TORONTO, August 2 /CNW/ - SunOpta Inc. (SunOpta or the Company)
(Nasdaq:STKL) (TSX:SOY) today announced results for the three and six month
periods ended June 30, 2006. All amounts are expressed in U.S. dollars.
The Company achieved record revenues for the three months ended June 30,
2006, realizing its 35th consecutive quarter of increased revenue growth
versus the same quarter in the previous year. Revenues in the quarter
increased by 51.4% to $155,745,000 as compared to $102,858,000 in the second
quarter of the prior year, led by a 48.3% increase in revenues within the
Company's vertically integrated natural, organic and specialty foods
operations. The Company's revenue growth in the quarter reflects an internal
growth rate of 19.3%, and growth via acquisitions of 32.1%.
Operating earnings(1) for the quarter increased by 54.1% to $8,772,000 or
5.6% of revenues as compared to $5,693,000 or 5.5% of revenues in the previous
year, driven by a 61.6% increase in operating earnings within the SunOpta Food
Group. Net earnings in the quarter were $4,343,000 or $0.08 per diluted common
share as compared to $3,307,000 or $0.06 per diluted common share in the prior
year. Operating earnings for the six months ended June 30, 2006 increased 65%
to $14,803,000 as compared to $8,973,000 in the prior year. Net earnings in
the six months ended June 30, 2006 increased to $7,355,000 or $0.13 per
diluted common share, a 35.8% increase compared to $5,400,000 or $0.10 per
diluted common share after excluding a net unusual gain of $4,512,000 realized
in the first quarter of 2005 mainly related to the initial public offering of
Opta Minerals Inc..
In the second quarter, and on a year to date basis, the SunOpta Food
Group reported increased revenues and operating earnings, when compared to
2005. In the second quarter revenues increased 48.3% while operating earnings
increased 61.6%. On a year to date basis revenues increased 50.2% and
operating earnings increased 78.6%. The improved operating earnings for the
second quarter and first half were driven by strong aseptic packaged product
revenues, the rebound in sales of oat fiber and addition of soy fiber, growth
in organic private label fruit and tomato based products and revenue and cost
improvements in the Canadian distribution operations. The SunOpta Grains and
Foods Group experienced lower operating earnings for the quarter and on a year
to date basis due to a significant decline in earnings within the Group's
sunflower business where product margins were affected by crop quality issues
from the 2005 crop and excess supply in international markets. The sunflower
business is expected to rebound in the fourth quarter with the delivery of new
crop, changes in planted seed varieties and an increase in irrigated lands.
Opta Minerals realized revenue growth in the second quarter and for the
first half of 85.6% and 78% respectively due primarily to the February
acquisition of Magnesium Technologies Corporation. Internal growth was driven
by abrasive operations that were commissioned during 2005. Opta Minerals
continues to pursue strategic transactions to complement its existing product
portfolio.
The interest in the SunOpta BioProcess Group's technology and equipment
for the pre-treatment of biomass for the production of cellulosic ethanol
continues to grow. Results for the second quarter reflect low revenues and
margins due to contract timing, project and marketing costs. The Group has
announced two new relationships in the last several months including a Joint
Development Agreement with Royal Nedalco out of the Netherlands and an
equipment supply contract with China Resources Alcohol Corporation (CRAC). The
Group is expected to complete its current contract with Abener Energia S.A. of
Seville Spain and the contract with CRAC in 2006.
SunOpta has reconfirmed its profit guidance for the year 2006 and has
raised its revenue guidance from $540 - $550 million to $585 - $600 million
for the 2006 year.
The Company remains well positioned for future growth with net working
capital of $82,789,000 and total assets of $334,890,000. Year to date capital
spending is $4,824,000 compared to $7,906,000 for the same period in the prior
year. The long term debt to equity ratio at June 30, 2006 was 0.38:1:00,
providing the Company further financial resources to invest in internal growth
and execute on its acquisition program. Equity per outstanding common share
has grown to $3.00 versus $2.73 at June 30, 2005.
Jeremy Kendall, Chairman and Chief Executive Officer of SunOpta
commented, "I am extremely pleased with our internal revenue growth from the
SunOpta Food Group of 21.5% in the quarter and 19.8% for the year. It is a
testament to the continuing maturation of organic foods, healthy food products
and growth of private label food products within these categories and supports
our vision to continue to expand within these markets both through internal
growth and selective acquisition. The Company is on track to achieve its goal
of an exit rate of $1 billion in sales by the end of 2007."
