Continued Progress on Value Creation Plan Initiatives
TORONTO--(BUSINESS WIRE)--
SunOpta Inc. ("SunOpta") (Nasdaq:STKL) (TSX:SOY), a leading global
company focused on organic, non-genetically modified and specialty
foods, today announced financial results for the second quarter ended
July 1, 2017.
"This quarter marks another important step in SunOpta's journey. Through
our Value Creation Plan we have brought intense focus to the
organization on our strategic direction, and our leadership team has
been upgraded and is fully engaged. With these foundational aspects in
place, during the second quarter the Company was able to become fully
engrossed in the actions that support the Value Creation Plan, which we
expect will ultimately lead to sustainable, profitable results," said
David Colo, Chief Executive Officer. "This quarter saw us take
meaningful action against all four pillars of our Value Creation Plan,
including sharpening our portfolio focus by announcing the exit from
re-sealable pouch products, improving our operational execution via the
implementation of safety, quality and productivity programs, enhancing
our go-to-market effectiveness via the build-out of a new food service
distribution network, and ensuring the benefit of these efforts are
sustainable via process and systems improvements."
All amounts are expressed in U.S. dollars and results are reported in
accordance with U.S. GAAP, except where specifically noted.
Second Quarter 2017 Highlights:
-
Revenues of $336.5 million for the second quarter of 2017, compared to
$348.1 million in the second quarter of 2016, a decrease of 3.4%.
-
Gross profit of $41.7 million or 12.4% of revenues for the second
quarter of 2017, versus $36.0 million or 10.3% of revenues in the
second quarter of 2016. Excluding expenses in cost of goods sold that
factor into adjusted earnings¹, the gross profit percentage in the
second quarter of 2017 increased 100 basis points to 12.5% compared to
11.5% in the second quarter of 2016.
-
Adjusted EBITDA¹ of $19.4 million or 5.8% of revenues for the second
quarter of 2017, versus $23.5 million or 6.7% of revenues in the
second quarter of 2016.
-
Loss from continuing operations of $0.4 million or $0.03 per diluted
common share in the second quarter of 2017, compared to a loss from
continuing operations of $4.1 million or $0.05 per diluted common
share in the second quarter of 2016.
-
Adjusted loss from continuing operations¹ of $0.7 million or $0.01 per
diluted common share during the second quarter of 2017, compared to
adjusted earnings¹ of $4.1 million or $0.05 per diluted common share
during the second quarter of 2016.
Value Creation Plan Update
As part of the Company's commitment to deliver long-term value to its
shareholders, in early 2017 it launched its Value Creation Plan. The
Company is targeting implementation of $30 million of
productivity-driven annualized enhancements of EBITDA in the first phase
of the plan, to be implemented over 2017 and 2018. For 2017 these EBITDA
benefits will be offset by expenses associated with the Value Creation
Plan, including structural investments made in the areas of quality,
sales, marketing, operations and engineering resources, as well as
non-structural third-party consulting support, severance and recruiting
costs. The plan also calls for increased investment in capital upgrades
at several manufacturing facilities to enhance food safety and
manufacturing efficiencies. Over time, these investments are expected to
yield additional improvement in EBITDA beyond the $30 million of initial
productivity-driven savings. For the second quarter of 2017, the Company
made progress against each of the four pillars of its Value Creation
Plan and believes it is on track to achieve targeted productivity
enhancements, while continuing to make the necessary structural
investments it believes will accelerate growth and drive long-term
value. Recent progress on each of the four pillars of the Value Creation
Plan is highlighted below.
Portfolio Optimization
The focus of the portfolio optimization pillar is to simplify the
business, investing where structural advantages exist, while exiting
businesses or product lines where the Company is not effectively
positioned. Recent highlights include:
-
Announced the discontinuation of flexible re-sealable pouch products
along with an agreement to sell the associated pouch equipment for
$2.0 million, which is expected to close during the fourth quarter of
2017.
-
Initiated a plan to consolidate certain soy and specialty grain volume
and close an under-utilized facility to enhance facility utilization
and reduce operating costs.
-
Purchased the remaining 25% minority interest stake in the Company's
Mexican frozen fruit operations and broke ground on an expansion
project to add incremental freezing capacity, storage, and retail
bagging capabilities to the Mexican frozen fruit facility.
-
Approved plans to increase capabilities at sunflower operations in
both North America and Europe, as well as a capacity expansion at the
speciality cocoa processing facility in the Netherlands.
Since the initiation of the Value Creation Plan, the Company has
implemented portfolio changes that are expected to yield $4.2 million of
annualized EBITDA benefits.
Operational Excellence
The focus of the operational excellence pillar is to ensure food quality
and safety, coupled with improved operational performance and
efficiency. These efforts are expected to generate productivity
improvements and cost savings in manufacturing, procurement and
logistics. Recent highlights include:
-
Launched "SunOpta 360", initially across the network of aseptic
beverage facilities, establishing a sustainable continuous improvement
methodology for the Company.
-
Enhanced food safety and quality across the manufacturing platform via
the roll-out of new processes and systems.
-
Continued to identify and implement productivity initiatives focusing
on manufacturing efficiencies, purchasing synergies and effective
freight management.
-
Initiated rapid recovery plans to resolve performance issues at
certain consumer product manufacturing facilities which, during the
first half of 2017, have partially consumed the benefit driven from
other productivity initiatives.
Since the initiation of the Value Creation Plan, the Company has
implemented process improvements and cost savings that are expected to
yield $3.1 million of annualized EBITDA benefits.
Go-To-Market Effectiveness
The focus of the go-to-market effectiveness pillar is to optimize
customer and product mix in existing sales channels, and identify and
penetrate new high-potential sales channels. The Company expects efforts
under this pillar to improve revenue growth and profitability over time.
Recent highlights include:
-
Completed the creation of a new food service distribution network,
leveraging third parties, which will support the Company's plan to
grow and diversify penetration into the food service channel.
-
Continued to attract and hire new commercial talent in the areas of
sales, marketing and R&D which has furthered the development of
control branded products that are expected to enhance access to the
food service channel.
-
Increased the pipeline of commercial opportunities across the
beverage, fruit and snack categories.
