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Key financial results, reported in U.S. dollars ("USD"), for the fifty-two weeks ended December 28, 2024, or Fiscal 2024, are as follows (unless otherwise noted, all comparisons are relative to the fifty-two weeks ended December 30, 2023, or "Fiscal 2023"):

• Adjusted EBITDA⁽¹⁾ increased by $8.2 million, or 8.6%, to $103.3 million compared to $95.1 million, and Adjusted EBITDA as a percentage of sales⁽¹⁾ increased to 10.8% compared to 8.8%;

• Sales volume decreased by 21.2 million pounds, or 8.2%, to 235.8 million pounds compared to 257.0 million pounds and sales decreased by $121.1 million, or 11.2%, to $959.2 million compared to $1,080.3 million;

• Net income⁽²⁾ increased by $28.5 million, or 89.9%, to $60.2 million compared to $31.7 million and diluted earnings per share ("EPS") increased to $1.89 per share compared to $0.93 per share;

• Adjusted Net income⁽¹⁾ increased by $9.3 million, or 24.0%, to $48.0 million compared to $38.7 million and Adjusted Diluted EPS⁽¹⁾ increased to $1.51 per share compared to $1.14 per share; and

• Gross profit decreased by $1.4 million, or 0.6%, to $217.3 million compared to $218.7 million, while gross profit as a percentage of sales increased to 22.7% compared to 20.2%;

Financial Results and Operational Update

For the purpose of presenting the Consolidated Financial Statements in USD, CAD-denominated assets and liabilities in the Company's operations are converted using the exchange rate at the reporting date, and revenue and expenses are converted at the average exchange rate of the month in which the transaction occurs. As such, foreign currency fluctuations affect the reported values of individual lines on our balance sheet and income statement. When the USD strengthens (weakening CAD), the reported USD values of the Parent's CAD-denominated items decrease in the Consolidated Financial Statements, and the opposite occurs when the USD weakens (strengthening CAD).

Investors are reminded for purposes of calculating financial ratios, including dividend payout and share price-to-earnings ratios, to take into consideration that the Company's share price and dividend rate are reported in CAD and its earnings, EPS and financial statements are reported in USD.

The financial results in USD for the thirteen and fifty-two weeks ended December 28, 2024 and December 30, 2023 are summarized in the following table:

Sales volume for the thirteen weeks ended December 28, 2024, or the fourth quarter of 2024, increased by 0.8 million pounds, or 1.3%, to 60.4 million pounds compared to 59.6 million pounds in the thirteen weeks ended December 30, 2023,  due to an increase in volume in our retail business, where the Company's targeted approach to value-driven promotions and innovations is supporting expanded distribution, especially in the growing Club channel.

In the Company's foodservice business, volume was flat as a result of slowdown across the foodservice industry as consumers pulled back on dining outside of the home, especially in casual dining. The relative stability of the Company's non-commercial business of schools, hospitals and long-term care helped offset market pressures, as did continued success of new value-added innovations in terms of volume and expanded distribution. The Company also saw continued growth in alternative species.

Sales in the fourth quarter of 2024 decreased by $2.1 million, or 0.9%, to $235.0 million compared to $237.1 million in the same period in 2023, driven by reduced pricing reflecting deflationary raw material costs, product mix and increased promotional activity, partially offset by the increase in volumes. Given the highly promotional and price sensitive retail and foodservice markets, the Company continues to promote and innovate while adding distribution to strengthen its competitive position. The weaker Canadian dollar in 2024 compared to the same period in 2023 decreased the value of reported USD sales from our CAD-denominated operations by approximately $1.5 million relative to the conversion impact last year.

Gross profit in the fourth quarter of 2024 increased by $2.3 million to $51.0 million compared to $48.7 million in the same period in 2023. Gross profit as a percentage of sales increased by 120 basis points to 21.7% compared to 20.5%. The increase in gross profit reflects  increased margins due to lower raw material costs, a more profitable mix, a balanced approach to pricing and promotion focused on supporting both the bottom and top line of the business, and partially offset by the decrease in sales. High Liner Foods continues to drive continuous improvements across operations to ensure prudent cost management. In addition, the weaker Canadian dollar decreased the value of reported USD gross profit from our CAD-denominated operations by $0.4 million relative to the conversion impact last year.

Adjusted EBITDA in the fourth quarter of 2024 increased by $1.9 million to $23.8 million compared to $21.9 million in the same period in 2023 and Adjusted EBITDA as a percentage of sales increased to 10.1% compared to 9.2%. The increase in Adjusted EBITDA reflects the increase in gross profit and favourable distribution expenses, partially offset by increased SG&A expenses.

