/NOT FOR DISTRIBUTION TO UNITED STATES OR FOR DISSEMINATION IN THE
UNITED STATES/
HALIFAX, Feb. 26, 2014 /CNW/ - (TSX: CLR):
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Sales and adjusted EBITDA growth of 10.9% and 9.5% in 2013, respectively
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Fourth quarter 2013 sales and adjusted EBITDA growth of 19.4% and 18.8%
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Growth of 50.6% in free cash flows to $26.1 million in 2013
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Free cash flows for the fourth quarter increased 2.4% to $38.7 million
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Declares quarterly dividend of $0.025 per share payable on March 24,
2014 to shareholders of record as of March 10, 2014.
-
Management updates outlook for 2014 - sales growth of 5% or greater;
growth in free cash flows of 5% or greater; and return on assets of
12% or greater
-
On track to achieve five year plan of $500 million in revenue and $100
million in adjusted EBITDA by 2016
Fourth quarter 2013 results
Clearwater reported sales of $111.0 million and adjusted EBITDA1 of $22.4 million for the fourth quarter of 2013 versus 2012 comparative
figures of $93.0 million and $18.8 million, reflecting growth of 19.4%
and 18.8%, respectively. Free cash flows1 were $38.7 million versus $37.8 million in the fourth quarter of 2012,
an increase of 2.4%. Margins improved 3.1 percentage points from 19.9%
in 2012 to 23.1% for 2013.
Adjusted EBITDA increased due to strong market demand that resulted in
an increase in sales volumes for scallops and shrimp, and improved
sales prices for several species. Margins were partially offset by
higher harvesting costs per pound for scallops and shrimp.
Free cash flow from operations for the fourth quarter of 2013 grew 9.1%
from the same period in 2012 as a result of strong sales prices and
volumes which contributed to improved margins. Improvements in free
cash flow from operations were partially offset by higher capital
expenditures from scheduled refits and vessel conversions, and the
timing of payments to minority interest partners. Refer to the
Management discussion and analysis for further information on free cash
flow.
Annual 2013 results
Clearwater reported sales of $388.7 million and adjusted EBITDA1 of $79.1 million for 2013 versus 2012 comparative figures of $350.3
million and $72.2 million, reflecting growth of 10.9% and 9.5%,
respectively. Results for free cash flow were $26.1 million in 2013
versus $17.3 million in 2012 an increase of 50.6%. Gross margins
improved 1.8 percentage points, to 22.5% as compared with the same
period in 2012.
Growth in adjusted EBITDA and free cash flow from operations were due to
a strong and growing market demand that improved sales prices for
scallops, clams and snow crab and strong sales volumes for scallops.
Margins were partially offset by higher clam, scallops and shrimp
harvest costs. Improvements in free cash flow from operations were
partially offset by higher capital expenditures from scheduled refits
and vessel conversions, and the timing of payments to minority interest
partners.
Clearwater successfully met its annual 2013 profitability and financial
performance targets of sales growth of 5% or greater; adjusted EBITDA
margins of 18% or greater; and return on assets of 12% or greater.
Dividends
On November 1, 2013 Clearwater announced the initiation of an annual
dividend of $0.10 per share, payable in quarterly installments of
$0.025 per share and on December 13, 2013 it made the first quarterly
dividend payment.
Consistent with that announcement, today the Board of Directors approved
a quarterly dividend of CAD$0.025 per share payable on March 24, 2014
to shareholders of record on March 10, 2014.
In making the determination of dividend levels Clearwater's Board gives
consideration to a number of key principles including:
-
the expected future earnings;
-
the amount of free cash flows that should be retained to reinvest in the
business;
-
the assurance that all obligations can be met with respect to existing
loan agreements; and
-
the desire to provide room for the dividend to increase in the future as
the business continues to grow and expand.
The Board is satisfied with current dividend levels.
These dividends are eligible dividends as defined for the purposes of
the Income Tax Act (Canada) and applicable provincial legislation and,
therefore, qualify for the favourable tax treatment applicable to such
dividends.
