SunOpta Announces 2005 Year End Results; Reports Record Revenues and Earnings
TORONTO--Feb. 22, 2006--SunOpta Inc. (SunOpta or the Company) (Nasdaq:STKL) (TSX:SOY) today announced results for the year ended December 31, 2005. All amounts are expressed in U.S. dollars.
Revenues in the fourth quarter of 2005 were a record $122,070,000, representing a 48% increase over the comparable quarter in 2004. This represents the 33rd consecutive quarter of record revenue growth versus the comparable quarter in the previous year. Net earnings in the quarter were $1,559,000 or $0.03 per diluted common share, compared to $353,000 or $0.01 per diluted share in the same period in 2004, a 342% increase. Quarterly earnings include the one time impact of costs related to food donations provided for the victims of Hurricane Katrina, costs associated with the flooding of Opta Minerals' New Orleans abrasives plant, fees associated with the Company's new bank financing arrangements completed in the quarter and a non-cash reduction in legal fees previously recorded in a legal suit with a supplier. Diluted earnings per share were $0.04 in the fourth quarter of 2005 prior to these special items.
During the fourth quarter the Company realized significant improvement in the SunOpta Food Group led by growth in oat fiber revenues and operating margin, continued strength in private label aseptically packaged products and cost rationalization initiatives within the SunOpta Canadian Food Distribution Group. The newly formed SunOpta Fruit Group performed well in the quarter, led by strong growth in organic ingredient sales sourced from strategic worldwide partners and growers, and strong growth in natural and organic private label solutions for the North American retail market. Internal growth for the company in the quarter was 18.3% representing the highest quarterly growth rate in 2005.
The contract to provide Europe's largest ethanol producer, Abener Energia, S.A. of Seville, Spain, with patented steam explosion equipment and process technology for the first commercial production facility in the world to convert wheat straw into ethanol remains on plan. The equipment is scheduled for delivery in the spring of 2006.
For the year ended December 31, 2005 the Company achieved record revenues and earnings. Revenues in 2005 increased by 39% to $426,101,000 from $306,251,000 in 2004, led by a 42% increase in revenues within the Company's vertically integrated natural and organic food operations. The Company's annualized revenue growth of 39% was driven by internal growth of 13.5% and growth via acquisitions of 25.5%.
Net earnings for the year were a record $13,558,000 or $0.24 per diluted common share as compared to $11,016,000 or $0.20 per diluted common share in 2004.
Jeremy N. Kendall, Chairman and CEO of SunOpta, commented, "I am very pleased with the improvement in operating earnings in the fourth quarter and satisfied that we have overcome the challenges we faced in our oat fiber and distribution businesses. Looking ahead to 2006 we expect all business units to grow their top and bottom lines. The previously announced contract to provide a major global retailer with aseptic packaged soymilk commenced in January and is going very well. We also expect that the recently announced acquisition of Magnesium Technologies Corporation (Magtech) by Opta Minerals Inc. will significantly add to their growth and profitability in 2006."
The Company continues to be well positioned for future growth with net working capital of $81,734,000 and total assets of $301,482,000. The debt to equity ratio at December 31, 2005 was 0.37:1.00, providing the Company with further financial resources to invest in internal growth and execute its acquisition program.
The Company has previously announced that it expects to achieve revenues of $540,000,000 to $550,000,000 in 2006, an increase of 27% to 29% versus 2005. The increase is based on a combination of expected 20% internal growth and the annualized revenues of acquisitions completed in 2005.
The Company expects to earn $0.26 - $0.30 diluted earnings per common share in 2006, excluding any special items or acquisitions that may be completed during the year. This guidance assumes an effective tax rate of 31%.
The Company will host a conference call at 10:00 AM Eastern Standard Time on Thursday, February 23, 2006, 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) 262-1292 or (719) 457-2680 followed by pass code: 8378224#. 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 February 23 and March 4, 2006, with the toll free dial-in number (888) 203-1112 or (719) 457-0820 followed by pass code: 8378224#.
About SunOpta Inc.
SunOpta Inc. is an operator of high-growth ethical businesses, focused on a healthy products portfolio that promotes the health and well-being of its communities and environmental responsibility. 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 SunOpta BioProcess 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.
Forward-Looking Statements
Certain statements included in this press release may constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to references to business strategies, competitive strengths, goals, capital expenditure plans, business and operational growth plans and references to the future growth of the business. These forward looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its interpretation of current conditions, historical trends and expected future developments as well as other factors that the Company believes are appropriate in the circumstance. However, whether actual results and developments will agree with expectations and predications of the Company is subject to many risks and uncertainties including, but not limited to; general economic, business or market risk conditions; competitive actions by other companies; changes in laws or regulations or policies of local governments, provinces and states as well as the governments of United States and Canada, many of which are beyond the control of the Company. Consequently all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized.
