High Liner sales up, but business suffers after recall
In its first full quarterly financial report since it replaced former CEO Keith Decker, High Liner Foods reported higher sales and profit, thanks in part of the acquisition of Rubicon Resources in late May.
After the company posted disappointing sales figures, Decker was replaced in August by Henry Demone, who previously served as High Liner Foods’ CEO from 1992 to 2015.
In its Q3 report, released 9 November, the company reported gross profit also increased by USD 2.3 million (EUR 1.97 million) to reach USD 48.3 million (EUR 41 million) during the quarter.
Year-over-year sales volume soared by USD 52.3 million (EUR 45 million) to reach USD 282.7 million (EUR 242.8 million) for the quarter, which ended 30 September, according to the major frozen seafood supplier based in Lunenberg, Nova Scotia, Canada.
However, the company’s Canadian business continued to struggle due to a major recall earlier this year. In April, the supplier recalled various High Liner, High Liner Captain’s Crew, and Portico Bounty brands in Canada due to the inclusion of a milk allergen that was not properly represented on the ingredient label and allergen statement.
Despite the recall, High Liner’s acquisition of Rubicon increased its sales by USD 49.3 million (EUR 42 million) and its sales volume by 9.4 million pounds. However, the sale of its New Bedford scallop business, on 7 September, lowered the supplier’s sales volume by one million pounds, and its sales, “as reported,” by USD 11.6 million (EUR 10 million).
High Liner’s adjusted EBITDA declined by USD 0.2 million (EUR 171,784) to reach USD 17.3 million (EUR 14.9 million), while its reported net income fell by USD 0.3 million (EUR 257,676) in the quarter to USD 6 million (EUR 5 million). The company’s diluted earnings per share also decreased by USD .02 (EUR .02) to USD .18 (EUR .15).
“Most notably, sales volume and profit margins decreased in our Canadian business on a year-over-year basis, partially due to low product availability following the recall that hindered our ability to fully promote certain higher-margin products with retailers during the third quarter,” Demone said. "The operational impact of the product recall is now behind us, and we are focused on increasing plant efficiency to improve the company's financial performance in the fourth quarter."