EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 SunOpta Inc.: Exhibit 99.1 - Filed by newsfilecorp.com

Exhibit 99.1


FOR IMMEDIATE RELEASE

SUNOPTA ANNOUNCES SECOND QUARTER 2011 RESULTS

Toronto, August 9, 2011 - 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 quarter and two quarters ended July 2, 2011. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.

For the quarter ended July 2, 2011 the Company realized quarterly revenues of $290.8 million versus revenues of $233.9 million for the quarter ended July 3, 2010, an increase of 24.3% . This represents the largest quarterly revenues from continuing operations in the Company’s history, and reflects continued growth in the natural and organic foods sectors. Revenues increased 13.2% excluding the impact of the acquisitions completed late in 2010.

For the quarter ended July 2, 2011 the Company reported earnings per diluted common share from continuing operations of $0.07, or $4.4 million, as compared to $0.09, or $6.2 million, for the quarter ended July 3, 2010. The Company experienced continued strong performance in the International Foods Group and Opta Minerals Inc. offset by reduced earnings in the Grains and Foods Group primarily due to commodity market pressures in the sunflower segment, reduced earnings in the Ingredients Group due mainly to the loss of a major customer earlier in the year, and higher income taxes.

Earnings for the quarter ended July 2, 2011 reflect an income tax rate of 42.2% . The income tax rate is expected to normalize over the balance of the year to an annualized tax rate of approximately 36% due to the expected realization of certain tax benefits in the third and fourth quarter of 2011.

The quarterly results include other pre-tax income of approximately $3.2 million, due primarily to gains on the sale of assets in the Fruit Group during the quarter. These gains were offset by additional pre-tax costs of approximately $3.4 million included within the segmented results related to the Fruit Group disposals and other legal and rationalization matters.

For the quarter ended July 2, 2011 the Company realized EBITDA1 of $12.9 million compared to $15.8 million for the quarter ended July 3, 2010.

For the two quarters ended July 2, 2011 the Company reported revenues of $551.7 million versus revenues of $450.6 million for the two quarters ended July 3, 2010, a year over year increase of 22.4% . Revenues increased 11.6% excluding the impact of the acquisitions completed late in 2010.

For the two quarters ended July 2, 2011 the Company realized earnings per diluted common share from continuing operations of $0.14, or $9.5 million, as compared to $0.16, or $10.4 million, for the two quarters ended July 3, 2010.


For the two quarters ended July 2, 2011 the Company realized EBITDA1 of $28.8 million as compared to $29.8 million for the two quarters ended July 3, 2010.

At July 2, 2011, the Company’s balance sheet reflects a current working capital ratio of 1.47 to 1.00, long-term debt to equity ratio of 0.20 to 1.00 and total debt to equity ratio of 0.55 to 1.00. For the quarter ended July 2, 2011 the Company generated cash from continuing operating activities of $20.5 million as compared to $18.6 million for the quarter ended July 3, 2010. At the end of the quarter the Company had total debt outstanding of $167.8 million, a decrease of $17.8 million from the period ended April 2, 2011. At July 2, 2011 the Company had total assets of $631.4 million and a net book value of $4.65 per outstanding share. At July 2, 2011, the Company was in compliance with all its debt covenants.

Steve Bromley, President and Chief Executive Officer of SunOpta commented, “Our results for the second quarter reflect record quarterly revenues from continuing operations for the Company and continued growth in the natural and organic foods categories where we operate. Although we are working through a difficult commodity environment at this time, especially in our sunflower business, we continue to believe in our core portfolio and are focused on a number of new initiatives and opportunities that are currently in the pipeline. We remain committed to expanding our business in fast growing healthy foods categories while at the same time improving operating margins and returns on assets employed. We believe we are well positioned in the natural and organic foods sector and are confident in our future prospects.”

The Company plans to host a conference call at 10:00 A.M. Eastern Time on Wednesday, August 10th, 2011 to discuss the second quarter results 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 August 10th and 17th with the toll free dial-in number 1-800-642-1687 or 706-645-9291 followed by pass code: 74437112#.

1See discussion of non-GAAP financial measures following the consolidated financial information below.

About SunOpta Inc.

