MIRA
INFORM REPORT
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Report Date : |
13th
June 2006 |
IDENTIFICATION
DETAILS
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Name : |
HIGH LINER FOODS INCORPORATED |
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Registered Office : |
100
Battery Point, Lunenburg
Nova
Scotia, B0j 2c0 Canada |
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Country : |
Canada |
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Financials (as on) : |
31/12/2005 |
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Date of Incorporation : |
01/01/1899 |
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Legal Form : |
Provincially Chartered Corporation - Public |
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Line of Business : |
Processor and distributor of fish and pasta
products |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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Status : |
Satisfactory
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Payment Behaviour : |
Regular
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Litigation : |
Clear |
IDENTIFICATION & EXECUTIVE SUMMARY
Company
Name: HIGH LINER FOODS INCORPORATED
Address: 100
Battery Point
City: LUNENBURG
State/Province: NOVA
SCOTIA
Zip
Code: B0J
2C0
Country: CANADA
Telephone: 634-8811
Total
Equity: 69,450
Facsimile: 902
634-4785
Number
of Employees: 1,061
Legal
Form: Provincially Chartered Corporation - Public
Website: www.highlinerfoods.com
Maj.
Shareholder: SCOTIA INVESTMENTS LIMITED
@rating
Opinion:
Founded
(D/M/Y): 01/01/1899
In
KCAD As of: 31/12/2005
Sales
/ Revenue: 260,433
Net
Income: - 40,469
Business
Activity:
The
Firm is a processor and distributor of fish and pasta products.
NOTE TO CLIENT
NOTE:
The Firm is publicly trade on Toronto Stock Exchange.
CREDIT
RECOMMENDATION: US$200,000
Based
on payment record, financial statements, longevity and operating history, we
believe the Firm to be responsible for trade credit up to and including US
$100,000.
Amount
Requested: 200,000
Amount
Advised: 200,000
The
amounts requested and advised are expressed in: USD
LEGAL
Legal
Form: Provincially Chartered Corporation – Public
Since
(D/M/Y): 11/01/1984
Status:
ACTIVE
Previous
Legal Form:
Company
is required to publish an annual financial report.
The
Firm is incorporated in Canada under the following:
Name: High Liner Foods Incorporated
Date
of Formation: Mar 1 1967
Governing
Jurisdiction: Nova Scotia
CUSIP
Number: 429695
Size
of Issuer (Assets): $100,000,001
to $500,000,000
Traded
on the Toronto Stock Exchange.
Symbol: HLF
Last
Updated: 08 Jun 2006
Rolling
52 Week High: $10.250
Rolling
52 Week Low: $ 8.100
Quoted
Market Value: $89,423,608
Shares
Outstanding: 10,302,259
Last
Bid Price: 8.680
Managers/Key Personnel
Mr.
D.J. Hennigar Chairman Of The Board Of Directors
Mr.
Henry E. Demone President & Chief Executive Officer
Mr.
Mario Marino Vice President
Mr.
Ronald G. Whynacht Vice President
Mr.
Kelly Nelson Chief Financial
Officer
OWNERS
SCOTIA
INVESTMENTS LIMITED 43.00% Minority
EMPIRE
COMPANY LIMITED
12.00 Minority
AFFILIATED ENTITIES
There
are no other affiliated companies.
