Stake Announces Third Quarter Results; Reports Record Sales and Earnings
TORONTO--Nov. 7, 2002--Stake Technology Ltd.
(Stake) (Nasdaq:STKL) (TSX:SOY) today announced results for the third
quarter and nine months ended September 30, 2002. All amounts are
expressed in US dollars.
The Company achieved record sales and earnings for both the three
and nine-month periods ended September 30, representing the 20th
consecutive quarter of record sales growth. Sales in the third quarter
of 2002 increased by 43% to $32,800,000 compared to $22,904,000 for
the same quarter last year. For the nine months ended September 30,
2002, sales increased 33% to $87,605,000 compared to $66,011,000 in
the previous year. These results were led by a 42% increase in the
quarter (34% for nine months) in sales within the Company's food
operations that are focused on the processing and distribution of
natural, organic and non-genetically modified food products. The
Environmental Industrial Group realized a 49% increase versus 2001
(30% for nine months), due to the acquisition of the operations of
Virginia Materials and International Materials in late 2001.
Net earnings for the third quarter were a record $1,527,000 or
$0.04 per common share, compared to $156,000 or $0.00 per common share
for the same period one year earlier. For the nine months ended
September 30, 2002, net earnings were also a record $3,254,000 or
$0.08 per common share, compared to $703,000 or $0.02 per common share
for the same period one year earlier. The gain over last year is due
primarily to continued improvements at Nordic Aseptic, the Company's
aseptic packaging operations. Other factors causing the dramatic rise
in profitability were: the impact of the 2001 acquisition of Virginia
Materials, higher volumes and gross margins in dietary fiber and
certain grain and agronomy products, cost reductions throughout the
organization and reduced borrowing costs as a result of the new
banking arrangements implemented earlier this year.
Stake continued to maintain a strong balance sheet with a working
capital position of $20,666,000 versus $11,066,000 in 2001 and a
long-term debt to equity ratio of 0.32:1 versus 0.56:1 in 2001. The
Company has leveraged this financial strength to fund recently
announced growth plans. On October 28, 2002, Stake announced a
definitive acquisition agreement with Opta Food Ingredients, Inc.
(Nasdaq - OPTS), a leading developer and manufacturer of proprietary
food ingredients, headquartered in Bedford, MA. One week earlier, the
Company entered into an agreement to purchase Simply Organic Co. Ltd,
a privately held Toronto, Ontario based distributor of organic and
natural foods, and on October 10, Stake signed agreement to acquire
Wild West Organic Harvest Co-operative Association, also a privately
held organic and natural food distributor based in Vancouver, British
Columbia. These acquisitions will further complement the Company's
growing natural and organic food operations and are accretive to
earnings.
Jeremy N. Kendall, Chairman and CEO of Stake Technology Ltd.,
commented that, "We are very pleased with the continued growth in both
revenues and net earnings across our organization and expect this
trend to continue. We believe the three recently announced
acquisitions, combined with the strength of our existing businesses,
position our Company as a dominant player in the organic and natural
foods sector. Stake's commitment to profitable growth in these
expanding food categories should produce above average returns for our
valued shareholders."