SunOpta Inc. is a leading global company focused on natural, organic and specialty foods. 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 significant 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 66.4% ownership position in Opta Minerals Inc. (TSX:OPM), a producer, distributor, and recycler of environmentally friendly industrial materials, and a minority ownership position in Mascoma Corporation, an innovative biofuels company.


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. These forward-looking statements include, but are not limited to, our expectations about future income tax rates, our continued efforts to streamline our portfolio, our focus on growing our business and improving operating margins and returns on assets employed and our positioning in the natural and organic foods sector. The terms and phrases “continue”, “believe”, “expect”, “confident”, “enthusiastic”, “improving”, “remain focused”, “positioned”, 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 predictions 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.

For further information, please contact:

SunOpta Inc.

Steve Bromley, President & CEO
Tony Tavares, Vice President & COO
Susan Wiekenkamp, Information Officer
Tel: 905-455-2528, ext 103
susan.wiekenkamp@sunopta.com
Website: www.sunopta.com


SunOpta Inc.
Consolidated Statements of Operations
For the quarter ended July 2, 2011 and July 3, 2010
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

 

  Quarter ended     Quarter ended        

 

  July 2, 2011     July 3, 2010     Change  

 

$   $     %  

 

                 

Revenues

  290,757     233,885     24.3%  

 

                 

Cost of goods sold

  257,055     196,942     30.5%  

 

                 

Gross profit

  33,702     36,943     (8.8)%  

 

                 

Selling, general and administrative expenses

  24,330     24,224     0.4%  

Intangible asset amortization

  1,393     1,144     21.8%  

Other (income) expense, net

  (3,189 )   1,044     (405.5)%  

Foreign exchange gain

  (57 )   (319 )   82.1%  

 

                 

Earnings from continuing operations before the following

  11,225     10,850     3.5%  

 

                 

Interest expense, net

  2,520     2,567     (1.8)%  

 

                 

Earnings from continuing operations before income taxes

  8,705     8,283     5.1%  

 

                 

Provision for income taxes

  3,672     1,854     98.1%  

 

                 

Earnings from continuing operations

  5,033     6,429     (21.7)%  

 

                 

Discontinued operations

                 

     Earnings from discontinued operations, net of taxes

  -     414     (100.0)%  

     Gain on sale of discontinued operations, net of taxes

  -     13,809     (100.0)%  

 

                 

Earnings from discontinued operations, net of taxes

  -     14,223     (100.0)%  

 

                 

Earnings

  5,033     20,652     (75.6)%  

 

                 

Earnings attributable to non-controlling interests

  632     186     239.8%  

 

                 

Earnings attributable to SunOpta Inc.

  4,401     20,466     (78.5)%  

 

                 

Earnings per share - basic

                 

       -from continuing operations

  0.07     0.09        

       -from discontinued operations

  -     0.22        

 

  0.07     0.31        

Earnings per share - diluted

                 

       -from continuing operations

  0.07     0.09        

       -from discontinued operations

  -     0.22        

 

  0.07     0.31        


SunOpta Inc.
Consolidated Statements of Operations
For the two quarters ended July 2, 2011 and July 3, 2010
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

 

Two quarters ended   Two quarters ended        

 

  July 2, 2011     July 3, 2010     Change  

 

$   $     %  

 

                 

Revenues

  551,680     450,634     22.4%  

 

                 

Cost of goods sold

  482,423     378,215     27.6%  

 

                 

Gross profit

  69,257     72,419     (4.4)%  

 

                 

Selling, general and administrative expenses

  47,337     50,020     (5.4)%  

Intangible asset amortization

  2,778     2,319     19.8%  

Other (income) expense, net

  (2,827 )   1,359     (308.0)%  

Foreign exchange loss (gain)

  78     (1,436 )   105.4%  

 

                 

Earnings from continuing operations before the following

  21,891     20,157     8.6%  

 

                 

Interest expense, net

  4,504     5,589     (19.4)%  

 

                 

Earnings from continuing operations before income taxes

  17,387     14,568     19.4%  

 

                 

Provision for income taxes

  6,681     3,930     70.0%  

 

                 

Earnings from continuing operations

  10,706     10,638     0.6%  

 

                 

Discontinued operations

                 

     Earnings from discontinued operations, net of income taxes

  -     846     (100.0)%  

     Gain on sale of discontinued operations, net of income taxes

  -     13,809     (100.0)%  

 

                 

Earnings from discontinued operations, net of income taxes

  -     14,655     (100.0)%  

 

                 

Earnings

  10,706     25,293     (57.7)%  

 

                 

Earnings attributable to non-controlling interests

  1,224     214     472.0%  

 

                 

Earnings attributable to SunOpta Inc.

