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SunOpta Announces 2004 Year End Results; Reports Record Revenues and Earnings

March 08,2005
SunOpta Announces 2004 Year End Results; Reports Record Revenues and Earnings

TORONTO--March 8, 2005--SunOpta Inc. (SunOpta or the Company) (Nasdaq:STKL) (TSX:SOY) today announced results for the year ended December 31, 2004. All amounts are expressed in U.S. dollars.

The Company achieved record revenues and earnings for the year ended December 31, 2004. Revenues in 2004 increased by 54% to $306,251,000 from $199,099,000 in 2003, led by a 57% increase in revenues within the Company's vertically integrated food operations, focused on the natural and organic foods markets. The Company's overall revenue growth of 54% was driven by internal growth of 14.5% and growth via acquisitions of 39.5%.

Net earnings for the year were a record $11,016,000 or $0.20 per diluted common share compared to $8,966,000 or $0.18 per diluted common share in 2003. The improvement in earnings is due to a number of factors including increased sales of fiber products and custom blended ingredients within the Company's Ingredients Group segment, the realization of a number of private label contracts throughout the organization, internal growth in the Canadian Food Distribution Group and the Opta Minerals Group, and the calendarization of acquisitions completed in 2003 and 2004. In addition, the Company recognized a gain in the second quarter of 2004 related to a legal award in the Company's favour. These factors were partially offset by the non-cash write-off of certain trademarks as detailed below, the direct and indirect costs of complying with the Sarbanes-Oxley Act, costs related to the Opta Minerals IPO, issues related to the integration of acquired distribution businesses, and the impact of the poor soy crop quality and yield.

Revenues in the fourth quarter of 2004 were $82,661,000, a 51% increase over 2003, representing the Company's 29th consecutive quarter of record revenue growth over the same quarter in the previous year. Net earnings in the quarter were $355,000 or $0.01 per diluted common share, compared to $3,197,000 or $0.06 per diluted share in the same period in 2003. Quarterly earnings were affected by the non-cash write-off of certain trademarks, the impact of Sarbanes-Oxley related costs and costs related to the Opta Minerals IPO as noted above. Excluding these costs, and certain other smaller one-time items, diluted earnings per share would have been $0.06 in the fourth quarter of 2004.

In the fourth quarter, the Company made the business decision to focus its future shelf-stable beverage packaging efforts on supplying its existing customers and marketing its aseptic packaging capabilities to the rapidly growing private label market. The private label market in North America has grown substantially in recent years as retailers recognize the benefit of generating consumer loyalty with an in-house brand. As a result of this decision, the Company has taken the decision to de-emphasize the use of its own brands in the shelf-stable beverage market, and accordingly have written-off the value of these trademarks recorded on its balance sheet, in the amount of $2,250,000 pre-tax.

The Company continues to be well positioned for future growth with net working capital of $60,491,000 and total assets of $220,172,000. The debt to equity ratio at December 31, 2004 was 0.25:1, providing the Company will significant financial resources to invest further in internal growth and execute its acquisition program.

The Company has announced that it expects to achieve revenues of $385,000,000 in 2005, an increase of 26% versus 2004. The increase is based on a combination of expected internal growth of 15% to 17% and the calendarization of acquisitions completed in 2004.

Jeremy N. Kendall, Chairman and CEO of SunOpta, commented that, "I am very pleased with our progress to date. Although we faced some challenges in 2004, we persevered and were able to generate record revenues, record earnings and record cash flow from operations, all while remaining true to our values and our mission."

SunOpta's Chairman and CEO, Jeremy Kendall, also plans to host a conference call at 10:00 AM Eastern Standard Time on Wednesday, March 9, 2005, to discuss annual results and recent corporate developments. After opening remarks, there will be a question and answer period. This conference call can be accessed with the toll free dial-in number (800) 946-0782 or (719) 457-2657 followed by pass code: 4152365#. The 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, and institutional investors may listen via www.streetevents.com. Additionally, the call may 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 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 March 9, 2005 and March 18, 2005 with the toll free dial-in number (888) 203-1112 or (719) 457-0820 followed by pass code: 4152365#.

