CANADA: SunOpta points to health trend as profits rise
- SunOpta wants to be "pure-play" natural, organic company
- Higher growth from "value-added" consumer and ingredient products
SunOpta saw sales and profits rise in first three months of 2014
Canadian food group SunOpta has emphasised the importance of tapping into consumer interest in healthy eating after reporting higher first-quarter sales and earnings.
SunOpta said its revenue and earnings for the three months to 30 March were hit "record" levels for the first quarter.
CEO Steve Bromley said: "We continue to believe that interest in healthy eating is a key long term global trend and that we are well positioned to capitalise on future industry growth via our integrated natural and organic foods platform."
Sales were up 17.9% at US$333.5m. The increase in revenues was led by continued growth in SunOpta's consumer packaged food, increased demand for organic raw materials in Europe and North America and new "value-added" ingredient business, it said.
Operating income hit US$12.1m, against US$10.7m a year earlier. Increased volume and margins on organic raw materials, higher volumes of consumer products including aseptic beverages and healthy snacks, as well as higher sales and margins of value-added ingredients, helped SunOpta's operating income.
Net earnings climbed to a record US$6.6m, compared to US$5.1m in the first quarter of 2013.
SunOpta Announces First Quarter 2014 Results
TORONTO, May 13, 2014 (GLOBE NEWSWIRE) -- SunOpta Inc. ("SunOpta" or the "Company") (Nasdaq:STKL) (TSX:SOY), a leading global company focused on natural, organic and specialty foods, today announced financial results for the first quarter ended April 5, 2014. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.
First Quarter 2014 Highlights
- Record first quarter revenues of $333.5 million, an increase of 17.9%, reflecting consolidated internal growth of 13.8% and 16.4% inSunOpta Foods
- Operating income¹ of $12.1 million, or 3.6% of revenues
- EBITDA¹ of $17.9 million, or 5.4% of revenues
- Record first quarter earnings of $6.6 million
- Diluted earnings per share of $0.10
(All comparisons above are to the first quarter ended March 30, 2013)
"We are pleased to report a solid start to the year driven by strong revenue and earnings growth. All our core foods operating segments generated increased revenues and operating income versus the prior year. We are extremely pleased that we are starting to see the results in our financial performance from the anticipated benefits of our operational realignment, investment in growing market opportunities and re-positioned go-to-market strategy," commented Steve Bromley, Chief Executive Officer of SunOpta. "We continue to believe that interest in healthy eating is a key long term global trend and that we are well positioned to capitalize on future industry growth via our integrated natural and organic foods platform. Our management team remains focused on our three core strategies of becoming a pure-play natural and organic foods company, growing our value-added consumer products and ingredients portfolio, and leveraging our integrated platform in support of our long-term financial targets."
First Quarter 2014 Results
Revenues increased 17.9% to a record $333.5 million compared to $282.8 million in the first quarter of 2013. Fiscal 2014 will be a 53-week year, and the extra week fell in the first quarter, resulting in a 14-week quarter versus 13 weeks in the prior year. Excluding the extra week of sales, as well as the impact of changes in commodity prices and foreign exchange rates, consolidated revenues increased 13.8% and SunOpta Foods revenues increased 16.4% versus the prior year. All core foods operating segments realized increased revenues versus the prior year. The increase in revenues was led by continued growth in consumer packaged categories, increased demand for organic raw materials in both Europe and North America and new value-added ingredient business. These strong growth areas more than offset the effect of lower soy and corn commodity prices.
Operating income¹ was $12.1 million, or 3.6% of revenues, compared to $10.7 million, or 3.8% of revenues in the first quarter of 2013. All core food group operating segments realized increased operating income versus the prior year and SunOpta Foods operating income was $13.3 million, or 4.5% of revenues, as compared to $9.6 million, or 3.9% of revenues in the prior year. The growth in operating income was driven by increased volume and margins on organic raw materials, increased volume of consumer products including aseptic beverages and healthy snacks, as well as higher sales and margins of value-added ingredients. These were partially offset by margin pressure experienced in Opta Minerals due to cyclical market weakness, lower organic feed margins, and increased corporate costs to drive efficiency in the operating segments. In addition, during the quarter many of the Company's operating facilities throughout the Mid-west and Eastern regions of the U.S. experienced incremental costs associated with extreme weather conditions including freight delays and increased utility costs, amounting to approximately $0.7 million before tax and minority interest.
Earnings for the first quarter of 2014 were $6.6 million, or $0.10 per diluted common share, as compared to $5.1 million, or $0.08 per diluted common share, during the first quarter of 2013. Earnings for the first quarter of 2014 include $1.2 million in costs related to the retrofit of the Company's premium juice operation, offset by $1.1 million in other income primarily related to a non-cash reduction in a contingent consideration liability related to a previous acquisition.
EBITDA¹ was $17.9 million in the first quarter of 2014, compared to $16.1 million in the prior year.
The Company's balance sheet remains strong and at April 5, 2014 reflected a net debt to equity ratio of 0.59 to 1.00. At April 5, 2014, the Company had total debt outstanding of $203.3 million, net debt of $196.6 million, total assets of $720.1 million, shareholders' equity of $333.2 million and a net book value of $5.00 per outstanding share.
The Company plans to host a conference call at 10:00 A.M. Eastern Time on Wednesday, May 14, 2014 to discuss the results for the first quarter of 2014 and recent corporate developments. After opening remarks, there will be a question and answer period. This conference call can be accessed via a link at the Company's website at www.sunopta.com. To listen to the live call over the Internet, please go to the Company's website at least 15 minutes early to register, download and install any necessary audio software. Additionally, the call may be accessed with the toll free dial-in number(877) 312-9198 or international dial-in number (631) 291-4622. 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.
1See discussion of non-GAAP measures
About SunOpta Inc.
SunOpta Inc. is a leading global company focused on natural, organic and specialty foods products. The Company specializes in sourcing, processing and packaging of natural and organic food products, integrated from seed through packaged products; with a focus on strategically vertically integrated business models. The Company's core natural and organic food operations focus on value-added grains, fiber and fruit based product offerings, supported by a global infrastructure. The Company has two non-core holdings, a 66.0% ownership position in Opta Minerals Inc., listed on the Toronto Stock Exchange, a producer, distributor, and recycler of environmentally friendly industrial materials; and a minority ownership position in Mascoma Corporation, an innovative biofuels company.
Original source: SunOpta
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