HIGH LINER Q1 RESULTS UNDERLINES RESILIENCE OF THE BUSINESS

High Liner Q1 results underlines resilience of the business. High Liner Foods Incorporated, a leading North American value-added frozen seafood company, has reported financial results for the thirteen weeks ended April 3, 2021.

“Our Q1 results demonstrate the continued resilience of our business, improving gross profit and the foodservice recovery that is underway,” said Rod Hepponstall, President and CEO of High Liner Foods. “In both our retail and foodservice businesses, we are executing against our strategy and driving profitability gains as a percentage of sales. Our efforts to build a strong, integrated supply chain and a diversified portfolio has served us well during this time of heightened global supply challenges.”

“With the ongoing improvement in cash flow, we are investing in our business to support our growth and provide additional capacity to support our most successful and sought-after products. During the quarter, we strengthened our balance sheet, further improved our leverage ratio, and with the repricing of our Term Loan Facility, generated savings of approximately $2.0 million in annual cash interest expenses.”

Key financial results, reported in U.S. dollars (“USD”), for the thirteen weeks ended April 3, 2021, or the first quarter of 2021, are as follows (unless otherwise noted, all comparisons are relative to the first quarter of 2020):

• Sales volume decreased by 7.5 million pounds, or 9.7%, to 69.8 million pounds compared to 77.3 million pounds, and sales decreased by $25.2 million, or 9.4%, to $243.4 million compared to $268.6 million, reflecting the impact of COVID-19 on the entire first quarter of 2021 compared to the last two weeks of the first quarter of 2020;
• Gross profit as a percentage of sales increased to 23.7% compared to 21.9% and gross profit decreased by $1.1 million, or 1.9%, to $57.7 million compared to $58.8 million;
• Adjusted EBITDA¹as a percentage of sales remained consistent with the prior year at 11.4% and Adjusted EBITDA decreased by $2.9 million, or 9.4%, to $27.8 million compared to $30.7 million;
• Net Debt¹to rolling twelve-month Adjusted EBITDA improved to 2.9x at April 3, 2021 compared to 3.0x at the end of Fiscal 2020 and 4.2x at March 28, 2020;
• Net income increased by $3.6 million, or 25.4%, to $17.8 million compared to $14.2 million and diluted earnings per share (“EPS”) increased to $0.51 per share compared to $0.41 per share; and
• Adjusted Net Income¹decreased by $0.2 million, or 1.4%, to $14.1 million compared to $14.3 million and Adjusted Diluted EPS¹ decreased to $0.40 per share compared to $0.41 per share, reflecting the impact of COVID-19.

 Q1 Operational Update 

Market conditions in High Liner Foods’ retail and foodservice business in the first quarter of 2021 were markedly different from the same period in the first quarter of 2020. In retail, the surge in retail demand at the March 2020 start of the COVID-19 pandemic in North America was not repeated in March 2021. In foodservice, operators faced a full quarter of pandemic conditions during the first quarter of 2021, including closures and dining restrictions across North America, compared to a few weeks in the first quarter of 2020.

As a result, sales volumes declined year-over-year in both retail and foodservice business. However, in foodservice, the Company delivered its strongest performance in Q1 since the onset of the pandemic, which is attributed to the foodservice recovery that is underway, coupled with strong operator relationships and a compelling product offering. The volume decline was partially offset by new business wins and new product sales.

Despite global supply challenges that are impacting the food manufacturing and processing industry as a whole, High Liner Foods’ overall supply chain continued to be robust, and no significant supply chain issues impacted the Company’s financial performance during the first quarter of 2021.

Employee safety is High Liner Foods’ top priority and as the pandemic continues to evolve, the Company will implement any further measures designed to protect the health and safety of its employees and mitigate disruption to the Company’s supply chain and operations.

Photo credit: High Liner Foods

Source