SunOpta Inc. is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food markets. For the last six consecutive years, SunOpta was included in Profit magazine's 'Profit 100' list of the 100 fastest growing companies in Canada. The Company has three business units: the SunOpta Food Group, which specializes in sourcing, processing and distribution of natural and organic food products integrated from seed through packaged products; the Opta Minerals Group, a producer, distributor, and recycler of environmentally friendly industrial materials; and the StakeTech Steam Explosion Group which engineers and markets proprietary steam explosion technology systems for the pulp, bio-fuel and food processing industries. 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. Actual future results may differ materially. The risks, uncertainties, and other factors that could influence actual results are described in the Company's annual report to shareholders and in SEC filings. The attached consolidated balance sheet and consolidated statement of earnings are unaudited. The information provided here should be considered in conjunction with the other information included within various SEC documents including Form 10Q reports filed during 2004 and Form 10K report to be filed March 15, 2005.

SunOpta Inc.
Consolidated Statements of Earnings and Comprehensive Income
For the years ended December 31, 2004, 2003
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
----------------------------------------------------------------------

                                                  2004     2003
                                                     $        $      %


Revenues                                       306,251  199,099    54%

Cost of goods sold                             247,812  163,421    52%
                                               -----------------------

Gross profit                                    58,439   35,678    64%

Warehousing and distribution expenses            6,016    2,365   154%
Selling, general and administrative expenses    37,225   23,065    61%
                                               -----------------------

Earnings before the following                   15,198   10,248    48%

Interest expense                                (1,437)  (1,942) (26%)
Interest and other income, net                   2,153      585   268%
Write-off of intangible asset                   (2,250)       -     -
Foreign exchange                                   565    1,076  (47%)
                                               -----------------------
                                                  (969)    (281)  245%
                                               -----------------------

Earnings before income taxes                    14,229    9,967    43%
Provision for income taxes)                      3,139    1,001   214%
                                               -----------------------

Net earnings before minority interest           11,090    8,966    24%

Minority interest                                   74        -     -
                                               -----------------------

Net earnings for the year                       11,016    8,966    23%
                                               -----------------------

Change in foreign currency
 translation adjustment                          4,006    3,019    33%
                                               -----------------------

Comprehensive income                            15,022   11,985    25%
                                               -----------------------
                                               -----------------------

Earnings per share for the year

 Basic                                            0.20     0.19     5%
                                               -----------------------
                                               -----------------------

 Diluted                                          0.20     0.18    11%
                                               -----------------------
                                               -----------------------


SunOpta Inc.
Consolidated Balance Sheets
As at December 31, 2004 and 2003
(Expressed in thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------

                                                        2004     2003
                                                           $        $
Assets

Current assets
Cash and cash equivalents                              8,081   21,990
Accounts receivable - trade                           38,446   26,241
Inventories                                           49,537   34,778
Prepaid expenses and other current assets              4,472    2,524
Current Income taxes recoverable                       2,000    1,686
Deferred income taxes                                    421    1,172
                                                    ------------------
                                                     102,957   88,391

Assets held for sale                                     208    6,007
Property, plant and equipment, net                    62,411   44,761
Goodwill and intangibles, net                         43,934   25,084
Deferred income taxes)                                 6,831    9,023
Other assets                                           3,831      490
                                                    ------------------
                                                     220,172  173,756
                                                    ------------------
Liabilities

Current liabilities
Accounts payable and accrued liabilities              35,668   24,664
Customer and other deposits                              431    1,778
Current portion of long-term debt                      4,819    3,840
Current portion of long-term payables                  1,548      740
                                                    ------------------
                                                      42,466   31,022

Long-term debt                                        31,003   21,196
Long-term payables                                     1,232    1,591
                                                    ------------------
                                                      74,701   53,809
                                                    ------------------

Minority Interest                                      1,378        -

Shareholders' Equity

Capital stock                                        105,794   96,670
Authorized
 Unlimited common shares without par value
Issued
  56,220,212 (December 31, 2003 - 52,705,096) common
   shares
Contributed surplus                                    3,330    3,330
Retained earnings                                     26,821   15,805
Cumulative other comprehensive income                  8,148    4,142
                                                    ------------------
                                                     144,093  119,947
                                                    ------------------
                                                     220,172  173,756
                                                    ------------------


SunOpta Inc.
Segmented Information
For the year ended December 31, 2004
(Expressed in thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------

                                                                 2004
                             -----------------------------------------
                                                StakeTech
                                                    Steam
                             SunOpta      Opta  Explosion
                                Food  Minerals  Group and
                               Group     Group  Corporate Consolidated
                                   $         $          $            $
   External revenues by
    market
   U.S.                     166,946    12,878      1,287      181,111
   Canada                    84,134    19,233          -      103,367
   Other                     21,642       131          -       21,773
                            ------------------------------------------

