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Press release from GlobeNewswire (a Nasdaq OMX company)

SunOpta Announces First Quarter 2011 Results

Wednesday, May 11, 2011

SunOpta Announces First Quarter 2011 Results13:33 EDT Wednesday, May 11, 2011TORONTO, May 11, 2011 (GLOBE NEWSWIRE) -- SunOpta Inc. ("SunOpta" or "the Company") (Nasdaq:STKL) (TSX:SOY), a leading global company focused on natural, organic and specialty foods, today announced financial results for the quarter ended April 2, 2011. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted. The Company realized revenues of $260.9 million in the first quarter of 2011 versus revenues of $216.7 million in the first quarter of 2010, a year over year increase of 20.4%. Revenues increased 9.7% excluding the impact of the acquisitions completed late in 2010. For the first quarter of 2011, the Company realized operating income1 of $11.0 million or 4.2% of revenues, an increase of approximately 14.6%, versus operating income1 in the first quarter of 2010 of $9.6 million or 4.4% of revenues. The increase in operating income was driven by increases in the Grains and Foods Group, International Foods Group and Opta Minerals Inc. combined with reduced corporate spending. Excluding the year over year impact of the foreign exchange loss (gain), operating earnings increased 31.3%. For the first quarter of 2011, the Company reported earnings per diluted common share from continuing operations of $0.08 or $5.1 million, as compared to $0.06 or $4.2 million for the first quarter of 2010. The Company realized EBITDA1 in first quarter of 2011 of $15.9 million as compared to $14.0 million in the first quarter of 2010, an increase of approximately 13.7%. At April 2, 2011, the Company's balance sheet reflects a current working capital ratio of 1.39 to 1.00, long-term debt to equity ratio of 0.22 to 1.00 and total debt to equity ratio of 0.62 to 1.00. During the first quarter of 2011, the Company used cash from continuing operating activities of $33.9 million as compared to $13.6 million in the first quarter of 2010, reflecting the impact of increased commodity volumes and costs and increased inventory and accounts receivable balances related to growth in the business. At April 2, 2011, the Company has total assets of $657.4 million and a net book value of $4.56 per outstanding share. At quarter-end, the Company was in compliance with its bank financial covenants. Steve Bromley, President and Chief Executive Officer of SunOpta, commented, "We are pleased with our first quarter 2011 results which represent record first quarter net earnings for our Company. Operating income1 has improved in spite of rising commodity prices. We continue to streamline our portfolio and over the last twelve months have divested of three non-core operations, most recently the Mexican Frozen Fruit Assets, while over the same period acquiring two core operations. We remain focused on growing our business in fast growing healthy foods categories while at the same time improving operating margins and returns on assets employed. We believe we are well positioned to continue our profitable growth in the future." The Company plans to host a conference call at 10:00 AM Eastern Time on Thursday, May 12, 2011 to discuss the first quarter results and recent corporate developments. The conference call can be accessed via a link at the Company's website at www.sunopta.com. Additionally, the call may be accessed with the toll free dial-in number 1-877-312-9198 or 631-291-4622. A replay number can also be accessed between May 12th and 19th with the toll free dial-in number 1–800-642-1687 or 706-645-9291 followed by pass code: 62090916#.1See discussion of non-GAAP measuresAbout SunOpta Inc. SunOpta Inc. is a leading global company focused on natural, organic and specialty foods. The Company specializes in sourcing, processing and packaging of natural and organic food products, integrated from seed through packaged products; with a focus on strategically significant vertically integrated business models. The Company's core natural and organic food operations focus on value-added grains, fiber and fruit based product offerings, supported by a global infrastructure. The Company has two non-core holdings, a 66.4% ownership position in Opta Minerals Inc. (TSX:OPM), a producer, distributor, and recycler of environmentally friendly industrial materials, and a minority ownership position in Mascoma Corporation, an innovative biofuels company. The SunOpta Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3958Forward-Looking Statements Certain statements included in this press release may be considered "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, which are based on information available to us on the date of this release. These forward-looking statements include, but are not limited to, our continued efforts to streamline our portfolio, our focus on growing our