  9,482     25,079     (62.2)%  

 

                 

Earnings per share – basic

                 

     -from continuing operations

  0.14     0.16        

     -from discontinued operations

  -     0.23        

 

  0.14     0.39        

 

                 

Earnings per share – diluted

                 

     -from continuing operations

  0.14     0.16        

     -from discontinued operations

  -     0.22        

 

  0.14     0.38        


SunOpta Inc.
Consolidated Balance Sheets
As at July 2, 2011 and January 1, 2011
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

    July 2, 2011     January 1, 2011  
    $   $  
             
Assets            
             
Current assets            
     Cash and cash equivalents   5,573     2,643  
     Accounts receivable   116,116     98,875  
     Inventories   208,946     200,278  
     Prepaid expenses and other current assets   24,899     30,041  
     Deferred income taxes   624     870  
    356,158     332,707  
             
Investments   33,345     33,345  
Property, plant and equipment   119,186     116,249  
Goodwill   49,251     48,558  
Intangible assets   59,300     60,200  
Deferred income taxes   11,940     11,889  
Other assets   2,219     2,930  
Non-current assets held for sale   -     3,806  
             
    631,399     609,684  
Liabilities            
             
Current liabilities            
     Bank indebtedness   107,258     75,910  
     Accounts payable and accrued liabilities   105,814     124,031  
     Customer and other deposits   2,076     2,858  
     Income taxes payable   1,682     973  
     Other current liabilities   1,582     7,674  
     Current portion of long-term debt   22,826     22,247  
     Current portion of long-term liabilities   582     571  
    241,820     234,264  
             
Long-term debt   37,689     42,735  
Long-term liabilities   5,920     6,642  
Deferred income taxes   24,591     20,808  
    310,020     304,449  
             
             
Equity            
SunOpta Inc. shareholders’ equity            
     Capital Stock   181,489     180,661  
     65,683,807 common shares (January 1, 2011 - 65,500,091)            
     Additional paid in capital   13,236     12,336  
     Retained earnings   104,694     95,212  
     Accumulated other comprehensive income   6,306     2,833  
    305,725     291,042  
Non-controlling interest   15,654     14,193  
Total equity   321,379     305,235  
             
    631,399     609,684  


SunOpta Inc.
Consolidated Statements of Cash Flows
For the quarter ended July 2, 2011 and July 3, 2010
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

 

  Quarter ended     Quarter ended  

 

  July 2, 2011     July 3, 2010  

 

$   $  

 

           

Cash provided by (used in)

           

Operating activities

           

     Earnings

  5,033     20,652  

     Earnings from discontinued operations

  -     14,223  

     Earnings from continuing operations

  5,033     6,429  

Items not affecting cash

           

     Depreciation and amortization

  4,863     3,912  

     Unrealized loss (gain) on foreign exchange

  246     (326 )

     Deferred income taxes

  2,212     482  

     Stock-based compensation

  552     800  

     Gain on sale of property, plant and equipment

  (3,824 )   -  

     Unrealized (gain) loss on derivative instruments

  (233 )   955  

     Other

  248     763  

Changes in non-cash working capital

  11,384     5,547  

Net cash flows from operations - continuing operations

  20,481     18,562  

Net cash flows from operations - discontinued operations

  -     (2,552 )

 

  20,481     16,010  

Investing activities

           

Purchases of property, plant and equipment

  (5,312 )   (2,880 )

Proceeds from sale of property, plant and equipment

  2,773     -  

Payment of deferred purchase consideration

  -     (221 )

Purchases of patents, trademarks and other intangible assets

  (9 )   (333 )

Other

  (441 )   (131 )

Cash flows from investing activities - continuing operations

  (2,989 )   (3,565 )

