SunOpta Inc.

SunOpta Inc.

March 08, 2005 17:00 ET

SunOpta Announces 2004 Year End Results; Reports Record Revenues and Earnings


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: SUNOPTA INC.

NASDAQ SYMBOL: STKL
TSX SYMBOL: SOY

MARCH 8, 2005 - 17:00 ET

SunOpta Announces 2004 Year End Results; Reports
Record Revenues and Earnings

TORONTO--(CCNMatthews - Mar 8, 2005) -

SunOpta Inc. (SunOpta or the Company) (Nasdaq:STKL) (TSX:SOY) today
announced results for the year ended December 31, 2004. All amounts are
expressed in U.S. dollars.

The Company achieved record revenues and earnings for the year ended
December 31, 2004. Revenues in 2004 increased by 54% to $306,251,000
from $199,099,000 in 2003, led by a 57% increase in revenues within the
Company's vertically integrated food operations, focused on the natural
and organic foods markets. The Company's overall revenue growth of 54%
was driven by internal growth of 14.5% and growth via acquisitions of
39.5%.

Net earnings for the year were a record $11,016,000 or $0.20 per diluted
common share compared to $8,966,000 or $0.18 per diluted common share in
2003. The improvement in earnings is due to a number of factors
including increased sales of fiber products and custom blended
ingredients within the Company's Ingredients Group segment, the
realization of a number of private label contracts throughout the
organization, internal growth in the Canadian Food Distribution Group
and the Opta Minerals Group, and the calendarization of acquisitions
completed in 2003 and 2004. In addition, the Company recognized a gain
in the second quarter of 2004 related to a legal award in the Company's
favour. These factors were partially offset by the non-cash write-off of
certain trademarks as detailed below, the direct and indirect costs of
complying with the Sarbanes-Oxley Act, costs related to the Opta
Minerals IPO, issues related to the integration of acquired distribution
businesses, and the impact of the poor soy crop quality and yield.

Revenues in the fourth quarter of 2004 were $82,661,000, a 51% increase
over 2003, representing the Company's 29th consecutive quarter of record
revenue growth over the same quarter in the previous year. Net earnings
in the quarter were $355,000 or $0.01 per diluted common share, compared
to $3,197,000 or $0.06 per diluted share in the same period in 2003.
Quarterly earnings were affected by the non-cash write-off of certain
trademarks, the impact of Sarbanes-Oxley related costs and costs related
to the Opta Minerals IPO as noted above. Excluding these costs, and
certain other smaller one-time items, diluted earnings per share would
have been $0.06 in the fourth quarter of 2004.

In the fourth quarter, the Company made the business decision to focus
its future shelf-stable beverage packaging efforts on supplying its
existing customers and marketing its aseptic packaging capabilities to
the rapidly growing private label market. The private label market in
North America has grown substantially in recent years as retailers
recognize the benefit of generating consumer loyalty with an in-house
brand. As a result of this decision, the Company has taken the decision
to de-emphasize the use of its own brands in the shelf-stable beverage
market, and accordingly have written-off the value of these trademarks
recorded on its balance sheet, in the amount of $2,250,000 pre-tax.

The Company continues to be well positioned for future growth with net
working capital of $60,491,000 and total assets of $220,172,000. The
debt to equity ratio at December 31, 2004 was 0.25:1, providing the
Company will significant financial resources to invest further in
internal growth and execute its acquisition program.

The Company has announced that it expects to achieve revenues of
$385,000,000 in 2005, an increase of 26% versus 2004. The increase is
based on a combination of expected internal growth of 15% to 17% and the
calendarization of acquisitions completed in 2004.

Jeremy N. Kendall, Chairman and CEO of SunOpta, commented that, "I am
very pleased with our progress to date. Although we faced some
challenges in 2004, we persevered and were able to generate record
revenues, record earnings and record cash flow from operations, all
while remaining true to our values and our mission."

SunOpta's Chairman and CEO, Jeremy Kendall, also plans to host a
conference call at 10:00 AM Eastern Standard Time on Wednesday, March 9,
2005, to discuss annual results and recent corporate developments. After
opening remarks, there will be a question and answer period. This
conference call can be accessed with the toll free dial-in number (800)
946-0782 or (719) 457-2657 followed by pass code: 4152365#. The call
will also be distributed live over CCBN's Investor Distribution Network
to both institutional and individual investors. Individual investors may
listen to the call via www.companyboardroom.com, and institutional
investors may listen via www.streetevents.com. Additionally, the call
may 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 one of the
websites at least 15 minutes early to register, download and install any
necessary audio software. If you are unable to listen live, the
conference call will be archived and can be accessed for approximately
90 days at the websites. A replay number can also be accessed between
March 9, 2005 and March 18, 2005 with the toll free dial-in number (888)
203-1112 or (719) 457-0820 followed by pass code: 4152365#.