Since the initiation of the Value Creation Plan, the Company has
implemented go-to-market improvements through strategic pricing actions
that are expected to yield $2.0 million of annualized EBITDA benefits.
Process Sustainability
The focus of the process sustainability pillar is to ensure the Company
has the infrastructure, systems and skills to sustain the business
improvements and value captured from the Value Creation Plan. Broadening
the skillset and experience of SunOpta's leadership team is a critical
component to the process sustainability pillar of the Value Creation
Plan. Recent highlights include:
-
Completed the onboarding of key senior leaders and continued to add
new talent in areas of sales and marketing, engineering, supply chain
and procurement.
-
Further maturation of the sales and operations planning (S&OP)
processes which were kicked off in the first quarter resulting in
improved customer service levels.
-
Continued enhancements to ERP systems in consumer products facilities.
Second Quarter 2017 Results
Revenues for the second quarter of 2017 were $336.5 million, a decrease
of 3.4% compared to $348.1 million in the second quarter of 2016.
Excluding the impact on revenues for the second quarter of 2017 of
changes in commodity-related pricing, foreign exchange rates and the
impact on west coast pouch operations as a result of a fire at a
third-party facility, revenues in the second quarter of 2017 decreased
by 0.6% compared with the second quarter of 2016.
The Consumer Products segment generated revenues from external customers
of $187.0 million during the second quarter of 2017, a decrease of 1.4%
compared to $189.6 million in the second quarter of 2016. Excluding the
impact of the fire at a third-party facility, revenues in Consumer
Products decreased 0.2% compared to the second quarter of 2016. The
revenue decline was driven by reduced sales of retail packaged frozen
fruit and aseptic beverage products, partially offset by increased
beverage sales into the food service channel, as well as higher
refrigerated juice and specialty bar sales.
The Global Ingredients segment generated revenues from external
customers of $149.4 million, a decline of 5.7% compared to $158.5
million in the second quarter of 2016. Excluding the impact on revenues
of changes in commodity-related pricing and foreign exchange rates,
Global Ingredients revenue decreased 1.2% in the second quarter of 2017,
compared with the second quarter of 2016. The revenue decline reflected
lower volumes of raw and roasted sunflower products, lower crop input
sales due to a reduction in contracted acres and lower specialty
ingredient sales partially offset by increased sales of non-GMO soy.
Gross profit was $41.7 million for the second quarter of 2017, compared
to $36.0 million for the second quarter of 2016. As a percentage of
revenues, gross profit for the second quarter of 2017 was 12.4% compared
to 10.3% in the second quarter of 2016. The gross profit percentage for
the second quarter of 2017 would have been approximately 12.5%,
excluding $0.3 million of costs related to plant closure and other
transition expenses, as compared to an adjusted gross profit percentage
of 11.5% in the second quarter of 2016. The improvement in gross margin
reflected operational savings from the closure of the San Bernardino
juice facility, improved productivity across the frozen fruit network
and favorable foreign exchange impact on purchase contracts for organic
raw materials. These factors were partially offset by reduced
operational efficiencies in our sunflower and roasting operations due to
lower customer demand following the recall.
Operating income¹ was $2.6 million, or 0.8% of revenues, compared to
operating income of $8.8 million, or 2.5% of revenues in the second
quarter of 2016. The decrease in operating income year-over-year is
primarily attributable to increased structural and non-structural costs
associated with the execution of the Value Creation Plan. The operating
income percentage for the second quarter of 2017 would have been
approximately 3.0%, excluding $7.0 million of non-structural third-party
consulting costs, employee recruitment, relocation and retention costs,
and the costs discussed above that impacted costs of sales, all incurred
in relation to the Value Creation Plan.
Adjusted EBITDA¹ was $19.4 million or 5.8% of revenues in the second
quarter of 2017, compared to $23.5 million or 6.8% of revenues in the
second quarter of 2016.
The Company reported a net loss from continuing operations for the
second quarter of 2017 of $0.4 million, or $0.03 per common share,
compared to a loss from continuing operations of $4.1 million, or $0.05
per diluted common share during the second quarter of 2016. Adjusted
loss¹ from continuing operations in the second quarter of 2017 was $0.7
million or $0.01 per diluted common share, compared to adjusted
earnings¹ of $4.1 million or $0.01 per diluted common share in the
second quarter of 2016. Please refer to the discussion and table below
under "Non-GAAP Measures - Adjusted Earnings".
Balance Sheet and Cash Flow
At July 1, 2017, SunOpta's balance sheet reflected total assets of
$1,149.8 million and total debt of $467.7 million. Cash used in
operating activities was $6.3 million in the first half of 2017,
compared to cash used in operating activities from continuing operations
of $52.3 million in the first half of 2016. The $46.0 million decrease
in cash used in operating activities was driven by less cash used to
fund working capital, due in part to liquidity optimization efforts
undertaken as part of the Value Creation Plan. Working capital
requirements are seasonal, and the Company expects to see working
capital decrease over the second half of 2017. At July 1, 2017, leverage
was approximately 6.1 times Adjusted EBITDA¹ on a trailing four quarter
adjusted basis, after eliminating the negative impact on EBITDA from the
San Bernardino juice facility.
Conference Call
SunOpta plans to host a conference call at 9:00 A.M. Eastern time on
Wednesday, August 9, 2017, to discuss the second quarter financial
results. After opening remarks, there will be a question and answer
period. This conference call can be accessed via a link on SunOpta's
website at www.sunopta.com
under the "Investors" section. To listen to the live call over the
Internet, please go to SunOpta's website at least 15 minutes early to
register, download and install any necessary audio software.
Additionally, the call may be accessed with the toll free dial-in number
1 (877) 312-9198 or International dial-in number 1 (631) 291-4622. If
you are unable to listen live, the conference call will be archived and
can be accessed for approximately 90 days on the Company's website.
¹ See discussion of non-GAAP measures
About SunOpta Inc.
SunOpta Inc. is a leading global company focused on organic,
non-genetically modified ("non-GMO") and specialty foods. SunOpta
specializes in the sourcing, processing and packaging of organic and
non-GMO food products, integrated from seed through packaged products;
with a focus on strategic vertically integrated business models.
