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Press release from GlobeNewswire (a Nasdaq OMX company)

SunOpta Announces Third Quarter 2011 Results

Tuesday, November 08, 2011

SunOpta Announces Third Quarter 2011 Results14:00 EST Tuesday, November 08, 2011TORONTO, Nov. 8, 2011 (GLOBE NEWSWIRE) -- SunOpta Inc. ("SunOpta" or "the Company") (Nasdaq:STKL) (TSX:SOY), a leading global company focused on natural, organic and specialty foods and natural health products, today announced financial results for the quarter and three quarters ended October 1, 2011. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted. For the quarter ended October 1, 2011, the Company realized quarterly revenues of $272.4 million versus revenues of $217.5 million for the quarter ended October 2, 2010, a year over year increase of 25.3%. This increase reflects continued growth in the natural and organic foods sectors. Revenues increased 14.6% excluding the impact of the acquisitions completed during 2010 and 2011. For the quarter ended October 1, 2011 the Company realized earnings per diluted common share from continuing operations of $0.06 or $3.7 million, as compared to $0.00 or a loss of $0.2 million for the quarter ended October 2, 2010. These results were driven by continued strong performance in the International Foods Group offset by reduced earnings in the Grains and Foods Group due to commodity market pressures in the sunflower segment, reduced earnings in the Ingredients Group due in part to the loss of a major customer earlier in the year, and reduced earnings at Opta Minerals due primarily to the impact of foreign exchange losses realized in 2011 versus significant gains in the third quarter of 2010. The quarterly results include additional pre-tax costs of approximately $2.1 million related primarily to rationalization and legal matters, acquisition and start-up costs, plus foreign exchange losses as a result of significant currency fluctuations during the quarter. For the quarter ended October 1, 2011, the Company realized EBITDA1 of $12.5 million as compared to $14.7 million for the quarter ended October 2, 2010. For the three quarters ended October 1, 2011, the Company has realized revenues of $823.6 million versus revenues of $667.7 million for the three quarters ended October 2, 2010, a year over year increase of 23.3%. Revenues increased 12.5% excluding the impact of the acquisitions completed late in 2010 and in the third quarter of 2011. For the three quarters ended October 1, 2011, the Company has realized earnings per diluted common share from continuing operations of $0.21 or $13.8 million, as compared to $0.16 or $10.6 million for the three quarters ended October 2, 2010. For the three quarters ended October 1, 2011 the Company realized EBITDA1 of $42.5 million as compared to $45.5 million for the three quarters ended October 2, 2010. At October 1, 2011, the Company's balance sheet reflects a current ratio of 1.49 to 1.00, long-term debt to equity ratio of 0.18 to 1.00 and total debt to equity ratio of 0.53 to 1.00. For the quarter ended October 1, 2011, the Company generated cash from continuing operating activities of $11.7 million as compared to $20.3 million for the quarter ended October 2, 2010. At the end of the quarter, the Company has total debt outstanding of $161.7 million, a decrease of $6.1 million from the period ended July 2, 2011. At October 1, 2011, the Company has total assets of $624.3 million and a net book value of $4.65 per outstanding share. At quarter-end, the Company was in compliance with all its debt covenants. Steve Bromley, President and Chief Executive Officer of SunOpta, commented, "Results for the third quarter reflect continued growth in the core natural and organic foods categories within which we operate. Our results also reflect the impact of the difficult commodity environment over the course of this year, especially in the sunflower component of our business. We continue to be very confident in our strategy and are encouraged by the number of new initiatives and opportunities in the pipeline. We are focused on expanding 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 in the natural and organic foods sector and are confident in our future prospects." The Company plans to host a conference call at 10:00 A.M. Eastern Time on Wednesday November 9th, 2011 to discuss the third quarter results and recent corporate developments. The conference call can be accessedvia 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 international 631-291-4622. A replay of the call can also be accessed between November 9th and 16th with the toll free dial-in number 1-855-859-2056 or 404-537-3406 followed by pass code: 17828140#.