Reported net income in the fourth quarter of 2024 decreased by $0.5 million to net income of $5.9 million (diluted EPS of $0.20) compared to $6.4 million (diluted EPS of $0.20) in the same period in 2023. The decrease in net income reflects the increase in SG&A expenses and higher income tax expense, partially offset with the increase in gross profit, and lower finance costs.

Reported net income in the fourth quarter of 2024 and 2023 included certain non-routine expenses classified as "business acquisition, integration and other (income) expense." Excluding the impact of these non-routine items or other non-cash expenses, and share-based compensation, Adjusted Net Income in the Fiscal 2024 increased by $5.2 million, or 71.2% to $12.5 million compared to $7.3 million in 2023 and Adjusted Diluted EPS increased $0.18 in the Fiscal 2024 to $0.41 as compared to $0.23 in 2023.

Net cash flows provided by operating activities in the fourth quarter of 2024 decreased by $46.3 million to an inflow of $20.6 million compared to an inflow of $66.9 million in the same period in 2023. The decrease is driven by reduced depreciation expense and lower changes in non-cash working capital balances, specifically within inventories, accounts receivable, and accounts payable. This is partially offset by lower interest and income taxes paid. Capital expenditures were $23.8 million in 2024 compared to $19.0 million in the prior year reflecting the continued significant investment in the business.

Net Debt decreased by $16.7 million to $233.2 million at December 28, 2024 compared to $249.9 million at December 30, 2023, reflecting lower bank loans, long-term debt, lease liabilities, and a higher cash balance as at December 28, 2024.

Net Debt to Rolling Twelve-Month Adjusted EBITDA was 2.3x at December 28, 2024 compared to 2.6x at the end of Fiscal 2023 and 3.7x at December 31, 2022. The ratio has continued to improve in 2024 due to lower net debt and higher Rolling Twelve-Month Adjusted EBITDA compared to Fiscal 2023. In the absence of any major acquisitions or unplanned capital expenditures in 2025, we expect this ratio to continue to be lower than the Company's long-term target of 3.0x at the end of Fiscal 2025.

Darryl Bergman, Chief Financial Officer, High Liner Foods said, "We have the balance sheet strength and flexibility needed to continue to navigate dynamic market conditions, while investing in our future and returning capital to our shareholders."

High Liner Foods announced today its commitment to participating in additional financing rounds for the two leading aquaculture companies of which it is a shareholder, Norcod AS ("Norcod") and Andfjord Salmon Group AS ("Andfjord"). The investments are aligned with High Liner Foods' goal to continue to position itself at the forefront of industry leadership.

The Company plans to invest approximately $6.75 million in Norcod and $10 million in Andfjord in the coming weeks. Both investments will support Norcod and Andfjords' continued growth, innovation and expansion and serve to preserve High Liner Foods' strategic ownership stake. Both investments will be funded by the Company's cash from operations and are expected to close in March 2025, subject to customary closing conditions.

Norcod is a leader in responsible and sustainable cod aquaculture based in Trondheim, Norway and listed on the Euronext Growth exchange on the Oslo Stock Exchange (NCOD.OL). Andfjord is a market leader is sustainable and fish-friendly salmon aquaculture, located on the island of Andoya in the Arctic archipelago of Vesteralen, Norway. It is also listed on the Euronext Growth exchange on the Oslo Stock Exchange (ANDF).

Outlook

High Liner Foods is focused on executing its profitable growth and innovation strategy while continuing to diversify its supply chain, as a means to reinforce its competitive positioning in a dynamic global seafood market.

"I am confident that our business will once again prove to be resilient to market headwinds and that over the course of 2025 we will profitably grow volume and end the year with Adjusted EBITDA growth," said Mr. Jewer.

High Liner Foods continues to navigate challenging market conditions, including the potential inflationary impact of tariffs and related impact on consumer purchasing decisions. The Company also notes that the later timing of the Lenten period, a key sales period for the seafood industry, will impact year over year performance in the first quarter of 2025.

"In a dynamic market and evolving trade environment, we are poised to focus on the factors within our control. We anticipate that despite fluctuations in performance due to market volatility and geopolitical challenges, we will still deliver another year of strong free cash flow generation. We are well positioned, not only with the necessary balance sheet strength and financial flexibility, but importantly with a diversified global supply chain and partnerships that provide operational flexibility and the ability to deliver the solutions our customers need. We also continue to pursue M&A opportunities as a part of our strategy to enhance near-term performance and achieve transformative growth and long-term value creation."

Dividend

Today, the Company's Board of Directors approved a quarterly dividend of CAD $0.17 per share on the Company's common shares, payable on March 15, 2025 to holders of record on March 5, 2025. These dividends are considered "eligible dividends" for Canadian income tax purposes.

