Clearwater Finance Inc. - Ársreikningur

CLEARWATER REPORTS 2009 ANNUAL AND FOURTH QUARTER RESULTS

Attention Business/Financial Editors                                            

CLEARWATER REPORTS 2009 ANNUAL AND FOURTH QUARTER RESULTS                       

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HALIFAX, MARCH 23/CNW/ - (TSX: CLR.UN, CLR.DB.B, CLR.DB.A):                     

Increased annual operating EBITDA in 2009 by 18.5% to $40 million, primarily a  
result of increased annual gross profit margins of 10% or $4 million over 2008  
to $44 million.  (see Note 1)                                                   

Significantly improved leverage and reduced total debt by $27 million in 2009.  

Strengthening Canadian dollar reduced fourth quarter margins by $4.3 million.   


Today, Clearwater Seafoods Limited Partnership (“Clearwater”) reported its 2009 
annual and fourth quarter results.                                              

Clearwater reported increased annual EBITDA of $40 million, an increase of 18.5%
or $6 million over 2008.  This was primarily a result of a 10% increase in gross
margins in 2009 to $44 million, an improvement of $4 million over 2008.  The    
higher margins as a percentage of sales were due primarily to improved operating
results in our clam business.  In addition, stronger average foreign exchange   
rates on foreign currency denominated sales and lower fuel costs had a positive 
impact on margins for the year. The improved results in the clam business were  
driven by having the new clam vessel in operation all year as well an ongoing   
focus on cost reduction.                                                        

Some of the key trends experienced in the latter half of 2009 included a        
strengthening Canadian dollar relative to key foreign currencies and soft market
conditions that reduced demand throughout the fourth quarter of 2009.  Despite  
these challenges, Clearwater managed to improve operations and maintain key     
customer relationships and selling prices.  In addition, for the majority of    
2009 foreign exchange fluctuations were managed through the operations of the   
business as no foreign currency rate swaps were maintained in the second half of
the year.                                                                       

As expected, compared to the fourth quarter of 2008, Clearwater experienced     
lower sales volumes and margins in the fourth quarter of 2009, because of lower 
average foreign exchange rates and tighter lobster margins.  Exchange rates,    
which were favourable for the first part of the year on US dollars, were 13%    
lower in the fourth quarter of 2009 as compared to 2008.  In addition, soft     
local market conditions in the US and Japan led to a decline in sales and       
margins realized for live lobsters.  Clearwater reported EBITDA of $8.7 million 
in the fourth quarter of 2009 versus $13.1 million in the same period of 2008.  
The fourth quarter of 2008 was a stronger quarter and the exchange rates and  
challenging market conditions for live lobster and other species made it        
difficult to achieve similar levels of EBITDA in the fourth quarter of 2009.    

Subsequent to year-end, Clearwater disposed of non-core quotas from which it was
not earning an adequate return on its capital employed.  In the first quarter of
2010 Clearwater sold $2.6 million of non-core groundfish quotas and will record 
a gain on sale of $1.2 million.  For all of 2009 and the first quarter of 2010  
Clearwater generated proceeds of $17.9 million from the sale of non-core quotas 
and $1.3 million from the sale of other surplus assets.                         
Clearwater's leverage has improved to 5.14 times EBITDA from 6.71 in 2008 due to
an improvement of $6.2 million in annual EBITDA a $27.2 million reduction in    
gross debt to $214.1 million at December 31, 2009 versus $241.3 million at      
December 31, 2008.   Senior debt is now less than 2.03 times EBITDA, down from  
2.87 times in 2008. Clearwater has a focused strategy for maintaining liquidity 
and reducing leverage which includes tightly managing its working capital,      
limiting capital spending and liquidating or selling assets which do not achieve
an adequate return on capital.                                                  

Over the next several years Clearwater will continue to focus on reducing its   
leverage.  This will come from a combination of improved earnings levels and    
from using the positive cash flow of the business to reduce debt.  This should  
enable Clearwater to lower interest costs over time.                            

