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SunOpta Announces First Quarter 2009 Results

May 07,2009

TORONTO, May 7, 2009 (GlobeNewswire via COMTEX News Network) -- SunOpta Inc. ("SunOpta" or "the Company") (Nasdaq:STKL) (TSX:SOY), a leading global company focused on natural, organic and specialty foods and natural health products, today announced financial results for the first quarter ended March 31, 2009. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.

For the first three months of 2009, the Company realized its 46th consecutive quarter of increased revenues versus the same quarter in the previous year. Revenues in the first quarter of 2009 were $232.1 million versus first quarter 2008 revenues of $230.4 million. These results reflect an $8.4 million increase in revenues from the SunOpta Food Group, offset by declines in revenue in non-core businesses of $6.7 million.

The main driver of the increase in revenues in the first quarter of 2009 as compared to the 2008 first quarter in the SunOpta Food Group was the positive contribution in the quarter of the April 2008 acquisition of The Organic Corporation, offset by year over year foreign exchange rate changes versus the U.S. dollar and the impact of declines in commodity prices that have a direct correlation on selling prices, totaling $15.9 million. Revenues in the first quarter were impacted by a number of factors related to the economic downturn combined with significant inventory de-leveraging that has been reported from consumers through retailers, branded product suppliers and food manufacturers.

For the first quarter of 2009, the Company realized a loss of ($1.7) million or ($0.03) per diluted common share versus earnings of $1.5 million or $0.02 per diluted common share in the first quarter of 2008. These results include an unfavorable pre-tax increase in foreign exchange loss of $1.0 million versus the first quarter of 2008 plus $2.4 million of additional pre-tax costs which were realized during the first quarter of 2009.

Adjusted earnings(1) for the first quarter of 2009 were ($0.1) million or $0.00 per diluted common share after adjusting for the additional pre-tax costs of $2.4 million which were incurred during the quarter and are expected to provide significant future benefits to the Company. During the quarter the Company incurred approximately $1.0 million pre-tax in start-up costs related to its Modesto soymilk processing and packaging facility which is scheduled to begin production in mid to late May 2009. The Company also incurred pre-tax severance and related costs of approximately $0.7 million within a number of its operating segments as it continues to position these operations for improved future performance. Also during the quarter the Company incurred pre-tax costs of approximately $0.4 million investing in new packaging, new formulations and new products intended to revitalize a number of company owned natural health products brands. These new products are expected to come to the market during the second quarter of 2009 and are expected to drive incremental volumes and contribution going forward.

Segment operating income(2) for the first quarter of 2009 reflects a loss of ($0.4) million as compared to income of $5.4 million in the first quarter of 2008, reflecting positive segment operating income in core Food Group operations, offset by the combined effect of losses in non-core businesses and Corporate costs. Segment operating income reflects reduced volumes and margins due in part to inventory de-leveraging and current economic conditions, unfavourable foreign exchange and the impact of the additional costs that were incurred in the quarter.

At March 31, 2009 the Company's balance sheet reflects a current working capital ratio of 1.70 to 1.00, long-term debt to equity ratio of 0.48 to 1.00 and total debt to equity ratio of 0.83 to 1.00. The Company has total assets of $573.7 million and a net book value of $3.42 per outstanding share.

During the three month period ended March 31, 2009, cash utilized to fund working capital decreased $7.0 million versus the first quarter of 2008, indicative of efforts to reduce working capital, especially inventories, across the Company. Net cash utilized by operating activities of $4.5 million reflects a small improvement versus cash utilized in the three month period ended March 31, 2008. Cash and short-term investments were $23.9 million at the end of the quarter versus $24.8 million at December 31, 2008. During the first quarter of 2009, the Company reduced net long-term debt by $3.3 million as compared to a net increase of $5.1 million in the first quarter of 2008.

The Company has reached an agreement with its lending syndicate to extend the term on its operating facilities, scheduled for renewal on June 30, 2009, through to December 31, 2009. As part of this agreement the Company has negotiated a waiver of financial covenants for the first quarter of 2009 and amended certain covenants for the balance of the fiscal year. The Company has started the process to convert its current operating lines to facilities which will provide more flexibility and better utilize the Company's strong asset base, and is targeting to complete this process no later than the end of the current fiscal year.