   Total revenues from
    external customers      272,722    32,242      1,287      306,251
                            ------------------------------------------

   Segment net earnings
    (loss) before interest
      expense and income
       taxes                 14,918     3,587     (2,839)      15,666
                            ------------------------------------------

   Interest  expense              -         -      1,437        1,437
                            ------------------------------------------

   Provision for  income
    taxes                         -         -      3,139        3,139
                            ------------------------------------------

   Minority Interest             74         -          -           74
                            ------------------------------------------

   Net earnings (loss)       14,844     3,587     (7,415)      11,016
                            ------------------------------------------

   Identifiable assets      170,110    26,777     23,285      220,172
                            ------------------------------------------
   Amortization               6,014       948        157        7,119
                            ------------------------------------------


The SunOpta Food Group has the following segmented reporting:


                                                                 2004
               -------------------------------------------------------
                   Grains
                  and Soy      SunOpta  Packaged     Canadian  SunOpta
                 Products  Ingredients  Products Distribution     Food
                    Group        Group     Group   Food Group    Group
                        $            $         $            $        $
   External
    revenues by
    market
   U.S.           68,073       61,652    36,813           408 166,946
   Canada          1,106        2,011     5,479        75,538  84,134
   Other          15,114        6,103       425             -  21,642
                ------------------------------------------------------

   Total
    revenues
    from
    external
    customers     84,293       69,766    42,717        75,946 272,722

   Segment net
    earnings
    before
    interest
    expense
   and income
    taxes          2,101        7,790     1,427         3,600  14,918
                ------------------------------------------------------

   Minority
    interest           -           74         -             -      74
                ------------------------------------------------------

   Segment net
    earnings
    before
    interest
    expense
    and income
    taxes          2,101        7,716     1,427         3,600  14,844
                ------------------------------------------------------

   Identifiable
    assets        43,961       64,589    26,246        35,314 170,110
                ------------------------------------------------------

   Amortization    1,434        2,178     1,490           912   6,014
                ------------------------------------------------------


SunOpta Inc.
Segmented Information
For the year ended December 31, 2003
(Expressed in thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------

                                                                 2003
                           -------------------------------------------
                                                StakeTech
                                                    Steam
                             SunOpta     Opta   Explosion
                                Food  Minerals  Group and
                               Group     Group  Corporate Consolidated
                                   $         $          $            $
   External revenues by
    market
   U.S.                     136,298     9,446        461      146,205
   Canada                    29,260    15,202          -       44,462
   Other                      8,249       183          -        8,432
                            ------------------------------------------

   Total revenues from
    external customers      173,807    24,831        461      199,099
                            ------------------------------------------

   Segment net earnings
    (loss) before interest
    expense and income
    taxes                    10,894     2,580     (1,565)      11,909
                            ------------------------------------------

   Interest  expense              -         -      1,942        1,942
                            ------------------------------------------

   Provision for  income
    taxes                         -         -      1,001        1,001
                            ------------------------------------------

   Net earnings (loss)       10,894     2,580     (4,508)       8,966
                            ------------------------------------------

   Identifiable assets      117,346    26,363     30,047      173,756
   Amortization               3,531       952        643        5,126
                            ------------------------------------------


The SunOpta Food Group has the following segmented reporting:


                                                                 2003
                ------------------------------------------------------
                   Grains
                  and Soy      SunOpta  Packaged     Canadian  SunOpta
                 Products  Ingredients  Products Distribution     Food
                    Group        Group     Group   Food Group    Group
                        $            $         $            $        $
   External
    revenues by
    market
   U.S.           57,499       42,756    36,043             -  136,298
   Canada            439        1,488     2,262        25,071   29,260
   Other           2,384        5,705       160             -    8,249
                ------------------------------------------------------

   Total
    revenues
    from
    external
    customers     60,322       49,949    38,465        25,071  173,807
                ------------------------------------------------------

   Segment net
    earnings
    (loss)
    before
    interest
    expense and
    income
    taxes          2,745        4,797     2,463           889   10,894
                ------------------------------------------------------

   Identifiable
    assets        36,588       46,140    20,985        13,633  117,346
                ------------------------------------------------------

   Amortization      744        1,656       985           146    3,531
                ------------------------------------------------------
    CONTACT: SunOpta Inc.
             Jeremy N. Kendall, Steve Bromley, John Dietrich,
             Susan Wiekenkamp, 905-455-2528, ext 103
             email: swiekenkamp@sunopta.com
             website: www.sunopta.com

    SOURCE: SunOpta Inc.

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