Revenue from continuing operations increased
13.7% to $181.6 million, driven by volume growth
Loss from continuing operations of $1.8
million, compared to $0.4 million in the prior year
Adjusted EBITDA from continuing operations
of $22.3 million, an increase of 17.5%
Re-affirming 2024 outlook
SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL)
(TSX:SOY), a U.S.-based global pioneer fueling the future of
sustainable, plant-based foods and beverages, today announced
financial results for the fourth quarter and fiscal year ended
December 30, 2023.
All amounts are expressed in U.S. dollars and results are
reported in accordance with U.S. GAAP, except where specifically
noted.
Fourth Quarter 2023 highlights:
- Revenues of $181.6 million increased 13.7% compared to $159.8
million in the prior year period, driven by volume growth
- Gross profit margin was 14.1% on a reported basis. Adjusted
gross margin1 was 17.3%, down 50-basis points from the prior year
period, mainly due to the 80-basis point increase in depreciation
related to new production equipment.
- Operating income of $5.1 million increased 47.8% compared to
$3.4 million in the prior year period.
- Loss from continuing operations was $1.8 million compared to
$0.4 million in the prior year period mainly due to an increase in
interest expense partially offset by increased gross profit.
- Adjusted earnings1 from continuing operations of $5.7 million
increased 120% compared to $2.6 million in the fourth quarter of
2022 mainly due to improved operating performance, partially offset
by increases in interest expense and depreciation.
- Adjusted EBITDA1 from continuing operations increased by 17.5%
to $22.3 million, or 12.3% of revenues, compared to $19.0 million
and 11.9% of revenues in the prior year period.
“Our latest results provide validation of the powerful potential
of our platform. We are a growth company in growing categories and
are armed with an optimized product portfolio and high-quality base
of leverageable assets that provide significant runway for
continued growth,” said Brian Kocher, Chief Executive Officer of
SunOpta. “Fourth quarter revenues and Adjusted EBITDA exceeded
expectations reflecting solid execution against our strategic
priorities focused on operational excellence and growth. Volume was
up double-digits and accelerated sharply from the third quarter,
underscoring the strength of our competitive position and the
broad-based demand we are seeing across our portfolio. Plant-based
milks and fruit snacks continue to drive growth. We are gaining
share with existing customers as well as adding new customers in
both categories. In addition, our 330-milliliter protein shake
business continues to ramp up aggressively, advancing our total
addressable market expansion efforts. We are re-affirming our
outlook for 2024 reflecting a high degree of confidence in the
direction and trajectory of our business.”
Fourth Quarter 2023 Results
Revenues increased 13.7% to $181.6 million for the fourth
quarter of 2023. The increase was driven by favorable volume/mix
which was up 14.7% partially offset by a price reduction of 1.0%
due to pass through of commodity prices. Volume/mix reflected broad
based volume growth from oat milks and creamers, 330-milliliter
protein shakes and teas, as well as increased sales volumes for
fruit snacks, partially offset as expected, by lower external sales
of plant-based ingredients, due to increased internal demand for
oat base, as well as lower broth volumes.
Gross profit was $25.6 million for the fourth quarter, compared
to $23.8 million in the prior year period. As a percentage of
revenues, gross profit margin was 14.1% compared to 14.9% in the
fourth quarter of 2022, a decrease of 80 basis points, as reported.
Adjusted gross margin1 was 17.3% for the fourth quarter of 2023
compared to 17.8% in the fourth quarter of 2022. The 50-basis point
decrease in adjusted gross margin reflected the impact of
incremental depreciation of new production equipment for capital
expansion projects partially offset by a positive mix shift in
plant-based ingredients with increased internal use.
Operating income was $5.1 million, or 2.8% of revenues in the
fourth quarter of 2023, compared to operating income of $3.4
million, or 2.1% of revenues in the fourth quarter of 2022. The
increase in operating income was primarily driven by higher gross
profit.
Loss from continuing operations was $1.8 million for the fourth
quarter of 2023 compared to $0.4 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 $0.02 for the fourth quarter compared with diluted loss
per share of $0.01 in the prior year period.
Loss from discontinued operations was $10.0 million or $0.09 per
diluted share in the fourth quarter of 2023 versus earnings of $1.5
million or $0.01 per diluted share in the year earlier period.
