01:12:17 EDT Thu 09 Jul 2020
Enter Symbol
or Name
USA
CA



SunOpta Inc
Symbol SOY
Shares Issued 88,040,561
Close 2020-05-05 C$ 3.77
Recent Sedar Documents

SunOpta earns $3.34-million (U.S.) in Q1 2020

2020-05-06 10:40 ET - News Release

Mr. Joe Ennen reports

SUNOPTA ANNOUNCES FIRST QUARTER FISCAL 2020 FINANCIAL RESULTS

SunOpta Inc. has released its financial results for the first quarter ended March 28, 2020.

All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.

First Quarter 2020 Highlights:

Revenues of $335.9 million for the first quarter of 2020, compared to $305.3 million in the first quarter of 2019, an increase of 10.0%. Adjusted for dispositions, acquisitions, foreign exchange and commodity prices, revenues grew by 13.2%.

Gross margin increased 380 basis points to 13.0% from 9.2% in the prior year.

Earnings attributable to common shareholders of $1.3 million or $0.01 per diluted common share in the first quarter of 2020, compared to $23.7 million or $0.26 per diluted common share in the first quarter of 2019. Earnings in the first quarter of 2019 included a pre-tax gain on the sale of the specialty and organic soy and corn business of $45.6 million. Adjusted earnings Superscript 1 excluding disposed operations of $0.9 million or $0.01 per common share during the first quarter of 2020, compared to an adjusted loss of $7.6 million or $0.09 per common share during the first quarter of 2019.

Adjusted EBITDA Superscript 1 excluding disposed operations of $24.3 million or 7.2% of revenues for the first quarter of 2020, versus $11.1 million or 3.6% of revenues in the first quarter of 2019.

"We are well into executing our turnaround plan. We delivered an outstanding first quarter, with 13% adjusted revenue growth and the second highest adjusted EBITDA in the Company's history. The growth and margin strength were broad based, across all three operating segments," said Joe Ennen, Chief Executive Officer of SunOpta. "Our focus and investment in plant-based foods and beverages continues to be a significant driver of revenue and margin growth. We generated 30% adjusted revenue growth in this key segment and doubled gross profit versus prior year. We remain well positioned to capitalize on the rapidly growing plant-based trend. We also continue to make progress on our capital investments to expand capacity and capabilities, supported by our recent preferred equity capital raise. Our Fruit-Based Food and Beverages segment is performing in-line with previously communicated expectations and our productivity initiatives to improve margins are on track. We generated 9% revenue growth in our fruit platform and continued to deliver sequential improvements in gross margin. We have sold through the vast majority of higher priced 2019 inventory related to last year's supply constraints. We have successfully taken pricing action, delivered productivity improvements and are entering the 2020 procurement season in a very healthy position. Finally, our Global Ingredients segment contributed 6% adjusted revenue growth and saw strong improvement in gross margin. We are successfully executing our strategy of investing and focusing on key ingredient categories, where we can maximize our return on capital."

"Looking ahead for the remainder of 2020, we remain focused on our key initiatives and remain confident in our ability to drive further year-over-year adjusted EBITDA improvement. We have successfully responded to the evolving environment of COVID-19. We have followed government advice as it evolved and are very focused on the health and safety of our employees. Our facilities are operating effectively and uninterrupted and we have maintained high levels of service to all of our customers. We remain well positioned in large and growing categories with strong market positions and are successfully executing our turnaround strategy," continued Ennen.

First Quarter 2020 Results

Revenues for the first quarter of 2020 were $335.9 million, an increase of 10.0% compared to $305.3 million in the first quarter of 2019. Excluding the impact on reported revenues of the soy and corn business sold in February 2019, changes in commodity-related pricing and foreign exchange rates and excluding the impact of the acquisition of Sanmark in April 2019, revenues in the first quarter of 2020 increased by 13.2% compared with the first quarter of 2019.

The Global Ingredients segment generated revenues of $128.4 million, a decrease of 4.8% compared to $134.8 million in the first quarter of 2019. Excluding the impact of the disposed soy and corn business, and changes in commodity-related pricing and foreign exchange rates, Global Ingredients revenue in the first quarter of 2020 increased 5.5% compared to the prior year period, which reflected higher volumes in certain organic ingredient product categories and of premium juice products.

