SunOpta Announces First Quarter Fiscal 2025 Financial Results
Revenue from continuing operations increased
Earnings from continuing operations of
Adjusted EBITDA from continuing operations increased
Adjusted EPS of
Share Repurchase Authorization of up to
Raising 2025 outlook
All amounts are expressed in
First quarter 2025 highlights:
-
Revenues of
$201.6 million 9.3% compared to$184.4 million 12.2% volume growth partially offset by a1.7% price reduction for pass-through raw material cost savings -
Earnings from continuing operations of
$4.8 million $3.8 million -
Adjusted earnings¹ from continuing operations of
$5.3 million $1.9 million -
Adjusted earnings per share¹ from continuing operations of
$0.04 $0.02 -
Adjusted EBITDA¹ from continuing operations increased
2.4% to$22.4 million 11.1% of revenues, compared to$21.9 million 11.9% of revenues, in the prior year period -
Strong cash contribution from continuing operations of
$22.3 million $7.4 million
“First quarter results exceeded our expectations, and we again delivered double-digit volume growth driven by broad-based gains across segments, products and customers,” said Brian Kocher, Chief Executive Officer of SunOpta. “Efforts to unlock latent capacity are ahead of schedule and our margin improvement initiatives are expected to deliver quarterly sequential margin increases throughout 2025. We are also seeing growth in our sales pipeline, reflecting incremental opportunities from both existing and potential new customers. In addition to our focus on improving margins, we remain tightly focused on optimizing cash flow and deleveraging - efforts that provide optionality and flexibility, positioning us to drive higher returns and long-term value for shareholders.”
First Quarter 2025 Results
Revenues increased
Gross profit decreased by
Operating income was
Earnings from continuing operations were
Adjusted earnings¹ from continuing operations were
Adjusted EBITDA¹ from continuing operations was
Please refer to the discussion and table below under “Non-GAAP Measures”.
Balance Sheet and Cash Flow
As of March 29, 2025, SunOpta had total assets of
Capital Allocation Priorities and Share Repurchase Authorization
Our capital allocation priorities are to achieve our leverage target of 2.5 times, followed by investing in growth capex, with the third priority being returning capital to shareholders. While our immediate plans are to achieve our 2.5x leverage target, since we currently do not envision needing growth capex in 2025, we would like to be positioned for opportunistic share repurchases if we are trending ahead of plan and have excess cash available while still being able to meet our leverage target. Accordingly, on May 5, 2025, the Company’s board of directors approved a share repurchase program, authorizing the Company to purchase up to an aggregate
Tariffs
Tariffs continue to be an evolving situation that we continue to monitor. While our employees, production facilities, and customers are predominately located in the
2025 Outlook2
For fiscal 2025, the Company is raising its outlook reflecting the strong first quarter and continues to expect strong growth in revenue and adjusted EBITDA:
($ millions) |
Prior Outlook |
|
|
Revised
|
||
Revenue |
$ |
775 - 805 |
|
$ |
788 - 805 |
|
Adj. EBITDA |
$ |
97 – 103 |
|
$ |
99 - 103 |
|
Revenue Growth |
|
|
|
|
|
|
Adj. EBITDA growth |
|
|
|
|
|
We expect to pass-through substantially all incremental costs due to tariffs to our customers and do not expect a material impact on Adjusted EBITDA. However, there could be an increase in revenue and decrease in gross margin and adjusted EBITDA margin simply due to the pass through of the incremental tariff costs which is not reflected in the outlook above.
Kocher continued, “Based on the Q1 results and the notable increase in our sales pipeline, I’m very confident in our 2025 outlook and in achieving 2026 revenue and adjusted EBITDA growth rates that approximate the midpoints of our long-term algorithm of
Conference Call
SunOpta plans to host a conference call at 5:30 P.M. Eastern time on Wednesday, May 7, 2025, to discuss the first 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 (800) 715-9871 or international dial-in number (646) 307-1963 using Conference ID: 8323651.
The quarterly earnings presentation, including the long-term grow algorithm and capital allocation priorities, can be accessed through the live webcast referenced above, and on SunOpta’s website at www.sunopta.com under the “Investor Relations” section or directly.