SunOpta's organic and non-GMO food operations revolve around value-added
grain, seed, fruit and vegetable based product offerings, supported by a
global sourcing and supply infrastructure.
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 intention to optimize business operations;
our ability to implement the four pillars and achieve the objectives of
our strategic Value Creation Plan, including the anticipated amount and
timing of achieving productivity-driven EBITDA enhancements; the
estimated amounts of annualized EBITDA benefits attributable to
improvements initiated or implemented to date pursuant to each of the
four pillars of our Value Creation Plan; our intention to exit
businesses or product lines where we are not effectively positioned
including the anticipated timing for discontinuing re-sealable pouch
products and the sale of related equipment; and our expectation for
improved revenue growth and profitability over time and that working
capital will decrease over the second half of 2017. Generally,
forward-looking statements do not relate strictly to historical or
current facts and are typically accompanied by words such as "expects",
"targeting", "becoming", ‘continue", "estimated", "would", "should",
"intend", "anticipate", "confident", "can", "may", "plans", "project",
"potential", "intention", "might", "predict" or other similar terms and
phrases 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 including,
but not limited to, anticipated procurement and logistics savings,
freight lane cost reductions, yield and throughput enhancements, and
labor cost reductions, as well as other factors the Company believes are
appropriate in the circumstances including, but not limited to, general
economic conditions, continued consumer interest in health and wellness,
ability to maintain product pricing levels, current customer demand,
planned facility and operational expansions, closures and divestitures,
competitive intensity, cost rationalization, product development
initiatives, and alternative potential uses for our capital resources.
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, issues or delays in the successful
integration of the operations, systems and personnel of recently
acquired businesses with those of the Company, incurring or experiencing
unanticipated costs and/or delays or difficulties, future levels of
revenues being lower than expected, costs being higher than expected,
inability to realize synergies to the extent anticipated and conditions
affecting the frozen fruit industry generally; failure or inability to
implement portfolio changes, process improvements, go-to-market
improvements and process sustainability strategies in a timely manner;
delays or difficulties in exiting certain businesses and product lines
including the failure of purchasers to satisfy the purchase price and
inability to satisfy the conditions of closing for any such
transactions; changes in the level of capital investment; local and
global political and economic conditions; consumer spending patterns and
changes in market trends; decreases in customer demand; delayed or
unsuccessful product development efforts; potential product recalls;
working capital management and continuous improvement initiatives;
availability and pricing of raw materials and supplies; potential
covenant breaches under our credit facilities; 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. The Company undertakes no obligation to publicly correct or
update the forward-looking statements in this document, in other
documents, or on its website to reflect future events or circumstances,
except as may be required under applicable securities laws.
|
|
|
SunOpta Inc.
|
|
Consolidated Statements of Operations
|
|
For the quarters and two quarters ended July 1, 2017 and July 2, 2016 |
|
(Unaudited)
|
|
(All dollar amounts expressed in thousands of U.S. dollars)
|
|
|
|
|
|
Quarter ended
|
|
Two quarters ended
|
|
|
|
July 1, 2017 |
|
July 2, 2016 |
|
July 1, 2017 |
|
July 2, 2016 |
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
336,454
|
|
|
348,146
|
|
|
666,485
|
|
|
700,460
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
294,792
|
|
|
312,168
|
|
|
586,124
|
|
|
632,581
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
41,662
|
|
|
35,978
|
|
|
80,361
|
|
|
67,879
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
35,039
|
|
|
24,489
|
|
|
73,311
|
|
|
48,761
|
|
|
Intangible asset amortization
|
|
2,809
|
|
|
2,824
|
|
|
5,612
|
|
|
5,646
|
|
|
Other expense, net
|
|
607
|
|
|
8,433
|
|
|
6,050
|
|
|
12,411
|
|
|
Foreign exchange loss (gain)
|
|
1,195
|
|
|
(180
|
)
|
|
1,775
|
|
|
1,992
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations before the following
|
|
2,012
|
|
|
412
|
|
|
(6,387
|
)
|
|
(931
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
7,695
|
|
|
11,548
|
|
|
15,449
|
|
|
22,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income taxes
|
|
(5,683
|
)
|
|
(11,136
|
)
|
|
(21,836
|
)
|
|
(23,501
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Recovery of income taxes
|
|
(5,581
|
)
|
|
(7,135
|
)
|
|
(10,550
|
)
|
|
(10,221
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
(102
|
)
|
|
(4,001
|
)
|
|
(11,286
|
)
|
|
(13,280
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,993
|
)
|
|
Gain on classification as held for sale
|
|
-
|
|
|
-
|
|
|
-
|
|
|
560
|
|
|
Recovery of income taxes
|
|
-
|
|
|
-
|
|
|
-
|
|
|
599
|
|
|
Loss from discontinued operations attributable to non-controlling
interests
|
|
-
|
|
|
-
|
|
|
-
|
|
|
264
|
|
|
Loss from discontinued operations attributable to SunOpta Inc.
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(570
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
|
(102
|
)
|
|
(4,001
|
)
|
|
(11,286
|
)
|
|
(13,850
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings attributable to non-controlling interests
|
|
306
|
|
|
123
|
|
|
520
|
|
|
507
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss attributable to SunOpta Inc.
|
|
(408
|
)
|
|
(4,124
|
)
|
|
(11,806
|
)
|
|
(14,357
|
)
|
|
|
|
|
|
SunOpta Inc.