Adjusted earnings1 from continuing operations was $5.7 million
or $0.05 per diluted share in the fourth quarter of 2023, compared
to adjusted earnings from continuing operations of $2.6 million or
$0.02 per diluted share in the fourth quarter of 2022 mainly due to
improved operating performance, partially offset by increases in
interest expense and depreciation.
Adjusted EBITDA1 from continuing operations was $22.3 million or
12.3% of revenue in the fourth quarter of 2023 compared to $19.0
million or 11.9% of revenue in the fourth quarter of 2022.
Please refer to the discussion and table below under “Non-GAAP
Measures”.
Balance Sheet and Cash Flow
As of December 30, 2023, SunOpta had total assets of $669.4
million and total debt of $263.2 million compared to total assets
of $855.9 million and total debt of $308.5 million at fiscal 2022
year end. During the fourth quarter of 2023, cash provided by
operating activities of continuing operations was $12.0 million
compared to $7.3 million during the fourth quarter of 2022. The
increase in cash provided mainly reflected improved operating
performance, partially offset by increased working capital and the
impact of higher start-up costs and cash interest expense.
Investing activities of continuing operations consumed $9.2 million
of cash during the fourth quarter of 2023 down from $26.4 million
in the prior year, reflecting the completion of certain major
capital projects, including the construction of our new plant-based
beverage facility in Midlothian, Texas.
2024 Outlook2
For fiscal 2024, the Company is re-affirming its outlook and
continues to expect strong growth in revenue and Adjusted
EBITDA:
($ millions)
2024 Outlook
Growth
Revenue
$
670 – 700
6% - 11%
Adj. EBITDA
$
87 - 92
11% - 17%
Conference Call
SunOpta plans to host a conference call at 5:30 P.M. Eastern
time on Wednesday, February 28, 2024, to discuss the fourth quarter
financial results. After opening 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 here. 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 dial (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
businesses or assets, including business development costs,
integration costs, severance, retention costs and transaction
costs;
- Start-up costs of new facilities and equipment;
- 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 a U.S.-based, global pioneer
fueling the future of sustainable, plant-based food and beverages.
Founded 50 years ago, SunOpta manufactures organic and specialty
products sold through retail and foodservice channels. SunOpta
operates as a manufacturer for leading natural and private label
brands, and also proudly produces its own brands, including SOWN ®,
Dream®, 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
belief that our protein shake business will ramp aggressively, our
expectation for strong growth in revenue and Adjusted EBITDA and
our anticipated Revenue, Adjusted EBITDA, Revenue growth and
Adjusted EBITDA growth for fiscal 2024. Generally, forward-looking
statements do not relate strictly to historical or current facts
and are typically accompanied by words such as “continues”,
“expect”, “believe”, “anticipate”, “estimates”, “can”, “will”,
“target”, "should", "would", "plans", "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; our exit from, and use of proceeds from the
divestiture of the assets and liabilities of, Frozen Fruit,
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; the cost of the
frozen fruit recall; 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; potential
additional costs associated with the frozen fruit recall; 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
30, 2023 and December 31, 2022
(Unaudited)
(All dollar amounts expressed in thousands
of U.S. dollars, except per share amounts)
Quarter ended
Year ended
December 30, 2023
December 31, 2022
December 30, 2023
December 31, 2022
$
$
$
$
Revenues
181,624
159,790
630,297
591,395
Cost of goods sold
155,983
135,974
541,680
491,665
Gross profit
25,641
23,816
88,617
99,730
Selling, general and administrative
expenses
19,597
19,605
78,000
78,469
Intangible asset amortization
446
446
1,784
1,784
Other expense, net
475
243
455
1,651
Foreign exchange loss (gain)
66
101
110
(107
)
Operating income
5,057
3,421
8,268
17,933
Interest expense, net
7,518
4,312
26,909
13,156
Earnings (loss) from continuing
operations before income taxes
(2,461
)
(891
)
(18,641
)
4,777
Income tax expense (benefit)
(709
)
(464
)
3,269
896
Earnings (loss) from continuing
operations
(1,752
)
(427
)
(21,910
)
3,881
Earnings (loss) from discontinued
operations
(9,982
)
1,481
(153,108
)
(8,722
)
Net earnings (loss)
(11,734
)
1,054
(175,018
)
(4,841
)
Dividends and accretion on preferred
stock
(429
)
(830
)
(1,981
)
(3,109
)
Earnings (loss) attributable to common
shareholders
(12,163
)
224
(176,999
)
(7,950
)
Basic and diluted earnings (loss) per
share
Earnings (loss) from continuing
operations
(0.02
)
(0.01
)
(0.21
)
0.01
Earnings (loss) from discontinued
operations
(0.09
)
0.01
(1.34
)
(0.08
)
Earnings (loss) attributable to common
shareholders
(0.11
)
0.00
(1.55
)
(0.07
)
Weighted-average common shares
outstanding (000s)
Basic
115,793
107,861
114,226
107,659
Diluted
115,793
107,861
114,226
110,247
SunOpta Inc.
