Revenue from continuing operations increased
9% to $193.9 million, driven by volume growth
Loss from continuing operations of $4.6
million compared to a loss of $3.0 million in the prior
year
Adjusted EBITDA from continuing operations
increased 20% to $26.1 million
Delivered strong free cash flow and achieved
targeted leverage of 3.0x
SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL)
(TSX:SOY), an innovative and sustainable manufacturer fueling the
future of food, today announced financial results for the fourth
quarter ended December 28, 2024.
All amounts are expressed in U.S. dollars and results are
reported in accordance with U.S. GAAP, except where specifically
noted.
Fourth quarter 2024 highlights:
- Revenues of $193.9 million increased 8.9% compared to $178.1
million in the prior year period, driven by 12.8% volume growth
partially offset by a 2.1% price reduction for pass-through
commodity pricing
- Loss from continuing operations was $4.6 million compared to a
loss of $3.0 million in the prior year period
- Adjusted earnings¹ from continuing operations was $7.6 million
compared to $4.5 million in the prior year period
- Adjusted EBITDA¹ from continuing operations increased 20.0% to
$26.1 million, or 13.5% of revenues, compared to $21.7 million, or
12.2% of revenues, in the prior year period
- Strong free cash flow enabling $24.7 million sequential
reduction of debt from Q3, driving achievement of leverage target
of 3.0x
“We delivered another solid quarter led by double-digit volume
growth reflecting broad strength across our portfolio,” said Brian
Kocher, Chief Executive Officer of SunOpta. “Our business momentum
remains strong with productivity and efficiency initiatives
progressing as planned, unlocking additional capacity. In 2025, we
look to again drive strong growth and expand our market share by
leveraging the competitive strengths of our platform to create
unique, high value-add solutions for our customers. We will also
maintain our disciplined financial approach to deliver sustainable
gross margin improvement and continue to generate significant free
cash flow. With no major growth capital investments on the horizon,
we expect to continue de-levering our balance sheet and drive
increasing returns on invested capital.”
Fourth quarter 2024 Results
Revenues increased 8.9% to $193.9 million for the fourth quarter
of 2024. The increase was driven by favorable volume/mix of 12.8%,
partially offset by a price reduction of 2.1% due to the pass
through of commodity costs for certain raw materials, together with
a 1.7% revenue reduction related to our exit from the smoothie
bowls category in March 2024. Volume/mix reflected volume growth
for fruit snacks, broths, and plant-based beverages.
Gross profit decreased by $3.9 million, or 15.4%, to $21.2
million for the fourth quarter of 2024, compared to $25.0 million
in the prior year period. As a percentage of revenues, gross profit
margin was 10.9% compared to 14.1% in the fourth quarter of 2023.
Adjusted gross margin¹ was 16.1% compared to 17.2% in the fourth
quarter of 2023. The 110-basis point decrease in adjusted gross
margin reflects incremental depreciation for newly launched
production assets along with short-term investments to drive future
sustainable supply chain efficiencies.
Operating income was $2.7 million down from $3.8 million in the
fourth quarter of 2023, reflecting lower gross profit partially
offset by lower SG&A expenses.
Loss from continuing operations was $4.6 million for the fourth
quarter of 2024 compared with a loss of $3.0 million in the prior
year period. Diluted loss per share from continuing operations
attributable to common shareholders (after dividends and accretion
on preferred stock) was $0.04 for the fourth quarter compared with
a diluted loss per share of $0.03 in the prior year period.
Adjusted earnings¹ from continuing operations was $7.6 million
or $0.06 per diluted share in the fourth quarter of 2024 compared
to adjusted earnings from continuing operations of $4.5 million or
$0.04 per diluted share in the fourth quarter of 2023.
Adjusted EBITDA¹ from continuing operations was $26.1 million in
the fourth quarter of 2024 compared to $21.7 million in the fourth
quarter of 2023.
In the fourth quarter of 2024, management identified certain
errors related to prior year amounts, which were not material to
the Company's previously issued financial statements. These
principally related to underpayment of duties on certain of our
products imported to the U.S. from Canada in fiscal years 2023 and
2022. We have revised the prior year financial results accordingly.
In the aggregate, the correction of these errors had the effect of
increasing the net losses previously reported for the fourth
quarter and year ended December 30, 2023 by $1.8 million ($0.02 per
share) and $3.8 million ($0.03 per share), respectively, and
reducing our previous determinations of Adjusted EBITDA for those
periods by $0.6 million and $2.6 million, respectively. These
revisions are fully described in the Company's Annual Report on
Form 10-K for fiscal 2024.