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. 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.
<<
For further information, please contact:
SunOpta Inc. Investment Community Inquiries:
Jeremy N. Kendall, Chairman & CEO Lytham Partners, LLC
Steve Bromley, President & COO Joe Diaz
John Dietrich, Vice President & CFO Robert Blum
Susan Wiekenkamp, Information Officer Joe Dorame
Tel: 905-455-2528, ext 103 Tel: 602-889-9700
susan.wiekenkamp(at)sunopta.com diaz(at)lythampartners.com
Website: www.sunopta.com
>>
(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 June 30, 2006 and 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
----------------------------------------------------------------------
June 30, June 30,
2006 2005 %
$ $ Change
----------------------------------------------------------------------
Revenues 155,745 102,858 51.4%
Cost of goods sold 128,399 84,352 52.2%
-------------------------
Gross profit 27,346 18,506 47.8%
Warehousing and distribution expenses 3,834 3,361 14.1%
Selling, general and administrative expenses 15,337 9,497 61.5%
-------------------------
Earnings before the following 8,175 5,648 44.7%
Interest expense, net (1,748) (594) 194.3%
Other expense (194) (203) (4.4%)
Foreign exchange 597 45
-------------------------
(1,345) (752) 78.9%
-------------------------
Earnings before income taxes 6,830 4,896 39.5%
Provision for income taxes 2,087 1,354 54.1%
-------------------------
Net earnings before minority interest 4,743 3,542 33.9%
-------------------------
Minority interest 400 235 70.2%
-------------------------
Net earnings for the period 4,343 3,307 31.3%
-------------------------
Change in foreign currency translation
adjustment 1,860 (635) 392.9%
-------------------------
Comprehensive income 6,203 2,672 132.1%
-------------------------
Net earnings per share for the period
- Basic 0.08 0.06
-------------------------
- Diluted 0.08 0.06
-------------------------
SunOpta Inc.
Condensed Consolidated Statements of Earnings
For the six months ended June 30, 2006 and 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
---------------------------------------------------------------------
June 30, June 30,
2006 2005 %
$ $ Change
----------------------------------------------------------------------
Revenues 289,057 189,081 52.9%
Cost of goods sold 238,083 154,939 53.7%
-------------------------
Gross profit 50,974 34,142 49.3%
Warehousing and distribution expenses 7,492 6,599 13.5%
Selling, general and administrative expenses 29,068 18,650 55.9%
-------------------------
Earnings before the following 14,414 8,893 62.1%
Interest expense, net (3,147) (896) 251.2%
Other income (expense) (279) 3,832 (107.3%)
Foreign exchange 389 80 386.3%
-------------------------
(3,037) 3,016 (200.7%)
-------------------------
Earnings before income taxes 11,377 11,909 (4.5%)
Provision for income taxes 3,490 1,589 119.6%
-------------------------
Net earnings before minority interest 7,887 10,320 (23.6%)
-------------------------
Minority interest 532 408 30.4%
-------------------------
Net earnings for the period 7,355 9,912 (25.8%)
-------------------------
Change in foreign currency translation
adjustment 1,747 (800) 318.3%
-------------------------
Comprehensive income 9,102 9,112
-------------------------
Net earnings per share for the period
- Basic 0.13 0.18
-------------------------
- Diluted 0.13 0.17
-------------------------
SunOpta Inc.
Condensed Consolidated Balance Sheets
As at June 30, 2006 and December 31, 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
----------------------------------------------------------------------
June 30, December 31,
2006 2005
$ $
----------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents 4,676 5,455
Accounts receivable 68,209 57,608
Inventories 97,772 88,340
Prepaid expenses and other current assets 4,907 4,194
Current income taxes recoverable - 1,847
Deferred income taxes 691 691
---------------------
176,255 158,135
Property, plant and equipment 82,690 77,257
Goodwill and intangibles 77,565 58,262
Deferred income taxes 5,519 4,473
Other assets 2,861 3,355
---------------------
344,890 301,482
---------------------
Liabilities
Current liabilities
Bank indebtedness 26,946 20,799
Accounts payable and accrued liabilities 59,127 50,688
Customer and other deposits 450 544
Current portion of long-term debt 6,377 3,518
Current portion of long-term payables 566 723
---------------------
93,466 76,272
Long-term debt 59,831 55,538
Long-term payables - 472
Deferred income taxes 9,539 -
---------------------
162,836 132,282
---------------------
Minority interest 9,725 9,116
---------------------
Shareholders' Equity
Capital stock 109,655 106,678
Contributed surplus 3,401 3,235
Retained earnings 47,734 40,379
Cumulative other comprehensive income 11,539 9,792
---------------------
172,329 160,084
---------------------
344,890 301,482
---------------------
SunOpta Inc.
