SOY SunOpta Inc

Revenue from continuing operations increased 21% to $171 million, driven by volume growth

Loss from continuing operations of $3.8 million compared to a loss of $11.7 million in the prior year

Adjusted EBITDA from continuing operations increased 12% to $20.6 million

Raising 2024 revenue outlook

SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL) (TSX:SOY), an innovative and sustainable manufacturer fueling the future of food, today announced financial results for the second quarter ended June 29, 2024.

All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.

Second Quarter 2024 highlights:

• Revenues of $171.0 million increased 21.1% compared to $141.2 million in the prior year period, driven by 26.9% volume growth partially offset by a 3.9% price reduction for pass-through commodity pricing
• Gross profit of $21.8 million increased 17.3% compared to $18.6 million in the prior year period
• Loss from continuing operations was $3.8 million compared to a loss of $11.7 million in the prior year period
• Adjusted earnings¹ from continuing operations was $2.8 million compared to $1.1 million in the prior year period
• Adjusted EBITDA¹ from continuing operations increased 11.9% to $20.6 million, compared to $18.4 million in the prior year period.

“We delivered another quarter of outstanding growth, reflecting strong underlying demand and solid execution on operational initiatives aimed at sustainable supply chain effectiveness and efficiency,” said Brian Kocher, Chief Executive Officer of SunOpta. “Revenue growth continues to be demand driven and broad based across customers and channels. Our supply chain supported a significant increase in output and simultaneously highlighted areas where investment is required to deliver sustainable gross margin expansion in the future. We are increasing our revenue outlook for 2024, and maintaining our adjusted EBITDA guidance to reflect short-term investments in the supply chain. Given the depth of our pipeline, operational and supply chain initiatives currently underway, and strength of our overall competitive position, we continue to have a high degree of confidence in the longer-term trajectory of our business and our ability to deliver significant value to shareholders.”

Second Quarter 2024 Results

Revenues increased 21.1% to $171.0 million for the second quarter of 2024. The increase was driven by favorable volume/mix, which was up 26.9%, partially offset by a price reduction of 3.9% due to the pass through of commodity costs for certain raw materials, together with a 1.8% revenue reduction related to our exit from the smoothie bowls category in March 2024. Volume/mix reflected volume growth for teas, protein shakes, broths, plant-based beverages, and fruit snacks.

Gross profit increased by $3.2 million, or 17.3%, to $21.8 million for the second quarter, compared to $18.6 million in the prior year period. As a percentage of revenues, gross profit margin was 12.8% compared to 13.2% in the second quarter of 2023. Adjusted gross margin¹ was 16.2% compared to 17.3% in the second quarter of 2023. The 110-basis point decrease in adjusted gross margin reflected the impact of incremental depreciation of new production equipment for capital expansion projects, together with certain manufacturing inefficiencies, partially offset by higher sales and production volumes that drove improved plant utilization.

Operating income¹ was $2.6 million, or 1.5% of revenue in the second quarter of 2024, compared to operating income of $1.2 million, or 0.8% of revenues in the second quarter of 2023. The increase in operating income reflected higher gross profit partially offset by higher variable compensation and an unrealized foreign exchange loss of $0.8 million on peso denominated restricted cash held in Mexico.

Loss from continuing operations was $3.8 million for the second quarter of 2024 compared with a loss of $11.7 million in the prior year period. Diluted loss per share from continuing operations attributable to common shareholders (after dividends and accretion on preferred stock) was $0.03 for the second quarter compared with a diluted loss per share of $0.10 in the prior year period.

Adjusted earnings¹ from continuing operations was $2.8 million or $0.02 per diluted share in the second quarter of 2024 compared to adjusted earnings from continuing operations of $1.1 million or $0.01 per diluted share in the second quarter of 2023.

Adjusted EBITDA¹ from continuing operations was $20.6 million in the second quarter of 2024 compared to $18.4 million in the second quarter of 2023.

Please refer to the discussion and table below under “Non-GAAP Measures”.

