TORONTO, Aug 8, 2005 (CCNMatthews via COMTEX) -- SunOpta Inc. (SunOpta or the Company) (STKL) (CA:SOY) today announced results for the three months and six months ended June 30, 2005. All amounts are expressed in U.S. dollars.
The Company achieved record revenues for the three months ended June 30, 2005, realizing its first quarter with revenues in excess of $100 million. Revenues in the quarter increased to $103 million from $81 million in the second quarter of the prior year, a 27.1% or $22 million increase. Revenue growth was led by a 29.1% increase in revenues within the Company's vertically integrated natural and organic food operations. The Company's revenue growth rate includes an internal growth rate of 12.8% and growth via acquisitions of 14.3%. For the six months ended June 30, 2005 revenues increased 31.8% to $189 million, compared to $143 million in the prior year.
Revenues in the second quarter exclude any significant contribution from the recently announced acquisitions, and therefore the Company fully expects future quarters to continue to exceed $100 million in revenues. Consequently, the Company is raising its revenue guidance for fiscal 2005 from $385 million to $415 million.
Net earnings after minority interest for the second quarter were $3,307,000 or $0.06 per diluted common share compared to $6,024,000 or $0.11 per diluted common share in the second quarter of the prior year. Earnings in the prior year included a one time award related to a legal settlement. Net earnings after minority interest for the six months ended June 30, 2005 were $9,912,000 or $0.17 per diluted common share compared to $7,894,000 or $0.14 per diluted common share in the prior year. Excluding one-time items in both years, net earnings per diluted common share for the six months ended June 30 were $0.10 in 2005 and $0.11 in 2004.
Net earnings in the second quarter and first six months of 2005 were assisted by strong demand for grain products, and in particular sunflower, and aseptically-packaged products including soy, rice and tea beverages. The shortfall in worldwide supply of sunflower has increased demand and margin for available product.
Net earnings in the quarter versus the prior period were negatively impacted by market issues in the Canadian Food Distribution Group. As previously disclosed, the Company's Distribution Group has encountered issues related to supply, freight, competition and integration in recent quarters and has been focused on addressing these issues. Demand for low-carb products peaked in the second quarter of 2004 and then declined, resulting in a significant downturn in the demand for oat fiber within the SunOpta Ingredients Group. The Company announced that it has implemented significant profit improvement plans in the second quarter, including expansion of its fiber portfolio, expansion of target markets, aggressive pursuit of international sales and cost reductions. These action plans are expected to improve results over the coming quarters.
Earlier today the Company confirmed the receipt of the first StakeTech Steam Explosion equipment contract with Abener Energia S.A. of Seville, Spain, a wholly-owned subsidiary of Abengoa S.A., for the first commercial production facility in the world to convert wheat straw into ethanol. This facility, which is scheduled to be operational in the fall of 2006, will be built in Babilafuente (Salamanca), Spain and is located adjacent to an existing cereal grain to ethanol plant operated by Abengoa. Abengoa is the largest ethanol producer in Europe and the second largest in the world.
Jeremy Kendall, Chairman and Chief Executive Officer of SunOpta stated that "We are pleased with our revenue growth and strategic direction of the Company, however, we are conscious of our need to improve margins in the near term, and with the implementation of profit improvement plans and our marketing strategies, we are confident about the future prospects of SunOpta."
SunOpta Inc. is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food markets. 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 StakeTech Steam Explosion 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.
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 filings. The attached consolidated balance sheet and consolidated statement of earnings are unaudited. The information provided here should be considered in conjunction with the other information included within various SEC documents including Form 10Q reports filed during 2004 and Form 10K report filed March 16, 2005.