Consolidated Balance Sheets
As at December 30, 2023 and December 31,
2022
(Unaudited)
(All dollar amounts expressed in thousands
of U.S. dollars)
December 30, 2023
December 31, 2022
$
$
ASSETS
Current assets
Cash and cash equivalents
306
679
Accounts receivable
64,862
59,545
Inventories
83,215
74,439
Prepaid expenses and other current
assets
25,235
15,535
Income taxes recoverable
4,717
4,040
Current assets held for sale
5,910
148,119
Total current assets
184,245
302,357
Restricted cash
8,448
-
Property, plant and equipment, net
319,898
292,306
Operating lease right-of-use assets
105,919
78,761
Intangible assets, net
21,861
23,646
Goodwill
3,998
3,998
Deferred income taxes
-
3,712
Other long-term assets
25,055
5,184
Non-current assets held for sale
-
145,888
Total assets
669,424
855,852
LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities
96,650
95,879
Notes payable
17,596
-
Income taxes payable
-
957
Current portion of long-term debt
24,346
38,491
Current portion of operating lease
liabilities
15,808
12,499
Current liabilities held for sale
-
13,207
Total current liabilities
154,400
161,033
Long-term debt
238,883
269,993
Operating lease liabilities
100,102
74,329
Deferred income taxes
505
-
Non-current liabilities held for sale
-
3,228
Total liabilities
493,890
508,583
Series B-1 preferred stock
14,509
28,062
SHAREHOLDERS' EQUITY
Common shares
464,169
440,348
Additional paid-in capital
27,534
33,184
Accumulated deficit
(332,687
)
(155,688
)
Accumulated other comprehensive income
2,009
1,363
Total shareholders' equity
161,025
319,207
Total liabilities and shareholders'
equity
669,424
855,852
SunOpta Inc.
Consolidated Statements of Cash Flows
For the quarters and years ended December
30, 2023 and December 31, 2022
(Unaudited)
(Expressed in thousands of U.S.
dollars)
Quarter ended
Year ended
December 30, 2023
December 31, 2022
December 30, 2023
December 31, 2022
$
$
$
$
CASH PROVIDED BY (USED IN)
Operating activities
Net earnings (loss)
(11,734
)
1,054
(175,018
)
(4,841
)
Earnings (loss) from discontinued
operations
(9,982
)
1,481
(153,108
)
(8,722
)
Earnings (loss) from continuing
operations
(1,752
)
(427
)
(21,910
)
3,881
Items not affecting cash:
Depreciation and amortization
8,166
6,219
31,039
23,047
Amortization of debt issuance costs
305
417
1,398
1,601
Deferred income taxes
(282
)
(11,533
)
3,978
(296
)
Stock-based compensation
2,789
4,139
11,778
13,830
Loss on extinguishment of debt
1,584
-
1,584
-
Other
297
2,003
707
3,825
Changes in operating assets and
liabilities, net of divestitures
853
6,509
(24,999
)
(15,142
)
Net cash provided by operating activities
of continuing operations
11,960
7,327
3,575
30,746
Net cash provided by (used in) operating
activities of discontinued operations
(7,529
)
20,186
11,269
29,829
Net cash provided by operating
activities
4,431
27,513
14,844
60,575
Investing activities
Additions to property, plant and
equipment
(8,853
)
(26,397
)
(46,125
)
(125,139
)
Cash settlement of foreign currency
forward contract
(394
)
-
(394
)
-
Proceeds from sale of property, plant and
equipment
-
-
-
4,182
Net cash used in investing activities of
continuing operations
(9,247
)
(26,397
)
(46,519
)
(120,957
)
Net cash provided by investing activities
of discontinued operations
91,636
6,383
90,551
14,133
Net cash provided by (used in) investing
activities
82,389
(20,014
)
44,032
(106,824
)
Financing activities
Increase (decrease) in borrowings under
revolving credit facilities
(38,581
)
9,916
(15,863
)
29,640
Borrowings of long-term debt
180,015
16,710
199,855
90,907
Repayment of long-term debt
(63,868
)
(6,528
)
(95,303
)
(20,085
)
Repayment of asset-based credit
facilities
(141,880
)
-
(141,880
)
-
Payment of debt issuance costs
(3,297
)
(63
)
(3,297
)
(735
)
Proceeds from notes payable
