Revenue from continuing operations increased
10.4%, with growth across both segments
Gross margin from continuing operations
improved 360 basis points
Adjusted EBITDA increased 84% to $20.6
million ($26.5 million with divested Global Ingredients
segment)
SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL)
(TSX:SOY), a leading healthy food and beverage company focused on
plant-based foods and beverages and fruit-based foods and
beverages, today announced financial results for the fourth quarter
ended January 2, 2021.
All amounts are expressed in U.S. dollars and results are
reported in accordance with U.S. GAAP, except where specifically
noted. The Company’s financial results presented below reflect the
divestiture of Tradin Organic (Global Ingredients segment) on
December 30, 2020, unless otherwise indicated. Tradin Organic has
been reported as discontinued operations for the current and prior
periods.
Fourth Quarter 2020:
- Revenues of $205.6 million from continuing operations for the
fourth quarter of 2020 compared to $186.1 million in the fourth
quarter of 2019, an increase of 10.4%.
- Gross margin increased 360 basis points to 15.5% from 11.9% in
the prior year.
- Earnings attributable to common shareholders were $70.2 million
or $0.78 per share in the fourth quarter of 2020, compared to a
loss attributable to common shareholders of $7.6 million or $0.09
per share in the fourth quarter of 2019. This includes earnings
from continuing and discontinued operations.
- Adjusted earnings attributable to common shareholders were $1.2
million or $0.01 per diluted common share in the fourth quarter of
2020, compared to a loss of $5.6 million or $0.06 per diluted
common share in the fourth quarter of 2019. This includes earnings
from continuing and discontinued operations.
- Adjusted EBITDA¹ from continuing operations of $20.6 million,
or 10.0% of revenues for the fourth quarter of 2020, versus $11.2
million or 6.0% of revenues in the fourth quarter of 2019.
“The fourth quarter was another strong quarter, capping off a
transformational year for SunOpta. We delivered 10.4% revenue
growth, 15.5% gross margins and 10.0% EBITDA margins in Q4
reflecting the fundamental strength of the business,” said Joe
Ennen, Chief Executive Officer. “The 84% increase in Adjusted
EBITDA for the go-forward business during the fourth quarter was on
top of a 649% increase a year earlier. We had more Adjusted EBITDA
in the fourth quarter of 2020 from continuing operations than in
the entire 2019 fiscal year. In the fourth quarter, we again
delivered solid growth in both Plant-Based and Fruit-Based segments
coupled with substantial margin improvements including a 19.4%
gross profit margin in plant-based and a 10.1% gross profit margin
in fruit-based. In addition, we significantly strengthened our
balance sheet ensuring the flexibility and capacity to continue
investing in core growth initiatives. We remain well positioned in
favorable, on-trend categories with a strong pipeline of new
business opportunities, particularly in plant-based foods and
beverages. I am very proud of our execution and the responsiveness
of the entire organization to the many challenges we faced
throughout 2020 and we are optimistic we will carry this momentum
into 2021.”
The table below summarizes the unaudited combined results from
continuing operations and discontinued operations for the quarters
ended January 2, 2021 and December 28, 2019. The net loss from
continuing operations of $34.3 million for the fourth quarter of
2020 included: (i) $11.2 million of facility exit costs (mainly
related to the previously announced exit from the Company’s Santa
Maria, California, fruit processing facility) severance and asset
impairment charges; (ii) a $12.7 million loss on a foreign currency
economic hedge of the cash consideration from the sale of Tradin
Organic; and (iii) an $8.9 million loss on the retirement of the
Company’s 9.5% second lien notes on December 31, 2020. In addition,
interest expense of $7.6 million in the fourth quarter of 2020
reflected the Company’s pre-December 30, 2020 capital structure
with approximately $425 million of debt versus the approximately
$70 million of debt at January 2, 2021. Earnings from discontinued
operations for the fourth quarter of 2020 included a pre-tax gain
on the sale of Tradin Organic of $111.8 million.
($000s)
Continuing Operations
Discontinued Operations
Combined Operations
Q4 2020
Q4 2019
Q4 2020
Q4 2019
Q4 2020
Q4 2019
Revenue
$
205,556
$
186,120
$
124,819
$
109,682
$
330,375
$
295,802
Gross Profit
31,807
22,197
13,738
11,198
45,545
33,395
Net earnings (loss)
(34,330)
(6,743)
107,391
1,140
73,061
(5,603)
Adj. earnings (loss)
(2,456)
(7,125)
3,635
1,528
1,179
(5,597)
Adj. EBITDA
20,570
11,162
5,969
5,208
26,539
16,370
The following table summarizes revenue growth as reported and as
adjusted for the impact of the additional week and commodity price
changes in the fourth quarter of 2020:
Revenue increase as reported
Adjusted for additional week and
commodity price changes
Plant-Based Foods and Beverages
11.1%
6.6%
Fruit-Based Foods and Beverages
9.6%
3.9%
Total
10.4%
5.4%
Fourth Quarter 2020 Results from Continuing
Operations
Revenues for the fourth quarter of 2020 were $205.6 million, an
increase of 10.4% compared to $186.1 million in the fourth quarter
of 2019.
The Plant-Based Foods and Beverages segment generated revenues
of $118.2 million during the fourth quarter of 2020, an increase of
11.1% compared to $106.4 million in the fourth quarter of 2019. The
growth primarily reflects expansion of plant-based beverage and
broth offerings for retail customers, and higher volumes of
ingredient extraction, partially offset by reduced sales volumes of
plant-based beverage products to foodservice customers as a result
of COVID-19.
