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.