High Liner Foods reports “strong finish” to Q4 2019

High Liner Foods has posted its fourth-quarter report for 2019, which indicates that the company is starting to rebound from difficulties it faced in 2018.

In a call for investors hosted on 26 February, CEO Rod Hepponstall – who was hired in April 2018 – said that the company’s implementation of a five-point plan to shift back to profitability has begun to show results. That plan included finding organization efficiencies, laying off part of the salaried workforce, and eliminating hundreds of less-profitable products from the company’s line up.

“We are continuing to improve the profitability of our business,” Hepponstall said. “We did what we set out to do and more, and we will build on this in 2020.”

The company’s adjusted EBITDA increased by USD 6.8 million (EUR 6.2 million) to USD 18.8 million (EUR 17.2 million) compared to USD 12 million (EUR 11 million) in the same period in 2018. In addition, grow profit increased by USD 4.2 million (EUR 3.8 million) to USD 44.5 million (EUR 40.8 million), compared to USD 40.3 million (EUR 37 million) posted in Q4 2018.

Adjusted net income also increased by USD 3.5 million (EUR 3.2 million) to USD 5.7 million (EUR 5.2 million), compared to USD 2.2 million (EUR 2 million).

Hepponstall credited the improving performance to the company refining its product portfolio, which included the elimination of over 230 products and eight different species from its offerrings. In addition, the company has placed a new emphasis on value added offerings, such as its recently launched “Alaska Wild Wings”, which was featured as a winner in the foodservice category in the Alaska Symphony of Seafood competition, as in SeafoodSource’s Top 25 Seafood Product Innovations.

Those new products helped get the company to two percent new organic growth, according to Hepponstall.

“Those efforts resulted in fourth-quarter new product sales of over 1.5 million pounds,” he said. “It is one of, if not the most successful product launch we’ve had as a North American entity.”

Overall in fiscal year 2019 the company increased its adjusted EBITDA by USD 22.8 million (EUR 20.9 million) to USD 85.3 million (EUR 78.2 million) from USD 62.5 million (EUR 57.3 million). However, the company’s total sales decreased by USD 106.3 million (EUR 97.5 million) to USD 942.2 million (EUR 864.7 million) compared to the USD 1.04 billion (EUR 954 million) in 2018.

Sales volumes, as well, decreased from 284 million pounds in 2018 to 258.8 million pounds in 2019, a difference of 25.2 million pounds. Part of that decrease, according to High Liner Executive Vice President and CFO Paul Jewer, was the company exiting low-margin business in 2019, which was partially offset by the new business and product sales.

According to Hepponstall, the performance in the final quarter of 2019 indicates that the company is well on its way through its turnaround plan.

"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,” Hepponstall said. “We’ve come a long way in a relatively short period of time.”

Still, he added that the company doesn’t plan to rest on its initiatives.

“We have a quote at the office, ‘yesterday’s home runs don’t win today’s games,’” Hepponstall said. “Those are the words we are living by.”