Balance Sheet and Cash Flow

As of June 29, 2024, SunOpta had total assets of $704.7 million and total debt of $303.1 million compared to total assets of $669.4 million and total debt of $263.2 million at year end fiscal 2023. During the two quarters ended June 29, 2024, cash provided in operating activities of continuing operations was $2.0 million compared to $17.5 million during the same period in 2023. The decrease in cash provided from operating activities mainly reflected increases in working capital due to the timing of accounts payable and increases in inventory supporting increased demand partially offset by increased operating income. Investing activities of continuing operations consumed $13.9 million of cash during the first two quarters of 2024 down from $32.6 million for the same period in the prior year, reflecting the completion of certain major capital projects including the construction of our new plant-based beverage facility in Midlothian, Texas.

2024 Outlook2

For fiscal 2024, the Company is raising its revenue outlook and continues to expect strong growth in revenue and adjusted EBITDA:

($ millions)

Prior Outlook

Revised Outlook

Revenue

$685 - 715

710 - 730

Adj. EBITDA

$88 - 92

88 - 92

Revenue growth

9% - 13%

13% - 16%

Adj. EBITDA growth

12% - 17%

12% - 17%

Conference Call

SunOpta plans to host a conference call at 5:30 P.M. Eastern time on Wednesday, August 7, 2024, to discuss the first quarter financial results. After prepared remarks, there will be a question and answer period. Investors interested in listening to the live webcast can access a link on SunOpta’s website at www.sunopta.com under the “Investor Relations” section or directly. A replay of the webcast will be archived and can be accessed for approximately 90 days on the Company’s website.

This call may be accessed with the toll free dial-in number (888) 440-4182 or international dial-in number (646) 960-0653 using Conference ID: 8338433.

1 See discussion of non-GAAP measures

2 The Company has included certain forward-looking statements about the future financial performance that include non-GAAP financial measures, including Adjusted EBITDA. These non–GAAP financial measures are derived by excluding certain amounts, expenses or income, from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts that are excluded from these non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period. We are unable to present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because management cannot reliably predict all of the necessary components of such GAAP measures. Historically, management has excluded the following items from certain of these non-GAAP measures, and such items may also be excluded in future periods and could be significant amounts.

• Expenses related to the acquisition or divestiture of a business, including business development costs, impairment of assets, integration costs, severance, retention costs and transaction costs;
• Start-up costs of new facilities and equipment;
• Charges associated with restructuring and cost saving initiatives, including but not limited to asset impairments, accelerated depreciation, severance costs and lease abandonment charges;
• Asset impairment charges and facility closure costs;
• Legal settlements or awards; and
• The tax effect of the above items.

About SunOpta Inc.

SunOpta (Nasdaq:STKL) (TSX:SOY) is an innovative and sustainable manufacturer fueling the future of food. With roots tracing back over 50 years, SunOpta drives growth for today’s leading brands by serving as a trusted innovation partner and value-added manufacturer, crafting organic, plant-based beverages, fruit snacks, nutritional beverages, broths and tea products sold through retail, club, foodservice and e-commerce channels. Alongside the company’s commitment to top brands, retailers and coffee shops, SunOpta also proudly produces its own brands, including Sown®, Dream®, and West LifeTM. For more information, visit www.sunopta.com and LinkedIn.