Please refer to the discussion and table below under “Non-GAAP
Measures”.
Balance Sheet and Cash Flow
As of December 28, 2024, SunOpta had total assets of $668.5
million and total debt of $265.2 million compared to total assets
of $667.2 million and total debt of $263.5 million at year end
fiscal 2023. During the fiscal year ended December 28, 2024, cash
provided by operating activities of continuing operations was $52.3
million compared to $3.6 million of cash provided by operating
activities of continuing operations during fiscal 2023. The
increase in cash provided from operating activities mainly
reflected improved working capital efficiency, together with
increased operating income, driven by revenue growth. Investing
activities of continuing operations consumed $25.0 million of cash
during fiscal 2024, down from $46.5 million in fiscal 2023,
reflecting lower capital expenditures together with proceeds from
the sale of the smoothie bowl product line.
2025 Outlook2
The Company is introducing its outlook for fiscal 2025 and
continues to expect strong growth in revenue and adjusted
EBITDA:
($ millions)
Outlook
Growth
Revenue
$
775 - 805
7% – 11%
Adj. EBITDA
$
97 – 103
9% - 16%
Conference Call
SunOpta plans to host a conference call at 5:30 P.M. Eastern
time on Wednesday, February 26, 2025, to discuss the fourth quarter
financial results. After prepared remarks, there will be a question
and answer period. Investors interested in listening to the live
webcast can access a link on SunOpta’s website at www.sunopta.com
under the “Investor Relations” section or directly. A replay of the
webcast will be archived and can be accessed for approximately 90
days on the Company’s website.
This call may be accessed with the toll free dial-in number
(888) 440-4182 or international dial-in number (646) 960-0653 using
Conference ID: 8338433.
¹ See discussion of non-GAAP measures
² The Company has included certain forward-looking statements
about the future financial performance that include non-GAAP
financial measures, including Adjusted EBITDA. These non–GAAP
financial measures are derived by excluding certain amounts,
expenses or income, from the corresponding financial measures
determined in accordance with GAAP. The determination of the
amounts that are excluded from these non-GAAP financial measures is
a matter of management judgment and depends upon, among other
factors, the nature of the underlying expense or income amounts
recognized in a given period. We are unable to present a
quantitative reconciliation of the aforementioned forward-looking
non-GAAP financial measures to their most directly comparable
forward-looking GAAP financial measures because management cannot
reliably predict all of the necessary components of such GAAP
measures. Historically, management has excluded the following items
from certain of these non-GAAP measures, and such items may also be
excluded in future periods and could be significant amounts.
- Expenses related to the acquisition or divestiture of a
business, including business development costs, impairment of
assets, integration costs, severance, retention costs and
transaction costs;
- Charges associated with restructuring and cost saving
initiatives, including but not limited to asset impairments,
accelerated depreciation, severance costs and lease abandonment
charges;
- Asset impairment charges and facility closure costs;
- Legal settlements or awards; and
- The tax effect of the above items.
About SunOpta Inc.
SunOpta (Nasdaq:STKL) (TSX:SOY) is an innovative and sustainable
manufacturer fueling the future of food. With roots tracing back
over 50 years, SunOpta drives growth for today’s leading brands by
serving as a trusted innovation partner and value-added
manufacturer, crafting organic, plant-based beverages, fruit
snacks, nutritional beverages, broths and tea products sold through
retail, club, foodservice and e-commerce channels. Alongside the
company’s commitment to top brands, retailers and coffee shops,
SunOpta also proudly produces its own brands,, including Sown®,
Dream®, and West LifeTM. For more information, visit
www.sunopta.com and LinkedIn.
