The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from GlobeNewswire (a Nasdaq OMX company)

SunOpta Announces Record 2012 Results

Tuesday, March 05, 2013

SunOpta Announces Record 2012 Results14:27 EST Tuesday, March 05, 2013 TORONTO, March 5, 2013 (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 year ended December 29, 2012. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.Fourth Quarter 2012 Highlights: Record revenues of $270.1 million, an increase of approximately 12% versus 2011 Operating income of $7.2 million, an increase of 46% versus 2011 Record fourth quarter earnings of $4.4 million versus a loss of $7.6 million in 2011 Earnings per diluted common share of $0.07 versus a loss of $0.11 in 2011Fiscal 2012 Highlights: Record revenues of $1.091 billion, an increase of approximately 7% versus 2011 Operating income of $47.0 million, an increase of 39% versus 2011 Record earnings of $24.2 million, an increase of 357% versus 2011 Earnings per diluted common share increased to a record $0.36 versus $0.08 in 2011 "We are pleased with our fiscal 2012 financial results which reflect both record revenues and earnings. We continue to execute on our core strategies focused on growing our value-added packaged foods and ingredients portfolio, and leveraging our integrated platform," commented Steve Bromley, Chief Executive Officer. "While our results improved significantly in fiscal 2012, we will continue to develop our global integrated natural and organic foods platform in support of our established operating targets. We continue to believe that healthy eating and healthy living are key long-term global trends and further believe that we are well positioned to be a key player in these markets."Fourth Quarter 2012 Results Revenues for the fourth quarter increased approximately 12% to $270.1 million as compared to $242.3 million in the fourth quarter of 2011. Excluding the impact of changes including foreign exchange rates, commodity-related pricing, acquisitions and rationalized product lines, revenues increased approximately 6% on a consolidated basis versus the prior year. The increase in consolidated revenues in the fourth quarter was driven by strong growth across integrated packaged food product categories within SunOpta Foods, particularly in the areas of packaged aseptic non-dairy beverages and pouch products, as well as higher sales within Opta Minerals Inc. as a result of recent acquisitions. Operating income1 increased approximately 46% to $7.2 million, or 2.6% of revenues for the fourth quarter of 2012 as compared to $4.9 million, or 2.0% of revenues in 2011. This increase was due to a significant improvement in operating income in the Consumer Products Group versus the prior year as a result of a decrease in rationalization costs in the Frozen Foods operations and leveraged selling, general and administrative costs due in part to streamlining and rationalizations completed over the past year. Earnings for the fourth quarter of 2012 were $4.4 million, or $0.07 per diluted common share, as compared to a loss of $7.6 million, or $0.11 per diluted common share, for the fourth quarter of 2011. Excluding discontinued operations, earnings during the fourth quarter of 2012 were $4.3 million or $0.06 per diluted common share, versus $1.4 million or $0.02 per diluted common share during the fourth quarter of 2011. Fourth quarter 2012 earnings include the impact of approximately $1.2 million in pre-tax severance, acquisition, start-up costs ($0.6 million after-tax and minority interest), offset by approximately $0.6 million in tax adjustments that lowered the Company's effective tax rate. For the fourth quarter of 2012 EBITDA1 increased 33% to $12.4 million as compared to $9.3 million during the fourth quarter of 2011.Fiscal 2012 Results For fiscal 2012 revenues increased 7% to $1.091 billion versus revenues of $1.020 billion in 2011. Excluding the impact of changes including foreign exchange rates, commodity-related pricing, acquisitions and rationalized product lines, revenues increased approximately 6% on a consolidated basis. The increase in consolidated revenues in 2012 was driven by strong growth within integrated packaged food product categories and