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SunOpta: Fiscal 2008 Year-End Results
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SunOpta Inc., a leading global company focused on natural, organic and specialty foods and natural health products, announced financial results for the year ended December 31, 2008. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP.
For fiscal 2008 the Company realized record revenues of $1.055 billion, an increase of 31.5% versus fiscal 2007 revenues of $802.5 million. These results were led by a 32.4% increase in revenues from the SunOpta Food Group and reflect a consolidated internal growth rate of approximately 16% for fiscal 2008.
On a GAAP basis for fiscal 2008 the Company realized a loss of ($10.9) million or ($0.17) per diluted common share including the impact of non-cash charges for goodwill impairment in certain operations and non-cash tax valuation allowances totaling $13.7 million or $0.21 per diluted common share, due in part to recent economic conditions and the decline in the Company's stock price.
Adjusted earnings(1) for fiscal 2008 were $13.3 million or $0.21 per diluted common share after adjusting for professional fees, severance and related costs incurred during the year related to the investigation of internal controls in the SunOpta Fruit Group and the Company's restatement of financial results for the first three months of 2007, non-cash charges for goodwill impairment and tax valuation allowances plus non-recurring start up and operational costs. Excluding non-recurring start up and operational costs, earnings were $10.8 million or $0.17 per diluted common share versus previous guidance of $0.19 to $0.23 per diluted common share. Segment operating income(2) for the year was $16.2 million as compared to $5.7 million in 2007, an increase of 186%.
During fiscal 2008 the Company realized cash from operating activities of $33.7 million versus cash used in 2007 of $35.1 million, a year over year improvement of $68.8 million, indicative of the extensive efforts to reduce working capital and control spending across the organization. Excluding the impact of credit facilities included with acquisitions completed in 2008, the Company reduced bank indebtedness by $24.6 million versus an increase of $18.0 million in 2007.
At December 31, 2008 the Company's balance sheet reflects a current working capital ratio of 1.74 to 1.00, long term debt to equity ratio of 0.49 to 1.00 and total debt to equity ratio of 0.79 to 1.00. The Company has total assets of $581.0 million and a net book value of $3.52 per outstanding share. The Company is in compliance with all banking covenants as at December 31, 2008.
Steve Bromley, President and Chief Executive Officer of SunOpta commented, "2008 was certainly a challenging year for our Company as we navigated through the issues we experienced in the SunOpta Fruit Group and the impact of the deterioration in the global economy. We have started 2009 with a cautious sense of awareness of the difficulties in the global economic environment, but confident that our position as a key player in health conscious food categories, combined with numerous cost control, efficiency and product development initiatives focused on improving and solidifying our business, will lead us to improved returns in 2009 and beyond."
Segment operating income(2) for the year was $16.2 million as compared to $5.7 million in 2007, an increase of 186%. Segment operating income(2) within the SunOpta Food Group increased 84.9%. The improved segment operating income(2) in the SunOpta Food Group was driven by record results in the SunOpta Grains & Foods Group and SunOpta Distribution Group. There is continued demand for the Food Groups natural, organic and specialty foods and natural health product offerings as consumers focus on health conscious food categories. The SunOpta Fruit Group reduced its losses as a result of a sharpened and continued focus on margin improvement and cost containment. Prospects for the SunOpta Fruit Group for 2009 are encouraging.
Segment operating income(2) within Opta Minerals declined approximately 17% to $5.5 million in 2008, reflecting the precipitous drop in the fourth quarter in the foundry and steel industries as a result of the decline in the global economy and a $2.8 million write-down of magnesium inventory to realizable value. Operations have been restructured to deal with this decline and the group is well positioned to benefit from expected increased infrastructure spending in 2009. Segment operating results in the SunOpta BioProcess Group improved in 2008 but remain in a loss position. The group remains focused on leveraging their technology and expertise in the production of cellulosic ethanol, a category that is believed offers excellent long term growth potential as the world looks to reduces its dependence on fossil fuels and reduce green house gas emissions.
For the fourth quarter of 2008 the Company realized revenues of $245.0 million versus $209.8 million in 2007, an increase of 16.8%. On a GAAP basis the Company realized a loss of ($17.0) or ($0.27) per diluted common share including the impact of non-cash charges for goodwill impairment and non-cash tax valuation allowances totalling $0.21 per diluted common share as well as charges related to the unfavourable arbitration decision in SunOpta BioProcess and professional fees and related costs totalling $0.03 per diluted common share, resulting in an adjusted loss(1) for the quarter of ($1.1) million or ($0.02) per diluted common share. Results in the quarter were significantly impacted by pre-tax commodity cost write-downs of approximately $3.6 million on certain commodities which needed to be marked to market.
As previously announced, as a result of the current uncertain and rapidly changing world-wide macroeconomic conditions, the Company has decided to take a more cautious approach with regard to providing guidance, and in doing so has decided not to provide specific revenue and earnings guidance for 2009. The Company will provide updates when appropriate related to material changes in business affairs resulting from changes in economic conditions. The Company expects to realize improved results in 2009 as a result of improved pricing and product mix; the impact of capacity expansion, cost reduction and rationalization initiatives; fixed cost leverage; and the avoidance of certain professional fees, severance and operational costs incurred in 2008 which are not expected to reoccur to the same extent in 2009. The Company's primary focus for 2009 remains the improvement of operating margins and return on assets employed.
SunOpta will host a conference call at 10:00 am Eastern Standard Time on Friday March 6, 2009 to discuss these results and recent corporate developments. The conference call can be accessed toll free by dialing 1-(866) 322-2356 or (416) 640-3405 followed by pass code 4939312#.
About SunOpta Inc.
SunOpta Inc. is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food and natural health 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; Opta Minerals Inc. (TSX:OPM) (66.2% owned by SunOpta), a producer, distributor, and recycler of environmentally friendly industrial materials; and SunOpta BioProcess Inc. which engineers and markets proprietary steam explosion technology systems for the bio-fuel, pulp and food processing industries. Each of these business units has proprietary products and services that give it a solid competitive advantage in its sector.
