TORONTO, May 2 /CNW/ - SunOpta Inc. (SunOpta or the Company)
(NASDAQ:STKL) (TSX:SOY) today announced results for the three months ended
March 31, 2006. All amounts are expressed in U.S. dollars.
The Company achieved record revenues for the three months ended March 31,
2006, realizing its 34th consecutive quarter of increased revenue growth
versus the same quarter in the previous year. Revenues in the quarter
increased by 54.6% to $133,312,000 as compared to $86,223,000 in the first
quarter of the prior year, led by a 52.5% increase in revenues within the
Company's vertically integrated natural and organic food operations. The
Company's revenue growth in the quarter reflects an internal growth rate of
18.1%, and growth via acquisitions of 36.5%.
Operating earnings(1) for the quarter increased by 83.9% to $6,031,000 or
4.5% of net revenue as compared to $3,280,000 or 3.8% of net revenue in the
previous year, driven by a 104% increase in operating earnings within the
SunOpta Food Group. Net earnings in the quarter were $3,012,000 or $0.053 per
diluted common share as compared to $6,605,000 or $0.116 per diluted common
share in the prior year. Excluding a net unusual gain realized in the first
quarter of 2005 related to the initial public offering of Opta Minerals Inc.,
net earnings per diluted common share increased 47.2% from $0.036 per diluted
common share in the prior year.
Gross margin as a percentage of revenue increased to 17.7% in the quarter
versus 15.6% in the fourth quarter of 2005. This increase of 2.1% reflects
improved product mix and operating efficiencies combined with the impact of
ongoing cost reduction initiatives. Selling, general and administrative costs
as a percentage of revenue decreased to 10.5% of revenues versus 10.9% in the
fourth quarter of 2005 and 11.4% in the first quarter of 2005. This reduction
reflects the benefits from leveraging costs as the Company grows combined with
continued cost reduction efforts.
All operating segments within the SunOpta Food Group reported increased
revenues and operating earnings versus 2005. Revenues increased 52.5% while
operating earnings increased 104.3%. The strong results were driven by record
aseptic soymilk revenues, the strong rebound in sales of oat fiber, growth in
private label fruit based products and continued momentum and cost improvement
in the Canadian distribution operations.
Opta Minerals realized strong growth in the quarter as a result of
internal growth of 14.6% combined with the February acquisition of Magnesium
Technologies Corporation. Internal growth was driven by strong performance of
abrasive operations including facilities that were commissioned during 2005.
Opta Minerals continues to pursue strategic acquisitions to complement their
existing product portfolio.
The SunOpta Bioprocess Group is in the final stages of completion on its
EUR 4.7 million contract with Abener Energia S.A. of Seville Spain. Delivery
of equipment is expected to commence during the second quarter. Interest in
the Group's technology and equipment for the pre-treatment of biomass for the
production of cellulosic ethanol remains high and the Group is actively
pursuing a number of exciting commercial ventures.
The Company continues to be well positioned for future growth with net
working capital of $75,368,000 and total assets of $334,969,000. The long term
debt to equity ratio at March 31, 2006 was 0.41:1:00, providing the Company
further financial resources to invest in internal growth and execute on its
acquisition program, all centered on achieving a run rate of $1 billion in
revenues by the end of 2007. Equity per outstanding common share has grown to
$2.88 versus $2.68 in the same period in 2005.
Jeremy Kendall, Chairman and Chief Executive Officer of SunOpta
commented, "I am extremely pleased with our continued growth and improvement
in operating earnings in the quarter. This improvement reflects the results of
numerous initiatives which have been implemented, all focused on positioning
SunOpta for sustainable growth and improved profitability. The Company is a
market leader in the key growth areas of organic, fiber enriched foods, whole
grains, fruits and vegetables and private label products, and we will continue
to position the Company for future growth in the healthy foods market
segments."
About SunOpta Inc.
SunOpta Inc. is an operator of high-growth ethical businesses, focusing
on integrated business models in the natural and organic food markets. For the
last seven consecutive years, SunOpta was included in Profit magazine's
'Profit 100' list of the 100 fastest growing companies in Canada. The Company
has three business units: the SunOpta Food Group, which specializes in
sourcing, processing and distribution of natural and organic food products
integrated from seed through packaged products; the Opta Minerals Group, a
producer, distributor, and recycler of environmentally friendly industrial
materials; and the SunOpta BioProcess Group which engineers and markets
proprietary steam explosion technology systems for the pulp, bio-fuel and food
processing industries. Each of these business units has proprietary products
and services that give it a solid competitive advantage in its sector.
Forward-Looking Statements
Certain statements included in this press release may constitute
"forward-looking statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to references to business strategies, competitive
strengths, goals, capital expenditure plans, business and operational growth
plans and references to the future growth of the business. These forward
looking statements are based on certain assumptions and analyses made by the
Company in light of its experience and its interpretation of current
conditions, historical trends and expected future developments as well as
other factors that the Company believes are appropriate in the circumstance.
However, whether actual results and developments will agree with expectations
and predications of the Company is subject to many risks and uncertainties
including, but not limited to; general economic, business or market risk
conditions; competitive actions by other companies; changes in laws or
regulations or policies of local governments, provinces and states as well as
the governments of United States and Canada, many of which are beyond the
control of the Company. 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.
(1) Operating earnings is defined as net earnings before other income
(expense), interest expense (net), income taxes and minority interest
<<
SunOpta Inc.