business and improving operating margins and returns on assets employed and our positioning to continue profitable growth in the future. The terms and phrases "continue", "improving", "remain focused", "positioned", and other similar terms and phrases are intended to identify these forward looking statements. Forward looking statements are based on information available to us on the date of this release and are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors the Company believes are appropriate in the circumstances including, but not limited to, general economic conditions, consumer interest in health and wellness, product pricing levels, current customer demand, competitive intensity, cost rationalization and product development initiatives. Whether actual timing and results will agree with expectations and predications of the Company is subject to many risks and uncertainties including, but not limited to, global economic conditions, consumer spending patterns and changes in market trends, decreases in customer demand, potential failure of product development, working capital management and continuous improvement initiatives, availability and pricing of raw materials and supplies, and other risks described from time to time under "Risk Factors" in the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q (available at www.sec.gov). Consequently all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized.SunOpta Inc. Consolidated Statements of Operations For the quarters ended April 2, 2011 and April 3, 2010 (Expressed in thousands of U.S. dollars, except per share amounts) (Unaudited)          April 2, 2011 April 3, 2010 Change        Revenues$260,923 $216,749 20.4%        Cost of goods sold 225,368 181,273 24.3%        Gross profit35,555 35,476 0.2%         Selling, general and administrative expenses23,007 25,796 (10.8%) Intangible asset amortization1,385 1,175 17.9% Other expense, net362 315 14.9% Foreign exchange loss (gain)135 (1,117) (112.1%)        Earnings from continuing operations      before the following10,666 9,307 14.6%         Interest expense, net1,984 3,022 (34.3%)        Earnings from continuing operations      before income taxes8,682 6,285 38.1%        Provision for income taxes3,009 2,076 44.9%        Earnings from continuing operations5,673 4,209 34.8%        Earnings from discontinued operations,      net of taxes--  432 n/m        Earnings 5,673 4,641 22.2%         Earnings attributable to non-controlling       interests592 28 n/m        Earnings attributable to SunOpta Inc.$5,081 $4,613 10.1%                Earnings per share – basic       -from continuing operations$0.08 $0.06  -from discontinued operations -- 0.01    $0.08 $0.07          Earnings per share – diluted       -from continuing operations$0.08 $0.06  -from discontinued operations -- 0.01    $0.08 $0.07  SunOpta Inc. Consolidated Balance Sheets As at April 2, 2011 and January 1, 2011 Unaudited (Expressed in thousands of U.S. dollars, except per share amounts)        April 2, 2011 January 1, 2011      Assets           Current assets      Cash and cash equivalents  $5,720  $2,643  Accounts receivable 112,038  98,875  Inventories  227,462  200,278  Prepaid expenses and other current assets  32,837  30,041  Deferred income taxes  740  870   378,797  332,707      Investments  33,345   33,345 Property, plant and equipment  120,063   118,924 Goodwill  49,078   48,558 Intangible assets  60,321   60,200 Deferred income taxes  11,796   11,889 Other assets 2,841   2,930 Non-current assets held for sale 1,131  1,131         $657,372  $609,684      Liabilities         Current liabilities     Bank indebtedness $120,643  $75,910  Accounts payable and accrued liabilities 118,528 124,031  Customer and other deposits  3,627  2,858  Income taxes payable  746  973  Other current liabilities  6,068  7,674  Current portion of long-term debt  22,892  22,247  Current portion of long-term liabilities  292  571   272,796  234,264      Long-term debt  42,088   42,735 Long-term liabilities  6,419   6,642 Deferred income taxes  22,351   20,808    343,654  304,449           Equity     SunOpta Inc. shareholders' equity    Capital Stock  180,881  180,661  65,539,104 common shares (January 1, 2011 - 65,500,091)    Additional paid in capital  12,758  12,336 Retained earnings  100,293  95,212 Accumulated other comprehensive income  4,872  2,833    298,804   291,042 Non-controlling interest  14,914  14,193 Total equity  313,718   305,235         $657,372   $609,684      SunOpta Inc. Consolidated Statements of Cash Flow For the quarters ended April 2, 2011 and April 3, 2010 (Expressed in thousands of U.S. dollars) (Unaudited)        Quarter ended April 2, 2011 Quarter ended April 3, 2010      Cash provided by (used in)          Operating activities    Earnings  $5,673  $4,641  Earnings from discontinued operations  --   432  Earnings from continuing operations  5,673   4,209       Items not affecting cash     