Sales Sales for fiscal 2013 were $947.3 million, compared to  $942.6 million in fiscal 2012. In 2013, more than two thirds of the  Company’s operations, including sales, were denominated in USD.  The weaker Canadian dollar in Fiscal 2013 compared to Fiscal 2012  decreased the value of reported USD sales by approximately  $9.3 million relative to the conversion impact in 2012.  Sales in domestic currency for 2013, including American Pride,  were $956.3 million compared to $942.3 million for the previous  year. American Pride added $39.7 million in sales in 2013. Sales  volume measured in pounds, including American Pride, was  282.4 million pounds compared to 275.2 million pounds for the  previous year, an increase of 2.6%. American Pride added  12.6 million pounds of sales in 2013. Excluding American Pride, sales in domestic currency decreased by  $25.7 million and pounds sold decreased by 5.4 million in 2013  compared to 2012. The vast majority of the decrease in sales in 2013  is attributable to lower food service sales in the U.S. and lower retail  private label value-added sales in Canada and the U.S., partially  offset by strong club sales in both countries, increased branded  retail sales in the U.S. and increased food service sales in Canada.  The decline in U.S. food service sales reflects weak sales being  experienced by the U.S. restaurant industry as a whole in 2013, and  the decrease in retail private label value-added sales reflects a trend  being experienced in the seafood marketplace overall of decreased  demand for retail private label seafood products. In addition, sales in  2013 were negatively impacted by the following items compared  to 2012:  Sales trends are discussed in more detail below in Section 5.4  “Performance by Segment”. Gross profit in 2013 was $215.4 million compared to $206.7 million  in 2012. Gross profit as a percentage of sales was 22.7% in 2013  compared to 21.9% the previous year. Gross profit increased by  $8.8 million in 2013 relative to 2012 due to increased sales as a  result of the American Pride Acquisition, along with an overall  decrease in input costs and synergies realized from integrating  Icelandic USA. Partially offsetting these items were a 2.0%  decrease in the Company’s sales volumes (excluding the impact of  the American Pride Acquisition); increased operating expenses  related to our U.S. manufacturing facilities; and the impact of an  unfavourable change in the CAD/USD exchange rate used to  translate our CAD denominated operations to USD.  In the first quarter of 2013, we expedited the closure of our plant in  Danvers and increased production at our manufacturing facilities  in Newport News and Portsmouth, and relocated U.S. food service  distribution to Newport News. During this transition, we incurred  incremental operating costs associated with decreased plant  throughput rates as our manufacturing facilities integrated new  products into their respective production facilities. While we have  been successful in increasing plant throughput rates from those  experienced in the first quarter, these rates have not been fully  restored to optimal levels and as a result, we continued to incur  additional operating costs in Newport News and Portsmouth  related to these reduced throughputs. In addition, in the first  quarter of 2013, additional costs were incurred related to the plant  closure to relocate equipment and competitive pressures that  reduced commodity selling prices more rapidly than the applicable  decline in cost for these products, negatively impacted gross profit. Distribution expense, consisting of freight and storage, increased  in 2013 by $8.9 million, or 19.9% from the previous year, due  partially to higher sales volumes resulting from the American Pride  Acquisition. Distribution expenses as a percentage of sales  increased in 2013 to 5.6%, compared to 4.7% in the previous year,  reflecting the production issues encountered after the closure of  our Danvers plant in the first quarter of 2013 associated with  reduced plant throughput rates and increased movement of  product between our U.S. facilities to balance the productivity  issues and plant capacities. In addition, in the first quarter of 2013  we relocated our U.S. food service distribution to Newport News  and incurred additional distribution costs as a result of challenges  encountered related to hiring and training additional staff for our  cold storage facility.  The additional distribution costs incurred in 2013 were  approximately $9.0 million and had the effect of deferring the full  impact of the expected synergies related to closing the Danvers  plant. Excluding these additional costs, distribution expense  would have been 4.7% of sales for 2013 equal to that of 2012. The  Company has focused on these costs throughout the year and it is  expected that costs will be lower as a percentage of sales in 2014  than in 2013, and just slightly higher than historical levels. *   The % of stock compensation expense allocated between SG&A and Cost of  sales in 2013 was relatively consistent with 2012. SG&A expense as reported was $2.0 million lower in 2013 than in  the previous year.  During 2013, we recorded a stock-based compensation expense of  $6.1 million in SG&A compared to $9.3 million during 2012. In  2012, our stock-based compensation expense was higher than in  2013 due to a significant increase in our stock price in that year.  Although our stock price continued to increase in 2013, we  amended stock options granted prior to the third quarter of 2013 to  ANNUAL REPORT 2013 35 Selling, General and Administrative (“SG&A”) Expense  Distribution Expense Gross Profit • Decreases in certain commodity seafood costs in 2013 led to a  reduction in the selling prices for some products in 2013;  • An earlier Lent resulted in a shorter selling period in 2013  between the Super Bowl and Good Friday, a period when seafood  is typically heavily promoted; and  • In the first quarter of 2013, we expedited the closure of our plant  in Danvers and relocated food service distribution to Newport  News which resulted in production and logistical challenges and  hindered the delivery of product to our customers. Fifty-two weeks ended December 28, December 29,  (Amounts in $000s) 2013 2012 SG&A expense $ 98,902 $ 100,862 Less: Stock compensation expense *  6,143 9,250 Amortization expense  5,255 5,518 Net SG&A expense $ 87,504 $ 86,094 Net SG&A expense as a % of sales 9.2% 9.1%