Subsidiaries
HIGH
LINER FOODS (USA) INCORPORATED
CANADA
NATIONAL
SEA PRODUCTS LIMITED
CANADA
BANKS
ROYAL
BANK OF CANADA
PRIVATE
BANKING HALIFAX, 5161 GEORG
HALIFAX, NS
B3J1M7
Telephone:
514 874-7908
Facsimile:
514 874-8740
Account
Number:
Account
Manager:
ROYAL
BANK OF CANADA
ROYAL
CENTRE BRANCH, 5161 GEORGE ST
HALIFAX NS
B3J2L7
Telephone:
902 421-8330
Facsimile:
514 874-8740
Account
Number:
Account
Manager:
PAYMENT HISTORY
Supplier's Name/Industry Terms Amount/Pay Habits/Comments
Rptd
Open Credit Credit
High Total Current
Past Due/Pay Period
Date
Date Limit Limit Dt. Credit Owing $ 1st
2nd 3rd
------------------------------------------------------------------------------
Mfr-Valve & Pipe Fit:
*Jun 0
1,597 1,597 1,597
0 0 0
Wholesale-Elec Equip:
*Jun 0
53,158 2,800 1,200
1,600 0 0
Mfr-Pump & Pumping E:
*Jun 0
499 499 0
499 0 0
Mfr-Paper Box:
*May 0
16,290 16,290 10,133
6,157 0 0
Whlsl-Ind Mach Sppls:
*May 0
868 868 868
0 0 0
Transportation Serv:
*May 0
151 151 0
151 0 0
Mfr Elevators& Moving:
*May 0
798 798 408
390 0 0
Trucking (APTA):
*May 0 1,500 484 0 484
0 0
Mfr-Paper Products:
*May 0
142 142 142
0 0 0
Whlsl-Plumbing/Heatg:
*Apr 0
468 468 251
0 217 0
ACKLAND GRAINGER CAN: 905-764-8989
*Apr 0
60,000 425 425
0 0 0
Mfr-Cnnr/Food Procsr:
*Apr 0
6,038 6,038 6,038
0 0 0
Whlsl-Ind Mach Sppls:
*Apr 0 575 575 575 0
0 0
Milling-Cereals:
*Apr 0
14,671 14,671 14,671
0 0 0
Mfr-Primary Metal:
*Apr 0
10,078 3,420 2,969
451 0 0
Mfr-Pump & Pumping E:
*Apr 0
1,664 1,664 1,664
0 0 0
Wholesale-Chemicals:
*Apr 0
11,837 4,087 4,087
0 0 0
Business Services:
*Mar 0 2,970
2,970 2,970 0
0 0
Mfr-Textile Goods:
*Mar 0
103 103 103
0 0 0
-------
------- ------- ------- ------- -------
P.I. =
6 90 Days 183K
58,050 48,101 9,732
217 0
Reported -------
------- ------- ------- ------- -------
Mfr-Non-Mtl Min Pdt:
*Mar 0
50,000 478 478
0 0 0
Wholesale-Chemicals:
*Mar 0
170 170 170
0 0 0
Mfr-Food Prep and Ki:
*Jan 0
557 557 0
557 0 0
Whlsl-Ind Mach Sppls:
*Jan 0
1,349 1,349 1,349
0 0 0
Milling-Cereals:
*Jan 0 6,840 4,416 4,416 0
0 0
Mfr-Fabricated Struc:
*Jan 0
523 523 523
0 0 0
EQUIFAX CAN: 416-227-8703
*Jan 0
2,817 2,817 0 2,817 0
0
Manufacturing Indust:
*Jan 0
500 45 45
0 0 0
Retail-Establishment:
*Nov 0
3,500 1,336 1,336
0 0 0
Wholesale-Elec Appls:
*Nov 0
500 62 1
2 0 59
Whlsl-Electronic Pts:
*Nov 0
12,386 12,386 12,386
0 0 0
Utility Systems:
*Oct 0
20 20 20
0 0 0
Mfr-Valve & Pipe Fit:
*Jul 0
1,367 1,367 1,367
0 0 0
-------
------- ------- ------- ------- -------
P.I. =
5 Total 263K
83,576 70,192 13,108
217 59
Reported -------
------- ------- ------- ------- -------
PAYMENT TRENDS
------------------------------------------------------------------------------
Payment
C.I. Number of Total
Current Overdue
Quarters Index Score Suppliers
Owing $ 1st 2nd 3rd
------------------------------------------------------------------------------
1 Qtr/2006 8 4 24
388,768 292,048 96,634 0 86
4 Qtr/2005 1 4 20
98,531 95,722 2,750 0 59
3 Qtr/2005 5 8 17
68,764 57,623 11,141 0 0
