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8-K - FORM 8-K - SunOpta Inc.form8k.htm

Exhibit 99.1


FOR IMMEDIATE RELEASE

SUNOPTA ANNOUNCES FIRST QUARTER 2011 RESULTS

Toronto, Ontario, May 11, 2011 - SunOpta Inc. (“SunOpta” or “the Company”) (NASDAQ:STKL; TSX:SOY), a leading global company focused on natural, organic and specialty foods, today announced financial results for the quarter ended April 2, 2011. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.

The Company realized revenues of $260.9 million in the first quarter of 2011 versus revenues of $216.7 million in the first quarter of 2010, a year over year increase of 20.4% . Revenues increased 9.7% excluding the impact of the acquisitions completed late in 2010.

For the first quarter of 2011, the Company realized operating income1 of $11.0 million or 4.2% of revenues, an increase of approximately 14.6%, versus operating income1 in the first quarter of 2010 of $9.6 million or 4.4% of revenues. The increase in operating income was driven by increases in the Grains and Foods Group, International Foods Group and Opta Minerals Inc. combined with reduced corporate spending. Excluding the year over year impact of the foreign exchange loss (gain), operating earnings increased 31.3% .

For the first quarter of 2011, the Company reported earnings per diluted common share from continuing operations of $0.08 or $5.1 million, as compared to $0.06 or $4.2 million for the first quarter of 2010. The Company realized EBITDA1 in first quarter of 2011 of $15.9 million as compared to $14.0 million in the first quarter of 2010, an increase of approximately 13.7% .

At April 2, 2011, the Company’s balance sheet reflects a current working capital ratio of 1.39 to 1.00, long-term debt to equity ratio of 0.22 to 1.00 and total debt to equity ratio of 0.62 to 1.00. During the first quarter of 2011 the Company used cash from continuing operating activities of $33.9 million as compared to $13.6 million in the first quarter of 2010, reflecting the impact of increased commodity volumes and costs and increased inventory and accounts receivable balances related to growth in the business. At April 2, 2011 the Company has total assets of $657.4 million and a net book value of $4.56 per outstanding share. At quarter-end, the Company was in compliance with its bank financial covenants.

Steve Bromley, President and Chief Executive Officer of SunOpta commented, ”We are pleased with our first quarter 2011 results which represent record first quarter net earnings for our Company. Operating income1 has improved in spite of rising commodity prices. We continue to streamline our portfolio and over the last twelve months have divested of three non-core operations, most recently the Mexican Frozen Fruit Assets, while over the same period acquiring two core operations. We remain focused on growing 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 to continue our profitable growth in the future.”


The Company plans to host a conference call at 10:00 AM Eastern Time on Thursday, May 12, 2011 to discuss the first 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 May 12th and 19th with the toll free dial-in number 1–800-642-1687 or 706-645-9291 followed by pass code: 62090916#.

1See discussion of non-GAAP measures

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, which are based on information available to us on the date of this release. These forward-looking statements include, but are not limited to, our continued efforts to streamline our portfolio, our focus on growing our business and improving operating margins and returns on assets employed and our positioning to continue profitable growth in the future. The terms and phrases “continue”, “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, competitive intensity, cost rationalization and product development initiatives. Whether actual timing and results will agree with expectations and predications of the Company is subject to many risks and uncertainties including, but not limited to, global economic conditions, consumer spending patterns and changes in market trends, decreases in customer demand, potential failure of product development, working capital management and continuous improvement initiatives, availability and pricing of raw materials and supplies, and other risks described from time to time under “Risk Factors” in the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q (available at www.sec.gov). Consequently all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized.

For further information, please contact:

SunOpta Inc.

Steve Bromley, President & CEO
Eric Davis, Vice President & CFO
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 quarters ended April 2, 2011 and April 3, 2010
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)

    April 2, 2011     April 3, 2010     Change  
Revenues $  260,923   $  216,749     20.4%  
Cost of goods sold   225,368     181,273     24.3%  
Gross profit   35,555     35,476     0.2%  
Selling, general and administrative expenses   23,007     25,796     (10.8% )
Intangible asset amortization   1,385     1,175     17.9%  
Other expense, net   362     315     14.9%  
Foreign exchange loss (gain)   135     (1,117 )   (112.1% )
Earnings from continuing operations before the following   10,666     9,307     14.6%  
Interest expense, net   1,984     3,022     (34.3% )
Earnings from continuing operations before income taxes   8,682     6,285     38.1%  
Provision for income taxes   3,009     2,076     44.9%  
Earnings from continuing operations   5,673     4,209     34.8%  
Earnings from discontinued operations, net of taxes   -     432     n/m  
Earnings   5,673     4,641     22.2%  
Earnings attributable to non-controlling interests   592     28     n/m  
Earnings attributable to SunOpta Inc. $  5,081   $  4,613     10.1%  
                   
Earnings per share – basic                  
     -from continuing operations $  0.08   $  0.06        
     -from discontinued operations   -     0.01        
  $  0.08   $  0.07        
Earnings per share – diluted                  
     -from continuing operations $  0.08   $  0.06        
     -from discontinued operations   -     0.01        
  $  0.08   $  0.07        


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

    April 2, 2011     January 1, 2011  
Assets            
             
Current assets            
     Cash and cash equivalents $  5,720   $  2,643  
     Accounts receivable   112,038     98,875  
     Inventories   227,462     200,278  
     Prepaid expenses and other current assets   32,837     30,041  
     Deferred income taxes   740     870  
    378,797     332,707  
             
