SunOpta Inc. (Nasdaq:STKL; TSX:SOY) announced results for the fourth quarter and year ended December 31, 2006. All amounts are expressed in U.S. dollars.
The company achieved record revenues for the quarter, realizing its 37th consecutive quarter of increased revenue growth versus the same quarter in the previous year. Revenues in the fourth quarter increased by 33.9% to $163.5 million compared to $122 million in the fourth quarter prior year. Fourth quarter revenues were the highest of any quarter in the Company’s history and reflect continued strong growth in core business segments.
For the year ended December 31, 2006 revenues increased 40.3% to $598 million compared to $426 million the prior year. Internal growth of 16.1% was realized during the year with 18.4% internal growth realized within the SunOpta Food Group.
Net earnings in the quarter rose 33.4% to $2 million ($0.04 per diluted common share) compared to $1.56 million ($0.03 per diluted common share) in the fourth quarter of 2005, after absorbing pre-tax costs of $1.6 million related to the frozen fruit recall previously announced by SunOpta’s subsidiary, Cleugh’s Frozen Foods Inc. These costs include $822,000 of direct expenses incurred by SunOpta. The recall was an isolated incident – the company has captured all the known costs within the fourth quarter.
Net earnings for the year were $10.95 million ($0.19 per diluted common share) compared to $13.6 million ($0.24 per diluted common share).
Steve Bromley, President and Chief Executive Officer of SunOpta commented, “Clearly 2006 was a year of significant improvements in many of our businesses including an internal growth rate within the range of 15 to 20% which we strive to achieve plus the addition of six strategic acquisitions which are all off to great starts in their first year. We have made a number of inroads on improving profitability as we leverage our assets, capital investments, IT infrastructure and selling, general and administrative platform. Unfortunately, these improvements were tempered by the results of our Sunflower business and the expense in dealing with our recall costs. We are confident however that these incidents are behind us and in dealing with them we have strengthened our organization including our risk management procedures and quality programs. We look forward to an exciting and profitable 2007.”
SunOpta confirmed revenue guidance for 2007 of $740 to $760 million and earnings guidance of $0.35 to $0.40 per diluted common share reflecting continued growth, further leverage in selling, general and administration costs and improved margins resulting from product mix, cost reductions including automation projects and a focus on higher plant utilization. This guidance reflects an approximate increase in revenues of 25% and approximately 100% in net earnings per share.
The Company remains well positioned for future growth, augmented by the post year end equity financing which raised gross proceeds of $53.8 million, leaving the Company with a long term debt to equity ratio of approximately 0.33:1.00 and providing financial resources to grow the Company through a combination of internal growth and strategic acquisitions for the next several years.
About SunOpta Inc.
SunOpta Inc. is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food. 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 SunOpta BioProcess Group (soon to become SunOpta BioProcess Inc.) which engineers and markets proprietary steam explosion technology systems for the pulp, bio-fuel and food processing industries.
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