SunOpta Announces Third Quarter 2011 Results

SunOpta Inc. (“SunOpta” or “the Company”) (NASDAQ:STKL; TSX:SOY), a leading global company focused on natural, organic and specialty foods and natural health products, today announced financial results for the quarter and three quarters ended October 1, 2011. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.

For the quarter ended October 1, 2011 the Company realized quarterly revenues of $272.4 million versus revenues of $217.5 million for the quarter ended October 2, 2010, a year over year increase of 25.3% . This increase reflects continued growth in the natural and organic foods sectors. Revenues increased 14.6% excluding the impact of the acquisitions completed during 2010 and 2011.

For the quarter ended October 1, 2011 the Company realized earnings per diluted common share from continuing operations of $0.06 or $3.7 million, as compared to $0.00 or a loss of $0.2 million for the quarter ended October 2, 2010. These results were driven by continued strong performance in the International Foods Group offset by reduced earnings in the Grains and Foods Group due to commodity market pressures in the sunflower segment, reduced earnings in the Ingredients Group due in part to the loss of a major customer earlier in the year, and reduced earnings at Opta Minerals due primarily to the impact of foreign exchange losses realized in 2011 versus significant gains in the third quarter of 2010.

The quarterly results include additional pre-tax costs of approximately $2.1 million related primarily to rationalization and legal matters, acquisition and start-up costs, plus foreign exchange losses as a result of significant currency fluctuations during the quarter.

For the quarter ended October 1, 2011 the Company realized EBITDA¹ of $12.5 million as compared to $14.7 million for the quarter ended October 2, 2010.

For the three quarters ended October 1, 2011 the Company has realized revenues of $823.6 million versus revenues of $667.7 million for the three quarters ended October 2, 2010, a year over year increase of 23.3% . Revenues increased 12.5% excluding the impact of the acquisitions completed late in 2010 and in the third quarter of 2011.

For the three quarters ended October 1, 2011 the Company has realized earnings per diluted common share from continuing operations of $0.21 or $13.8 million, as compared to $0.16 or $10.6 million for the three quarters ended October 2, 2010. For the three quarters ended October 1, 2011 the Company realized EBITDA¹ of $42.5 million as compared to $45.5 million for the three quarters ended October 2, 2010.

At October 1, 2011, the Company’s balance sheet reflects a current ratio of 1.49 to 1.00, long-term debt to equity ratio of 0.18 to 1.00 and total debt to equity ratio of 0.53 to 1.00. For the quarter ended October 1, 2011 the Company generated cash from continuing operating activities of $11.7 million as compared to $20.3 million for the quarter ended October 2, 2010. At the end of the quarter the Company has total debt outstanding of $161.7 million, a decrease of $6.1 million from the period ended July 2, 2011. At October 1, 2011 the Company has total assets of $624.3 million and a net book value of $4.65 per outstanding share. At quarter-end, the Company was in compliance with all its debt covenants.

Steve Bromley, President and Chief Executive Officer of SunOpta commented, “Results for the third quarter reflect continued growth in the core natural and organic foods categories within which we operate. Our results also reflect the impact of the difficult commodity environment over the course of this year, especially in the sunflower component of our business. We continue to be very confident in our strategy and are encouraged by the number of new initiatives and opportunities in the pipeline. We are focused on expanding our business in fast growing healthy foods categories while at the same time improving operating margins and returns on assets employed. We believe we are well positioned in the natural and organic foods sector and are confident in our future prospects.”

The Company plans to host a conference call at 10:00 A.M. Eastern Time on Wednesday November 9th, 2011 to discuss the third quarter results and recent corporate developments. The conference call can be accessed via a link at the Company’s website at www.sunopta.com. Additionally, the call may be accessed with the toll free dial-in number 1-877-312-9198 or international 631-291-4622. A replay of the call can also be accessed between November 9^th and 16^th with the toll free dial-in number 1-855-859-2056 or 404-537-3406 followed by pass code: 17828140#.

¹See discussion of non-GAAP measures

About SunOpta Inc.

