10.03.10
SunOpta: Q4 and Fiscal 2009 Results
SunOpta Inc., a leading global company focused on natural, organic and specialty foods and natural health products, announced financial results for the fourth quarter and year ended December 31, 2009. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.
For the fourth quarter of 2009, the Company realized revenues of $245.5 million versus revenues of $245.0 million for the fourth quarter of 2008.
Adjusted earnings(1) for the fourth quarter of 2009 were $3.9 million or $0.06 per diluted common share versus an adjusted loss(1) in the comparable period in 2008 of ($1.1) million or ($0.02) per diluted common share. On a GAAP basis the Company realized a loss of ($2.2) million or ($0.03) per diluted common share for the quarter versus a loss of ($17.0) million or ($0.27) per diluted common share for the fourth quarter of 2008.
Fourth quarter results include a non-cash write-down of tax assets of $0.9 million and additional pre-tax costs of $7.6 million related to a number of restructuring and related costs. Additional pre-tax costs include $3.6 million related to ongoing product and facility rationalization efforts including non-cash charges of $1.2 million; legal and professional costs of $3.0 million related to the 2007 restatement and class action settlement, legal costs related to completion of a number of ongoing legal matters and costs related to banking amendments; a non-cash goodwill impairment charge of $0.5 million in the Fruit Group and pre-tax costs of $0.5 million related to the ongoing revitalization and re-launch of a number of company owned natural health products brands. Adjusted earnings(1) excluding the impact of foreign exchange gains for the fourth quarter of 2009 were $3.6 million or $0.05 per diluted common share versus an adjusted loss(1) excluding the impact of foreign exchange gains of ($0.7) million or ($0.01) per diluted common share in the fourth quarter of 2008.
Results for the fourth quarter of 2009 reflect significant improvement in operating performance versus the fourth quarter of 2008 and continued operating performance improvement versus the third quarter of 2009. Gross margins increased to 15.9% for the quarter versus 11.7% in the fourth quarter of 2008. On a segment basis the SunOpta Ingredients Group had record earnings in the quarter achieving operating margins of 17.8%. For the fourth quarter of 2009 operating earnings within SunOpta Food Group increased 124% to $4.4 million versus $2.0 million in the same period in 2008. Opta Minerals Inc. realized operating earnings of $0.7 million in the fourth quarter of 2009 versus a loss of ($2.4) million loss in the fourth quarter of 2008.
For fiscal 2009 the Company realized revenues of $989.1 million versus fiscal 2008 revenues of $1,055.2 million.
For 2009 the Company reported a loss on a GAAP basis of ($6.8) million or ($0.10) per diluted common share versus a loss of ($10.9) million or ($0.17) per diluted common share in fiscal 2008. Adjusted earnings(1) for fiscal 2009 were $12.9 million or $0.20 per diluted common share versus adjusted earnings(1) in fiscal 2008 of $13.3 million or $0.21 per diluted common share. Fiscal 2009 results include the impact of a non-cash write-down of tax assets of $0.9 million and additional pre-tax costs of $24.8 million including net non-cash charges after minority interest of $4.8 million related to the impairment of goodwill in Opta Minerals Inc. and $0.5 million related to impairment of goodwill in the SunOpta Fruit Group; pre-tax costs of $10.1 million related to ongoing product and facility rationalization efforts including non-cash charges of $2.3 million, pre-tax costs of $3.2 million related to the ongoing revitalization and re-launch of a number of company owned natural health products brands and additional legal and professional fees of $6.2 million related to the 2007 restatement and class action settlement, a legal action in the SunOpta BioProcess Group, settlements of other legal matters and costs related to banking amendments. Adjusted earnings(1) excluding the impact of foreign exchange gains for fiscal 2009 were $12.2 million or $0.19 per diluted common share versus adjusted earnings(1) excluding the impact of foreign exchange of $10.2 million or $0.16 per diluted common share in fiscal 2008.