Condensed Notes to Consolidated Financial Statements
For the three and six months ended June 30, 2006 and 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
----------------------------------------------------------------------
Three months ended
June 30, 2006
----------------------------------------------------
SunOpta
SunOpta Opta Minerals BioProcess and
Food Group Inc. Corporate Consolidated
$ $ $ $
----------------------------------------------------
Total
revenues to
external
customers 137,287 18,260 198 155,745
----------------------------------------------------
Segment
earnings
before other
income
(expense),
interest
expense
(net),
income taxes
and minority
interest 8,168 2,396 (1,792) 8,772
----------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
Three months ended
June 30, 2006
----------------------------------------------------
SunOpta
SunOpta Canadian
Grains & SunOpta SunOpta Food SunOpta
Foods Ingredients Fruit Distribution Food Group
$ $ $ $ $
----------------------------------------------------
Total
revenues
from
external
customers 49,862 17,138 39,491 30,796 137,287
----------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net),
income
taxes and
minority
interest 2,273 1,774 2,870 1,251 8,168
----------------------------------------------------
Six months ended
June 30, 2006
-----------------------------------------------------
SunOpta
SunOpta Opta Minerals BioProcess and
Food Group Inc. Corporate Consolidated
$ $ $ $
-----------------------------------------------------
Total
revenues to
external
customers 256,558 31,305 1,194 289,057
-----------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net),
income
taxes and
minority
interest 14,997 3,394 (3,588) 14,803
-----------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
Six months ended
June 30, 2006
----------------------------------------------------
SunOpta
SunOpta Canadian
Grains & SunOpta SunOpta Food SunOpta
Foods Ingredients Fruit Distribution Food Group
$ $ $ $ $
----------------------------------------------------
Total
revenues
from
external
customers 89,016 35,251 70,587 61,704 256,558
----------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net),
income
taxes and
minority
interest 4,066 3,480 4,370 3,081 14,997
----------------------------------------------------
SunOpta Inc.
Condensed Notes to Consolidated Financial Statements
For the three and six months ended June 30, 2006 and 2005
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)
----------------------------------------------------------------------
Three months ended
June 30, 2005
-----------------------------------------------------
SunOpta
SunOpta Opta Minerals BioProcess and
Food Group Inc. Corporate Consolidated
$ $ $ $
-----------------------------------------------------
Total
revenues to
external
customers 92,555 9,839 464 102,858
-----------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net),
income
taxes and
minority
interest 5,054 1,621 (982) 5,693
-----------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
Three months ended
June 30, 2005
-----------------------------------------------------
SunOpta
SunOpta Canadian
Grains & SunOpta SunOpta Food SunOpta
Foods Ingredients Fruit Distribution Food Group
$ $ $ $ $
-----------------------------------------------------
Total
revenues
from
external
customers 38,956 16,647 10,230 26,722 92,555
-----------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net),
income
taxes and
minority
interest 2,880 1,062 500 612 5,054
-----------------------------------------------------
Six months ended
June 30, 2005
-----------------------------------------------------
SunOpta
SunOpta Opta Minerals BioProcess and
Food Group Inc. Corporate Consolidated
$ $ $ $
-----------------------------------------------------
Total
revenues to
external
customers 170,760 17,577 744 189,081
-----------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net),
income
taxes and
minority
interest 8,396 2,458 (1,881) 8,973
-----------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
Six months ended
June 30, 2005
----------------------------------------------------
SunOpta
SunOpta Canadian SunOpta
Grains & SunOpta SunOpta Food Food
Foods Ingredients Fruit Distribution Group
$ $ $ $ $
----------------------------------------------------
Total
revenues
from
external
customers 70,136 31,800 16,620 52,204 170,760
----------------------------------------------------
Segment
earnings
before
other
income
(expense),
interest
expense
(net),
income
taxes and
minority
interest 4,492 1,737 865 1,302 8,396
----------------------------------------------------
>>
