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SunOpta Announces Record First Quarter 2012 Results

May 08,2012

TORONTO, May 8, 2012 (GLOBE NEWSWIRE) -- SunOpta Inc. ("SunOpta" or "the Company") (Nasdaq:STKL) (TSX:SOY), a leading global company focused on natural, organic and specialty foods, today announced financial results for the quarter ended March 31, 2012. 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 quarter of 2012, the Company reported quarterly revenues of $274.5 million versus revenues of $260.6 million for the quarter ended April 2, 2011, a year over year increase of 5.4%. These revenues represent record first quarter revenues for the Company. Excluding the impact of changes including foreign exchange rates, commodity-related pricing, the impact of acquisitions and rationalized product lines, revenues increased approximately 7.0% on a consolidated basis. The increase in consolidated revenues in the first quarter was driven by strong growth in integrated packaged food product categories within SunOpta Foods and the steel products segment within Opta Minerals Inc. These increases were somewhat offset by the effect of product rationalizations in SunOpta Foods which in turn led to improved earnings, plus decreased volumes across certain ingredient categories.  

Operating income1 for the first quarter of 2012 increased to $13.4 million or 4.9% of revenues versus $11.6 million or 4.5% of revenues in the prior year, a year over year increase of 15.8%. This increase was driven by improved operating income in both SunOpta Foods and Opta Minerals Inc. Within SunOpta Foods the Grains and Foods Group, Consumer Products Group and International Foods Group all realized improved operating income1 versus the prior year.

For the first quarter of 2012, the Company reported earnings per diluted common share from continuing operations of $0.09 or earnings of $6.1 million, as compared to $0.08 or earnings of $5.4 million for the quarter ended April 2, 2011. After accounting for a loss from discontinued operations, earnings for the first quarter of 2012 were $5.9 million or $0.09 per diluted common share versus $5.1 million or $0.08 per diluted common share in the prior year.  With the exception of the first quarter of 2005 when the Company realized a large one-time gain, these first quarter results are a record for the Company.

For the quarter ended March 31, 2012, the Company realized EBITDA1 of $18.3 million as compared to $16.4 million for the quarter ended April 2, 2011.

At March 31, 2012, the Company's balance sheet reflects a current ratio of 1.38 to 1.00, long-term debt to equity ratio of 0.21 to 1.00 and total debt to equity ratio of 0.64 to 1.00. At March 31, 2012 the Company has total debt outstanding of $196.2 million, total assets of $669.3 million and a net book value of $4.66 per outstanding share. During the quarter the Company used cash from operating activities of $7.3 million versus $33.9 million in the prior year, indicative of ongoing efforts to leverage resources within the Company plus the impact of increased commodity costs realized in the first quarter of 2011.

Steve Bromley, President and Chief Executive Officer of SunOpta commented, "We are very pleased with our first quarter results as they reflect both continued growth in our core natural and organic foods categories, plus the positive impact of operational improvements which we have continued to implement. During the first quarter we took a number of steps to streamline our operations and organization structure and we are pleased with our results to date. We remain confident in our focus on natural and organic foods and our strategy to improve operating margins, earnings predictability and return on assets."

The Company plans to host a conference call at 10:00 A.M. Eastern Time on Wednesday May 9th, 2012 to discuss the results for the first quarter of 2012 and recent corporate developments. The conference call can be accessed via a link at the Company's website at www.sunopta.com. Additionally, the call may be accessed with the toll free dial-in number 1-877-312-9198 or 631-291-4622. A replay number can also be accessed between May 9th and 16th with the toll free dial-in number 1—855-859-2056 or 404-537-3406 followed by pass code: 73382554#.

1See discussion of non-GAAP measures

About SunOpta Inc.

SunOpta Inc. is a leading global company focused on natural, organic and specialty foods products. The company specializes in sourcing, processing and packaging of natural and organic food products, integrated from seed through packaged products; with a focus on strategically vertically integrated business models. The Company's core natural and organic food operations focus on value-added grains, fiber and fruit based product offerings, supported by a global infrastructure. The company has two non-core holdings, a 66.2% ownership position in Opta Minerals Inc., listed on the Toronto Stock Exchange, a producer, distributor, and recycler of environmentally friendly industrial materials; and a minority ownership position in Mascoma Corporation, an innovative biofuels company.

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, our continued growth in our core natural and organic foods, the positive impact of operating improvements and our strategy to improve earnings predictability, operating margins and return on assets. The terms and phrases "continue", "improve", "remain 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, consumer interest in health and wellness, product pricing levels, current customer demand, planned facility and operational expansions, competitive intensity, cost rationalization and product development initiatives. 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 and changes in market trends, decreases in customer demand, potential failure of product development, working capital management and continuous improvement initiatives, availability and pricing of raw materials and supplies, and other risks described from time to time under "Risk Factors" in the Company's Annual Report on 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.