The Fruit-Based Foods and Beverages segment generated revenues
of $87.4 million during the fourth quarter of 2020, an increase of
9.6% compared to $79.7 million in the fourth quarter of 2019. The
growth primarily reflects increased retail volumes of fruit snacks
and frozen fruit, as well as increased pricing for frozen fruit
partially offset by lower volume for frozen fruit and fruit
preparations to foodservice customers as a result of COVID-19.
Gross profit was $31.8 million for the fourth quarter, an
increase of $9.6 million compared to $22.2 million in the prior
year period. As a percentage of revenues, gross profit margin was
15.5% in the fourth quarter of 2020 compared to 11.9% in the fourth
quarter of 2019, an increase of 360 basis points. The Plant-Based
Foods and Beverages segment accounted for $3.1 million of the
increase in gross profit, primarily due to higher sales and
production volumes of plant-based beverages, broths and plant-based
ingredients, coupled with productivity-driven cost savings. The
Fruit-Based Foods and Beverages segment increased gross profit by
$6.5 million in the quarter, reflecting higher sales, pricing and
mix factors, as well as further productivity enhancements.
Segment operating income¹ was $6.8 million, or 3.3% of revenues
in the fourth quarter of 2020, compared to an operating loss of
$0.5 million, or 0.3% of revenues in the fourth quarter of 2019.
The increase in operating income year-over-year was primarily
attributable to the $9.6 million increase in gross profit and the
benefit from headcount reductions and other cost savings measures
taken in 2019, partially offset by higher SG&A primarily driven
by employee-related variable compensation and benefit costs.
The Company reported a loss from continuing operations for the
fourth quarter of 2020 of $34.3 million, or $0.41 per diluted
common share (after dividends on preferred stock). The loss
included $11.2 million of facility exit costs, severance and asset
impairment charges, a $12.7 million loss on a foreign currency
economic hedge of the cash consideration from the sale of Tradin
Organic, and an $8.9 million loss on the retirement of the
Company’s second lien notes on December 31, 2020. This compares to
a loss from continuing operations of $6.7 million, or $0.10 per
diluted common share during the fourth quarter of 2019.
Adjusted loss¹ in the fourth quarter of 2020 was $2.5 million or
$0.03 per common share, compared to an adjusted loss of $7.1
million or $0.08 per common share in the fourth quarter of
2019.
Adjusted EBITDA¹ was $20.6 million or 10.0% of revenues in the
fourth quarter of 2020, compared to $11.2 million or 6.0% of
revenues in the fourth quarter of 2019.
Please refer to the discussion and table below under “Non-GAAP
Measures”.
Balance Sheet and Cash Flow
At January 2, 2021, SunOpta had total assets of $585.6 million
and total debt of $69.7 million compared to total assets of $923.4
million and total debt of $480.0 million a year earlier, primarily
reflecting the sale of Tradin Organic and improved operating
performance. During the fourth quarter of 2020, cash generated by
operating activities of continuing operations was $19.8 million
compared to $33.2 million during the fourth quarter of 2019.
Investing activities of continuing operations used $11.2 million of
cash in the fourth quarter of 2020 versus $7.9 million in the prior
year, primarily due to the settlement of the foreign currency
contract economically hedging the Tradin Organic cash
consideration.
Conference Call
SunOpta plans to host a conference call at 9:00 A.M. Eastern
time on Wednesday, March 3, 2021, to discuss the fourth quarter
financial results. After opening remarks, there will be a
question-and-answer period. Investors interested in listening to a
live webcast of the conference call can access a link on SunOpta's
website at www.sunopta.com under the "Investors" section or
directly here. Investors interested in listening to the live call
over the telephone must pre-register for the conference call via a
link on SunOpta's website at www.sunopta.com under the "Investors
Relations" section or directly at
http://www.directeventreg.com/registration/event/9477779. Upon
registration, investors will be provided with the dial-in
information, passcode and individual ID. Investors will also
receive a confirmation email. Investors are encouraged to register
at least 15 minutes prior to the scheduled call time and can
register earlier at any time to receive the conference details. If
you are unable to listen live, the conference call will be archived
and can be accessed for approximately 90 days at the Company's
website.
¹ See discussion of non-GAAP measures
About SunOpta Inc.
SunOpta Inc. is a leading company specializing in the sourcing,
processing and production of organic, natural and non-GMO
plant-based and fruit-based food and beverage products.