The SunOpta Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3958
Forward Looking Statements
Certain statements included in this press release regarding 2008 results and 2009 plans and projected results are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, and are based on information available to us on the date of this release. These forward looking statements include, but are not limited to management's expectations for improved financial results in 2009 and beyond, increased infrastructure spending in 2009 and the long term growth potential of cellulosic ethanol as well as the Company's business strategy and objectives. The terms and phrases "will", "continued", "prospects", "expected", "believed" 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 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, product pricing levels, customer demand, competitive intensity, cost rationalization initiatives, product development initiatives, projected capacity expansion, supply contracts and certain market publications and studies. 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, economic conditions, consumer spending patterns, potential failure of product development 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 (available at www.sec.gov). 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. We assume no obligation to update these forward looking statements except as required by law.
(1) Adjusted earnings (loss) is not a GAAP measure. SunOpta believes adjusted earnings (adjusted for the impact of the professional fees and severance costs incurred in relation to the investigation and related activities, non-recurring start up and operational costs plus the non-cash charges for goodwill impairment and tax valuation allowances) provides useful information to understand the underlying performance of the business and as a result these items have been adjusted.
(2) Segment Operating Income is defined as "Earnings Before the Following" excluding the impact of "Other expenses, net" and "Goodwill Impairment." This provides useful information to understand the underlying performance of the particular segment of the Company's business.
SunOpta Inc.
Consolidated Statements of Operations
For the years ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31, %
2008 2007 change
$ $
Revenues 1,055,173 802,494 31.5%
Cost of goods sold 899,078 676,360 32.9%
--------------------------------------
Gross profit 156,095 126,134 23.8%
Warehousing and distribution
expenses 21,040 20,899 0.7%
Selling, general and
administrative expenses 117,808 95,911 22.8%
Intangible asset amortization 5,879 4,201 39.9%
Other expenses, net 1,003 1,187 (15.5%)
Goodwill impairmant 10,154 996 919.5%
Foreign exchange gain (4,835) (539) 797.0%
--------------------------------------
Earnings before the following 5,046 3,479 45.0%
Dilution gain -- 693 --
Interest expense, net (14,281) (8,823) 61.9%
--------------------------------------
Loss before income taxes (9,235) (4,651) 98.6%
Provision for (recovery of)
income taxes 790 (6,101) (112.9%)
--------------------------------------
(Loss) earnings before
minority interest (10,025) 1,450 (791.4%)
Minority interest 911 1,043 (12.7%)
--------------------------------------
(Loss) earnings for the year (10,936) 407 (2,787.0%)
--------------------------------------
(Loss) earnings per share for
the year
Basic (0.17) 0.01
--------------------------
Diluted (0.17) 0.01
--------------------------
SunOpta Inc.
Consolidated Balance Sheets
As at December 31, 2008 and December 31, 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
Assets
Current assets
Cash and cash equivalents 24,755 30,302
Accounts receivable 95,129 87,729
Inventories 200,689 181,460
Prepaid expenses and other current assets 14,448 15,879
Current income taxes recoverable 595 1,491
Deferred income taxes 493 1,749
--------------------------
336,109 318,610
Property, plant and equipment 110,641 116,389
Goodwill 54,022 55,503
Intangible assets 63,161 62,076
Deferred income taxes 16,160 14,110
Other assets 954 2,752
--------------------------
581,047 569,440
--------------------------
Liabilities
Current liabilities
Bank indebtedness 67,164 58,806
Accounts payable and accrued liabilities 106,989 93,462
Customer and other deposits 1,228 1,300
Other current liabilities 4,437 4,868
Current portion of long-term debt 12,174 13,119
Current portion of long-term liabilities 1,362 1,304
--------------------------
193,354 172,859
Long-term debt 99,353 85,595
Long-term liabilities 5,017 3,307
Deferred income taxes 13,614 11,430
--------------------------
311,338 273,191
--------------------------
Minority interest 15,102 13,863
Preferred shares of a subsidiary company 27,796 27,409
Shareholders' Equity
Capital stock
64,493,320 common shares (December 31,
2007 - 64,149,593) 177,858 176,547
Additional paid in capital 6,778 5,967
Retained earnings 40,909 51,845
Accumulated other comprehensive income 1,266 20,618
--------------------------
226,811 254,977
--------------------------
581,047 569,440
--------------------------
SunOpta Inc.
Consolidated Statements of Cash Flow
For the years ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
Cash provided by (used in)
Operating activities
(Loss) earnings for the year (10,936) 407
Items not affecting cash
Amortization 19,364 15,058
Goodwill impairment 10,154 996
Stock-based compensation 1,106 867
Dilution gain -- (693)
Minority interest 911 1,043
Deferred income taxes (1,116) (8,752)
Other 833 3,384
Changes in non-cash working capital, net
of businesses acquired 13,369 (47,387)
--------------------------
33,685 (35,077)
--------------------------
Investing activities
Acquisition of businesses, net of cash
acquired (5,267) (21,319)
Purchases of property, plant and equipment (9,650) (29,686)
Proceeds from disposal of property, plant
and equipment 2,005 65
Payment of deferred purchase consideration (2,042) (2,156)
Purchase of patents, trademarks and other
intangible assets (673) (1,805)
Other (105) (1,358)
--------------------------
(15,732) (56,259)
--------------------------
Financing activities
(Decrease) increase in line of credit
facilities (24,584) 18,011
Proceeds from the issuance of preferred
shares by a subsidiary -- 27,954
Borrowings under long-term debt 15,655 33,216
Repayment of long-term debt (15,322) (21,127)
Proceeds from the issuance of common
shares, net of issuance costs 1,016 54,989
Other 337 7,144
--------------------------
(22,398) 120,127
--------------------------
Foreign exchange (loss) gain on cash held
in a foreign currency (602) 497
--------------------------
(Decrease) increase in cash and cash
equivalents during the period (5,547) 29,348
Cash and cash equivalents - beginning of
the period 30,302 954
--------------------------
Cash and cash equivalents - end of the
period 24,755 30,302
--------------------------
SunOpta Inc.
