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High Liner Foods Inc T.HLF

Alternate Symbol(s):  HLNFF

High Liner Foods Incorporated is a Canada-based processor and marketer of value-added frozen seafood. The Company produces a range of products from breaded and battered items to seafood entrees, that are sold to North American food retailers and foodservice distributors. In addition, it is a supplier of commodity products in the North American market. The retail channel includes grocery and club stores, and its products are sold throughout the United States and Canada under the High Liner, Fisher Boy, Mirabel, Sea Cuisine and Catch of the Day labels. The foodservice channel includes sales of seafood that is usually eaten outside the home and its branded products are sold through distributors to restaurants and institutions under the High Liner, Mirabel, Icelandic Seafood1 and FPI labels. The Company is also a supplier of private-label value-added frozen premium seafood products to North American food retailers and foodservice distributors.


TSX:HLF - Post by User

Bullboard Posts
Post by hotrunneron Nov 05, 2015 9:43am
162 Views
Post# 24261273

Rating Update - Nov.04

Rating Update - Nov.04
.Recent Update Text as of 4NOV15 High Liner Foods reported Q3/15 Adjusted EBITDA of $17.1M vs. our estimate of
. $17.2M and consensus at $18.8M.

 While results were largely in line with our estimates, we have seen material
improvements in volume declines (to -2.5% vs. -9.6% sequentially), EBITDA
margins (+150 bps) and leverage (-0.3x) QOQ. We expect these improvements to be
sustained in Q4 and to further improve in 2016 as lower price input costs flow
through the P&L (allowing for further margin expansion).

 . HLF maintained their $20M to $25M cost savings run-rate target exiting 2016.
Furthermore, the company believes it can attain these levels in today's negative
mid-single-digit organic growth environment. While we expect organic growth to
improve over our forecast horizon, we have pushed out our cost savings estimate
into 2017. This has resulted in lower estimates, and consequently a lower $22/
share target.

 . HLF is trading at 6.2x EV/EBITDA and 5.9x P/E (F2016E), both significant
discounts to its peer group. We expect this valuation gap to close with the
demonstration of sustained improvement in HLF's organic growth profile, which we
believe could start in Q1/16.
Bullboard Posts