In December 2010 Clearwater Seafoods Income Fund has $45 million of convertible 
debentures that come due.  These funds were invested by the Fund in Class C     
Units issued by Clearwater with similar terms and conditions, including maturity
in December 2010. Clearwater also has approximately 1.3 billion in ISK          
denominated bonds, including CPI and accrued interest that come due in September
2010 (approximately Canadian $10.5 million).  Clearwater is currently           
investigating refinancing alternatives and plans to refinance before respective 
maturity dates.                                                                 

Prior to the receivership of Glitnir Banki hf (“Glitnir”) in 2008 Clearwater had
derivative contracts with Glitnir including foreign exchange derivative         
contracts and cross currency and interest rate swaps.  For the foreign exchange 
derivative contracts, Clearwater and Glitnir reached an agreement in 2009       
whereby the potential liability under these contracts was capped at $13.97      
million, the minimum settlement was set at $2.9 million and Clearwater agreed to
commence litigation on its position that these contracts are null and void and  
it has no liability. Clearwater has accrued $13.97 million plus interest as of  
December 31, 2009 for these contracts.  For the cross currency and interest rate
swap contracts, Clearwater has received external legal advice that these        
contracts may become declared null and void.  In the fourth quarter of 2009     
Clearwater commenced litigation with Glitnir with respect to these contracts and
as well as for funds on deposit it has with Glitnir and damages related to      
financing that Glitnir was to provide for a privatization in 2008.  It expects  
that this litigation could take some time to settle.                            

Looking forward to 2010, Clearwater's management believe that there is potential
to build on the 2009 results with improvements in earnings and continuing the   
trend of positive cash flows.  This is of course subject to any impact of       
weakened economic conditions in Asia, North America and Europe and a measure of 
stability in exchange rates.  In addition, Clearwater expects continued soft    
market conditions in the first and perhaps second quarter of 2010 but expects   
that its efforts to improve results and reduce costs will show in the second    
half of 2010. Clearwater also believes that overall, as a food company, the     
business will continue to respond well in the current recessionary period as it 
has in 2009.                                                                    

Colin MacDonald, Chairman and Chief Executive Officer, commented, “We are       
pleased to report a strong improvement in our results in 2009 despite the       
challenging worldwide economic conditions and are looking to build on that in   
2010.“                                                                          

Colin MacDonald                                                                 
Chairman and Chief Executive Officer                                            
Clearwater Seafoods Limited Partnership                                         
March 23, 2010                                                                  

Financial Statements and Management's Discussion and Analysis Documents         

For an analysis of Clearwater and Clearwater Seafoods Income Fund's 2009 annual 
and fourth quarter results, please see the Management's Discussion and Analysis 
and the annual financial statements.  These documents can be found in the       
disclosure documents filed by Clearwater Seafoods Income Fund with the          
securities regulatory authorities available at www.sedar.com or at its website  
(www.clearwater.ca).                                                            


The Fund does not consolidate the results of Clearwater's operations but rather 
accounts for the investment using the equity method.  Due to the limited amount 
of information that this would provide on the underlying operations of          
Clearwater, the financial highlights of Clearwater are included above.          

Note 1 Operating EBITDA is Earnings before interest, taxes, depreciation and    
amortization, foreign exchange gains and losses and one time and unusual        
adjustments. For a reconciliation of these amounts please refer to the          
Management's Discussion and Analysis.                                           

About Clearwater                                                                

Clearwater is recognized for its consistent quality, wide diversity and reliable
delivery of premium seafood, including scallops, lobster, clams, coldwater      
shrimp, crab and ground fish.                                                   

Since its founding in 1976, Clearwater has invested in science, people,         
technology, resource ownership and resource management to preserve and grow its 
seafood resource. This commitment has allowed it to remain a leader in the      
global seafood market.                                                          

For further information: Robert Wight, Chief Financial Officer, Clearwater,     
(902) 457-2369; Tyrone Cotie, Director of Corporate Finance and Investor        
Relations, Clearwater, (902) 457-8181.