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
intention to maintain our disciplined financial approach to deliver
sustainable gross margin improvement and continue to generate
significant free cash flow, our expectation to continue de-levering
our balance sheet and drive increasing returns on invested capital
and our anticipated Revenue, Adjusted EBITDA, Revenue growth and
Adjusted EBITDA growth for fiscal 2025. Generally, forward-looking
statements do not relate strictly to historical or current facts
and are typically accompanied by words such as “potential”,
“expect”, “believe”, “anticipate”, “estimates”, “can”, “will”,
“target”, "should", "would", "plans", “continue”, "becoming",
"intend", "confident", "may", "project", "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; current customer demand for the
Company’s products; 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; procurement and logistics savings;
freight lane cost reductions; yield and throughput enhancements;
labor cost reductions; and the terms of our insurance policies.
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 the possibility of supply chain,
logistics and other disruptions; 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 December
28, 2024 and December 30, 2023
(Unaudited)
(All dollar amounts expressed in thousands
of U.S. dollars, except per share amounts)
Quarter ended
Year ended
December 28, 2024
December 30, 2023(1)
December 28, 2024
December 30, 2023(1)
$
$
$
$
Revenues
193,909
178,057
723,728
626,730
Cost of goods sold
172,717
153,013
627,424
540,730
Gross profit
21,192
25,044
96,304
86,000
Selling, general and administrative
expenses
18,236
20,251
79,406
78,654
Intangible asset amortization
446
446
1,784
1,784
Other expense (income), net
(179
)
475
(1,833
)
455
Foreign exchange loss (gain)
(15
)
66
1,357
110
Operating income
2,704
3,806
15,590
4,997
Interest expense, net
5,686
7,518
24,908
26,909
Other non-operating expense
450
-
686
-
Loss from continuing operations before
income taxes
(3,432
)
(3,712
)
(10,004
)
(21,912
)
Income tax expense (benefit)
1,187
(709
)
1,470
3,269
Loss from continuing operations
(4,619
)
(3,003
)
(11,474
)
(25,181
)
Net loss from discontinued operations
(4,105
)
(10,482
)
(5,919
)
(153,608
)
Net loss
(8,724
)
(13,485
)
(17,393
)
(178,789
)
Dividends and accretion on preferred
stock
(138
)
(429
)
(539
)
(1,981
)
Loss attributable to common
shareholders
(8,862
)
(13,914
)
(17,932
)
(180,770
)
Basic and diluted loss per
share
Loss from continuing operations
attributable to common shareholders
(0.04
)
(0.03
)
(0.10
)
(0.24
)
Loss from discontinued operations
(0.04
)
(0.09
)
(0.05
)
(1.34
)
Loss attributable to common
shareholders
(0.08
)
(0.12
)
(0.15
)
(1.58
)
Weighted-average common shares
outstanding (000s)
Basic
116,951
115,793
116,617
114,226
Diluted
116,951
115,793
116,617
114,226
(1) Revised from amounts previously filed
to adjust for prior period errors. More information is included in
our Form 10-K.
SunOpta Inc.
Consolidated Balance Sheets
As at December 28, 2024 and December 30,
2023
(Unaudited)
(All dollar amounts expressed in thousands
of U.S. dollars)
December 28, 2024
December 30, 2023(1)
$
$
ASSETS
Current assets
Cash and cash equivalents
1,552
306
Accounts receivable
46,314
63,023
Inventories
92,798
85,070
Prepaid expenses and other current
assets
14,680
23,776
Income taxes recoverable
4,114
4,717
Current assets held for sale
-
5,910
Total current assets
159,458
182,802
Restricted cash
7,460
8,448
Property, plant and equipment, net
343,618
320,199
Operating lease right-of-use assets
105,692
104,788
Intangible assets, net
20,077
21,861
Goodwill
3,998
3,998
Other long-term assets
28,224
25,055
Total assets
668,527
667,151
LIABILITIES
Current liabilities
Accounts payable
93,362
77,467
Accrued liabilities
17,876
22,724
Notes payable
11,110
17,596
Income taxes payable
638
-
Current portion of long-term debt
29,393
24,647
Current portion of operating lease
liabilities
17,055
15,808
Total current liabilities
169,434
158,242
Long-term debt
235,798
238,883
Operating lease liabilities
99,328
98,696
Deferred income taxes
325
505
Total liabilities
504,885
496,326
Series B-1 Preferred Stock
15,048
14,509
SHAREHOLDERS' EQUITY
Common shares
471,792
464,169
Additional paid-in capital
30,775
28,188
Accumulated deficit
(355,982
)
(338,050
)
Accumulated other comprehensive income
2,009
2,009
Total shareholders' equity
148,594
156,316
Total liabilities and shareholders'
equity
668,527
667,151
(1) Revised from amounts previously filed
to adjust for prior period errors. More information is included in
our Form 10-K.