the benefit of increased prices and higher volume of sales of raw grains in SunOpta Foods, as well as higher sales within Opta Minerals as a result of recent acquisitions. These increases were partially offset by the effect of lower fiber and fruit ingredient sales and decreased revenues in the Company's European organic ingredients operation. Operating income1 for fiscal 2012 increased 39% to $47.0 million or 4.3% of revenues, versus $33.8 million, or 3.3% of revenues in the prior year. This increase was primarily due to improved operating income in the Grains and Foods Group, Consumer Products Group and Opta Minerals versus the prior year. For fiscal 2012, earnings increased 357% to $24.2 million, or $0.36 per diluted common share, as compared to earnings of $5.3 million, or $0.08 per diluted common share in 2011. Excluding discontinued operations, earnings were $23.0 million or $0.34 per diluted common share, versus $16.2 million, or $0.24 per diluted common share in 2011. Fiscal 2012 EBITDA1 increased 30% to $67.2 million as compared to $51.6 million in fiscal 2011.Balance Sheet The Company's balance sheet remains strong, and shareholders' equity increased to $326.2 million as of December 29, 2012 compared to $299.1 million at December 31, 2011. At the end of fiscal 2012 the Company's balance sheet reflects a current ratio of 1.46 to 1.00, and a total debt to equity ratio of 0.58 to 1.00. At December 29, 2012, the Company had total debt outstanding of $189.3 million, total assets of $707.3 million and a net book value of $4.94 per outstanding share. During fiscal 2012 the Company generated cash from operating activities of $31.0 million versus cash used in operating activities of $5.6 million in 2011, indicative of improved earnings and less cash used to fund working capital.Conference Call Information The Company plans to host a conference call at 10:00 A.M. Eastern Time on Wednesday, March 6, 2013 to discuss the results for the fourth quarter and year ended 2012 and recent corporate developments. After opening remarks, there will be a question and answer period. This conference call can be accessed via a link at the Company's website at www.sunopta.com. To listen to the live call over the Internet, please go to the Company's website at least 15 minutes early to register, download and install any necessary audio software. Additionally, the call may be accessed with the toll free dial-in number (877) 312-9198 or international dial-in number (631) 291-4622. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days at the Company's website.1See discussion of non-GAAP measuresAbout SunOpta Inc. SunOpta Inc. is a leading global company focused on natural, organic and specialty foods products. 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 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 66.1% ownership position in Opta Minerals Inc., listed on the Toronto Stock Exchange, 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 our core natural and organic foods business and our belief that healthy eating and healthy living are key long-term global trends and we are well positioned to be a key player in these markets. The terms and phrases "continued", "improve", "will provide", "remain 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 and continuous improvement initiatives, availability and pricing of raw materials and supplies, potential covenant breaches under our credit facilities 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 December 29, 2012 and December 31, 2011 Unaudited (Expressed in thousands of U.S. dollars, except per share amounts)          Quarter ended Quarter ended    December 29, 2012 December 31, 2011 Change  $ $ %        Revenues270,089 242,322 11.5%        Cost of goods sold241,107 215,711 11.8%        Gross profit28,982 26,611 8.9%         Selling, general and administrative expenses20,967 20,679 1.4% Intangible asset amortization1,280 983 30.2% Other expense, net188 55 241.8% Foreign exchange (gain) loss(417) 62 -772.6%        Earnings from continuing operations before the following6,964 4,832 44.1%         Interest expense, net1,853 2,302 -19.5%        Earnings from continuing operations before income taxes5,111 2,530 102.0%        