SunOpta Announces Third Quarter Results
TORONTO--Nov. 2, 2005--SunOpta Inc. (NASDAQ:STKL)(TSX:SOY) today announced results for the third quarter and nine months ended September 30, 2005. All amounts are expressed in U.S. dollars.
For the third quarter the Company achieved record revenues of $115 million, up from $80 million in the comparable quarter last year; an increase of 43%. Revenue growth was led by a 47% increase in the Company's vertically integrated food operations.
Net earnings for the third quarter were $2.1 million, or $0.04 per diluted common share, compared to $2.8 million, or $0.05 per diluted common share in the third quarter of the prior year. Net earnings in the third quarter included the first earnings from the Company's steam explosion equipment and process technology contract to Abener Energia, S.A. The Company also realized solid earnings within its newly formed SunOpta Fruit Group segment and continued success with its Packaged Products Group, led by strong sales of private label aseptically packaged products and roasted soy and sunflower products.
The Company recently announced that it was awarded a three-year contract from a major international retailer to provide aseptic packaged soymilk. The Company expects revenues in the range of $20 million annually from this new contract commencing late in fiscal 2005.
Jeremy Kendall, Chairman and Chief Executive Officer of SunOpta stated, "While we were pleased with the top-line results for the quarter and the nine months, we remain focused on improving our bottom-line results. During the quarter we made significant progress aimed at increasing future oat fiber sales and in realizing operational efficiencies in our Toronto-based distribution business. Consequently, we believe we are now much better positioned to deliver improved operational results in the quarters to come."
"Clearly, the fading popularity of the "low-carb" phenomenon has yielded lower oat fiber sales on a year-to-date basis. However, in addition to its nutritional benefits, our oat fiber products provide a functional advantage by adding strength to avoid breakage in products such as taco shells, crackers, pretzels and pet foods. We have seen a steady increase in oat fiber sales throughout the year by manufacturers of these types of products and we have commenced a number of new initiatives to continue to drive growth in this segment. We firmly believe that most of the obstacles in this product category have been largely overcome."
Mr. Kendall continued, "With regards to the consolidation of our Toronto-based distribution operations, throughout the first nine months of the year the Company paid duplicate warehouse costs and maintained extra personnel to support operations as we transitioned our distributors into our new 135,000 square foot state-of-the-art facility. With the three distributors now fully operational at the new facility, duplicate warehouse costs are now virtually eliminated, headcount has been streamlined and the focus on growth has been reinstated. The savings from the consolidation of the distribution operations, as well as other cost reduction initiatives within the Canadian Food Distribution Group are expected to yield annual savings of $3.4 million. We look forward to greater efficiencies and a rededication to driving growth in this business. All in all, we are very well positioned going forward to grow our Company and we look forward to 2006 and beyond with great anticipation."
For the nine months ended September 30, 2005 revenues increased 36% to $304 million, compared to $224 million in the prior year. The Company remains on track to achieve its revenue guidance for fiscal 2005 of $415 million; which would equate to a 36% year-over-year increase. Net earnings for the nine months ended September 30, 2005 were $12.0 million, or $0.21 per diluted common share, compared to $10.7 million, or $0.20 per diluted common share, in the prior year.
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 seven 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 bio-fuel, food processing and pulp 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 2005 and Form 10K report filed March 16, 2005.
SunOpta Inc.
Condensed Consolidated Statements of Earnings and Comprehensive Income
For the three months ended September 30, 2005 and 2004
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
September 30, September 30, %
2005 2004 Change
$ $
----------------------------------------------------------------------
Revenues 114,950 80,142 43%
Cost of goods sold 96,653 64,673 49%
------------------------------------
Gross profit 18,297 15,469 18%
Warehousing and distribution
expenses 2,655 1,547 72%
Selling, general and
administrative expenses 12,218 9,350 31%
------------------------------------
Earnings before the following 3,424 4,572 (25%)
Interest expense, net (1,186) (632) 88%
Other income (expense) 146 (212)
Foreign exchange 438 227 93%
------------------------------------
(602) (617) (2.4%)
------------------------------------
Earnings before income taxes 2,822 3,955 (29%)
Provision for income taxes 601 1,188 (49%)
------------------------------------
Net earnings before minority
interest 2,221 2,767 (20%)
------------------------------------
Minority interest 133 - -
------------------------------------
Net earnings for the period 2,088 2,767 (25%)
------------------------------------
Net earnings per share for the
period
- Basic 0.04 0.05
------------------------------------
------------------------------------
- Diluted 0.04 0.05
------------------------------------
------------------------------------
SunOpta Inc.
