SunOpta, an innovative and sustainable food manufacturer, today announced its financial results for the third quarter ending September 28, 2024. All figures are in U.S. dollars and are reported in accordance with U.S. GAAP, unless otherwise stated.
Third Quarter 2024 Highlights:
- Revenues increased 15.5% to $176.2 million, up from $152.5 million in the same period last year. This growth was driven by a 20.6% increase in volume, partially offset by a 2.8% price reduction due to pass-through commodity pricing.
- Gross profit rose 16.4% to $23.6 million, compared to $20.3 million in Q3 2023.
- Loss from continuing operations was $5.5 million, improving slightly from a loss of $5.7 million in the prior year.
- Adjusted earnings from continuing operations were $2.5 million, compared to $0.5 million in Q3 2023.
- Adjusted EBITDA from continuing operations grew 12.6% to $21.5 million, up from $19.1 million last year.
CEO Commentary: “The third quarter unfolded as expected,” said Brian Kocher, CEO of SunOpta. “Volume-driven revenue growth reflects our strong competitive position. Our growth spans multiple customer segments, channels, and products. We continue to invest in our supply chain to support this growth, with productivity initiatives creating significant future capacity within our current asset base, which will drive long-term margin expansion.”
Third Quarter 2024 Financial Details:
- Revenues: Increased by 15.5% to $176.2 million, mainly driven by a favorable 20.6% volume/mix, partially offset by a 2.8% price reduction due to commodity cost pass-throughs. The exit from the smoothie bowls category in March 2024 resulted in a 2.3% reduction in revenue.
- Gross Profit: Increased by $3.3 million to $23.6 million. Gross margin was 13.4%, up slightly from 13.3% in Q3 2023. Adjusted gross margin improved to 17.0% from 16.4%, reflecting higher sales volumes and production efficiencies.
- Operating Income: Rose slightly to $1.5 million due to increased gross profit and reduced business development and severance costs. However, this was offset by higher compensation accruals and increased professional fees linked to operational productivity projects.
- Loss from Continuing Operations: Was $5.5 million, compared to $5.7 million last year. The diluted loss per share from continuing operations remained the same at $0.05.
- Adjusted Earnings: Came in at $2.5 million, or $0.02 per diluted share, a significant improvement from $0.5 million, or $0.00 per share, in the same quarter of 2023.
- Adjusted EBITDA: Increased by 12.6% to $21.5 million, compared to $19.1 million in Q3 2023.
Balance Sheet and Cash Flow:
- Total Assets: As of September 28, 2024, SunOpta reported total assets of $699.3 million, up from $669.4 million at the end of fiscal 2023.
- Total Debt: Increased to $289.9 million, compared to $263.2 million at the end of fiscal 2023.
- Operating Cash Flow: Generated $19.2 million in cash from continuing operations, a significant improvement from the $8.4 million used in the same period of 2023. The increase was driven by improved working capital and profitability, as well as lower start-up costs from the Midlothian, Texas facility.
- Investing Cash Flow: SunOpta spent $16.5 million on investing activities in the first three quarters of 2024, down from $37.3 million last year, following the completion of major capital projects, including the new plant-based beverage facility in Midlothian.
Outlook for 2024:
SunOpta is reaffirming its 2024 outlook, expecting strong revenue and adjusted EBITDA growth:
- Revenue: Expected between $710 million and $730 million (13%-16% growth).
- Adjusted EBITDA: Projected to be between $88 million and $92 million (12%-17% growth).
Conference Call:
SunOpta will host a conference call at 5:30 P.M. Eastern Time on Tuesday, November 5, 2024, to discuss the third quarter financial results. A live webcast can be accessed via the company’s website under the “Investor Relations” section. The webcast replay will be available for approximately 90 days.
For participation, dial in toll-free at (888) 440-4182 or internationally at (646) 960-0653, using Conference ID: 8338433.
Non-GAAP Measures:
SunOpta uses non-GAAP measures like Adjusted EBITDA and Adjusted Earnings, which exclude certain expenses or income for clarity in understanding operational performance. Detailed reconciliations of these non-GAAP measures are available in the company’s financial filings.