SunOpta Inc.
Consolidated Statements of Cash Flows
For the years ended December 28, 2024 and
December 30, 2023
(Unaudited)
(Expressed in thousands of U.S.
dollars)
Year ended
December 28, 2024
December 30, 2023(1)
$
$
CASH PROVIDED BY (USED IN)
Operating activities
Net loss
(17,393
)
(178,789
)
Net loss from discontinued operations
(5,919
)
(153,608
)
Loss from continuing operations
(11,474
)
(25,181
)
Items not affecting cash:
Depreciation and amortization
36,497
31,039
Amortization of debt issuance costs
914
1,398
Deferred income taxes
(180
)
3,978
Stock-based compensation
11,190
12,432
Gain on sale of smoothie bowls product
line
(1,800
)
-
Gain on sale of property, plant and
equipment
(244
)
-
Loss on extinguishment of debt
-
1,584
Other
(275
)
707
Changes in operating assets and
liabilities, net of divestitures
17,711
(22,382
)
Net cash provided by operating activities
of continuing operations
52,339
3,575
Net cash provided by (used in) operating
activities of discontinued operations
(2,310
)
11,269
Net cash provided by operating
activities
50,029
14,844
Investing activities
Additions to property, plant and
equipment
(31,928
)
(46,125
)
Proceeds from sale of smoothie bowls
product line
6,336
-
Proceeds from sale of property, plant and
equipment
612
-
Cash settlement of foreign currency
forward contract
-
(394
)
Net cash used in investing activities of
continuing operations
(24,980
)
(46,519
)
Net cash provided by investing activities
of discontinued operations
6,300
90,551
Net cash provided by (used in) investing
activities
(18,680
)
44,032
Financing activities
Increase (decrease) in borrowings under
revolving credit facilities
2,187
(15,863
)
Borrowings of long-term debt
1,446
199,855
Repayment of long-term debt
(26,953
)
(95,303
)
Repayment of asset-based credit
facilities
-
(141,880
)
Payment of debt issuance costs
-
(3,297
)
Proceeds from notes payable
129,662
102,043
Repayment of notes payable
(136,148
)
(84,447
)
Proceeds from the exercise of stock
options and employee share purchases
1,935
1,882
Payment of withholding taxes on
stock-based awards
(2,915
)
(9,404
)
Payment of cash dividends on preferred
stock
(305
)
(1,732
)
Payment of common share issuance costs
-
(191
)
Net cash used in financing activities of
continuing operations
(31,091
)
(48,337
)
Net cash used in financing activities of
discontinued operations
-
(2,464
)
Net cash used in financing activities
(31,091
)
(50,801
)
Increase in cash, cash equivalents and
restricted cash in the period
258
8,075
Cash, cash equivalents and restricted
cash, beginning of the period
8,754
679
Cash, cash equivalents and restricted
cash, end of the period
9,012
8,754
(1) Revised from amounts previously filed
to adjust for prior period errors. More information is included in
our Form 10-K.
In the fourth quarter of 2024, management identified certain
underpayment of duties to U.S. Customs and Border Protection,
recognized in cost of goods sold, for the period from January 2022
to December 2024. The identified errors related to prior years were
not deemed material to the Company's previously issued financial
statements, but it was determined that correcting the errors in the
current period would be considered material to the Company’s
consolidated results of operations for fiscal 2024. As at December
28, 2024, the Company accrued $7.4 million for duties and interest
thereon estimated to be owed for the impacted periods, of which
$2.9 million related to each of the years ended December 28, 2024
and December 30, 2023, and $1.6 million related to the year ended
December 31, 2022.
Additionally, the Company has corrected the financial results
for the prior fiscal period for unrelated immaterial errors
originating in fiscal 2023 that were previously corrected in fiscal
2024. The Company also reclassified certain consideration payable
to a customer in 2023 from cost of goods sold to a reduction in
revenues and remeasured certain lease assets and liabilities
recognized as at December 30, 2023.
These revisions are fully described in the Company's Annual
Report on Form 10-K for fiscal 2024.
