Attention Business/Financial Editors
CLEARWATER REPORTS 2009 YEAR-TO-DATE AND THIRD QUARTER RESULTS STRONGER THAN
2008
/Not for distribution to United States or for dissemination in the United States
/
HALIFAX, NOVEMBER 10/CNW/ - (TSX: CLR.UN, CLR.DB, CLR.DB.A):
Increased EBITDA of 40% or $7.3 million year-to-date to $25.4 million versus
2008 and of 34% to $10.6 million for the quarter or $2.7 million over the third
quarter of 2008. (EBITDA is Earnings before interest, taxes, depreciation and
amortization, foreign exchange gains and losses and one time and unusual
adjustments. For a reconciliation of these amounts please refer to the
Management's Discussion and Analysis).
Increased gross profit margins of 35% or $9 million year-to-date over 2008 to
$34.9 million. Gross profit margins in the third quarter of 2009 were up 27% or
$3.1 million over the third quarter of 2008.
Significantly improved leverage over the prior year as management continues to
focus on improving the balance sheet. Total long term debt has been reduced by
$17 million in the first 9-months.
Today, Clearwater Seafoods Limited Partnership (“Clearwater”) reported its
year-to-date and third quarter 2009 results.
Clearwater reported a 35% increase in gross margin to $34.9 million, on a 4%
year-to-date increase in sales to $215.7 million, improvements of $9.0 million
and $7.7 million over the respective periods in 2008. Year-to-date, the
business experienced overall higher margins as a percentage of sales due
primarily to improved operating results in our clam, scallops, FAS shrimp and
processed lobster businesses. In addition, strengthening foreign exchange rates
on foreign currency denominated sales and lower fuel costs had a positive impact
on margins. With the launch of the new clam vessel and the finalization of a
new shrimp joint venture, both of which occurred in the second quarter of 2008,
and our ongoing focus on cost reduction, Clearwater's operating results have
continued to show improvement in 2009. These positive factors resulted in a 40%
increase in year-to-date 2009 EBITDA before foreign exchange losses and one time
and unusual adjustments. Clearwater reported EBITDA of $25.4 million
year-to-date 2009 versus $18.1 million in the same period of 2008 (for
calculation of EBITDA refer to the Definitions and Reconciliations section of
the 2009 third quarter MD&A).
As a percent of sales, gross profit margin improved 35% for the first 9 months
of 2009 over 2008. Gross margin was up 27% in the third quarter against 2008's
third quarter. The significant improvement in margins in 2009 was primarily
because of greater productivity in our clam and scallop businesses partially
offset by a sales mix of relatively lower margins for shrimp and live lobster.
In addition management has focused on controlling costs, and increasing vessel
operations and productivity, resulting in better margin realization for key
species. Clearwater reported EBITDA of $10.6 million in the third quarter of
2009 versus $7.9 million in the same period of 2008. The improvements for both
periods are a result of higher gross profits as the business returns to more
normal operations.
During the quarter Clearwater continued to generate cash by disposing of
non-core quotas from which it was not earning an adequate return on its capital
employed. In the third quarter Clearwater sold $7.2 million of non-core
groundfish quotas and recorded a gain on sale of $2.0 million. Year-to-date
Clearwater has generated proceeds of $15.3 million from the sale of non-core
quotas and $1.3 million from the sale of other surplus assets.
Leverage improved to 4.83 times EBITDA from 9.23 in Q3 2008 because of a rolling
12 months of sustaining EBITDA of $45.3 million from operations and reduced
debt. Senior debt is now less than 2 times EBITDA. Total debt repayments of
more than $17 million reduced total debt to $223.9 million at the third quarter
of 2009 versus $241.3 million at December 31, 2008.
The sale of these non-core quotas is part of Clearwater's focused strategy for
maintaining liquidity which includes tightly managing its working capital,
limiting capital spending, liquidating under performing assets and selling
non-core assets which do not achieve an adequate return on capital, and limiting
distributions.
Looking forward to the last quarter of 2009, Clearwater believes that with the
improvements to the (clam, shrimp and lobster) fleets and the possibility of
continued lower fuel costs it will be able to operate without disruption to
continue to grow the trend of positive cash flows and profit margins. This is
of course subject to any impact of weakened economic conditions in Asia, North
America and Europe. Clearwater also believes that as a food company the
business will continue to respond well in the current recessionary period as it
has so far this year.
Over the next several years Clearwater will continue its focus on reducing its
leverage. This will come from a combination of improved earnings levels and
from using the positive cash flow of the business to reduce debt. This should
result in lower interest costs as debt levels are reduced. In December 2010
Clearwater Seafoods Income Fund has $45 million of convertible debentures that
come due. These funds were invested by the Fund in Class C Units issued by
Clearwater with similar terms and conditions, including maturity in December
2010. Clearwater also has approximately $1.2 billion in ISK denominated bonds,
including CPI and accrued interest that come due in September 2010
(approximately Canadian $10.5 million). Management is currently assessing
alternative solutions and believes that the Company will be successful in
refinancing both of these facilities before they come due.
Colin MacDonald, Chairman and Chief Executive Officer, commented, “We are
pleased to report continued strong results in 2009 despite the challenging
worldwide economic conditions. Our solid results speak to the success of all our
business units and in particular our outstanding and dedicated workforce which
continues to seek and find ways to drive innovation in our harvesting, our
processing and in building strong relationships with our customers.”
Colin MacDonald
Chairman and Chief Executive Officer
Clearwater Seafoods Limited Partnership
November 10, 2009
Financial Statements and Management's Discussion and Analysis Documents
For an analysis of Clearwater and Clearwater Seafoods Income Fund's third
quarter results, please see the Management's Discussion and Analysis and the
2009 third quarter financial statements. These documents can be found in the
disclosure documents filed by Clearwater Seafoods Income Fund with the
securities regulatory authorities available at www.sedar.com or at its website
(www.clearwater.ca).
Key Financial Figures ($000's except unit amounts)
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Clearwater 13 weeks ended 39 weeks ended
October 3, September 27, October 3, September 27,
2009 2008 2009 2008
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Sales $74,483 $81,557 $215,671 $207,905
Net earnings
(loss) $418 ($10,234) $29,310 ($20,671)
Basic earnings
(loss) per unit $0.01 ($0.20) $0.57 ($0.40)
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EBITDA(1) $10,562 $7,882 $25,405 $18,088
Units outstanding
at period-end
Limited
Partnership
Units 51,126,912 51,126,912 51,126,912 51,126,912
Fully diluted 62,323,941 62,323,941 62,323,941 62,323,941
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1. Please see the Management's Discussion and Analysis for a
reconciliation of these amounts to the financial statements.
The Fund does not consolidate the results of Clearwater's operations but rather
accounts for the investment using the equity method. Due to the limited amount
of information that this would provide on the underlying operations of
Clearwater, the financial highlights of Clearwater are included above.
About Clearwater
Clearwater is recognized for its consistent quality, wide diversity and reliable
delivery of premium seafood, including scallops, lobster, clams, coldwater
shrimp, crab and ground fish.
Since its founding in 1976, Clearwater has invested in science, people,
technology, resource ownership and resource management to preserve and grow its
seafood resource. This commitment has allowed it to remain a leader in the
global seafood market.
For further information: Robert Wight, Chief Financial Officer, Clearwater,
(902) 457-2369; Tyrone Cotie, Director of Corporate Finance and Investor
Relations, Clearwater, (902) 457-8181.
CLEARWATER REPORTS 2009 YEAR-TO-DATE AND THIRD QUARTER RESULTS STRONGER THAN 2008
| Quelle: Clearwater Finance Inc.