Clearwater fourth quarter and 2019 annual results.
- Fourth quarter sales and adjusted EBITDA1 were $167.1 million and $30.1 million respectively versus $159.8 million and $24.1 million in the prior year.
- Annual sales and adjusted EBITDA1 were $616.2 million and $114.9 million respectively versus $592.2 million and $104.4 million in the prior year.
- Gross margin and adjusted EBITDA as a percentage of sales increased to 19.8% and 18.6% respectively in 2019 compared to 18.0% and 17.6% in 2018.
- Leverage decreased to 4.1x in 2019 compared to 4.7x in 2018. Cash from operations decreased $12.8 million due to timing of sales.
- Return on assets increased to 9.6% in 2019 compared to 7.4% in 2018.
- The Board of Directors declared a dividend of $0.05 per share payable on April 1, 2020 to shareholders of record as of March 18, 2020.
Clearwater achieved its second highest annual sales in 2019. Year-over-year adjusted EBITDA grew by $10.5 million or 10.1%.
Sales for fourth quarter and full year 2019 grew 4.6% and 4.1% respectively, compared to the same periods of 2018. Strong harvest conditions, landings and available supply in clam, scallops and langoustines were partially offset by competitive market conditions for certain scallop sizes. Sales benefited from the introduction of sea cucumber in 2019, while shrimp was negatively impacted by the timing of landings, sales mix and competitive market conditions.
Adjusted EBITDA for the fourth quarter and full year 2019 was $30.1 million and $114.9 million respectively, as compared to $24.1 million and $104.4 million in 2018. Gross margin as a percentage of sales increased in the fourth quarter and full year due to strong harvest conditions and favourable mix for clam and scallops, partially offset by competitive conditions for shrimp. Steady market demand for lobster was offset by increased price competition in key markets. Overall, access to supply and customer demand in procured species remained strong as compared to the prior year.
Annual sales to Europe and Asia are up 6% and 7% respectively.
Average foreign exchange rates realized on sales for the fourth quarter and full year 2019 had a net negative impact to sales of $2.3 million and $1.3 million, respectively, as compared to the same periods in the prior year.
Cash from operations increased $18.5 million in the fourth quarter of 2019 as compared to the same period in 2018. Full year cash from operations and free cash flow were $63.7 million and $17.4 million respectively versus $76.5 million and $45.2 million in the prior year as EBITDA growth was offset by higher accounts receivable related to the timing of sales. Free cash flow was also affected by a planned increase in capital expenditures.