Clearwater reports 2009 year-to-date and third quarter results stronger than
2008

    
    /NOT FOR DISTRIBUTION TO UNITED STATES OR FOR DISSEMINATION IN THE UNITED
    STATES/
    

HALIFAX, Nov. 10 /CNW/ - (TSX: CLR.UN, CLR.DB, CLR.DB.A):

    
    - Increased EBITDA of 40% or $7.3 million year-to-date to $25.4 million
      versus 2008 and of 34% to $10.6 million for the quarter or $2.7 million
      over the third quarter of 2008. (EBITDA is Earnings before interest,
      taxes, depreciation and amortization, foreign exchange gains and losses
      and one time and unusual adjustments. For a reconciliation of these
      amounts please refer to the Management's Discussion and Analysis).
    - Increased gross profit margins of 35% or $9 million year-to-date over
      2008 to $34.9 million.  Gross profit margins in the third quarter of
      2009 were up 27% or $3.1 million over the third quarter of 2008.
    - Significantly improved leverage over the prior year as management
      continues to focus on improving balance sheet.  Total long term debt
      has been reduced by $17 million in the first 9-months.
    

Today, Clearwater Seafoods Limited Partnership ("Clearwater") reported its year-to-date and third quarter 2009 results.

Clearwater reported a 35% increase in gross margin to $34.9 million, on a 4% year-to-date increase in sales to $215.7 million, improvements of $9.0 million and $7.7 million over the respective periods in 2008. Year-to-date, the business experienced overall higher margins as a percentage of sales due primarily to improve operating results in our clam, scallops, FAS shrimp and processed lobster businesses. In addition, strengthening foreign exchange rates, on foreign currency denominated sales and lower fuel costs had a positive impact on margins. With the launch of the new clam vessel and the finalization of a new shrimp joint venture, both of which occurred in the second quarter of 2008, and our ongoing focus on cost reduction, Clearwater's operating results have continued to show improvement in 2009. These positive factors resulted in a 40% increase in year-to-date 2009 EBITDA before foreign exchange losses and one time and unusual adjustments. Clearwater reported EBITDA of $25.4 million year-to-date 2009 versus $18.1 million in the same period of 2008 (for calculation of EBITDA refer to the Definitions and Reconciliations section of the 2009 third quarter MD&A).

As a percent of sales, gross profit margin improved 35% for the first 9 months of 2009 over 2008. Gross margin was up 27% in the third quarter against 2008's third quarter. The significant improvement in margins in 2009 was primarily because of greater productivity in our clam and scallop businesses partially offset by a sales mix of relatively lower margins for shrimp and live lobster. In addition management has focused on controlling costs, and increasing vessel operations and productivity, resulting in better margin realization for key species. Clearwater reported EBITDA of $10.6 million in the third quarter of 2009 versus $7.9 million in the same period of 2008. The improvements for both periods are a result of higher gross profits as the business returns to more normal operations.

During the quarter Clearwater continued to generate cash by disposing of non-core quotas from which it was not earning an adequate return on its capital employed. In the third quarter Clearwater sold $7.2 million of non-core groundfish quotas and recorded a gain on sale of $2.0 million. Year-to-date Clearwater has generated proceeds of $15.3 million from the sale of non-core quotas and $1.3 million from the sale of other surplus assets.

Leverage improved to 4.83 times EBITDA from 9.23 in Q3 2008 because of a rolling 12 months of sustaining EBITDA of $45.3 million from operations and reduced debt. Senior debt is now less than 2 times EBITDA. Total debt repayments of more than $17 million reduced total debt to $223.9 million at the third quarter of 2009 versus $241.3 million at December 31, 2008.

The sale of these non-core quotas is part of Clearwater's focused strategy for maintaining liquidity which includes tightly managing its working capital, limiting capital spending, liquidating under performing assets and selling non-core assets which do not achieve an adequate return on capital, and limiting distributions.

Looking forward to the last quarter of 2009, Clearwater believes that with the improvements to the (clam, shrimp and lobster) fleets and the possibility of continued lower fuel costs it will be able to operate without disruption to continue to grow the trend of positive cash flows and profit margins. This is of course subject to any impact of weakened economic conditions in Asia, North America and Europe. Clearwater also believes that as a food company the business will continue to respond well in the current recessionary period as it has so far this year.

Over the next several years Clearwater will continue its focus on reducing its leverage. This will come from a combination of improved earnings levels and from using the positive cash flow of the business to reduce debt. This should result in lower interest costs as debt levels are reduced. In December 2010 Clearwater Seafoods Income Fund has $45 million of convertible debentures that come due. These funds were invested by the Fund in Class C Units issued by Clearwater with similar terms and conditions, including maturity in December 2010. Clearwater also has approximately 1.2 billion in ISK denominated bonds, including CPI and accrued interest that come due in September 2010 (approximately Canadian $10.5 million). Management is currently assessing alternative solutions and believes that the Company will be successful in refinancing both of these facilities before they come due.

Colin MacDonald, Chairman and Chief Executive Officer, commented, "We are pleased to report continued strong results in 2009 despite the challenging worldwide economic conditions. Our solid results speak to the success of all our business units and in particular our outstanding and dedicated workforce which continues to seek and find ways to drive innovation in our harvesting, our processing and in building strong relationships with our customers."

    
    Colin MacDonald
    Chairman and Chief Executive Officer
    Clearwater Seafoods Limited Partnership
    November 10, 2009
    

Financial Statements and Management's Discussion and Analysis Documents

For an analysis of Clearwater and Clearwater Seafoods Income Fund's third quarter results, please see the Management's Discussion and Analysis and the 2009 third quarter financial statements. These documents can be found in the disclosure documents filed by Clearwater Seafoods Income Fund with the securities regulatory authorities available at www.sedar.com or at its website (www.clearwater.ca).

    
    Key Financial Figures ($000's except unit amounts)

    -------------------------------------------------------------------------
    Clearwater                13 weeks ended             39 weeks ended
                        October 3, September 27,    October 3, September 27,
                             2009          2008          2009          2008
    -------------------------------------------------------------------------

    Sales                 $74,483       $81,557      $215,671      $207,905
    Net earnings
     (loss)                  $418      ($10,234)      $29,310      ($20,671)

    Basic earnings
     (loss) per unit        $0.01        ($0.20)        $0.57        ($0.40)
    -------------------------------------------------------------------------

    EBITDA(1)             $10,562        $7,882       $25,405       $18,088

    Units outstanding
     at period-end
    Limited
     Partnership
     Units             51,126,912     51,126,912   51,126,912    51,126,912
    Fully diluted      62,323,941     62,323,941   62,323,941    62,323,941
    -------------------------------------------------------------------------
    1. Please see the Management's Discussion and Analysis for a
       reconciliation of these amounts to the financial statements.
    

The Fund does not consolidate the results of Clearwater's operations but rather accounts for the investment using the equity method. Due to the limited amount of information that this would provide on the underlying operations of Clearwater, the financial highlights of Clearwater are included above.

About Clearwater

Clearwater is recognized for its consistent quality, wide diversity and reliable delivery of premium seafood, including scallops, lobster, clams, coldwater shrimp, crab and ground fish.

Since its founding in 1976, Clearwater has invested in science, people, technology, resource ownership and resource management to preserve and grow its seafood resource. This commitment has allowed it to remain a leader in the global seafood market.

%SEDAR: 00018023E

SOURCE Clearwater Seafoods Incorporated

For further information: For further information: Robert Wight, Chief Financial Officer, Clearwater, (902) 457-2369; Tyrone Cotie, Director of Corporate Finance and Investor Relations, Clearwater, (902) 457-8181


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