Letter to shareholders
High Liner Foods’ financial results came in below our expectations in 2015 amid a challenging industry environment. Reported sales decreased by $50.3 million, or 4.8%, to $1,001.3 million compared to $1,051.6 million in 2014. Sales in domestic currency1 decreased by $9.7 million, or 0.9%, to $1,073.8 million due to softness in both the retail and foodservice channels. This was largely a consequence of higher raw material costs which increased the price of our frozen fish products relative to other “centre-of-theplate” protein choices. The approximate 15% decline in the Canadian dollar during the year also had a negative impact, diminishing the reported value of USD sales from our Canadian operations by an additional $40.9 million compared to 2014. As a result of the same factors, and partially offset by improvements in distribution and SG&A expenses, Adjusted EBITDA2 decreased by $5.1 million, or 6.1%, to $78.2 million. Adjusted Net Income2 decreased by $3.2 million, or 8.2%, to $35.6 million and Adjusted Diluted Earnings Per Share2 were $1.14 compared to $1.24 in 2014.
On a positive note, increased cash flow from operating activities in 2015 was used to pay down our net interest-bearing debt by almost $52 million, improving our ratio of net interest-bearing debt to Adjusted EBITDA to 4.0x at the end of Fiscal 2015 compared to 4.4x a year earlier. Also, in the second quarter of 2015, the Board of Directors approved a CAD$0.015 per share increase to the Company’s annual dividend, representing a 14.3% increase and the seventh consecutive year that the annual dividend has been increased.
- Domestic currency is before the impact of converting our Canadian dollar (“CAD”) operations to United States dollars (“USD”). Financial information presented in domestic currency reflects mixed currencies, i.e. CAD for our Canadian operations and USD for our U.S. operations.
- Please refer to High Liner Foods’ Management’s Discussion and Analysis Introduction section beginning on page 12 of this Annual Report which defines all non-IFRS financial measures.