At December 31, 2009 the Company's balance sheet reflects a current working capital ratio of 1.37 to 1.00, long-term debt to equity ratio of 0.37 to 1.00 and total debt to equity ratio of 0.65 to 1.00. The decrease in the working capital ratio compared to 2008 is due to presenting the $45 million term loan due December 20, 2010 as a current liability at December 31, 2009. During fiscal 2009 the Company generated cash from operating activities of $44.9 million including cash generated from working capital of $27.3 million, reflecting ongoing efforts to reduce working capital, especially inventories, across the Company. The Company also continued to focus on reducing debt and realized a decrease in net debt of $34.4 million in fiscal 2009. At December 31, 2009 the Company has total assets of $551.3 million and a net book value of $3.58 per outstanding share.
At year-end, the Company is in compliance with all financial covenants.
Steve Bromley, President and Chief Executive Officer of SunOpta commented, "We are very pleased with the continued improvement in operating results within our core business segments. Our balance sheet continues to improve with reduced working capital levels and net reductions in debt. We remain focused on improving operating margins and return on assets employed and are very pleased that our extensive restructuring and repositioning initiatives are having a positive effect on our results. We are confident that this focus, when combined with growing consumer interest in health and wellness, positions our Company for long-term success. We are looking forward to a return to profitability in 2010."
The Company plans to host a conference call at 10:00 AM Eastern Time on Wednesday, March 10th, 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 1-866-551-3680 or 212-401-6760 followed by pass code: 8061610#. A replay number can also be accessed between March 11th and 21st with the toll free dial-in number 1--866-551-4520 or 212-401-6750 followed by pass code: 260041#.
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) (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.
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 may be considered "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, which are based on information available to us on the date of this release. These forward-looking statements include, but are not limited to, management's expectations regarding ongoing revitalization and re-launch of a number natural health products brands, continued operating performance improvement, ongoing product and facility rationalization efforts, improving operating margins and return on assets employed and return to profitability. The terms and phrases ongoing, "continued", "future performance", "will", "remain focused", "believes", "confident", "positions" and other similar terms and phrases are intended to identify these forward looking statements. Forward looking statements are based on information available to us on the date of this release and are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors the Company believes are appropriate in the circumstances including, but not limited to, general economic conditions, applicable tax legislation, consumer trends, preferences and spending patterns, product pricing levels, current customer demand, competitive intensity, cost rationalization and product development initiatives. Whether actual timing and results will agree with expectations and predications of the Company is subject to many risks and uncertainties including, but not limited to, global economic conditions, consumer spending patterns and changes in market trends, decreases in customer demand, potential failure of product development, working capital management and continuous improvement initiatives, availability and pricing of raw materials and supplies, and other risks described from time to time under "Risk Factors" in the Company's Annual Report of Form 10-K and its Quarterly Reports on Form 10-Q (available at www.sec.gov). Consequently all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized.
(1) Adjusted earnings (loss) is not a GAAP measure. SunOpta believes adjusted earnings (adjusted for the impact of non recurring start-up and operational costs, severance and closure costs, marketing costs in support of brand relaunches and certain professional fees) provides useful information to understand the underlying performance of the business and as a result these items have been adjusted. A reconciliation of this non-GAAP measure to GAAP is included on the last page of this release.
SunOpta Inc.
Consolidated Statements of Operations
For the three month periods ended December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
December 31, December 31, %
2009 2008 change
$ $
Revenues 245,521 245,037 0.2%
Cost of goods sold 206,581 216,319 (4.5%)
--------------------------------------------------------------- ------------------------
Gross profit 38,940 28,718 35.6%
Warehousing and distribution
expenses 5,165 4,858 6.3%
Selling, general and
administrative expenses 29,910 25,852 15.7%
Intangible asset amortization 1,347 1,627 (17.2%)
Other expense, net 2,935 1,003 192.6%
Goodwill impairment 500 10,154 (95.1%)
Foreign exchange (gain) loss (460) 501 (191.8%)
--------------------------------------------------------------- ------------------------
Loss before the following (457) (15,277) (97.0%)
Interest expense, net 3,762 3,797 (0.9%)
--------------------------------------------------------------- ------------------------
Loss before income taxes (4,219) (19,074) (77.9%)
Recovery of provision for income
taxes (1,726) (1,375) (25.5%)
--------------------------------------------------------------- ------------------------
Loss for the period (2.493) (17,699) (85.9%)
Loss for the period attributable
to non-controlling interests (279) (654) (57.3%)
--------------------------------------------------------------- ------------------------
Loss for the period attributable
to SunOpta Inc. (2,214) (17,045) (87.07%)
=============================================================== ========================
Loss per share for the period
Basic (0.03) (0.27)
===============================================================
Diluted (0.03) (0.27)
===============================================================
SunOpta Inc.