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, our
belief that investment in plant-based foods and beverages will
continue to be a significant driver of revenue and margin growth,
and our ability to drive further year-over-year adjusted EBITDA
improvement. Generally, forward-looking statements do not relate
strictly to historical or current facts and are typically
accompanied by words such as “continue”, “expect”, “believe”,
“anticipate”, “estimates”, “can”, “will”, “target”, "should",
"would", "plans", "becoming", "intend", "confident", "may",
"project", "potential", "intention", "might", "predict", “budget”,
“forecast” or other similar terms and phrases intended to identify
these forward-looking statements. Forward-looking statements are
based on information available to the Company 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
including, but not limited to, the Company’s actual financial
results; uninterrupted operations and service levels to our
customers during COVID-19; current customer demand for the
Company’s products and the additional anticipated demand due to
COVID-19; general economic conditions; continued consumer interest
in health and wellness; the Company’s ability to maintain product
pricing levels; planned facility and operational expansions,
closures and divestitures; cost rationalization and product
development initiatives; alternative potential uses for the
Company’s capital resources; portfolio optimization and
productivity efforts; the sustainability of the Company’s sales
pipeline; the Company’s expectations regarding commodity pricing,
margins and hedging results; improved availability and field prices
for fruit; procurement and logistics savings; freight lane cost
reductions; yield and throughput enhancements; and labor cost
reductions. Whether actual timing and results will agree with
expectations and predictions of the Company is subject to many
risks and uncertainties including, but not limited to, potential
loss of suppliers and customers as well as supply chain, logistics
and other disruptions resulting from or related to COVID-19;
unexpected issues or delays with the Company’s structural
improvements and automation investments; failure or inability to
implement portfolio changes, process improvements, go-to-market
improvements and process sustainability strategies in a timely
manner; changes in the level of capital investment; local and
global political and economic conditions; consumer spending
patterns and changes in market trends; decreases in customer
demand; delayed or unsuccessful product development efforts;
potential product recalls; working capital management; availability
and pricing of raw materials and supplies; potential covenant
breaches under the Company’s credit facilities; and other risks
described from time to time under "Risk Factors" in the Company's
Annual Report on 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. The
Company undertakes no obligation to publicly correct or update the
forward-looking statements in this document, in other documents, or
on its website to reflect future events or circumstances, except as
may be required under applicable securities laws.
SunOpta Inc.
Consolidated Statements of Operations
For the quarters and years ended January
2, 2021 and December 28, 2019
(Unaudited)
(All dollar amounts expressed in thousands
of U.S. dollars, except per share amounts)
Quarter ended
Year ended
January 2, 2021
December 28, 2019
January 2, 2021
December 28, 2019
$
$
$
$
Revenues
205,556
186,120
789,213
721,596
Cost of goods sold
173,749
163,923
680,136
656,093
Gross profit
31,807
22,197
109,077
65,503
Selling, general and administrative
expenses
25,590
20,581
89,463
80,603
Intangible asset amortization
2,194
2,305
8,946
9,112
Other expense (income), net
22,604
(653
)
23,393
(40,639
)
Foreign exchange gain
(2,790
)
(200
)
(1,640
)
(157
)
Earnings (loss) from continuing
operations before the following
(15,791
)
164
(11,085
)
16,584
Interest expense, net
7,605
8,259
30,042
32,765
Loss on retirement of debt
8,915
-
8,915
-
Loss from continuing operations before
income taxes
(32,311
)
(8,095
)
(50,042
)
(16,181
)
Provision for (recovery of) income
taxes
2,019
(1,352
)
(2,740
)
(3,101
)
Loss from continuing operations
(34,330
)
(6,743
)
(47,302
)
(13,080
)
Earnings from discontinued operations
107,391
1,140
124,820
12,322
Net earnings (loss)
73,061
(5,603
)
77,518
(758
)
Dividends and accretion on preferred
stock
(2,855
)
(2,017
)
(10,328
)
(8,022
)
Earnings (loss) attributable to common
shareholders
70,206
(7,620
)
67,190
(8,780
)
Basic and diluted earnings (loss) per
share
From continuing operations
(0.41
)
(0.10
)
(0.65
)
(0.24
)
From discontinued operations
1.19
0.01
1.40
0.14
Basic and diluted earnings (loss) per
share
0.78
(0.09
)
0.75
(0.10
)
Weighted-average common shares
outstanding (000s)
Basic
89,991
88,017
89,234
87,787
Diluted
89,991
88,017
89,234
87,787
SunOpta Inc.
Consolidated Balance Sheets
As at January 2, 2021 and December 28,
2019
(Unaudited)
(All dollar amounts expressed in thousands
of U.S. dollars)
January 2, 2021
December 28, 2019
$
$
ASSETS
Current assets
Cash and cash equivalents
251
128
Accounts receivable
72,724
71,818
Inventories
147,748
153,562
Prepaid expenses and other current
assets
21,665
20,558
Current income taxes recoverable
6,935
7,480
Current assets held for sale
-
236,408
Total current assets
249,323
489,954
Property, plant and equipment
158,048
159,675
Operating lease right-of-use
assets
35,172
65,939
Goodwill
3,998
3,998
Intangible assets
133,317
142,263
Other assets
5,757
1,991
Long-term assets held for sale
-
59,539
Total assets
585,615
923,359
LIABILITIES
Current liabilities
Bank indebtedness
-
241,666
Accounts payable and accrued
liabilities
118,592
89,136
Income taxes payable
1,431
356
Current portion of long-term debt
3,478
2,492
Current portion of operating lease
liabilities
12,750
16,084
Current portion of long-term
liabilities
200
4,286
Current liabilities held for sale
-
51,644
Total current liabilities
136,451
405,664
Long-term debt
66,245
235,840
Operating lease liabilities
24,582
50,657
Long-term liabilities
-
982
Deferred income taxes
25,408
9,040
Long-term liabilities held for
sale
-
8,743
Total liabilities
252,686
710,926
Series A Preferred Stock
87,305
82,524
Series B Preferred Stock
27,595
-
EQUITY
SunOpta Inc. shareholders’
equity
Common shares
326,545
318,456
Additional paid-in capital
37,862
35,767
Accumulated deficit
(147,741
)
(214,931
)
Accumulated other comprehensive income
(loss)
1,363
(11,271
)
218,029
128,021
Non-controlling interests
-
1,888
Total equity
218,029
129,909
Total equity and liabilities
585,615
923,359
SunOpta Inc.