Consistent with the Company's efforts to meet best standards in corporate governance, the Board today approved certain changes to the Company's Employee Stock Purchase Plan ("Plan") to ensure compliance with recommendations made by the Risk Metrics Group, ISS Governance Services. In particular, the revised Plan now requires shareholder approval for matters relating to changes in employee contribution limits and to the discount factor applied to the exercise price.

Steve Bromley, President and Chief Executive Officer of SunOpta commented: "The Company's primary focus for 2009 remains the improvement of operating margins and return on assets employed through working capital management and a tight focus on capital spending. The first quarter was marked by continued consumer uncertainty and market volatility resulting from the deterioration in global economic conditions. While market conditions were difficult, we have remained focused on numerous cost control, efficiency, product development and asset utilization initiatives that we believe will position the Company for improved returns. We remain confident that our core food operations are well positioned as interest in health and wellness continues to increase around the globe."

As previously announced, as a result of uncertain and rapidly changing world-wide macroeconomic conditions, the Company has decided to take a cautious approach with regards to providing guidance, and in doing so has not provided specific revenue and earnings guidance for 2009. The Company will continue to provide updates when appropriate related to material changes in business affairs resulting from changes in the business and related economic conditions.

SunOpta will host a conference call at 10:00 am Eastern Time on Friday May 8, 2009 to discuss these results and recent corporate developments. The conference call can be accessed toll-free by dialing 1-866-322-1159 or 416-640-3404 followed by pass code 8639140#. Additionally, the call may be accessed via a link at the Company's website at www.sunopta.com. A replay number can also be accessed between May 8th and May 18th with the toll-free dial-in number 1-888-203-1112 or 647-436-0148 followed by pass code 8639140#.

About SunOpta Inc.

SunOpta Inc. is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food and natural health markets. 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; Opta Minerals Inc. (TSX:OPM) (66.5% owned by SunOpta), a producer, distributor, and recycler of environmentally friendly industrial materials; and SunOpta BioProcess Inc. which engineers and markets proprietary steam explosion technology systems for the bio-fuel, pulp and food processing industries. Each of these business units has proprietary products and services that give it a solid competitive advantage in its sector.

The SunOpta Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3958

Forward-Looking Statements

Certain statements included in this press release may be considered "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, which are based on information available to us on the date of this release. These forward-looking statements include, but are not limited to, management's expectations regarding future benefits of additional tax costs, intended revitalization of a number natural health products brands, incremental volumes and contribution, benefits of new banking arrangements as well as cost cutting and restructuring measures, and overall improved returns for 2009. The terms and phrases "expected", "continues", "intended", "scheduled", "future performance", "will", 'targeting", "positioned", "remain focused", "believe", "confident" and other similar terms and phrases are intended to identify these forward looking statements. Forward looking statements are based on information available to us on the date of this release and are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors the Company believes are appropriate in the circumstances including, but not limited to, general economic conditions, applicable tax legislation, consumer trends, preferences and spending patterns, product pricing levels, current customer demand, competitive intensity, cost rationalization, product development initiatives, supply contracts and discussions with the Company's lenders to date. Whether actual timing and results will agree with expectations and predications of the Company is subject to many risks and uncertainties including, but not limited to, global economic conditions, consumer spending patterns, decreases in customer demand, potential failure of product development initiatives, availability and pricing of raw materials and supplies, potential refusal or inability of lenders to amend the Company's credit facilities and/or continue to waive certain covenants and other risks described from time to time under "Risk Factors" in the Company's Annual Report of Form 10-K and its Quarterly Reports on Form 10-Q (available at www.sec.gov). 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.

(1) Adjusted earnings is not a GAAP measure. SunOpta believes adjusted earnings (adjusted for the impact of the professional fees and severance costs incurred in relation to the investigation and related activities, additional start up and operational costs plus the non-cash charges for goodwill impairment and tax valuation allowances) provides useful information to understand the underlying performance of the business and as a result these items have been adjusted. A reconciliation of this non-GAAP measure to GAAP is included on the last page of this release.

