TORONTO, Feb 22, 2006 (CCNMatthews via COMTEX) -- SunOpta Inc. (SunOpta or the Company) (STKL) (CA:SOY) today announced results for the year ended December 31, 2005. All amounts are expressed in U.S. dollars.
Revenues in the fourth quarter of 2005 were a record $122,070,000, representing a 48% increase over the comparable quarter in 2004. This represents the 33rd consecutive quarter of record revenue growth versus the comparable quarter in the previous year. Net earnings in the quarter were $1,559,000 or $0.03 per diluted common share, compared to $353,000 or $0.01 per diluted share in the same period in 2004, a 342% increase. Quarterly earnings include the one time impact of costs related to food donations provided for the victims of Hurricane Katrina, costs associated with the flooding of Opta Minerals' New Orleans abrasives plant, fees associated with the Company's new bank financing arrangements completed in the quarter and a non-cash reduction in legal fees previously recorded in a legal suit with a supplier. Diluted earnings per share were $0.04 in the fourth quarter of 2005 prior to these special items.
During the fourth quarter the Company realized significant improvement in the SunOpta Food Group led by growth in oat fiber revenues and operating margin, continued strength in private label aseptically packaged products and cost rationalization initiatives within the SunOpta Canadian Food Distribution Group. The newly formed SunOpta Fruit Group performed well in the quarter, led by strong growth in organic ingredient sales sourced from strategic worldwide partners and growers, and strong growth in natural and organic private label solutions for the North American retail market. Internal growth for the company in the quarter was 18.3% representing the highest quarterly growth rate in 2005.
The contract to provide Europe's largest ethanol producer, Abener Energia, S.A. of Seville, Spain, with patented steam explosion equipment and process technology for the first commercial production facility in the world to convert wheat straw into ethanol remains on plan. The equipment is scheduled for delivery in the spring of 2006.
For the year ended December 31, 2005 the Company achieved record revenues and earnings. Revenues in 2005 increased by 39% to $426,101,000 from $306,251,000 in 2004, led by a 42% increase in revenues within the Company's vertically integrated natural and organic food operations. The Company's annualized revenue growth of 39% was driven by internal growth of 13.5% and growth via acquisitions of 25.5%.
Net earnings for the year were a record $13,558,000 or $0.24 per diluted common share as compared to $11,016,000 or $0.20 per diluted common share in 2004.
Jeremy N. Kendall, Chairman and CEO of SunOpta, commented, "I am very pleased with the improvement in operating earnings in the fourth quarter and satisfied that we have overcome the challenges we faced in our oat fiber and distribution businesses. Looking ahead to 2006 we expect all business units to grow their top and bottom lines. The previously announced contract to provide a major global retailer with aseptic packaged soymilk commenced in January and is going very well. We also expect that the recently announced acquisition of Magnesium Technologies Corporation (Magtech) by Opta Minerals Inc. will significantly add to their growth and profitability in 2006."
The Company continues to be well positioned for future growth with net working capital of $81,734,000 and total assets of $301,482,000. The debt to equity ratio at December 31, 2005 was 0.37:1.00, providing the Company with further financial resources to invest in internal growth and execute its acquisition program.
The Company has previously announced that it expects to achieve revenues of $540,000,000 to $550,000,000 in 2006, an increase of 27% to 29% versus 2005. The increase is based on a combination of expected 20% internal growth and the annualized revenues of acquisitions completed in 2005.
The Company expects to earn $0.26 - $0.30 diluted earnings per common share in 2006, excluding any special items or acquisitions that may be completed during the year. This guidance assumes an effective tax rate of 31%.
About SunOpta Inc.
SunOpta Inc. is an operator of high-growth ethical businesses, focused on a healthy products portfolio that promotes the health and well-being of its communities and environmental responsibility. For the last seven consecutive years, SunOpta was included in Profit magazine's 'Profit 100' list of the 100 fastest growing companies in Canada. 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 which engineers and markets proprietary steam explosion technology systems for the pulp, bio-fuel and food processing industries. Each of these business units has proprietary products and services that give it a solid competitive advantage in its sector.
Certain statements included in this press release may constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to references to business strategies, competitive strengths, goals, capital expenditure plans, business and operational growth plans and references to the future growth of the business. These forward looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its interpretation of current conditions, historical trends and expected future developments as well as other factors that the Company believes are appropriate in the circumstance. However, whether actual results and developments will agree with expectations and predications of the Company is subject to many risks and uncertainties including, but not limited to; general economic, business or market risk conditions; competitive actions by other companies; changes in laws or regulations or policies of local governments, provinces and states as well as the governments of United States and Canada, many of which are beyond the control of the Company. 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.