|
|
Consolidated Statements of Operations (continued)
|
|
For the quarters and two quarters ended July 1, 2017 and July 2, 2016 |
|
(Unaudited)
|
|
(All dollar amounts expressed in thousands of U.S. dollars, except
per share amounts)
|
|
|
|
|
|
Quarter ended
|
|
Two quarters ended
|
|
|
|
July 1, 2017 |
|
July 2, 2016 |
|
July 1, 2017 |
|
July 2, 2016 |
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations, less amount attributable to
non-controlling interests
|
|
(408
|
)
|
|
(4,124
|
)
|
|
(11,806
|
)
|
|
(13,787
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Less: dividends and accretion on Series A preferred stock
|
|
(1,954
|
)
|
|
-
|
|
|
(3,894
|
)
|
|
-
|
|
|
Loss from continuing operations available to common shareholders
|
|
(2,362
|
)
|
|
(4,124
|
)
|
|
(15,700
|
)
|
|
(13,787
|
)
|
|
Loss from discontinued operations attributable to SunOpta Inc. |
|
-
|
|
|
-
|
|
|
-
|
|
|
(570
|
)
|
|
Loss available to common shareholders
|
|
(2,362
|
)
|
|
(4,124
|
)
|
|
(15,700
|
)
|
|
(14,357
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share:
|
|
|
|
|
|
|
|
|
|
- from continuing operations
|
|
(0.03
|
)
|
|
(0.05
|
)
|
|
(0.18
|
)
|
|
(0.16
|
)
|
|
- from discontinued operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(0.01
|
)
|
|
|
|
(0.03
|
)
|
|
(0.05
|
)
|
|
(0.18
|
)
|
|
(0.17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share:
|
|
|
|
|
|
|
|
|
|
- from continuing operations
|
|
(0.03
|
)
|
|
(0.05
|
)
|
|
(0.18
|
)
|
|
(0.16
|
)
|
|
- from discontinued operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(0.01
|
)
|
|
|
|
(0.03
|
)
|
|
(0.05
|
)
|
|
(0.18
|
)
|
|
(0.17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding (000s):
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
86,213
|
|
|
85,541
|
|
|
86,062
|
|
|
85,483
|
|
|
- Diluted
|
|
86,213
|
|
|
85,541
|
|
|
86,062
|
|
|
85,483
|
|
|
(a)
|
|
Loss per share is computed by dividing loss available to common
shareholders by the weighted-average number of common shares
outstanding during the period. Loss available to common shareholders
is computed by adding dividends and accretion of Series A preferred
stock to loss attributable to SunOpta Inc. |
|
|
|
|
|
|
|
SunOpta Inc.
|
|
Consolidated Balance Sheets
|
|
As at July 1, 2017 and December 31, 2016 |
|
(Unaudited)
|
|
(All dollar amounts expressed in thousands of U.S. dollars)
|
|
|
|
|
|
July 1, 2017 |
|
December 31, 2016 |
|
|
|
$
|
|
$
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
3,457
|
|
|
1,251
|
|
|
Accounts receivable
|
|
152,406
|
|
|
157,369
|
|
|
Inventories
|
|
381,979
|
|
|
368,482
|
|
|
Prepaid expenses and other current assets
|
|
31,193
|
|
|
19,794
|
|
|
Current income taxes recoverable
|
|
2,815
|
|
|
2,801
|
|
|
Total current assets
|
|
571,850
|
|
|
549,697
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
164,131
|
|
|
162,239
|
|
|
Goodwill
|
|
224,161
|
|
|
223,611
|
|
|
Intangible assets
|
|
178,030
|
|
|
183,524
|
|
|
Deferred income taxes
|
|
3,060
|
|
|
1,045
|
|
|
Other assets
|
|
8,563
|
|
|
9,442
|
|
|
|
|
|
|
|
|
Total assets
|
|
1,149,795
|
|
|
1,129,558
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Bank indebtedness
|
|
237,107
|
|
|
201,494
|
|
|
Accounts payable and accrued liabilities
|
|
182,841
|
|
|
173,745
|
|
|
Customer and other deposits
|
|
1,155
|
|
|
2,543
|
|
|
Income taxes payable
|
|
876
|
|
|
5,661
|
|
|
Other current liabilities
|
|
433
|
|
|
1,016
|
|
|
Current portion of long-term debt
|
|
2,062
|
|
|
2,079
|
|
|
Current portion of long-term liabilities
|
|
6,300
|
|
|
5,500
|
|
|
Total current liabilities
|
|
430,774
|
|
|
392,038
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
228,514
|
|
|
229,008
|
|
|
Long-term liabilities
|
|
10,374
|
|
|
15,354
|
|
|
Deferred income taxes
|
|
36,751
|
|
|
44,561
|
|
|
Total liabilities
|
|
706,413
|
|
|
680,961
|
|
|
|
|
|
|
|
|
Series A Preferred Stock
|
|
79,678
|
|
|
79,184
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
SunOpta Inc. shareholders' equity
|
|
|
|
|
|
Common shares
|
|
306,827
|
|
|
300,426
|
|
|
Additional paid-in capital
|
|
24,726
|
|
|
25,522
|
|
|
Retained earnings
|
|
38,138
|
|
|
53,838
|
|
|
Accumulated other comprehensive loss
|
|
(9,527
|
)
|
|
(13,104
|
)
|
|
|
|
360,164
|
|
|
366,682
|
|
|
Non-controlling interests
|
|
3,540
|
|
|
2,731
|
|
|
Total equity
|
|
363,704
|
|
|
369,413
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
1,149,795
|
|
|
1,129,558
|
|
|
|
|
|
|
SunOpta Inc.
