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SunOpta Announces First Quarter Results; Reports Record Revenues and Earnings

May 04,2005
SunOpta Announces First Quarter Results; Reports Record Revenues and Earnings

TORONTO--May 4, 2005--SunOpta Inc. (SunOpta or the Company) (Nasdaq:STKL) (TSX:SOY) today announced results for the three months ended March 31, 2005. All amounts are expressed in U.S. dollars.

The Company achieved record revenues and earnings for the three months ended March 31, 2005, realizing its 30th consecutive quarter of record revenue growth compared to the same quarter in the previous year. Revenues in the quarter increased by 38% to $86,223,000 as compared to $62,502,000 in the first quarter of the prior year, led by a 41% increase in revenues within the Company's vertically integrated natural and organic food operations. The Company's overall revenue growth of 38% includes an internal growth rate of 12.8% and growth via acquisitions of 25.2%.

Net earnings for the first quarter increased by 253% to a record $6,605,000 or $0.12 per diluted common share compared to $1,870,000 or $0.03 per diluted common share in the first quarter of the prior year. Net earnings in the quarter included a net unusual gain of $0.08 per diluted common share, consisting primarily of the recognition of a dilution gain on the sale of a 29.6% interest in the Company's subsidiary Opta Minerals Inc. through the previously announced initial public offering. Excluding the net unusual gain, operating earnings were $0.04 per diluted common share.

The Company's Grains & Soy Products Group improved significantly over the first quarter of 2004, led by strong growth in its sunflower operations which generated record revenues and gross profits. Although there is an overall shortage of sunflower seeds in North America, the Company anticipates being able to meet all of its requirements in 2005, leading to continued strong financial results in the coming quarters.

The results of the Packaged Products Group in the first quarter improved significantly over the prior year, benefiting from the recent capital improvements and strong growth in new business in aseptically packaged products, including soy, rice and tea beverages.

The SunOpta Ingredients Group experienced reduced volume and margins in its oat fiber operations as a result of the decline in the low-carb market and increase in competition. The Company has taken actions to counteract these factors, including the addition of organic fibers, expansion into new markets and aggressive pursuit of international markets. These measures are expected to have a positive financial impact in the remainder of the year.

The Canadian Food Distribution Group continued its aggressive growth and consolidation plan, however, profits fell short of expectations as the Group encountered a significant shortage of fresh product supply from California, resulting from local weather issues, including one of the rainiest seasons on record. Fresh product supplies have now been reestablished.

Jeremy Kendall, Chairman and Chief Executive Officer of SunOpta stated that "We are very pleased with our first quarter results, and particularly with the momentum that is evident in our business."

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 filed March 16, 2005.

SunOpta Inc.
Condensed Consolidated Statements of Earnings
For the three months ended March 31, 2005 and 2004
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

                                       March 31,   March 31,         %
                                           2005        2004     Change
                                              $           $
----------------------------------------------------------------------
Revenues                                  86,223     62,502        38%

Cost of goods sold                        70,587     50,231        41%
                                      --------------------------------

Gross profit                              15,636     12,271        27%

Warehousing and distribution expenses      2,604      1,156       125%
Selling, general and administrative
 expenses                                  9,787      7,979        23%
                                      --------------------------------

Earnings before the following              3,245      3,136         3%

Interest expense, net                       (302)      (208)       45%
Other income (expense)                     4,035       (115)        -
Foreign exchange                              35       (141)      125%
                                      --------------------------------

                                           3,768       (464)      912%
                                      --------------------------------

Earnings before income taxes               7,013      2,672       162%

Provision for income taxes                   235        802      (71%)
                                      --------------------------------

Net earnings before minority interest      6,778      1,870       262%
                                      --------------------------------

Minority interest                            173          -         -
                                      --------------------------------

Net earnings for the period                6,605      1,870       253%
                                      --------------------------------

Change in foreign currency
 translation adjustment                      165       (197)      184%

                                      --------------------------------

Comprehensive income                       6,440      1,673       285%
                                      --------------------------------

Net earnings per share for the period

   - Basic                                  0.12       0.04
                                      ================================

   - Diluted                                0.12       0.03
                                      ================================

SunOpta Inc.
Condensed Consolidated Balance Sheets
As at March 31, 2005 and December 31, 2004
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

                                                March 31, December 31,
                                                    2005         2004
                                                       $            $
----------------------------------------------------------------------

Assets

Current assets
Cash and cash equivalents                         10,643        8,081
Accounts receivable                               41,871       38,446
Inventories                                       57,757       49,537
Prepaid expenses and other current assets          4,010        4,472
Current income taxes recoverable                       -        2,000
Deferred income taxes                                421          421
                                              ------------------------

                                                 114,702      102,957

Property, plant and equipment                     65,516       62,619
Goodwill and intangibles                          43,718       43,934
Deferred income taxes                              7,310        6,831
Other assets                                       3,372        3,831
                                              ------------------------

                                                 234,618      220,172
                                              ========================
Liabilities

Current liabilities
Bank indebtedness                                  6,815            -
Accounts payable and accrued liabilities          28,511       35,668
Customer and other deposits                        2,027          431
Current portion of long-term debt                  4,947        4,819
Current portion of long-term payables                474        1,548
                                              ------------------------