Non-GAAP Measures
Adjusted Gross Margin
Gross margin is a measure of gross profit (equal to revenues
less cost of goods sold) as a percentage of revenues. The Company
uses a measure of adjusted gross margin that excludes
non-capitalizable start-up costs that are incurred in connection
with capital expansion projects. In recent years, the Company has
undergone the largest capital expansion in its history, including
the construction of a new plant-based beverage facility in
Midlothian, Texas. As a result, start-up costs have had a
significant impact on the comparability of reported gross margins,
which may obscure trends in our margin performance. Additionally,
the Company’s measure of adjusted gross margin may exclude other
unusual items that are identified and evaluated on an individual
basis, which due to their nature or size, the Company would not
expect to occur as part of its normal business on a regular
basis.
The Company uses the measure of adjusted gross margin to
evaluate the underlying profitability of its revenue-generating
activities within each reporting period. The Company believes that
disclosing this non-GAAP measure provides users with a meaningful,
consistent comparison of its profitability measure for the periods
presented. However, the non-GAAP measure of adjusted gross margin
should not be considered in isolation or as a substitute for gross
margin calculated based on gross profit determined in accordance
with U.S. GAAP.
The following table presents a reconciliation of adjusted gross
margin from reported gross margin calculated in accordance with
U.S. GAAP.
Revenues
Cost of Goods Sold
Gross Profit
For the quarter ended
$
$
$
December 28, 2024
As reported
193,909
172,717
21,192
Adjustments:
Start-up costs(a)
1,306
(8,207)
9,513
Wastewater haul-off charges(b)
-
(755)
755
As adjusted
195,215
163,755
31,460
Reported gross margin
10.9%
Adjusted gross margin
16.1%
Revenues(1)
Cost of Goods Sold(1)
Gross Profit(1)
For the quarter ended
$
$
$
December 30, 2023
As reported
178,057
153,013
25,044
Adjustments:
Start-up costs(a)
1,728
(666)
2,394
Product withdrawal costs(c)
-
(3,440)
3,440
As adjusted
179,785
148,907
30,878
Reported gross margin
14.1%
Adjusted gross margin
17.2%
Revenues
Cost of Goods Sold
Gross Profit
For the year ended
$
$
$
December 28, 2024
As reported
723,728
627,424
96,304
Adjustments:
Start-up costs(a)
1,727
(14,608)
16,335
Wastewater haul-off charges(b)
-
(4,361)
4,361
Product withdrawal costs(c)
-
(2,145)
2,145
As adjusted
725,455
606,310
119,145
Reported gross margin
13.3%
Adjusted gross margin
16.4%
Revenues(1)
Cost of Goods Sold(1)
Gross Profit(1)
For the year ended
$
$
$
December 30, 2023
As reported
626,730
540,730
86,000
Adjustments:
Start-up costs(a)
1,728
(16,997)
18,725
Product withdrawal costs(c)
-
(3,440)
3,440
As adjusted
628,458
520,293
108,165
Reported gross margin
13.7%
Adjusted gross margin
17.2%
(1) Revised from amounts previously filed
to adjust for prior period errors. More information is included in
our
Form 10-K.
Adjusted Earnings and Adjusted EBITDA from continuing
operations
In addition to reporting financial results in accordance with
U.S. GAAP, the Company provides additional information about its
operating results regarding adjusted earnings and adjusted earnings
before interest, taxes, depreciation and amortization (“Adjusted
EBITDA”) from continuing operations, which are not measures in
accordance with U.S. GAAP. The Company believes that adjusted
earnings and adjusted EBITDA from continuing operations assist
investors in comparing performance across reporting periods on a
consistent basis by excluding items that management believes are
not indicative of its operating performance. 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.
The following are tabular presentations of adjusted earnings and
adjusted EBITDA from continuing operations, including a
reconciliation from loss from continuing operations, which the
Company believes to be the most directly comparable U.S. GAAP
financial measure.