Provision for income taxes632 1,021 -38.1%        Earnings from continuing operations4,479 1,509 196.8%        Discontinued operations      Loss from discontinued operations, net of taxes(69) (8,948) n/aGain on sale of discontinued operations, net of taxes132 -- n/a        Gain (loss) from discontinued operations, net of taxes63 (8,948) 100.7%        Earnings (loss)4,542 (7,439) 161.1%         Earnings attributable to non-controlling interests159 113 40.7%        Earnings (loss) attributable to SunOpta Inc.4,383 (7,552) 158.0%        Earnings (loss) per share - basic      -from continuing operations0.07 0.02 -from discontinued operations-- (0.14)    0.07 (0.11)         Earnings (loss) per share - diluted      -from continuing operations0.06 0.02 -from discontinued operations-- (0.13)    0.07 (0.11)         SunOpta Inc. Consolidated Statements of Operations For the year ended December 29, 2012 and December 31, 2011 Unaudited (Expressed in thousands of U.S. dollars, except per share amounts)          Year ended Year ended    December 29, 2012 December 31, 2011 Change  $ $ %       Revenues1,091,064 1,019,871 7.0%      Cost of goods sold957,327 898,627 6.5%      Gross profit133,737 121,244 10.3%       Selling, general and administrative expenses82,878 82,176 0.9% Intangible asset amortization4,933 4,061 21.5% Other expense (income), net2,194 (2,832) 177.5% Foreign exchange (gain) loss(1,046) 1,238 -184.5%      Earnings from continuing operations before the following44,778 36,601 22.3%       Interest expense, net9,333 8,839 5.6%      Earnings from continuing operations before income taxes35,445 27,762 27.7%      Provision for income taxes10,934 9,896 10.5%      Earnings from continuing operations24,511 17,866 37.2%      Discontinued operations     Earnings (loss) from discontinued operations, net of taxes448 (11,005) n/aGain on sale of discontinued operations, net of taxes808 71 n/a      Earnings (loss) from discontinued operations, net of taxes1,256 (10,934) 111.5%      Earnings25,767 6,932 271.7%       Earnings attributable to non-controlling interests1,543 1,636 -5.7%     Earnings attributable to SunOpta Inc.24,224 5,296 357.4%      Earnings (loss) per share – basic    -from continuing operations0.35 0.25  -from discontinued operations0.02 (0.17)    0.37 0.08         Earnings (loss) per share – diluted     -from continuing operations0.34 0.24  -from discontinued operations0.02 (0.16)    0.36 0.08         SunOpta Inc. Consolidated Balance Sheets As at December 29, 2012 and December 31, 2011 Unaudited (Expressed in thousands of U.S. dollars)        December 29, 2012 December 31, 2011  $ $      Assets          Current assets     Cash and cash equivalents6,840 2,378 Restricted cash6,595 -- Accounts receivable113,314 88,898 Inventories255,738 228,455 Prepaid expenses and other current assets20,538 21,378 Current income taxes recoverable1,814 1,503 Deferred income taxes2,653 4,773 Current assets held for sale-- 17,923  407,492 365,308      Investments33,845 33,845Property, plant and equipment140,579 120,584Goodwill57,414 49,387Intangible assets52,885 48,035Deferred income taxes12,879 11,751Other assets2,216 1,854Non-current assets held for sale-- 739        707,310 631,503      Liabilities          Current liabilities     Bank indebtedness131,061 109,718 Accounts payable and accrued liabilities128,544 114,308 Customer and other deposits4,734 843 Income taxes payable4,125 1,229 Other current liabilities2,660 1,419 Current portion of long-term debt6,925 35,198 Current portion of long-term liabilities1,471 995 Current liabilities held for sale-- 5,920  279,520 269,630      Long-term debt51,273 17,066Long-term liabilities5,544 5,586Deferred income taxes27,438 24,273  363,775 316,555            Equity     SunOpta Inc. shareholders' equity    Capital Stock183,027 182,108 66,007,236 common shares (December 31, 2011 - 65,796,398)    Additional paid in capital16,855 14,134Retained earnings124,732 100,508Accumulated other comprehensive income1,537 2,382  326,151 299,132Non-controlling interest17,384 15,816Total equity343,535 314,948        707,310 631,503      SunOpta Inc. Consolidated Statements of Cash Flows For the quarter ended December 29, 2012 and December 31, 2011 Unaudited (Expressed in thousands of U.S. dollars)        Quarter ended Quarter ended  December 29, 2012 December 31, 2011  $ $      Cash provided by (used in)          Operating activities     Earnings (loss)4,542 (7,439) Earnings (loss) from discontinued operations63 (8,948) Earnings from continuing operations4,479 1,509       Items not affecting cash     Depreciation and amortization5,280 4,455 Unrealized gain on foreign exchange-- (246) Deferred income taxes(1,096) (1,842) Stock-based compensation712 554 Impairment of long-lived assets-- 358 Unrealized loss on derivative instruments483 4,111 Loss on sale of property, plant and equipment51 39 Other(2) 383 Changes in non-cash working capital(16,917) (12,266) Net cash flows from operating activities - continuing operations(7,010) (2,945) Net cash flows from operating activities - discontinued operations(55) 36  (7,065) (2,909)Investing activities     Acquisitions of businesses, net of cash acquired(870) (2,961) Purchases of property, plant and equipment(6,628) (1,964) Increase in restricted cash(6,595) -- Proceeds on sale of property, plant and equipment50 1,755 Purchases of intangible assets(47) 9 Payment of contingent consideration(89) (233) Other(352) (919) Net cash flows from investing activities - continuing operations(14,531) (4,313) Net cash flows from investing activities - discontinued operations-- (35)  (14,531) (4,348)Financing activities     Increase under line of credit facilities19,379 3,317 Borrowings under long-term debt6,573 2,913 Repayment of long-term debt(1,713) (4,545) Financing costs(74) -- Proceeds from the issuance of common shares107 166 Other(105) 114 Net cash flows from financing activities - continuing operations24,167 1,965 Foreign exchange gain on cash held in a foreign currency82 144 Increase (decrease) in cash and cash equivalents during the period2,653 (5,148) Discontinued operations cash activity included above:     Cash and cash equivalents - beginning of the period4,187 7,526 Cash and cash equivalents - end of the period6,840 2,378      SunOpta Inc. Consolidated Statements of Cash Flows For the year ended December 29, 2012 and December 31, 2011 Unaudited (Expressed in thousands of U.S. dollars)        Year ended Year ended  December 29, 2012 December 31, 2011  $ $      Cash provided by (used in)          Operating activities     Earnings25,767 6,932 Earnings (loss) from discontinued operations1,256 (10,934) Earnings from continuing operations24,511 17,866       Items not affecting cash     Depreciation and amortization20,226 17,809 Unrealized gain on foreign exchange(169) (268) Deferred income taxes1,981 3,993 Stock-based compensation2,753 2,090 Impairment of long-lived assets-- 358 Unrealized (gain) loss on derivative instruments(695) 839 Loss (gain) on sale of property, plant and equipment51 (3,201) Other1,215 693 Changes in non-cash working capital(18,838) (44,169) Net cash flows from operating activities - continuing operations31,035 (3,990) Net cash flows from operating activities - discontinued operations(58) (1,602)  30,977 (5,592)Investing activities     Acquisition of businesses, net of cash acquired(30,044) (5,461) Purchases of property, plant and equipment(24,251) (17,220) Increase in restricted cash(6,595) -- Proceeds on sale of property, plant and equipment50 4,528 Purchases of intangible assets(128) (58) Payment of contingent consideration(477) (233) Other(436) (949) Net cash flows from investing activities - continuing operations(61,881) (19,393) Net cash flows from investing activities - discontinued operations12,134 (423)  (49,747) (19,816)Financing activities     Increase under line of credit facilities65,813 36,503 Repayment of line of credit facilities(45,296) -- Borrowings under long-term debt59,992 4,825 Repayment of long-term debt(55,484) (17,968) Financing costs(2,564) (186) Proceeds from the issuance of common shares787 1,155 Other(81) 916 Net cash flows from financing activities - continuing operations23,167 25,245 Foreign exchange gain (loss) on cash held in a foreign currency65 (102)       Increase (decrease) in cash and cash equivalents during the period4,462 (265) Discontinued operations cash activity included above:     Add: Balance included at beginning of period-- 