SunOpta Inc. is a leading global company focused on natural, organic and specialty foods. The Company specializes in sourcing, processing and packaging of natural and organic food products, integrated from seed through packaged products; with a focus on strategically significant vertically integrated business models. The Company’s core natural and organic food operations focus on value-added grains, fiber and fruit based product offerings, supported by a global infrastructure. The Company has two non-core holdings, a 66.4% ownership position in Opta Minerals Inc. (TSX:OPM), a producer, distributor, and recycler of environmentally friendly industrial materials, and a minority ownership position in Mascoma Corporation, an innovative biofuels company.

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 focus on growing our business and improving operating margins and returns on assets employed and our positioning in the natural and organic foods sector. The terms and phrases “continue”, “improving”, “focused”, “believe”, “positioned” and “confident”, and other similar terms and phrases are intended to identify these forward looking statements. Forward looking statements are based on information available to us 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 as well as other factors the Company believes are appropriate in the circumstances including, but not limited to, general economic conditions, consumer interest in health and wellness, product pricing levels, current customer demand, planned facility and operational expansions, competitive intensity, cost rationalization and product development initiatives. Whether actual timing and results will agree with expectations and predications of the Company is subject to many risks and uncertainties including, but not limited to, global economic conditions, consumer spending patterns and changes in market trends, decreases in customer demand, potential failure of product development, working capital management, inability or delays in implementing continuous improvement initiatives, availability and pricing of raw materials and supplies, 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.

For further information, please contact:

SunOpta Inc.

Steve Bromley, President & CEO
Tony Tavares, Vice President & COO
Robert McKeracher, Vice President & CFO
Susan Wiekenkamp, Information Officer
Tel: 905-455-2528, ext 103
susan.wiekenkamp@sunopta.com  
Website: www.sunopta.com  

SunOpta Inc.
Consolidated Statements of Operations
For the quarter ended October 1, 2011 and October 2, 2010
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

SunOpta Inc.
Consolidated Statements of Operations
For the three quarters ended October 1, 2011 and October 2, 2010
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

SunOpta Inc.
Consolidated Balance Sheets
As at October 1, 2011 and January 1, 2011
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

SunOpta Inc.
Consolidated Statements of Cash Flows
For the quarter ended October 1, 2011 and October 2, 2010
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

SunOpta Inc.
Consolidated Statements of Cash Flows
For the three quarters ended October 1, 2011 and October 2, 2010
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

SunOpta Inc.
Segmented Information
For the quarter ended October 1, 2011 and October 2, 2010
Unaudited
(Expressed in thousands of U.S. dollars)

SunOpta Foods has the following segmented reporting:

SunOpta Foods has the following segmented reporting:

(Operating Income (Loss) is defined as “Earnings before the following” excluding the impact of “Other (income) expense, net” and "Goodwill impairment")

SunOpta Inc.
Segmented Information
For the three quarters ended October 1, 2011 and October 2, 2010
Unaudited
(Expressed in thousands of U.S. dollars)

SunOpta Foods has the following segmented reporting:

SunOpta Foods has the following segmented reporting:

(Operating Income (Loss) is defined as “Earnings before the following” excluding the impact of “Other (income) expense, net” and "Goodwill impairment")

In addition to reporting financial results in accordance with generally accepted accounting principles (“GAAP”), the Company provides information regarding Operating Income and Earnings before interest, taxes, depreciation and amortization (“EBITDA”) as additional information about its operating results, which are not measures in accordance with GAAP. The Company believes that these non-GAAP measures assist investors in comparing performance across reporting periods on a consistent basis by excluding items that are not indicative of the Company’s core operating performance. The non-GAAP measures of operating income and EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

The Company defines Operating Income as “Earnings from continuing operations before the following” excluding the impact of “Other (income) expense, net” and “Goodwill impairment”; and EBITDA as Operating Income plus depreciation and amortization. The following is a tabular presentation of Operating income and EBITDA, including a reconciliation to GAAP earnings, which the Company believes to be the most directly comparable GAAP financial measure:

¹Non-GAAP Measures