2009
    -------------------------------------------------  ----------------------
    Sales                      $ 148,827   $ 177,441   $ 627,186   $ 615,993
    Cost of sales                114,455     138,913     492,564     482,454
    Distribution expenses          7,561      10,358      32,352      36,997
    -------------------------------------------------  ----------------------
    Gross profit                  26,811      28,170     102,270      96,542
    Foreign exchange gain
     (loss)                           64        (847)        264      (1,234)
    Selling, general and
     administrative expenses     (17,435)    (20,000)    (65,571)    (63,860)
    Business acquisition
     integration costs                 -      (1,862)       (460)     (4,879)
    Amortization of
     intangibles assets             (436)       (477)     (1,499)     (1,383)
    Interest expense:
      Short-term                    (353)       (744)     (1,680)     (2,695)
      Long-term                     (932)     (1,167)     (3,765)     (3,768)
    Loss on asset disposal           (40)       (276)       (492)       (402)
    Non-operating transactions      (922)        (84)       (922)        (84)
    -------------------------------------------------  ----------------------
    Income before income taxes     6,757       2,713      28,145      18,237
    -------------------------------------------------  ----------------------
    Income taxes
      Current                       (206)        135      (2,548)     (3,002)
      Future                      (2,753)       (472)     (5,850)     (1,043)
    -------------------------------------------------  ----------------------
    Total income taxes            (2,959)       (337)     (8,398)     (4,045)
    -------------------------------------------------  ----------------------
    Net income                     3,798       2,376      19,747      14,192
    -------------------------------------------------  ----------------------
    -------------------------------------------------  ----------------------

    PER SHARE INFORMATION
    Earnings per Common Share
      Basic                         0.21        0.13        1.07        0.88
      Diluted                       0.21        0.13        1.07        0.77

    Average shares outstanding
     for the period
      Basic                   18,330,663  18,521,005  18,384,940  15,059,296
      Diluted                 18,350,378  18,521,784  18,396,067  18,203,100
    -------------------------------------------------  ----------------------
    -------------------------------------------------  ----------------------



                        HIGH LINER FOODS INCORPORATED

         For the thirteen and fifty-two weeks ended January 2, 2010
       (with comparative figures for the fourteen and fifty-three weeks
                           ended January 3, 2009)

               CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                     (in thousands of Canadian dollars)


                                 For the     For the     For the     For the
                                thirteen    fourteen   fifty-two fifty-three
                                   weeks       weeks       weeks       weeks
                                   ended,      ended,      ended,      ended,
                               January 2,  January 3,  January 2,  January 3,
                                    2010        2009        2010        2009
    -------------------------------------------------  ----------------------
    Net income for the period      3,798       2,376      19,747      14,192
    -------------------------------------------------  ----------------------

    Other comprehensive income,
     net of future income taxes
      Unrealized foreign
       exchange gains (losses)
       of self-sustaining foreign
       operations net of $0.3
       million income tax
       recovery (2008; net of nil
       income taxes)              (1,846)      7,013      (6,586)      9,093
    -------------------------------------------------  ----------------------
      Net (loss) gain on
       derivative financial
       instruments designated as
       cash flow hedges net of
       $2.1 million income tax
       recovery (2008; $3.6
       million income tax
       expense)                     (885)      4,785      (5,358)      7,045
       Net gain (loss) on
        derivative financial
        instruments designated
        as cash flow hedges in
        prior periods transferred
        to net income in the
        current period net of
        $0.6 million income tax
        recovery (2008; $0.8
        million income tax
        expense)                   1,536      (1,490)     (1,140)     (1,536)
    -------------------------------------------------  ----------------------
       Change in gains and
        losses on derivatives
        designated as cash
        flow hedges                  651       3,295      (6,498)      5,509
    -------------------------------------------------  ----------------------
    Other comprehensive
     (loss) income                (1,195)     10,308     (13,084)     14,602
    -------------------------------------------------  ----------------------
    Comprehensive income           2,603      12,684       6,663      28,794
    -------------------------------------------------  ----------------------
    -------------------------------------------------  ----------------------



                        HIGH LINER FOODS INCORPORATED

         For the thirteen and fifty-two weeks ended January 2, 2010
       (with comparative figures for the fourteen and fifty-three weeks
                           ended January 3, 2009)

                 CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
                     (in thousands of Canadian dollars)

