Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the High Liner Foods Incorporated Conference Call for results of the Third Quarter of 2019. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. [Operator Instructions]. This conference call is being recorded today, Thursday, November 7, 2019 at 2:00 P.M. Eastern Time for replay purposes. I would now like to turn the call over to Heather Keeler-Hurshman, Vice President of Investor Relations and Communications for High Liner Foods. Ms. Keeler-Hurshman, please go ahead. Heather Keeler-Hurshman: Good afternoon, everyone. Thanks for joining High Liner Foods' conference call to discuss our financial results for the third quarter of 2019. On the call today from High Liner Foods are Rod Hepponstall, President and Chief Executive Officer; and Paul Jewer, Executive Vice President and Chief Financial Officer. In a moment, I will pass the call over to Rod for some brief remarks before handing over to Paul who will review the financial performance for the third quarter. Rod will then wrap up the call with an update on our progress against our five critical initiatives, and then open the call up to questions. I would like to remind listeners that we use certain non-IFRS measures and ratios when discussing our financial results as we believe these are useful in assessing the company's financial performance. These measures are fully described and reconciled to IFRS measures in our MD&A. Listeners are also reminded that certain statements made in today's call may be forward-looking statements that are subject to risks and uncertainties. Management may use forward-looking statements when they discuss the company's strategy and business in the future. Actual operating or financial results could differ materially from those anticipated in these forward-looking statements. High Liner Foods includes a thorough discussion of the risk factors that can cause anticipated outcomes to differ from actual outcomes in its publicly available disclosure documents, particularly in its Annual Report and its Annual Information Form. Please note that High Liner Foods is under no obligation to update any forward-looking statements discussed today. Earlier today, High Liner Foods reported its financial results for the third quarter ended September 28, 2019. That news release, along with the company's MD&A and unaudited condemned interim consolidated financial statements for the third quarter of 2019 have been filed on SEDAR, and can also be found in the Investor Information section on the High Liner Foods' website. If you would like to receive our news releases in the future, please visit the company's website to register. Lastly, please note that the company reports its financial results in U.S. dollars, and the results to be discussed today are stated in U.S. dollars, unless otherwise noted. High Liner Foods' common shares trade on the Toronto Stock Exchange and are quoted in Canadian dollars. I will now turn the call over to Rod. Rod, please go ahead.

Thank you. Good afternoon everyone and thank you for joining us today. As you will have seen in our financial results, the health and performance of our business continues to improve. Highlights include another quarter of adjusted EBITDA growth and a stronger balance sheet. $2.4 million from cost savings secured through our supply chain initiative bringing supply chain savings to $6.4 million year-to-date; a great reception from our customers on our new product innovations and a better portfolio mix of high margin value-added products; an important vote of confidence from the investor community as we successfully completed our refinancing ahead of schedule. Our rate of volume decline is slowing, sales and marketing execution is improving and innovation continues. We're acquiring new customers and product placements at a faster pace than in recent history and are operating far more efficiently. I expect all of these positive trends to continue, as this is why we are confident that we will continue to deliver adjusted EBITDA growth in 2019 and 2020 despite anticipated further top-line challenges. Paul, over to you for financial review.