Segmented Information
For the years ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
2008
------------------------------------------------------
SunOpta
Food Opta SunOpta
Group Minerals BioProcess Corporate Consolidated
$ $ $ $ $
------------------------------------------------------
Total revenues
from external
customers 960,316 93,422 1,435 -- 1,055,173
------------------------------------------------------
Segment
Operating
Income(1) 22,833 5,531 (3,286) (8,875) 16,203
------------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
--------------------------------------------------------
2008
--------------------------------------------------------
SunOpta
Grains SunOpta SunOpta
and SunOpta Fruit Distri- Food
Foods Ingredients Group IST bution Group
$ $ $ $ $ $
--------------------------------------------------------
Total
revenues
from
external
customers 327,307 65,270 150,879 157,817 259,046 960,316
--------------------------------------------------------
Segment
Operating
Income(1) 18,541 3,392 (10,219) 1,333 9,786 22,833
--------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
2007
------------------------------------------------------
SunOpta
Food Opta SunOpta
Group Minerals BioProcess Corporate Consolidated
$ $ $ $ $
------------------------------------------------------
Total revenues
from external
customers 725,290 75,365 1,839 -- 802,494
------------------------------------------------------
Segment
Operating
Income(1) 12,348 6,668 (5,985) (7,369) 5,662
------------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
--------------------------------------------------------
2007
--------------------------------------------------------
SunOpta
Grains SunOpta SunOpta
and SunOpta Fruit Distri- Food
Foods Ingredients Group IST bution Group
$ $ $ $ $ $
--------------------------------------------------------
Total
revenues
from
external
customers 248,021 70,315 133,645 53,039 220,270 725,290
--------------------------------------------------------
Segment
Operating
Income(1) 16,155 4,432 (18,679) 997 9,443 12,348
--------------------------------------------------------
(1) Segment Operating Income is defined as "Earnings Before the
Following" excluding the impact of "Other expenses, net" and
"Goodwill Impairment."
SunOpta Inc.
Consolidated Statements of Operations
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31, %
2008 2007 change
$ $
Revenues 245,037 209,838 16.8%
Cost of goods sold 216,319 182,885 18.3%
--------------------------------------
Gross profit 28,718 26,953 6.6%
Warehousing and distribution
expenses 4,858 5,794 (16.2%)
Selling, general and
administrative expenses 25,852 30,424 (15.0%)
Intangible asset amortization 1,627 1,189 36.8%
Other expenses, net 1,003 408 145.8%
Goodwill impairment 10,154 996 919.5%
Foreign exchange loss 501 277 80.9%
--------------------------------------
Loss before the following (15,277) (12,135) 38.3%
Interest expense, net (3,797) (2,745) 25.9%
--------------------------------------
Loss before income taxes (19,074) (14,880) 28.2%
Recovery of income taxes (1,375) (7,863) (82.5%)
--------------------------------------
Loss before minority interest (17,699) (7,017) (152.2%)
Minority interest (654) 78 938.5%
--------------------------------------
Loss for the three months
ended (17,045) (7,095) (140.2%)
--------------------------------------
Loss per share for the three
months ended
Basic (0.27) (0.11)
--------------------------
Diluted (0.27) (0.11)
--------------------------
SunOpta Inc.
Consolidated Statements of Cash Flow
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
Cash provided by (used in)
Operating activities
Loss for the three months ended (17,045) (7,095)
Items not affecting cash
Amortization 5,013 4,348
Goodwill impairment 10,154 996
Minority interest (654) 79
Deferred income taxes (1,091) (2,477)
Other 1,255 2,656
Changes in non-cash working capital, net
of businesses acquired 23,317 16,277
--------------------------
20,949 14,784
--------------------------
Investing activities
Acquisition of businesses, net of cash
acquired -- (1,735)
Purchases of property, plant and equipment (2,732) (7,762)
Proceeds from disposal of property, plant
and equipment 2,005 65
Payment of deferred purchase consideration (83) (688)
Purchase of patents, trademarks and other
intangible assets (176) (883)
Decrease in short term investments 20,000 --
Other (128) 255
--------------------------
18,886 (10,748)
--------------------------
Financing activities
Decrease in line of credit facilities (21,849) (22,578)
Proceeds from exercise of warrants -- 7,501
Borrowings under long-term debt 581 10,135
Repayment of long-term debt (2,375) (2,839)
Proceeds from the issuance of common
shares, net of issuance costs 199 973
Other (103) (312)
--------------------------
(23,547) (7,120)
--------------------------
Foreign exchange (loss) gain on cash held
in a foreign currency (649) 22
--------------------------
(Decrease) increase in cash and cash
equivalents during the period 15,639 (3,062)
Cash and cash equivalents - beginning of
the period 9,116 33,364
--------------------------
Cash and cash equivalents - end of the
period 24,755 30,302
--------------------------
SunOpta Inc.
Supplemental Information
For the years ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
(Loss) earnings for the year (10,936) 407
Professional fees, severance and related
costs incurred in relation to the internal
investigation, net of taxes of $1,871
(2007 - $nil) 6,262 --
Non-cash goodwill impairment charge 10,154 996
Non-cash income tax valuation allowance 3,498 --
Arbitration decision in SunOpta BioProcess
Group 1,855 --
--------------------------
10,833 1,403
Non-recurring start-up, operational and
legal costs, net of taxes of $337
(2007 - $nil) 2,483 --
--------------------------
Adjusted earnings for the year 13,316 1,403
--------------------------
SunOpta Inc.
Supplemental Information
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
Loss for the period (17,045) (7,095)
Professional fees, severance and related
costs incurred in relation to the internal
investigation, net of taxes of $115
(2007 - $nil) 387 --
Non-cash goodwill impairment charge 10,154 996
Non-cash income tax valuation allowance 3,498 --
Arbitration decision in SunOpta BioProcess
Group 1,855 --
--------------------------
(1,151) (6,099)
Non-recurring start-up, operational and
legal costs, net of taxes of $27
(2007 - $nil) 91 --
--------------------------
Adjusted loss for the year (1,060) (6,099)
--------------------------
SunOpta Inc.