Consolidated Statements of Operations
For the years ended December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
December 31, December 31, %
2009 2008 change
$ $
Revenues 989,132 1,055,173 (6.3%)
Cost of goods sold 840,262 899,078 (6.5%)
--------------------------------------------------------------- -----------------------
Gross profit 148,870 156,095 (4.6%)
Warehousing and distribution
expenses 18,856 21,040 (10.4%)
Selling, general and
administrative expenses 111,475 117,808 (5.4%)
Intangible asset
amortization 5,677 5,879 (3.4%)
Other expense, net 2,587 1,003 157.9%
Goodwill impairment 8,841 10,154 (12.9%)
Foreign exchange gain (1,042) (4,835) (78.4%)
--------------------------------------------------------------- -----------------------
Earnings before the
following 2,476 5,046 (50.9%)
Interest expense, net 14,028 14,281 (1.8%)
--------------------------------------------------------------- -----------------------
Loss before income taxes (11,552) (9,235) 25.1%
(Recovery of) provision for
income taxes (1,762) 790 (323.1%)
--------------------------------------------------------------- -----------------------
Loss for the period (9,790) (10,025) (2.3%)
(Loss) earnings for the
period attributable to
non-controlling interests (3,027) 911 (432.3%)
--------------------------------------------------------------- -----------------------
Loss for the period
attributable to SunOpta
Inc. (6,763) (10,936) (38.2%)
=============================================================== =======================
Loss per share for the
period
Basic (0.10) (0.17)
===============================================================
Diluted (0.10) (0.17)
===============================================================
SunOpta Inc.
Consolidated Balance Sheet
As at December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)
(Unaudited)
December 31, December 31,
2009 2008
Assets
Current assets
Cash and cash equivalents 20,723 24,755
Accounts receivable 94,241 95,129
Inventories 178,140 200,689
Prepaid expenses and other
current assets 10,813 14,448
Current income taxes
recoverable 442 595
Deferred income taxes 5,457 493
----------------------------- ----------------------
309,816 336,109
Property, plant and
equipment 113,245 110,641
Goodwill 49,717 54,022
Intangible assets 60,902 63,161
Deferred income taxes 14,734 16,160
Other assets 2,876 954
----------------------------- ----------------------
551,290 581,047
============================= ======================
Liabilities
Current liabilities
Bank indebtedness 63,481 67,164
Accounts payable and
accrued liabilities 106,253 106,989
Customer and other deposits 1,436 1,228
Other current liabilities 1,566 4,437
Current portion of
long-term debt 52,455 12,174
Current portion of
long-term liabilities 712 1,362
----------------------------- ----------------------
225,903 193,354
Long-term debt 34,734 99,353
Long-term liabilities 3,247 5,017
Deferred income taxes 12,708 13,614
276,592 311,338
----------------------------- ----------------------
Preferred shares of a
subsidiary company 28,187 27,796
Equity
SunOpta Inc. Shareholders'
Equity
Capital stock 178,694 177,858
64,982,968 common shares
(2008 -- 64,493,320)
Additional paid in capital 7,934 6,778
Retained earnings 34,146 40,909
Accumulated other
comprehensive income 12,079 1,266
----------------------------- ----------------------
Total SunOpta Inc.
Shareholders' Equity 232,853 226,811
Non-controlling interest 13,658 15,102
----------------------------- ----------------------
Total Equity 246,511 241,913
----------------------------- ----------------------
551,290 581,047
============================= ======================
SunOpta Inc.
