"We are pleased to report High Liner Foods' Adjusted Net Income was $10.4 million for the third quarter of 2013, which represents a $2.4 million, or 30 per cent, increase over the third quarter of 2012," said Henry Demone, CEO.
"Profitability improved in the third quarter, despite continued pressure on sales in certain segments of our business, and our operating cash flow was strong, as evidenced by Standardized Free Cash Flow of $64.7 million for the fifty-two week period ended September 28, 2013, compared to $41.1 million for the same period ended September 29, 2012. Strong cash flows from operating activities allowed us to reduce our net interest-bearing debt to Adjusted EBITDA ratio, also calculated on a rolling fifty-two week basis, from 3.40x at the end of fiscal 2012 to 3.16x at the end of the third quarter."
"Consistent with the first half of this year, in the third quarter we experienced sale declines compared to last year in our US food service business and our US and Canadian retail private label businesses. The decline in US food service sales reflected continued soft restaurant sales related to a sluggish economic recovery in the US and the decline in retail private label sales reflects the trend being experienced in the seafood marketplace overall of decreased demand for retail private label seafood products," explained Mr Demone.
"However, the impact of these sales declines in the third quarter was partially offset by sales growth in our branded retail business on both sides of the border and our Canadian food service business, when compared to the same period last year."
"The $2.4 million increase in Adjusted Net Income in the third quarter also reflects lower overall raw material costs, significant savings in financing costs resulting from amendments made to our term loan in the first quarter of this year, realization of synergies resulting from integrating the Icelandic USA acquisition and a lower effective income tax rate," said Mr Demone.
"In the first quarter of this year, we expedited the closure of our plant in Danvers, Massachusetts, and as a result, incurred incremental operating costs related to reduced plant throughput rates as our US plants integrated new products into their respective production facilities. The extent of these incremental costs, incurred in part to ensure minimal disruption to our customers, was not fully anticipated, and while we have been successful in increasing plant throughput rates from those experienced in the first quarter, these rates have not been fully restored to optimal levels.
"As a result, the Company continued to incur additional operating costs in the third quarter related to the reduced throughput rates and the full impact of the synergies related to closing the Danvers plant have not yet been fully realized. Maximizing throughput rates and reducing operating costs associated with our US manufacturing facilities is currently a top priority."