Reconciliation of GAAP Results to Non-GAAP Presentation
For the year ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
--------------------------------------------------------------------
For the Year Ended December 31,
--------------------------------------------------
2008 2007
2008 GAAP Adjustments Adjusted Adjusted
Revenues 1,055,173 -- 1,055,173 802,494
Cost of goods sold 899,078 (2,053) 897,025 676,360
--------------------------------------------------
Gross profit 156,095 2,053 158,148 126,134
Warehousing and
distribution
expenses 21,040 -- 21,040 20,899
Selling, general
and administrative
expenses 117,808 (8,900) 108,908 95,911
Intangible asset
amortization 5,879 -- 5,879 4,201
Other expenses, net 1,003 (1,855) (852) 1,187
Goodwill impairment 10,154 (10,154) -- --
Foreign exchange
gain (4,835) -- (4,835) (539)
--------------------------------------------------
Earnings before the
following 5,046 22,962 28,008 4,475
Dilution gain -- -- -- 693
Interest expense,
net (14,281) -- (14,281) (8,823)
--------------------------------------------------
(Loss) earnings
before income
taxes (9,235) 22,962 13,727 (3,655)
Provision for
(recovery of)
income taxes 790 (1,290) (500) (6,101)
--------------------------------------------------
(Loss) earnings
before minority
interest (10,025) 24,252 14,227 2,446
Minority interest 911 -- 911 1,043
--------------------------------------------------
(Loss) earnings
for the year (10,936) 24,252 13,316 1,403
--------------------------------------------------
(Loss) earnings per
share for the year
Basic (0.17) 0.38 0.21 0.02
--------------------------------------------------
Diluted (0.17) 0.38 0.21 0.02
--------------------------------------------------
SunOpta Inc.
Reconciliation of GAAP Results to Non-GAAP Presentation
For the year ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
Year Ended Year Ended
December 31, 2008 December 31, 2007
-------------------------------------------------------
Impact on
Impact on Impact on (loss) Impact on
(loss) provision for earnings provision for
earnings (recovery of) before (recovery of)
before taxes income taxes income taxes income taxes
-------------------------------------------------------
Non-recurring
start-up,
operational
and legal
costs 2,053 337 -- --
-------------------------------------------------------
Cost of sales 2,053 337 -- --
-------------------------------------------------------
Professional
fees,
severance and
related costs
incurred in
relation to
the internal
investigation 8,133 1,871 -- --
Legal and
other fees
incurred
related to the
arbitration
decision in
SunOpta
BioProcess
Group 767 -- -- --
-------------------------------------------------------
Selling,
general and
administrative
expense 8,900 1,871 -- --
-------------------------------------------------------
Arbitration
decision in
SunOpta
BioProcess
Group 1,855 -- -- --
-------------------------------------------------------
Other expenses,
net 1,855 -- -- --
-------------------------------------------------------
Goodwill
impairment in
SunOpta Fruit
Group 8,198 -- 996 --
Goodwill
impairment in
SunOpta
International
Sourcing and
Trading Group 1,956 -- -- --
-------------------------------------------------------
Goodwill
impairment 10,154 -- 996 --
-------------------------------------------------------
Non-cash
income tax
valuation
allowance -- (3,498) -- --
-------------------------------------------------------
Provision for
(recovery of)
income taxes -- (3,498) -- --
-------------------------------------------------------
Total
adjustments 22,962 (1,290) 996 --
-------------------------------------------------------
SunOpta Inc.
Reconciliation of GAAP Results to Non-GAAP Presentation
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
For the Three Months Ended December 31,
--------------------------------------------------
2008 2007
2008 GAAP Adjustments Adjusted Adjusted
Revenues 245,037 -- 245,037 209,838
Cost of goods sold 216,319 (11) 216,308 182,885
--------------------------------------------------
Gross profit 28,718 11 28,729 26,953
Warehousing and
distribution
expenses 4,858 -- 4,858 5,794
Selling, general
and administrative
expenses 25,852 (609) 25,243 30,424
Intangible asset
amortization 1,627 -- 1,627 1,189
Other expenses, net 1,003 (1,855) (852) 408
Goodwill impairment 10,154 (10,154) -- --
Foreign exchange
loss 501 -- 501 277
--------------------------------------------------
Loss before the
following (15,277) 12,629 (2,648) (11,139)
Interest expense,
net (3,797) -- (3,797) (2,745)
--------------------------------------------------
Loss before income
taxes (19,074) 12,629 (6,445) (13,884)
Recovery of income
taxes (1,375) (3,356) (4,731) (7,863)
--------------------------------------------------
Loss before
minority interest (17,699) 15,985 (1,714) (6,021)
Minority interest (654) -- (654) 78
--------------------------------------------------
Loss for the three
months ended (17,045) 15,985 (1,060) (6,099)
--------------------------------------------------
(Loss) per share
for the three
months ended
Basic (0.27) 0.25 (0.02) (0.10)
--------------------------------------------------
Diluted (0.27) 0.25 (0.02) (0.10)
--------------------------------------------------
SunOpta Inc.
Reconciliation of GAAP Results to Non-GAAP Presentation
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
Three Months Ended Three Months Ended
December 31, 2008 December 31, 2007
-------------------------------------------------------
Impact on
Impact on Impact on (loss) Impact on
(loss) provision for earnings provision for
earnings (recovery of) before (recovery of)
before taxes income taxes income taxes income taxes
-------------------------------------------------------
Non-recurring
start-up,
operational
and legal
costs 11 27 -- --
-------------------------------------------------------
Cost of sales 11 27 -- --
-------------------------------------------------------
Professional
fees,
severance and
related costs
incurred in
relation to
the internal
investigation 502 115 -- --
Legal and
other fees
incurred
related to the
arbitration
decision in
SunOpta
BioProcess
Group 107 -- -- --
-------------------------------------------------------
Selling,
general and
administrative
expense 609 115 -- --
-------------------------------------------------------
Arbitration
decision in
SunOpta
BioProcess
Group 1,855 -- -- --
-------------------------------------------------------
Other expenses,
net 1,855 -- -- --
-------------------------------------------------------
Goodwill
impairment in
SunOpta Fruit
Group 8,198 -- 996 --
Goodwill
impairment in
SunOpta
International
Sourcing and
Trading Group 1,956 -- -- --
-------------------------------------------------------
Goodwill
impairment 10,154 -- 996 --
-------------------------------------------------------
Non-cash
income tax
valuation
allowance -- (3,498) -- --
-------------------------------------------------------
Provision for
(recovery of)
income taxes -- (3,498) -- --
-------------------------------------------------------
Total
adjustments 12,629 (3,356) 996 --
-------------------------------------------------------
Contact:
SunOpta Inc.
Jeremy N. Kendall, Chairman
Steve Bromley, President & CEO
John Dietrich, Vice President & CFO
Tony Tavares, Chief Operating Officer
Susan Wiekenkamp, Information Officer
905-455-2528, ext 103
[email protected]
www.sunopta.com
SunOpta Inc., a leading global company focused on natural, organic and specialty foods and natural health products, announced financial results for the year ended December 31, 2008. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP.