|
|
Consolidated Statements of Cash Flows
|
|
For the quarters and two quarters ended July 1, 2017 and July 2, 2016 |
|
(Unaudited)
|
|
(Expressed in thousands of U.S. dollars)
|
|
|
|
|
|
Quarter ended
|
|
Two quarters ended
|
|
|
|
July 1, 2017 |
|
July 2, 2016 |
|
July 1, 2017 |
|
July 2, 2016 |
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
CASH PROVIDED BY (USED IN)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
Loss
|
|
(102
|
)
|
|
(4,001
|
)
|
|
(11,286
|
)
|
|
(13,850
|
)
|
|
Loss from discontinued operations attributable to SunOpta Inc. |
|
-
|
|
|
-
|
|
|
-
|
|
|
(570
|
)
|
|
Loss from continuing operations
|
|
(102
|
)
|
|
(4,001
|
)
|
|
(11,286
|
)
|
|
(13,280
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Items not affecting cash:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
8,167
|
|
|
8,549
|
|
|
16,347
|
|
|
17,309
|
|
|
Amortization and write-off of debt issuance costs
|
|
652
|
|
|
2,854
|
|
|
1,138
|
|
|
6,222
|
|
|
Deferred income taxes
|
|
(3,823
|
)
|
|
(10,821
|
)
|
|
(9,915
|
)
|
|
(14,508
|
)
|
|
Stock-based compensation
|
|
1,286
|
|
|
953
|
|
|
2,138
|
|
|
1,992
|
|
|
Unrealized gain on derivative instruments
|
|
(1,267
|
)
|
|
(306
|
)
|
|
(1,229
|
)
|
|
(515
|
)
|
|
Fair value of contingent consideration
|
|
204
|
|
|
(1,603
|
)
|
|
204
|
|
|
(1,405
|
)
|
|
Impairment of long-lived assets
|
|
-
|
|
|
-
|
|
|
3,723
|
|
|
1,735
|
|
|
Acquisition accounting adjustment on inventory sold
|
|
-
|
|
|
3,888
|
|
|
-
|
|
|
11,514
|
|
|
Other
|
|
(244
|
)
|
|
367
|
|
|
(101
|
)
|
|
407
|
|
|
Changes in non-cash working capital
|
|
(30,648
|
)
|
|
(34,294
|
)
|
|
(7,313
|
)
|
|
(61,779
|
)
|
|
Net cash flows from operations - continuing operations
|
|
(25,775
|
)
|
|
(34,414
|
)
|
|
(6,294
|
)
|
|
(52,308
|
)
|
|
Net cash flows from operations - discontinued operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
758
|
|
|
|
|
(25,775
|
)
|
|
(34,414
|
)
|
|
(6,294
|
)
|
|
(51,550
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
(7,143
|
)
|
|
(4,793
|
)
|
|
(16,167
|
)
|
|
(9,340
|
)
|
|
Proceeds from sale of assets
|
|
51
|
|
|
-
|
|
|
301
|
|
|
-
|
|
|
Other
|
|
254
|
|
|
700
|
|
|
364
|
|
|
700
|
|
|
Net cash flows from investing activities - continuing operations
|
|
(6,838
|
)
|
|
(4,093
|
)
|
|
(15,502
|
)
|
|
(8,640
|
)
|
|
Net cash flows from investing activities - discontinued operations
|
|
-
|
|
|
1,945
|
|
|
-
|
|
|
1,754
|
|
|
|
|
(6,838
|
)
|
|
(2,148
|
)
|
|
(15,502
|
)
|
|
(6,886
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
Increase under line of credit facilities
|
|
36,690
|
|
|
39,029
|
|
|
29,349
|
|
|
271,572
|
|
|
Repayment of line of credit facilities
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(192,677
|
)
|
|
Borrowings under long-term debt
|
|
-
|
|
|
-
|
|
|
-
|
|
|
432
|
|
|
Repayment of long-term debt
|
|
(589
|
)
|
|
(523
|
)
|
|
(1,116
|
)
|
|
(11,009
|
)
|
|
Payment of cash dividends on Series A Preferred Stock
|
|
(1,700
|
)
|
|
-
|
|
|
(3,291
|
)
|
|
-
|
|
|
Proceeds from the exercise of stock options and employee share
purchases
|
|
2,535
|
|
|
575
|
|
|
3,629
|
|
|
687
|
|
|
Payment of contingent consideration
|
|
(4,330
|
)
|
|
(4,554
|
)
|
|
(4,330
|
)
|
|
(4,554
|
)
|
|
Payment of debt issuance costs
|
|
-
|
|
|
(256
|
)
|
|
-
|
|
|
(4,366
|
)
|
|
Other
|
|
(101
|
)
|
|
(119
|
)
|
|
(303
|
)
|
|
(134
|
)
|
|
Net cash flows from financing activities - continuing operations
|
|
32,505
|
|
|
34,152
|
|
|
23,938
|
|
|
59,951
|
|
|
Net cash flows from financing activities - discontinued operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,180
|
)
|
|
|
|
32,505
|
|
|
34,152
|
|
|
23,938
|
|
|
58,771
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain (loss) on cash held in a foreign currency
|
|
54
|
|
|
(61
|
)
|
|
64
|
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents in the period
|
|
(54
|
)
|
|
(2,471
|
)
|
|
2,206
|
|
|
311
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations cash activity included above:
|
|
|
|
|
|
|
|
|
|
Add: Balance included at beginning of period
|
|
-
|
|
|
1,288
|
|
|
-
|
|
|
1,707
|
|
|
Less: Balance included at end of period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - beginning of the period
|
|
3,511
|
|
|
5,475
|
|
|
1,251
|
|
|
2,274
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - end of the period
|
|
3,457
|
|
|
4,292
|
|
|
3,457
|
|
|
4,292
|
|
|
|
|
|
|
SunOpta Inc.