308 Cash and cash equivalents - beginning of the period2,378 2,335 Cash and cash equivalents - end of the period6,840 2,378      SunOpta Inc. Segmented Information For the quarter ended December 29, 2012 and December 31, 2011 Unaudited (Expressed in thousands of U.S. dollars)    Quarter endedDecember 29, 2012    SunOpta   Corporate       Foods Opta Minerals Services Consolidated     $ $ $ $Total revenues from external customers 235,96434,125--270,089Segment Operating Income (Loss) 6,4881,884(1,220)7,152             SunOpta Foods has the following segmented reporting:            Quarter endedDecember 29, 2012  Grains and Ingredients Consumer Products International SunOpta   Foods Group Group Group Foods Group Foods   $ $ $ $ $Total revenues from external customers127,56320,13645,14343,122235,964Segment Operating Income (Loss)5,134518(433)1,2696,488              Quarter ended December 31, 2011     SunOpta   Corporate       Foods Opta Minerals Services Consolidated     $ $ $ $Total revenues from external customers  219,697 22,625 -- 242,322Segment Operating Income (Loss)  5,123 1,361 (1,597) 4,887             SunOpta Foods has the following segmented reporting:             Quarter ended December 31, 2011   Grains and Ingredients Consumer Products International SunOpta   Foods Group Group Group Foods Group Foods   $ $ $ $ $Total revenues from external customers 117,224 19,472 39,482 43,519 219,697Segment Operating Income (Loss) 6,851 391 (3,827) 1,708 5,123             (Segment operating income (loss) is defined as "Earnings from continuing operations before the following" excluding the impact of "Other expense (income), net".)            SunOpta Inc. Segmented Information For the year ended December 29, 2012 and December 31, 2011 Unaudited (Expressed in thousands of U.S. dollars)    Year endedDecember 29, 2012    SunOpta   Corporate       Foods Opta Minerals Services Consolidated     $ $ $ $Total revenues from external customers 964,413126,651--1,091,064Segment Operating Income (Loss) 42,91110,062(6,001)46,972            SunOpta Foods has the following segmented reporting:            Year endedDecember 29, 2012  Grains and Ingredients Consumer Products International SunOpta   Foods Group Group Group Foods Group Foods   $ $ $ $ $Total revenues from external customers524,65982,544181,022176,188964,413Segment Operating Income (Loss)32,7963,464(982)7,63342,911              Year ended December 31, 2011     SunOpta   Corporate       Foods Opta Minerals Services Consolidated     $ $ $ $Total revenues from external customers  926,751 93,120 -- 1,019,871Segment Operating Income (Loss)  34,958 7,577 (8,766) 33,769             SunOpta Foods has the following segmented reporting:             Year ended December 31, 2011   Grains and Ingredients Consumer Products International SunOpta   Foods Group Group Group Foods Group Foods   $ $ $ $ $Total revenues from external customers 479,195 91,074 165,239 191,243 926,751Segment Operating Income (Loss) 22,813 7,083 (3,978) 9,040 34,958             (Segment operating income (loss) is defined as "Earnings from continuing operations before the following" excluding the impact of "Other expense (income), 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 (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  December 29, 2012 December 31, 2011  $ $      Earnings from continuing operations4,479 1,509      Provision for income taxes632 1,021 Interest expense, net1,853 2,302 Other expense, net188 55 Operating income7,152 4,887 Depreciation and amortization5,280 4,455 Earnings before interest, taxes, depreciation and amortization (EBITDA)12,432 9,342              Year ended Year ended  December 29, 2012 December 31, 2011  $ $      Earnings from continuing operations24,511 17,866      Provision for income taxes10,934 9,896 Interest expense, net9,333 8,839 Other expense (income), net2,194 (2,832) Operating income46,972 33,769 Depreciation and amortization20,226 17,809 Earnings before interest, taxes, depreciation and amortization (EBITDA)67,198 51,578      CONTACT: SunOpta Inc. Steve Bromley, CEO Robert McKeracher, Vice President & CFO Susan Wiekenkamp, Information Officer Tel: 905-455-2528, ext 103 susan.wiekenkamp@sunopta.com Website: www.sunopta.com