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 belief that we are well positioned to deliver significant long-term sustainable growth and value for shareholders, our continued confidence in the longer-term trajectory of our business and ability to deliver significant value to shareholders, our expectation for strong growth in revenue and Adjusted EBITDA for fiscal 2024 and our revised outlook for Revenue, Adjusted EBITDA , Revenue growth and Adjusted EBITDA growth for fiscal 2024. Generally, forward-looking statements do not relate strictly to historical or current facts and are typically accompanied by words such as “expect”, “believe”, “anticipate”, “estimates”, “can”, “will”, “target”, "should", "would", "plans", “continue”, "becoming", "intend", "confident", "may", "project", "intention", "might", "predict", “budget”, “forecast” or other similar terms and phrases intended to identify these forward-looking statements. Forward-looking statements are based on information available to the Company 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 including, but not limited to, the Company’s actual financial results; our exit from, and use of proceeds from the divestiture of the assets and liabilities of, Frozen Fruit, uninterrupted operations and service levels to our customers; current customer demand for the Company’s products; general economic conditions; continued consumer interest in health and wellness; the Company’s ability to maintain product pricing levels; planned facility and operational expansions, closures and divestitures; cost rationalization and product development initiatives; alternative potential uses for the Company’s capital resources; portfolio optimization and productivity efforts; the sustainability of the Company’s sales pipeline; the Company’s expectations regarding commodity pricing, margins and hedging results; procurement and logistics savings; freight lane cost reductions; yield and throughput enhancements; the cost of the frozen fruit recall; labor cost reductions; and the terms of our insurance policies. Whether actual timing and results will agree with expectations and predictions of the Company is subject to many risks and uncertainties including, but not limited to, potential loss of suppliers and customers as well as the possibility of supply chain, logistics and other disruptions; unexpected issues or delays with the Company’s structural improvements and automation investments; failure or inability to implement portfolio changes, process improvements, go-to-market improvements and process sustainability strategies in a timely manner; changes in the level of capital investment; local and global political and economic conditions; consumer spending patterns and changes in market trends; decreases in customer demand; delayed or unsuccessful product development efforts; potential product recalls; potential additional costs associated with the frozen fruit recall; working capital management; availability and pricing of raw materials and supplies; potential covenant breaches under the Company’s credit facilities; 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. The Company undertakes no obligation to publicly correct or update the forward-looking statements in this document, in other documents, or on its website to reflect future events or circumstances, except as may be required under applicable securities laws.

SunOpta Inc.

Consolidated Statements of Operations

For the quarters and two quarters ended June 29, 2024 and July 1, 2023

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars, except per share amounts)

 

 

 

 

 

 

Quarter ended

Two quarters ended

 

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

 

$

$

$

$

 

 

 

 

 

Revenues

170,995

 

141,163

 

353,843

 

296,132

 

 

 

 

 

 

Cost of goods sold

149,147

 

122,534

 

300,248

 

253,424

 

 

 

 

 

 

Gross profit

21,848

 

18,629

 

53,595

 

42,708

 

 

 

 

 

 

Selling, general and administrative expenses

17,784

 

16,957

 

40,772

 

40,026

 

Intangible asset amortization

446

 

446

 

892

 

892

 

Other income, net

(304

)

(62

)

(2,104

)

(20

)

Foreign exchange loss

1,310

 

92

 

1,259

 

81

 

 

 

 

 

 

Operating income

2,612

 

1,196

 

12,776

 

1,729

 

 

 

 

 

 

Interest expense, net

6,410

 

6,565

 

12,460

 

12,229

 

 

 

 

 

 

Earnings (loss) from continuing operations before income taxes

(3,798

)

(5,369

)

316

 

(10,500

)

 

 

 

 

 

Income tax expense (benefit)

(17

)

6,282

 

260

 

3,978

 

 

 

 

 

 

Earnings (loss) from continuing operations

(3,781

)

(11,651

)

56

 

(14,478

)

Net loss from discontinued operations

(897

)

(7,187

)

(2,314

)

(2,983

)

Net loss

(4,678

)

(18,838

)

(2,258

)

(17,461

)

 

 

 

 

 

Dividends and accretion on preferred stock

169

 

(422

)

(264

)

(1,126

)

 

 

 

 

 

Loss attributable to common shareholders

(4,509

)

(19,260

)

(2,522

)

(18,587

)

 

 

 

 

 

Basic and diluted loss per share

 

 

 

 

Loss from continuing operations attributable to common shareholders

(0.03

)

(0.10

)

(0.00

)

(0.14

)

Loss from discontinued operations

(0.01

)

(0.06

)

(0.02

)

(0.03

)

Loss attributable to common shareholders(1)

(0.04

)

(0.17

)

(0.02

)

(0.16

)

 

 

 

 

 

Weighted-average common shares outstanding (000s)

 

 

 

 

Basic

116,640

 

115,471

 

116,336

 

112,743

 

Diluted

116,640

 

115,471

 

116,336

 

112,743

 

 

 

 

 

 

(1) The sum of the individual per share amounts may not add due to rounding.