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 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
SunOpta (Nasdaq: STKL) (TSX: SOY) delivers customized supply chain solutions and innovation for top brands, retailers and foodservice providers across a broad portfolio of beverages, broths and better-for-you snacks. With over 50 years of expertise, SunOpta fuels customers’ growth with high-quality, sustainability-forward solutions distributed through retail, club, foodservice and e-commerce channels across
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, share repurchases, our expectations to recover tariff impacts through pass-through pricing, 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; the impact of the imposition of tariffs, including increases in food prices and inflation, and any resulting negative impacts on the macro-economic environment; 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. |
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||||
Consolidated Statements of Operations |
|
|
||||
For the quarters ended March 29, 2025 and March 30, 2024 |
||||||
(Unaudited) |
|
|
||||
(All dollar amounts expressed in thousands of |
||||||
|
|
|
||||
|
Quarter ended |
|||||
|
March 29, 2025 |
March 30, 2024 |
||||
|
$ |
$ |
||||
|
|
|
||||
|
|
|
||||
Revenues |
201,628 |
|
184,422 |
|
||
Cost of goods sold |
171,309 |
|
153,370 |
|
||
Gross profit |
30,319 |
|
31,052 |
|
||
Selling, general and administrative expenses |
19,196 |
|
22,334 |
|
||
Intangible asset amortization |
446 |
|
446 |
|
||
Other expense (income), net |
75 |
|
(1,800 |
) |
||
Foreign exchange loss (gain) |
115 |
|
(51 |
) |
||
Operating income |
10,487 |
|
10,123 |
|
||
Interest expense, net |
5,107 |
|
6,050 |
|
||
Other non-operating expense |
422 |
|
- |
|
||
Earnings from continuing operations before income taxes |
4,958 |
|
4,073 |
|
||
Income tax expense |
147 |
|
277 |
|
||
Earnings from continuing operations |
4,811 |
|
3,796 |
|
||
Net loss from discontinued operations |
- |
|
(917 |
) |
||
Net earnings |
4,811 |
|
2,879 |
|
||
Dividends and accretion on preferred stock |
(140 |
) |
(433 |
) |
||
Earnings attributable to common shareholders |
4,671 |
|
2,446 |
|
||
|
|
|
||||
Basic and diluted earnings (loss) per share |
|
|
||||
Earnings from continuing operations attributable to common shareholders |
0.04 |
|
0.03 |
|
||
Loss from discontinued operations |
- |
|
(0.01 |
) |
||
Earnings attributable to common shareholders |
0.04 |
|
0.02 |
|
||
|
|
|
||||
Weighted-average common shares outstanding (000s) |
|
|
||||
Basic |
117,201 |
|
116,033 |
|
||
Diluted |
125,007 |
|
117,558 |
|
||
SunOpta Inc. |
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Consolidated Balance Sheets |
|
|
||||
As at March 29, 2025 and December 28, 2024 |
|
|
||||
(Unaudited) |
|
|
||||
(All dollar amounts expressed in thousands of |
|
|||||
|
|
|
||||
|
March 29, 2025 |
December 28, 2024 |
||||
|
$ |
$ |
||||
|
|
|
||||
ASSETS |
|
|
||||
Current assets |
|
|
||||
Cash and cash equivalents |
2,299 |
|
1,552 |
|
||
Accounts receivable |
64,099 |
|
46,314 |
|
||
Inventories |
99,407 |
|
92,798 |
|
||
Prepaid expenses and other current assets |
15,189 |
|
14,680 |
|
||
Income taxes recoverable |
696 |
|
4,114 |
|
||
Total current assets |
181,690 |
|
159,458 |
|
||
|
|
|
||||
Restricted cash |
7,442 |
|
7,460 |
|
||
Property, plant and equipment, net |
343,465 |
|
343,618 |
|
||
Operating lease right-of-use assets |
103,323 |
|
105,692 |
|
||
Intangible assets, net |
22,566 |
|
20,077 |
|
||
Goodwill |
3,998 |
|
3,998 |
|
||
Other long-term assets |
28,201 |
