SunOpta: Q2 2010 Results
SunOpta Inc. , a leading global company focused on natural, organic and specialty foods and natural health products, today announced financial results for the period ended July 3, 2010. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted. Please note that as a result of the June 2010 sale of the Company's Food Distribution assets, all results from operations related to this business have been excluded from operating results and are now reported as discontinued operations for all comparable periods.
For the second quarter of 2010 the Company realized revenues of $235.9 million versus second quarter 2009 revenues of $216.1 million, a year over year increase of 9.2%. Revenues in SunOpta Foods were $212.7 million, an increase of 5.5% versus the second quarter of 2009. After adjusting for movements in foreign exchange rates and commodity prices, revenues in SunOpta Foods increased approximately 6.9% versus the second quarter of 2009, reflecting continued momentum in the natural and organic foods sector. All operating segments realized increased revenues and operating income1 year over year.
For the second quarter of 2010 the Company reported net income on a GAAP basis of $20.5 million or $0.31 per diluted common share versus net income in the second quarter of 2009 of $1.8 million or $0.03 per diluted common share. Included in the results of the second quarter was a gain on the sale of the Canadian Food Distribution assets of $13.8 million or $0.21 per diluted common share.
Earnings from operations1 for the second quarter of 2010 were $6.7 million or $0.10 per diluted common share. Earnings from operations1 for the second quarter include additional pre-tax costs of approximately $1.3 million, including legal and professional fees and costs related to ongoing facility and operational rationalizations.
Operating income1 increased to $11.8 million or 5.0% of revenues versus operating income1 in the prior year of $4.6 million or 2.1% of revenues. Operating income1 in SunOpta Foods increased to $12.8 million or 6.0% of revenues versus $6.8 million or 3.4% in the prior year.
EBITDA1 for the second quarter of 2010, excluding the benefits of one-time gain items and contributions from discontinued operations increased 75% to $15.8 million versus $9.0 million in 2009, indicative of the improved operating performance realized in the business.
For the year to date period ended July 3, 2010 the Company has realized revenues of $453.3 million versus year to date second quarter 2009 revenues of $407.4 million, a year over year increase of 11.3%. Revenues in SunOpta Foods for the period were $411.6 million, an increase of 8.8% versus the first half of 2009. After adjusting for movements in foreign exchange rates and commodity prices, the increase in food revenues remained constant at approximately 8.8% versus the first half of 2009. Year to date all operating segments have realized increased revenues and operating income1 versus the prior year.
Year to date the Company has realized net income on a GAAP basis of $25.1 million or $0.38 per diluted common share versus net income in 2009 of $0.1 million or $0.00 per diluted common share. Included in the year to date results was a gain on the sale of the Canadian Food Distribution assets of $13.8 million or $0.21 per diluted common share.
Earnings from operations1 for the first half of 2010 were $11.3 million or $0.17 per diluted common share. Earnings from operations in the first half also include additional pre-tax costs of approximately $3.6 million, including legal and professional fees and costs related to ongoing facility and operational rationalizations.
Year to date the Company has realized operating income1 of $20.8 million or 4.6% of revenues versus operating income1 in the prior year of $3.0 million or 0.7% of revenues. Operating income1 in SunOpta Foods increased to $24.2 million or 5.9% of revenues versus $8.8 million or 2.3% in the prior year.
The Company has realized EBITDA1 through the six month period ended July 3, 2010 of $29.2 million versus $11.7 million in the prior year, an increase of 150%, excluding the benefit of one-time items and the benefit of discontinued operations.
At July 3, 2010 the Company's balance sheet reflects a current working capital ratio of 1.71 to 1.00, long-term debt to equity ratio of 0.33 to 1.00 and total debt to equity ratio of 0.43 to 1.00. During the second quarter the Company generated cash from continuing operations of $16.6 million versus $11.0 million in the prior year, due primarily to increased earnings from operating activities. At July 3, 2010 the Company has total assets of $500.8 million and a net book value of $3.84 per outstanding share.
At quarter-end, the Company is in compliance with all banking covenants.
Steve Bromley, President and Chief Executive Officer of SunOpta commented, "We are very pleased with our second quarter and year to date results which are indicative of numerous initiatives which have been implemented, centered on improving operating results within our core business segments while at the same time improving our return on assets employed. We continue to focus on these core operating processes and believe that the initiatives are having the expected positive effect on our results. At the same time our balance sheet has also improved significantly with lower debt levels and improved return on net assets employed. Our continued focus on margin improvement and asset management combined with strong consumer interest in health and wellness positions our Company for long-term success."
The Company plans to host a conference call at 10:00 a.m. Eastern Time on Wednesday, August 11th, 2010 to discuss these results and recent corporate developments. The conference call can be accessed via a link at the Company's website at www.sunopta.com. Additionally, the call may be accessed with the toll free dial-in number 1-877-312-9198 or 631-291-4622. A replay number can also be accessed between August 11th and 18th with the toll free dial-in number 1--800-642-1687 or 706-645-9291 followed by pass code: 86530032#.
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 Foods, which specializes in sourcing, processing and distribution of natural and organic food products integrated from seed through packaged products; Opta Minerals Inc. (TSX:OPM - News) (66.4 % 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. SunOpta believes that each of these business units has proprietary products and services that give it a solid competitive advantage in its sector.
Steve Bromley, President & CEO
Eric Davis, Vice President & CFO
Tony Tavares, Chief Operating Officer
Susan Wiekenkamp, Information Officer
905-455-2528, ext 103