SunOpta Inc. (Nasdaq) (TSX), a leader in sustainable food manufacturing, today announced its financial results for the third quarter ended September 28, 2024.
All figures are in U.S. dollars and presented according to U.S. GAAP, unless otherwise noted.
Third Quarter 2024 Highlights:
- Revenues grew by 15.5% to $176.2 million, compared to $152.5 million in the prior year, driven by a 20.6% increase in volume, partially offset by a 2.8% reduction in prices due to pass-through commodity pricing.
- Gross profit increased by 16.4%, reaching $23.6 million, up from $20.3 million in Q3 2023.
- Loss from continuing operations was $5.5 million, an improvement from the $5.7 million loss in the same period last year.
- Adjusted earnings from continuing operations were $2.5 million, or $0.02 per diluted share, compared to $0.5 million, or $0.00 per diluted share, in the prior year.
- Adjusted EBITDA from continuing operations increased by 12.6%, totaling $21.5 million, compared to $19.1 million in Q3 2023.
CEO Statement:
“We are pleased with our third-quarter performance, which unfolded as expected,” said Brian Kocher, Chief Executive Officer of SunOpta. “Volume growth continues to drive revenue expansion, reflecting the strength of our competitive position. We are seeing broad-based growth across our customer base, channels, and product offerings, with a robust pipeline of new business opportunities. We remain focused on strategic investments in our supply chain to fuel this growth, while our productivity initiatives are positioning us for sustainable gross margin expansion and long-term value creation for shareholders.”
Detailed Financial Overview:
- Revenues: For the third quarter of 2024, revenues increased by 15.5% to $176.2 million. The growth was primarily driven by a 20.6% increase in volume, offset partially by a 2.8% price reduction due to commodity cost pass-throughs. Exiting the smoothie bowls category in March 2024 reduced revenue by 2.3%. Key volume drivers included growth in fruit snacks, broths, plant-based beverages, and protein shakes.
- Gross Profit: Gross profit increased by 16.4% to $23.6 million, up from $20.3 million in the prior year. Gross margin as a percentage of revenue was 13.4%, a slight improvement from 13.3% in Q3 2023. Adjusted gross margin rose to 17.0%, up from 16.4% in the same period last year, reflecting higher sales and production volumes, though slightly offset by increased depreciation and manufacturing inefficiencies.
- Operating Income: Operating income was $1.5 million, showing slight improvement due to higher gross profit and lower costs related to business development and employee severance, following the divestiture of the Frozen Fruit segment in 2023. This was offset by higher compensation costs and increased professional fees for operational productivity initiatives.
- Loss from Continuing Operations: The company reported a loss of $5.5 million for Q3 2024, an improvement over the $5.7 million loss reported in the prior year. The diluted loss per share from continuing operations remained flat at $0.05.
- Adjusted Earnings: Adjusted earnings from continuing operations were $2.5 million, or $0.02 per diluted share, compared to adjusted earnings of $0.5 million, or $0.00 per diluted share, in Q3 2023.
- Adjusted EBITDA: Adjusted EBITDA increased by 12.6%, reaching $21.5 million, up from $19.1 million in the same quarter last year.
Balance Sheet and Cash Flow:
As of September 28, 2024, SunOpta’s total assets stood at $699.3 million, with total debt of $289.9 million, compared to total assets of $669.4 million and total debt of $263.2 million at the end of fiscal 2023.
For the year-to-date period, cash provided by operating activities of continuing operations was $19.2 million, compared to cash used of $8.4 million in the same period of 2023. The increase was primarily driven by improved working capital efficiency and better profitability from volume growth and lower start-up costs associated with the new Midlothian, Texas facility.
Investing activities consumed $16.5 million in cash during the first three quarters of 2024, a decrease from $37.3 million in the same period of 2023, reflecting the completion of major capital projects, including the new plant-based beverage facility in Midlothian, Texas.
For more detailed information, please refer to the company’s full financial statements and Non-GAAP Measures.