Thank you, Rod, and good afternoon, everyone. Please note that all comparisons provided during my financial review of the third quarter of 2019 are relative to the third quarter of 2018, unless otherwise noted. Before getting into the financial results, I would like to remind the listeners that the company adopted the new lease standard IFRS 16, Leases, effective December 30, 2018. The implementation of IFRS 16 resulted in additional assets and liabilities on the consolidated statements of financial position of approximately $14.6 million upon transition and approximately $5.1 million previously accounted for as operating lease expense is now accounted for as $4.6 million of depreciation expense and $1.3 million of finance costs for the full fiscal year 2019. The new lease standard was adopted using the modified retrospective method and therefore comparative information for 2018 has not been restated. Sales volume decreased in the third quarter by 4 million pounds to 60.2 million pounds. The decrease reflects lower sales volume in our foodservice and retail businesses, including lower sales volume as a result of lost business in the latter half of fiscal 2018 and the exit of lower margin business in 2019. Sales in U.S. dollars decreased in the third quarter by $21.1 million to $220.1 million mainly due to the decreased volume mentioned previously and changes in sales mix, partially offset by price increases related to material cost increases. Gross profit decreased in the third quarter by $1.6 million to $42.4 million. Our gross profit as a percent of sales increased to 19.3% compared to 18.2%. The decrease in gross profit reflects the lower sales volume and raw material cost increases in tariffs on certain species imported into the U.S. from China. This was partially offset by sales price increases, favorable product mix related to the exit of low margin business and improved plant efficiencies, partially due to our supply chain excellence initiatives, all of which lead to the 110 basis point improvement in gross margin as a percentage of sales. Adjusted EBITDA increased in the third quarter by $2.3 million to $16.5 million and was 7.5% of sales compared to 5.9% in 2018. This increase reflects the impact of adopting the new lease standard and a decrease in distribution and net selling, general and administrative expenses, partially offset by the lower gross profit discussed previously. The impact of converting our Canadian dollar-denominated operations and corporate activities to our U.S. dollar presentation currency decreased value of reported adjusted EBITDA in U.S. dollars by $700,000 in the third quarter of 2019 compared to $400,000 in 2018. Reported net income decreased in the third quarter by $6.9 million to a net loss of $2.4 million with diluted loss per share of $0.07 compared to diluted earnings per share of $0.13 in 2018. The decrease in net income reflects the product recall recovery of $8.5 million on the ingredient supplier that was recognized in the third quarter of 2018, increased share-based compensation expense, costs associated with the company's critical initiatives and higher depreciation and appreciation expense largely related to the new lease standard, partially offset by the increase in adjusted EBITDA mentioned previously and lower income taxes. We continue to believe that we will have benefits far in excess of costs related to our critical initiatives. The effective tax rate for the third quarter of 2019 was a recovery of 21.6%, compared to an expense of 56.3% in 2018. However, we expect the effective tax rate for 2019 on an annual basis will be more consistent with the statutory rate. Excluding the impact of certain non-routine and non-cash items, which are explained in our MD&A, adjusted net income increased in the third quarter by $3.5 million to $3.9 million and correspondingly, adjusted diluted earnings per share increased by $0.10 to $0.11. Turning now to cash flows from operations and the balance sheet, net cash flows from operating activities increased by $28.7 million to $75.7 million in the first three quarters of 2019, primarily reflecting increased cash flow from operations and favorable changes in net non-cash working capital, partially offset by higher interest and income tax payments. Net debt decreased by $48.3 million to $312.3 million at the end of the first three quarters of 2019 compared to $360.6 million at the end of fiscal 2018. Excluding the transitional increase in lease liabilities upon the adoption of the new lease standard, effective at the beginning of fiscal 2019, net debt decreased by $62.9 million in the first three quarters of 2019. Including the impact of the new lease standard since adoption only, net debt to rolling 12 month adjusted EBITDA was 4 times at September 20, 2019 compared to 5.8 times at the end of fiscal 2018. In the absence of any major acquisitions or strategic initiatives requiring capital expenditures in 2019, we expect this ratio will remain consistent throughout the final quarter 2019 due to the increased working capital requirements in advance of the Lenten period. As previously announced, we reduced and extended our debt facilities with the early refinancing of our Term Loan B, reducing this facility from $370 million to $300 million and extending the term from April 2021 to October 2026. We also amended our asset base revolving facility, including reducing the amount of the facility from $180 million to $150 million and extending the term from April 2021 to April 2023. With the certainty of this longer term financing in place, we have the confidence, capacity and flexibility we need to continue to execute on our EBITDA growth plan. That concludes my financial review. And I will now turn the call back to Rod for some color on our critical initiatives.