December 28, 2024
December 30, 2023
Per Share
Per Share
For the quarters ended
$
$
$
$
Loss from continuing operations
(4,619
)
(3,003
)
Dividends and accretion on preferred
stock
(138
)
(429
)
Loss from continuing operations
attributable to common
shareholders
(4,757
)
(0.04
)
(3,432
)
(0.03
)
Adjusted for:
Start-up costs(a)
11,494
2,394
Wastewater haul-off charges(b)
755
-
Product withdrawal costs(c)
-
3,440
Unrealized foreign exchange loss on
restricted cash(d)
244
-
Loss on extinguishment of debt(f)
-
1,584
Other(i)
(179
)
491
Adjusted earnings from continuing
operations
7,557
0.06
4,477
0.04
December 28, 2024
December 30, 2023(1)
For the quarters ended
$
$
Loss from continuing operations
(4,619
)
(3,003
)
Interest expense, net
5,686
7,518
Loss on sale of receivables*
450
-
Income tax expense (benefit)
1,187
(709
)
Depreciation and amortization
9,492
8,166
Stock-based compensation
1,575
3,443
Adjusted for:
Start-up costs(a)
11,494
2,394
Wastewater haul-off charges(b)
755
-
Product withdrawal costs(c)
-
3,440
Unrealized foreign exchange loss on
restricted cash(d)
244
-
Other(i)
(179
)
491
Adjusted EBITDA from continuing
operations
26,085
21,740
* Included in other non-operating
expense.
December 28, 2024
December 30, 2023(1)
Per Share
Per Share
For the years ended
$
$
$
$
Loss from continuing operations
(11,474
)
(25,181
)
Dividends and accretion on preferred
stock
(539
)
(1,981
)
Loss from continuing operations
attributable to common
shareholders
(12,013
)
(0.10
)
(27,162
)
(0.24
)
Adjusted for:
Start-up costs(a)
19,149
20,249
Wastewater haul-off charges(b)
4,361
-
Product withdrawal costs(c)
2,145
3,440
Unrealized foreign exchange loss on
restricted cash(d)
1,607
-
Business development costs(e)
-
2,390
Loss on extinguishment of debt(f)
-
1,584
Severance costs(g)
-
897
Gain on sale of smoothie bowls product
line(h)
(1,800
)
-
Other(i)
(33
)
471
Change in valuation allowance for deferred
tax assets(j)
-
3,978
Adjusted earnings from continuing
operations
13,416
0.11
5,847
0.05
December 28, 2024
December 30, 2023(1)
For the years ended
$
$
Loss from continuing operations
(11,474
)
(25,181
)
Interest expense, net
24,908
26,909
Loss on sale of receivables*
686
-
Income tax expense
1,470
3,269
Depreciation and amortization
36,497
31,039
Stock-based compensation
11,190
12,432
Adjusted for:
Start-up costs(a)
19,149
20,249
Wastewater haul-off charges(b)
4,361
-
Product withdrawal costs(c)
2,145
3,440
Unrealized foreign exchange loss on
restricted cash(d)
1,607
-
Business development costs(e)
-
2,390
Severance costs(g)
-
897
Gain on sale of smoothie bowls product
line(h)
(1,800
)
-
Other(i)
(33
)
471
Adjusted EBITDA from continuing
operations
88,706
75,915
* Included in other non-operating
expense.
Footnotes
(1)
Revised from amounts previously filed to
adjust for prior period errors. More information is included in our
Form 10-K.
(a)
For the fourth quarter and year ended
2024, start-up costs of $9.5 million and $16.3 million,
respectively, were recorded as a reduction of revenues ($1.3
million and $1.7 million, respectively) and an increase to cost of
goods sold ($8.2 million and $14.6 million, respectively). Start-up
costs in 2024 were mainly related to the scale-up of production at
our plant-based beverage facility in Midlothian, Texas, including
the start-up of a new high-speed Edge line, as well as the impact
of production downtime during the fourth quarter of 2024, to allow
for the installation of new electrical switchgear to replace
temporary equipment that had been put in use due to supply chain
disruptions during the facility’s construction.
Additionally, for the fourth quarter and
year ended 2024, start-up costs included $2.0 million and $2.8
million, respectively, of consultancy fees related to operational
productivity initiatives, which were recorded in SG&A
expenses.
For the fourth quarter and year ended
2023, start-up costs of $2.4 million and $18.7 million,
respectively, were recorded as a reduction of revenues ($1.7
million for the fourth quarter and year) and an increase to cost of
goods sold ($0.7 million and $17.0 million, respectively). Start-up
costs in 2023 were mainly related to the initial ramp-up of
production at our Midlothian, Texas, facility, and the addition of
new extrusion and high-speed packaging lines at our fruit snacks
facility in Omak, Washington.