For fiscal 2008 the Company realized record revenues of $1.055 billion, an increase of 31.5% versus fiscal 2007 revenues of $802.5 million. These results were led by a 32.4% increase in revenues from the SunOpta Food Group and reflect a consolidated internal growth rate of approximately 16% for fiscal 2008.
On a GAAP basis for fiscal 2008 the Company realized a loss of ($10.9) million or ($0.17) per diluted common share including the impact of non-cash charges for goodwill impairment in certain operations and non-cash tax valuation allowances totaling $13.7 million or $0.21 per diluted common share, due in part to recent economic conditions and the decline in the Company's stock price.
Adjusted earnings(1) for fiscal 2008 were $13.3 million or $0.21 per diluted common share after adjusting for professional fees, severance and related costs incurred during the year related to the investigation of internal controls in the SunOpta Fruit Group and the Company's restatement of financial results for the first three months of 2007, non-cash charges for goodwill impairment and tax valuation allowances plus non-recurring start up and operational costs. Excluding non-recurring start up and operational costs, earnings were $10.8 million or $0.17 per diluted common share versus previous guidance of $0.19 to $0.23 per diluted common share. Segment operating income(2) for the year was $16.2 million as compared to $5.7 million in 2007, an increase of 186%.
During fiscal 2008 the Company realized cash from operating activities of $33.7 million versus cash used in 2007 of $35.1 million, a year over year improvement of $68.8 million, indicative of the extensive efforts to reduce working capital and control spending across the organization. Excluding the impact of credit facilities included with acquisitions completed in 2008, the Company reduced bank indebtedness by $24.6 million versus an increase of $18.0 million in 2007.
At December 31, 2008 the Company's balance sheet reflects a current working capital ratio of 1.74 to 1.00, long term debt to equity ratio of 0.49 to 1.00 and total debt to equity ratio of 0.79 to 1.00. The Company has total assets of $581.0 million and a net book value of $3.52 per outstanding share. The Company is in compliance with all banking covenants as at December 31, 2008.
Steve Bromley, President and Chief Executive Officer of SunOpta commented, "2008 was certainly a challenging year for our Company as we navigated through the issues we experienced in the SunOpta Fruit Group and the impact of the deterioration in the global economy. We have started 2009 with a cautious sense of awareness of the difficulties in the global economic environment, but confident that our position as a key player in health conscious food categories, combined with numerous cost control, efficiency and product development initiatives focused on improving and solidifying our business, will lead us to improved returns in 2009 and beyond."
Segment operating income(2) for the year was $16.2 million as compared to $5.7 million in 2007, an increase of 186%. Segment operating income(2) within the SunOpta Food Group increased 84.9%. The improved segment operating income(2) in the SunOpta Food Group was driven by record results in the SunOpta Grains & Foods Group and SunOpta Distribution Group. There is continued demand for the Food Groups natural, organic and specialty foods and natural health product offerings as consumers focus on health conscious food categories. The SunOpta Fruit Group reduced its losses as a result of a sharpened and continued focus on margin improvement and cost containment. Prospects for the SunOpta Fruit Group for 2009 are encouraging.
Segment operating income(2) within Opta Minerals declined approximately 17% to $5.5 million in 2008, reflecting the precipitous drop in the fourth quarter in the foundry and steel industries as a result of the decline in the global economy and a $2.8 million write-down of magnesium inventory to realizable value. Operations have been restructured to deal with this decline and the group is well positioned to benefit from expected increased infrastructure spending in 2009. Segment operating results in the SunOpta BioProcess Group improved in 2008 but remain in a loss position. The group remains focused on leveraging their technology and expertise in the production of cellulosic ethanol, a category that is believed offers excellent long term growth potential as the world looks to reduces its dependence on fossil fuels and reduce green house gas emissions.
For the fourth quarter of 2008 the Company realized revenues of $245.0 million versus $209.8 million in 2007, an increase of 16.8%. On a GAAP basis the Company realized a loss of ($17.0) or ($0.27) per diluted common share including the impact of non-cash charges for goodwill impairment and non-cash tax valuation allowances totalling $0.21 per diluted common share as well as charges related to the unfavourable arbitration decision in SunOpta BioProcess and professional fees and related costs totalling $0.03 per diluted common share, resulting in an adjusted loss(1) for the quarter of ($1.1) million or ($0.02) per diluted common share. Results in the quarter were significantly impacted by pre-tax commodity cost write-downs of approximately $3.6 million on certain commodities which needed to be marked to market.
As previously announced, as a result of the current uncertain and rapidly changing world-wide macroeconomic conditions, the Company has decided to take a more cautious approach with regard to providing guidance, and in doing so has decided not to provide specific revenue and earnings guidance for 2009. The Company will provide updates when appropriate related to material changes in business affairs resulting from changes in economic conditions. The Company expects to realize improved results in 2009 as a result of improved pricing and product mix; the impact of capacity expansion, cost reduction and rationalization initiatives; fixed cost leverage; and the avoidance of certain professional fees, severance and operational costs incurred in 2008 which are not expected to reoccur to the same extent in 2009. The Company's primary focus for 2009 remains the improvement of operating margins and return on assets employed.
SunOpta will host a conference call at 10:00 am Eastern Standard Time on Friday March 6, 2009 to discuss these results and recent corporate developments. The conference call can be accessed toll free by dialing 1-(866) 322-2356 or (416) 640-3405 followed by pass code 4939312#.
About SunOpta Inc.
SunOpta Inc. is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food and natural health 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; Opta Minerals Inc. (TSX:OPM) (66.2% owned by SunOpta), a producer, distributor, and recycler of environmentally friendly industrial materials; and SunOpta BioProcess Inc. which engineers and markets proprietary steam explosion technology systems for the bio-fuel, pulp and food processing industries. Each of these business units has proprietary products and services that give it a solid competitive advantage in its sector.
