High Liner Foods Reports Operating Results for the Second Quarter of 2022

- Delivers Year-over-Year Growth of 33.6% in Sales and 26.8% in Gross Profit -

LUNENBURG, NS, Aug. 10, 2022 /CNW/ - High Liner Foods Incorporated (TSX: HLF) ("High Liner Foods" or "the Company"), a leading North American value-added frozen seafood company, today reported financial results for the thirteen and twenty-six weeks ended July 2, 2022.

"Q2 2022 was another strong quarter for High Liner Foods. Our products continue to be in high demand, our team is executing well, and the reliability of our diverse global supply chain continues to differentiate us in the market, said Rod Hepponstall, President and CEO of High Liner Foods. "This solid performance drove year over year increases in volume and sales and Adjusted EBITDA, putting us on track to deliver another year of Adjusted EBITDA growth."

"Our ability to perform well in a supply constrained inflationary environment underscores the strong underlying fundamentals of our business and potential for further growth as market conditions stabilize. We remain focused on efficiencies, innovation, and optimization across the portfolio. We are confident that this is the path to continue to drive profitability and advance our leadership position in branded, value-added seafood in North America."

Key financial results, reported in U.S. dollars ("USD"), for the twenty-six weeks ended July 2, 2022, or Fiscal 2022, are as follows (unless otherwise noted, all comparisons are relative to the twenty-six weeks ended July 3, 2021, or "Fiscal 2021"):

• Sales increased by $115.0 million, or 26.5%, to $548.2 million compared to $433.2 million and sales volume increased by 11.9 million pounds, or 9.9%, to 132.1 million pounds compared to 120.2 million pounds;
• Gross profit increased by $16.3 million, or 16.0%, to $118.3 million compared to $102.0 million, while gross profit as a percentage of sales decreased to 21.6% compared to 23.6%;
• Adjusted EBITDA⁽¹⁾ increased by $6.3 million, or 13.3%, to $53.7 million compared to $47.4 million and Adjusted EBITDA as a Percentage of Sales⁽¹⁾ decreased to 9.8% compared to 10.9%;
• Net Debt⁽¹⁾ to Rolling Twelve-Month Adjusted EBITDA⁽¹⁾ was 3.0x at July 2, 2022 compared to 3.2x at April 2, 2022 and 3.0x at the end of Fiscal 2021;
• Net income increased by $7.8 million, or 30.2%, to $33.6 million compared to $25.8 million and diluted earnings per share ("EPS") increased to $0.95 per share compared to $0.74 per share; and
• Adjusted Net Income⁽¹⁾ increased by $0.7 million, or 2.9%, to $25.1 million compared to $24.4 million and Adjusted Diluted EPS⁽¹⁾ increased to $0.71 per share compared to $0.70 per share.

Key financial results, reported in U.S. dollars ("USD"), for the thirteen weeks ended July 2, 2022, or the second quarter of 2022, are as follows (unless otherwise noted, all comparisons are relative to the second quarter of 2021):

• Sales increased by $63.7 million, or 33.6%, to $253.5 million compared to $189.8 million and sales volume increased by 8.4 million pounds, or 16.7%, to 58.8 million pounds compared to 50.4 million pounds;
• Gross profit increased by $11.9 million, or 26.8%, to $56.3 million compared to $44.4 million, while gross profit as a percentage of sales decreased to 22.2% compared to 23.4%;
• Adjusted EBITDA⁽¹⁾ increased by $5.7 million, or 29.1%, to $25.3 million compared to $19.6 million, while Adjusted EBITDA as a Percentage of Sales decreased to 10.0% compared to 10.3% ;
• Net Debt⁽¹⁾ to Rolling Twelve-Month Adjusted EBITDA⁽¹⁾ was 3.0x at July 2, 2022 compared 3.0x at the end of Fiscal 2021 and 2.8x at July 3, 2021;
• Net income increased by $11.0 million, or 137.5%, to $19.0 million compared to $8.0 million and diluted earnings per share ("EPS") increased to $0.54 per share compared to $0.23 per share; and
• Adjusted Net Income⁽²⁾ decreased by $0.4 million, or 3.8%, to $10.0 million compared to $10.4 million and Adjusted Diluted EPS⁽¹⁾ decreased to $0.29 per share compared to $0.30 per share.