2 Qtr/2005 8 4 15
173,004 135,196 36,479 0 1,329
1 Qtr/2005 12 4 14
53,147 35,759 15,568
1,653 167
4 Qtr/2004 5 4 18
52,818 44,666 7,819
137 196
3 Qtr/2004 7 4 20
181,949 150,354 26,691
4,118 786
2 Qtr/2004 1 4 12
98,532 94,736 3,692 0 104
1 Qtr/2004 7 4
19 127,613 102,582
24,488 0 543
FINANCIAL INFORMATION
FINANCIAL FIGURES
Year-End (D/M/Y): 31/12/2005 30/12/2004 30/12/2004
Consolidated Consolidated
Sales / Revenues 260,433 269,494 -
Gross Margin 48,357 57,305
-
Depreciation -3,369 -3,453
-
RESULTS
Income before Taxes -37,837 15,004 -
Income Tax -2,632 -3,735
-
Net Income -40,469 8,162
-
ASSETS
Cash and Equivalents 580 506 -
Inventory 59,279 45,322
-
Accounts Receivables 26,495 28,167 -
Other Current Assets 546 7,383 -
Total Current Assets 87,537 82,019 -
Property Plant & Equip 26,952
27,176 -
Total Fixed Assets 36,217 84,976 -
Total Assets 123,754 166,995
-
LIABILITIES
Trade Creditors 28,337 31,357 -
Current Bank Loans 24,808 7,321 -
Other Current Liab 526 444 -
Total Current Liab 53,671
39,122 -
Deferred Taxation - 7,267 -
Other Long Term Liab 633 781 -
Total Long Term Liab 633 8,048 -
Total Liabilities 54,304 47,170 -
EQUITY
Total Equity 69,450 119,825
-
FINANCIAL ANALYSIS
Actual Previous Percentage of total assets
31/12/2005 30/12/2004 31/12/2005 30/12/2004
Cash and Equivalents 580 506
0.47 0.30
Inventory 59,279
45,322 47.90 27.14
Other Current Assets 546 7,383
0.44 4.42
Total Current Assets 87,537 82,019
70.73 49.11
Total Assets 123,754
166,995 100.00 100.00
Total Current Liab 53,671 39,122
43.37 23.43
Other Long Term Liab 633 781
0.51 0.47
Total Liabilities 54,304 47,170
43.88 28.25
Total Equity 69,450
119,825 56.12 71.75
HISTORY
The
Company was founded as W.C. SMITH &
COMPANY LIMITED in 1899. In
1926, the same group of shareholders founded LUNENBURG SEA PRODUCTS LIMITED to
diversify into fresh fish and cold storage.
These two companies merged in 1938.
In 1945, the merged companies, along with MARITIME NATIONAL FISH COMPANY
LIMITED and other related companies, were brought together under the ownership
of NATIONAL SEA PRODUCTS LIMITED. The
present company was formed by amalgamation of the related companies in 1967. It changed its name to HIGH LINER FOODS
INCORPORATED on December 31, 1998.
On
September 19, 1998, the Company acquired the operations of ITALIAN VILLAGE
RAVIOLI & PASTA PRODUCTS INC. and
FLORESTA PASTA PRODUCTS INC.
Mr.
Henry Demone was born in High Liner's home town, Lunenburg, NS, in 1954. A
mathematician by academic training, Henry joined the Company (then National Sea
Products), in 1977, soon taking over management of international sales. I 1980,
he left National Sea to serve as Managing Director of a French subsidiary of
Franz Witte AB, a Swedish food company and division of Volvo. Returning to
National Sea in 1984 as Vice President, International, Henry was appointed
President and Chief Operating Officer of the Company in 1989. At the Company's
Annual Meeting in 1992, he was appointed President and Chief Executive Officer.