Selected financial information (Expressed in US dollars)
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Sept. 30, 2002 Sept. 30, 2001 % Change
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Working Capital $20,666,000 $11,066,000 87%
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Total Assets $82,994,000 $72,280,000 15%
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Long-Term Debt $15,396,000 $18,472,000 (17)%
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Shareholders' Equity $48,567,000 $33,969,000 43%
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Equity per Share $1.16 $0.95 22%
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Three months ended Three months ended
Sept. 30, 2002 Sept. 30, 2001 % Change
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Sales $32,800,000 $22,904,000 43%
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Gross Profit $5,290,000 $2,811,000 88%
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Operating Earnings $2,050,000 $275,000 645%
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Earnings Before Taxes $1,456,000 $326,000 347%
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Net Earnings $1,527,000 $156,000 879%
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Basic E.P.S. $0.04 $0.00 400%
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EBITDA $2,782,000 $1,637,000 70%
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Nine months ended Nine months ended
Sept. 30, 2002 Sept. 30, 2001 % Change
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Sales $87,605,000 $66,011,000 33%
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Gross Profit $14,005,000 $9,284,000 51%
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Operating Earnings $4,589,000 $1,874,000 145%
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Earnings Before Taxes $3,934,000 $1,133,000 247%
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Net Earnings $3,254,000 $703,000 363%
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Basic E.P.S. $0.08 $0.02 400%
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Weighted # of Shares 41,402,000 30,569,000 35%
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EBITDA(1) $7,646,000 $4,903,000 56%
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(1) EBITDA is not a recognized measure under Canadian or United States
generally accepted accounting principles (GAAP). Management believes
that in addition to net income, EBITDA is a useful supplemental
measure as it provides investors with an indication of earnings from
our operations prior to debt service, amortization and income taxes.
Investors should be cautioned however, that EBITDA should not be
construed as an alternative to net income determined in accordance
with GAAP as an indicator of Stake's performance or to cash flows from
operating, investing and financing activities as a measure of
liquidity and cash flows. Stake's method of calculating EBITDA may
differ from other companies and, accordingly, EBITDA may not be
comparable to measures used by other companies.
Historical consolidated results have been restated using a translation
of convenience, whereby all historical results have been reflected
using the exchange rate in effect on December 31, 2001 of $1 U.S. to
$1.5928 CDN
Stake Technology will be holding a conference call for investors
and analysts at 10:00 am. Eastern Standard Time on Friday, November 8,
2002. Jeremy Kendall will discuss third quarter results, as well as
recent corporate developments. After opening remarks, there will be a
question and answer period. The dial in numbers are 1 (800) 946-0741
or (719) 457-2649 followed by pass code: 356812#. This conference call
will also be distributed live over CCBN's Investor Distribution
Network to both institutional and individual investors. Individual
investors may listen to the call via www.companyboardroom.com.
Institutional investors may access the call via www.streetevents.com.
Additionally, the call may be accessed via a link at the Company's
website at www.staketech.com. To listen to the live call over the
Internet please go to one of the websites at least 15 minutes early to
register, download and install any necessary audio software. If you
are unable to listen live, the conference call will be archived and
can be accessed for approximately 90 days at the websites. A replay
number can also be accessed between November 8 - 17 with a toll free
dial-in number (888) 203-1112 or (719) 457-0820 followed by pass code:
356812#
Stake Technology Ltd. is an owner/operator of high-growth ethical
businesses, focused on environmental responsibility and the health and
well being of its communities. For the last four consecutive years,
Stake was included in Profit magazine's `Profit 100' list of the 100
fastest growing companies in Canada. Currently, the company has three
business units: the Food Group, which specializes in
identity-preserved (IP) grain products and natural and organic food
products; from seed to packaged product; the Environmental Industrial
Group; a producer, distributor, and recycler of industrial materials;
and the Steam Explosion Technology Group who market clean pulping
technologies. Each of these business units has proprietary products
and services that give it a solid competitive advantage in its sector.
| Note: |
This news release may contain forward-looking information. |
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Actual future results may differ materially. The risks, uncertainties, |
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and other factors that could influence actual results are described in |
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the Company's Annual Report to shareholders and in SEC reports. |
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--30--jsw/cl*
| CONTACT: |
Stake Technology Ltd. |
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Jeremy N. Kendall, John D. Taylor or Susan Wiekenkamp |
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905/455-1990 |
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info@staketech.com |
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Websites: www.staketech.com www.sunrich.com www.bei.ca |
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www.steamexplosion.com www.sunrichvalley.com |
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www.organickitchen.ca |
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or |
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Investor Relations Counsel |
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The Equity Group Inc. |
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Linda Latman, 212/836-9609 |
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llatman@equityny.com |
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www.theequitygroup.com |
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