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SunOpta Announces Third Quarter Results

November 02,2005
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.

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