24,441
-
102,043
-
Repayment of notes payable
(51,291
)
-
(84,447
)
-
Proceeds from the exercise of stock
options and employee share purchases
1,051
425
1,882
1,628
Payment of withholding taxes on
stock-based awards
(283
)
(27
)
(9,404
)
(1,629
)
Payment of cash dividends on preferred
stock
(305
)
(609
)
(1,732
)
(2,436
)
Payment of common share issuance costs
-
-
(191
)
-
Payment of preferred stock issuance
costs
-
(756
)
-
(756
)
Net cash provided by (used in) financing
activities of continuing operations
(93,998
)
19,068
(48,337
)
96,534
Net cash provided by (used in) financing
activities of discontinued operations
12,388
(26,347
)
(2,464
)
(49,833
)
Net cash provided by (used in) financing
activities
(81,610
)
(7,279
)
(50,801
)
46,701
Increase in cash, cash equivalents and
restricted cash in the period
5,210
220
8,075
452
Cash, cash equivalents and restricted
cash, beginning of the period
3,544
459
679
227
Cash, cash equivalents and restricted
cash, end of the period
8,754
679
8,754
679
Non-GAAP Measures
Adjusted Gross Margin
The Company uses a measure of adjusted gross margin to evaluate
the underlying profitability of its revenue-generating activities
within each reporting period. This non-GAAP measure excludes
non-capitalizable start-up costs included in cost of goods sold
that are incurred in connection with capital expansion projects.
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 believes that disclosing this non-GAAP
measure provides investors 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.
Quarter ended
Year ended
December 30, 2023
December 31, 2022
December 30, 2023
December 31, 2022
Reported gross margin
14.1
%
14.9
%
14.1
%
16.9
%
Start-up costs(a)
1.3
%
2.9
%
3.0
%
1.0
%
Product withdrawal costs(b)
1.9
%
-
0.5
%
-
Adjusted gross margin
17.3
%
17.8
%
17.6
%
17.8
%
Note: percentages may not add due to
rounding.
(a)
Represents incremental direct costs
incurred in connection with plant expansion projects and new
product introductions before the project or product reaches normal
production levels, including costs for the hiring and training of
additional personnel, fees for outside services, travel costs, and
plant- and production-related expenses. For 2023, start-up costs
included in cost of goods sold related to the ramp-up of production
at our new plant-based beverage facility in Midlothian, Texas, and
the start-up of a new extrusion and high-speed packaging lines at
our fruit snacks facility in Omak, Washington. For 2022, start-up
costs included in cost of goods sold related to the hiring and
training of new employees for the Midlothian facility together with
costs related to the integration of the acquired Dream and West
Life brands.
(b)
Reflects costs, net of expected
recoveries, related to the withdrawal of specific batches of
aseptically-packaged product due to a faulty seal caused by an
equipment misconfiguration by a third-party service provider. The
equipment issue was identified and resolved in the third quarter of
2023, and none of the withdrawn product made it into the consumer
marketplace.
Adjusted Earnings/Loss and Adjusted
EBITDA
In addition to reporting financial results in accordance with
U.S. GAAP, the Company provides additional information about its
operating results regarding adjusted earnings/loss and adjusted
earnings/loss before interest, taxes, depreciation and amortization
(“Adjusted EBITDA”), which are not measures in accordance with U.S.
GAAP. The Company believes that adjusted earnings/loss and adjusted
EBITDA 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/loss and adjusted EBITDA, including a reconciliation from
net earnings/loss, which the Company believes to be the most
directly comparable U.S. GAAP financial measure.
