HIGH LINER FOODS MONITORING IMPACT OF CORONAVIRUS
High Liner Foods monitoring impact of coronavirus. High Liner Foods, the North American value-added frozen seafood company, says it is closely monitoring the impact of the current coronavirus outbreak.
A company statement said:
“The Company currently purchases its seafood raw materials and commodity products from 25 countries, including China. Chinese processors are central to the Company’s supply chain operating efficiently and, therefore, it is closely monitoring the current coronavirus disease outbreak (“COVID-19”) and reviewing options, should they be required, to mitigate the impact of any prolonged disruption in supply from any of the Company’s Chinese suppliers.
“The Company will also continue to closely monitor developments related to U.S. tariffs on seafood products imported to the U.S. from China and any potential recovery of previously paid tariffs.
“Excluding any impact related to the current COVID-19 outbreak and U.S. tariffs on seafood products imported from China, the pricing and supply of seafood raw materials for the products sold by the Company are expected to remain relatively stable throughout 2020.
Meanwhile the company has also reported financial results for the fourth quarter of 2019, ending on December 28.
“I am pleased to report a strong finish to a transformative year for High Liner Foods,” said Rod Hepponstall, President and CEO of High Liner Foods. “The significant improvement in Adjusted EBITDA in the fourth quarter speaks to the progress we have made throughout the year to drive profitability by re-focusing our portfolio on higher margin, value-added products and running a far more efficient and integrated operation.”
“We are now well positioned to move into the next phase of our turnaround plan that will drive continuous improvement across the business, deliver additional cost savings and execute on our enhanced sales and marketing strategy. We are confident that this work will continue to lead to annual Adjusted EBITDA improvements and create the conditions for profitable, sustainable revenue growth,” added Mr. Hepponstall.
Key highlights are:
- Adjusted EBITDA1,2increased by $6.8 million to $18.8 million compared to $12.0 million, and Adjusted EBITDA as a percentage of sales increased by 360 basis points to 8.5% compared to 4.9%;
- Sales decreased by $21.3 million to $221.6 million compared to $242.9 million;
- Gross profit increased by $4.2 million to $44.5 million compared to $40.3 million, and gross profit as a percentage of sales increased by 350 basis points to 20.1% compared to 16.6%; and
- Adjusted Net Income1increased by $3.5 million to $5.7 million ($0.17 Adjusted Diluted Earnings per Share (“EPS”)1) compared to $2.2 million ($0.07 Adjusted Diluted EPS).
Key financial results, reported in USD, for the fifty-two weeks ended December 28, 2019, or Fiscal 2019, are as follows (unless otherwise noted, all comparisons are relative to Fiscal 2018):
- Adjusted EBITDA2increased by $22.8 million to $85.3 million compared to $62.5 million, and Adjusted EBITDA as a percentage of sales increased by 310 basis points as a percentage of sales to 9.1% compared to 6.0%;
- Net Debt1,2improved by $14.0 million to $346.6 million compared to $360.6 million (excluding the transitional increase in lease liabilities upon the adoption of the new lease standard effective at the beginning of Fiscal 2019, Net Debt improved by $28.6 million);
- Net Debt to Adjusted EBITDA improved to 4.1x at December 28, 2019compared to 5.8x at the end of Fiscal 2018;
- Sales decreased by $106.3 million to $942.2 million compared to $1,048.5 million;
- Gross profit decreased by $2.3 million to $185.9 million compared to $188.2 million and gross profit as a percentage of sales increased by 180 basis points to 19.7% compared to 17.9%; and
- Adjusted Net Income increased by $12.1 million to $29.1 million ($0.85 Adjusted Diluted EPS) compared to $17.0 million ($0.51 Adjusted Diluted EPS).