Conference Call

The Company will host a conference call on Thursday, February 27, 2025, at 10:00 a.m. ET (11:00 a.m. AT) during which Paul Jewer, Chief Executive Officer, Darryl Bergman, Chief Financial Officer and Anthony Rasetta, Chief Commercial Officer, will discuss the financial results for the fourth quarter of 2024. To access the conference call by telephone, dial 1-416-945-7677 or 1-888-699-1199. Please connect approximately 10 minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay by telephone until Thursday, March 27, 2025 at midnight (ET). To access the archived conference call, dial 1-888-660-6345 and enter the replay entry code 98140#.

A live audio webcast of the conference call will be available at www.highlinerfoods.com. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.

The Company's Audited Consolidated Financial Statements and MD&A as at and for the fifty-two weeks ended December 28, 2024 were filed concurrently on SEDAR+ with this news release and are also available at www.highlinerfoods.com.

Non-IFRS Measures

The Company reports its financial results in accordance with International Financial Reporting Standards ("IFRS"). Included in this media release are the following non-IFRS financial measures: Adjusted EBITDA, Adjusted EBITDA as a Percentage of Net Sales, Adjusted Net Income, Adjusted Diluted EPS, Net Debt and Net Debt to Rolling Twelve-Month Adjusted EBITDA. The Company believes these non-IFRS financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company for the reasons outlined below. These measures do not have any standardized meaning as prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to other financial measures determined in accordance with IFRS.

Adjusted EBITDA and Adjusted EBITDA as a Percentage of Sales

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization adjusted for items that are not considered representative of ongoing operational activities of the business. The related margin, Adjusted EBITDA as a Percentage of Sales, is defined as Adjusted EBITDA divided by net sales, where net sales is defined as "Sales" on the consolidated statements of income.

We use Adjusted EBITDA (and Adjusted EBITDA as a percentage of sales) as a performance measure as it approximates cash generated from operations before capital expenditures and changes in working capital, and it excludes the impact of expenses and recoveries associated with certain non-routine items that are not considered representative of the ongoing operational activities, as discussed above, and share-based compensation expense related to the Company's share price. We believe investors and analysts also use Adjusted EBITDA (and Adjusted EBITDA as a percentage of sales) to evaluate the performance of our business. The most directly comparable IFRS  measure to Adjusted EBITDA is "Net income" on the consolidated statements of income. Adjusted EBITDA is also useful when comparing to other companies, as it eliminates the differences in earnings that are due to how a company is financed. Also, for the purpose of certain covenants on our credit facilities, "EBITDA" is based on Adjusted EBITDA, with further adjustments as defined in the Company's credit agreements.

The following table reconciles Adjusted EBITDA with measures in our Consolidated Financial Statements and calculates Adjusted EBITDA as a Percentage of Sales.

 

Adjusted Net Income and Adjusted Diluted EPS
Adjusted Net Income is net income adjusted for the after-tax impact of items which are not representative of ongoing operational activities of the business and certain non-cash expenses or income. Adjusted Diluted EPS is Adjusted Net Income divided by the average diluted number of shares outstanding.

We use Adjusted Net Income and Adjusted Diluted EPS to assess the performance of our business without the effects of the above-mentioned items, and we believe our investors and analysts also use these measures. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. The most comparable IFRS financial measures are net income and EPS.

The table below reconciles our Adjusted Net Income with measures that are found in our Consolidated Financial Statements and calculates Adjusted Diluted EPS.

 

Net Debt and Net Debt to Rolling Twelve-Month Adjusted EBITDA

Net Debt is calculated as the sum of bank loans, long-term debt (excluding deferred finance costs and modification gains/losses) and lease liabilities, less cash.

We consider Net Debt to be an important indicator of our Company's financial leverage because it represents the amount of debt that is not covered by available cash. We believe investors and analysts use Net Debt to determine the Company's financial leverage. Net Debt has no comparable IFRS financial measure, but rather is calculated using several asset and liability items in the consolidated statements of financial position.

Net Debt to Rolling Twelve-Month Adjusted EBITDA is calculated as Net Debt divided by Rolling Twelve-Month Adjusted EBITDA (see above). We consider Net Debt to Rolling Twelve-Month Adjusted EBITDA to be an important indicator of our ability to generate sufficient earnings to service our debt, that enhances understanding of our financial performance, and highlights operational trends. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies; however, the calculations of Adjusted EBITDA may not be comparable to those of other companies, which limits their usefulness as comparative measures.

The following table reconciles Net Debt to IFRS measures reported as at the end of the indicated periods in the consolidated statements of financial position and calculates Net Debt to Rolling Twelve-Month Adjusted EBITDA.

