US frozen seafood company grows profitability. High Liner Foods Incorporated, a leading North American value-added frozen seafood company, has announced financial results for the 13 weeks ended June 29, 2024.
“We continued to grow the profitability of our business during the second quarter, increasing EBITDA and gross profit, while continuing to take action to improve our topline performance,” said Paul Jewer, President and Chief Executive Officer of High Liner Foods. “While market softness certainly presents headwinds, the year over year volume decline in Q2 is once again a result of lower levels of contract manufacturing, intentional exit of low margin business and a return to normalised inventory levels compared to 2023.”
“As we navigate a dynamic market, we remain focused on leveraging the diversity of our supply chain, customer base and portfolio across price points and species to showcase value and choice to customers and consumers. We believe that this approach, paired with targeted promotional activity, is the path to sustainable improvements aligned with our longer-term growth agenda. We are well positioned to execute with a strong balance sheet and enhanced financial flexibility as a result of continued improvements to our leverage ratio and recent successful refinancing ahead of schedule.”
Key financial results, reported in U.S. dollars (“USD”), for the thirteen weeks ended June 29, 2024, or the second quarter of 2024, are as follows (unless otherwise noted, all comparisons are relative to the second quarter of 2023):
- Gross profit increased by $0.5 million, or 1.0%, to $52.5 million compared to $52.0 million, and gross profit as a percentage of sales increased to 24.0% compared to 20.4%;
- Adjusted EBITDA(1) increased by $1.8 million, or 8.2%, to $23.8 million compared to $22.0 million, and Adjusted EBITDA as a percentage of sales increased to 10.9% compared to 8.7%;
- Net income(2) increased by $13.4 million, or 227.1%, to $19.3 million compared to $5.9 million and diluted earnings per share (“EPS”) increased to $0.59 per share, compared to $0.17 per share;
- Adjusted Net Income([1]) increased by $1.2 million, or 12.0%, to $11.2 million compared to $10.0 million and Adjusted Diluted EPS(1) increased to $0.35 per share compared to $0.29 per share;
- Sales volume decreased by 7.7 million pounds, or 13.0%, to 51.7 million pounds compared to 59.4 million pounds and sales decreased by $36.0 million, or 14.2%, to $218.3 million compared to $254.3 million;
- Cash Flows from Operations decreased by $6.4 million, or 14.1%, to an inflow of $39.0 million compared to an inflow of $45.4 million; and
- Net Debt(1) to Rolling Twelve-Month Adjusted EBITDA(1) was 2.3x at June 29, 2024 compared to 2.6x at the end of Fiscal 2023 and 3.7x at end of Fiscal 2022. The Company reverted to normal working capital levels, leading to an improvement in the Net Debt to Rolling Twelve-Month Adjusted EBITDA ratio by the second half of Fiscal 2023.