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High Liner Foods reports third quarter financial results

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  Published in House and Home on Thursday, November 12th 2009 at 12:12 GMT by Market Wire
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 Third quarter highlights: - Higher sales in both Canadian retail and food service operations; - Adjusted EBITDA(1) of $10.4 million; - Net income of $5.1 million, or fully diluted earnings per share of $0.28; - Overall sales decreased 3.8% to $143.7 million; - Net interest bearing debt decreased to 32.8% of total capitalization compared to 39.5% at the end of last year and 39.1% at the end of the third quarter a year ago; - Dividend declared for the fourth quarter of $0.075 cents per common and non-voting equity share; increased from $0.07 in the previous quarter. 

 ------------------------------------- (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. Management believes that EBITDA is a useful performance measure as it approximates cash generated from operations, before capital expenditures and changes in working capital and excludes unusual items. EBITDA also assists comparison among companies as it eliminates the differences in earnings due to how a company is financed. The calculation of Adjusted EBITDA follows the general principles and guidance for reporting EBITDA issued by the Canadian Institute of Chartered Accountants. 

 ------------------------------------------------------------------------- (Amounts in thousands of Canadian $ except per share amounts) ------------------------------------------------------------------------- Thirty- Thirty- Thirteen Thirteen nine nine weeks ended weeks ended weeks ended weeks ended Oct. 3, Sept. 27, Oct. 3, Sept. 27, 2009 2008 2009 2008 ------------------------------------------------------------------------- Sales $143,709 $149,354 $478,359 $438,552 ------------------------------------------------------------------------- Adjusted EBITDA $10,359 $10,926 $32,534 $28,729 ------------------------------------------------------------------------- Net income $5,129 $5,442 $15,949 $11,816 ------------------------------------------------------------------------- Adjusted net income(1) $5,129 $5,974 $16,515 $14,312 ------------------------------------------------------------------------- Diluted earnings per Common Share: ------------------------------------------------------------------------- Net income $0.28 $0.29 $0.87 $0.64 ------------------------------------------------------------------------- Adjusted net income(1) $0.28 $0.32 $0.90 $0.79 ------------------------------------------------------------------------- (1) Net income excluding one-time integration costs and non-operating items. Operational Highlights for the Third Quarter Canada 

 HIGH LINER FOODS INCORPORATED As at October 3, 2009 (with comparative figures as at September 27, 2008 and January 3, 2009) CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of Canadian dollars) October 3, September 27, January 3, 2009 2008 2009 ------------------------------------------------------------------------- ASSETS Current: Cash 1,924 2,712 7,032 Accounts receivable 55,736 63,196 63,873 Income tax receivable - 1,732 45 Inventories 120,393 114,540 146,863 Prepaid expenses 1,974 1,926 1,782 Future income taxes 2,965 912 1,533 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total current assets 182,992 185,018 221,128 ------------------------------------------------------------------------- Property, plant and equipment 54,295 53,185 59,016 ------------------------------------------------------------------------- Other: Future income taxes 522 1,262 833 Other assets 139 66 133 Employee future benefits 4,315 7,316 3,477 Intangible assets 20,854 20,875 24,065 Goodwill 29,176 28,444 30,767 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 55,006 57,963 59,275 ------------------------------------------------------------------------- 292,293 296,166 339,419 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current: Bank loans 19,985 39,719 39,931 Accounts payable and accrued liabilities 52,990 51,328 73,611 Income taxes payable 1,615 771 2,443 Current portion of long-term debt 3,522 - - Current portion of capital lease obligations 440 474 458 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total current liabilities 78,552 92,292 116,443 ------------------------------------------------------------------------- Long-term debt 53,830 54,441 63,939 ------------------------------------------------------------------------- Long-term