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 focus on growing our business and improving operating margins and returns on assets employed and our positioning in the natural and organic foods sector. The terms and phrases "continue", "improving", "focused", "believe", "positioned" and "confident", 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, planned facility and operational expansions, 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, inability or delays in implementing 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 quarter ended October 1, 2011 and October 2, 2010       Unaudited       (Expressed in thousands of U.S. dollars, except per share amounts)              Quarter ended Quarter ended    October 1, 2011 October 2, 2010 Change  $ $ %        Revenues 272,420   217,487  25.3%       Cost of goods sold 239,478   184,723  29.6%       Gross profit  32,942   32,764  0.5%        Selling, general and administrative expenses 22,981   21,118  8.8% Intangible asset amortization 1,413   1,155  22.3% Other expense, net  321   7,453  -95.7% Goodwill impairment  --   1,654  -100.0% Foreign exchange loss (gain) 934  (58) 1,710.3%       Earnings from continuing operations before the following 7,293  1,442  405.8%        Interest expense, net 2,033   2,036  -0.1%       Earnings (loss) from continuing operations before income taxes5,260  (594) 985.5%       Provision for (recovery of) income taxes1,438  (1,053) 236.6%       Earnings from continuing operations3,822  459  732.7%       Discontinued operations      Loss from discontinued operations, net of taxes(383) (15,616) 97.5%Gain on sale of discontinued operations, net of taxes 71   49,867  -99.9%      (Loss) earnings from discontinued operations, net of taxes(312) 34,251  -100.9%      Earnings3,510  34,710  -89.9%        Earnings attributable to non-controlling interests144  643  -77.6%       Earnings attributable to SunOpta Inc.3,366  34,067  -90.1%       Earnings (loss) per share - basic       -from continuing operations0.06   --    -from discontinued operations(0.01) 0.53      0.05  0.53           Earnings (loss) per share - diluted        -from continuing operations0.06   --    -from discontinued operations(0.01) 0.52      0.05  0.52                           SunOpta Inc.       Consolidated Statements of Operations        For the three quarters ended October 1, 2011 and October 2, 2010     Unaudited       (Expressed in thousands of U.S. dollars, except per share amounts)              Three quarters ended Three quarters ended    October 1, 2011 October 2, 2010 Change  $ $ %        Revenues 823,562   667,727  23.3%       Cost of goods sold  721,324   561,932  28.4%       Gross profit 102,238   105,795  -3.4%        Selling, general and administrative expenses 69,150   70,670  -2.2% Intangible asset amortization 4,191   3,474  20.6% Other (income) expense, net (2,506)  8,812  -128.4% Goodwill impairment  --   1,654  -100.0% Foreign exchange loss (gain) 1,012  (1,494) 167.7%       Earnings from continuing operations before the following  30,391   22,679  34.0%        Interest expense, net 6,537   7,625  -14.3%       Earnings from continuing operations before income taxes 23,854  15,054  58.5%       Provision for income taxes 8,566  3,277  161.4%       Earnings from continuing operations 15,288  11,777  29.8%       Discontinued operations       Loss from discontinued operations, net of taxes(988) (15,096) 93.5%Gain on sale of discontinued operations, net of taxes 71  63,676  -99.9%      (Loss) earnings from discontinued operations, net of taxes(917) 48,580  -101.9%      Earnings14,371  60,357  -76.2%        Earnings attributable to non-controlling interests1,523  1,211  25.8%     Earnings attributable to SunOpta Inc.12,848  59,146  -78.3%       Earnings (loss) per share – basic      -from continuing operations 0.21  0.16   -from discontinued operations(0.01) 0.75      0.20  0.91           Earnings (loss) per share – diluted       -from continuing operations 0.21  0.16   -from discontinued operations(0.01) 0.74      0.20  0.90                     SunOpta Inc.     Consolidated Balance Sheets     As at October 1, 2011 and January 1, 2011     Unaudited     (Expressed in thousands of U.S. dollars, except per share amounts)          October 1, 2011 January 1, 2011  $ $      Assets           Current assets     Cash and cash equivalents  7,526  2,335  Accounts receivable 112,863  98,777  Inventories  204,760  200,278  Prepaid expenses and other current assets 24,720  30,023  Current income taxes recoverable 655   --  Deferred income taxes 489  870  Current assets held for sale  --   424   351,013  332,707      Investments  33,845   33,345 Property, plant and equipment 119,964   115,200 Goodwill  48,751   48,174 Intangible assets 56,544   60,200 Deferred income taxes 12,233   11,889 Other assets 1,977   2,930 Non-current assets held for sale  --   4,855         624,327  609,300      Liabilities         Current liabilities    Bank indebtedness  107,713  75,910  Accounts payable and accrued liabilities 103,427  122,743  Customer and other deposits 2,065  2,858  Income taxes payable 329  973  Other current liabilities 2,610  7,674  Current portion of long-term debt 18,790  22,247  Current portion of long-term liabilities 672  493  Currrent liabilities held for sale  --   1,028   235,606  233,926      Long-term debt  35,183   42,485 Long-term liabilities 6,187   6,596 Deferred income taxes 25,608   20,808 Non-current liabilities held for sale  --   358    302,584  304,173           Equity    SunOpta Inc. shareholders' equity   Capital Stock  181,751  180,661  65,742,868 common shares (January 1, 2011 - 65,500,091)   Additional paid in capital  13,771  12,336 Retained earnings 108,060  95,212 Accumulated other comprehensive income 2,377  2,833    305,959   291,042 Non-controlling interest 15,784  14,085 Total equity 321,743   305,127        624,327   609,300                   SunOpta Inc.     