Continuing
Discontinued
Operations
Operations
Consolidated
Per Share
Per Share
Per Share
For the quarters ended
$
$
$
$
$
$
December 30, 2023
Net loss
(1,752
)
(9,982
)
(11,734
)
Dividends and accretion on preferred
stock
(429
)
-
(429
)
Loss attributable to common
shareholders
(2,181
)
(0.02
)
(9,982
)
(0.09
)
(12,163
)
(0.11
)
Adjusted for:
Product withdrawal costs(a)
3,440
-
3,440
Exit from frozen fruit processing
facility(b)
-
3,150
3,150
Start-up costs(c)
2,394
-
2,394
Frozen fruit inventory reserves(d)
-
1,900
1,900
Loss on extinguishment of debt(e)
1,584
-
1,584
Loss on divestiture of discontinued
operations(f)
-
1,026
1,026
Severance costs(g)
-
1,016
1,016
Other(h)
491
617
1,108
Net income tax on adjusting items(i)
-
-
-
Adjusted earnings (loss)
5,728
0.05
(2,273
)
(0.02
)
3,455
0.03
December 31, 2022
Net earnings (loss)
(427
)
1,481
1,054
Dividends and accretion on preferred
stock
(830
)
-
(830
)
Earnings (loss) attributable to common
shareholders
(1,257
)
(0.01
)
1,481
0.01
224
0.00
Adjusted for:
Start-up costs(c)
4,699
-
4,699
Business development costs(j)
296
-
296
Other(h)
243
(138
)
105
Net income tax on adjusting items(i)
(1,377
)
(1,889
)
(3,266
)
Adjusted earnings (loss)
2,604
0.02
(546
)
(0.00
)
2,058
0.02
Continuing
Discontinued
Operations
Operations
Consolidated
For the quarters ended
$
$
$
December 30, 2023
Net loss
(1,752
)
(9,982
)
(11,734
)
Income tax expense (benefit)
(709
)
469
(240
)
Interest expense (income), net
7,518
(838
)
6,680
Depreciation and amortization
8,166
25
8,191
Stock-based compensation
2,789
-
2,789
Adjusted for:
Product withdrawal and recall costs(a)
3,440
-
3,440
Exit from frozen fruit processing
facility(b)
-
3,150
3,150
Start-up costs(c)
2,394
-
2,394
Frozen fruit inventory reserves(d)
-
1,900
1,900
Loss on divestiture of discontinued
operations(f)
-
1,026
1,026
Severance costs(g)
-
1,016
1,016
Other(h)
491
617
1,108
Adjusted EBITDA
22,337
(2,617
)
19,720
December 31, 2022
Net earnings (loss)
(427
)
1,481
1,054
Income tax benefit
(464
)
(176
)
(640
)
Interest expense, net
4,312
418
4,730
Depreciation and amortization
6,219
2,939
9,158
Stock-based compensation
4,139
-
4,139
Adjusted for:
Start-up costs(c)
4,699
-
4,699
Business development costs(j)
296
-
296
Other(h)
243
(138
)
105
Adjusted EBITDA
19,017
4,524
23,541
(a)
Reflects costs, net of expected
recoveries, of $3.4 million related to the withdrawal of specific
batches of aseptically-packaged product due to a faulty seal caused
by an equipment misconfiguration by a third-party service provider,
which are recorded in cost of goods sold.
(b)
Reflects asset impairment charges and
contract cancellation costs related to the exit from our Oxnard,
California, frozen fruit processing facility in connection with the
divestiture of Frozen Fruit, which are recorded in loss from
discontinued operations.
(c)
For the fourth quarter of 2023, start-up
costs included the ramp-up of production at our new plant-based
beverage facility in Midlothian, Texas, and the start-up of a new
extrusion line at our fruit snacks facility in Omak, Washington,
which are recorded in cost of goods sold. For the fourth quarter of
2022, start-up costs mainly related to the hiring and training of
new employees for the Midlothian facility, which are recorded in
cost of goods sold ($4.6 million) and SG&A expenses ($0.1
million).
(d)
Reflects inventory reserves recognized in
connection with the divestiture of Frozen Fruit, which are recorded
in loss from discontinued operations.
(e)
For the fourth quarter of 2023, we
recognized 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.
(f)
Reflects the pre-tax loss on the
divestiture of Frozen Fruit, which is recorded in loss from
discontinued operations.
(g)
Reflects severance costs of $1.0 million
for employees of Frozen Fruit that did not transfer as part of the
divestiture, which are recorded in loss from discontinued
operations.
