One of the world’s largest seafood companies spent an extra $2 million dollars on parting ways with an executive employee, according to its recent quarterly report.

After 26 years with Clearwater Seafoods Inc., former chief operating officer Eric R. Roe “decided to leave” the company this past April.

It’s unclear why Roe left Clearwater, and he could not be reached for comment, but his departure comes at a time when the company is shifting gears to grow its market share in new corners of the globe.

The multinational company, known for its airport lobsters, is expanding into Asia, capitalizing on the region’s growing middle class and taste for seafood.

Michael Mills, an analyst with Beacon Securities who follows the company, said Roe’s departure “wasn’t a major blow […] if anything, it bolstered their management ranks.”

Clearwater spent two million dollars more than last quarter on ‘other’ administrative costs, “the largest portion” of which belonged to costs associated with Roe’s departure.

“[Roe] was a long term executive and well respected in the company,” said Tyrone Cotie, Clearwater’s treasurer.

The payments, he said, were related to early retirement and long-term incentive programs.

“I wouldn’t necessarily call it a severance,” he said.

The company’s last Management Information Circular put Roe’s base salary at $259,453 in 2012.

“Eric leaves the company with a legacy of accomplishment,” said Clearwater CEO Ian Smith in a news release from April announcing the changes. “Eric will be missed, his contribution to the company will be felt for years to come”. 

The Clearwater shuffle

But it’s a different company than the one Roe joined more than two decades ago.

Roe was there from the start of Clearwater’s rise, not long after the company’s modest beginnings.

In the ultimate rags-to-riches story, John Risley, alongside his brother-in-law Colin MacDonald started the company in 1976 with “a pickup truck, a vision and a lot of entrepreneurial drive.”

Within 10 years, the company had become a global conglomerate that owned a large portion of the fishing licenses in the country – a valuable spot for a business whose main commodity is under tight regulatory control.

Roe started with the company in the late 80s, not long after Clearwater’s rise to seafood stardom, and had been part of its continued growth until his departure.

But the company hasn’t always done well – and Roe was in the trenches for those parts, too.

After taking the company public as an income trust at $10 a share, the stock plummeted to below 50 cents, according to The Globe and Mail. There were talks about going private, but they fell through. Clearwater was also drowning in debt.

The company that was once the beacon of hope for the whole of Atlantic Canada, had started to falter.

In 2009, it restructured, changing its name officially from Clearwater Limited Partnership to Clearwater Seafood Incorporated.

And Roe was there for it all.

Roe was also there in 2011, when current CEO Ian Smith took over the helm, following Risley’s retirement.

Prior to joining Clearwater, Smith was one of the top executives of Campbell Soup Company, where he opened up a headquarters in China – now a key area of growth for Clearwater.

He also held numerous top positions at Colgate-Palmolive.

Clearwater was still struggling when he took over – the stock was still hitting prices as low as $1.47.

Just shy of a year after entering the top position, Smith brought in Greg Morency, also a top executive at Campbell Soup Company. He was given the title of executive vice president and chief commercial officer with a base salary of $238,718.

It was Morency’s “diverse range of global experience” in marketing and sales in the food industry that brought him into the position, Smith said in a news release about the appointment.

In Morency’s 27-year business career, he also held senior roles at Tate &Lyle, H.J. Heinz Company, Unilever and Coca Cola.

By 2013, he had received a sizeable raise. 

Smith said in a news release, the shift in direction “would increase (the company’s) capacity … to grow in new and exciting ways.”

 

Q2 results and the five-year plan

Since Smith’s takeover and the executive shuffle, the company’s stock hit a high of $9.21 this past January and this year’s second quarter results released last week hit new levels.

The past quarter results are “better than expected,” said Mills.

The company had a 19 per cent increase in sales and earnings before interest, taxes, depreciation, and amortization (EBITDA) from last year, bringing in more than $113 million in sales.

The increase, the report notes, is because of a strong demand for Clearwater’s products, and an increase in the volume and price of scallops, shrimp and lobster, as well as favourable foreign exchange rates.

Gross margins were also up two per cent this past quarter, mainly due to higher catch rates for sea scallops and early landing for shrimp, according to the report.

The company is in the middle of its five-year plan, which has a goal of $500 million in annual sales and $100 million in EBITDA by the end of 2016.

It’s a goal Mills calls “rather conservative.”

“I think they’re definitely on track,” he said. “If they can do an acquisition, they would probably get there one year early.”

A bigger catch

Whether the company will make any acquisition moves in the next year is unknown, but Cotie said the company expanded its takeover budget range up to anywhere from $25 to $250 million.

“We’re just trying to get a sense of the market,” he said.

With the company’s main products – scallops, shrimp and lobster – under tight federal controls, one of the biggest barriers to Clearwater’s growth is in being able to harvest for seafood, according to the company’s investor presentation.

Acquiring a company with more quotas, “is an incredible asset to have for a business,” said Cotie.

“Anytime we can acquire more quota, that’s going to be something that we will definitely go after,” he said.

With the new blood at the top of the ranks, the company is looking to the future.