Condensed Consolidated Statements of Cash Flow
For the three month periods ended December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)
(Unaudited)
December 31, December 31,
2009 2008
$ $
Cash provided by (used in)
Operating activities
Loss for the period (2,493) (17,699)
Items not affecting cash
Amortization 4,970 5,013
Goodwill impairment 500 10,154
Stock-based compensation 374 342
Non-cash interest accretion 334 381
Unrealized gain on foreign
exchange (619) (436)
Deferred income taxes (1,765) (1,091)
Other 856 2,053
Changes in non-cash working
capital, net of businesses
acquired 16,510 22,232
----------------------------- ------------------------------------
18,667 20,949
----------------------------- ------------------------------------
Investing activities
Purchases of property, plant and
equipment, net (1,155) (727)
Payment of deferred purchase
consideration (356) (83)
Purchase of patents, trademarks
and other intangible assets (7) (176)
Decrease in short-term
investments -- 20,000
Other 450 (128)
----------------------------- ------------------------------------
(1,068) 18,886
----------------------------- ------------------------------------
Financing activities
Increase (decrease) in line of
credit facilities 4,106 (21,849)
Repayment of long-term debt (19,768) (2,375)
Borrowings under long-term debt 3 581
Proceeds from the issuance of
common shares 209 199
Deferred financing fees (2,198) --
Other (74) (103)
----------------------------- ------------------------------------
(17,722) (23,547)
----------------------------- ------------------------------------
Foreign exchange gain (loss) on
cash held in a foreign currency 125 (649)
----------------------------- ------------------------------------
Increase (decrease) in cash and
cash equivalents during the
period 2 15,639
Cash and cash equivalents --
beginning of the period 20,721 9,116
----------------------------- ------------------------------------
Cash and cash equivalents -- end
of the period 20,723 24,755
============================= ====================================
SunOpta Inc.
Condensed Consolidated Statements of Cash Flow
For the years ended December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)
(Unaudited)
December 31, December 31,
2009 2008
$ $
Cash provided by (used in)
Operating activities
Loss for the period (9,790) (10,025)
Items not affecting cash
Amortization 19,370 19,364
Goodwill impairment 8,841 10,154
Stock-based compensation 1,435 1,106
Non-cash interest accretion 1,266 1,009
Unrealized gain on foreign
exchange (1,022) (1,702)
Deferred income taxes (3,030) (1,116)
Other 522 1,526
Changes in non-cash working
capital, net of businesses
acquired 27,296 13,369
----------------------------- ------------------------------------
44,888 33,685
----------------------------- ------------------------------------
Investing activities
Purchases of property, plant and
equipment, net (12,161) (7,645)
Payment of deferred purchase
consideration (1,856) (2,042)
Purchase of patents, trademarks
and other intangible assets (374) (673)
Acquisition of businesses, net
of cash acquired -- (5,267)
Other 259 (105)
----------------------------- ------------------------------------
(14,132) (15,732)
----------------------------- ------------------------------------
Financing activities
Decrease in line of credit
facilities (5,644) (24,584)
Repayment of long-term debt (29,438) (15,322)
Borrowings under long-term debt 719 15,655
Proceeds from the issuance of
common shares 836 1,016
Deferred financing fees (2,198) --
Other (14) 337
----------------------------- ------------------------------------
(35,739) (22,898)
----------------------------- ------------------------------------
Foreign exchange gain (loss) on
cash held in a foreign currency 951 (602)
----------------------------- ------------------------------------
Decrease in cash and cash
equivalents during the period (4,032) (5,547)
Cash and cash equivalents --
beginning of the period 24,755 30,302
----------------------------- ------------------------------------
Cash and cash equivalents -- end
of the period 20,723 24,755
============================= ====================================
SunOpta Inc.