capital lease obligations 527 510 513 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other long-term liabilities 1,173 - 2,112 ------------------------------------------------------------------------- Future income taxes 955 - - ------------------------------------------------------------------------- Employee future benefits 1,404 4,278 563 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Shareholders' Equity: Preference shares - - - Common shares 108,804 110,155 109,787 Contributed surplus 364 364 364 Retained earnings 62,267 48,633 49,897 Accumulated other comprehensive loss (15,583) (14,507) (4,199) ------------------------------------------------------------------------- 155,852 144,645 155,849 ------------------------------------------------------------------------- 292,293 296,166 339,419 ------------------------------------------------------------------------- ------------------------------------------------------------------------- HIGH LINER FOODS INCORPORATED For the thirteen and thirty-nine weeks ended October 3, 2009 (with comparative figures for the thirteen and thirty-nine weeks ended September 27, 2008) CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands of Canadian dollars, except per share amounts) Thirteen Weeks Thirty-Nine Weeks 2009 2008 2009 2008 ----------------------------------------------- ------------------------- Sales $ 143,709 $ 149,354 $ 478,359 $ 438,552 Cost of sales 114,179 116,533 378,109 342,240 Distribution expenses 7,560 9,135 24,791 27,115 ----------------------------------------------- ------------------------- Gross profit 21,970 23,686 75,459 69,197 Selling, general and administrative expenses (13,604) (14,250) (48,136) (44,685) Foreign exchange gain (loss) 364 (98) 200 (387) Business acquisition costs - (722) (460) (3,017) Amortization of intangible assets (336) (308) (1,063) (906) Loss on disposal of assets and other expense (112) (12) (452) (126) Interest expense: Short-term (366) (522) (1,327) (1,951) Long-term (905) (860) (2,833) (2,601) ----------------------------------------------- ------------------------- Income before income taxes 7,011 6,914 21,388 15,524 ----------------------------------------------- ------------------------- Income taxes: Current (1,113) (1,292) (2,342) (3,137) Future (769) (180) (3,097) (571) ----------------------------------------------- ------------------------- Total income taxes (1,882) (1,472) (5,439) (3,708) ----------------------------------------------- ------------------------- Net income 5,129 5,442 15,949 11,816 ----------------------------------------------- ------------------------- ----------------------------------------------- ------------------------- PER SHARE INFORMATION Earnings per Common Share Basic, net income 0.28 0.35 0.87 0.79 Diluted, net income 0.28 0.29 0.87 0.64 ----------------------------------------------- ------------------------- ----------------------------------------------- ------------------------- Average shares outstanding for the period Basic 18,338,476 14,595,394 18,404,424 13,816,631 Diluted 18,355,358 18,510,665 18,412,967 18,094,365 ----------------------------------------------- ------------------------- ----------------------------------------------- ------------------------- Depreciation (1,629) (1,588) (5,011) (4,604) HIGH LINER FOODS INCORPORATED For the thirteen and thirty-nine weeks ended October 3, 2009 (with comparative figures for the thirteen and thirty-nine weeks ended September 27, 2008) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands of Canadian dollars) Thirteen Weeks Thirty-Nine Weeks 2009 2008 2009 2008 ----------------------------------------------- ------------------------- Net income for the period 5,129 5,442 15,949 11,816 ----------------------------------------------- ------------------------- Other comprehensive income, net of future income taxes Unrealized foreign exchange (losses) gains of self- sustaining foreign operations (net of $0.4 million tax expense and $0.5 million tax recovery for the thirteen and thirty-nine weeks in 2009; net of nil taxes in 2008) (3,612) 813 (4,740) 2,080 ----------------------------------------------- ------------------------- Net (loss) gain on derivative financial instruments designated as cash flow hedges (net of $1.0 million income tax recovery and a $1.8 million income tax recovery for the thirteen and thirty-nine weeks in 2009; $0.2 million tax expense and $1.0 million tax expense for the thirteen and thirty-nine weeks in 2008) (2,264) 387 (4,473) 2,260 Net loss (gain) on derivatives designated as cash flow hedges in prior periods