Note: 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 to be filed not later than February 27, 2006.
SunOpta Inc.
Consolidated Statements of Earnings - Unaudited
For the three months ended December 31, 2005 and 2004
(Expressed in thousands of U.S. dollars, except per share amounts)
Three months ended
December 31,
----------------------
2005 2004
$ $ %
Revenues 122,070 82,663 48%
Cost of goods sold 103,011 68,191 51%
----------------------
Gross profit 19,059 14,472 32%
Warehousing and distribution expenses 2,811 1,872 50%
Selling, general and administrative expenses 13,357 10,971 22%
----------------------
Earnings (loss) before the following 2,891 1,629 77%
Interest expense, net (1,335) (409) 226%
Other income (expense) (407) (2,335) -83%
Foreign exchange 823 123 569%
----------------------
(919) (2,621) -65%
----------------------
Earnings before income taxes 1,972 (992) -299%
Provision for (recovery of) income taxes 376 (1,412) -127%
----------------------
Net earnings before minority interest 1,596 420 280%
----------------------
Net earnings for the period 1,559 353 342%
----------------------
----------------------
Earnings per share for the period
Basic 0.03 0.01
----------------
----------------
Diluted 0.03 0.01
----------------
----------------
SunOpta Inc.
Consolidated Statements of Earnings - Unaudited
For the years ended December 31, 2005 and 2004
(Expressed in thousands of U.S. dollars, except per share amounts)
Year-ended
----------------------
2005 2004
$ $ %
Revenues 426,101 306,251 39%
Cost of goods sold 354,603 247,812 43%
----------------------
Gross profit 71,498 58,439 22%
Warehousing and distribution expenses 10,659 6,016 77%
Selling, general and administrative expenses 45,632 37,225 23%
----------------------
Earnings before the following 15,207 15,198 0%
Interest expense, net (3,417) (1,522) 125%
Other income, net 3,571 (12)
Foreign exchange 1,341 565 137%
----------------------
1,495 (969) 254%
----------------------
Earnings before income taxes 16,702 14,229 17%
Provision for income taxes
2,566 3,139 -18%
----------------------
Net earnings before minority interest 14,136 11,090 27%
----------------------
Net earnings for the year 13,558 11,016 23%
----------------------
----------------------
Earnings per share for the year
Basic 0.24 0.20
-----------------
-----------------
Diluted 0.24 0.20
-----------------
-----------------
SunOpta Inc.
Consolidated Balance Sheets - Unaudited
As at December 31, 2005 and 2004
(Expressed in thousands of U.S. dollars)
2005 2004
$ $
Current assets
Cash and cash equivalents 5,455 8,081
Accounts receivable 57,608 38,446
Inventories 88,340 49,537
Prepaid expenses and other current assets 4,194 4,472
Current income taxes recoverable 1,718 2,000
Deferred income taxes 691 421
-----------------
158,006 102,957
Assets held for sale - 208
Property, plant and equipment 77,257 62,411
Goodwill and intangibles 58,262 43,934
Deferred income taxes 4,602 6,831
Other assets 3,355 3,831
-----------------
301,482 220,172
-----------------
Current liabilities
Bank indebtedness 20,799 -
Accounts payable and accrued liabilities 50,688 35,668
Customer and other deposits 544 431
Current portion of long-term debt 3,518 4,819
Current portion of long-term payables 723 1,548
-----------------
76,272 42,466
Long-term debt 55,538 31,003
Long-term payables 472 1,232
-----------------
132,282 74,701
Minority Interest 9,116 1,378
Shareholders' Equity
Capital stock 106,678 105,794
Contributed surplus 3,235 3,330
Retained earnings 40,379 26,821
Cumulative other comprehensive income 9,792 8,148
-----------------
160,084 144,093
-----------------
301,482 220,172
-----------------
SunOpta Inc.