Cash flows from investing activities - discontinued operations

  -     65,156  

 

  (2,989 )   61,591  

Financing activities

           

Decrease in line of credit facilities

  (14,124 )   (58,182 )

Borrowings under long-term debt

  -     247  

Proceeds from the issuance of common shares

  534     305  

Repayment of long-term debt

  (4,722 )   (3,067 )

Other

  632     (55 )

Cash flows from financing activities - continuing operations

  (17,680 )   (60,752 )

Foreign exchange gain (loss) on cash held in a foreign currency

  41     (834 )

(Decrease) increase in cash and cash equivalents during the period

  (147 )   16,015  

Discontinued operations cash activity included above:

           

     Add: Balance included at beginning of period

  -     20,135  

     Less: Balance included at end of period

  -     (17,974 )

Cash and cash equivalents - beginning of the period

  5,720     2,205  

Cash and cash equivalents - end of the period

  5,573     20,381  


SunOpta Inc.
Consolidated Statements of Cash Flows
For the two quarters ended July 2, 2011 and July 3, 2010
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

 

Two quarters ended   Two quarters ended  

 

  July 2, 2011     July 3, 2010  

 

$   $  

 

           

Cash provided by (used in)

           

Operating activities

           

     Earnings

  10,706     25,293  

     Earnings from discontinued operations

  -     14,655  

     Earnings from continuing operations

  10,706     10,638  

Items not affecting cash

           

     Depreciation and amortization

  9,696     8,240  

     Unrealized loss (gain) on foreign exchange

  969     (1,418 )

     Deferred income taxes

  3,978     1,648  

     Stock-based compensation

  981     1,420  

     Gain on sale of property, plant and equipment

  (3,824 )   -  

     Unrealized (gain) loss on derivative instruments

  (3,918 )   1,009  

     Other

  (66 )   1,248  

Changes in non-cash working capital

  (31,944 )   (17,807 )

Net cash flows from operations - continuing operations

  (13,422 )   4,978  

Net cash flows from operations - discontinued operations

  -     (3,303 )

 

  (13,422 )   1,675  

Investing activities

           

Purchases of property, plant and equipment

  (9,221 )   (8,831 )

Proceeds from sale of property, plant and equipment

  2,773     -  

Payment of deferred purchase consideration

  -     (721 )

Purchases of patents, trademarks and other intangible assets

  (90 )   (363 )

Other

  (441 )   165  

Cash from investing activities - continuing operations

  (6,979 )   (9,750 )

Cash from investing activities - discontinued operations

  -     64,783  

 

  (6,979 )   55,033  

Financing activities

           

Increase (decrease) in line of credit facilities

  28,427     (34,796 )

Borrowings under long-term debt

  37     247  

Proceeds from the issuance of common shares

  747     512  

Repayment of long-term debt

  (6,726 )   (4,169 )

Financing costs

  (120 )   -  

Other

  755     (243 )

Cash from financing activities - continuing operations

  23,120     (38,449 )

 

           

Foreign exchange gain (loss) on cash held in a foreign currency

  211     (627 )

 

           

Increase in cash and cash equivalents during the period

  2,930     17,632  

Discontinued operations cash activity included above:

           

     Add: Balance included at beginning of period

  -     18,971  

     Less: Balance included at end of period

  -     (17,974 )

Cash and cash equivalents - beginning of the period

  2,643     1,752  

Cash and cash equivalents - end of the period

  5,573     20,381  



SunOpta Inc.
Segmented Information
For the quarter ended July 2, 2011 and July 3, 2010
Unaudited
(Expressed in thousands of U.S. dollars)
 

Quarter ended
July 2, 2011

SunOpta
Foods
$

Opta Minerals
$

Corporate
Services
$

Consolidated
$

Total revenues

 

 

 

 

     from external customers

265,970

24,787

-

290,757

 

 

 

 

 

Segment Operating Income

7,857

2,159

(1,980)

8,036

SunOpta Foods has the following segmented reporting for the quarter ended July 2, 2011:

Quarter ended
July 2, 2011

Grains and
Foods Group
$

Ingredients
Group
$

Fruit
Group
$

International
Foods Group
$

SunOpta
Foods
$

Total revenues from

 

 

 

 