Condensed Consolidated Statements of Earnings and Comprehensive Income
For the nine months ended September 30, 2005 and 2004
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
September 30, September 30, %
2005 2004 Change
$ $
----------------------------------------------------------------------
Revenues 304,031 223,588 36%
Cost of goods sold 251,592 179,621 40%
------------------------------------
Gross profit 52,439 43,967 19%
Warehousing and distribution
expenses 7,848 4,144 89%
Selling, general and
administrative expenses 32,274 26,254 23%
------------------------------------
Earnings before the following 12,317 13,569 (9%)
Interest expense, net (2,082) (952) 119%
Other income 3,978 2,155 85%
Foreign exchange 518 442 17%
------------------------------------
2,414 1,645 47%
------------------------------------
Earnings before income taxes 14,731 15,214 (3%)
Provision for income taxes 2,190 4,551 (52%)
------------------------------------
Net earnings before minority
interest 12,541 10,663 18%
------------------------------------
Minority interest 541 - -
------------------------------------
Net earnings for the period 12,000 10,663 13%
------------------------------------
Net earnings per share for the
period
- Basic 0.21 0.20
---------------------------
---------------------------
- Diluted 0.21 0.20
---------------------------
---------------------------
SunOpta Inc.
Condensed Consolidated Balance Sheets
As at September 30, 2005 and December 31, 2004
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
September 30, December 31,
2005 2004
$ $
----------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents 6,054 8,081
Accounts receivable 53,539 38,446
Inventories 79,564 49,537
Prepaid expenses and other current assets 4,622 4,472
Current income taxes recoverable - 2,000
Deferred income taxes 421 421
--------------------------
144,200 102,957
Property, plant and equipment 76,302 62,619
Goodwill and intangibles 57,464 43,934
Deferred income taxes 4,200 6,831
Other assets 3,644 3,831
--------------------------
285,810 220,172
--------------------------
--------------------------
Liabilities
Current liabilities
Bank indebtedness 22,105 -
Accounts payable and accrued liabilities 40,615 35,668
Customer and other deposits 928 431
Current portion of long-term debt 10,559 4,819
Current portion of long-term payables 453 1,548
--------------------------
74,660 42,466
Long-term debt 42,880 31,003
Long-term payables 620 1,232
--------------------------
118,160 74,701
--------------------------
Minority interest 9,079 1,378
--------------------------
Shareholders' Equity
Capital stock 106,451 105,794
Contributed surplus 3,235 3,330
Retained earnings 38,821 26,821
Cumulative other comprehensive income 10,064 8,148
--------------------------
158,571 144,093
--------------------------
285,810 220,172
--------------------------
--------------------------
SunOpta Inc.
Condensed Segment Note to Consolidated Financial Statements
For the three and nine months ended September 30, 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share and
share amounts)
Three months ended
September 30, 2005
-------------------------------------------------
StakeTech
Steam
Opta Explosion
SunOpta Minerals Group and
Food Group Group Corporate Consolidated
$ $ $ $
Total revenues to
external customers 104,484 8,520 1,946 114,950
-------------------------------------------------
Segment earnings
(loss) before
other income
(expense),
interest expense
(net), income
taxes and minority
interest 3,180 948 (266) 3,862
-------------------------------------------------
Other income
(expense) - - 146 146
-------------------------------------------------
Segment earnings
(loss) before
interest expense
(net), income
taxes and minority
interest 3,180 948 (120) 4,008
-------------------------------------------------
Interest expense,
net - - 1,186 1,186
-------------------------------------------------
Provision for
income taxes - - 601 601
-------------------------------------------------
Minority interest - 133 - 133
-------------------------------------------------
Net earnings (loss) 3,180 815 (1,907) 2,088
-------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
Three months ended
September 30, 2005
----------------------------------------------------------
Grains & Canadian
Soy SunOpta SunOpta Packaged Food SunOpta
Products Ingredients Fruit Products Distribution Food
Group Group Group Group Group Group
$ $ $ $ $ $
Total
revenues
from
external
customers 25,629 15,046 27,486 14,002 22,321 104,484
----------------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net),
income
taxes and
minority
interest 323 962 1,264 847 (216) 3,180
----------------------------------------------------------
Nine months ended
September 30, 2005
----------------------------------------------------
StakeTech
Steam
Opta Explosion
SunOpta Minerals Group and
Food Group Group Corporate Consolidated
$ $ $ $
Total revenues
to external
customers 275,245 26,097 2,689 304,031
----------------------------------------------------
Segment earnings
(loss) before
other income
(expense),
interest
expense (net)
and income
taxes and
minority
interest 11,575 3,406 (2,146) 12,835
----------------------------------------------------
Other income
(expense) - - 3,978 3,978
----------------------------------------------------
Segment
earnings before
interest
expense (net),
income taxes
and minority
interest 11,575 3,406 1,832 16,813
----------------------------------------------------
Interest
expense, net - - 2,082 2,082
----------------------------------------------------
Provision for
income taxes - - 2,190 2,190
----------------------------------------------------
Minority
interest 104 437 - 541
----------------------------------------------------
Net earnings
(loss) 11,471 2,969 (2,440) 12,000
----------------------------------------------------
SunOpta Inc.