Investments   33,345     33,345  
Property, plant and equipment   120,063     118,924  
Goodwill   49,078     48,558  
Intangible assets   60,321     60,200  
Deferred income taxes   11,796     11,889  
Other assets   2,841     2,930  
Non-current assets held for sale   1,131     1,131  
             
  $  657,372   $  609,684  
             
Liabilities            
             
Current liabilities            
     Bank indebtedness $  120,643   $  75,910  
     Accounts payable and accrued liabilities   118,528     124,031  
     Customer and other deposits   3,627     2,858  
     Income taxes payable   746     973  
     Other current liabilities   6,068     7,674  
     Current portion of long-term debt   22,892     22,247  
     Current portion of long-term liabilities   292     571  
    272,796     234,264  
             
Long-term debt   42,088     42,735  
Long-term liabilities   6,419     6,642  
Deferred income taxes   22,351     20,808  
    343,654     304,449  
             
             
Equity            
SunOpta Inc. shareholders’ equity            
     Capital Stock   180,881     180,661  
     65,539,104 common shares (January 1, 2011 - 65,500,091)            
     Additional paid in capital   12,758     12,336  
     Retained earnings   100,293     95,212  
     Accumulated other comprehensive income   4,872     2,833  
    298,804     291,042  
Non-controlling interest   14,914     14,193  
Total equity   313,718     305,235  
             
  $  657,372   $  609,684  


SunOpta Inc.
Consolidated Statements of Cash Flow
For the quarters ended April 2, 2011 and April 3, 2010
(Expressed in thousands of U.S. dollars)
(Unaudited)

    Quarter ended     Quarter ended  
    April 2, 2011     April 3, 2010  
             
Cash provided by (used in)            
Operating activities            
     Earnings $  5,673   $  4,641  
     Earnings from discontinued operations   -     432  
     Earnings from continuing operations   5,673     4,209  
Items not affecting cash            
     Amortization   4,833     4,328  
     Unrealized loss (gain) on foreign exchange   723     (1,092 )
     Deferred income taxes   1,766     1,166  
     Unrealized (gain) loss on derivative instruments   (3,685 )   1,443  
     Other   115     (284 )
Changes in non-cash working capital   (43,328 )   (23,354 )
Net cash flows from operations - continuing operations   (33,903 )   (13,584 )
Net cash flows from operations - discontinued operations   -     (751 )
    (33,903 )   (14,335 )
Investing activities            
Purchases of property, plant and equipment, net   (3,909 )   (5,951 )
Payment of deferred purchase consideration   -     (500 )
Purchases of patents, trademarks and other intangible assets   (81 )   (30 )
Other   -     296  
Cash from investing activities - continuing operations   (3,990 )   (6,185 )
Cash from investing activities - discontinued operations   -     (373 )
    (3,990 )   (6,558 )
Financing activities            
Increase in line of credit facilities   42,551     23,386  
Borrowings under long-term debt   37     -  
Proceeds from the issuance of common shares   213     207  
Repayment of long-term debt   (2,004 )   (1,102 )
Financing costs   (25 )   -  
Other   28     (188 )
Cash from financing activities - continuing operations   40,800     22,303  
Cash from financing activities - discontinued operations   -     -  
    40,800     22,303  
Foreign exchange gain on cash held in a foreign currency   170     207  
           
Increase in cash and cash equivalents during the period   3,077     1,617  
Discontinued operations cash activity included above:            
     Add: Balance included at beginning of period   -     18,971  
     Less: Balance included at end of period   -     (20,135 )
Cash and cash equivalents - beginning of the period   2,643     1,752  
Cash and cash equivalents - end of the period $  5,720   $  2,205  


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

                      Quarter ended  
                      April 2, 2011  
                Corporate        
    SunOpta Foods     Opta Minerals     Services     Consolidated  
  $   $   $   $  
                         
Total revenues from external customers   239,317     21,606     -     260,923  
                         
Segment Operating Income   10,463     2,451     (1,886 )   11,028  

The SunOpta Foods has the following segmented reporting:

                      Quarter ended  
                            April 2, 2011  
    Grains and                 International     SunOpta  
    Foods     Ingredients     Fruit     Foods     Foods  
  $   $   $   $   $  
                               
Total revenues from external customers   115,601     15,751     37,010     70,955     239,317  
                               
Segment Operating Income   5,707     1,895     388     2,473     10,463  

                      Quarter ended  
                      April 3, 2010  
                Corporate        
    SunOpta Foods     Opta Minerals     Services     Consolidated  
  $   $   $ $  
                         
Total revenues from external customers   198,818     17,931     -     216,749  
                         
Segment Operating Income   11,391     1,713     (3,482 )   9,622  

The SunOpta Foods has the following segmented reporting:

                      Quarter ended  
                            April 3, 2010  
    Grains and                 International     SunOpta  
    Foods     Ingredients     Fruit     Foods     Foods  
  $   $   $   $   $  
                               
Total revenues from external customers   78,845     18,150     40,340     61,483     198,818  
                               
Segment Operating Income   5,016     4,212     1,864     299     11,391  

(Segment Operating Income is defined as “Earnings from continuing operations before the following” excluding the impact of “other expense, net”)


1Non-GAAP Measures

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

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

    Quarter ended     Quarter ended  
    April 2, 2011     April 3, 2010  
Earnings from continuing operations before the following $  10,666   $  9,307  
Other expense, net   362     315  
         Operating Income   11,028     9,622  
Depreciation and amortization   4,833     4,328  
Earnings before interest, taxes, depreciation and amortization (EBITDA) $  15,861   $  13,950