The Plant-Based Foods and Beverages segment generated revenues of $106.2 million during the first quarter of 2020, an increase of 30.7% compared to $81.3 million in the first quarter of 2019. Excluding sunflower price variances, Plant-Based segment revenues in the first quarter increased 29.7% compared to the prior year period, reflecting higher volumes of aseptic beverages, broth offerings, and ingredient extraction.

The Fruit-Based Foods and Beverages segment generated revenues of $101.4 million during the first quarter of 2020, an increase of 13.7% compared to $89.2 million in the first quarter of 2019. Excluding the impact of commodity price fluctuations, Fruit-Based segment revenues in the first quarter increased 9.1% compared to the prior year period, primarily reflecting increased retail volumes and pricing for frozen fruit.

Gross profit was $43.7 million for the quarter ended March 28, 2020, an increase of $15.5 million compared to $28.2 million for the quarter ended March 30, 2019. As a percentage of revenues, gross profit for the quarter ended March 28, 2020 was 13.0% compared to 9.2% for the quarter ended March 30, 2019, an increase of 3.8%. The Plant-Based Foods and Beverages segment accounted for $10.6 million of the increase in gross profit, primarily due to higher sales and production volumes of plant-based beverages, broths and plant-based ingredients, and improved plant utilization and productivity-driven cost savings. The Fruit-Based Foods and Beverages segment increased gross profit by $3.1 million in the quarter due to increased gross margin, reflecting increased sales, pricing and productivity improvements. The Global Ingredients segment accounted for $1.9 million of the increased gross profit in the quarter primarily due to increased pricing spreads for organic ingredients and premium juice products and productivity improvements in our factories.

Segment operating income Superscript 1 was $11.5 million, or 3.4% of revenues in the first quarter of 2020, compared to operating income of $0.3 million, or 0.1% of revenues in the first quarter of 2019. The increase in operating income year-over-year was primarily attributable to the $15.5 million increase in gross profit, partially offset by a year-over-year unfavorable foreign exchange impact of $3.4 million within our Mexican frozen fruit and European organic ingredient operations and increased reserves for credit losses included in SG&A expenses, due to a weaker economic outlook.

Other income of $1.3 million for the first quarter of 2020 reflected the settlement of a dispute arising from a prior business acquisition, offset by employee termination and facility closure costs, mainly related to the consolidation of our corporate office functions.

Adjusted EBITDA Superscript 1 was $24.3 million or 7.2% of revenues in the first quarter of 2020, compared to $10.9 million or 3.6% of revenues in the first quarter of 2019. Excluding disposed operations, adjusted EBITDA for the quarter ended March 30, 2019 was $11.1 million.

The Company reported earnings attributable to common shareholders for the first quarter of 2020 of $1.3 million, or $0.01 per diluted common share, compared to earnings of $23.7 million, or $0.26 per diluted common share during the first quarter of 2019. Earnings in the first quarter of 2019 included a pre-tax gain on the sale of the specialty and organic soy and corn business of $45.6 million.

Adjusted earnings Superscript 1 in the first quarter of 2020 was $0.9 million or $0.01 per common share, compared to an adjusted loss of $7.9 million or $0.09 per common share in the first quarter of 2019. Please refer to the discussion and table below under "Non-GAAP Measures - Adjusted Earnings/Loss".

Balance Sheet and Cash Flow

At March 28, 2020, SunOpta's balance sheet reflected total assets of $894.4 million and total debt of $469.3 million. During the first quarter of 2020, cash provided by operating activities was $34.7 million, compared to $1.0 million during the first quarter of 2019. The $33.8 million increase in cash provided by operating activities primarily reflects the improved year-over-year operating results, along with more efficient working capital management. Cash used in investing activities was $9.7 million in the first quarter of 2020, compared with $8.0 million in the first quarter of 2019, an increase in cash used of $1.7 million, including a higher level of capital expenditures related to the expansion of our ingredient extraction capabilities.

Conference Call

SunOpta plans to host a conference call at 9:00 A.M. Eastern time on Wednesday, May 6, 2020, to discuss the first 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 Relations" 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 (833) 979-2699 or International dial-in number 1 (236) 714-2200 using Conference ID 7369963. 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.

Superscript 1 See discussion of non-GAAP measures

About SunOpta Inc.

SunOpta Inc. is a leading global company focused on plant-based foods and beverages, fruit-based foods and beverages, and organic ingredient sourcing and production. SunOpta specializes in the sourcing, processing and packaging of organic, natural and non-GMO food products, integrated from seed through packaged products, with a focus on strategic vertically integrated business models.

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