SunOpta Inc. is an operator of high-growth ethical businesses, focusing
on integrated business models in the natural and organic food markets.
For the last six consecutive years, SunOpta was included in Profit
magazine's 'Profit 100' list of the 100 fastest growing companies in
Canada. The Company has three business units: the SunOpta Food Group,
which specializes in sourcing, processing and distribution of natural
and organic food products integrated from seed through packaged
products; the Opta Minerals Group, a producer, distributor, and recycler
of environmentally friendly industrial materials; and the StakeTech
Steam Explosion Group which engineers and markets proprietary steam
explosion technology systems for the pulp, bio-fuel and food processing
industries. Each of these business units has proprietary products and
services that give it a solid competitive advantage in its sector.

Note: This news release may contain forward-looking information. Actual
future results may differ materially. The risks, uncertainties, and
other factors that could influence actual results are described in the
Company's annual report to shareholders and in SEC filings. The attached
consolidated balance sheet and consolidated statement of earnings are
unaudited. The information provided here should be considered in
conjunction with the other information included within various SEC
documents including Form 10Q reports filed during 2004 and Form 10K
report to be filed March 15, 2005.



SunOpta Inc.
Consolidated Statements of Earnings and Comprehensive Income
For the years ended December 31, 2004, 2003
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
----------------------------------------------------------------------

2004 2003
$ $ %


Revenues 306,251 199,099 54%

Cost of goods sold 247,812 163,421 52%
-----------------------

Gross profit 58,439 35,678 64%

Warehousing and distribution expenses 6,016 2,365 154%
Selling, general and administrative expenses 37,225 23,065 61%
-----------------------

Earnings before the following 15,198 10,248 48%

Interest expense (1,437) (1,942) (26%)
Interest and other income, net 2,153 585 268%
Write-off of intangible asset (2,250) - -
Foreign exchange 565 1,076 (47%)
-----------------------
(969) (281) 245%
-----------------------

Earnings before income taxes 14,229 9,967 43%
Provision for income taxes) 3,139 1,001 214%
-----------------------

Net earnings before minority interest 11,090 8,966 24%

Minority interest 74 - -
-----------------------

Net earnings for the year 11,016 8,966 23%
-----------------------

Change in foreign currency
translation adjustment 4,006 3,019 33%
-----------------------

Comprehensive income 15,022 11,985 25%
-----------------------
-----------------------

Earnings per share for the year

Basic 0.20 0.19 5%
-----------------------
-----------------------

Diluted 0.20 0.18 11%
-----------------------
-----------------------


SunOpta Inc.
Consolidated Balance Sheets
As at December 31, 2004 and 2003
(Expressed in thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------

2004 2003
$ $
Assets

Current assets
Cash and cash equivalents 8,081 21,990
Accounts receivable - trade 38,446 26,241
Inventories 49,537 34,778
Prepaid expenses and other current assets 4,472 2,524
Current Income taxes recoverable 2,000 1,686
Deferred income taxes 421 1,172
------------------
102,957 88,391

Assets held for sale 208 6,007
Property, plant and equipment, net 62,411 44,761
Goodwill and intangibles, net 43,934 25,084
Deferred income taxes) 6,831 9,023
Other assets 3,831 490
------------------
220,172 173,756
------------------
Liabilities

Current liabilities
Accounts payable and accrued liabilities 35,668 24,664
Customer and other deposits 431 1,778
Current portion of long-term debt 4,819 3,840
Current portion of long-term payables 1,548 740
------------------
42,466 31,022

Long-term debt 31,003 21,196
Long-term payables 1,232 1,591
------------------
74,701 53,809
------------------

Minority Interest 1,378 -

Shareholders' Equity

Capital stock 105,794 96,670
Authorized
Unlimited common shares without par value
Issued
56,220,212 (December 31, 2003 - 52,705,096) common
shares
Contributed surplus 3,330 3,330
Retained earnings 26,821 15,805
Cumulative other comprehensive income 8,148 4,142
------------------
144,093 119,947
------------------
220,172 173,756
------------------