Consolidated Statements of Cash Flows     For the quarter ended October 1, 2011 and October 2, 2010   Unaudited     (Expressed in thousands of U.S. dollars, except per share amounts)          Quarter ended Quarter ended  October 1, 2011 October 2, 2010  $ $      Cash provided by (used in)          Operating activities    Earnings 3,510   34,710  (Loss) earnings from discontinued operations(312)  34,251  Earnings from continuing operations 3,822   459       Items not affecting cash    Depreciation and amortization 4,912   4,110  Unrealized (gain) loss on foreign exchange(991)  829  Loss on sale of property, plant and equipment 584   --  Deferred income taxes 1,102  (2,227) Stock-based compensation 555   447  Goodwill impairment  --   1,654  Impairment of long-lived assets  --   7,505  Unrealized loss (gain) on derivative instruments 646  (681) Other 375  (1,450) Changes in non-cash working capital 648  9,670  Net cash flows from operations - continuing operations11,653   20,316  Net cash flows from operations - discontinued operations(914)  (5,100)   10,739   15,216 Investing activities    Acquisition of business, net of cash acquired(2,500)  --  Purchases of property, plant and equipment(6,092) (4,707) Purchases of patents, trademarks and other intangible assets --  (37) Other411  116  Cash flows from investing activities - continuing operations(8,181) (4,628) Cash flows from investing activities - discontinued operations(308)  (12,485)  (8,489) (17,113)Financing activities    Increase (decrease) in line of credit facilities 4,759  (4,329) Borrowings under long-term debt1,875   --  Proceeds from the issuance of common shares 242   338  Repayment of long-term debt(6,697) (12,188) Other(19) (44) Cash flows from financing activities - continuing operations 160  (16,223)      Foreign exchange (loss) gain on cash held in a foreign currency(457)  725       Increase (decrease) in cash and cash equivalents during the period 1,953  (17,395)      Discontinued operations cash activity included above:    Add: Balance included at beginning of period 212   17,974       Cash and cash equivalents - beginning of the period 5,361    20,365       Cash and cash equivalents - end of the period 7,526   20,944                   SunOpta Inc.     Consolidated Statements of Cash Flows     For the three quarters ended October 1, 2011 and October 2, 2010   Unaudited     (Expressed in thousands of U.S. dollars, except per share amounts)          Three quarters ended Three quarters ended  October 1, 2011 October 2, 2010  $ $      Cash provided by (used in)          Operating activities    Earnings 14,371   60,357  (Loss) earnings from discontinued operations(917)  48,580  Earnings from continuing operations 15,288   11,777       Items not affecting cash    Depreciation and amortization 14,608   12,350  Unrealized gain on foreign exchange(22) (589) Deferred income taxes 5,527  (179) Stock-based compensation 1,536   1,867  Gain on sale of property, plant and equipment(3,240)  --  Goodwill impairment  --   1,654  Impairment of long-lived assets  --   7,895  Unrealized (gain) loss on derivative instruments(3,272)  328  Other309  (592) Changes in non-cash working capital (31,699) (8,648) Net cash flows from operations - continuing operations(965)  25,863  Net cash flows from operations - discontinued operations(1,718)  (8,403)  (2,683)  17,460 Investing activities    Acquisition of business, net of cash acquired(2,500)  --  Purchases of property, plant and equipment(15,313) (13,283) Proceeds on sale of property, plant and equipment 2,773   --  Payment of deferred purchase consideration --  (721) Purchases of patents, trademarks and other intangible assets(90) (400) Other(30)  38  Cash from investing activities - continuing operations(15,160) (14,366) Cash from investing activities - discontinued operations(308)   52,298   (15,468)  37,932 Financing activities    Increase (decrease) in line of credit facilities 33,186  (39,125) Borrowings under long-term debt1,912   92  Proceeds from the issuance of common shares 989   850  Repayment of long-term debt(13,423) (16,327) Financing costs(186)  --  Other 802  (755) Cash from financing activities - continuing operations 23,280  (55,265)      Foreign exchange (loss) gain on cash held in a foreign currency(246)  98             Increase in cash and cash equivalents during the period 4,883   225       Discontinued operations cash activity included above:    Add: Balance included at beginning of period 308   18,967       Cash and cash equivalents - beginning of the period 2,335   1,752       Cash and cash equivalents - end of the period 7,526   20,944             SunOpta Inc.   