 

 

SunOpta Inc.

Consolidated Balance Sheets

As at June 29, 2024 and December 30, 2023

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars)

 

 

 

 

June 29, 2024

December 30, 2023

 

$

$

 

 

 

ASSETS

 

 

Current assets

 

 

Cash and cash equivalents

3,190

 

306

 

Accounts receivable

65,326

 

64,862

 

Inventories

98,484

 

83,215

 

Prepaid expenses and other current assets

17,429

 

25,235

 

Income taxes recoverable

4,048

 

4,717

 

Current assets held for sale

-

 

5,910

 

Total current assets

188,477

 

184,245

 

 

 

 

Restricted cash

8,227

 

8,448

 

Property, plant and equipment, net

346,909

 

319,898

 

Operating lease right-of-use assets

108,736

 

105,919

 

Intangible assets, net

20,969

 

21,861

 

Goodwill

3,998

 

3,998

 

Deferred income taxes

315

 

-

 

Other assets

27,067

 

25,055

 

 

 

 

Total assets

704,698

 

669,424

 

 

 

 

LIABILITIES

 

 

Current liabilities

 

 

Accounts payable and accrued liabilities

86,532

 

96,650

 

Notes payable

16,364

 

17,596

 

Current portion of long-term debt

29,306

 

24,346

 

Current portion of operating lease liabilities

16,400

 

15,808

 

Total current liabilities

148,602

 

154,400

 

 

 

 

Long-term debt

273,806

 

238,883

 

Operating lease liabilities

102,857

 

100,102

 

Deferred income taxes

325

 

505

 

Total liabilities

525,590

 

493,890

 

 

 

 

Series B-1 preferred stock

14,773

 

14,509

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

Common shares

469,719

 

464,169

 

Additional paid-in capital

27,816

 

27,534

 

Accumulated deficit

(335,209

)

(332,687

)

Accumulated other comprehensive income

2,009

 

2,009

 

Total shareholders' equity

164,335

 

161,025

 

 

 

 

Total liabilities and shareholders' equity

704,698

 

669,424

 

 

 

 

SunOpta Inc.

Consolidated Statements of Cash Flows

For the two quarters ended June 29, 2024 and July 1, 2023

(Unaudited)

(Expressed in thousands of U.S. dollars)

 

 

 

 

 

 

 

Two quarters ended

 

 

 

June 29, 2024

July 1, 2023

 

 

 

$

$

 

 

 

 

 

CASH PROVIDED BY (USED IN)

 

 

 

 

Operating activities

 

 

 

 

Net loss

 

 

(2,258

)

(17,461

)

Net loss from discontinued operations

 

 

(2,314

)

(2,983

)

Earnings (loss) from continuing operations

 

 

56

 

(14,478

)

Items not affecting cash:

 

 

 

 

Depreciation and amortization

 

 

17,686

 

14,890

 

Amortization of debt issuance costs

 

 

457

 

795

 

Deferred income taxes

 

 

(368

)

3,978

 

Stock-based compensation

 

 

7,742

 

5,921

 

Gain on sale of smoothie bowls product line

 

 

(1,800

)

-

 

Other

 

 

(193

)

506

 

Changes in operating assets and liabilities, net of divestitures

 

 

(21,567

)

5,856

 

Net cash provided by operating activities of continuing operations

 

 

2,013

 

17,468

 

Net cash provided by (used in) operating activities of discontinued operations

 

 

(2,310

)

2,277

 

Net cash provided by (used in) operating activities

 

 

(297

)

19,745

 

Investing activities

 

 

 

 

Additions to property, plant and equipment

 

 

(17,259

)

(32,556

)

Proceeds received from sale of smoothie bowls product line

 

 

3,336

 

-

 

Net cash used in investing activities of continuing operations

 

 

(13,923

)

(32,556

)

Net cash provided by (used in) investing activities of discontinued operations

 

 

6,300

 

(958

)

Net cash used in investing activities

 

 

(7,623

)

(33,514

)

Financing activities

 

 

 

 

Increase in borrowings under revolving credit facilities

 

 

26,350

 

6,511

 

Repayment of long-term debt

 