|
|
Segmented Information
|
|
For the quarters and two quarters ended July 1, 2017 and July 2, 2016 |
|
Unaudited
|
|
(Expressed in thousands of U.S. dollars)
|
|
|
|
|
|
Quarter ended
|
|
Two quarters ended
|
|
|
|
July 1, 2017 |
|
July 2, 2016 |
|
July 1, 2017 |
|
July 2, 2016 |
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Segment revenues from external customers:
|
|
|
|
|
|
|
|
|
|
Global Ingredients
|
|
149,423
|
|
|
158,498
|
|
|
279,714
|
|
|
304,520
|
|
|
Consumer Products
|
|
187,031
|
|
|
189,648
|
|
|
386,771
|
|
|
395,940
|
|
|
Total segment revenues from external customers
|
|
336,454
|
|
|
348,146
|
|
|
666,485
|
|
|
700,460
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment gross profit:
|
|
|
|
|
|
|
|
|
|
Global Ingredients
|
|
20,743
|
|
|
19,828
|
|
|
36,389
|
|
|
37,920
|
|
|
Consumer Products
|
|
20,919
|
|
|
16,150
|
|
|
43,972
|
|
|
29,959
|
|
|
Total segment gross profit
|
|
41,662
|
|
|
35,978
|
|
|
80,361
|
|
|
67,879
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss):
|
|
|
|
|
|
|
|
|
|
Global Ingredients
|
|
8,372
|
|
|
10,411
|
|
|
13,123
|
|
|
16,852
|
|
|
Consumer Products
|
|
4,220
|
|
|
663
|
|
|
10,168
|
|
|
(1,115
|
)
|
|
Corporate Services
|
|
(9,973
|
)
|
|
(2,229
|
)
|
|
(23,628
|
)
|
|
(4,257
|
)
|
|
Total segment operating income (loss)
|
|
2,619
|
|
|
8,845
|
|
|
(337
|
)
|
|
11,480
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment gross profit percentage:
|
|
|
|
|
|
|
|
|
|
Global Ingredients
|
|
13.9
|
%
|
|
12.5
|
%
|
|
13.0
|
%
|
|
12.5
|
%
|
|
Consumer Products
|
|
11.2
|
%
|
|
8.5
|
%
|
|
11.4
|
%
|
|
7.6
|
%
|
|
Total segment gross profit percentage
|
|
12.4
|
%
|
|
10.3
|
%
|
|
12.1
|
%
|
|
9.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income percentage:
|
|
|
|
|
|
|
|
|
|
Global Ingredients
|
|
5.6
|
%
|
|
6.6
|
%
|
|
4.7
|
%
|
|
5.5
|
%
|
|
Consumer Products
|
|
2.3
|
%
|
|
0.3
|
%
|
|
2.6
|
%
|
|
-0.3
|
%
|
|
Total segment operating income
|
|
0.8
|
%
|
|
2.5
|
%
|
|
-0.1
|
%
|
|
1.6
|
%
|
|
|
Non-GAAP Measures
In addition to reporting financial results in accordance with U.S. GAAP,
the Company provides information regarding segment operating income,
Adjusted earnings, earnings before interest, taxes, depreciation and
amortization ("EBITDA"), and Adjusted EBITDA as additional information
about its operating results, which are not measures in accordance with
U.S. GAAP. We believe that segment operating income and Adjusted
earnings 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. We use EBITDA and Adjusted
EBITDA when assessing the performance of the Company's operations and
its ability to generate cash flows to fund its cash requirements,
including debt service and capital expenditures. The non-GAAP measures
of segment operating income, Adjusted earnings, EBITDA and Adjusted
EBITDA should not be considered in isolation or as a substitute for
performance measures calculated in accordance with U.S. GAAP.
In order to evaluate the Company's results of operations, we use certain
other non-GAAP measures that we believe enhance an investor's ability to
derive meaningful year-over-year comparisons and trends from the results
of operations. In particular, we evaluate the Company's revenues on a
basis that excludes the effects of fluctuations in commodity pricing and
foreign exchange rates. In addition, we exclude specific items from the
Company's reported results that due to their nature or size, we do not
expect to occur as part of our normal business on a regular basis. These
items are identified in the tables below. These non-GAAP measures are
presented solely to allow investors to more fully assess the Company's
results of operations and should not considered in isolation of, or as
substitutes for an analysis of the Company's results as reported under
U.S. GAAP.
Adjusted Earnings/Loss
When assessing our financial performance, we use an internal measure
that excludes the results of discontinued operations, as well as other
charges and gains that we believe are not reflective of normal
operations. This information is provided to allow investors to make
meaningful comparisons of the Company's operating performance between
periods and to view the Company's business from the same perspective as
Company management. Adjusted earnings/loss and Adjusted earnings/loss
per diluted share should not be considered in isolation or as a
substitute for performance measures calculated in accordance with U.S.
GAAP.
The following is a tabular presentation of Adjusted earnings/loss and
Adjusted earnings/loss per diluted share, including a reconciliation
from loss from continuing operations, which the Company believes to be
the most directly comparable U.S. GAAP financial measure.
|
|
|
|
|
Per Diluted Share
|
|
For the quarter ended
|
|
$
|
|
$
|
|
July 1, 2017
|
|
|
|
|
|
Loss from continuing operations
|
|
(102
|
)
|
|
|
|
Less: earnings attributable to non-controlling interests
|
|
(306
|
)
|
|
|
|
Less: dividends and accretion of Series A Preferred Stock
|
|
(1,954
|
)
|
|
|
|
Loss from continuing operations available to common shareholders
|
|
(2,362
|
)
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
Adjusted for:
|
|
|
|
|
|
Costs related to the Value Creation Plan(a) |
|
7,688
|
|
|
|
|
Other(b) |
|
182
|
|
|
|
|
Net income tax effect(c) |
|
(6,254
|
)
|
|
|
|
Adjusted loss
|
|
(746
|
)
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
|
|
|
Loss from continuing operations
|
|
(4,001
|
)
|
|
|
|
Less: earnings attributable to non-controlling interests
|
|
(123
|
)
|
|
|
|
Loss from continuing operations available to common shareholders
|
|
(4,124
|
)
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
Adjusted for:
|
|
|
|
|
|
Legal settlement and litigation-related legal fees(d) |
|
9,661
|
|
|
|
|
Costs related to business acquisitions(e) |
|
7,905
|
|
|
|
|
Product withdrawal and recall costs(f) |
|
529
|
|
|
|
|
Plant start-up costs(g) |
|
278
|
|
|
|
|
Other(b) |
|
412
|
|
|
|
|
Gain on settlement of contingent consideration(h) |
|
(1,715
|
)
|
|
|
|
Net income tax effect(c) |
|
(8,825
|
)
|
|
|
|
Adjusted earnings
|
|
4,121
|
|
|
0.05
|
|
|
|
|
|
|
(a)
|
|
Reflects facility closure costs of $0.3 million recorded in cost of
goods sold; consulting fees, temporary labor, employee recruitment,
relocation and retention costs of $7.0 million recorded in selling,
general and administrative ("SG&A") expenses; and employee
termination costs of $0.4 million recorded in other expense.
|
|
|
|
(b)
|
|
Other included fair value adjustments related to contingent
consideration arrangements and gain/loss on the sale of assets,
which were recorded in other expense.
|
|
|
|
(c)
|
|
Reflects the tax effect of the preceding adjustments to earnings and
reflects an overall estimated annual effective tax rate of
approximately 30% on adjusted earnings before tax.
|
|
|
|
(d)
|
|
Reflects a charge of $9.0 million for the settlement of a product
recall dispute with a customer, which was recorded in other expense,
and associated litigation-related legal costs, which were recorded
in SG&A expenses.