Thanks, Paul. I'll now highlight some of our key actions over the last few months as we continue to execute on our critical initiative plan. This time last year I spoke to you about my vision to create One High Liner Foods, an integrated organization positioned to take advantage of its North American scale. That statement is no longer visionary. It accurately reflects the nature of our business today. With every passing quarter, our new North American structure, relationships and internal work processes make us a stronger and more efficient company and I expect this will continue in the months and years ahead. Our One High Liner Foods initiative has been foundational in our ability to execute on our other critical initiatives. We simply would not be where we are today had we not taken swift action to better align our business structure a year ago. Work on our supply chain critical initiative continues to progress. We delivered $2.4 million in cost savings related to our supply chain during the third quarter, bringing the total cost savings achieved this year to $6.4 million. This can be attributed to better procurement processes, improved plant performance, and continued optimization of our transportation and warehousing strategy. In terms of shrimp alignment and growth, we no longer think of the Rubicon business as separate from High Liner Foods. Rather, it's embedded within our overall product portfolio. As we work to grow our shrimp business, we are focused on value-added products with higher margins, with an emphasis on new product innovations that are on trend and will create new eating occasions. Regarding business simplification, an enormous amount of complexity has been removed from our business over the past year, and we are continuing to move closer to a more optimal product portfolio. We will continue to evaluate existing and new opportunities against our detailed criteria for profitability and growth. A good portion of our product rationalization is now behind us. But the work to optimize our SKUs and portfolio is ongoing. In fact, it will never be done. We are committed to continuous improvement and we'll constantly be evaluating our portfolio to make necessary shifts and improvements based on market trends, customer demands and our own internal metrics. Last quarter I shared with you some of the promising early results of our new product and fast growing non-traditional areas like snacking, including our haddock bites and fish wings. We have good momentum and efforts to be market ready for our peak sale season are paying off. We know that our customers are returning to the frozen food aisle at an ever-increasing pace, and our new products are there to greet them. We're also working to ensure that these products are well established and stored prior to key sales period and opportune snacking occasions such as Christmas, New Year’s and Super Bowl. These are occasions that we haven't been able to capitalize on in prior years. And I'm excited about the potential here as we're offering consumers the opportunity to have a new and tasty seafood appetizer for whatever occasions they choose. It's important to note that our new product innovations represent incremental growth. We're not taking space from nor competing with our existing products. Rather our product innovations are helping to increase eating occasions and grow food consumption. This is a mission we are advancing through our Seafood is Better campaign that we launched in Canada in conjunction with our High Liner brand refresh. Not only are we right where we wanted to be at this point in terms of distribution of our new products, we've also had early success in securing optimal store placement. We are expanding our in-store presence beyond the frozen food aisle. And let me tell you, it's the seafood equivalent of hitting a home run when you are featured in the main grocery bunker areas. And this is where our products are increasingly being showcased. High Liner’s elevated presence continues beyond retail. Last quarter, High Liner received a number of prominent awards from various industry and marketing organizations. We won awards in categories that are extremely meaningful for us such as strategic vendor partner of the year and innovative supplier of the year. Our team also brought home an award for most innovative product of the year for our newly launched Guinness Distinctive Seafood product line in Canadian foodservice, along with an award of excellence from one of our quick service restaurant partners. This is great recognition for our team and an important vote of confidence from the market. Our growth objectives for higher margin value-added products are not just focused on new products. We're leveraging products that until now have just been offered on one side of the border. For example, our pan-seared product line, which has been very successful to-date in Canada, represents real opportunity south of the border. The same is true for our Guinness Distinctive Seafood product line that has been successful already in the U.S. and is now poised to capture Canadian appetites. Our more integrated operations allows us to take both products across the border with relative ease. We will continue to look for opportunities to take advantage of our scale to maximize the return on products we already have and already know work for us. Despite these enormous leaps forward, we anticipate we will still have a few more periods of top-line challenges in 2020. This is primarily reflective of a major customer diversifying its supplier base for shrimp and represents commodity business that does not flow through our plans. Our net sales results are not fully reflective of how far we've come as a business and how we are repositioning our product portfolio and how much potential we have in front of us. Our sales and marketing execution is better than ever and new customer acquisitions and product placements are occurring at a faster pace than in recent history. This together with the positive response to our product innovation is already helping to offset volume decline and we expect the top-line impact from new products will continue to grow. To wrap-up, you can see why we are confident that we will be able to continue to drive improved EBITDA through 2019 and 2020. Our business continues to get more efficient, our sales execution more effective, our new products are becoming widely distributed and we have a better mix of higher margin value-added products that are focused on delivering the right product to the right customer at the right price. We also have certainty of longer term financing in place and a much stronger balance sheet, this gives us the capacity and flexibility we need to continue to execute on our EBITDA growth plan. At year end, I will conclude our reporting on the critical initiatives and outline our next steps as we drive ahead with continuous improvement, strong execution of course more innovation. Operator, I would like to now open the call for questions. Thank you.