Segmented Information
For the three month periods ended December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)
(Unaudited)
Three months ended
December 31, 2009
----------------------------------------------------------------------
SunOpta SunOpta
Foods Opta Minerals BioProcess Corporate Consolidated
$ $ $ $ $
----------------------------------------------------------------------
Total revenues from external customers 228,421 16,713 387 -- 245,521
----------------------------------------------------------------------
Segment Operating Income 4,385 732 (819) (1,320) 2,978
----------------------------------------------------------------------
SunOpta Foods has the following segmented reporting:
Three months ended
December 31, 2009
-------------------------------------------------------------
Grains
and Ingredients Fruit Distribution SunOpta
Foods Group IST Foods
$ $ $ $ $ $
-------- ----------- ------- ------ ------------ -------
Total revenues from external customers 74,692 17,519 34,112 37,894 64,204 228,421
-------- ----------- ------- ------ ------------ -------
Segment Operating Income 3,639 3,120 (1,794) (364) (216) 4,385
-------- ----------- ------- ------ ------------ -------
Three months ended
December 31, 2008
--------------------------------------------------------------------
SunOpta SunOpta Corporate
Foods Opta Minerals BioProcess Consolidated
$ $ $ $ $
-------------- ------------- ---------- --------- --------------
Total revenues from external customers 227,315 17,364 358 -- 245,037
-------------- ------------- ---------- --------- --------------
Segment Operating Income 1,956 (2,360) (105) (3,611) (4,120)
-------------- ------------- ---------- --------- --------------
SunOpta Foods has the following segmented
reporting:
Three months ended
December 31, 2008
-------------------------------------------------------------------------------------------
Grains Fruit SunOpta
and Foods Ingredients Group IST Distribution Foods
$ $ $ $ $ $
-------------------------------------------------------------------------------------------
Total revenues from external
customers 80,072 14,943 32,967 41,403 57,930 227,315
-------------------------------------------------------------------------------------------
Segment Operating Income 4,276 1,088 (3,198) (1,705) 1,495 1,956
-------------------------------------------------------------------------------------------
(Segment Operating Income is defined as "loss before the following" excluding the impact of "other expense,
net and goodwill impairment")
SunOpta Inc.
Segmented Information
For the years ended December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)
(Unaudited)
Year ended
December 31, 2009
--------------------------------------------------------------------
SunOpta SunOpta Corporate
Foods OptaMinerals BioProcess Consolidated
$ $ $ $ $
-------------- ------------- ---------- --------- --------------
Total revenues from external customers 926,090 62,523 519 -- 989,132
-------------- ------------- ---------- --------- --------------
Segment Operating Income 20,822 1,161 (3,287) (4,852) 13,904
-------------- ------------- ---------- --------- --------------
SunOpta Foods has the following segmented reporting:
Year ended
December 31, 2009
--------------------------------------------------------------
Grains
and Ingredients Fruit Distribution SunOpta
Foods Group IST Foods
$ $ $ $ $ $
-------- ----------- ------- ------- ------------ -------
Total revenues from external customers 325,038 64,657 147,443 151,698 237,254 926,090
-------- ----------- ------- ------- ------------ -------
Segment Operating Income 18,044 8,691 (4,073) (1,153) (627) 20,882
-------- ----------- ------- ------- ------------ -------
Year ended
December 31, 2008
------------------------------------------------------------------------
SunOpta SunOpta Corporate
Foods Opta Minerals BioProcess Consolidated
$ $ $ $ $
-------------- ------------- ------------ --------- ----------------
Total revenues from external customers 960,316 93,422 1,435 -- 1,055,173
-------------- ------------- ------------ --------- ----------------
Segment Operating Income 22,833 5,531 (3,286) (8,875) 16,203
-------------- ------------- ------------ --------- ----------------
SunOpta Foods has the following
segmented reporting:
Year ended
December 31,
2008
---------------------------------------------------------------------------------------------
Grains Fruit SunOpta
and Foods Ingredients Group IST Distribution Foods
$ $ $ $ $ $
-------------- ------------- -------------- -------------- -------------- --------------
Total revenues from
external customers 327,307 65,270 150,879 157,814 259,046 960,316
-------------- ------------- -------------- -------------- -------------- --------------
Segment Operating
Income 18,541 3,392 (10,219) 1,333 9,786 22,833
-------------- ------------- -------------- -------------- -------------- --------------
(Segment Operating Income is defined as "Earnings before the following" excluding the impact of "other expense, net
and goodwill impairment")
SunOpta Inc.