Seasonality
Clearwater's business experiences a seasonal pattern in which sales,
margins and adjusted EBITDA are lower in the first half of the year
while investments in capital expenditures and working capital are
higher resulting in lower free cash flows in the first half of the year
and higher free cash flows in the second half of the year.
Results for the fourth quarter and annual 2013 are consistent with
Management's expectations for the year and show strong sales, margins
and free cash flows.
Outlook
Global demand for seafood is outpacing supply, creating favorable market
dynamics for vertically integrated producers such as Clearwater which
have strong resource access.
Demand has been driven by growing worldwide population, shifting
consumer tastes towards healthier diets, and rising purchasing power of
middle class consumers in emerging economies.
The supply of wild seafood is limited and is expected to continue to lag
behind the growing global demand. This supply-demand imbalance has
created a market place in which purchasers of seafood are increasingly
willing to pay a premium to suppliers that can provide consistent
quality and food safety, wide diversity and reliable delivery of
premium, wild, sustainably harvested seafood.
Clearwater, like other vertically integrated seafood companies, is well
positioned to take advantage of this opportunity because of its
licenses, premium product quality, diversity of species, global sales
footprint, and year-round harvest and delivery capability.
Ian Smith, Chief Executive Officer, commented, "In 2013 Clearwater
surpassed all previous records for sales revenue and adjusted EBITDA."
Mr. Smith continued "We posted strong results across our portfolio of
sustainably harvested, wild caught seafood with six out of seven core
species showing increased revenues, margins or both. We also made
significant improvements to our capital structure and advanced several
major capital projects - activities critical to sustaining our long
term growth, profitability and competitive advantage."
For 2014 Clearwater set the following targets:
-
sales growth - 5% or greater,
-
adjusted EBITDA margins - 18% or greater,
-
Free cash flow growth - 5% or greater
-
Leverage - 3x or lower
-
return on assets - 12% or higher
Key Performance Indicators
Key Performance Indicators
In 000's of Canadian dollars (unless otherwise indicated)
Year Ended December 31
|
|
2013
|
|
2012
|
Target
|
Profitability
|
|
|
|
|
|
Adjusted EBITDA
|
$
|
79,103
|
$
|
72,243
|
|
|
|
|
|
|
|
Adjusted EBITDA (as a % of sales)
|
|
20.4%
|
|
20.6%
|
18%
or greater
|
|
|
|
|
|
|
Sales
|
|
388,659
|
|
350,302
|
|
Sales growth
|
|
10.9%
|
|
5.3%
|
5%
or greater
|
|
|
|
|
|
|
Financial Performance
|
|
|
|
|
|
Free cash flows
|
|
26,121
|
|
17,347
|
|
|
|
|
|
|
|
Leverage (adjusted EBITDA multiple)
|
|
2.7
|
|
2.9
|
3.0
or lower
|
|
|
|
|
|
|
Returns
|
|
|
|
|
|
Return on assets
|
|
13.3%
|
|
12.1%
|
12%
or greater
|
Note: Refer to definitions within the Management Discussion and Analysis
|
Management believes that it has the correct strategies and focus to
provide sustainable competitive advantage and long-term growth. These
strategies include:
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Expanding access to supply;
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Targeting profitable and growing markets, channels and customers;
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Innovating and positioning our products to deliver superior customer
satisfaction and value;
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Increasing margins by improving price realization and cost management;
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Preserving the long-term sustainability of our resources; and
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Improving our organizational capability and capacity, talent, diversity
and engagement
Management also believes that it has the people, processes and financial
resources to execute these strategies and create value for its
shareholders. This includes the capacity to execute Clearwater's five
year strategic plan. This plan, developed and initiated in 2012, is
entitled 5-1-5 and includes goals to achieve $500 million in sales and
$100 million in adjusted EBITDA by the end of 2016 (i.e. in 5 years) or
earlier.
1- Refer to definitions within the Management discussion and Analysis
2- Clearwater's business experiences a predictable seasonal pattern in
which sales, margins and adjusted EBITDA are lower in the first half of
the year while investments in capital expenditures and working capital
are higher. This normally results in negative cash flows in the first
half of the year. We refer to the negative cash flows as "a net use of
cash" in this document.