[Operator Instructions]. Your first question comes from the line of George Doumet from Scotiabank. Your line is now open.

The first one is on the organic growth. So maybe just a clarification. We’re no longer looking for positive volume growth in 2020, but we’re looking for continued sequential improvements in the next couple of quarters, right?

Yes, I would say that’s a fair presentation. We feel very, very confident about our ability to drive certainly new product innovation into the marketplace that will offset some of the top-line losses and certainly our sales and marketing execution is getting better as I noted earlier. But we will have some top-line -- continued top-line losses that mentioned, specifically as it relates to the customer who diversified away from a shrimp supplier, right.

Is that the only reason, are there any other -- I think that was kind of follow-on. But are there any reasons other than that customer as it relates to shrimp that would have caused a change in our kind of outlook there?

Now, that’s the most significant factor, George, in that particular piece of business alone, depending on the quarter it’s 1 million to 2 million pounds of business a quarter. Low-margin commodity business, so it has a significant impact on the volume, but clearly doesn’t have the same kind of impact on the margin. And the good news is as you identified, sequentially each quarter we're starting to offset more and more of that lost business with our innovation efforts.

And the deliberate actions also account, I think last quarter accounted for 50% of volume decline. Is that also the case for this quarter?

Yes, that's a similar number this quarter, it’s just slightly below that, above -- over 40% of the volume decline this quarter was related to our efforts to improve our margin program.

Okay. And where do you see that number going like in the next 12 months?

Well, I think it will shift a bit as a result of this shrimp loss that we just talked, a little bit more will obviously come from lost business as a percentage. But the good news is, it's a shrinking pie, right. We're going to see less volume loss as we move forward both at a gross level, but even more importantly, on a net level, because of the fact that we're going to offset more of that lost business with better sales execution, but also importantly, innovation.

And just one more if I may. On the commentary around the stable pricing environment that you guys called out. Is that across all species, or is that just kind of on an average of the basket? And any commentary you can provide on maybe outlook for input costs?

Yes, no, I would say the -- that would be across our major species that we feel very confident that the input costs will remain stable for the foreseeable future with certainly next several quarters.

Yes, the only species where we're really seeing any inflation George right now is Atlantic salmon because of some challenges that you've probably heard about in Chile. But across all of our other major species, it's a very favorable raw material costs environment currently and we expect that to continue through 2020.

Your next question comes from the line of Sabahat Khan from RBC Capital Markets. Your line is open.

Thanks and good afternoon. Just a couple of follow ups on the top-line discussion there. The commentary around the new business you're adding, can you maybe give a little bit of color on what types of products these might be? Is it the retail ones you referred to earlier? Are you adding foodservice customers? And then just a second part to the question, I know you mentioned the customers returning to the frozen food aisle. Would this be the trends that were sort of out there in the retail market over the last couple of years? Are you seeing a more accelerated pick up in the frozen seafood category?

So George, I would say they are -- the seafood category would be certainly supported by the trends we've seen over the last couple of years. People returning to the frozen grocery aisle. I don't have any specifics with me today that would suggest that seafood consumption is on the rise as a result of new traffic to dial. Now we certainly think that our innovative products and new eating occasions are going to support additional seafood consumption. So to your point, your first question, yes, we are having significant success with the products we’ve talked about previously, our haddock bites and fish wings as an example. Now those products are just reaching store shelves over the last three weeks as an example. And we have placements at quite frankly north of 15 significant retailers in North America already with an eye to significantly more as we're getting very, very favorable response on those products. We also have other products as mentioned, either from -- our pan-seared product as an example that has been very successful for us in the Canadian marketplace. Those products will be launched in the U.S. marketplace, and we anticipate certainly significant opportunities associated with them. On the foodservice front, we are securing new customers every day. Fish wings, as an example as well as haddock bites have most recently just been launched in the U.S. and have already secured approval with three very, very significant providers that will provide a pull strategy through broad-line distribution for us. So we feel very, very good about our position there.