(2) Segment Operating Income is defined as "Earnings Before the Following" excluding the impact of "Other expense, net".

 SunOpta Inc.
 Condensed Consolidated Statements of Operations
 For the three month periods ended March 31, 2009 and 2008
 (expressed in thousands of U.S. dollars)
 (unaudited)
 ---------------------------------------------------------------------

                                          March 31, March 31,
                                              2009      2008
                                                 $         $

 Revenues                                  232,074   230,444      0.7%

 Cost of goods sold                        198,427   190,243      4.3%
                                          --------  --------

 Gross profit                               33,647    40,201    -16.3%

 Warehousing and distribution expenses       4,461     5,446    -18.1%
 Selling, general and administrative
  expenses                                  26,852    27,811     -3.4%
 Intangible amortization                     1,431     1,258     13.8%
 Other income, net                            (186)       --       n/m
 Foreign exchange loss                       1,263       288    338.5%
                                          --------  --------

 (Loss) earnings before the following         (174)    5,398   -103.2%

 Interest expense, net                       2,871     2,900     -1.0%

                                          --------  --------
 (Loss) earnings before income taxes        (3,045)    2,498   -221.9%

 (Recovery of) provision for income taxes   (1,066)      649   -264.3%
                                          --------  --------

 (Loss) earnings for the period             (1,979)    1,849   -207.0%
                                          --------  --------

 (Loss) earnings for the period
  attributable to non-controlling
  interests                                   (322)      363   -188.7%
                                          --------  --------

 (Loss) earnings for the period
  attributable to SunOpta Inc.              (1,657)    1,486   -211.5%
                                          --------  --------


 (Loss) earnings per share for the period

    Basic                                 $  (0.03) $   0.02
                                          --------  --------
    Diluted                               $  (0.03) $   0.02
                                          --------  --------


 SunOpta Inc.
 Condensed Balance Sheet
 As at March 31, 2009 and December 31, 2008
 (expressed in thousands of U.S. dollars)
 (unaudited)

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

                                               March 31,   December 31,
                                                   2009           2008
                                                      $              $
 Assets

 Current Assets
 Cash and cash equivalents                          7,405       24,755
 Short-term investments                            16,500           --
 Accounts receivable                              101,442       95,129
 Inventories                                      190,435      200,689
 Prepaid expenses and other current assets         14,267       14,448
 Current income taxes recoverable                     540          595
 Deferred income taxes                              4,558          493
                                              -----------  -----------
                                                  335,147      336,109

 Property, plant and equipment                    110,765      110,641
 Goodwill                                          52,805       54,022
 Intangible assets                                 60,676       63,161
 Deferred income taxes                             12,900       16,160
 Other assets                                       1,384          954
                                              -----------  -----------
                                                  573,677      581,047
                                              -----------  -----------

 Liabilities

 Current liabilities
 Bank indebtedness                                 76,228       67,164
 Accounts payable and accrued liabilities         100,968      106,989
 Customer and other deposits                        2,606        1,228
 Other current liabilities                          3,760        4,437
 Current portion of long-term debt                 13,266       12,174
 Current portion of long-term liabilities             845        1,362
                                              -----------  -----------
                                                  197,673      193,354

 Long-term debt                                    94,066       99,353
 Long-term liabilities                              4,858        5,017
 Deferred income taxes                             13,288       13,614
                                              -----------  -----------
                                                  309,885      311,338

 Preferred shares of a subsidiary company          27,894       27,796

 Equity
 SunOpta Inc. Shareholders' Equity
  Capital stock                                   178,056      177,858
   64,692,661 common shares (2008-64,493,320)
  Additional paid in capital                        7,031        6,778
  Retained earnings                                39,252       40,909
  Accumulated other comprehensive (loss)
   income                                          (2,922)       1,266
                                              -----------  -----------
  Total SunOpta Inc. Shareholders' Equity         221,417      226,811
 Non-controlling interest                          14,481       15,102
                                              -----------  -----------
 Total Equity                                     235,898      241,913
                                              -----------  -----------
                                                  573,677      581,047
                                              -----------  -----------