Condensed Consolidated Statements of Earnings
For the three months ended March 31, 2006 and 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
----------------------------------------------------------------------
March 31, March 31,
2006 2005 %
$ $ Change
----------------------------------------------------------------------
Revenues 133,312 86,223 54.6%
Cost of goods sold 109,684 70,587 55.4%
----------------------------
Gross profit 23,628 15,636 51.1%
Warehousing and distribution expenses 3,429 2,604 31.7%
Selling, general and administrative
expenses 13,960 9,787 42.6%
----------------------------
Earnings before the following 6,239 3,245 92.3%
Interest expense, net (1,399) (302) 363.2%
Other income (expense) (85) 4,035 (102.1%)
Foreign exchange (208) 35 (694.3%)
----------------------------
(1,692) 3,768 (144.9%)
----------------------------
Earnings before income taxes 4,547 7,013 (35.2%)
Provision for income taxes 1,403 235 497.0%
----------------------------
Net earnings before minority interest 3,144 6,778 (53.6%)
----------------------------
Minority interest 132 173 (23.7%)
----------------------------
Net earnings for the period 3,012 6,605 (54.4%)
----------------------------
Net earnings per share for the period
- Basic 0.05 0.12 (58.3%)
----------------------------
- Diluted 0.05 0.12 (58.3%)
----------------------------
SunOpta Inc.
Condensed Consolidated Balance Sheets
As at March 31, 2006 and December 31, 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
----------------------------------------------------------------------
March 31, December 31,
2006 2005
$ $
----------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents 5,068 5.455
Accounts receivable 64,043 57,608
Inventories 90,325 88,340
Prepaid expenses and other current assets 6,059 4,194
Current income taxes recoverable 759 1,847
Deferred income taxes 691 691
---------------------------
166,945 158,135
Property, plant and equipment 82,214 77,257
Goodwill and intangibles 76,960 58,262
Deferred income taxes 5,543 4,473
Other assets 3,307 3,355
---------------------------
334,969 301,482
---------------------------
Liabilities
Current liabilities
Bank indebtedness 34,424 20,799
Accounts payable and accrued liabilities 48,733 50,688
Customer and other deposits 1,538 544
Current portion of long-term debt 6,185 3,518
Current portion of long-term payables 697 723
---------------------------
91,577 76,272
Long-term debt 60,479 55,538
Long-term payables 303 472
Deferred income taxes 9,432 -
---------------------------
161,791 132,282
---------------------------
Minority interest 9,259 9,116
---------------------------
Shareholders' Equity
Capital stock 107,539 106,678
Contributed surplus 3,310 3,235
Retained earnings 43,391 40,379
Cumulative other comprehensive income 9,679 9,792
---------------------------
163,919 160,084
---------------------------
334,969 301,482
---------------------------
SunOpta Inc.
Condensed Notes to Consolidated Financial Statements
For the three months ended March 31, 2006
Unaudited
(Expressed in thousands of U.S. dollars, except per share and share
amounts)
----------------------------------------------------------------------
Three months ended
March 31, 2006
-------------------------------------------
SunOpta
SunOpta Opta BioProcess
Food Minerals and
Group Inc. Corporate Consolidated
$ $ $ $
-------------------------------------------
Total revenues to
external customers 119,271 13,045 996 133,312
-------------------------------------------
Segment earnings
before other income
(expense), interest
expense (net), income
taxes and minority
interest 6,829 998 (1,796) 6,031
-------------------------------------------
Other income (expense) (85)
-------------------------------------------
Interest expense, net 1,399
-------------------------------------------
Provision for income
taxes 1,403
-------------------------------------------
Minority interest 132
-------------------------------------------
Net earnings 3,012
-------------------------------------------
The SunOpta Food Group has the following segmented reporting:
Three months ended
March 31, 2006
----------------------------------------------------
SunOpta
SunOpta Canadian SunOpta
Grains SunOpta SunOpta Food Food
& Foods Ingredients Fruit Distribution Group
$ $ $ $ $
---------------------------------------------------
Total revenues
from external
customers 39,154 18,113 31,096 30,908 119,271
---------------------------------------------------
Segment
earnings
before other
income
(expense),
interest
expense
(net), income
taxes and
minority
interest 1,793 1,706 1,500 1,830 6,829
---------------------------------------------------
SunOpta Inc.
Condensed Notes to Consolidated Financial Statements
For the three months ended March 31, 2006
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
----------------------------------------------------------------------
Three months ended
March 31, 2005
------------------------------------------
SunOpta
SunOpta Opta BioProcess
Food Minerals and
Group Inc. Corporate Consolidated
$ $ $ $
------------------------------------------
Total revenues to
external customers 78,205 7,738 280 86,223
------------------------------------------
Segment earnings before
other income
(expense), interest
expense (net), income
taxes and minority
interest 3,343 837 (900) 3,280
------------------------------------------
Other income 4,035
------------------------------------------
Interest expense, net 302
------------------------------------------
Provision for income
taxes 235
------------------------------------------
Minority interest 173
------------------------------------------
Net earnings 6,605
------------------------------------------
The SunOpta Food Group has the following segmented reporting:
Three months ended
March 31, 2005
---------------------------------------------------
SunOpta
SunOpta Canadian SunOpta
Grains & SunOpta SunOpta Food Food
Foods Ingredients Fruit Distribution Group
$ $ $ $ $
---------------------------------------------------
Total revenues
from external
customers 31,180 15,153 6,390 25,482 78,205
---------------------------------------------------
Segment
earnings
before other
income
(expense),
interest
expense
(net), income
taxes and
minority
interest 1,612 676 365 690 3,343
---------------------------------------------------
>>
%SEDAR: 00017008E