 

     external customers

125,312

13,924

41,677

85,057

265,970

 

 

 

 

 

 

Segment Operating Income

4,654

899

(217)

2,521

7,857


Quarter ended
July 3, 2010

SunOpta
Foods
$

Opta Minerals
$

Corporate
Services
$

Consolidated
$

Total revenues from

 

 

 

 

     external customers

212,744

21,141

-

233,885

 

 

 

 

Segment Operating Income

12,824

1,719

(2,649)

11,894

SunOpta Foods has the following segmented reporting for the quarter ended July 3, 2010:

Quarter ended
July 3, 2010

Grains and
Foods Group
$

Ingredients
Group
$

Fruit
Group
$

International
Foods Group
$

SunOpta
Foods
$

Total revenues from

 

 

 

 

 

     external customers

92,088

17,648

39,531

63,477

212,744

 

 

 

 

 

 

Segment Operating Income

7,188

3,006

1,404

1,226

12,824




SunOpta Inc.
Segmented Information
For the two quarters ended July 2, 2011 and July 3, 2010
Unaudited
(Expressed in thousands of U.S. dollars)
 

Two quarters ended
July 2, 2011

SunOpta
Foods
$

Opta Minerals
$

Corporate
Services
$

Consolidated
$

Total revenues from

 

 

 

 

     external customers

505,287

46,393

-

551,680

 

 

 

 

 

Segment Operating Income (Loss)

18,320

4,610

(3,866)

19,064

SunOpta Foods has the following segmented reporting for the two quarters ended July 2, 2011:

Two quarters ended
July 2, 2011

Grains and
Foods Group
$

Ingredients
Group
$

Fruit
Group
$

International
Foods Group
$

SunOpta
Foods
$

Total revenues from

 

 

 

 

 

     external customers

240,913

29,675

78,687

156,012

505,287

 

 

 

 

 

 

Segment Operating Income

10,361

2,794

171

4,994

18,320


Two quarters ended
July 3, 2010

SunOpta
Foods
$

Opta Minerals
$

Corporate
Services
$

Consolidated
$

Total revenues from

 

 

 

 

     external customers

411,562

39,072

-

450,634

 

 

 

 

 

Segment Operating Income (Loss)

24,215

3,432

(6,131)

21,516

SunOpta Foods has the following segmented reporting for the two quarters ended July 3, 2010:

Two quarters ended
July 3, 2010

Grains and
Foods Group
$

Ingredients
Group
$

Fruit
Group
$

International
Foods Group
$

SunOpta
Foods
$

Total revenues from

 

 

 

 

 

     external customers

170,933

35,798

79,871

124,960

411,562

 

 

 

 

 

 

Segment Operating Income

12,204

7,218

3,268

1,525

24,215



1Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company provides information regarding Earnings before interest, taxes, depreciation and amortization (“EBITDA”) as additional information about its operating results, which is not a financial measure calculated and presented in accordance with GAAP. The Company believes that EBITDA assists 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. EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

The Company defines EBITDA as “earnings from continuing operations plus provision for income taxes, interest expense, depreciation and amortization”. The following is a tabular presentation of EBITDA, including reconciliation to GAAP earnings, which the Company believes to be the most directly comparable GAAP financial measure.

 

  Quarter ended     Quarter ended  

 

  July 2, 2011     July 3, 2010  

 

$   $  

 

           

Earnings from continuing operations

  5,033     6,429  

 

           

Provision for income taxes

  3,672     1,854  

Interest expense, net

  2,520     2,567  

Other (income) expense, net

  (3,189 )   1,044  

Depreciation and amortization

  4,863     3,912  

     Earnings before interest, taxes, depreciation and amortization (EBITDA)

  12,899     15,806  

 

           
             
    Two quarters     Two quarters  
    ended     ended  
    July 2, 2011     July 3, 2010  
  $   $  
             

Earnings from continuing operations

  10,706     10,638  

 

           

Provision for income taxes

  6,681     3,930  

Interest expense, net

  4,504     5,589  

Other (income) expense, net

  (2,827 )   1,359  

Depreciation and amortization

  9,696     8,240  

     Earnings before interest, taxes, depreciation and amortization (EBITDA)

  28,760     29,756