Segmented Information         For the quarter ended October 1, 2011 and October 2, 2010 Unaudited       (Expressed in thousands of U.S. dollars)                            Quarter endedOctober 1, 2011     SunOpta   Corporate       Foods Opta Minerals Services Consolidated     $ $ $ $Total revenues from             external customers   248,318  24,102  --  272,420             Segment Operating Income (Loss) 8,564  1,606 (2,556) 7,614              SunOpta Foods has the following segmented reporting:            Quarter endedOctober 1, 2011   Grains and Ingredients Fruit International SunOpta   Foods Group Group Group Foods Group Foods   $ $ $ $ $Total revenues from             external customers 121,596  13,690  35,498  77,534  248,318             Segment Operating Income 4,394  1,374  346  2,450  8,564                          Quarter ended October 2, 2010     SunOpta   Corporate       Foods Opta Minerals Services Consolidated     $ $ $ $Total revenues from             external customers    197,066   20,421   --   217,487             Segment Operating Income (Loss)  10,257   2,792  (2,500)  10,549              SunOpta Foods has the following segmented reporting:             Quarter ended October 2, 2010   Grains and Ingredients Fruit International SunOpta   Foods Group Group Group Foods Group Foods   $ $ $ $ $Total revenues from             external customers  86,534   17,134   33,244   60,154   197,066             Segment Operating Income  5,906   3,104   853   394   10,257              (Operating Income (Loss) is defined as "Earnings before the following" excluding the impact of "Other (income) expense, net" and "Goodwill impairment")            SunOpta Inc.   Segmented Information         For the three quarters ended October 1, 2011 and October 2, 2010 Unaudited       (Expressed in thousands of U.S. dollars)                            Three quarters endedOctober 1, 2011     SunOpta   Corporate       Foods Opta Minerals Services Consolidated     $ $ $ $Total revenues from             external customers   753,067  70,495  --  823,562             Segment Operating Income (Loss) 28,091  6,216 (6,422) 27,885              SunOpta Foods has the following segmented reporting:            Three quarters endedOctober 1, 2011   Grains and Ingredients Fruit International SunOpta   Foods Group Group Group Foods Group Foods   $ $ $ $ $Total revenues from             external customers 361,971  43,365  114,185  233,546  753,067             Segment Operating Income 15,962  4,168  517  7,444  28,091                          Three quarters ended October 2, 2010     SunOpta   Corporate       Foods Opta Minerals Services Consolidated     $ $ $ $Total revenues from             external customers    608,234   59,493   --   667,727             Segment Operating Income (Loss)  35,552   6,224  (8,631)  33,145              SunOpta Foods has the following segmented reporting:             Three quarters ended October 2, 2010   Grains and Ingredients Fruit International SunOpta   Foods Group Group Group Foods Group Foods   $ $ $ $ $Total revenues from             external customers  257,073   52,932   113,115   185,114   608,234             Segment Operating Income  19,190   10,322   4,121   1,919   35,552              (Operating Income (Loss) is defined as "Earnings before the following" excluding the impact of "Other (income) expense, net" and "Goodwill impairment")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 (income) expense, net" and "Goodwill impairment"; 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 Quarter ended  October 1, 2011 October 2, 2010  $ $      Earnings from continuing operations 3,822   459       Provision for (recovery of) income taxes 1,438  (1,053) Interest expense, net 2,033   2,036  Other expense, net 321   7,453  Goodwill impairment --   1,654  Operating income 7,614   10,549  Depreciation and amortization 4,912   4,110  Earnings before interest, taxes, depreciation and amortization (EBITDA) 12,526   14,659         Three quarters ended Three quarters ended  October 1, 2011 October 2, 2010  $ $      Earnings from continuing operations 15,288   11,777       Provision for income taxes 8,566   3,277  Interest expense, net 6,537   7,625  Other (income) expense, net(2,506)  8,812  Goodwill impairment --   1,654  Operating income 27,885   33,145  Depreciation and amortization 14,608   12,350  Earnings before interest, taxes, depreciation and amortization (EBITDA) 42,493   45,495 CONTACT: Steve Bromley, President & CEO Tony Tavares, Vice President & COO Robert McKeracher, Vice President & CFO Susan Wiekenkamp, Information Officer Tel: 905-455-2528, ext 103 susan.wiekenkamp@sunopta.com Website: www.sunopta.com