For the year ended 29 December 2001, Canadian food processor High Liner earned net income of C$6.2m (US$3.8m), compared to the C$6.4m earned in 2000.
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Henry Demone, President and CEO, said: “Despite a challenging year for our commodity products and a weakening economy, I am pleased to announce that we met our income projections for 2001.
“This could not have been achieved without the excellent performance of our three brands, High Liner, Fisher Boy and Gina Italian Village, which achieved sales increases of 7.2%, 15.6% and 15.7%, respectively.”
Other highlights of 2001 included the launch of new products within seafood areas of Canadian grocery stores, increasing the company’s retail presence; expansion of retail distribution into US club stores and the distribution of new products to Sam’s Club and Costco, channels that are expected to increase significantly in 2002.
Operating EBITDA in 2001 is lower from 2000, however included in the results of operations of 2001 are costs relating to the Italian Village litigation totaling C$2.6m. This compares with litigation expenses incurred in 2000 of C$0.7m. Adjusting for this, operating EBITDA in both 2001 and 2000 would be approximately C$27.6m.
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By GlobalDataNet income in the Q4 was C$1.6m, equal to the comparable period in 2000. This was achieved despite lower sales through the Canadian food service division and lower US fresh fish sales – primarily scallops, as a result of weaker economic conditions. Lower interest expense, an exchange gain and a gain on disposal of assets offset the impact of lower gross profit on sales in this division.
Looking forward, Henry Demone said: “I am excited by the prospects for 2002. The company will continue to focus on expanding distribution for its retail products to a variety of channels, including the US club stores. In fact, High Liner’s focus on US club stores is proving successful, and shipments to club stores in January 2002 are substantially higher than last year. We launched Italian Village recently in Canada and first orders of our authentic stuffed pasta shipped in late January. Brand sales will increase income in 2002.”
The company expects sales and income to increase in 2002. Despite the economic downturn, High Liner Foods is well positioned to increase profitability. During periods of economic uncertainty, people eat less in restaurants and purchase more groceries. Since 75% of High Liner’s sales are retail, the company is confident that 2002 will be a good year. High Liner will continue to focus on increasing volumes in all distribution channels, particularly in club stores for its existing products, and to introduce new products to existing customers.
Changes in accounting standards that will be implemented in 2002 will cease amortizing goodwill to earnings. Not amortizing goodwill will increase 2002 income by approximately C$1m.
During the Q4, regular quarterly dividends on second preference shares in the amount of C$1.27 per share were paid for the period from 30 September 2001, to 29 December 2001. Dividends were also paid in the amount of C$3.85 per share on the outstanding cumulative redeemable Second Preference Shares for the period from 30 June 1991, to 30 December 1991. The semi-annual dividend payment of 13.75 cents per share was paid on the C&D Preference Shares on 2 January 2002.
