Steady as she goes for High Liner Foods

Firm’s customer base changing as restaurants close, consumers dine at home

High Liner Foods Inc. is landing more retail sales as demand from eateries takes a dive amid COVID-19.

“The evolving customer needs started mid-march, when social distancing restrictions took hold in North America; segments of the food-service industry, in essence, closed, and consumers began to stockpile groceries,” said Rod Hepponstall, president and CEO of High Liner Foods, during a conference call Tuesday.

“We met this increased demand on the retail side with excellent fill rates and quickly began working with our restaurant customers to pivot to takeout and delivery options.”

The Lunenburg-based frozen seafood company reported financial results Tuesday for the 13 weeks ended March 28. Profit for the period was US$14.2 million, or 41 cents per diluted share, compared with US$14.8 million, or 43 cents, for the same period a year earlier. Sales were US$268.6 million; they were US$277.4 million in the first quarter last year.

“In many respects, it is a time of opportunity for us as consumers try our products for the first time,” Hepponstall said on the call.

“We are focused on retaining these customers and are aligning our strategies with evolving shopping habits and consumer preferences.

“For example, we know that customers are shopping less frequently and are doing so with larger basket sizes, increasingly online purchases and in search of value offerings and healthy protein.”

He said the company is working to transfer some of its food-service products to the retail channel.

“This is a win-win, as it puts excess product to good use while supporting consumer demand for bulk purchasing.”

The company indicated its overall supply chain has operated with minimal disruption during COVID-19 despite operating fewer production lines and implementing social distancing measures. High Liner said there have been limited interruptions in production, transportation and warehousing activities, and no significant issues related to procuring raw materials and ingredients.

The company announced

April 20 that it had temporarily suspended production at its plant in Portsmouth, N.H., after cases of COVID-19 were detected. Work resumed April 27, High Liner said Tuesday.

There are increased costs associated with COVID-19 that include extraordinary recognition pay for frontline employees, personal protective equipment, safety enhancements and increased sanitation, according to a news release. It is deferring about $6 million of the $15 million previously planned for capital expenditures this year.

High Liner Foods' retail branded products are sold throughout Canada and the United States under the High Liner, Fisher Boy, Mirabel and Sea Cuisine 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 seafood products to North American food retailers and food service distributors.

The board of directors approved a quarterly dividend of $0.05 per share on common shares, payable June 15 to holders of record on June 1.

High Liner Foods trades under the symbol HLF on the Toronto Stock Exchange, where shares were trading late Tuesday at $7.02, up 52 cents. Four analysts surveyed by Marketwatch had an average “hold” recommendation on the stock.