|
|
|
|
(e)
|
|
Reflects costs related to the acquisition of Sunrise Holdings
(Delaware), Inc. ("Sunrise") in October 2015 (the "Sunrise
Acquisition"), including an acquisition accounting adjustment
related to Sunrise's inventory sold in the second quarter of 2016 of
$3.9 million, which was recorded in cost of goods sold; the non-cash
amortization of debt issuance costs incurred in connection with the
initial financing related to the Sunrise Acquisition of $2.6
million, as well as $0.9 million of additional financing costs
expensed as incurred in the second quarter of 2016, which was
recorded in interest expense; and $0.5 million of integration costs
related to the closure and consolidation of our frozen fruit
processing operations following the Sunrise Acquisition, which were
recorded other expense.
|
|
|
|
(f)
|
|
Reflects costs of $0.2 million related to the withdrawal or recall
of products, which were recorded in other expense, and a $0.3
million adjustment for the estimated lost gross profit caused by the
recall of certain sunflower kernel products, which reflected a
shortfall in revenues against anticipated volumes of approximately
$3.5 million, less associated cost of goods sold of approximately
$3.2 million.
|
|
|
|
(g)
|
|
Plant start-up costs relate to the ramp-up of production at our
Allentown, Pennsylvania, facility following the completion of the
addition of aseptic beverage processing and filling capabilities in
the fourth quarter of 2015, which were recorded in cost of goods
sold. These start-up costs reflected the negative gross profit
reported by the facility as the facility ramped up to break-even
production levels.
|
|
|
|
(h)
|
|
Reflects a gain of settlement of the contingent consideration
obligation related to the August 2015 acquisition of Niagara Natural
Fruit Snack Company Inc. ("Niagara Natural"), which was recorded in
other income.
|
|
|
|
|
|
|
|
Per Diluted Share
|
|
For the two quarters ended
|
|
$
|
|
$
|
|
July 1, 2017
|
|
|
|
|
|
Loss from continuing operations
|
|
(11,286
|
)
|
|
|
|
Less: earnings attributable to non-controlling interests
|
|
(520
|
)
|
|
|
|
Less: dividends and accretion of Series A Preferred Stock
|
|
(3,894
|
)
|
|
|
|
Loss from continuing operations available to common shareholders
|
|
(15,700
|
)
|
|
(0.18
|
)
|
|
|
|
|
|
|
|
Adjusted for:
|
|
|
|
|
|
Costs related to the Value Creation Plan(a) |
|
24,971
|
|
|
|
|
Product recall costs(b) |
|
1,008
|
|
|
|
|
Other(c) |
|
(127
|
)
|
|
|
|
Net income tax effect(d) |
|
(11,786
|
)
|
|
|
|
Adjusted loss
|
|
(1,634
|
)
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
July 2, 2016
|
|
|
|
|
|
Loss from continuing operations
|
|
(13,280
|
)
|
|
|
|
Less: earnings attributable to non-controlling interests
|
|
(507
|
)
|
|
|
|
Loss from continuing operations available to common shareholders
|
|
(13,787
|
)
|
|
(0.16
|
)
|
|
|
|
|
|
|
|
Adjusted for:
|
|
|
|
|
|
Costs related to business acquisitions(e) |
|
20,416
|
|
|
|
|
Legal settlement and litigation-related legal fees(f) |
|
10,286
|
|
|
|
|
Product withdrawal and recall costs(g) |
|
1,997
|
|
|
|
|
Plant start-up costs(h) |
|
1,565
|
|
|
|
|
Write-off of debt issuance costs(i) |
|
215
|
|
|
|
|
Other(j) |
|
1,187
|
|
|
|
|
Gain on settlement of contingent contribution(k) |
|
(1,715
|
)
|
|
|
|
Net income tax effect(d) |
|
(13,356
|
)
|
|
|
|
Adjusted earnings
|
|
6,808
|
|
|
0.08
|
|
|
|
|
|
|
(a)
|
|
Reflects facility closure costs of $0.6 million recorded in cost of
goods sold; consulting fees, temporary labor, employee recruitment,
relocation and retention costs of $18.4 million recorded in SG&A
expenses; and asset impairment and employee termination costs of
$5.9 million recorded in other expense.
|
|
|
|
(b)
|
|
Reflects costs related to the recall of certain sunflower kernel
products, including a $0.7 million adjustment for the estimated lost
gross profit caused by the sunflower recall in the first quarter of
2017, which reflected a shortfall in revenues against prior year
volumes of approximately $3.3 million, less associated cost of goods
sold of approximately $2.6 million; and $0.3 million of direct costs
recorded in other expense that are not eligible for reimbursement
under our insurance policies.
|
|
|
|
(c)
|
|
Other included fair value adjustments related to contingent
consideration arrangements and gain/loss on the sale of assets,
which were recorded in other expense.
|
|
|
|
(d)
|
|
Reflects the tax effect of the preceding adjustments to earnings and
reflects an overall estimated annual effective tax rate of
approximately 30% on adjusted earnings before tax.
|
|
|
|
(e)
|
|
Reflects costs related to the Sunrise Acquisition, including an
acquisition accounting adjustment related to Sunrise's inventory
sold in the first half of 2016 of $11.5 million, which was recorded
in cost of goods sold; the non-cash amortization of debt issuance
costs incurred in connection with the initial financing related to
the Sunrise Acquisition of $5.6 million, as well as $0.9 million of
additional financing costs expensed as incurred in the second
quarter of 2016, which were recorded in interest expense; and $2.4
million of integration costs related to the closure and
consolidation of our frozen fruit processing operations following
the Sunrise Acquisition, which were recorded in cost of goods sold
and other expense.
|
|
|
|
(f)
|
|
Reflects a charge of $9.0 million for the settlement of a product
recall dispute with a customer, which was recorded in other expense,
and associated litigation-related legal costs, which were recorded
in SG&A expenses.
|
|
|
|
(g)
|
|
Reflects costs of $1.1 million for the withdrawal of a
consumer-packaged product for a quality-related issue and $0.6
million for insurance deductibles related to the sunflower recall,
which were recorded in other expense. Also reflects a $0.3 million
adjustment for the estimated lost gross profit caused by the
sunflower recall, which reflected a shortfall in revenues against
anticipated volumes of approximately $3.5 million, less associated
cost of goods sold of approximately $3.2 million.