Consolidated Statements of Cash Flows
For the quarters and years ended January
2, 2021 and December 28, 2019
(Unaudited)
(Expressed in thousands of U.S.
dollars)
Quarter ended
Year ended
January 2, 2021
December 28, 2019
January 2, 2021
December 28, 2019
$
$
$
$
CASH PROVIDED BY (USED IN)
Operating activities
Net earnings (loss)
73,061
(5,603
)
77,518
(758
)
Earnings from discontinued operations
107,391
1,140
124,820
12,322
Loss from continuing operations
(34,330
)
(6,743
)
(47,302
)
(13,080
)
Items not affecting cash:
Depreciation and amortization
7,415
7,774
30,308
29,266
Amortization of debt issuance costs
1,055
699
4,078
2,721
Deferred income taxes
2,043
(230
)
7,553
1,075
Stock-based compensation
4,251
1,834
11,676
6,340
Loss on foreign currency forward
contract
12,658
-
12,658
-
Impairment of long-lived assets
7,803
-
7,803
-
Loss on retirement of debt
8,915
-
8,915
-
Gain on sale of business
-
242
-
(44,027
)
Other
(368
)
(59
)
(157
)
(34
)
Changes in operating assets and
liabilities, net of businesses sold
10,397
29,708
17,131
731
Net cash provided by (used in) operating
activities of continuing operations
19,839
33,225
52,663
(17,008
)
Net cash provided by operating activities
of discontinued operations
14,282
2,967
39,033
26,817
Net cash provided by operating
activities
34,121
36,192
91,696
9,809
Investing activities
Purchases of property, plant and
equipment
1,473
(6,571
)
(24,754
)
(28,387
)
Cash settlement of foreign currency
forward contract
(12,658
)
-
(12,658
)
-
Net proceeds from sale of business
-
(1,348
)
-
63,324
Other
-
-
41
-
Net cash provided by (used in) investing
activities of continuing operations
(11,185
)
(7,919
)
(37,371
)
34,937
Net cash provided by (used in) investing
activities of discontinued operations
363,496
(1,286
)
361,889
(7,718
)
Net cash provided by (used in) investing
activities
352,311
(9,205
)
324,518
27,219
Financing activities
Decrease under revolving credit
facilities
(149,518
)
(23,641
)
(175,990
)
(11,290
)
Repayment of long-term debt, including
premium paid
(229,729
)
(623
)
(231,431
)
(1,281
)
Borrowings of long-term debt
5,179
413
5,179
637
Payment of debt issuance costs
(2,397
)
(17
)
(4,888
)
(412
)
Proceeds on issuance of preferred stock,
net of issuance costs
-
-
26,804
-
Payment of cash dividends on preferred
stock
(2,378
)
(1,700
)
(4,078
)
(6,800
)
Proceeds from the exercise of stock
options and employee share purchases
613
166
2,048
979
Payment of withholding taxes on
stock-based awards
(1,704
)
(10
)
(4,080
)
(394
)
Other
(181
)
(5
)
(185
)
(19
)
Net cash used in financing activities of
continuing operations
(380,115
)
(25,417
)
(386,621
)
(18,580
)
Net cash used in financing activities of
discontinued operations
(7,216
)
(2,297
)
(31,063
)
(20,183
)
Net cash used in financing activities
(387,331
)
(27,714
)
(417,684
)
(38,763
)
Decrease in cash and cash equivalents
during the year
(899
)
(727
)
(1,470
)
(1,735
)
Cash and cash equivalents of discontinued
operations:
Balance at the beginning of the period
678
1,970
1,370
2,501
Foreign exchange gain (loss) on cash and
cash equivalents
212
16
223
(47
)
Less: Balance at the end of period
-
(1,370
)
-
(1,370
)
Cash and cash equivalents - beginning of
the period
260
239
128
779
Cash and cash equivalents - end of the
period
251
128
251
128
SunOpta Inc.
Segmented Information
For the quarters and years ended January
2, 2021 and December 28, 2019
Unaudited
(Expressed in thousands of U.S.
dollars)
Quarter ended
Year ended
January 2, 2021
December 28, 2019
January 2, 2021
December 28, 2019
$
$
$
$
Segment revenues from external
customers:
Plant-Based Foods and Beverages
118,179
106,371
415,164
361,398
Fruit-Based Foods and Beverages
87,377
79,749
374,049
349,852
Global Ingredients
-
-
-
10,346
Total segment revenues from external
customers
205,556
186,120
789,213
721,596
Segment gross profit:
Plant-Based Foods and Beverages
22,980
19,881
80,497
58,812
Fruit-Based Foods and Beverages
8,827
2,316
28,580
6,499
Global Ingredients
-
-
-
192
Total segment gross profit
31,807
22,197
109,077
65,503
Segment operating income
(loss):
Plant-Based Foods and Beverages
13,324
13,745
50,780
29,476
Fruit-Based Foods and Beverages
1,185
(4,669
)
(7,321
)
(26,873
)
Global Ingredients
-
-
-
(187
)
Corporate Services
(7,696
)
(9,565
)
(31,151
)
(26,471
)
Total segment operating income (loss)
6,813
(489
)
12,308
(24,055
)
Segment gross profit
percentage:
Plant-Based Foods and Beverages
19.4
%
18.7
%
19.4
%
16.3
%
Fruit-Based Foods and Beverages
10.1
%
2.9
%
7.6
%
1.9
%
Global Ingredients
-
-
-
1.9
%
Total segment gross profit percentage
15.5
%
11.9
%
13.8
%
9.1
%
Segment operating income (loss)
percentage:
Plant-Based Foods and Beverages
11.3
%
12.9
%
12.2
%
8.2
%
Fruit-Based Foods and Beverages
1.4
%
-5.9
%
-2.0
%
-7.7
%
Global Ingredients
-
-
-
-1.8
%
Total segment operating income (loss)
percentage
3.3
%
-0.3
%
1.6
%
-3.3
%
Non-GAAP Measures
In addition to reporting financial results in accordance with
U.S. GAAP, the Company provides additional information about its
operating results regarding segment operating income, adjusted
earnings and adjusted earnings before interest, taxes, depreciation
and amortization (“Adjusted EBITDA”), which are not measures in
accordance with U.S. GAAP. The Company believes that segment
operating income, adjusted earnings and adjusted EBITDA assist
investors in comparing performance across reporting periods on a
consistent basis by excluding items that are not indicative of its
operating performance. The non-GAAP measures of segment operating
income, adjusted earnings and adjusted EBITDA should not be
considered in isolation or as a substitute for performance measures
calculated in accordance with U.S. GAAP.