And Sabs I would add, when you look at the frozen seafood category, we have seen some improvements in the category overall, particularly in Canada, and to be honest, that's largely us being responsible for it as the category leader. Frankly, the market performs as we perform, and our better sales and marketing execution has allowed us to see some category growth in that market.

Okay. And then just on the product mix that you were alluding to earlier in terms of getting rid of some lower margin business that's deliberate. If you look at your entire portfolio, I guess, can you maybe give an approximate number for what percentage of your sales mix you consider to be some of this lower margin stuff that you would ideally like to be out of? And then if you could maybe give a little bit of color on the type of businesses as I'm assuming it's in the foodservice channel, but is it like -- is this specific customer? Is it the business through the broad-line distributors, some element of that? Just hoping to get some color on the composition.

I wouldn't identify a particular channel or a particular customer. It really is for us an analysis that we do literally SKU-by-SKU. And we believe that frankly we need to improve the margin profile of all of our products. So we're never happy with the margin, we always look for ways to try to improve it. Having said that, if you look at our business, clearly, we enjoy better margins from our value-added branded portfolio. And our innovation has been focused in that area. Our improved sales execution has been focused in that area. And that's one of the main reasons that you've seen us to be able to grow gross margins as a percentage of sales and ultimately EBITDA as a percentage of sales that the focus in those areas is absolutely paying off. We will continue to rationalize that portfolio. We've eliminated over 200 SKUs which represents over 10% of our SKU base. And there will be more of that to come. But importantly, what we're able to do more and more is offset that with better margin, value-added branded business coming from our innovation efforts.

And then one on the organizational realignment. The commentary in the MD&A indicated that, I guess, you don't expect any additional short-term benefits, but the aggregate annual savings are about $7 million. So if we read into that, should we assume that from this point forward going into 2020, that additional $7 million should flow to the bottom-line if there might be some element that might be offset given the lower sales maybe? But I guess is that kind of the majority of your EBITDA growth or the way you are thinking about it? And I guess from your perspective, apart from some of these smaller initiatives, is that programs are largely behind you and you're more focused on the top-line now?

Well, I'd say a couple of things there, Saba. So the $7 million you're referring to, some of that benefit we've already enjoyed in 2018. So you won't see a full increment -- 2019 sorry, because we started it at the end of 2018. So you won’t see a full incremental benefit from that one in particular in 2020. However, as we also talked about our initiatives in total, where we had originally targeted $10 million of savings, we're well ahead of that. And we will continue to see some additional EBITDA benefit through 2020. Ultimately, there will be some negative impact from lost business as we talked about in terms of margin. But with all of the -- the success of all of the initiatives on the cost side that we have in place, and we will continue to pursue, that's what gives us the confidence to talk about our adjusted EBITDA growth as we look forward including all the way through 2020.

If I also may add, in relationship to the question on returning our focus to growth, the absolute question -- answer is yes, that we're immensely focused, to Paul’s point on creating a very efficient environment to support that very targeted growth, right product, right customer -- right product at the right customer at the right price. But if you recall we launched five critical initiatives roughly a year ago and the -- in very specific order with One High Liner Foods being the significant enabler followed by simplification, followed by supply chain excellense, followed by our Rubicon growth and alignment and then a profitable growth, the last point, our fifth initiative. So we're now in a very, very strong position to allow us to execute on that profitable organic growth plant.

And then just one last one from me. Just given your exposure to both the retail and the customer -- or sorry, the foodservice channels in the -- across both Canada and the U.S., can you maybe talk about just broadly what you're seeing -- or what you're hearing from your customers? Like there's some commentary around potentially us being in the -- or the economy being in late cycle. Are you seeing any of that effect in your foodservice or retail channels at all? Or do you feel your results are more going to be driven by company-specific factors over the near to medium term?

No, I would say, Saba, one of the many advantages of being in multi-channel, both retail foodservice and then the multi-segments within those channels is, we are well positioned as it relates to either significant economic growth or some downturn as we see consumers either move from the away-from-home channel, maybe a more challenging difficult times to eating more at home. We clearly have a very strong retail presence. And then specifically when you take a look at in the foodservice channel, an area where we don’t play significantly, because it’s primarily fresh is what we’ll term as white table cloth. But we are very well very well-positioned through the rest of the segments whether that be family dining, casual dining, QSR and the list goes on and on. So as we see consumers played up and down that market segment depending on economic cycles, again we're well positioned both in retail and foodservice to take advantage of those opportunities.