 SunOpta Inc.
 Condensed Consolidated Statements of Cash Flows
 For the three month periods ended March 31, 2009 and 2008
 (expressed in thousands of U.S. dollars)
 (unaudited)
 ---------------------------------------------------------------------

                                                  March 31,  March 31,
                                                       2009       2008
                                                          $          $

 Cash provided by (used in)

 Operating activities
 (Loss) earnings for the period                     (1,979)     1,849
 Items not affecting cash
   Amortization                                      4,731      4,378
   Unrealized gain on foreign exchange                (525)        --
   Deferred income taxes                            (1,798)       488
   Other                                              (475)        62
 Changes in non-cash working capital                (4,474)   (11,427)
                                                  ---------  ---------
                                                    (4,520)    (4,650)
                                                  ---------  ---------

 Investing activities
 Increase in short-term investment                 (16,500)      --
 Payment of deferred purchase consideration           (500)      (500)
 Purchases of property, plant and equipment         (4,588)    (2,366)
 Purchase of patents, trademarks and other
  intangible assets                                    (64)       (90)
 Other                                                  50         52
                                                  ---------  ---------
                                                   (21,602)    (2,904)
                                                  ---------  ---------

 Financing activities
 Borrowings under long-term debt                       716     13,075
 Repayment of long-term debt                        (4,019)    (7,957)
 Increase in line of credit facilities              12,002      4,852
 Proceeds from the issuance of common shares           198        219
 Other                                                  69         84
                                                  ---------  ---------
                                                     8,966     10,273
                                                  ---------  ---------

 Foreign exchange loss on cash held in a foreign
  subsidiary                                          (194)       (20)
                                                  ---------  ---------

 (Decrease) increase in cash and cash equivalents
  during the period                                (17,350)     2,699

 Cash and cash equivalents - beginning of period    24,755     30,302
                                                  ---------  ---------

                                                  ---------  ---------
 Cash and cash equivalents - end of period           7,405     33,001
                                                  ---------  ---------


 SunOpta Inc.
 Segmented Information
 For the three month periods ended March 31, 2009 and 2008
 (expressed in thousands of U.S. dollars)
 (unaudited)
 ---------------------------------------------------------------------
                                                    Three Months Ended
                                                        March 31, 2009
                  ----------------------------------------------------
                  SunOpta
                   Food     Opta     SunOpta    Corporate
                   Group  Minerals  BioProcess  Services  Consolidated
                     $       $          $           $          $
                  ----------------------------------------------------

 Total revenues
  from external
  customers       217,336   14,725         13         --      232,074

 Segment operating
  income (loss)     2,746     (752)      (758)    (1,596)        (360)
          ------------------------------------------------------------


 The SunOpta Food Group has the following segmented reporting:

          -------------------------------------------------------------
                                                     Three Months Ended
                                                         March 31, 2009
          -------------------------------------------------------------
           SunOpta                       Inter-
           Grains              SunOpta  national                SunOpta
             and     SunOpta    Fruit   Sourcing     SunOpta     Food
            Foods  Ingredients  Group   & Trading  Distribution  Group
              $         $         $         $           $          $
          -------------------------------------------------------------

 Total
  revenues
  from
  external
  customers 74,339     13,540   37,602    35,183       56,672   217,336

Segment
 operating
 income
 (loss)      3,935        822   (1,157)   (1,172)        318      2,746
          -------------------------------------------------------------


 ---------------------------------------------------------------------
                                                    Three Months Ended
                                                        March 31, 2008
                  ----------------------------------------------------
                  SunOpta
                   Food     Opta     SunOpta    Corporate
                   Group  Minerals  BioProcess  Services  Consolidated
                     $       $          $           $          $
                  ----------------------------------------------------

 Total revenues
  from external
  customers       208,942   21,370        132         --      230,444

 Segment operating
  income (loss)     6,228    2,004       (882)    (1,952)       5,398
                  ----------------------------------------------------