Condensed Segment Note to Consolidated Financial Statements
For the three and nine months ended September 30, 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share and
share amounts)
The SunOpta Food Group has the following segmented reporting:
Nine months ended
September 30, 2005
----------------------------------------------------------
Grains & Canadian
Soy SunOpta SunOpta Packaged Food SunOpta
Products Ingredients Fruit Products Distribution Food
Group Group Group Group Group Group
$ $ $ $ $ $
Total
revenues
from
external
customers 74,214 45,398 41,584 39,524 74,525 275,245
-----------------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net),
income
taxes and
minority
interest 3,718 2,931 2,051 1,789 1,086 11,575
-----------------------------------------------------------
Three months ended
September 30, 2004
----------------------------------------------------
StakeTech
Steam
SunOpta Opta Explosion
Food Minerals Group and
Group Group Corporate Consolidated
$ $ $ $
Total revenues
to external
customers 71,317 8,330 495 80,142
----------------------------------------------------
Segment earnings
(loss) before
other income
(expense),
interest
expense (net),
and income
taxes 3,900 1,092 (193) 4,799
----------------------------------------------------
Other income
(expense) - - (212) (212)
----------------------------------------------------
Segment earnings
before interest
expense (net)
and income
taxes 3,900 1,092 (405) 4,587
----------------------------------------------------
Interest
expense, net - - 632 632
----------------------------------------------------
Provision for
income taxes - - 1,188 1,188
----------------------------------------------------
Net earnings
(loss) 3,900 1,092 (2,225) 2,767
----------------------------------------------------
The SunOpta Food Group
has the following Three months ended
segmented reporting: September 30, 2004
----------------------------------------------------------
Grains & Canadian
Soy SunOpta SunOpta Packaged Food SunOpta
Products Ingredients Fruit Products Distribution Food
Group Group Group Group Group Group
$ $ $ $ $ $
Total
revenues
from
external
customers 23,207 17,353 995 10,388 19,374 71,317
---------------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net) and
income
taxes 341 2,537 6 420 596 3,900
---------------------------------------------------------
SunOpta Inc.
Condensed Segment Note to Consolidated Financial Statements
For the three and nine months ended September 30, 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share and
share amounts)
Nine months ended
September 30, 2004
-----------------------------------------------------
StakeTech
Steam
Opta Explosion
SunOpta Minerals Group and
Food Group Group Corporate Consolidated
$ $ $ $
Total revenues
to external
customers 198,494 24,161 933 223,588
-----------------------------------------------------
Segment earnings
(loss) before
other income
(expense),
interest
expense (net)
and income
taxes 12,612 3,459 (2,060) 14,011
-----------------------------------------------------
Other income
(expense) - - 2,155 2,155
-----------------------------------------------------
Segment
earnings before
interest
expense (net)
and income
taxes 12,612 3,459 95 16,166
-----------------------------------------------------
Interest
expense, net - - 952 952
-----------------------------------------------------
Provision for
income taxes - - 4,551 4,551
-----------------------------------------------------
Net earnings
(loss) 12,612 3,459 (5,408) 10,663
-----------------------------------------------------
The SunOpta Food Group
has the following Nine months ended
segmented reporting: September 30, 2004
----------------------------------------------------------
Grains & Canadian
Soy SunOpta SunOpta Packaged Food SunOpta
Products Ingredients Fruit Products Distribution Food
Group Group Group Group Group Group
$ $ $ $ $ $
Total
revenues
from
external
customers 65,520 49,326 995 29,877 52,776 198,494
---------------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net) and
income
taxes 1,912 6,634 6 926 3,134 12,612
---------------------------------------------------------
Effective July 1, 2005, the Company expanded its segment reporting within the SunOpta Food Group to include the SunOpta Fruit Group consisting of the Company's wholly-owned subsidiaries Organic Ingredients Inc., Cleugh's Frozen Foods, Inc. and Pacific Fruit Processors, Inc. During the three months ended March 31, 2005 and June 30, 2005 the SunOpta Fruit Group revenue was $5,143 and $8,955 respectively. Segment earnings before other income (expense), interest expense (net) and income taxes was $277 and $510, respectively. The Fruit Group was previously recorded within the SunOpta Ingredients Group.
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
OR
Investment Community Inquiries:
Lytham Partners, LLC
Joe Diaz, Robert Blum, Joe Dorame, 602-889-9700
email: diaz@lythampartners.com
SOURCE: SunOpta Inc.