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⁽¹⁾ This is a non-IFRS financial measure. For more information on non-IFRS financial measures, see "Non-IFRS Measures" below and see "Non-IFRS Financial Measures" in our Second Quarter 2022 Management's Discussion and Analysis ("2Q22 MD&A").

Q2 Operational Update 

Overall sales and volumes increased year over year in the Company's foodservice and retail businesses, with most of the gains delivered by our foodservice business.  As anticipated, the full reopening of our institutional and hospitality customers, combined with the continued pent-up demand by consumers to enjoy dining out during the spring months, led to high demand for our products.

"This quarter demonstrated that our longstanding efforts to ensure that we were well positioned for the full reopening of foodservice are paying off – our customers appreciate the versatility of our offerings, reliability of supply and the value we deliver," said Mr. Hepponstall. 

"We are encouraged that as consumers enjoyed dining on seafood outside of the home, our retail business remained strong and grew sales and volume compared to the same time last year. While we have yet to see a major shift in consumer behaviour because of the inflationary environment, we are well positioned to continue to benefit at different price points across our portfolio."

Like others in the industry, the Company continues to experience shipping delays and raw material supply issues, which impacted the Company's ability to maximize overall volume sales by an estimated 4 million pounds or 6.8% during the quarter. By taking various steps to mitigate these supply challenges, the Company has reduced the impact on its performance and customers.

During the quarter, the Company continued to take various actions to counteract the impact of the inflationary environment, including measured pricing actions and will carefully monitor and manage these issues moving forward. These pricing actions and the increased volume due to higher demand, resulted in a 33.6% increase in net sales in the second quarter versus a year ago.

While many COVID-19 restrictions have been removed across North America, High Liner Foods continues to take prudent and proactive measures designed to protect the health and safety of its employees and mitigate disruption to the Company's supply chain and operations.

___________________________

⁽¹⁾ This is a non-IFRS financial measure. For more information on non-IFRS financial measures, see "Non-IFRS Measures" below and see "Non-IFRS Financial Measures" in our Second Quarter 2022 Management's Discussion and Analysis ("2Q22 MD&A").

Financial Results

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 twenty-six weeks ended July 2, 2022 and July 3, 2021 are summarized in the following table:

		Thirteen weeks ended					Twenty-six weeks ended
(Amounts in 000s, except per share amounts, unless otherwise noted)		July 2, 2022		July 3, 2021			July 2, 2022		July 3, 2021
Sales volume (millions of lbs)		58.8		50.4			132.1		120.2
Average foreign exchange rate (USD/CAD)		1.2775		1.2276			1.2718		1.2465
Sales		$         253,452		$          189,811			$         548,187		$          433,224
Gross profit		$           56,329		$            44,361			$         118,343		$          102,038
Gross profit as a percentage of sales		22.2 %		23.4 %			21.6 %		23.6 %
Adjusted EBITDA		$           25,333		$            19,575			$           53,673		$            47,378
Adjusted EBITDA as a percentage of sales		10.0 %		10.3 %			9.8 %		10.9 %
Net income		$           18,977		$              8,021			$           33,622		$            25,849
Diluted EPS		$               0.54		$                0.23			$               0.95		$                0.74
Adjusted Net Income		$           10,034		$            10,378			$           25,102		$            24,438
Adjusted Diluted EPS		$               0.29		$                0.30			$               0.71		$                0.70
Diluted weighted average number of shares outstanding		35,048		35,141			35,212		35,162

Sales volume for the thirteen weeks ended July 2, 2022, or the second quarter of 2022, increased by 8.4 million pounds, or 16.7%, to 58.8 million pounds compared to 50.4 million pounds in the thirteen weeks ended July 3, 2021, or the second quarter of 2021. In our foodservice business, sales volume was higher due to the significantly reduced COVID-19 restrictions on the Company's foodservice customers in 2022 as compared to 2021, leading to increased demand. The increase in sales volume was also due to growth in our retail business due to marketing efforts and increased sales in newer product lines and new business in both foodservice and retail. This was partially offset by the impact of global supply chain challenges on raw material supply to North America, that impacted the Company's sales volumes by an estimated 4.0 million pounds or 6.8% in the second quarter.