(h)
For the fourth quarter of 2023, other
includes a $0.4 million loss on a foreign exchange hedge in
connection with the divestiture of Frozen Fruit, which is recorded
in other expense. For the fourth quarters of 2022 and 2023, other
also reflects gains and losses on the disposal of assets, which are
recorded in other expense and loss from discontinued
operations.
(i)
Reflects the tax effect of the adjustments
to earnings calculated based on the statutory tax rates applicable
in the tax jurisdiction of the underlying adjustment, net of
deferred tax valuation allowances. In addition, for the fourth
quarter of 2022, includes $1.9 million of tax benefits resulting
from the settlement of the purchase price allocation related to the
divestiture of Tradin Organic.
(j)
Represents third-party costs associated
with business development activities, which are inclusive of costs
related to the evaluation, execution, and integration of external
acquisitions and divestitures, internal expansion projects, and
other strategic initiatives. For the fourth quarter of 2022, these
costs related to the divestiture of Frozen Fruit, which are
recorded in SG&A expenses.
Continuing
Discontinued
Operations
Operations
Consolidated
Per Share
Per Share
Per Share
For the years ended
$
$
$
$
$
$
December 30, 2023
Net loss
(21,910
)
(153,108
)
(175,018
)
Dividends and accretion on preferred
stock
(1,981
)
-
(1,981
)
Loss attributable to common
shareholders
(23,891
)
(0.21
)
(153,108
)
(1.34
)
(176,999
)
(1.55
)
Adjusted for:
Loss on divestiture of discontinued
operations(a)
-
119,821
119,821
Start-up costs(b)
20,249
-
20,249
Frozen fruit inventory reserves(c)
-
12,900
12,900
Exit from frozen fruit processing
facility(d)
-
10,014
10,014
Product withdrawal and recall costs(e)
3,440
2,500
5,940
Business development costs(f)
2,390
-
2,390
Loss on extinguishment of debt(g)
1,584
-
1,584
Severance costs(h)
897
1,016
1,913
Other(i)
471
1,136
1,607
Net income tax on adjusting items(j)
-
-
-
Change in valuation allowance for deferred
tax
assets(k)
3,978
-
3,978
Adjusted earnings (loss)
9,118
0.08
(5,721
)
(0.05
)
3,397
0.03
December 31, 2022
Net earnings (loss)
3,881
(8,722
)
(4,841
)
Dividends and accretion on preferred
stock
(3,109
)
-
(3,109
)
Earnings (loss) attributable to common
shareholders
772
0.01
(8,722
)
(0.08
)
(7,950
)
(0.07
)
Adjusted for:
Loss on divestiture of discontinued
operations(a)
-
31,468
31,468
Start-up costs(b)
6,028
-
6,028
Sale of frozen fruit processing
facility(l)
-
(2,544
)
(2,544
)
Business development costs(f)
1,170
-
1,170
Exit from fruit ingredient processing
facility(m)
577
-
577
Other(i)
1,074
(202
)
872
Net income tax on adjusting items(j)
(2,326
)
(18,303
)
(20,629
)
Adjusted earnings
7,295
0.07
1,697
0.02
8,992
0.08
Continuing
Discontinued
Operations
Operations
Consolidated
For the years ended
$
$
$
December 30, 2023
Net loss
(21,910
)
(153,108
)
(175,018
)
Income tax expense (benefit)
3,269
(167
)
3,102
Interest expense, net
26,909
554
27,463
Depreciation and amortization
31,039
8,886
39,925
Stock-based compensation
11,778
-
11,778
Adjusted for:
Loss on divestiture of discontinued
operations(a)
-
119,821
119,821
Start-up costs(b)
20,249
-
20,249
Frozen fruit inventory reserves(c)
-
12,900
12,900
Exit from frozen fruit processing
facility(d)
-
10,014
10,014
Product withdrawal and recall costs(e)
3,440
2,500
5,940
Business development costs(f)
2,390
-
2,390
Severance costs(h)
897
1,016
1,913
Other(i)
471
1,136
1,607
Adjusted EBITDA
78,532
3,552
82,084
December 31, 2022
Net earnings (loss)
3,881
(8,722
)
(4,841
)
Income tax expense (benefit)
896
(16,154
)
(15,258
)
Interest expense, net
13,156
1,578
14,734
Depreciation and amortization
23,047
14,626
37,673
Stock-based compensation
13,830
-
13,830
Adjusted for:
Loss on divestiture of discontinued
operations(a)
-
31,468
31,468
Start-up costs(b)
6,028
-
6,028
Sale of frozen fruit processing
facility(l)
-
(2,544
)
(2,544
)
Business development costs(f)
1,170
-
1,170
Exit from fruit ingredient processing
facility(m)
577
-
577
Other(i)
1,074
(202
)
872
Adjusted EBITDA
63,659
20,050
83,709
(a)
For 2023, reflects the pre-tax loss on the
divestiture of Frozen Fruit, which is recorded in loss from
discontinued operations. For 2022, reflects the pre-tax loss on the
divestiture of Sunflower of $23.2 million, together with a loss of
$8.2 million on the settlement of the purchase price allocation
related to the 2020 divestiture of our global ingredients business,
Tradin Organic, which are recorded in loss from discontinued
operations.
