HIGH LINER FOODS REPORTS OPERATING RESULTS FOR THE SECOND QUARTER OF 2025

Executive Summary

• High Liner Foods reported financial results for the second quarter and first half of fiscal 2025, highlighting increased sales volume and Adjusted EBITDA in Q2, despite a decline in reported net income due to acquisition-related expenses and lower non-routine income compared to the prior year.
• The company completed the acquisition of the Mrs. Paul's and Van de Kamp's frozen seafood brands from Conagra Brands for USD $42.4 million on June 30, 2025, securing co-manufacturing volume and expanding its U.S. retail footprint.
• Net debt increased to $275.9 million, resulting in a Net Debt to Rolling 52-week Adjusted EBITDA ratio of 2.7x, with the company noting that leverage is expected to rise slightly above its 3.0x target by year-end due to the Conagra acquisition.

Key Details

• Q2 2025 Financials (13 weeks ended June 28, 2025):
  • Sales: $239.6 million (up 9.8% YoY), driven by a 6.0% increase in sales volume to 54.8 million pounds.
  • Adjusted EBITDA: $25.1 million (up 5.5% YoY), with margin decreasing to 10.5% from 10.9%.
  • Net Income: $8.5 million (down 56.0% YoY); Diluted EPS $0.28 (down from $0.59).
  • Adjusted Net Income: $11.5 million (up 2.7% YoY); Adjusted Diluted EPS $0.38 (up from $0.35).
  • Gross Profit: $53.3 million (up 1.5% YoY), with margin decreasing to 22.3% from 24.0% due to tariff costs and higher raw material pricing.
• H1 2025 Financials (26 weeks ended June 28, 2025):
  • Sales: $508.0 million (up 2.6% YoY), with volume up 1.9% to 120.8 million pounds.
  • Adjusted EBITDA: $57.2 million (down 1.5% YoY), margin at 11.3%.
  • Net Income: $23.8 million (down 33.7% YoY); Diluted EPS $0.79 (down from $1.08).
  • Adjusted Net Income: $28.1 million (down 5.7% YoY); Adjusted Diluted EPS $0.93 (up from $0.90).
• Conagra Brands Acquisition:
  • Closed on June 30, 2025, for an adjusted purchase price of USD $42.4 million.
  • Includes Mrs. Paul's and Van de Kamp's brands.
  • Secures approximately 29 million pounds of annual seafood volume currently under co-manufacturing (expiring 2027).
  • Expected to deliver USD $11 million annual run-rate Adjusted EBITDA in 2027.
• Balance Sheet & Liquidity:
  • Net Debt: Increased by $42.7 million to $275.9 million (June 28, 2025) from $233.2 million (Dec 28, 2024).
  • Leverage Ratio: Net Debt to Rolling 52-week Adjusted EBITDA is 2.7x (vs 2.3x at end of Fiscal 2024).
  • Operating Cash Flow: Decreased by $23.4 million to an inflow of $15.6 million in Q2, driven by unfavorable working capital changes (inventory purchases and accounts payable repayments).
  • Capital Expenditures: $7.9 million in H1 2025 (vs $10.1 million in prior year).
• Dividend:
  • Board approved a quarterly dividend of CAD $0.17 per share, payable September 15, 2025, to holders of record on September 1, 2025.

Notable Quotes

• "In the second quarter, we delivered higher volumes, sales and Adjusted EBITDA compared to the prior year... We will build on our strong start to the year by leveraging our diversified global supply chain alongside balanced pricing strategies and operational efficiencies to support both the top and bottom line." — Paul Jewer, President and CEO
• "Our second quarter performance demonstrates the underlying strength of our business and our ability to grow. While we anticipate operating challenges posed by tariffs will continue in the second half of the year, we are aggressively pursuing targeted strategies to support volume growth while preserving margin to deliver year over year Adjusted EBITDA growth." — Paul Jewer, President and CEO