Forward Looking Statements

Certain statements contained in this press release constitute "forward-looking information" under applicable securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "may", "would", "could", "will", "should", "expect", "expects", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "pursue", "continue", "seek", "intend", or the negative of these terms or other similar expressions concerning matters that are not historical facts. Specific forward-looking statements in this press release include, but are not limited to, statements regarding, investments by the Company in Norcod and Andfjord and the timing for such investments, Company dividends and the timing for payment thereof, the future financial and operating performance of the Company, including free cash flow and growth in Adjusted EBITDA and volume in 2025, expected leverage levels and expected Net Debt to Adjusted EBITDA, M&A and other investment and growth strategies; the markets and industries in which the Company operates, U.S. and Canadian tariffs, inflation and the geopolitical and macroeconomic environment, product innovation and distribution, consumer preferences and purchasing decisions, growth in alternative species and other diversification of products and the Company's supply chain, and the business strategies and operational activities of the Company.

Forward-looking statements are based on information currently available and estimates, expectations and assumptions that are believed to be reasonable as of the date of this press release, but may prove to be incorrect. In addition to any other factors and assumptions set forth in this press release, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: availability, demand and prices of raw materials, energy and supplies; the ability of the Company to mitigate the impacts of tariffs; expectations with regards to sales volume, earnings, product margins, product innovations, brand development and anticipated financial performance; the ability to develop new and innovative products that result in increased sales and market share; the maintenance of existing customer and supplier relationships; manufacturing facility efficiency; the ability of the Company to reduce operating and supply chain costs; the condition of the Canadian and American economies; product pricing; foreign exchange rates, especially the rate of exchange of the CAD to the USD; the ability to attract and retain customers; operating costs and improvement to operating efficiencies; interest rates; continued access to capital; the competitive environment and related market conditions;and the general assumption that none of the risks identified below or elsewhere in this document will materialize.

Forward-looking information is inherently subject to risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A number of known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, could cause actual events, performance, or results to differ materially from what is projected in the forward-looking statements in this press release. Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to: compliance with food safety laws and regulations; timely identification of and response to events that could lead to a product recall; volatility in the CAD/USD exchange rate; competitive developments including increases in overseas seafood production and industry consolidation; ability to import seafood into North America while adhering to updated government sanctions; ability to adapt to regulatory changes and increase flexibility on seafood substitutions in certain products with customers; availability and price of seafood raw materials and finished goods and the impact of geopolitical events (and related economic sanctions) on the same; the impact of the U.S. and Canadian tariffs on certain seafood products and other supplies; costs of commodity products, freight, storage and other production inputs, and the ability to pass cost increases on to customers; successful integration of acquired operations and other acquisition-related risk; potential increases in maintenance and operating costs; shifts in market demands for seafood; performance of new products launched and existing products in the market place; changes in laws and regulations, including environmental, taxation and regulatory requirements; technology changes with respect to production and other equipment and software programs; enterprise resource planning system risk; adverse impacts of cybersecurity attacks or breach of sensitive information; supplier fulfillment of contractual agreements and obligations; competitor reactions; completion and/or advancement of sustainability initiatives, including, without limitation, initiatives relating to the carbon workplan, waste reduction and/or seafood sustainability and traceability initiatives; High Liner Foods' ability to generate adequate cash flow or to finance its future business requirements through outside sources; credit risk associated with receivables from customers; volatility associated with the funding status of the Company's post-retirement pension benefits; adverse weather conditions and natural disasters; the availability of adequate levels of insurance; management retention and development; economic and geopolitical conditions such as Russia's invasion of Ukraine and the implementation and/or expansion of related sanctions; and the potential impact of a pandemic outbreak of a contagious illness, on general economic and business conditions and therefore the Company's operations and financial performance; and other factors discussed in materials filed with applicable securities regulatory authorities from time to time including matters discussed under the Risk Factors sections of our most recent annual MD&A and Annual Information Form, all filed with the securities regulatory authorities in Canada and available under the Company's profile on SEDAR+ (www.sedarplus.ca).

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Undue reliance should not be placed on these forward-looking statements, which are made only as of the date hereof, and the Company does not undertake to update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise, except as may be required by applicable law.

About High Liner Foods Incorporated

High Liner Foods Incorporated is a leading North American processor and marketer of value-added frozen seafood. High Liner Foods' retail branded products are sold throughout the United States and Canada under the High Liner, Fisher Boy, Mirabel, Sea Cuisine, and Catch of the Day labels, and are available in most grocery and club stores. The Company also sells branded products to restaurants and institutions under the High Liner, Mirabel, Icelandic Seafood and FPI labels and is a major supplier of private label value-added seafood products to North American food retailers and foodservice distributors. High Liner Foods is a publicly traded Canadian company, trading under the symbol HLF on the Toronto Stock Exchange.

For further information about the Company, please visit our website at www.highlinerfoods.com or send an e-mail to investor@highlinerfoods.com.

SOURCE High Liner Foods Incorporated

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