5.4  Performance by Segment Canadian Operations U.S. Operations Outlook Our Canadian operations had external sales of $312.6 million in  2013, consistent with the previous year. Sales volume decreased  0.2% to 72.6 million pounds.  Canadian retail sales volume decreased 1.5% in 2013 compared to  2012, reflecting decreased retail value-added private label sales,  partially offset by increased club store sales. The lower private  label value-added sales reflect an overall trend being experienced  in the seafood marketplace. Retail branded product sales  decreased slightly in 2013 compared to 2012; however, 2012  included initial stocking sales of the new  Flame Savours  product  that were not repeated in 2013. (All currency amounts in this section are in CAD, unless otherwise  noted) Canadian food service sales volume increased by 1.1% in 2013  compared to 2012. Adjusted EBITDA for our Canadian operations increased by  $4.6 million to $33.2 million in 2013 compared to $28.5 million in  2012. This increase primarily reflects the lower overall raw  material costs in 2013 compared to 2012 and cost savings related to  closing our Burin plant in late 2012.  (All currency amounts in this section are in USD, unless otherwise  noted) U.S. retail sales volume increased by 0.5% in 2013 compared to the  same period last year, reflecting increased sales to club stores and  an increase in our retail branded product sales (primarily  Sea  Cuisine  products which have been heavily promoted in 2013  compared to 2012), partially offset by decreased retail private label  value-added sales. As previously explained, the decrease in private  label value-added sales reflects an overall trend being experienced  in the seafood market place. Our U.S. food service sales volumes decreased by 3.8% in 2013  compared to 2012, reflecting:  Adjusted EBITDA for our U.S. operations decreased in 2013 to  $53.2 million from $63.1 million in 2012. American Pride  contributed $1.5 million in Adjusted EBITDA in 2013 and excluding  this amount, Adjusted EBITDA from our U.S. operations decreased  by $11.4 million in 2013 compared to 2012. Adjusted EBITDA from our U.S. operations was affected by the  following items which are primarily the same items listed above  that were responsible for the decrease in the Company’s  consolidated Adjusted EBITDA in 2013 compared to 2012: In the first quarter of 2013 we expedited the closure of our plant in  Danvers, increased production at our Newport News and  Portsmouth production facilities and relocated U.S food service  distribution to Newport News. This was discussed under Section  5.3 “Consolidated Results” of this MD&A. We have been focused on maximizing throughput rates and  reducing operating costs associated with our U.S. manufacturing  facilities and distribution costs are expected to be lower in the first  quarter of 2014. Improvements have been made in throughput rates  in the U.S. plants but we will not achieve our targets until the  second half of 2014. As part of the integration of Icelandic USA into our business,  certain products have been converted from one brand to another as  we solidify our brand positioning and as a result, we can no longer  report sales and operating results for High Liner Foods’ pre- Icelandic USA business separate from the post-Icelandic  USA results. Our U.S. operations had external sales in 2013, including American Pride, of $643.7 million, compared to $629.7 million in  2012. American Pride added $39.7 million in sales. Sales volume for the year, including American Pride, increased by 3.6% to  209.8 million pounds compared to 202.4 million pounds in 2012.  American Pride added 12.6 million pounds of volume in 2013.  Excluding American Pride, sales from our U.S. operations  decreased by $25.7 million and pounds sold decreased by  5.2 million in 2013 compared to 2012.  We will continue to focus on our vision to be the leading supplier of  frozen seafood in North America. We expect our annual sales will  exceed the $1.0 billion mark for the first time in 2014 and we remain  committed to growing Adjusted EBITDA to $150 million, although  we have extended the period to reach this goal by one year to 2016.  Our strategy to achieve this has not changed and organic growth,  acquisitions and optimizing our supply chain will all play an  important role. We are focused on growing our Adjusted EBITDA in  2014. Regarding current pricing on the major seafood species we  procure, prices for haddock, scallops and shrimp remain high,  ANNUAL REPORT 2013 39 • Lower overall sales (excluding American Pride);  • Increased production and distribution costs associated with  reduced plant thoughput rates experienced at our U.S.  manufacturing facilities since our Danvers plant was closed and  relocation of U.S. food service distribution to Newport News in  the first quarter of 2013; • Higher  Sea Cuisine  marketing costs; • Lower margins in the first quarter of 2013 on certain food service  commodity products as selling price declines were passed on to  customers in advance of experiencing lower average costs; and • The negative impact of these items on Adjusted EBITDA was  partially offset by lower overall raw material costs in 2013,  realization of synergies resulting from integrating Icelandic USA  and $1.5 million in Adjusted EBITDA from American Pride  in 2013. • Lower sales to food distributors and restaurants in 2013 related to  soft restaurant sales resulting from a sluggish economic recovery  in the U.S and severe weather conditions than the previous year  keeping diners at home;  • An earlier Lent in the first quarter of 2013 compared to 2012,  which is when seafood products are heavily promoted by  restaurants; and • Lower food service sales to schools, as schools chose to reduce  seafood items from their menus due to uncertainties created from  the introduction of new nutritional requirements for  these products.