(b)
For 2023, start-up costs included the
ramp-up of production at our new plant-based beverage facility in
Midlothian, Texas, the start-up of new extrusion and high-speed
packaging lines at our fruit snacks facility in Omak, Washington,
and professional fees related to productivity initiatives within
our manufacturing operations, which are recorded in cost of goods
sold ($18.7 million) and SG&A expenses ($1.5 million). For
2022, start-up costs mainly related to the hiring and training of
new employees for the Midlothian facility, and the integration of
the Dream and West Life brands, which are recorded in cost of goods
sold ($5.7 million) and SG&A expenses ($0.3 million).
(c)
For 2023, reflects inventory reserves
recognized in connection with the divestiture of Frozen Fruit,
which are recorded in loss from discontinued operations.
(d)
For 2023, reflects asset impairment
charges and contract cancellation costs related to the exit from
our Oxnard, California, frozen fruit processing facility in
connection with the divestiture of Frozen Fruit, which are recorded
in loss from discontinued operations.
(e)
For 2023, reflects costs, net of expected
recoveries, of $3.4 million related to the withdrawal of specific
batches of aseptically-packaged product due to a faulty seal caused
by an equipment misconfiguration by a third-party service provider,
which are recorded in cost of goods sold, as well as the
self-insured retention amount of $2.5 million under our insurance
policies related to the recall of specific frozen fruit products
initiated in the second quarter of 2023, which is recorded in loss
from discontinued operations.
(f)
Represents third-party costs associated
with business development activities, which are inclusive of costs
related to the evaluation, execution, and integration of external
acquisitions and divestitures, internal expansion projects, and
other strategic initiatives. For 2023, business development costs
related to the divestiture of Frozen Fruit, and, for 2022, these
costs related to the divestitures of Frozen Fruit and Sunflower,
together with our inaugural Investor Day held in June 2022. These
costs are recorded in SG&A expenses.
(g)
For 2023, we recognized 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.
(h)
For 2023, reflects employee severance
costs of $0.9 million recognized in connection with the
consolidation of our continuing operations following the
divestiture of Frozen Fruit, which are recorded in SG&A
expenses, as well as severance costs of $1.0 million for employees
of Frozen Fruit that did not transfer as part of the divestiture,
which are recorded in loss from discontinued operations.
(i)
For 2023, other includes a $0.4 million
loss on a foreign exchange hedge in connection with the divestiture
of Frozen Fruit, which is recorded in other expense. For 2023 and
2022, other also reflects reserves for legal settlements and gains
and losses on the disposal of assets, which are recorded in other
expense/income and loss from discontinued operations.
(j)
Reflects the tax effect of the adjustments
to earnings calculated based on the statutory tax rates applicable
in the tax jurisdiction of the underlying adjustment, net of
deferred tax valuation allowances. In addition, for 2022, includes
$12.9 million of tax benefits resulting from the settlement of the
purchase price allocation related to the divestiture of Tradin
Organic.
(k)
For 2023, reflects an increase to the
valuation allowance for U.S. deferred tax assets recognized in the
second quarter of 2023, based on an assessment of the future
realizability of the related tax benefits.
(l)
For 2022, reflects the gain on sale of a
previously owned frozen fruit processing facility, net of exit
costs, which is recorded in loss from discontinued operations.
(m)
For 2022, reflects exit costs related to a
former fruit ingredient processing facility, which are recorded in
other expense.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228507642/en/
Investor Relations: Reed Anderson ICR 646-277-1260
reed.anderson@icrinc.com
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