                                 For the     For the     For the     For the
                                thirteen    fourteen   fifty-two fifty-three
                                   weeks       weeks       weeks       weeks
                                   ended,      ended,      ended,      ended,
                               January 2,  January 3,  January 2,  January 3,
                                    2010        2009        2010        2009
    -------------------------------------------------  ----------------------
    Balance, beginning of
     period                       62,267      48,633      49,897      40,112
    Net income for the period      3,798       2,376      19,747      14,192
    Dividends:
      Common shares               (1,375)     (1,157)     (4,959)     (3,244)
      Series A preference shares       -           -           -        (774)
      Second preference shares         -           -           -        (166)
    Share issuance expenses            -          45           5        (223)
    -------------------------------------------------  ----------------------
    Balance, end of period        64,690      49,897      64,690       49,897
    -------------------------------------------------  ----------------------
    -------------------------------------------------  ----------------------


                        HIGH LINER FOODS INCORPORATED

         For the thirteen and fifty-two weeks ended January 2, 2010
        (with comparative figures for the fourteen and fifty-three weeks
                           ended January 3, 2009)

                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                     (in thousands of Canadian dollars)


                                 For the     For the     For the     For the
                                thirteen    fourteen   fifty-two fifty-three
                                   weeks       weeks       weeks       weeks
                                   ended,      ended,      ended,      ended,
                               January 2,  January 3,  January 2,  January 3,
                                    2010        2009        2010        2009
    -------------------------------------------------  ----------------------
    Cash provided by (used in)
     operations:
      Net income from
       operations for the
       period                      3,798       2,376      19,747      14,192
      Charges (credits) to
       income not involving
       cash from operations:
        Depreciation and
         amortization              2,268       2,482       9,048       8,311
        Loss on disposal of
         assets                       56         356         517         448
        Stock compensation
         expense (recovery)          326           -         364         (81)
        Payments of employee
         future benefits less
         than (in excess of)
         expense                      68          35          77        (523)
        Unwound foreign exchange
         contract gains
         reclassed from
         Accumulated Other
         Comprehensive Income       (451)          -      (7,245)          -
        Unrealized foreign
         exchange (gain) loss        (10)        263         700         475
        Future income taxes        2,753         472       5,850       1,043
    -------------------------------------------------  ----------------------
      Cash flow from operations
       before changes in
       non-cash working capital:   8,808       5,984      29,058      23,865
      Net change in non-cash
       working capital balances   (5,293)        770      (4,471)      4,832
    -------------------------------------------------  ----------------------
                                   3,515       6,754      24,587      28,697
    -------------------------------------------------  ----------------------
    Cash provided by (used in)
      financing activities:
      Net change in current
       bank loans                  3,500      (5,614)    (13,277)    (29,254)
      Proceeds from lease
       financing                   2,671           -       2,671           -
      Repayment of capital
       lease obligations            (149)        (99)       (475)       (519)
      Dividends paid:
        Second Preference              -           -           -        (166)
        Series A Preference            -           -           -        (774)
        Common                    (1,375)     (1,157)     (4,959)     (3,244)
      Share issuance expenses          -         (55)          5        (323)
      Repurchase of capital
       stock                           -        (369)       (983)       (402)
      Issue of equity shares           -           2           -         993
    -------------------------------------------------  ----------------------
                                   4,647      (7,292)    (17,018)    (33,689)
    -------------------------------------------------  ----------------------
    Cash provided by (used in)
     investing activities:
      Purchase of property,
       plant and equipment
       (net of investment
       tax credits)               (7,995)     (2,782)    (12,153)     (4,671)
      Proceeds of unwound
       foreign exchange
       contracts                       -       7,436           -       7,436
      Net proceeds
       (expenditures) on
       disposal of assets             13           4          25         (25)
      Acquisition of business          -           -           -       2,000
      Business acquisition costs       -          (7)          -        (235)
      Decrease in other
       receivables                  (110)        (67)       (110)        (67)
    -------------------------------------------------  ----------------------
                                  (8,092)      4,584     (12,238)      4,438
    -------------------------------------------------  ----------------------
    Foreign exchange impact on
     cash and cash equivalents       (41)        274        (410)        522
    -------------------------------------------------  ----------------------
    Change in cash and cash
     equivalents during the
     period                           70       4,046      (4,669)       (554)
    Cash and cash equivalents,
     beginning of period           1,924       2,712       7,032       7,064
    -------------------------------------------------  ----------------------
    Cash and cash equivalents,
     end of period                 1,953       7,032       1,953       7,032
    -------------------------------------------------  ----------------------
    -------------------------------------------------  ----------------------
    

%SEDAR: 00001789E

SOURCE High Liner Foods Incorporated

For further information: For further information: Kelly Nelson, Vice President Corporate Services & Chief Financial Officer, High Liner Foods Incorporated, Tel: (902) 634-6200, investor@highlinerfoods.com; Trevor Heisler, Investor Relations, The Equicom Group Inc., Tel: (416) 815-0700 ext.270, theisler@equicomgroup.com


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