High Liner Foods cuts salaried workforce by 14 per cent after disappointing Q3

High Liner Foods Inc. shares fell more than 20 per cent as the company announced Thursday it cut 14 per cent of its salaried workforce following a “disappointing” third quarter.

“It’s never easy to lose good people,” said CEO Rod Hepponstal during a conference call with analysts in the afternoon after the company released its most recent financial results.

“It’s clear to me that our recent results are not reflecting our potential,” he said.

High Liner, which keeps its books in U.S. dollars, reported a $44 million gross profit for the third quarter ending Sept. 29, down $4.3 million from $48.3 million in the same quarter the previous year.

It says its net income fell $1.5 million to $4.5 million or 13 cents per share, down from $6 million or 18 cents per share in the last financial year’s third quarter.

Sales in the quarter dropped by $41.5 million to $241.2 million. That’s down from $282.7 million in the same quarter the previous year.

The company’s shares fell C$2.25 cents or 24.27 per cent to close at C$7.02 on the Toronto Stock Exchange.

“We have work to do,” said Hepponstal, who started in his role on May 1.

The company recognizes the urgency of the situation and is taking swift action, he said, adding he’s not interested in a quick fix.

The layoffs are one part of five critical initiatives the frozen seafood processor will execute to achieve more than US$10 million net annualized run rate cost savings within the next 12 to 15 months. A one time charge of US$4.5 million, including US$3.3 million in the fourth quarter, will be associated with the latest restructuring.

The company is also taking steps to simplify its business, implement one integrated supply chain, fully extract value and synergies from its Rubicon acquisition, and invest in product innovation and other things to return to profitable organic growth by 2020.

Part of the work will include eliminating some of the more than 1,500 products High Liner currently offers, Hepponstal said.