 

(12,320

)

(20,806

)

Borrowings of long-term debt

 

 

-

 

19,333

 

Proceeds from notes payable

 

 

70,477

 

35,095

 

Repayment of notes payable

 

 

(71,709

)

(15,368

)

Proceeds from the exercise of stock options and employee share purchases

 

 

749

 

576

 

Payment of withholding taxes on stock-based awards

 

 

(2,659

)

(9,007

)

Payment of cash dividends on preferred stock

 

 

(305

)

(1,123

)

Payment of share issuance costs

 

 

-

 

(123

)

Net cash provided by financing activities of continuing operations

 

 

10,583

 

15,088

 

Net cash used in financing activities of discontinued operations

 

 

-

 

(1,017

)

Net cash provided by financing activities

 

 

10,583

 

14,071

 

Increase in cash, cash equivalents and restricted cash in the period

 

 

2,663

 

302

 

Cash, cash equivalents and restricted cash, beginning of the period

 

 

8,754

 

679

 

Cash, cash equivalents and restricted cash, end of the period

 

 

11,417

 

981

 

Non-GAAP Measures

Adjusted Gross Margin

The Company uses a measure of adjusted gross margin to evaluate the underlying profitability of its revenue-generating activities within each reporting period. This non-GAAP measure excludes non-capitalizable start-up costs included in cost of goods sold that are incurred in connection with capital expansion projects. Start-up costs have had a significant impact on the comparability of reported gross margins, which may obscure trends in the Company’s margin performance. Additionally, the Company’s measure of adjusted gross margin may exclude other unusual items that are identified and evaluated on an individual basis, which due to their nature or size, the Company would not expect to occur as part of its normal business on a regular basis. The Company believes that disclosing this non-GAAP measure provides investors with a meaningful, consistent comparison of its profitability measure for the periods presented. However, the non-GAAP measure of adjusted gross margin should not be considered in isolation or as a substitute for gross margin calculated based on gross profit determined in accordance with U.S. GAAP.

The following table presents a reconciliation of adjusted gross margin from reported gross margin calculated in accordance with U.S. GAAP.

 

Quarter ended

Two quarters ended

 

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

Reported gross margin

12.8%

13.2%

15.1%

14.4%

Start-up costs(a)

2.2%

4.1%

1.2%

3.9%

Product withdrawal costs(b)

1.3%

-

0.6%

-

Adjusted gross margin

16.2%

17.3%

16.9%

18.3%

 

 

 

 

 

Note: percentages may not add due to rounding.

 

 

(a)

Represents incremental direct costs incurred in connection with plant expansion projects and new product introductions before the project or product reaches normal production levels, including costs for the hiring and training of additional personnel, fees for outside services, travel costs, and plant- and production-related expenses. For the second quarter and first two quarters of 2024, start-up costs of $3.8 million and $4.1 million, respectively, recorded in costs of goods sold include haul-off charges for excess wastewater produced at our plant-based beverage facility in Midlothian, Texas, as we continue to scale up production, together with start-up costs for a new high-speed edge line and short-term incremental investments to accelerate process improvements. In addition, start-up costs for the second quarter and first two quarters of 2024, include the ramp-up of oat-base extraction operations at our Modesto, California, facility. For the second quarter and first two quarters of 2023, start-up costs of $5.8 million and 11.6 million, respectively, included in cost of goods sold mainly related to the initial ramp-up of production at our Midlothian, Texas, facility, and the addition of a high-speed packaging line at our fruit snacks facility in Omak, Washington.

 

 

(b)

In the second quarter of 2024, we conducted a voluntary withdrawal from customers of certain batches of aseptically-packaged products that may have the potential for non-pathogenic microbial contamination. None of the withdrawn product made it into the consumer marketplace. For the second quarter, we recognized direct costs related to the withdrawal of $2.1 million, net of expected insurance recoveries, which included finished goods inventory write-offs, product return and logistic costs, and costs related to investigative and remedial actions taken in response to the withdrawal, which corrective actions have been completed. These charges are incremental to our normal course reserves and have had a significant unfavorable impact on our reported gross profit and gross margin for the second quarter of 2024.