 The SunOpta Food Group has the following segmented reporting:

          -------------------------------------------------------------
                                                     Three Months Ended
                                                         March 31, 2008
          -------------------------------------------------------------
           SunOpta                       Inter-
           Grains              SunOpta  national                SunOpta
             and     SunOpta    Fruit   Sourcing     SunOpta     Food
            Foods  Ingredients  Group   & Trading  Distribution  Group
              $         $         $         $           $          $
          -------------------------------------------------------------



 Total
  revenues
  from
  external
  customers 72,555     16,948   37,168    12,729       69,542   208,942

Segment
 operating
 income
 (loss)      5,493      1,018   (4,068)      260        3,525     6,228
          -------------------------------------------------------------


 SunOpta Inc.
 Non-GAAP Reconciliation
 For the three month periods ended March 31, 2009 and 2008
 (expressed in thousands of U.S. dollars)
 (unaudited)

                                For the Three Months Ended March 31,
 ---------------------------------------------------------------------
                                2009                  2009      2008
                                GAAP   Adjustments  Adjusted  Adjusted
                              ----------------------------------------

 Revenues                     232,074          --   232,074    230,444
 Cost of goods sold           198,427      (1,000)  197,427    190,243
                              ----------------------------------------
                               33,647       1,000    34,647     40,201

 Warehousing and distribution
  expenses                      4,461          --     4,461      5,446
 Selling, general and
  administrative expense       26,852      (1,372)   25,480     26,443
 Intangible asset amortization  1,431          --     1,431      1,258
 Other income, net               (186)         --      (186)        --
 Foreign exchange loss          1,263          --     1,263        288
                              ----------------------------------------

 (Loss) earnings before the
  following                      (174)      2,372     2,198      6,766

 Interest expense, net          2,871          --     2,871      2,900
                              ----------------------------------------
 (Loss) earnings before income
  taxes                        (3,045)      2,372      (673)     3,866

 (Recovery of) provision for
  income taxes                 (1,066)        830      (236)     1,080
                              ----------------------------------------

 (Loss) earnings for the
  period                       (1,979)      1,542      (437)     2,786

 (Loss) earnings for the
  period attributable to
  non-controlling interests      (322)         --      (322)       363
                              ----------------------------------------
 (Loss) earnings for the
  period attributable to
  SunOpta Inc.                 (1,657)      1,542      (115)     2,423
                              ========================================

 (Loss) earnings per share for
  the period
                              ----------------------------------------
   Basic                        (0.03)       0.03        --       0.04
                              ----------------------------------------
   Diluted                      (0.03)       0.03        --       0.04
                              ----------------------------------------


                            Three Months Ended     Three Months Ended
                              March 31, 2009         March 31, 2008
                          --------------------------------------------
                          Impact on  Impact on   Impact on  Impact on
                            (loss)   (recovery     (loss)   (recovery
                           earnings     of)       earnings     of)
                            before   provision     before   provision
                            income   for income    income   for income
                            taxes      taxes       taxes      taxes
                          --------------------------------------------

 Non-recurring start-up
  and operational costs       1,000         350         --          --
                          --------------------------------------------
 Cost of sales                1,000         350         --          --
                          --------------------------------------------

 Severance costs and
  related plant closure
  expenses                      742         260         --          --
 Up front marketing costs
  in support of brand
  re-launches                   431         151         --          --
 Professional fees
  incurred in relation to
  the internal
  investigation                 199          70      1,368         431
                          --------------------------------------------
 Selling, general and
  administrative expense      1,372         480      1,368         431
                          --------------------------------------------

                          --------------------------------------------
 Total adjustments            2,372         830      1,368         431
                          ============================================

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: SunOpta Inc.

SunOpta Inc.
          Jeremy N. Kendall, Chairman
          Steve Bromley, President & CEO
          Eric Davis, Vice President & CFO
          Tony Tavares, Chief Operating Officer
          Susan Wiekenkamp, Information Officer
            905-455-2528, ext 103
            susan.wiekenkamp@sunopta.com
          www.sunopta.com

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