Type to search




Clearwater reports third quarter 2020 results.

  • Third quarter sales and adjusted EBITDA1 were $133.7 million and $30.9 million respectively, versus $175.2 million and $34.5 million in the prior year, due to the global impact of COVID-19.
  • Year-to-date sales and adjusted EBITDA1 were $340.0 million and $62.9 million respectively versus $449.2 million and $84.8 million in the prior year, due to the global impact of COVID-19.
  • Gross margin and adjusted EBITDA as a percentage of sales were 22.0% and 23.1% respectively in the third quarter compared to 21.6% and 19.7% in 2019.
  • Leverage1 increased modestly to 5.0x compared to 4.9x in the third quarter of 2019 due to management’s prudent cash preservation measures.
  • Clearwater entered into an arrangement agreement, subject to conditions including shareholder approval, with a Mi’kmaq First Nations Coalition and Premium Brands Holdings Corporation to acquire all of the issued and outstanding common shares of Clearwater for $8.25 per share.
  • Subsequent to the end of the third quarter, Clearwater sold two of its eight offshore lobster licences to Membertou First Nations for proceeds of $25 million, diversifying access to the fishery and strengthening the business relationship between Clearwater and Membertou.

Third Quarter and Year-to-date Results

“The impact of COVID-19 has been complex for our customers, our supply chain partners and our company in 2020. We are proud of our ability to remain in continuous operation at sea, on land and around the globe, a testament to our employees’ character and teamwork which resulted in strong third quarter margin realisation and cashflow. Our customer relationships and demonstrated agility in responding to shifts in consumer demand have been successful in partially mitigating the impacts of COVID-19 on our business” said Ian Smith, Chief Executive Officer of Clearwater. “We implemented measures in the first quarter of 2020 to protect employee health and safety and to align harvesting and processing to customer demand.  These measures have allowed us to remain operational in our fleet and all plants.  We experienced strong demand in the third quarter as certain markets re-opened and we continue to prepare for the recovery in the global food service segment.  We remain focused on protecting the organisation, our operations and meeting consumer needs.”

Sales for third quarter and year-to-date 2020 were $133.7 million and $340.0 million as compared to $175.2 million and $449.2 million in the same periods of 2019. Demand rebounded as some markets re-opened in the third quarter of 2020. Year-to-date sales volumes decreased across most species and regions due to lower demand in food service in 2020. Traditional retail and on-line consumer demand continue to thrive in this difficult market, whereas food service customers and their supply chain have been more seriously affected by social distancing measures.

Adjusted EBITDA for third quarter and year-to-date 2020 were $30.9 million and $62.9 million as compared to $34.5 million and $84.8 million in 2019. In the quarter, lower, but improving, demand for  clam, lower market prices for certain species and higher costs related to COVID-19 were partially offset by improved scallop, crab and live lobster demand and prices, lower harvesting costs for scallops and clam, lower fuel costs, continuous improvement programs savings, refined procurement strategies and government COVID-19 support programs.

Average foreign exchange rates realised on sales had a net positive impact of $3.4 million and $6.4 million for the third quarter and year-to-date 2020, respectively, as compared to the same periods of 2019.

Cash from operations and free cash flow increased $20.1 million and $20.0 million in the third quarter of 2020 as compared to the same period of 2019. Increase in free cash flow was due to favourable changes in working capital, driven by inventory management strategies, partially offset by lower cash earnings and higher capital expenditures. Measures that Clearwater has implemented will ensure continued generation of cash to support ongoing operations and capital expenditures as well as selective strategic initiatives that will generate future growth.

Click here to view full release