TORONTO, ONTARIO--Stake Technology Ltd. (Stake) (Nasdaq:STKL)(TSX:SOY) today announced results for the year ended December 31, 2002. All amounts are expressed in US dollars.
The Company achieved record sales and earnings for the year ended December 31, 2002, realizing its 21st consecutive quarter of record sales growth. Sales in 2002 increased by 35% to $120,898,000 compared to $89,822,000 in the prior year. These results were led by a 38% increase in sales within the Company's vertically integrated food operations which are focused on the natural and organic foods markets. The Environmental Industrial Group realized a 25% increase in sales versus 2001, primarily due to the acquisition of the operations of Virginia Materials and International Materials in late 2001.
Net earnings for the year were a record $3,766,000 or $0.09 per common share compared to $19,000 or $0.00 per common share in 2001. The increase over the prior year was due to a number of factors including significant improvements at the Nordic Aseptic packaging operation, higher volumes and margins in dietary fiber and certain grain and agronomy products, cost reductions throughout the organization, the impact of the 2001 acquisition of Virginia Materials and reduced borrowing costs as a result of the new banking arrangements implemented in 2002.
During the fourth quarter of 2002, the Company used its strong balance sheet to acquire Opta Food Ingredients, Inc. (Nasdaq - OPTS), a leading developer and manufacturer of proprietary food ingredients, headquartered in Bedford, MA., Wild West Organic Harvest Co-operative Association, a privately held organic and natural foods distributor based in Vancouver, British Columbia and Simply Organic Co. Ltd, a privately held Toronto, Ontario based distributor of organic and natural foods. These acquisitions were all competed late in the year and consequently had a limited effect on 2002 results.
The Company continues to maintain a strong balance sheet with working capital of $13,134,000, total assets of $115,287,000 and a debt to equity ratio of 0.74:1. During the first quarter of 2003 the Company refinanced the tender facility used to fund the acquisition of Opta and as such the debt to equity ratio has been reduced to approximately 0.55:1.
The Company has announced that it expects to achieve revenues of $175,000,000 in 2003, an increase of 45% versus 2002. The increase is based on a combination of continued internal growth and the impact of the food based acquisitions completed in the fourth quarter of 2002.
Jeremy N. Kendall, Chairman and CEO of Stake Technology Ltd., commented that, "We are very pleased with the record results of the past year and are confident that this will continue to improve as we integrate our recent acquisitions and position the Company as a dominant player in the fast growing natural and organic foods sectors. Stake's commitment to profitable growth in these expanding food categories should produce solid returns for our valued shareholders."
Stake Technology Ltd. is an owner/operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food markets. For the last four consecutive years, Stake was included in Profit magazine's 'Profit 100' list of the 100 fastest growing companies in Canada. Currently, the company has three business units: the Food Group, which specializes in identity-preserved (IP) grain products and natural and organic food products; from seed to packaged product; the Environmental Industrial Group; a producer, distributor, and recycler of industrial materials; and the Steam Explosion Technology Group who market clean pulping technologies. Each of these business units has proprietary products and services that give it a solid competitive advantage in its sector.
Note: This news release may contain forward-looking information. Actual future results may differ materially. The risks, uncertainties, and other factors that could influence actual results are described in the Company's annual report to shareholders and in SEC reports.