Mr.
Kelly Nelson obtained his CA designation in 1978 with a Canadian National Firm
of Chartered Accountants, after graduating with a Bachelor of Commerce degree
in Economics. He joined the Company in 1984, and now oversees all accounting,
treasury, risk management, internal audit, tax
compliance
and planning and information systems for the Company.
CURRENT OPERATIONS
NAICS
Code: 311712 Fresh and Frozen Seafood Processing
SIC
Code: 2092
Number
of Employees: 1,061
Business
Activity:
The
Firm is a processor and distributor of fish and pasta products. The Firm
processes and marketes seafood, frozen pasta, and other food products in North
America. The Firm specializes in frozen food. The Firm’s packaged foods
division produces and markets products for the food service, retail (including
private
label), and club store channels. The Company owns strong retail brands, but is
also a supplier of private labels for many North American food retailers.
The
High Liner® brand is among brands in Canada.
The
Firm is headquarteredsat the provided address.
The
following chart describes High Liner’s major production facilities:
LOCATION TYPE OF PRODUCTION
ANNUAL
CAPACITY (1) CAPACITY
Metric
Tonnes (MT) UTILIZATION
PACKAGED
FOODS
Lunenburg Prepared Foods 18,150 80%
Portsmouth
NH Prepared Foods 29,500 60%
Secaucus
NJ (2) Prepared Foods 18,150 20%
FISHING
DIVISION
Arnold’s
Cove NF Primary Processing 6,350 100%
(1)
Based on the production of finished pounds, on two shifts for 5 days per week.
(2)
Building is leased by the Company, subject to a 5-year lease expiring in 2005.
All
food processing plants conducting business throughout North America require a
combination of State or Provincial and Federal licenses to operate. The
requirement to obtain and maintain a food-processing license principally
relates to food safety and quality, transportation of food and labeling. High
Liner Foods possesses all necessary licenses and approvals to operate.
The
United States requires its seafood processing plants to adopt a quality
management plan known as HACCP (Hazard Analysis of Critical Control Points).
Its seafood processing plant in Portsmouth, New Hampshire was one of the firs
plants to have an approved Seafood HACCP plan in the USA and to pass a
regulatory HACCP audit. In Canada all seafood-processing plants are required to
adopt a Quality Management Plan (QMP) covering the regulatory and safety
aspects of food processing. High Liner’s QMP has been approved and in good
standing since inception of this requirement. Canada’s QMP is an accepted
standard under the U.S. HACCP system.
Plants
outside of North America must also pass HACCP audits to be able to export
products to the U.S. All of the Company’s non-North American suppliers are
HACCP approved plants. The Company also maintains internal quality
specifications that in many respects exceed HACCP or QMP requirements.
Suppliers
are required to adhere to its internal specifications and it regularly audit
for compliance.
The
Company’s food processing plants are subject to Canadian Federal, Provincial
and United States Federal and State legislation with respect to safety and
environmental matters. In the United States, state labour laws and the Federal
Occupational Safety & Health Act
(OSHA) regulate how work must be
conducted
in the Company’s plants. In Canada, provincial Departments of Labour and
Worker’s Compensation Boards play an active role in monitoring health and
safety in the workplace. Abroad, High Liner engages external consultants who
ensure its suppliers meet local requirements. The Company’s Environment and
Safety Committee of the Board of Directors receives quarterly reports on the
Company’s safety and environmental management, and oversees efforts of the
Company to maintain safe and environmentally compliant workplaces.
PUBLIC RECORD
There
has been no legal proceedings against the Company at this time.
GENERAL COMMENTS
The
Firm is a well established processor and distributor of fish and pasta
products. The payment record is satisfactory. No judgements, tax liens or
bankruptcy petitions were traced to the Firm. The Firm is considered responsible
for normal trade relations.
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |