SunOpta Reports Q4 and Full-Year 2024 Financial Results
SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq: STKL) (TSX: SOY), a leading sustainable food manufacturer, has announced its financial results for the fourth quarter and full fiscal year ending December 28, 2024. Reports The figures, expressed in U.S. dollars, adhere to U.S. Generally Accepted Accounting Principles (GAAP), except where otherwise noted.
Fourth Quarter 2024 Highlights
- Revenue increased by 8.9% to $193.9 million compared to $178.1 million in the prior-year quarter, driven by a 12.8% rise in volume, partially offset by a 2.1% price reduction reflecting pass-through commodity pricing.
- Loss from continuing operations amounted to $4.6 million, compared to a $3.0 million loss in the previous year’s fourth quarter.
- Adjusted earnings from continuing operations rose to $7.6 million from $4.5 million in the previous period.
- Adjusted EBITDA from continuing operations increased by 20.0% to $26.1 million, representing 13.5% of revenues, up from $21.7 million, or 12.2% of revenues, in the same quarter of the prior year.
- Strong free cash flow enabled a $24.7 million sequential debt reduction from Q3, achieving a leverage target of 3.0x.
Brian Kocher, Chief Executive Officer of SunOpta, expressed optimism about the company’s performance, stating, “We delivered another solid quarter with double-digit volume growth across our portfolio. Our business momentum remains strong as we advance productivity and efficiency initiatives, unlocking additional capacity. Looking ahead to 2025, we aim to expand our market share by leveraging our competitive strengths to provide high-value solutions for customers while maintaining disciplined financial strategies to enhance gross margin and cash flow. With no major capital investments planned, we anticipate continued deleveraging and improved returns on invested capital.”
Fourth Quarter 2024 Financial Performance
Total revenue for the quarter grew by 8.9% to $193.9 million. Reports This increase was primarily due to a 12.8% boost in volume and mix, with growth seen in fruit snacks, broths, and plant-based beverages. However, a 2.1% price decrease due to commodity cost pass-through and a 1.7% decline resulting from SunOpta’s exit from the smoothie bowl category in March 2024 partially offset the gains.
Gross profit declined by $3.9 million, or 15.4%, to $21.2 million compared to $25.0 million in the prior-year quarter. Gross profit margin decreased to 10.9% from 14.1% in Q4 2023. Adjusted gross margin also declined by 110 basis points, reaching 16.1% compared to 17.2% in Q4 2023, due to increased depreciation from new production assets and short-term investments aimed at improving future supply chain efficiencies.
Operating income fell to $2.7 million from $3.8 million in Q4 2023, reflecting reduced gross profit, partially offset by lower selling, general, and administrative (SG&A) expenses.
The loss from continuing operations for the quarter was $4.6 million, widening from $3.0 million in the prior-year period. The diluted loss per share attributable to common shareholders (after dividends and preferred stock accretion) was $0.04, compared to $0.03 per share in Q4 2023.
Adjusted earnings from continuing operations rose to $7.6 million, or $0.06 per diluted share, compared to $4.5 million, or $0.04 per diluted share, in Q4 2023. Meanwhile, adjusted EBITDA from continuing operations climbed to $26.1 million, up from $21.7 million in the same quarter of the prior year.
Accounting Adjustments
During the fourth quarter, SunOpta identified errors in previously reported financial statements. Reports The corrections primarily related to the underpayment of duties on certain products imported from Canada during fiscal years 2022 and 2023. Reports These errors were deemed immaterial but resulted in adjustments to prior financial reports. The aggregate effect increased net losses for Q4 and full-year 2023 by $1.8 million ($0.02 per share) and $3.8 million ($0.03 per share), respectively. Adjusted EBITDA for those periods was also reduced by $0.6 million and $2.6 million, respectively. These revisions are detailed in the company’s 2024 Annual Report on Form 10-K.
Balance Sheet and Cash Flow
As of December 28, 2024, SunOpta reported total assets of $668.5 million and total debt of $265.2 million, compared to $667.2 million in assets and $263.5 million in debt at the end of fiscal 2023.
Cash provided by operating activities from continuing operations rose sharply to $52.3 million in fiscal 2024, up from $3.6 million in the prior year. Reports This increase was driven by improved working capital efficiency and higher operating income from revenue growth.
Investing activities from continuing operations consumed $25.0 million in fiscal 2024, significantly lower than the $46.5 million spent in fiscal 2023. Reports The reduction reflects lower capital expenditures and proceeds from the sale of the smoothie bowl product line.