Segmented information - Unaudited
For the three months ended December 31, 2005 and 2004
(Expressed in thousands of U.S. dollars)
Three months ended December 31, 2005
--------------------------------------------------
SunOpta
SunOpta Opta BioProcess
Food Group Minerals and Corporate Consolidated
$ $ $ $
Total revenues from
external customers 111,296 8,562 2,212 122,070
-------------------------------------------------
Segment net earnings
(loss) before other
income , interest
expense (net),
income taxes and
minority interest 4,670 402 (1,358) 3,714
-------------------------------------------------
Other income
(expense) (407)
-------------------------------------------------
Interest expense,
net 1,335
-------------------------------------------------
Provision for income
taxes 376
-------------------------------------------------
Minority interest 37
-------------------------------------------------
Net earnings 1,559
-------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
Three months ended December 31, 2005
--------------------------------------------------------
SunOpta Canadian
Grains & SunOpta SunOpta Food
Foods Ingredients Fruit Distribution SunOpta
Group Group Group Group Food Group
$ $ $ $ $
Total
revenues
from
external
customers 39,842 16,311 29,792 25,351 111,296
--------------------------------------------------------
Segment
earnings
before other
income
(expense),
interest
expense
(net),
income taxes
and minority
interest 2,115 1,118 1,232 205 4,670
--------------------------------------------------------
Three months ended December 31, 2004
--------------------------------------------------
SunOpta
SunOpta Opta BioProcess
Food Group Minerals and Corporate Consolidated
$ $ $ $
Total revenues from
external customers 74,228 8,081 354 82,663
-------------------------------------------------
Segment net earnings
(loss) before other
income, interest
expense (net),
income taxes and
minority interest 2,013 498 (759) 1,752
-------------------------------------------------
Other income
(expense) (2,335)
-------------------------------------------------
Interest expense,
net 409
-------------------------------------------------
Provision (recovery)
for income taxes (1,412)
-------------------------------------------------
Minority interest 67
-------------------------------------------------
Net earnings 353
-------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
Three months ended December 31, 2004
--------------------------------------------------------
SunOpta Canadian
Grains & SunOpta SunOpta Food
Foods Ingredients Fruit Distribution SunOpta
Group Group Group Group Food Group
$ $ $ $ $
Total
revenues
from
external
customers 29,314 15,537 6,210 23,167 74,228
--------------------------------------------------------
Segment
earnings
before other
income,
interest
expense
(net),
income taxes
and minority
interest 668 598 307 440 2,013
--------------------------------------------------------
SunOpta Inc.
Segmented information - Unaudited
For the years ended December 31, 2005 and 2004
(Expressed in thousands of U.S. dollars)
2005
--------------------------------------------------
SunOpta
SunOpta Opta BioProcess
Food Group Minerals and Corporate Consolidated
$ $ $ $
Total revenues from
external customers 386,541 34,659 4,901 426,101
-------------------------------------------------
Segment net earnings
(loss) before other
income , interest
expense (net),
income taxes and
minority interest 16,245 3,808 (3,505) 16,548
-------------------------------------------------
Other income 3,571
-------------------------------------------------
Interest expense,
net 3,417
-------------------------------------------------
Provision for income
taxes 2,566
-------------------------------------------------
Minority interest 578
-------------------------------------------------
Net earnings 13,558
-------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
2005
--------------------------------------------------------
SunOpta Canadian
Grains & SunOpta SunOpta Food
Foods Ingredients Fruit Distribution SunOpta
Group Group Group Group Food Group
$ $ $ $ $
Total
revenues
from
external
customers 148,084 63,953 74,628 99,876 386,541
--------------------------------------------------------
Segment
earnings
before other
income
(expense),
interest
expense
(net),
income taxes
and minority
interest 8,005 3,784 3,165 1,291 16,245
--------------------------------------------------------
2004
--------------------------------------------------
SunOpta
SunOpta Opta BioProcess
Food Group Minerals and Corporate Consolidated
$ $ $ $
Total revenues from
external customers 272,722 32,242 1,287 306,251
-------------------------------------------------
Segment net earnings
(loss) before other
income, interest
expense (net),
income taxes and
minority interest 14,625 3,957 (2,819) 15,763
-------------------------------------------------
Other income
(expense) (12)
-------------------------------------------------
Interest expense,
net 1,522
-------------------------------------------------
Provision for income
taxes 3,139
-------------------------------------------------
Minority interest 74
-------------------------------------------------
Net earnings 11,016
-------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
2004
--------------------------------------------------------
SunOpta Canadian
Grains & SunOpta SunOpta Food
Foods Ingredients Fruit Distribution SunOpta
Group Group Group Group Food Group
$ $ $ $ $
Total
revenues
from
external
customers 120,685 66,301 9,790 75,946 272,722
--------------------------------------------------------
Segment
earnings
before other
income,
interest
expense
(net),
income taxes
and minority
interest 4,346 6,585 94 3,600 14,625
--------------------------------------------------------
CONTACT: SunOpta Inc.
Jeremy N. Kendall, Steve Bromley, John Dietrich,
Susan Wiekenkamp, 905-455-2528, ext 103
email: susan.wiekenkamp@sunopta.com
website: www.sunopta.com
OR
Investment Community Inquiries
Lytham Partners, LLC
Joe Diaz, Robert Blum or Joe Dorame, 602-889-9700
email: diaz@lythampartners.com
SOURCE: SunOpta Inc.