SunOpta Inc.
Segmented Information
For the year ended December 31, 2004
(Expressed in thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------

2004
-----------------------------------------
StakeTech
Steam
SunOpta Opta Explosion
Food Minerals Group and
Group Group Corporate Consolidated
$ $ $ $
External revenues by
market
U.S. 166,946 12,878 1,287 181,111
Canada 84,134 19,233 - 103,367
Other 21,642 131 - 21,773
------------------------------------------

Total revenues from
external customers 272,722 32,242 1,287 306,251
------------------------------------------

Segment net earnings
(loss) before interest
expense and income
taxes 14,918 3,587 (2,839) 15,666
------------------------------------------

Interest expense - - 1,437 1,437
------------------------------------------

Provision for income
taxes - - 3,139 3,139
------------------------------------------

Minority Interest 74 - - 74
------------------------------------------

Net earnings (loss) 14,844 3,587 (7,415) 11,016
------------------------------------------

Identifiable assets 170,110 26,777 23,285 220,172
------------------------------------------
Amortization 6,014 948 157 7,119
------------------------------------------


The SunOpta Food Group has the following segmented reporting:


2004
-------------------------------------------------------
Grains
and Soy SunOpta Packaged Canadian SunOpta
Products Ingredients Products Distribution Food
Group Group Group Food Group Group
$ $ $ $ $
External
revenues by
market
U.S. 68,073 61,652 36,813 408 166,946
Canada 1,106 2,011 5,479 75,538 84,134
Other 15,114 6,103 425 - 21,642
------------------------------------------------------

Total
revenues
from
external
customers 84,293 69,766 42,717 75,946 272,722

Segment net
earnings
before
interest
expense
and income
taxes 2,101 7,790 1,427 3,600 14,918
------------------------------------------------------

Minority
interest - 74 - - 74
------------------------------------------------------

Segment net
earnings
before
interest
expense
and income
taxes 2,101 7,716 1,427 3,600 14,844
------------------------------------------------------

Identifiable
assets 43,961 64,589 26,246 35,314 170,110
------------------------------------------------------

Amortization 1,434 2,178 1,490 912 6,014
------------------------------------------------------


SunOpta Inc.
Segmented Information
For the year ended December 31, 2003
(Expressed in thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------

2003
-------------------------------------------
StakeTech
Steam
SunOpta Opta Explosion
Food Minerals Group and
Group Group Corporate Consolidated
$ $ $ $
External revenues by
market
U.S. 136,298 9,446 461 146,205
Canada 29,260 15,202 - 44,462
Other 8,249 183 - 8,432
------------------------------------------

Total revenues from
external customers 173,807 24,831 461 199,099
------------------------------------------

Segment net earnings
(loss) before interest
expense and income
taxes 10,894 2,580 (1,565) 11,909
------------------------------------------

Interest expense - - 1,942 1,942
------------------------------------------

Provision for income
taxes - - 1,001 1,001
------------------------------------------

Net earnings (loss) 10,894 2,580 (4,508) 8,966
------------------------------------------

Identifiable assets 117,346 26,363 30,047 173,756
Amortization 3,531 952 643 5,126
------------------------------------------


The SunOpta Food Group has the following segmented reporting:


2003
------------------------------------------------------
Grains
and Soy SunOpta Packaged Canadian SunOpta
Products Ingredients Products Distribution Food
Group Group Group Food Group Group
$ $ $ $ $
External
revenues by
market
U.S. 57,499 42,756 36,043 - 136,298
Canada 439 1,488 2,262 25,071 29,260
Other 2,384 5,705 160 - 8,249
------------------------------------------------------

Total
revenues
from
external
customers 60,322 49,949 38,465 25,071 173,807
------------------------------------------------------

Segment net
earnings
(loss)
before
interest
expense and
income
taxes 2,745 4,797 2,463 889 10,894
------------------------------------------------------

Identifiable
assets 36,588 46,140 20,985 13,633 117,346
------------------------------------------------------

Amortization 744 1,656 985 146 3,531
------------------------------------------------------



-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    SunOpta Inc.
    Jeremy N. Kendall, Steve Bromley, John Dietrich,
    Susan Wiekenkamp, 905-455-2528, ext 103
    email: swiekenkamp@sunopta.com
    website: www.sunopta.com