High Liner Foods Inc. of Lunenburg announced Tuesday that its board of directors has elected to reduced the quarterly dividend to five cents per common share, in an attempt to save money.
The value-added seafood company decided to reduce the dividend after an extensive review of its capital allocation strategy.
“The revised dividend will free up approximately $10 million annually in cash flow that will support the reduction and refinancing of debt to create a stronger balance sheet,” according to High Liner management.
“The board has already reduced its size and cut its compensation ... the board has taken the step to right size the dividend to support our de-leveraging objectives,” High Liner’s new board chair Robert Pace said in a statement.
The Nova Scotia-based company reported first quarter results on Tuesday, in U.S. dollars, for the 13 weeks ending on March 30.
High Liner sales decreased by $41.8 million to $277.4 million in the quarter, compared to $319.2 million during the same quarter in 2018.
Adjusted earnings before interest, taxes, depreciation and amortization increased by $8 million to $32.2 million compared to the first quarter 2018 EBITDA of $24.2 million, according to High Liner management.
The seafood firm reported adjusted net income in the first quarter increased by $4.2 million to $14.9 million (44 cents per diluted share), compared to adjusted net income of $10.7 million (32 cents per diluted share) during the same quarter last year.
The company’s net debt decreased by $32.7 million to $353.4 million on March 30, compared to $386.1 million at March 31, 201.
The reduction in net debt was partially offset by the transitional increase in lease liabilities upon the adoption of the new lease standard effective at the beginning of fiscal 2019, according to management in its quarterly discussion and analysis.