Sales in the second quarter of 2022 increased by $63.7 million, or 26.5%, to $253.5 million compared to $189.8 million in the same period in 2021, reflecting higher sales volumes mentioned above as well as pricing actions related to inflationary increases in input costs. In addition, the weaker Canadian dollar in the second quarter of 2022 compared to the same quarter of 2021 decreased value of reported USD sales from our CAD-denominated operations by approximately $2.6 million relative to the conversion impact last year.

Gross profit in the second quarter of 2022 increased by $11.9 million to $56.3 million compared to $44.4 million in the same period in 2021 and gross profit as a percentage of sales decreased by 120 basis points to 22.2% compared to 23.4%. The increase in gross profit reflects the higher sales volume and pricing actions as discussed previously, despite inflationary increases in input costs, offset by a change in product mix. In addition, the weaker Canadian dollar decreased the value of reported USD gross profit from our CAD-denominated operations by approximately in $0.6 million relative to the conversion impact last year.

Adjusted EBITDA in the second quarter of 2022 increased by $5.7 million to $25.3 million compared to $19.6 million in the same period in 2021 while Adjusted EBITDA as a percentage of sales decreased to 10.0% compared to 10.3%. The increase in Adjusted EBITDA is a result of the increase in gross profit, partially offset by the increase in net SG&A expenses and in distribution expenses.

Reported net income in the second quarter of 2022 increased by $11.0 million to net income of $19.0 million (diluted EPS of $0.54) compared to $8.0 million (diluted EPS of $0.23) in the same period in 2021. The increase in net income was due to the $10.0 million insurance proceeds received during the second quarter of 2022, as well as an increase in Adjusted EBITDA and a decrease in share-based compensation expense.  The increase in net income was partially offset by an increase in income tax expense.

Reported net income in the second quarter of 2022 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, share-based compensation, and the insurance proceeds, Adjusted Net Income in the second quarter of 2022 decreased by $0.4 million or 3.8% to $10.0 million compared to $10.4 million in the same period in the prior year. Adjusted Diluted EPS decreased $0.01 in the first half of 2022 to $0.29 as compared to $0.30 in the same period in the prior year.

Net cash flows provided by (used in) operating activities in the second quarter of 2022 increased by $3.4 million to an inflow of $9.3 million compared to an inflow of $5.9 million in the same period in 2021 due to favorable changes in non-cash working capital as well as lower interest and income taxes paid.

Net Debt increased by $23.2 million to $294.2 million at the end of the second quarter of 2022 as compared to $271.0 million at January 1, 2022, primarily reflecting higher bank loans on July 2, 2022 as compared to the first quarter of 2022 and lower cash, partially offset by lower long-term debt and lease liabilities.

Net Debt to Rolling Twelve-Month Adjusted EBITDA was 3.0x at July 2, 2022 compared to 3.0x at the end of Fiscal 2021, despite the investment in seasonal working capital and inflation in raw materials. In the absence of any major acquisitions or unplanned capital expenditures in 2022, we expect this ratio to be slightly below the Company's long-term target of 3.0x at the end of Fiscal 2022.

Outlook

"I am confident that we will continue to grow sales and generate year-over-year Adjusted EBITDA growth in Fiscal 2022 as we execute on our strategy to be the leader in branded, value-added seafood in North America," said Mr. Hepponstall.

Demand for the Company's products remains strong, however, like others in the industry, the Company is navigating global supply challenges exacerbated by the invasion of Ukraine, inflationary pressures on raw material and ongoing uncertainty related to the COVID-19 pandemic. High Liner Foods remains focused on working to mitigate ongoing supply challenges, the diversification of species, product and procurement, and strong customer and supplier relationships to support our position.

With a strong balance sheet and cash flow, the Company is well equipped to navigate current market conditions and invest in the business. The Company anticipates capital expenditures of approximately $25.0 million in Fiscal 2022, as we modernize our asset base, explore automation opportunities and maintain and upgrade our facilities.

With the extension of our $150.0 million working capital credit facility until April 2027, the Company does not have any impending debt maturities and we remain confident in our liquidity position. High Liner Foods expects the Net Debt to Rolling Twelve-Month Adjusted EBITDA ratio to be slightly below the Company's long-term target of 3.0x at the end of Fiscal 2022.

Dividend

Today, the Company's Board of Directors approved a quarterly dividend of CAD$0.10 per share on the Company's common shares, payable on September 15, 2022 to holders of record on September 1, 2022. These dividends are considered "eligible dividends" for Canadian income tax purposes.

Conference Call

The Company will host a conference call on Wednesday, August 10, 2022, at 2:00 p.m. ET (3:00 p.m. AT) during which Rod Hepponstall, President & Chief Executive Officer and Paul Jewer, Executive Vice President & Chief Financial Officer, will discuss the financial results for the second quarter of 2022. To access the conference call by telephone, dial 416-764-8659 or 1-888-664-6392. 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 Wednesday, August 17, 2022 at midnight (ET). To access the archived conference call, dial 1-888-390-0541 and enter the replay entry code 535543#.

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 Unaudited Condensed Interim Consolidated Financial Statements and MD&A as at and for the thirteen and twenty-six weeks ended July 2, 2022 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. For the thirteen and twenty-six weeks ended July 2, 2022, Adjusted EBITDA also excludes the $10.0 million in insurance proceeds as described in the Recent Developments section on page 4 of the Company's MD&A. 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 that are found in our Consolidated Financial Statements, and calculates Adjusted EBITDA as a Percentage of Sales.

				Thirteen weeks ended
(Amounts in $000s)		July 2, 2022		July 3, 2021
Net income		$                               18,977		$                                 8,021
Add back (deduct):
Depreciation and amortization expense		5,692		5,766
Finance costs		3,808		3,708
Income tax expense (recovery)		5,319		(1,237)
Standardized EBITDA		33,796		16,258
Add back (deduct):
Business acquisition, integration and other (income) expenses^(1)		(9,034)		760
(Gain) loss on disposal of assets		(27)		76
Share-based compensation expense		547		2,481
Adjusted EBITDA		$                               25,333		$                               19,575
Net Sales		$                             253,452		$                             189,811
Adjusted EBITDA as Percentage of Sales		10.0 %		10.3 %

⁽¹⁾ The business acquisition, integration and other (income) expenses for the thirteen and twenty-six weeks ended July 2, 2022, includes insurance proceeds of $10.0 million described in the Recent Developments section on page 4 of the Company's MD&A which is excluded in Adjusted EBITDA.

				Twenty-six weeks ended
(Amounts in $000s)		July 2, 2022		July 3, 2021
Net income		$                             33,622		$                             25,849
Add back (deduct):
Depreciation and amortization expense		11,363		11,484
Finance costs^(1)		7,600		173
Income tax expense		9,076		3,703
Standardized EBITDA		61,661		41,209
Add back (deduct):
Business acquisition, integration and other (income) expenses^(2)		(8,766)		1,106
Impairment of property, plant and equipment		51		—
Loss on disposal of assets		14		70
Share-based compensation expense		713		4,993
Adjusted EBITDA		$                             53,673		$                             47,378
Net Sales		$                           548,187		$                           433,224
Adjusted EBITDA as a Percentage of Sales		9.8 %		10.9 %

⁽¹⁾ The thirteen and twenty-six weeks ended July 3, 2021 includes a $7.8 million gain on modification of debt related to the debt refinancing completed in March 2021.

⁽²⁾ The business acquisition, integration and other (income) expenses for the thirteen and twenty-six weeks ended July 2, 2022, includes insurance proceeds of $10.0 million described in the Recent Developments section on page 4 of the Company's MD&A which is excluded in Adjusted EBITDA.

Rolling Twelve-Month Adjusted EBITDA

	Rolling twelve months ended
(Amounts in $000s)	July 2, 2022		January 1, 2022		July 3, 2021
Net income	$              50,022		$              42,249		$              37,042
Add back (deduct):
Depreciation and amortization expense	22,960		23,081		23,164
Finance costs^(1)	14,921		7,494		9,268
Income tax expense	12,206		6,833		5,049
Standardized EBITDA	100,109		79,657		74,523
Add back (deduct):
Business acquisition, integration and other (income) expenses^(2)	(7,022)		2,850		2,636
Impairment of property, plant and equipment	93		42		—
Loss on disposal of assets	66		122		145
Share-based compensation expense	3,471		7,751		10,327
Rolling Twelve-Month Adjusted EBITDA	$              96,717		$              90,422		$              87,631

⁽¹⁾ The thirteen and twenty-six weeks ended July 3, 2021 includes a $7.8 million gain on modification of debt related to the debt refinancing completed in March 2021.

⁽²⁾ The business acquisition, integration and other (income) expenses for the thirteen and twenty-six weeks ended July 2, 2022, includes insurance proceeds of $10.0 million described in the Recent Developments section on page 4 of the Company's MD&A which is excluded in Adjusted EBITDA.

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.  For the thirteen and twenty-six weeks ended July 2, 2022, Adjusted Net Income also excludes the $10.0 million in insurance proceeds as described in the Recent Developments section on page 4 of the Company's MD&A. 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.

		Thirteen weeks ended				Thirteen weeks ended
		July 2, 2022				July 3, 2021
		$000s		Adjusted Diluted EPS		$000s		Adjusted Diluted EPS
Net income		$               18,977		$                   0.54		$                 8,021		$                   0.23
Add back (deduct):
Business acquisition, integration and other (income) expenses^(1)		(9,034)		(0.26)		760		0.02
Share-based compensation expense		547		0.03		2,481		0.07
Tax impact of reconciling items		(507)		(0.01)		(884)		(0.02)
Adjusted Net Income		$               10,034		$                   0.29		$               10,378		$                   0.30
Average shares for the period (000s)				35,048				35,141

⁽¹⁾ The business acquisition, integration and other (income) expenses for the thirteen and twenty-six weeks ended July 2, 2022, includes insurance proceeds of $10.0 million described in the Recent Developments section on page 4 of the Company's MD&A which is excluded in Adjusted Net Income.

		Twenty-six weeks ended				Twenty-six weeks ended
		July 2, 2022				July 3, 2021
		$000s		Adjusted Diluted EPS		$000s		Adjusted Diluted EPS
Net income		$             33,622		$                 0.95		$             25,849		$                 0.74
Add back (deduct):
Business acquisition, integration and other (income) expenses^(1)		(8,766)		(0.25)		1,106		0.03
Gain on modification of debt ^(2)		—		—		(7,901)		(0.22)
Impairment of property, plant and equipment		51		—		—		—
Share-based compensation expense		713		0.03		4,993		0.14
Tax impact of reconciling items		(518)		(0.01)		391		0.01
Adjusted Net Income		$             25,102		$                 0.71		$             24,438		$                 0.70
Average shares for the period (000s)				35,212				35,162

⁽¹⁾ The business acquisition, integration and other (income) expenses for the thirteen and twenty-six weeks ended July 2, 2022, includes insurance proceeds of $10.0 million described in the Recent Developments section on page 4 of the Company's MD&A which is excluded in Adjusted Net Income.

