CANADA - Clearwater Seafoods has reported record sales and adjusted EBITDA of $147.3 million and $38.8 million for the third quarter of 2015 versus 2014 comparative figures of $134.1 million and $30.9 million, respectively, representing growth of 10 per cent in sales and 26 per cent in adjusted EBITDA.
The 10 per cent growth in sales and 25 per cent growth in adjusted EBITDA were due to higher prices and higher average exchange rates, partially offset by lower sales volumes.
Sales and gross margin were positively impacted by strong market demand in all regions for our core species as well as higher selling prices in home currencies and higher average exchange rates for the US dollar, partially offset by higher harvesting and procurement costs and lower sales volumes.
These positive market conditions were partially offset by lower available supply for scallops and clams in the third quarter of 2015.
Lower supply was due to challenging weather conditions in the first half of the year, unplanned vessel maintenance in our clam fleet, an expected cyclical reduction in our total allowable catch for sea scallops and the timing of landings were all contributing factors.
Gross margin as a percentage of sales increased from 25.4 per cent to 31.8 per cent as strong sales prices for the majority of species and a strengthening US dollar against the Canadian dollar had a $15.3 million net positive impact on sales and margins.
Adjusted earnings attributable to shareholders increased $8.5 million to $18.7 million for the third quarter of 2015 primarily a result of improvements in gross margin from strong sales prices for the majority of core species and higher average foreign exchange rates as the US dollar strengthened against the Canadian dollar. Refer to the Management Discussion and Analysis for a breakdown of the non-IFRS measure and the related earnings attributable to shareholders.
Strong operating cash flows were offset by the timing of seasonal investments in working capital in the third quarter of 2015. As a result free cash flows1 declined $2.5 million from $6.2 million in the third quarter of 2014. The third quarter free cash flow results are in line with management's expectations and position the company well to generate strong annual free cash flows.
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