letter to  shareholders On December 19, 2011 your Company acquired the  Icelandic Group’s U.S. and Asian operations. This  transaction has helped us achieve our vision of being the  leading value-added seafood supplier in North America. I t was an exceptional conclusion to another year of strong sales and earnings.  Sales volume increased for the third  consecutive year, exceeding 200  million pounds from 177 million in  2010. Revenue was up 14.3% to $668  million and earnings before interest,  taxes, depreciation and amortization  (EBITDA) increased 15.9% to $54.7.  Excluding stock option expense, net  income excluding business acquisition,  integration and other costs increased  by 11.2% to $28.2 million, and diluted  EPS increased 17.9% to $1.84. We  achieved this growth with a very strong  performance in the U.S. despite strong  upward raw material cost pressure from the beginning of the year.  Canadian results improved as the year progressed. It is important that we keep in mind  that our performance has been  achieved during a time of great  economic uncertainty. Unemployment  remains stubbornly high and  consumers remain cautious. It has  become more fashionable to save  money. Cautious consumers are putting  pressure on our retail and food service  customers as they fight to maintain  profitability. In turn, they are putting  pressure on us to control our prices  and provide them with the exciting  new products that will help them grow  market share. Nevertheless, this is a time of  considerable opportunity for High Liner  Foods. Our business is selling seafood  to North Americans. Food is a staple  and, as such, demand for our products  remains relatively stable during good  times and bad. We manage our business  well with the proof in our financial and  operating performance.  We acquired the assets for a purchase  price of US$232.7 million paid in cash,  excluding seasonal working capital  of US$14 million, and financed with  new long-term debt of US$250 million  and an increase in High Liner Foods’  existing loan facility from US$120  million to US$180 million. This pushes  our debt to EBITDA ratio to 4.4X  before synergies, which is above our  traditional leverage target of 3X, but it  also brings High Liner Foods very close  to $1 billion in revenue and $94 million  in EBITDA on a  pro forma  basis including  During 2010, we set the aggressive  goal of increasing our EBITDA to $100  million by 2015. We now own the  assets to achieve this goal, potentially  a year or two earlier than our original  objective. For the 12 months ending  December 2011, the Icelandic USA  Acquisition operations achieved sales  of US$265 million excluding trading  sales, and  pro forma  adjusted EBITDA  of approximately US$30 million.  We expect the acquisition to be  immediately accretive to earnings per  share before one-time costs related to  the acquisition. Total annual synergies  are expected to be US$16 million to  US$18 million by 2014.  The Icelandic USA Acquisition 4 HIGH lIneR FooDS InCoRpoRAteD Henry Demone  President & CEO