The SunOpta Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3958
Forward Looking Statements
Certain statements included in this press release regarding 2008 results and 2009 plans and projected results are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, and are based on information available to us on the date of this release. These forward looking statements include, but are not limited to management's expectations for improved financial results in 2009 and beyond, increased infrastructure spending in 2009 and the long term growth potential of cellulosic ethanol as well as the Company's business strategy and objectives. The terms and phrases "will", "continued", "prospects", "expected", "believed" 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 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, product pricing levels, customer demand, competitive intensity, cost rationalization initiatives, product development initiatives, projected capacity expansion, supply contracts and certain market publications and studies. 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, economic conditions, consumer spending patterns, potential failure of product development 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 (available at www.sec.gov). 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. We assume no obligation to update these forward looking statements except as required by law.
(1) Adjusted earnings (loss) is not a GAAP measure. SunOpta believes adjusted earnings (adjusted for the impact of the professional fees and severance costs incurred in relation to the investigation and related activities, non-recurring start up and operational costs plus the non-cash charges for goodwill impairment and tax valuation allowances) provides useful information to understand the underlying performance of the business and as a result these items have been adjusted.
(2) Segment Operating Income is defined as "Earnings Before the Following" excluding the impact of "Other expenses, net" and "Goodwill Impairment." This provides useful information to understand the underlying performance of the particular segment of the Company's business.
SunOpta Inc.
Consolidated Statements of Operations
For the years ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31, %
2008 2007 change
$ $
Revenues 1,055,173 802,494 31.5%
Cost of goods sold 899,078 676,360 32.9%
--------------------------------------
Gross profit 156,095 126,134 23.8%
Warehousing and distribution
expenses 21,040 20,899 0.7%
Selling, general and
administrative expenses 117,808 95,911 22.8%
Intangible asset amortization 5,879 4,201 39.9%
Other expenses, net 1,003 1,187 (15.5%)
Goodwill impairmant 10,154 996 919.5%
Foreign exchange gain (4,835) (539) 797.0%
--------------------------------------
Earnings before the following 5,046 3,479 45.0%
Dilution gain -- 693 --
Interest expense, net (14,281) (8,823) 61.9%
--------------------------------------
Loss before income taxes (9,235) (4,651) 98.6%
Provision for (recovery of)
income taxes 790 (6,101) (112.9%)
--------------------------------------
(Loss) earnings before
minority interest (10,025) 1,450 (791.4%)
Minority interest 911 1,043 (12.7%)
--------------------------------------
(Loss) earnings for the year (10,936) 407 (2,787.0%)
--------------------------------------
(Loss) earnings per share for
the year
Basic (0.17) 0.01
--------------------------
Diluted (0.17) 0.01
--------------------------
SunOpta Inc.
Consolidated Balance Sheets
As at December 31, 2008 and December 31, 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
Assets
Current assets
Cash and cash equivalents 24,755 30,302
Accounts receivable 95,129 87,729
Inventories 200,689 181,460
Prepaid expenses and other current assets 14,448 15,879
Current income taxes recoverable 595 1,491
Deferred income taxes 493 1,749
--------------------------
336,109 318,610
Property, plant and equipment 110,641 116,389
Goodwill 54,022 55,503
Intangible assets 63,161 62,076
Deferred income taxes 16,160 14,110
Other assets 954 2,752
--------------------------
581,047 569,440
--------------------------
Liabilities
Current liabilities
Bank indebtedness 67,164 58,806
Accounts payable and accrued liabilities 106,989 93,462
Customer and other deposits 1,228 1,300
Other current liabilities 4,437 4,868
Current portion of long-term debt 12,174 13,119
Current portion of long-term liabilities 1,362 1,304
--------------------------
193,354 172,859
Long-term debt 99,353 85,595
Long-term liabilities 5,017 3,307
Deferred income taxes 13,614 11,430
--------------------------
311,338 273,191
--------------------------
Minority interest 15,102 13,863
Preferred shares of a subsidiary company 27,796 27,409
Shareholders' Equity
Capital stock
64,493,320 common shares (December 31,
2007 - 64,149,593) 177,858 176,547
Additional paid in capital 6,778 5,967
Retained earnings 40,909 51,845
Accumulated other comprehensive income 1,266 20,618
--------------------------
226,811 254,977
--------------------------
581,047 569,440
--------------------------
SunOpta Inc.
Consolidated Statements of Cash Flow
For the years ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
Cash provided by (used in)
Operating activities
(Loss) earnings for the year (10,936) 407
Items not affecting cash
Amortization 19,364 15,058
Goodwill impairment 10,154 996
Stock-based compensation 1,106 867
Dilution gain -- (693)
Minority interest 911 1,043
Deferred income taxes (1,116) (8,752)
Other 833 3,384
Changes in non-cash working capital, net
of businesses acquired 13,369 (47,387)
--------------------------
33,685 (35,077)
--------------------------
Investing activities
Acquisition of businesses, net of cash
acquired (5,267) (21,319)
Purchases of property, plant and equipment (9,650) (29,686)
Proceeds from disposal of property, plant
and equipment 2,005 65
Payment of deferred purchase consideration (2,042) (2,156)
Purchase of patents, trademarks and other
intangible assets (673) (1,805)
Other (105) (1,358)
--------------------------
(15,732) (56,259)
--------------------------
Financing activities
(Decrease) increase in line of credit
facilities (24,584) 18,011
Proceeds from the issuance of preferred
shares by a subsidiary -- 27,954
Borrowings under long-term debt 15,655 33,216
Repayment of long-term debt (15,322) (21,127)
Proceeds from the issuance of common
shares, net of issuance costs 1,016 54,989
Other 337 7,144
--------------------------
(22,398) 120,127
--------------------------
Foreign exchange (loss) gain on cash held
in a foreign currency (602) 497
--------------------------
(Decrease) increase in cash and cash
equivalents during the period (5,547) 29,348
Cash and cash equivalents - beginning of
the period 30,302 954
--------------------------
Cash and cash equivalents - end of the
period 24,755 30,302
--------------------------
SunOpta Inc.