Non-GAAP Reconciliation
For the three month periods ended December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)
(Unaudited)
For the Three Months Ended December 31,
-------------------------------- ---------------------------------------------
2009 2009 2008
GAAP Adjustments Adjusted Adjusted
Revenues 245,521 -- 245,521 245,037
Cost of goods sold 206,581 (1,874) 204,707 216,308
-------- ----------- -------- ------------
Gross profit 38,940 1,874 40,814 28,729
Warehousing and distribution
expenses 5,165 -- 5,165 4,858
Selling, general and
administrative expenses 29,910 (2,069) 27,841 25,243
Intangible asset amortization 1,347 -- 1,347 1,627
Other expense, net 2,935 (2,460) 475 (852)
Goodwill impairment 500 (500) -- --
Foreign exchange(gain) loss (460) -- (460) 501
-------- ----------- -------- ------------
(Loss) earnings before the
following (457) 6,903 6,446 (2,648)
Interest expense, net 3,762 (675) 3,087 3,797
-------- ----------- -------- ------------
(Loss) earnings before income
taxes (4,219) 7,578 3,359 (6,445)
(Recovery of) provision for (1,726) 1,509 (217) (4,731)
-------- ----------- -------- ------------
(Loss) earnings for the period (2,493) 6,069 3,576 (1,714)
(Loss) earnings for the period
attributable to non-controlling
interests (279) -- (279) (654)
-------- ----------- -------- ------------
(Loss) earnings for the period
attributable to SunOpta Inc. (2,214) 6,069 3,855 (1,060)
======== =========== ======== ============
(Loss) earnings per share for
the period
-------- ----------- -------- ------------
Basic (0.03) 0.09 0.06 (0.02)
-------- ----------- -------- ------------
Diluted (0.03) 0.09 0.06 (0.02)
-------- ----------- -------- ------------
SunOpta Inc.
Non-GAAP Reconciliation
For the three month periods ended December 31, 2009 and 2008 (continued)
(Expressed in thousands of U.S. dollars)
(Unaudited)
Three months Three Months
Ended Ended
December 31, December 31,
2009 2008
------------ ------------
Impact on
(loss) Impact on
earnings (loss)
before earnings
income before
taxes income taxes
------------ ------------
Costs to rationalize product offerings in the
Fruit Group 1,217 --
Non-recurring start-up and operational costs 542 11
Non-cash inventory write-off 115 --
Costs in support of brand re-launches -- --
------------ ------------
Cost of sales 1,874 11
------------ ------------
Marketing costs in support of brand re-launches 493 --
Professional fees incurred in relation to the
2007 restatement 531 502
Legal costs incurred related to SunOpta
BioProcess litigation 392 107
Severance costs and related plant closure
expenses 653 --
------------ ------------
Selling, general and administrative expense 2,069 609
------------ ------------
Arbitration settlement in SunOpta BioProcess
Group -- 1,855
Legal settlements 1,425 --
Impairment of long-lived assets 1,119 --
Sale of business in the Ingredients Group (84) --
------------ ------------
Other expense, net 2,460 1,855
------------ ------------
Goodwill impairment in Fruit Group 500 8,198
Goodwill impairment in International Sourcing
and Trading Group -- 1,956
------------ ------------
Goodwill impairment 500 10,154
------------ ------------
Non-cash amortization of amended financing fees 675 --
------------ ------------
Interest expense, net 675 --
------------ ------------
Total adjustments to (loss) earnings before
income taxes 7,578 12,629
============ ============
Impact on Impact on
(loss) (loss)
earnings for earnings for
the period the period
attributable attributable
to to
SunOpta Inc. SunOpta Inc.
------------ ------------
Valuation allowance against deferred taxes (947) (3,498)
Tax impact of adjustments noted above 2,456 142
------------ ------------
1,509 (3,356)
------------ ------------
------------ ------------
Total adjustments to (loss) earnings for the
period attributable to SunOpta Inc. 6,069 15,985
============ ============
SunOpta Inc.