Amortization  4,833   4,328  Unrealized loss (gain) on foreign exchange  723  (1,092) Deferred income taxes  1,766   1,166  Unrealized (gain) loss on derivative instruments (3,685)  1,443  Other  115  (284) Changes in non-cash working capital (43,328) (23,354) Net cash flows from operations - continuing operations (33,903) (13,584) Net cash flows from operations - discontinued operations  --  (751)  (33,903) (14,335)Investing activities    Purchases of property, plant and equipment, net (3,909) (5,951) Payment of deferred purchase consideration  --  (500) Purchases of patents, trademarks and other intangible assets (81) (30) Other  --   296  Cash from investing activities - continuing operations (3,990) (6,185) Cash from investing activities - discontinued operations  --  (373)  (3,990) (6,558)Financing activities    Increase in line of credit facilities  42,551   23,386  Borrowings under long-term debt  37   --  Proceeds from the issuance of common shares  213   207  Repayment of long-term debt (2,004) (1,102) Financing costs (25)  --  Other  28  (188) Cash from financing activities - continuing operations  40,800   22,303  Cash from financing activities - discontinued operations  --   --    40,800   22,303       Foreign exchange gain on cash held in a foreign currency  170   207             Increase in cash and cash equivalents during the period  3,077   1,617       Discontinued operations cash activity included above:     Add: Balance included at beginning of period  --   18,971  Less: Balance included at end of period  --  (20,135)      Cash and cash equivalents - beginning of the period  2,643   1,752       Cash and cash equivalents - end of the period  $5,720   $2,205      SunOpta Inc.     Segmented Information     For the quarters ended April 2, 2011 and April 3, 2010     (Expressed in thousands of U.S. dollars)     (Unaudited)                                        Quarter ended April 2, 2011                     SunOpta Foods $ Opta Minerals $ Corporate Services $ Consolidated $    Total revenues from external customers239,317 21,606 --260,923    Segment Operating Income10,463 2,451 (1,886)11,028                   The SunOpta Foods has the following segmented reporting:                                        Quarter ended April 2, 2011                   Grains and Foods $ Ingredients $ Fruit $ International Foods $ SunOpta Foods $  Total revenues from external customers115,601 15,751 37,010 70,955 239,317  Segment Operating Income5,707 1,895 388 2,473 10,463                                       Quarter ended April 3, 2010       SunOpta Foods $ Opta Minerals $ Corporate Services $ Consolidated $    Total revenues from external customers 198,818 17,931  -- 216,749    Segment Operating Income 11,391 1,713 (3,482) 9,622                   The SunOpta Foods has the following segmented reporting:                                        Quarter ended April 3, 2010     Grains and Foods $ Ingredients $ Fruit $ International Foods $ SunOpta Foods $  Total revenues from external customers 78,845 18,150 40,340 61,483 198,818  Segment Operating Income 5,016 4,212 1,864 299 11,391                 (Segment Operating Income is defined as "Earnings from continuing operations before the following" excluding the impact of "other expense, net")  1Non-GAAP Measures In addition to reporting financial results in accordance with generally accepted accounting principles ("GAAP"), the Company provides information regarding Operating Income and Earnings before interest, taxes, depreciation and amortization ("EBITDA") as additional information about its operating results, which are not measures in accordance with GAAP. The Company believes that these non-GAAP measures assist investors in comparing performance across reporting periods on a consistent basis by excluding items that are not indicative of the Company's core operating performance. The non-GAAP measures of operating income and EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.  The Company defines Operating Income as "Earnings from continuing operations before the following" excluding the impact of "Other expense, net"; and EBITDA as Operating Income plus depreciation and amortization. The following is a tabular presentation of Operating income and EBITDA, including a reconciliation to GAAP earnings, which the Company believes to be the most directly comparable GAAP financial measure.         Quarter ended April 2, 2011 Quarter ended April 3, 2010    Earnings from continuing operations before the following$10,666  $9,307 Other expense, net362  315 Operating Income11,028  9,622 Depreciation and amortization4,833 4,328 Earnings before interest, taxes, depreciation and amortization (EBITDA)$15,861 $13,950CONTACT: SunOpta Inc. Steve Bromley, President & CEO Eric Davis, Vice President & CFO Tony Tavares, Vice President & COO Susan Wiekenkamp, Information Officer Tel: 905-455-2528, ext 103 susan.wiekenkamp@sunopta.com Website: www.sunopta.com