|
28,224 |
|
||
Total assets |
690,685 |
|
668,527 |
|
||
|
|
|
||||
LIABILITIES |
|
|
||||
Current liabilities |
|
|
||||
Accounts payable |
113,649 |
|
93,362 |
|
||
Accrued liabilities |
21,501 |
|
17,876 |
|
||
Notes payable |
9,772 |
|
11,110 |
|
||
Income taxes payable |
670 |
|
638 |
|
||
Current portion of long-term debt |
28,429 |
|
29,393 |
|
||
Current portion of operating lease liabilities |
16,835 |
|
17,055 |
|
||
Total current liabilities |
190,856 |
|
169,434 |
|
||
|
|
|
||||
Long-term debt |
232,153 |
|
235,798 |
|
||
Operating lease liabilities |
97,348 |
|
99,328 |
|
||
Deferred income taxes |
325 |
|
325 |
|
||
Total liabilities |
520,682 |
|
504,885 |
|
||
|
|
|
||||
Series B-1 Preferred Stock |
15,188 |
|
15,048 |
|
||
|
|
|
||||
SHAREHOLDERS' EQUITY |
|
|
||||
Common shares |
472,763 |
|
471,792 |
|
||
Additional paid-in capital |
31,354 |
|
30,775 |
|
||
Accumulated deficit |
(351,311 |
) |
(355,982 |
) |
||
Accumulated other comprehensive income |
2,009 |
|
2,009 |
|
||
Total shareholders' equity |
154,815 |
|
148,594 |
|
||
Total liabilities and shareholders' equity |
690,685 |
|
668,527 |
|
||
SunOpta Inc. |
|
|
|
|||
Consolidated Statements of Cash Flows |
|
|
|
|||
For the quarters ended March 29, 2025 and March 30, 2024 |
|
|||||
(Unaudited) |
|
|
|
|||
(Expressed in thousands of |
|
|||||
|
|
|
|
|||
|
|
Quarters ended |
||||
|
|
March 29, 2025 |
March 30, 2024 |
|||
|
|
$ |
$ |
|||
|
|
|
|
|||
CASH PROVIDED BY (USED IN) |
|
|
|
|||
Operating activities |
|
|
|
|||
Net earnings |
|
4,811 |
|
2,879 |
|
|
Net loss from discontinued operations |
|
- |
|
(917 |
) |
|
Earnings from continuing operations |
|
4,811 |
|
3,796 |
|
|
Items not affecting cash: |
|
|
|
|||
Depreciation and amortization |
|
9,726 |
|
8,576 |
|
|
Amortization of debt issuance costs |
|
249 |
|
229 |
|
|
Stock-based compensation |
|
1,543 |
|
4,645 |
|
|
Gain on sale of smoothie bowls product line |
|
- |
|
(1,800 |
) |
|
Other |
|
(97 |
) |
(97 |
) |
|
Changes in operating assets and liabilities, net of divestitures |
|
6,049 |
|
(7,947 |
) |
|
Net cash provided by operating activities of continuing operations |
|
22,281 |
|
7,402 |
|
|
Net cash used in operating activities of discontinued operations |
|
- |
|
(2,133 |
) |
|
Net cash provided by operating activities |
|
22,281 |
|
5,269 |
|
|
Investing activities |
|
|
|
|||
Additions to property, plant and equipment |
|
(12,735 |
) |
(7,548 |
) |
|
Addition to intangible assets |
|
(2,419 |
) |
- |
|
|
Proceeds from sale of smoothie bowls product line |
|
- |
|
3,336 |
|
|
Net cash used in investing activities of continuing operations |
|
(15,154 |
) |
(4,212 |
) |
|
Net cash provided by investing activities of discontinued operations |
|
- |
|
6,300 |
|
|
Net cash provided by (used in) investing activities |
|
(15,154 |
) |
2,088 |
|
|
Financing activities |
|
|
|
|||
Increase (decrease) in borrowings under revolving credit facilities |
|
(1,437 |
) |
250 |
|
|
Repayment of long-term debt |
|
(12,115 |
) |
(4,782 |
) |
|
Borrowings of long-term debt |
|
8,485 |
|
- |
|
|
Proceeds from notes payable |
|
41,750 |
|
33,424 |
|
|
Repayment of notes payable |
|
(43,088 |
) |
(34,373 |
) |
|
Proceeds from the exercise of stock options and employee share purchases |
|
368 |
|
314 |
|
|
Payment of withholding taxes on stock-based awards |
|
(361 |
) |
(86 |
) |
|
Payment of cash dividends on preferred stock |
|
- |
|
(305 |
) |
|
Net cash used in financing activities of continuing operations |
|
(6,398 |
) |
(5,558 |
) |
|
Increase in cash, cash equivalents and restricted cash in the period |
|
729 |