                                                  42,774       42,466

Long-term debt                                    29,768       31,003
Long-term payables                                 1,131        1,232
                                              ------------------------

                                                  73,673       74,701
                                              ------------------------

Minority interest                                 10,203        1,378
                                              ------------------------

Shareholders' Equity

Capital stock                                    106,003      105,794
Contributed surplus                                3,330        3,330
Retained earnings                                 33,426       26,821
Cumulative other comprehensive income              7,983        8,148
                                              ------------------------

                                                 150,742      144,093
                                              ------------------------

                                                 234,618      220,172
                                              ========================
SunOpta Inc.
Segmented Information
For the three months ended March 31, 2005
(Expressed in thousands of U.S. dollars)
(Unaudited)

                                                    Three months ended
                                                        March 31, 2005
                        ----------------------------------------------
                                                StakeTech
                                                    Steam
                                         Opta   Explosion
                           SunOpta   Minerals   Group and
                        Food Group      Group   Corporate Consolidated
                                 $          $           $            $
External revenues by
 market
U.S.                       44,670      3,160         280       48,110
Canada                     27,638      4,568           -       32,206
Other                       5,897         10           -        5,907
                        ----------------------------------------------

Total revenues to
 external customers        78,205      7,738         280       86,223
                        ----------------------------------------------

Segment earnings before
 other income, interest
 expense (net),  income
 taxes and minority
 interest                   3,343        837        (900)       3,280
                        ----------------------------------------------

Other income                                       4,035        4,035
                        ----------------------------------------------

Segment earnings before
 interest expense
 (net), income taxes
 and minority interest      3,343        837       3,135        7,315
                        ----------------------------------------------

Interest expense, net                                302          302
                        ----------------------------------------------

Provision for income
 taxes                                               235          235
                        ----------------------------------------------

Minority interest                                    173          173
                        ----------------------------------------------

Net earnings                3,343        837       2,425        6,605
                        ----------------------------------------------
                                                    Three months ended
                                                        March 31, 2005
                ------------------------------------------------------
                  Grains &                           Canadian
                       Soy     SunOpta  Packaged         Food  SunOpta
                  Products Ingredients  Products Distribution    Food
                     Group       Group     Group        Group    Group
                         $           $         $            $        $
External
 revenues by
 market
U.S.               15,509      17,851    11,247           63   44,670
Canada                249         385     1,585       25,419   27,638
Other               4,523       1,335        39            -    5,897
                 -----------------------------------------------------

Total revenues
 from external
 customers         20,281      19,571    12,871       25,482   78,205
                 -----------------------------------------------------

Segment earnings
 before other
 income,
 interest
 expense (net),
 income taxes
 and minority
 interest           1,113       1,106       434          690    3,343
                 -----------------------------------------------------
SunOpta Inc.
Segmented Information
For the three months ended March 31, 2005
(Expressed in thousands of U.S. dollars)
(Unaudited)

                                                    Three months ended
                                                        March 31, 2004
                        ----------------------------------------------
                                                StakeTech
                                                    Steam
                                         Opta   Explosion
                            SunOpta  Minerals   Group and
                         Food Group     Group   Corporate Consolidated
                                  $         $           $            $
External revenues by
 market
U.S.                        35,236     4,135         147       39,518
Canada                      15,567     2,704           -       18,271
Other                        4,713         -           -        4,713
                        ----------------------------------------------

Total revenues to
 external customers         55,516     6,839         147       62,502
                        ----------------------------------------------

Segment earnings before
 other  expense,
 interest expense (net)
 and income taxes            3,191       677        (873)       2,995
                        ----------------------------------------------

Other (expense)                                     (115)        (115)
                        ----------------------------------------------

Segment earnings before
 interest expense (net)
 and income taxes            3,191       677        (988)       2,880
                        ----------------------------------------------

Interest expense, net                                208          208
                        ----------------------------------------------

Provision for income
 taxes                                               802          802
                        ----------------------------------------------

Net earnings (loss)          3,191       677      (1,998)       1,870
                        ----------------------------------------------
                                                    Three months ended
                                                        March 31, 2004
                 -----------------------------------------------------
                     Grains                          Canadian
                      & Soy     SunOpta Packaged         Food  SunOpta
                   Products Ingredients Products Distribution     Food
                      Group       Group    Group        Group    Group
                          $           $        $            $        $
External revenues
 by market
U.S.                14,381      13,277    7,578            -   35,236
Canada                 159         493      914       14,001   15,567
Other                3,143       1,515       55            -    4,713
                  ----------------------------------------------------

Total revenues
 from external
 customers          17,683      15,285    8,547       14,001   55,516
                  ----------------------------------------------------

Segment earnings
 (loss) before
 other expense,
 interest expense
 (net) and
 income taxes          467       1,812     (246)       1,158    3,191
                  ----------------------------------------------------
    CONTACT: SunOpta Inc.
             Jeremy N. Kendall, Steve Bromley, John Dietrich,
             Susan Wiekenkamp, 905-455-2528, ext 103
             swiekenkamp@sunopta.com
             Website: www.sunopta.com

    SOURCE: SunOpta Inc.

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