SunOpta Inc.      
Consolidated Statements of Operations       
For the quarters ended March 31, 2012 and April 2, 2011      
Unaudited      
(Expressed in thousands of U.S. dollars, except per share amounts)      
       
 Quarter ended Quarter ended  
 March 31, 2012 April 2, 2011 Change
 $ $ %
       
Revenues 274,542   260,589  5.4%
      
Cost of goods sold  237,204   225,055  5.4%
      
Gross profit 37,338   35,534  5.1%
      
Selling, general and administrative expenses 22,549   22,405  0.6%
Intangible asset amortization 1,273   1,385  -8.1%
Other expense, net  368   362  1.7%
Foreign exchange loss 71   135  -47.4%
      
Earnings from continuing operations before the following  13,077   11,247  16.3%
      
Interest expense, net 2,583   1,984  30.2%
      
Earnings from continuing operations before income taxes 10,494  9,263  13.3%
      
Provision for income taxes 3,831  3,224  18.8%
      
Earnings from continuing operations 6,663  6,039  10.3%
      
Loss from discontinued operations, net of income taxes(224) (291) 23.0%
      
Earnings6,439  5,748  12.0%
      
Earnings attributable to non-controlling interests547  667  -18.0%
    
Earnings attributable to SunOpta Inc.5,892  5,081  16.0%
     
Earnings per share — basic     
-from continuing operations 0.09  0.08  
-from discontinued operations --  --  
  0.09  0.08  
      
Earnings per share — diluted      
-from continuing operations 0.09  0.08  
-from discontinued operations --  --  
  0.09  0.08  
       
       
SunOpta Inc.    
Consolidated Balance Sheets    
As at March 31, 2012 and April 2, 2011    
Unaudited    
(Expressed in thousands of U.S. dollars, except per share amounts)    
     
 March 31, 2012 April 2, 2011
 $ $
     
ASSETS    
     
Current assets    
Cash and cash equivalents  3,729  2,378 
Accounts receivable 113,221  94,177 
Inventories  237,965  240,852 
Prepaid expenses and other current assets 21,437  21,625 
Current income taxes recoverable 1,501   1,503 
Deferred income taxes 4,834  4,773 
 382,687  365,308 
    
Investments  33,845   33,845 
Property, plant and equipment 126,066   120,734 
Goodwill  57,276   49,387 
Intangible assets 57,214   48,624 
Deferred income taxes 10,875   11,751 
Other assets 1,360   1,854 
    
  669,323  631,503 
    
LIABILITIES   
    
Current liabilities   
Bank indebtedness  130,368  109,718 
Accounts payable and accrued liabilities 104,459  120,228 
Customer and other deposits 6,225  843 
Income taxes payable 2,067  1,229 
Other current liabilities 1,181  1,419 
Current portion of long-term debt  32,444  35,198 
Current portion of long-term liabilities 890  995 
 277,634  269,630 
    
Long-term debt  33,383   17,066 
Long-term liabilities 6,518   5,586 
Deferred income taxes 28,597   24,273 
  346,132  316,555 
    
    
EQUITY   
SunOpta Inc. shareholders' equity   
Capital Stock  182,269  182,108 
65,835,327 common shares (December 31, 2011 - 65,796,398)   
Additional paid in capital  14,718  14,134 
Retained earnings 106,400  100,508 
Accumulated other comprehensive income 3,376  2,382 
  306,763   299,132 
Non-controlling interest 16,428  15,816 
Total equity 323,191   314,948 
    
  669,323   631,503 
     
SunOpta Inc.    
Consolidated Statements of Cash Flows    
For the quarters ended March 31, 2012 and April 2, 2011    
Unaudited    
(Expressed in thousands of U.S. dollars, except per share amounts)    
     
 Quarter ended Quarter ended
 March 31, 2012 April 2, 2011
 $ $
     
Cash provided by (used in)    
     
Operating activities    
Earnings 6,439   5,748 
Loss from discontinued operations(224) (291)
Earnings from continuing operations 6,663   6,039 
    