|
1,799 |
|
|
Cash, cash equivalents and restricted cash, beginning of the period |
|
9,012 |
|
8,754 |
|
|
Cash, cash equivalents and restricted cash, end of the period |
|
9,741 |
|
10,553 |
|
|
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 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
The following table presents a reconciliation of adjusted gross margin from reported gross margin calculated in accordance with
|
Revenues |
Cost of Goods Sold |
Gross Profit |
|||||
First Quarter Ended |
$ |
$ |
$ |
|||||
March 29, 2025 |
|
|
|
|||||
As reported |
201,628 |
171,309 |
|
30,319 |
|
|||
Adjustments: |
|
|
|
|||||
Wastewater haul-off charges(a) |
- |
(543 |
) |
543 |
|
|||
As adjusted |
201,628 |
170,766 |
|
30,862 |
|
|||
|
|
|
|
|||||
Reported gross margin |
|
|
15.0 |
% |
||||
Adjusted gross margin |
|
|
15.3 |
% |
||||
|
|
|
|
|||||
|
|
|
|
|||||
|
Revenues |
Cost of Goods Sold |
Gross Profit |
|||||
First Quarter Ended |
$ |
$ |
$ |
|||||
March 30, 2024 |
|
|
|
|||||
As reported |
184,422 |
153,370 |
|
31,052 |
|
|||
Adjustments: |
|
|
|
|||||
Start-up costs(b) |
- |
(327 |
) |
327 |
|
|||
As adjusted |
184,422 |
153,043 |
|
31,379 |
|
|||
|
|
|
|
|||||
Reported gross margin |
|
|
16.8 |
% |
||||
Adjusted gross margin |
|
|
17.0 |
% |
||||
Adjusted Earnings and Adjusted EBITDA from continuing operations
In addition to reporting financial results in accordance with
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
|
First Quarter Ended |
|||||||||
|
March 29, 2025 |
March 30, 2024 |
||||||||
|
|
Per Share |
|
Per Share |
||||||
|
$ |
$ |
$ |
$ |
||||||
Earnings from continuing operations |
4,811 |
|
|
3,796 |
|
|
||||
Dividends and accretion on preferred stock |
(140 |
) |
|
(433 |
) |
|
||||
Earnings from continuing operations attributable to common shareholders |
4,671 |
|
0.04 |
3,363 |
|
0.03 |
||||
Adjusted for: |
|
|
|
|
||||||
Wastewater haul-off charges(a) |
543 |
|
|
- |
|
|
||||
Start-up costs(b) |
- |
|
|
327 |
|
|
||||
Other(c) |
94 |
|
|
- |
|
|
||||
Gain on sale of smoothie bowls product line(d) |
- |
|
|
(1,800 |
) |
|
||||
Adjusted earnings from continuing operations |
5,308 |
|
0.04 |
1,890 |
|
0.02 |
||||
|
First Quarter Ended |
||||
|
March 29, 2025 |
|
March 30, 2024 |
||
|
$ |
|
$ |
||
Earnings from continuing operations |
4,811 |
|
3,796 |
|
|
Interest expense, net |
5,107 |
|
6,050 |
|
|
Loss on sale of receivables* |
422 |
|
- |
|
|
Income tax expense |
147 |
|
277 |
|
|
Depreciation and amortization |
9,726 |
|
8,576 |
|
|
Stock-based compensation |
1,543 |
|
4,645 |
|
|
Adjusted for: |
|
|
|
||
Wastewater haul-off charges(a) |
543 |
|
- |
|
|
Start-up costs(b) |
- |
|
327 |
|
|
Other(c) |
94 |
|
- |
|
|
Gain on sale of smoothie bowls product line(d) |
- |
|
(1,800 |
) |
|
Adjusted EBITDA from continuing operations |
22,393 |
|
21,871 |
|
|
|
|
|
|
||
* Included in other non-operating expense. |
|
|
|
||
Footnotes
(a) |
For the first quarter of 2025, reflects temporary third-party haul-off charges for excess wastewater produced at our |
|
(b) |
For the first quarter of 2024, start-up costs mainly related to the scale-up of production at our plant-based beverage facility in |
|
(c) |
For the first quarter of 2025, other reflects an unrealized foreign exchange loss associated with peso-denominated restricted cash held in |
|
(d) |
For the first quarter of 2024, reflects the pre-tax gain on sale of the smoothie bowls product line, which is recorded in other income. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250507674045/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
Source: SunOpta Inc.