⁽²⁾ Included in the "Finance costs (income)" line in the consolidated statements of income for the twenty-six weeks ended July 2, 2022 and represents a gain on the modification of debt related to the debt refinancing completed in March 2021.

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 earnings sufficient 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.

(Amounts in $000s)		July 2, 2022		January 1, 2022		July 3, 2021
Bank loans		$              30,594		$                4,388		$                     —
Add-back: Deferred finance costs included in bank loans ^(1)		481		163		—
Total bank loans		31,075		4,551		—
Long-term debt		241,741		244,994		248,228
Current portion of long-term debt		7,500		5,625		1,875
Add-back: Deferred finance costs included in long-term debt ^(2)		5,248		5,810		6,393
Less: Net loss on modification of debt ^(3)		(609)		(674)		(742)
Total term loan debt		253,880		255,755		255,754
Long-term portion of lease liabilities		4,960		6,851		8,811
Current portion of lease liabilities		4,577		4,327		4,853
Total lease liabilities		9,537		11,178		13,664
Less: Cash		(286)		(443)		(21,257)
Net Debt		$            294,206		$            271,041		$            248,161
Rolling Twelve-Month Adjusted EBITDA		$              96,717		$              90,422		$              87,631
Net Debt to Rolling Twelve-Month Adjusted EBITDA		3.0x		3.0x		2.8x

⁽¹⁾ Represents deferred finance costs that are included in "Bank loans" in the consolidated statements of financial position. See Note 5 to the Consolidated Financial Statements.

⁽²⁾ Represents deferred finance costs that are included in "Long-term debt" in the consolidated statements of financial position. See Note 6 to the Consolidated Financial Statements.

⁽³⁾ A gain on modification of debt related to the refinancing completed in March 2021, net of a loss on the modification of debt related to debt refinancing completed in October 2019, has been excluded from the calculation of Net Debt as it does not represent the expected cash outflows from the term loan facility. See Note 6 to the Consolidated Financial Statements.

Forward Looking Statements

Forward-looking statements can generally be identified by the use of the conditional tense, the words "may", "should", "would", "could", "believe", "plan", "expect", "intend", "anticipate", "estimate", "foresee", "objective", "goal", "remain" or "continue" or the negative of these terms or variations of them or words and expressions of similar nature. Actual results could differ materially from the conclusion, forecast or projection stated in such forward-looking information. As a result, we cannot guarantee that any forward-looking statements will materialize. Assumptions, expectations and estimates made in the preparation of forward-looking statements and risks that could cause our actual results to differ materially from our current expectations are discussed in detail in the Company's materials filed with the Canadian securities regulatory authorities from time to time, including the Risk Factors section of our MD&A for the thirteen and twenty-six weeks ended, the Risk Factors section of our 2021 Annual Report and the Risk Factors section of our 2021 Annual Information Form. The risks and uncertainties that may affect the operations, performance, development and results of High Liner Foods' business include, but are not limited to, the following factors: 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; 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. Trade Representative's tariffs on certain seafood products; 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; 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 policies; and the potential impact of a pandemic outbreak of a contagious illness, such as the 2019 coronavirus/COVID-19 pandemic, on general economic and business conditions and therefore the Company's operations and financial performance. Forward-looking information is based on management's current estimates, expectations and assumptions, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Except as required under applicable securities laws, we do not undertake to update these forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, whether as a result of new information, future events or otherwise. We include in publicly available documents filed from time to time with securities commissions and The Toronto Stock Exchange, a discussion of the risk factors that can cause anticipated outcomes to differ from actual outcomes. Except as required under applicable securities legislation, we do not undertake to update forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, whether as a result of new information, future events or otherwise.

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 [email protected]. 

SOURCE High Liner Foods Incorporated

Paul Jewer, FCPA, FCA, Executive Vice President & Chief Financial Officer, High Liner Foods Incorporated, Tel: [phone], [email protected]; Kimberly Stephens, CPA, CA, Vice President, Finance, High Liner Foods Incorporated, Tel: [phone], [email protected]