In order to evaluate its results of operations, the Company uses
certain other non-GAAP measures that it believes enhance an
investor’s ability to derive meaningful period-over-period
comparisons and trends from the results of operations. In
particular, the Company evaluates its revenues on a basis that
excludes the effects of foreign exchange rates and the impact of
acquired or disposed operations. In addition, the Company excludes
specific items from its reported results that due to their nature
or size, it does not expect to occur as part of its normal business
on a regular basis. These items are identified in the tables below.
These non-GAAP measures are presented solely to allow investors to
more fully assess the Company’s results of operations and should
not be considered in isolation of, or as substitutes for an
analysis of the Company’s results as reported under U.S. GAAP.
Adjusted Earnings/Loss
When assessing its financial performance, the Company uses an
internal measure that excludes losses and gains that it believes
are not reflective of normal operations. This information is
provided to allow investors to make meaningful comparisons of the
Company’s operating performance between periods and to view the
Company’s business from the same perspective as the Company’s
management. Adjusted earnings/loss and adjusted earnings/loss per
diluted share should not be considered in isolation or as a
substitute for performance measures calculated in accordance with
U.S. GAAP.
The following is a tabular presentation of adjusted
earnings/loss and adjusted earnings/loss per diluted share,
including a reconciliation from net earnings/loss, which the
Company believes to be the most directly comparable U.S. GAAP
financial measure. In addition, the Company has prepared this table
in a columnar format to present the effects of discontinued
operations on its consolidated results for the periods presented.
The Company believes this presentation assists investors in
assessing the financial performance of its continuing
operations.
Continuing Operations
Discontinued
Operations
Consolidated
Per Share
Per Share
Per Share
For the quarters ended
$
$
$
$
$
$
January 2, 2021
Net earnings (loss)
(34,330
)
107,391
73,061
Dividends and accretion on preferred
stock
(2,855
)
-
(2,855
)
Earnings (loss) attributable to common
shareholders
(37,185
)
(0.41
)
107,391
1.19
70,206
0.78
Adjusted for:
Gain on sale of discontinued
operations(a)
-
(111,818
)
(111,818
)
Loss on foreign currency forward
contract(b)
12,658
-
12,658
Costs related to Value Creation
Plan(c)
8,548
(1,331
)
7,217
Loss on retirement of debt(d)
8,915
-
8,915
Long-lived asset impairments(e)
2,676
771
3,447
Plant expansion costs(f)
1,546
-
1,546
Other(g)
(732
)
(163
)
(895
)
Net income tax effect(h)
1,118
8,785
9,903
Adjusted earnings (loss)
(2,456
)
(0.03
)
3,635
0.04
1,179
0.01
December 28, 2019
Net earnings (loss)
(6,743
)
1,140
(5,603
)
Dividends and accretion on preferred
stock
(2,017
)
-
(2,017
)
Earnings (loss) attributable to common
shareholders
(8,760
)
(0.10
)
1,140
0.01
(7,620
)
(0.09
)
Adjusted for:
Gain on sale of soy and corn
business(i)
242
-
242
Costs related to Value Creation
Plan(j)
1,042
237
1,279
Plant expansion costs(k)
-
298
298
Other(l)
(1,154
)
112
(1,042
)
Net income tax effect(m)
1,505
(259
)
1,246
Adjusted earnings (loss)
(7,125
)
(0.08
)
1,528
0.02
(5,597
)
(0.06
)
(a)
Reflects the pre-tax gain on sale
of Tradin Organic recorded in earnings from discontinued
operations.
(b)
Reflects a loss on a foreign
currency forward contract to economically hedge the cash
consideration from the sale of Tradin Organic, which was recorded
in other expense.
(c)
Reflects long-lived asset
impairment and facility closure costs of $6.4 million recorded in
other expense; employee termination costs of $1.6 million recorded
in SG&A expenses, and the reclassification to earnings from
discontinued operations of $1.3 million of professional fees
related to the divestiture of Tradin Organic.
(d)
Reflects the premium paid ($5.3
million) and write-off of unamortized debt issuance costs ($3.6
million) on the redemption and retirement of our second lien notes,
which was recorded in non-operating expenses.
(e)
Reflects the write-down of owned
and right-of-use assets related to the consolidation of roasting
lines at our Crookston, Minnesota, facility, and the write-off of
obsolete cocoa processing equipment at Tradin Organic, with was
recorded in other expense and earnings from discontinued
operations.