transferred to net income in the current period (net of $0.8 million and $1.3 million income tax expense for the thirteen and thirty-nine weeks in 2009; $0.1 million and $0.1 million of income tax recovery for the thirteen and thirty-nine weeks in 2008) 405 (304) (2,676) (46) ----------------------------------------------- ------------------------- Net (loss) gain on derivatives designated as cash flow hedges (1,859) 83 (7,149) 2,214 ----------------------------------------------- ------------------------- Other comprehensive (loss) income (5,471) 896 (11,889) 4,294 ----------------------------------------------- ------------------------- Comprehensive (loss) income (342) 6,338 4,060 16,110 ----------------------------------------------- ------------------------- ----------------------------------------------- ------------------------- HIGH LINER FOODS INCORPORATED For the thirteen and thirty-nine weeks ended October 3, 2009 (with comparative figures for the thirteen and thirty-nine weeks ended September 27, 2008) CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (Unaudited) (in thousands of Canadian dollars) Thirteen Weeks Thirty-Nine Weeks 2009 2008 2009 2008 ----------------------------------------------- ------------------------- Balance, beginning of period 58,421 44,330 49,897 40,112 Net income for the period 5,129 5,442 15,949 11,816 Dividends: Common shares (1,283) (745) (3,584) (2,087) Series A preference shares - (274) - (774) Second preference shares - - - (166) Share issuance expenses - (120) 5 (268) ----------------------------------------------- ------------------------- Balance, end of period 62,267 48,633 62,267 48,633 ----------------------------------------------- ------------------------- ----------------------------------------------- ------------------------- HIGH LINER FOODS INCORPORATED For the thirteen and thirty-nine weeks ended October 3, 2009 (with comparative figures for the thirteen and thirty-nine weeks ended September 27, 2008) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of Canadian dollars) Thirteen Weeks Thirty-Nine Weeks 2009 2008 2009 2008 ----------------------------------------------- ------------------------- Cash provided by (used in) operations: Net income for the period 5,129 5,442 15,949 11,816 Charges (credits) to income not involving cash from operations: Depreciation and amortization 2,199 2,002 6,780 5,829 Loss (gain) on disposal of assets 114 15 461 92 Stock compensation (reversal) expense (17) (60) 38 (81) Payments of employee future benefits less than expense (in excess of expense) 7 (17) 9 (558) Unrealized foreign exchange (gain) loss (187) (170) 710 212 Future income taxes 769 180 3,097 571 ----------------------------------------------- ------------------------- Cash flow from operations before changes in non-cash working capital 8,014 7,392 27,044 17,881 Net change in non- cash working capital balances 5,722 2,587 (5,972) 4,061 ----------------------------------------------- ------------------------- 13,736 9,979 21,072 21,942 ----------------------------------------------- ------------------------- Cash (used in) provided by financing activities: Change in current bank loans (12,136) (9,596) (16,777) (23,640) Repayment of long- term capital lease obligations (116) (97) (326) (420) Dividends paid: Second Preference - - - (166) Series A Preference - (274) - (774) Common (1,283) (745) (3,584) (2,087) Share issuance cost - (120) 5 (268) Share repurchase (62) - (983) - Preference share redemption - - - (18) Issue of equity shares - 540 - 991 ----------------------------------------------- ------------------------- (13,597) (10,292) (21,665) (26,382) ----------------------------------------------- ------------------------- Cash (used in) provided by investing activities: Purchase of property, plant and equipment (net of investment tax credits) (2,065) (870) (4,158) (1,889) Net proceeds (expenditures) on disposal of assets 1 4 12 (29) Business acquisition adjustment - (144) - 1,758 ----------------------------------------------- ------------------------- (2,064) (1,010) (4,146) (160) ----------------------------------------------- ------------------------- Foreign exchange impact on cash (300) 66 (369) 248 ----------------------------------------------- ------------------------- Decrease in cash during the period (2,225) (1,257) (5,108) (4,352) Cash, beginning of period 4,149 3,969 7,032 7,064 ----------------------------------------------- ------------------------- Cash, end of period 1,924 2,712 1,924 2,712 ----------------------------------------------- -------------------------