CANADA: High Liner sees mixed FY

By Katy Askew | 21 February 2013

  •  Adjusted EBITDA up 62.5%
  •  Adjusted net income rises to $38.1m
  •  Financing cost causes net loss

High Liner has reported a jump in 2012 adjusted EBITDA and sales but financing costs caused the firm to book a net loss in the period.

The Canadian value-added seafood producer said adjusted EBITDA rose by 62.5% in 2012, climbing to C$91.7m (US$). Adjusted net income rose to $38.1m, compared with $28.9m last year. Sales volumes rose 37.5% to 276.2m pounds. Icelandic USA - which was fully integrated into High Liner in November - contributed 85m pounds to total sales volume in 2012.

However, the company saw its net earnings hit by a deferred financing cost of $8.7m. As a consequence, the group booked a net loss of $2.7m in 2012, slightly down on the net loss of $2.9m in the previous year.

Show the press release

 

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 an 18% increase in dividends to reflect its continued confidence in High Liner's operations."

 

Original source: High Liner

Sectors: Financials

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