(f)
Reflects start-up costs related
to expansion projects within our plant-based ingredient extraction
and beverage operations, which were recorded in cost of goods
sold.
(g)
Other includes a reversal of
previously accrued costs related to the withdrawal of certain
consumer-packaged products, which was recorded in other
income/expense.
(h)
Reflects estimated income tax
attributable to the gain on sale of Tradin Organic, together with
the tax effect of the other preceding adjustments to earnings based
on an overall estimated annual effective tax rate of approximately
30% for 2020.
(i)
Reflects the gain on sale of the
soy and corn business, which was recorded in other income.
(j)
Reflects employee retention and
relocation costs of $0.4 million, and professional fees of $0.4
million recorded in SG&A expenses; and employee termination
costs of $1.7 million (offset by the reversal of $1.3 million of
previously recognized stock-based compensation related to forfeited
awards previously granted to terminated employees), which was
recorded in other expense and earnings from discontinued
operations.
(k)
Reflects costs related to the
start-up of Tradin Organic’s avocado oil facility in Ethiopia,
which were recorded in earnings from discontinued operations.
(l)
Other includes gains on the
settlement of certain legal matters and a project cancellation,
partially offset by losses on disposal of assets, which were
recorded in other income/expense and earnings from discontinued
operations.
(m)
Consolidated reflects the tax
effect of the preceding adjustments to earnings and reflects an
overall estimated annual effective tax rate of approximately 27%
for 2019.
Continuing Operations
Discontinued
Operations
Consolidated
Per Share
Per Share
Per Share
For the years ended
$
$
$
$
$
$
January 2, 2021
Net earnings (loss)
(47,302
)
124,820
77,518
Dividends and accretion on preferred
stock
(10,328
)
-
(10,328
)
Earnings (loss) attributable to common
shareholders
(57,630
)
(0.65
)
124,820
1.40
67,190
0.75
Adjusted for:
Gain on sale of discontinued
operations(a)
-
(111,818
)
(111,818
)
Contingent consideration settlement(b)
-
(2,286
)
(2,286
)
Loss on foreign currency forward
contract(c)
12,658
-
12,658
Costs related to Value Creation
Plan(d)
9,897
783
10,680
Loss on retirement of debt(e)
8,915
-
8,915
Long-lived asset impairments(f)
2,676
771
3,447
Plant expansion costs(g)
1,883
-
1,883
Other(h)
(189
)
(50
)
(239
)
Net income tax effect(i)
255
8,809
9,064
Adjusted earnings (loss)
(21,535
)
(0.24
)
21,029
0.24
(506
)
(0.01
)
December 28, 2019
Net earnings (loss)
(13,080
)
12,322
(758
)
Dividends and accretion on preferred
stock
(8,022
)
-
(8,022
)
Earnings (loss) attributable to common
shareholders
(21,102
)
(0.24
)
12,322
0.14
(8,780
)
(0.10
)
Adjusted for:
Gain on sale of soy and corn
business(j)
(44,027
)
-
(44,027
)
Costs related to Value Creation
Plan(k)
9,412
237
9,649
Plant expansion costs(l)
311
298
609
Contract manufacturer transition
costs(m)
-
448
448
Product withdrawal and recall costs(n)
260
-
260
Other(o)
(2,728
)
195
(2,533
)
Net income tax effect(p)
12,394
(397
)
11,997
Adjusted earnings (loss)
(45,480
)
(0.52
)
13,103
0.15
(32,377
)
(0.37
)
(a)
Reflects the pre-tax gain on sale
of Tradin Organic recorded in earnings from discontinued
operations.
(b)
Reflects a gain on the settlement
of the remaining earn-out obligation related to a prior acquisition
of a premium juice business, which was recorded in earnings from
discontinued operations.
(c)
Reflects a loss on a foreign
currency forward contract to economically hedge the cash
consideration from the sale of Tradin Organic, which was recorded
in other expense.
(d)
Reflects professional fees of
$1.0 million and employee retention costs of $0.6 million recorded
in SG&A expenses; and long-lived asset impairment and facility
closure costs of $6.7 million, and employee termination costs of
$3.2 million (offset by the reversal of $0.9 million of previously
recognized stock-based compensation related to forfeited awards
previously granted to terminated employees), which were recorded in
other expense and earnings from discontinued operations.
(e)
Reflects the premium paid ($5.3
million) and write-off of unamortized debt issuance costs ($3.6
million) on the redemption and retirement of our second lien notes,
which was recorded in non-operating expenses.
(f)
Reflects the write-down of owned
and right-of-use assets related to the consolidation of roasting
lines at our Crookston, Minnesota, facility, and the write-off of
obsolete cocoa processing equipment at Tradin Organic, with was
recorded in other expense and earnings from discontinued
operations.
(g)
Reflects start-up costs related
to expansion projects within our plant-based ingredient extraction
and beverage operations, which were recorded in cost of goods
sold.
(h)
Other includes a loss of $2.4
million on the settlement of a customer claim related to the recall
of certain sunflower products in 2016, net of gains of $2.2 million
on the settlement of unrelated matters, and reversal of previously
accrued costs related to the withdrawal of certain
consumer-packaged products, which was recorded in other
income/expense.
(i)
Reflects estimated income tax
attributable to the gain on sale of Tradin Organic, together with
the tax effect of the other preceding adjustments to earnings based
on an overall estimated annual effective tax rate of approximately
30% for 2020.
(j)
Reflects the gain on sale of the
soy and corn business, which was recorded in other income.
