SunOpta: SunOpta Announces Fourth Quarter and Fiscal 2024 Financial Results

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 $46.5 million in fiscal 2023, reflecting lower capital expenditures together with proceeds from the sale of the smoothie bowl product line. 2025 Outlook 2 The Company is introducing its outlook for fiscal 2025 and continues to expect strong growth in revenue and adjusted EBITDA: ($ 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 Life TM . 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"