Non-GAAP Reconciliation
For the years ended December 31,
2009 and 2008
(Expressed in thousands of U.S.
dollars)
(Unaudited)
For the Years Ended December 31,
---------------------------------- -------------------------------------------
2009 2009 2008
GAAP Adjustments Adjusted Adjusted
Revenues 989,132 -- 989,132 1,055,173
Cost of goods sold 840,262 (6,613) 833,649 897,025
-------- ----------- -------- ----------
Gross profit 148,870 6,613 155,483 158,148
Warehousing and distribution
expenses 18,856 -- 18,856 21,040
Selling, general and
administrative expenses 111,475 (7,671) 103,804 108,908
Intangible asset amortization 5,677 -- 5,677 5,879
Other expense, net 2,587 (2,344) 243 (852)
Goodwill impairment 8,841 (8,841) -- --
Foreign exchange gain (1,042) -- (1,042) (4,835)
-------- ----------- -------- ----------
Earnings before the following 2,476 25,469 27,945 28,008
Interest expense, net 14,028 (1,800) 12,228 14,281
-------- ----------- -------- ----------
(Loss) earnings before income
taxes (11,552) 27,269 15,717 13,727
(Recovery of) provision for income
taxes (1,762) 5,156 3,394 (500)
-------- ----------- -------- ----------
(Loss) earnings for the period (9,790) 22,113 12,323 14,227
(Loss) earnings for the period
attributable to non-controlling
interests (3,027) 2,447 (580) 911
-------- ----------- -------- ----------
(Loss) earnings for the period
attributable to SunOpta Inc. (6,763) 19,666 12,903 13,316
======== =========== ======== ==========
(Loss) earnings per share for the
period
-------- ----------- -------- ----------
Basic (0.10) 0.30 0.20 0.21
-------- ----------- -------- ----------
Diluted (0.10) 0.30 0.20 0.21
-------- ----------- -------- ----------
SunOpta Inc.
Non-GAAP Reconciliation
For the years ended December 31, 2009 and 2008
(continued)
(Expressed in thousands of U.S. dollars)
(Unaudited)
------------ ------------
Year Ended Year Ended
December 31, December 31,
2009 2008
------------ ------------
Impact on
(loss) Impact on
earnings (loss)
before earnings
income before
taxes income taxes
------------ ------------
Costs to rationalize product offerings in the
Fruit Group 3,238 --
Non-recurring start-up and operational costs 3,190 2,053
Costs in support of brand re-launches 647 --
Non-cash inventory write-off 115 --
Business interruption proceeds received (577) --
------------ ------------
Cost of sales 6,613 2,053
------------ ------------
Marketing costs in support of brand re-launches 2,551 --
Severance costs and related plant closure
expenses 2,140 --
Professional fees incurred in relation to the
2007 restatement 1,619 8,133
Legal costs incurred related to SunOpta
BioProcess litigation 1,361 767
------------ ------------
Selling, general and administrative expense 7,671 8,900
------------ ------------
Impairment of long-lived assets 2,188 --
Legal settlements 1,425 --
Arbitration decision in SunOpta BioProcess
Group -- 1,855
Elimination of long-term liability at Opta
Minerals (1,110) --
Sale of business in the Ingredients Group (159) --
------------ ------------
Other expense, net 2,344 1,855
------------ ------------
Goodwill impairment in Opta Minerals 8,341 --
Goodwill impairment in Fruit Group 500 8,198
Goodwill impairment in International Sourcing
and Trading Group -- 1,956
------------ ------------
Goodwill impairment 8,841 10,154
------------ ------------
Non-cash amortization of amended financing fees 1,800 --
------------ ------------
Interest expense, net 1,800 --
------------ ------------
Total adjustments to (loss) earnings before
income taxes 27,269 22,962
============ ============
Impact on Impact on
(loss) (loss)
earnings for earnings for
the period the period
attributable attributable
to to
SunOpta Inc. SunOpta Inc.
------------ ------------
Valuation allowance against deferred taxes (947) (3,498)
Tax impact of adjustments noted above 6,103 2,208
------------ ------------
Provision for income taxes 5,156 (1,290)
------------ ------------
Goodwill impairment and elimination of
long-term liability at Opta Minerals (2,447) --
------------ ------------
(Loss) earnings for the period attributable to
non-controlling interests (2,447) --
------------ ------------
Total adjustments to (loss) earnings for the
period attributable to SunOpta Inc. 19,666 24,252
============ ============
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CONTACT:
SunOpta Inc.
Jeremy N. Kendall, Chairman
Steve Bromley, President & CEO
Eric Davis, Vice President & CFO
Tony Tavares, Vice President & COO
Susan Wiekenkamp, Information Officer
905-455-2528, ext 103
susan.wiekenkamp@sunopta.com
www.sunopta.com