Items not affecting cash   
Depreciation and amortization 4,853   4,833 
Unrealized loss on foreign exchange 102   723 
Deferred income taxes 2,331   1,476 
Stock-based compensation 588   429 
Unrealized loss (gain) on derivative instruments 682  (3,685)
Other 341  (389)
Changes in non-cash working capital, net of business acquired(22,657) (42,844)
Net cash flows from operations - continuing operations(7,097) (33,418)
Net cash flows from operations - discontinued operations(161) (485)
 (7,258) (33,903)
Investing activities   
Acquisition of business(17,530)  -- 
Purchases of property, plant and equipment(4,932) (3,909)
Purchases of patents, trademarks and other intangible assets(25) (81)
Other(77)  -- 
Cash from investing activities - continuing operations(22,564) (3,990)
     
Financing activities   
Increase in line of credit facilities 19,008   42,551 
Borrowings under long-term debt 19,088   37 
Proceeds from the issuance of common shares 157   213 
Repayment of long-term debt(7,030) (2,004)
Financing costs(91) (25)
Other(3)  28 
Cash from financing activities - continuing operations 31,129   40,800 
    
Foreign exchange gain on cash held in a foreign currency 44   170 
    
Increase in cash and cash equivalents during the period 1,351   3,077 
    
Discontinued operations cash activity included above:   
Add: Balance included at beginning of period --   308 
Less: Balance included at end of period --  (212)
    
Cash and cash equivalents - beginning of the period 2,378   2,335 
    
Cash and cash equivalents - end of the period 3,729   5,508 
     
SunOpta Inc.          
Segmented Information          
For the quarters ended March 31, 2012 and April 2, 2011        
Unaudited          
(Expressed in thousands of U.S. dollars)          
 
 
         Quarter ended
         March 31, 2012
    SunOpta   Corporate  
    Foods Opta Minerals Services Consolidated
    $ $ $ $
Total revenues from external customers   246,210  28,332  -- 274,542
Segment Operating Income (Loss)   12,011  3,081 (1,647) 13,445 
           
SunOpta Foods has the following segmented reporting:        
 
         Quarter ended
         March 31, 2012
  Grains and Ingredients Consumer Products International SunOpta
  Foods Group Group Group Foods Group Foods
  $ $ $ $ $
Total revenues from external customers 121,175  21,649  45,152  58,234 246,210 
Segment Operating Income (Loss) 8,386  1,229 (175) 2,571  12,011 
 
          Quarter ended
          April 2, 2011
    SunOpta   Corporate  
    Foods Opta Minerals Services Consolidated
    $ $ $ $
Total revenues from external customers    238,983   21,606   --   260,589 
Segment Operating Income (Loss)    11,044   2,451  (1,886)  11,609 
           
SunOpta Foods has the following segmented reporting:        
 
          Quarter ended
          April 2, 2011
  Grains and Ingredients Consumer Products International SunOpta
  Foods Group Group Group Foods Group Foods
  $ $ $ $ $
Total revenues from external customers  115,267   25,936  35,944   61,836   238,983 
Segment Operating Income  6,288   2,966  (478)  2,268  11,044 
           
(Operating Income (Loss) is defined as "Earnings from continuing operations before the following" excluding the impact of "Other expense, net".)

1Non-GAAP Measures

In addition to reporting financial results in accordance with generally accepted accounting principles ("GAAP"), the Company provides information regarding Operating Income and Earnings before interest, taxes, depreciation and amortization ("EBITDA") as additional information about its operating results, which are not measures in accordance with GAAP. The Company believes that these non-GAAP measures assist investors in comparing performance across reporting periods on a consistent basis by excluding items that are not indicative of the Company's core operating performance. The non-GAAP measures of operating income and EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. 

The Company defines Operating Income as "Earnings from continuing operations before the following" excluding the impact of "Other expense, net"; and EBITDA as Operating Income plus depreciation and amortization. The following is a tabular presentation of Operating Income and EBITDA, including a reconciliation to GAAP earnings, which the Company believes to be the most directly comparable GAAP financial measure:

 Quarter ended Quarter ended
 March 31, 2012 April 2, 2011
 $ $
     
Earnings from continuing operations 6,663   6,039 
     
Provision for income taxes 3,831   3,224 
Interest expense, net 2,583   1,984 
Other expense, net 368   362 
Operating income 13,445   11,609 
Depreciation and amortization 4,853   4,833 
Earnings before interest, taxes, depreciation and amortization (EBITDA) 18,298   16,442 
     
CONTACT: SunOpta Inc.

         

         Steve Bromley, President & CEO

         Tony Tavares, Vice President & COO

         Robert McKeracher, Vice President & CFO

         John Dietrich, VP Corporate Development & Secretary

         Susan Wiekenkamp, Information Officer

         Tel: 905-455-2528, ext 103

         susan.wiekenkamp@sunopta.com

         Website:  www.sunopta.com

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