I'm sorry, if I can maybe squeeze in one more. Is there -- I guess based on the portfolio review that you've done and some SKU rationalization, is there any product or specific silo that you feel like you're not in but you see growth in over the next while?

Well I can tell you one of the areas where we identified a significant opportunity is in the snacking category. And quite frankly having in essence for the seafood industry really pioneered that area, we believe there is significant opportunity not only in the snacking category but certainly within further penetration in channels we're in. So I wouldn’t narrow it to a particular product but rather say, as we really look at the marketplace we believe we have significant opportunity again in snacking as well as further penetration in segments of the marketplace where we may under index.

Your next question comes from line of Jonathan Lamers from BMO Capital Markets. Your line is open.

When was that customer loss in shrimp effective?

So we started to see some impact in Q3, towards the end of Q3 and we will start to see more impact currently in our fourth quarter.

Has there been a shift in seasonality following the portfolio changes and customer changes? I believe, historically, Q2 was the weakest quarter, Q3 was a stronger quarter for sales. And the point of my question is just to understand better whether Q4 is expected to be a seasonally stronger quarter versus Q2 like past years?.

Yes, I would say there's a little bit of a shift Jonathan as we've gotten a little bit more exposure to shrimp. Q4 is a more significant selling season for shrimp because of the holiday. But as you know, the most significant impact in our business really is lent. So it really is Q1 that we would call out as the most significant seasonal impact. And the timing of lent obviously impacts a little bit of whether that's fully in Q1 or Q2.

Okay. And the opportunities that were called out in snacking and getting into the bunkers and being better positioned for the Christmas and New Year holiday, are you able to size what those -- like a range of what those might represent relative to the 1 million pounds to 2 million pounds that are being lost in shrimp?

Well, I would say at this point it’s probably a bit early to provide any perspective on that. I would say this though is that -- again, we're very, very pleased with the reception of those products, the positioning our customers are giving us in store, and so on. But as it relates to offsetting the entire loss of the shrimp business at this point, no, we don't anticipate that happening for the next several quarters.

Okay. And Rod, I believe on the last call, you highlighted two significant sales opportunities with restaurant chains that were identified. Could you just update us on sort of how things progress with those two opportunities?

Yes, I mean those two opportunities are certainly closed. They are shipping business. We have many new opportunities that we can certainly highlight. As I mentioned, with the haddock bites and fish wings securing position with three very, very significant customers in U.S. foodservice and not to mention similar customer acquisition in the Canadian marketplace. And we anticipate with better sales execution and marketing execution, a ever increasing rapid securing of new customers.

Okay. And I haven't heard any comments about any other new products in development. Are you able to talk about any other products that are in the pipeline?

Jonathan, I'd love to be able to talk to you about the significant pipeline of innovation we have ready to come to market. Our team is absolutely always focused on next opportunities, but I think it'd be a bit premature and tipping on hand as to innovation we’re bringing.

Okay. And Rod, you mentioned that you'll be concluding your comments about the critical initiatives at the end of 2019. Should we interpret that to mean that there will not be another round of reduction to the indirect spend coming out of your latest review with AlixPartners?

So I would -- quite frankly, it's the closing of that -- those initiatives for us as a company. But again, we will have further initiatives to continue to drive efficiency and performance across our business. As I’ve said numerous times, we are absolutely 100% committed to continuous improvement in this organization. So they will take form of either sometimes formalized initiatives or quite frankly embedded in the DNA of High Liner.

Okay. And just quickly on the Chilean situation, should we think about that as a potential cost increase issue or potential access to supply and sales volume issue?

I would say temporarily it's an access to supply and sales volume issue, but for us as you know Atlantic salmon is pretty low in terms of the significant species. But the good news is we're starting to see some improvement there already. And we're confident that working with our supply base that we will be able to overcome any issues there.

And there are no further questions at this time. Mr. Rod Hepponstall, I’ll turn the call back over to you for some closing remarks.

Thank you. To close, I want to thank you for joining our call today and we look forward to updating you on the results of our fourth quarter of 2019 on our next conference call in February. Thank you.

Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.