Financial Statements and Management's Discussion and Analysis Documents
For a detailed analysis of Clearwater's 2013 fourth quarter and Annual
results, please see Clearwater's Annual Report for 2013, which includes
Management's Discussion and Analysis and the related financial
statements. These documents can be found in the disclosure documents
filed by the Corporation with the securities regulatory authorities
available at www.sedar.com or on Clearwater's website at www.clearwater.ca.
Key Financial Figures (In 000 of Canadian dollars except share amounts)
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
Year Ended
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
111,012
|
|
$
|
92,945
|
|
$
|
388,659
|
|
$
|
350,302
|
Earnings (loss)
|
|
(298)
|
|
|
10,518
|
|
|
15,298
|
|
|
22,704
|
Basic Earnings per share
|
|
(0.06)
|
|
|
0.17
|
|
|
0.12
|
|
|
0.29
|
Diluted Earnings per share1
|
|
(0.06)
|
|
|
0.15
|
|
|
0.12
|
|
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA 2
|
$
|
22,347
|
|
$
|
18,812
|
|
$
|
79,103
|
|
$
|
72,243
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding, at period-end3
|
|
50,948,698
|
|
|
50,948,698
|
|
|
50,948,698
|
|
|
50,948,698
|
Weighted average shares on a fully diluted basis
|
|
50,948,698
|
|
|
60,069,575
|
|
|
55,277,321
|
|
|
65,536,260
|
1. Diluted earnings per share for the 13 weeks and year ended December
31, 2013 and the year ended December 31, 2012 were anti-dilutive.
2. Please see the Management's Discussion and Analysis for a
reconciliation of adjusted EBITDA to the financial statements.
3. On February 4, 2014, Clearwater completed the issuance to the public,
on a bought deal basis, of 4,029,400 common shares from the treasury of
the Company. The shares were offered at a price of $8.50 per Share, for
gross proceeds to Clearwater of approximately $34 million.
COMMENTARY REGARDING FORWARD-LOOKING STATEMENTS
This news release may contain "forward-looking information" as defined
in applicable Canadian securities legislation. All statements other than statements of historical fact, included in
this release, including, without limitation, statements regarding
future plans and objectives of Clearwater, constitute forward-looking
information that involve various known and unknown risks, uncertainties, and other
factors outside management's control. Forward-looking information is
based on a number of factors and assumptions which have been used to
develop such information but which may prove to be incorrect including,
but not limited to, total allowable catch levels, selling prices,
weather, exchange rates, fuel and other input costs. There can be no
assurance that such information will prove to be accurate and actual
results and future events could differ materially from those
anticipated in such forward-looking information.
For additional information with respect to risk factors applicable to
Clearwater, reference should be made to Clearwater's continuous
disclosure materials filed from time to time with securities
regulators, including, but not limited to, Clearwater's Annual
Information Form. The forward-looking information contained in this
release is made as of the date of this release and Clearwater does not
undertake to update publicly or revise the forward-looking information
contained in this release, whether as a result of new information,
future events or otherwise, except as required by applicable securities
laws.
No regulatory authority has approved or disapproved the adequacy or
accuracy of this news release.
About Clearwater
Clearwater is one of North America's largest vertically integrated
seafood companies and the largest holder of shellfish licenses and
quotas in Canada. It is recognized globally for its superior quality,
food safety, diversity of species and reliable worldwide delivery of
premium wild, eco-certified seafood, including scallops, lobster,
clams, coldwater shrimp, crab and groundfish.
Since its founding in 1976, Clearwater has invested in science, people
and technological innovation as well as resource ownership and
management to sustain and grow its seafood resource. This commitment
has allowed it to remain a leader in the global seafood market and in
sustainable seafood excellence.
SOURCE Clearwater Seafoods Incorporated
Robert Wight, Chief Financial Officer, Clearwater, (902) 457-2369; Tyrone Cotie, Treasurer, Clearwater, (902) 457-8181.