03:25:23 EDT Thu 01 Oct 2020
SunOpta Inc
Symbol SOY
Shares Issued 88,040,561
Close 2020-08-04 C$ 9.55
Recent Sedar Documents

SunOpta earns $777,000 (U.S.) in Q2 2020

2020-08-05 09:11 ET - News Release

Mr. Joe Ennen reports

SUNOPTA ANNOUNCES SECOND QUARTER FISCAL 2020 FINANCIAL RESULTS

SunOpta Inc. has released its financial results for the second quarter ended June 27, 2020.

All amounts are expressed in U.S. dollars, except where specifically noted.

Second Quarter 2020 Highlights:

  • Revenues of $310.9 million for the second quarter of 2020, compared to $293.0 million in the second quarter of 2019, an increase of 6.1%. Adjusted for foreign exchange and commodity prices, revenues grew by 5.8%.
  • Gross margin increased 350 basis points to 12.8% from 9.3% in the prior year.
  • Earnings attributable to common shareholders was a loss of $1.6 million or $0.02 per diluted common share in the second quarter of 2020, compared to a loss of $11.1 million or $0.13 per diluted common share in the second quarter of 2019.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $20.5 million or 6.6% of revenues for the second quarter of 2020, versus $10.1 million or 3.5% of revenues in the second quarter of 2019.

"We delivered another strong quarter, doubling adjusted EBITDA over the prior year for the third consecutive quarter. We believe our turnaround efforts have now taken root, setting us up for more consistent revenue and profitability growth going forward. The quarter represented a powerful combination of strong execution and favorable underlying category trends. Each of our three segments produced revenue growth and expanded gross margin during the second quarter," said Joe Ennen, Chief Executive Officer of SunOpta. "Our growth continues to be led by our No. 1 focus area, which is plant-based foods and beverages. Despite the negative impact on volumes in the food service channel, as a result of COVID-19, we still produced 10% growth on an adjusted basis. This growth and our ability to offset COVID-19 impacts are a direct reflection of the strength of our plant-based platform. We are extremely bullish on our plant-based opportunity including a robust sales pipeline and incremental capacity expected to come on-line in the fourth quarter of this year.

"Within our Global Ingredients segment, we saw continued strong growth and enhanced margin as we optimize our category investments. We remain confident and encouraged about initiatives across our global organization and remain well-positioned in each of our operating segments to drive growth, improve margins and enhance shareholder value. We continued to generate sequential and year-over-year margin improvement in our Fruit-Based Foods and Beverages segment, reflecting each of our initiatives to date and remain confident that our productivity investments will further this improvement in the second half of 2020."

Second Quarter 2020 Results

Revenues for the second quarter of 2020 were $310.9 million, an increase of 6.1% compared to $293.0 million in the second quarter of 2019. Excluding the impact of changes in commodity-related pricing and foreign exchange rates, revenues in the second quarter of 2020 increased by 5.8% compared with the second quarter of 2019.

The Plant-Based Foods and Beverages segment generated revenues of $91.7 million during the second quarter of 2020, an increase of 11.9% compared to $81.9 million in the second quarter of 2019. Excluding sunflower commodity price variances, Plant-Based segment revenues in the second quarter increased 9.6% compared to the prior year period, reflecting higher volumes of aseptic beverages, broth offerings, and ingredient extraction partially offset by reduced sales volumes of plant-based beverage products to foodservice customers as a result of COVID-19.

The Global Ingredients segment generated revenues of $126.5 million, an increase of 4.7% compared to $120.9 million in the second quarter of 2019. Excluding the impact of changes in commodity-related pricing and foreign exchange rates, Global Ingredients revenue in the second quarter of 2020 increased 6.9% compared to the prior year period, which reflected higher volumes in certain organic ingredient product categories and of premium juice products.

The Fruit-Based Foods and Beverages segment generated revenues of $92.7 million during the second quarter of 2020, an increase of 2.8% compared to $90.2 million in the second quarter of 2019. Excluding the impact of commodity price fluctuations, Fruit-Based segment revenues in the second quarter increased 0.8% compared to the prior year period, primarily reflecting increased retail volumes and pricing for frozen fruit partially offset by lower demand for frozen fruit and fruit preparations from foodservice customers as a result of COVID-19.

Gross profit was $39.7 million for the quarter ended June 27, 2020, an increase of $12.4 million compared to $27.3 million for the quarter ended June 29, 2019. As a percentage of revenues, gross profit for the quarter ended June 27, 2020 was 12.8% compared to 9.3% for the quarter ended June 29, 2019, an increase of 350 basis points. The Plant-Based Foods and Beverages segment accounted for $4.6 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 partially offset by wage premiums and higher cleaning costs attributable to COVID-19. The Global Ingredients segment accounted for $4.4 million of the increased gross profit in the quarter primarily due to increased pricing spreads for certain organic ingredients and premium juice products and productivity improvements. The Fruit-Based Foods and Beverages segment increased gross profit by $3.4 million in the quarter, reflecting increased sales, pricing and a favorable sales mix of higher-margin retail versus foodservice sales, and the impact of our automation and productivity initiatives partially offset by lower sales volumes and plant utilization for fruit ingredients, together with wage premiums and higher cleaning costs attributable to COVID-19.

Segment operating income was $8.8 million, or 2.8% of revenues in the second quarter of 2020, compared to operating loss of $2.5 million, or 0.9% of revenues in the second quarter of 2019. The increase in operating income year-over-year was primarily attributable to the $12.4 million increase in gross profit, partially offset by a year-over-year $1.0 million increase in SG&A primarily related to higher employee-related variable compensation and benefit costs, partially offset by lower travel and marketing costs and stock-based compensation expense.

Adjusted EBITDA was $20.5 million or 6.6% of revenues in the second quarter of 2020, compared to $10.1 million or 3.5% of revenues in the second quarter of 2019.

The Company reported a loss attributable to common shareholders for the second quarter of 2020 of $1.6 million, or $0.02 per diluted common share, compared to a loss of $11.1 million, or $0.13 per diluted common share during the second quarter of 2019.

Adjusted loss in the second quarter of 2020 was $1.4 million or $0.02 per common share, compared to an adjusted loss of $9.0 million or $0.10 per common share in the second quarter of 2019. Please refer to the discussion and table below under "Non-GAAP Measures - Adjusted Earnings/Loss".

Balance Sheet and Cash Flow

At June 27, 2020, SunOpta's balance sheet reflected total assets of $909.4 million and total debt of $448.9 million. During the second quarter of 2020, cash generated by operating activities was $2.7 million, compared to cash used in operations of $31.7 million during the second quarter of 2019. The $34.4 million improvement in operating cash flow primarily reflects the improved year-over-year operating results, along with more efficient working capital management. Cash used in investing activities in the second quarter of 2020 was $6.3 million, compared with $12.9 million in the second quarter of 2019, a decrease in cash used of $6.6 million.

Conference Call

SunOpta plans to host a conference call at 9:00 A.M. Eastern time on Wednesday, August 5, 2020, to discuss the second quarter financial results. After opening remarks, there will be a question and answer period. Investors interested in listening to a live webcast of the conference call can access a link on SunOpta's website at www.sunopta.com under the "Investors" section or directly here. Investors interested in listening to the live call over the telephone must pre-register for the conference call via a link on SunOpta's website. Upon registration, investors will be provided with the dial-in information, passcode and individual ID. Investors will also receive a confirmation email. Investors are encouraged to register at least 15 minutes prior to the scheduled call time and can register earlier at any time to receive the conference details. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days at the company's website.

About SunOpta Inc.

SunOpta 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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