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Sales Down But Profits Up for Higher Liner

09 August 2013

CANADA & US - High Liner Foods, a North American value-added frozen seafood company, has reported its financial results for the first half of 2013. Sales for the second quarter were $204.9 million, compared with $216.8 million in the first six months last year.

Financial and operational highlights for the second quarter of 2013 include (all comparisons are relative to the second quarter and first twenty-six weeks of 2012, unless otherwise noted):

Reported net income increased in the second quarter to $9.9 million, compared with $1.0 million in the second quarter of 2012.

Adjusted Net Income increased in the second quarter to $9.2 million and adjusted EBITDA was $19.3 million, compared with $16.4 million last year.

"We are pleased with our financial performance in the second quarter, particularly with the $3.7 million increase in the Company's Adjusted Net Income and the $2.9 million increase in its Adjusted EBITDA," said Henry Demone, President and CEO.

"Despite experiencing an overall reduction in sales volumes in the quarter, the Company's profitability has improved, primarily reflecting lower raw material costs compared to last year, along with realization of synergies resulting from integrating the Icelandic USA acquisition. The increase in Adjusted Net Income also reflects significant savings in financing costs resulting from amendments made to our term loan in Q1 of this year," explained Mr Demone.

"However, similar to Q1, we saw continued challenges in our US food service business related to soft restaurant sales, and retail private labels sales continued to be weaker in both the US and Canada, reflecting the trend of decreased private label seafood sales in the seafood marketplace overall.

Helping to offset lower private label sales in the US, sales increased in the second quarter for our Sea Cuisine and Fisher Boy products compared to last year, the impact of which was partially offset by higher Sea Cuisine promotional costs which are expensed as a reduction to sales as incurred."

Mr Demone also noted: "Canadian branded retail sales volume was consistent with last year, while sales volume in our Canadian food service business experienced an increase in the second quarter compared to last year."

"Lastly, we remain focused on deleveraging and our strong Free Cash Flow is allowing us to do this. When calculated on a fifty-two week rolling basis, net interest-bearing debt to Adjusted EBITDA has decreased from 3.74x at the end of the first quarter of this year to 3.15x at the end of the second quarter."


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