(k)
Reflects employee retention and
relocation costs of $2.2 million, and professional fees of $1.4
million recorded in SG&A expenses; and employee termination
costs of $8.6 million (offset by the reversal of $4.1 million of
previously recognized stock-based compensation related to forfeited
awards previously granted to terminated employees), CEO and CFO
recruitment costs of $1.3 million, and facility closure costs of
$0.3 million, which was recorded in other expense and earnings from
discontinued operations.
(l)
Reflects costs related to the
expansion of our Allentown, Pennsylvania, plant-based beverage
facility and start-up of Tradin Organic’s avocado oil facility in
Ethiopia, which were recorded in cost of goods sold and earnings
from discontinued operations.
(m)
Reflects costs related to the
transition of Tradin Organic’s premium juice production activities
to new contract manufacturers, which were recorded in earnings from
discontinued operations.
(n)
Reflects product withdrawal and
recall costs that were not eligible for reimbursement under
insurance policies or exceeded the limits of those policies,
including costs related to the recall of certain sunflower kernel
products initiated in 2016, which were recorded in other
expense.
(o)
Other includes gains on the
settlement of certain legal matters and a project cancellation,
partially offset by losses on disposal of assets, insurance
deductibles, and business development costs, which were recorded in
other income/expense and earnings from discontinued operations.
(p)
Consolidated reflects the tax
effect of the preceding adjustments to earnings and reflects an
overall estimated annual effective tax rate of approximately 27%
for 2019.
Segment Operating Income/Loss and Adjusted
EBITDA
The Company defines segment operating income/loss as net
earnings/loss before income taxes, interest expense and other
income/expense items, and adjusted EBITDA as segment operating
income/loss plus depreciation, amortization, non-cash stock-based
compensation, and other unusual items that affect the comparability
of operating performance as identified above in the determination
of adjusted earnings/loss. The following is a tabular presentation
of segment operating income/loss and adjusted EBITDA, including a
reconciliation to net earnings/loss, which the Company believes to
be the most directly comparable U.S. GAAP financial measure. In
addition, as with adjusted earnings/loss presented above, the
Company has prepared this table in a columnar format to present the
effects of discontinued operations on its consolidated results for
the periods presented. The Company believes this presentation
assists investors in assessing the financial performance of its
continuing operations.
Continuing Operations
Discontinued
Operations
Consolidated
For the quarters ended
$
$
$
January 2, 2021
Net earnings (loss)
(34,330
)
107,391
73,061
Loss attributable to non-controlling
interests(a)
-
(259
)
(259
)
Gain on sale of discontinued
operations(b)
-
(111,818
)
(111,818
)
Provision for income taxes
2,019
9,503
11,522
Loss on retirement of debt(c)
8,915
-
8,915
Interest expense, net
7,605
613
8,218
Other expense, net
22,604
608
23,212
Total segment operating income
6,813
6,038
12,851
Depreciation and amortization
7,415
1,212
8,627
Stock-based compensation(d)
4,250
50
4,300
Costs related to Value Creation
Plan(e)
546
(1,331
)
(785
)
Plant expansion costs(f)
1,546
-
1,546
Adjusted EBITDA
20,570
5,969
26,539
December 28, 2019
Net earnings (loss)
(6,743
)
1,140
(5,603
)
Earnings attributable to non-controlling
interests(a)
-
95
95
Provision for (recovery of) income
taxes
(1,352
)
1,334
(18
)
Interest expense, net
8,259
561
8,820
Other expense (income), net
(653
)
349
(304
)
Total segment operating income (loss)
(489
)
3,479
2,990
Depreciation and amortization
7,774
1,173
8,947
Stock-based compensation(d)
3,093
258
3,351
Costs related to Value Creation
Plan(e)
784
-
784
Plant expansion costs(g)
-
298
298
Adjusted EBITDA
11,162
5,208
16,370
(a)
Reflects non-controlling
interests in the earnings/loss of certain subsidiaries of Tradin
Organic, which is included in earnings from discontinued
operations.
(b)
Reflects the pre-tax gain on sale
of Tradin Organic recorded in earnings from discontinued
operations.
(c)
Reflects the premium paid ($5.3
million) and write-off of unamortized debt issuance costs ($3.6
million) on the redemption and retirement of our second lien notes,
which was recorded in non-operating expenses.
(d)
For 2020 and 2019, consolidated
stock-based compensation of $4.3 million and $3.4 million,
respectively, was recorded in SG&A expenses and earnings from
discontinued operations, and the reversal of $1.3 million in 2019
of previously recognized stock-based compensation related to
forfeited awards previously granted to terminated employees was
recognized in other income.
(e)
For 2020, reflects professional
fees of $0.5 million (2019 – $0.4 million), employee retention
costs of $nil (2019 – $0.4 million) recorded in SG&A expenses,
and the reclassification of $1.3 million of professional fees
related to the divestiture of Tradin Organic to earnings from
discontinued operations.
(f)
Reflects start-up costs related
to expansion projects within our plant-based ingredient extraction
and beverage operations, which were recorded in cost of goods
sold.
(g)
Reflects costs related to the
expansion of our Allentown, Pennsylvania, plant-based beverage
facility and start-up of Tradin Organic’s avocado oil facility in
Ethiopia, which were recorded in cost of goods sold and earnings
from discontinued operations.