Segmented Information
For the years ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
2008
------------------------------------------------------
SunOpta
Food Opta SunOpta
Group Minerals BioProcess Corporate Consolidated
$ $ $ $ $
------------------------------------------------------
Total revenues
from external
customers 960,316 93,422 1,435 -- 1,055,173
------------------------------------------------------
Segment
Operating
Income(1) 22,833 5,531 (3,286) (8,875) 16,203
------------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
--------------------------------------------------------
2008
--------------------------------------------------------
SunOpta
Grains SunOpta SunOpta
and SunOpta Fruit Distri- Food
Foods Ingredients Group IST bution Group
$ $ $ $ $ $
--------------------------------------------------------
Total
revenues
from
external
customers 327,307 65,270 150,879 157,817 259,046 960,316
--------------------------------------------------------
Segment
Operating
Income(1) 18,541 3,392 (10,219) 1,333 9,786 22,833
--------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
2007
------------------------------------------------------
SunOpta
Food Opta SunOpta
Group Minerals BioProcess Corporate Consolidated
$ $ $ $ $
------------------------------------------------------
Total revenues
from external
customers 725,290 75,365 1,839 -- 802,494
------------------------------------------------------
Segment
Operating
Income(1) 12,348 6,668 (5,985) (7,369) 5,662
------------------------------------------------------
The SunOpta Food Group has the following segmented reporting:
--------------------------------------------------------
2007
--------------------------------------------------------
SunOpta
Grains SunOpta SunOpta
and SunOpta Fruit Distri- Food
Foods Ingredients Group IST bution Group
$ $ $ $ $ $
--------------------------------------------------------
Total
revenues
from
external
customers 248,021 70,315 133,645 53,039 220,270 725,290
--------------------------------------------------------
Segment
Operating
Income(1) 16,155 4,432 (18,679) 997 9,443 12,348
--------------------------------------------------------
(1) Segment Operating Income is defined as "Earnings Before the
Following" excluding the impact of "Other expenses, net" and
"Goodwill Impairment."
SunOpta Inc.
Consolidated Statements of Operations
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31, %
2008 2007 change
$ $
Revenues 245,037 209,838 16.8%
Cost of goods sold 216,319 182,885 18.3%
--------------------------------------
Gross profit 28,718 26,953 6.6%
Warehousing and distribution
expenses 4,858 5,794 (16.2%)
Selling, general and
administrative expenses 25,852 30,424 (15.0%)
Intangible asset amortization 1,627 1,189 36.8%
Other expenses, net 1,003 408 145.8%
Goodwill impairment 10,154 996 919.5%
Foreign exchange loss 501 277 80.9%
--------------------------------------
Loss before the following (15,277) (12,135) 38.3%
Interest expense, net (3,797) (2,745) 25.9%
--------------------------------------
Loss before income taxes (19,074) (14,880) 28.2%
Recovery of income taxes (1,375) (7,863) (82.5%)
--------------------------------------
Loss before minority interest (17,699) (7,017) (152.2%)
Minority interest (654) 78 938.5%
--------------------------------------
Loss for the three months
ended (17,045) (7,095) (140.2%)
--------------------------------------
Loss per share for the three
months ended
Basic (0.27) (0.11)
--------------------------
Diluted (0.27) (0.11)
--------------------------
SunOpta Inc.
Consolidated Statements of Cash Flow
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
Cash provided by (used in)
Operating activities
Loss for the three months ended (17,045) (7,095)
Items not affecting cash
Amortization 5,013 4,348
Goodwill impairment 10,154 996
Minority interest (654) 79
Deferred income taxes (1,091) (2,477)
Other 1,255 2,656
Changes in non-cash working capital, net
of businesses acquired 23,317 16,277
--------------------------
20,949 14,784
--------------------------
Investing activities
Acquisition of businesses, net of cash
acquired -- (1,735)
Purchases of property, plant and equipment (2,732) (7,762)
Proceeds from disposal of property, plant
and equipment 2,005 65
Payment of deferred purchase consideration (83) (688)
Purchase of patents, trademarks and other
intangible assets (176) (883)
Decrease in short term investments 20,000 --
Other (128) 255
--------------------------
18,886 (10,748)
--------------------------
Financing activities
Decrease in line of credit facilities (21,849) (22,578)
Proceeds from exercise of warrants -- 7,501
Borrowings under long-term debt 581 10,135
Repayment of long-term debt (2,375) (2,839)
Proceeds from the issuance of common
shares, net of issuance costs 199 973
Other (103) (312)
--------------------------
(23,547) (7,120)
--------------------------
Foreign exchange (loss) gain on cash held
in a foreign currency (649) 22
--------------------------
(Decrease) increase in cash and cash
equivalents during the period 15,639 (3,062)
Cash and cash equivalents - beginning of
the period 9,116 33,364
--------------------------
Cash and cash equivalents - end of the
period 24,755 30,302
--------------------------
SunOpta Inc.
Supplemental Information
For the years ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
(Loss) earnings for the year (10,936) 407
Professional fees, severance and related
costs incurred in relation to the internal
investigation, net of taxes of $1,871
(2007 - $nil) 6,262 --
Non-cash goodwill impairment charge 10,154 996
Non-cash income tax valuation allowance 3,498 --
Arbitration decision in SunOpta BioProcess
Group 1,855 --
--------------------------
10,833 1,403
Non-recurring start-up, operational and
legal costs, net of taxes of $337
(2007 - $nil) 2,483 --
--------------------------
Adjusted earnings for the year 13,316 1,403
--------------------------
SunOpta Inc.
Supplemental Information
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars)
(Unaudited)
---------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
Loss for the period (17,045) (7,095)
Professional fees, severance and related
costs incurred in relation to the internal
investigation, net of taxes of $115
(2007 - $nil) 387 --
Non-cash goodwill impairment charge 10,154 996
Non-cash income tax valuation allowance 3,498 --
Arbitration decision in SunOpta BioProcess
Group 1,855 --
--------------------------
(1,151) (6,099)
Non-recurring start-up, operational and
legal costs, net of taxes of $27
(2007 - $nil) 91 --
--------------------------
Adjusted loss for the year (1,060) (6,099)
--------------------------
SunOpta Inc.