|
|
|
|
(h)
|
|
Plant start-up costs relate to the ramp-up of production at our
Allentown, Pennsylvania, facility following the completion of the
addition of aseptic beverage processing and filling capabilities in
the fourth quarter of 2015, which were recorded in cost of goods
sold. These start-up costs reflected the negative gross profit
reported by the facility as the facility ramped up to break-even
production levels.
|
|
|
|
(i)
|
|
Reflects the write-off to interest expense of $0.2 million of
remaining unamortized debt issuance costs related to our former
North American credit facilities, which were replaced by the Global
Credit Facility.
|
|
|
|
(j)
|
|
Other includes severance costs of $0.5 million and fair value
adjustments related to contingent consideration arrangements of $0.4
million, which were recorded in other expense.
|
|
|
|
(k)
|
|
Reflects a gain of settlement of the contingent consideration
obligation related to the August 2015 acquisition of Niagara
Natural, which was recorded in other income.
|
Segment Operating Income, EBITDA, and Adjusted
EBITDA
The Company defines segment operating income/loss as "earnings/loss from
continuing operations before the following" excluding the impact of
other income/expense items; EBITDA as segment operating income/loss plus
depreciation, amortization and non-cash stock-based compensation; and
adjusted EBITDA as EBITDA excluding other unusual items that affect the
comparability of operating performance as identified in the
determination of Adjusted earnings. The following is a tabular
presentation of segment operating income/loss, EBITDA and Adjusted
EBITDA, including a reconciliation to loss from continuing operations,
which the Company believes to be the most directly comparable U.S. GAAP
financial measure:
|
|
|
|
|
Quarter ended
|
|
Two quarters ended
|
|
|
|
July 1, 2017 |
|
July 2, 2016 |
|
July 1, 2017 |
|
July 2, 2016 |
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Loss from continuing operations
|
|
(102
|
)
|
|
(4,001
|
)
|
|
(11,286
|
)
|
|
(13,280
|
)
|
|
Recovery of income taxes
|
|
(5,581
|
)
|
|
(7,135
|
)
|
|
(10,550
|
)
|
|
(10,221
|
)
|
|
Interest expense, net
|
|
7,695
|
|
|
11,548
|
|
|
15,449
|
|
|
22,570
|
|
|
Other expense, net
|
|
607
|
|
|
8,433
|
|
|
6,050
|
|
|
12,411
|
|
|
Total segment operating income (loss)
|
|
2,619
|
|
|
8,845
|
|
|
(337
|
)
|
|
11,480
|
|
|
Depreciation and amortization
|
|
8,167
|
|
|
8,549
|
|
|
16,347
|
|
|
17,309
|
|
|
Stock-based compensation(a) |
|
1,337
|
|
|
953
|
|
|
2,465
|
|
|
1,992
|
|
|
EBITDA
|
|
12,123
|
|
|
18,347
|
|
|
18,475
|
|
|
30,781
|
|
|
Adjusted for:
|
|
|
|
|
|
|
|
|
|
Costs related to Value Creation Plan(b) |
|
7,263
|
|
|
-
|
|
|
19,073
|
|
|
-
|
|
|
Product recall costs(c) |
|
-
|
|
|
300
|
|
|
729
|
|
|
300
|
|
|
Costs related to business acquisitions(d) |
|
-
|
|
|
3,888
|
|
|
-
|
|
|
11,664
|
|
|
Plant expansion and start-up costs(e) |
|
-
|
|
|
278
|
|
|
-
|
|
|
1,565
|
|
|
Litigation-related legal fees(f) |
|
-
|
|
|
661
|
|
|
-
|
|
|
1,286
|
|
|
Adjusted EBITDA
|
|
19,386
|
|
|
23,474
|
|
|
38,277
|
|
|
45,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
For the quarter and two quarters ended July 1, 2017, stock-based
compensation of $1.3 million and $2.5 million were recorded in SG&A
expenses. The reversal of $0.1 million and $0.3 million of
previously recognized stock-based compensation related to forfeited
awards previously granted to terminated employees was recognized in
other expense.
|
|
|
|
(b)
|
|
For the quarter ended July 1, 2017, reflects facility closure costs
of $0.3 million recorded in cost of goods sold, and consulting fees,
temporary labor, employee recruitment, relocation and retention
costs of $7.0 million recorded in SG&A expenses. For the two
quarters ended July 1, 2017, reflects facility closure costs of $0.6
million recorded in cost of goods sold and consulting fees,
temporary labor, employee recruitment, relocation and retention
costs of $18.4 million recorded in SG&A expenses.
|
|
|
|
(c)
|
|
For the two quarters ended July 1, 2017, reflects the estimated lost
gross profit caused by the recall of certain sunflower kernel
products of $0.7 million, which reflected the shortfall in revenues
in the first quarter of 2017 against first quarter 2016 volumes of
approximately $3.3 million, less associated cost of goods sold of
approximately $2.6 million. For the quarter and two quarters ended
July 2, 2016, reflects estimated lost gross profit of $0.3 million,
which reflected a shortfall in revenues in the second quarter of
2016 against anticipated volumes of approximately $3.5 million, less
associated cost of goods sold of approximately $3.2 million.
|
|
|
|
(d)
|
|
For the quarter ended July 2, 2016, reflects costs related to the
acquisition accounting adjustment related to Sunrise's inventory
sold in the second quarter of 2016 of $3.9 million, which was
recorded in cost of goods sold. For the first half of 2016, $11.5
million relates to the same acquisition accounting adjustment, as
well as $0.2 million of costs related to the closure and
consolidation of a frozen fruit processing operation, all of which
were recorded in cost of goods sold.
|
|
|
|
(e)
|
|
Reflects the negative gross profit reported by the Allentown
facility as the facility ramped up to break-even production levels.
|
|
|
|
(f)
|
|
Reflects legal costs related to the settlement of a product recall
dispute with a customer, which were recorded in SG&A expenses.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170809005491/en/
ICR
Scott Van Winkle, 617-956-6736
scott.vanwinkle@icrinc.com
Source: SunOpta Inc.
News Provided by Acquire Media