Continuing Operations
Discontinued
Operations
Consolidated
For the years ended
$
$
$
January 2, 2021
Net earnings (loss)
(47,302
)
124,820
77,518
Loss attributable to non-controlling
interests(a)
-
(301
)
(301
)
Gain on sale of discontinued
operations(b)
-
(111,818
)
(111,818
)
Provision for (recovery of) income
taxes
(2,740
)
15,885
13,145
Loss on retirement of debt(c)
8,915
-
8,915
Interest expense, net
30,042
2,409
32,451
Other expense (income), net
23,393
(782
)
22,611
Total segment operating income
12,308
30,213
42,521
Depreciation and amortization
30,308
4,661
34,969
Stock-based compensation(d)
12,570
540
13,110
Costs related to Value Creation
Plan(e)
1,649
-
1,649
Plant expansion costs(f)
1,883
-
1,883
Adjusted EBITDA
58,718
35,414
94,132
December 28, 2019
Net earnings (loss)
(13,080
)
12,322
(758
)
Earnings attributable to non-controlling
interests(a)
-
154
154
Provision for (recovery of) income
taxes
(3,101
)
6,322
3,221
Interest expense, net
32,765
1,912
34,677
Other expense (income), net
(40,639
)
591
(40,048
)
Total segment operating income (loss)
(24,055
)
21,301
(2,754
)
Depreciation and amortization
29,266
4,686
33,952
Stock-based compensation(d)
10,471
1,145
11,616
Costs related to Value Creation
Plan(e)
3,556
-
3,556
Plant expansion costs(g)
311
298
609
Contract manufacturer transition
costs(h)
-
289
289
Adjusted EBITDA
19,549
27,719
47,268
(a)
Reflects non-controlling
interests in the earnings/loss of certain subsidiaries of Tradin
Organic, which is included in earnings from discontinued
operations.
(b)
Reflects the pre-tax gain on sale
of Tradin Organic recorded in earnings from discontinued
operations.
(c)
Reflects the premium paid ($5.3
million) and write-off of unamortized debt issuance costs ($3.6
million) on the redemption and retirement of our second lien notes,
which was recorded in non-operating expenses.
(d)
For 2020 and 2019, consolidated
stock-based compensation of $13.1 million and $11.6 million,
respectively, was recorded in SG&A expenses and earnings from
discontinued operations, and the reversal of $0.9 million and $4.1
million, respectively, of previously recognized stock-based
compensation related to forfeited awards previously granted to
terminated employees was recognized in other income.
(e)
For 2020, reflects professional
fees of $1.0 million (2019 – $1.4 million) and employee retention
costs of $0.6 million (2019 – $2.2 million) recorded in SG&A
expenses.
(f)
Reflects start-up costs related
to expansion projects within our plant-based ingredient extraction
and beverage operations, which were recorded in cost of goods
sold.
(g)
Reflects costs related to the
expansion of our Allentown, Pennsylvania, plant-based beverage
facility and start-up of Tradin Organic’s avocado oil facility in
Ethiopia, which were recorded in cost of goods sold and earnings
from discontinued operations.
(h)
Reflects costs related to the
transition of Tradin Organic’s premium juice production activities
to new contract manufacturers, which were recorded in earnings from
discontinued operations.
Quarterly Adjusted EBITDA from Continuing
Operations
The following table presents quarterly segment operating
income/loss and adjusted EBITDA from continuing operations.
Fiscal 2020
First
Second
Third
Fourth
Full
Quarter
Quarter
Quarter
Quarter
Year
$
$
$
$
$
Loss from continuing operations
(3,964
)
(5,133
)
(3,875
)
(34,330
)
(47,302
)
Provision for (recovery of) income
taxes
(1,497
)
(1,821
)
(1,441
)
2,019
(2,740
)
Loss on retirement of debt
-
-
-
8,915
8,915
Interest expense, net
7,665
7,413
7,359
7,605
30,042
Other expense (income), net
555
(835
)
1,069
22,604
23,393
Total segment operating income (loss)
2,759
(376
)
3,112
6,813
12,308
Depreciation and amortization
7,725
7,655
7,513
7,415
30,308
Stock-based compensation
2,670
2,215
3,435
4,250
12,570
Costs related to Value Creation Plan
527
456
120
546
1,649
Plant expansion costs
-
92
245
1,546
1,883
Adjusted EBITDA
13,681
10,042
14,425
20,570
58,718
Fiscal 2019
First
Second
Third
Fourth
Full
Quarter
Quarter
Quarter
Quarter
Year
$
$
$
$
$
Earnings (loss) from continuing
operations
19,757
(12,380
)
(13,714
)
(6,743
)
(13,080
)
Provision for (recovery of) income
taxes
7,495
(3,283
)
(5,961
)
(1,352
)
(3,101
)
Interest expense, net
8,520
7,697
8,289
8,259
32,765
Other expense (income), net
(43,511
)
419
3,106
(653
)
(40,639
)
Total segment operating loss
(7,739
)
(7,547
)
(8,280
)
(489
)
(24,055
)
Depreciation and amortization
7,128
7,017
7,347
7,774
29,266
Stock-based compensation
1,632
2,702
3,044
3,093
10,471
Costs related to Value Creation Plan
203
954
1,615
784
3,556
Plant expansion costs
-
311
-
-
311
Adjusted EBITDA
1,224
3,437
3,726
11,162
19,549
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210303005345/en/
Reed Anderson ICR 646-277-1260 reed.anderson@icrinc.com
SunOpta (NASDAQ:STKL)
Historical Stock Chart
From Mar 2024 to Apr 2024
SunOpta (NASDAQ:STKL)
Historical Stock Chart
From Apr 2023 to Apr 2024