Reconciliation of GAAP Results to Non-GAAP Presentation
For the year ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
--------------------------------------------------------------------
For the Year Ended December 31,
--------------------------------------------------
2008 2007
2008 GAAP Adjustments Adjusted Adjusted
Revenues 1,055,173 -- 1,055,173 802,494
Cost of goods sold 899,078 (2,053) 897,025 676,360
--------------------------------------------------
Gross profit 156,095 2,053 158,148 126,134
Warehousing and
distribution
expenses 21,040 -- 21,040 20,899
Selling, general
and administrative
expenses 117,808 (8,900) 108,908 95,911
Intangible asset
amortization 5,879 -- 5,879 4,201
Other expenses, net 1,003 (1,855) (852) 1,187
Goodwill impairment 10,154 (10,154) -- --
Foreign exchange
gain (4,835) -- (4,835) (539)
--------------------------------------------------
Earnings before the
following 5,046 22,962 28,008 4,475
Dilution gain -- -- -- 693
Interest expense,
net (14,281) -- (14,281) (8,823)
--------------------------------------------------
(Loss) earnings
before income
taxes (9,235) 22,962 13,727 (3,655)
Provision for
(recovery of)
income taxes 790 (1,290) (500) (6,101)
--------------------------------------------------
(Loss) earnings
before minority
interest (10,025) 24,252 14,227 2,446
Minority interest 911 -- 911 1,043
--------------------------------------------------
(Loss) earnings
for the year (10,936) 24,252 13,316 1,403
--------------------------------------------------
(Loss) earnings per
share for the year
Basic (0.17) 0.38 0.21 0.02
--------------------------------------------------
Diluted (0.17) 0.38 0.21 0.02
--------------------------------------------------
SunOpta Inc.
Reconciliation of GAAP Results to Non-GAAP Presentation
For the year ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
Year Ended Year Ended
December 31, 2008 December 31, 2007
-------------------------------------------------------
Impact on
Impact on Impact on (loss) Impact on
(loss) provision for earnings provision for
earnings (recovery of) before (recovery of)
before taxes income taxes income taxes income taxes
-------------------------------------------------------
Non-recurring
start-up,
operational
and legal
costs 2,053 337 -- --
-------------------------------------------------------
Cost of sales 2,053 337 -- --
-------------------------------------------------------
Professional
fees,
severance and
related costs
incurred in
relation to
the internal
investigation 8,133 1,871 -- --
Legal and
other fees
incurred
related to the
arbitration
decision in
SunOpta
BioProcess
Group 767 -- -- --
-------------------------------------------------------
Selling,
general and
administrative
expense 8,900 1,871 -- --
-------------------------------------------------------
Arbitration
decision in
SunOpta
BioProcess
Group 1,855 -- -- --
-------------------------------------------------------
Other expenses,
net 1,855 -- -- --
-------------------------------------------------------
Goodwill
impairment in
SunOpta Fruit
Group 8,198 -- 996 --
Goodwill
impairment in
SunOpta
International
Sourcing and
Trading Group 1,956 -- -- --
-------------------------------------------------------
Goodwill
impairment 10,154 -- 996 --
-------------------------------------------------------
Non-cash
income tax
valuation
allowance -- (3,498) -- --
-------------------------------------------------------
Provision for
(recovery of)
income taxes -- (3,498) -- --
-------------------------------------------------------
Total
adjustments 22,962 (1,290) 996 --
-------------------------------------------------------
SunOpta Inc.
Reconciliation of GAAP Results to Non-GAAP Presentation
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
For the Three Months Ended December 31,
--------------------------------------------------
2008 2007
2008 GAAP Adjustments Adjusted Adjusted
Revenues 245,037 -- 245,037 209,838
Cost of goods sold 216,319 (11) 216,308 182,885
--------------------------------------------------
Gross profit 28,718 11 28,729 26,953
Warehousing and
distribution
expenses 4,858 -- 4,858 5,794
Selling, general
and administrative
expenses 25,852 (609) 25,243 30,424
Intangible asset
amortization 1,627 -- 1,627 1,189
Other expenses, net 1,003 (1,855) (852) 408
Goodwill impairment 10,154 (10,154) -- --
Foreign exchange
loss 501 -- 501 277
--------------------------------------------------
Loss before the
following (15,277) 12,629 (2,648) (11,139)
Interest expense,
net (3,797) -- (3,797) (2,745)
--------------------------------------------------
Loss before income
taxes (19,074) 12,629 (6,445) (13,884)
Recovery of income
taxes (1,375) (3,356) (4,731) (7,863)
--------------------------------------------------
Loss before
minority interest (17,699) 15,985 (1,714) (6,021)
Minority interest (654) -- (654) 78
--------------------------------------------------
Loss for the three
months ended (17,045) 15,985 (1,060) (6,099)
--------------------------------------------------
(Loss) per share
for the three
months ended
Basic (0.27) 0.25 (0.02) (0.10)
--------------------------------------------------
Diluted (0.27) 0.25 (0.02) (0.10)
--------------------------------------------------
SunOpta Inc.
Reconciliation of GAAP Results to Non-GAAP Presentation
For the three months ended December 31, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
---------------------------------------------------------------------
Three Months Ended Three Months Ended
December 31, 2008 December 31, 2007
-------------------------------------------------------
Impact on
Impact on Impact on (loss) Impact on
(loss) provision for earnings provision for
earnings (recovery of) before (recovery of)
before taxes income taxes income taxes income taxes
-------------------------------------------------------
Non-recurring
start-up,
operational
and legal
costs 11 27 -- --
-------------------------------------------------------
Cost of sales 11 27 -- --
-------------------------------------------------------
Professional
fees,
severance and
related costs
incurred in
relation to
the internal
investigation 502 115 -- --
Legal and
other fees
incurred
related to the
arbitration
decision in
SunOpta
BioProcess
Group 107 -- -- --
-------------------------------------------------------
Selling,
general and
administrative
expense 609 115 -- --
-------------------------------------------------------
Arbitration
decision in
SunOpta
BioProcess
Group 1,855 -- -- --
-------------------------------------------------------
Other expenses,
net 1,855 -- -- --
-------------------------------------------------------
Goodwill
impairment in
SunOpta Fruit
Group 8,198 -- 996 --
Goodwill
impairment in
SunOpta
International
Sourcing and
Trading Group 1,956 -- -- --
-------------------------------------------------------
Goodwill
impairment 10,154 -- 996 --
-------------------------------------------------------
Non-cash
income tax
valuation
allowance -- (3,498) -- --
-------------------------------------------------------
Provision for
(recovery of)
income taxes -- (3,498) -- --
-------------------------------------------------------
Total
adjustments 12,629 (3,356) 996 --
-------------------------------------------------------
Contact:
SunOpta Inc.
Jeremy N. Kendall, Chairman
Steve Bromley, President & CEO
John Dietrich, Vice President & CFO
Tony Tavares, Chief Operating Officer
Susan Wiekenkamp, Information Officer
905-455-2528, ext 103
[email protected]
www.sunopta.com