Additionally, for the year ended 2023,
start-up costs included $1.5 million of consultancy fees related to
operational productivity initiatives, which were recorded in
SG&A expenses.
(b)
Reflects temporary third-party haul-off
charges for excess wastewater produced at our Midlothian, Texas,
facility, due to volume constraints within our current treatment
system. These charges are recorded in cost of goods sold.
(c)
For the year ended 2024, reflects certain
direct costs, net of expected insurance recoveries, related to the
voluntary withdrawal from customers of certain batches of
aseptically packaged products that may have had the potential for
non-pathogenic microbial contamination.
For the fourth quarter and year ended
2023, reflects direct costs, net of expected recoveries, related to
the withdrawal from customers of specific batches of
aseptically-packaged product due to a faulty seal caused by an
equipment misconfiguration by a third-party service provider.
Product withdrawal costs are recorded in cost of goods sold.
(d)
For the fourth quarter and year ended
2024, reflects an unrealized foreign exchange loss associated with
peso-denominated bank accounts in Mexico that were retained
following the divestiture of our Frozen Fruit business (“Frozen
Fruit”) in 2023. These accounts are currently subject to a judicial
hold in connection with a litigation matter.
(e)
For the year ended 2023, business
development costs were related to the divestiture of Frozen Fruit.
These costs are recorded in SG&A expenses.
(f)
For the quarter and year ended 2023,
reflects a loss on the extinguishment of debt in connection with
the refinancing of our credit agreement in December 2023, which is
recorded in interest expense, net.
(g)
For the year ended 2023, reflects employee
severance costs recognized in connection with the consolidation of
our continuing operations following the divestiture of Frozen
Fruit, which are recorded in SG&A expenses.
(h)
For the year ended 2024, reflects the
pre-tax gain on sale of the smoothie bowls product line, which is
recorded in other income.
(i)
For the quarter ended 2024, other reflects
a gain on sale of a former warehouse facility. Additionally, for
the year ended 2024, other includes gains on the settlement of
certain legal matters, partially offset by accrued demolition costs
related to our former roasted snack facility, which was abandoned
in 2018. For the quarter and year ended 2023, other includes a $0.4
million loss on a foreign exchange hedge in connection with the
divestiture of Frozen Fruit and reserves for legal settlements.
These other amounts are recorded in other expense/income.
(j)
For the year ended 2023, reflects an
increase to the valuation allowance for U.S. deferred tax assets
based on an assessment of the future realizability of the related
tax benefits.
Quarterly Adjusted EBITDA from Continuing
Operations
The following table presents quarterly adjusted EBITDA from
continuing operations.
Fiscal 2024
Quarter ended
Year ended
March 30, 2024
June 29, 2024
September 28, 2024
December 28, 2024
December 28, 2024
$
$
$
$
$
Earnings (loss) from continuing
operations
3,796
(4,437
)
(6,214
)
(4,619
)
(11,474
)
Interest expense, net
6,050
6,410
6,762
5,686
24,908
Loss on sale of receivables*
-
-
236
450
686
Income tax expense (benefit)
277
(17
)
23
1,187
1,470
Depreciation and amortization
8,576
9,110
9,319
9,492
36,497
Stock-based compensation
4,645
2,443
2,527
1,575
11,190
Adjusted for:
Start-up costs
327
2,348
4,980
11,494
19,149
Wastewater haul-off charges
-
1,426
2,180
755
4,361
Product withdrawal costs
-
2,145
-
-
2,145
Unrealized foreign exchange loss on
restricted cash
-
838
525
244
1,607
Gain on sale of smoothie bowls product
line
(1,800
)
-
-
-
(1,800
)
Other
-
(304
)
450
(179
)
(33
)
Adjusted EBITDA from continuing
operations
21,871
19,962
20,788
26,085
88,706
* Included in other non-operating
expense.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250226033897/en/
Investor Relations: Reed Anderson ICR 646-277-1260
reed.anderson@icrinc.com
Media Relations: Claudine Galloway SunOpta 952-295-9579
press.inquiries@sunopta.com
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