Adjusted Earnings and Adjusted EBITDA from continuing operations

In addition to reporting financial results in accordance with U.S. GAAP, the Company provides additional information about its operating results regarding adjusted earnings and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) from continuing operations, which are not measures in accordance with U.S. GAAP. The Company believes that adjusted earnings and adjusted EBITDA from continuing operations assist investors in comparing performance across reporting periods on a consistent basis by excluding items that management believes are not indicative of the Company’s operating performance. These non-GAAP measures are presented solely to allow investors to more fully assess the Company’s results of operations and should not be considered in isolation of, or as substitutes for, an analysis of the Company’s results as reported under U.S. GAAP.

The following are tabular presentations of adjusted earnings and adjusted EBITDA from continuing operations, including a reconciliation from earnings (loss) from continuing operations, which the Company believes to be the most directly comparable U.S. GAAP financial measure.

 

June 29, 2024

July 1, 2023

 

 

Per Share

 

Per Share

For the quarter ended

$

$

$

$

 

 

 

 

 

Loss from continuing operations

(3,781

)

 

(11,651

)

 

Dividends and accretion on preferred stock

169

 

 

(422

)

 

Loss from continuing operations attributable to common

 

 

 

 

shareholders

(3,612

)

(0.03

)

(12,073

)

(0.10

)

Adjusted for:

 

 

 

 

Start-up costs(a)

3,774

 

 

6,697

 

 

Product withdrawal costs(b)

2,145

 

 

-

 

 

Unrealized foreign exchange loss on restricted cash(c)

838

 

 

-

 

 

Business development costs(d)

-

 

 

731

 

 

Other(e)

(304

)

 

(62

)

 

Net income tax on adjusting items(f)

-

 

 

1,873

 

 

Change in valuation allowance for deferred tax assets(g)

-

 

 

3,978

 

 

Adjusted earnings from continuing operations

2,841

 

0.02

 

1,144

 

0.01

 

 

June 29, 2024

July 1, 2023

For the quarter ended

$

$

Loss from continuing operations

(3,781

)

(11,651

)

Income tax expense (benefit)

(17

)

6,282

 

Interest expense, net

6,410

 

6,565

 

Depreciation and amortization

9,110

 

7,840

 

Stock-based compensation

2,443

 

2,029

 

Adjusted for:

 

 

Start-up costs(a)

3,774

 

6,697

 

Product withdrawal costs(b)

2,145

 

-

 

Unrealized foreign exchange loss on restricted cash(c)

838

 

-

 

Business development costs(d)

-

 

731

 

Other(e)

(304

)

(62

)

Adjusted EBITDA from continuing operations

20,618

 

18,431

 

(a)

Refer to footnote (a) to the Adjusted Gross Margin table above for a description of start-up costs included in cost of goods sold. Additionally, for the second quarter of 2023, start-up costs included $0.9 million of professional fees related to productivity initiatives, which are recorded in SG&A expenses.

 

 

(b)

Refer to footnote (b) to the Adjusted Gross Margin table above for a description of product withdrawal costs included in cost of goods sold.

 

 

(c)

For the second quarter of 2024, reflects an unrealized foreign exchange loss associated with peso-denominated bank accounts in Mexico that were retained following the divestiture of our frozen fruit business (“Frozen Fruit”) in October 2023. These accounts are currently subject to a judicial hold in connection with a litigation matter.

 

 

(d)

For the second quarter of 2023, business development costs related to the divestiture of Frozen Fruit and are recorded in SG&A expenses.

 

 

(e)

For the second quarter of 2024, other reflects gains on the settlement of certain legal matters.

 

 

(f)

Reflects the tax effect of the adjustments to earnings calculated based on the statutory tax rates applicable in the tax jurisdiction of the underlying adjustment, net of deferred tax valuation allowances.

 

 

(g)

For the second quarter of 2023, reflects an increase to the valuation allowance for U.S. deferred tax assets based on an assessment of the future realizability of the related tax benefits.

 

June 29, 2024

July 1, 2023

 

 

Per Share

 

Per Share

For the two quarters ended

$

$

$

$

 

 

 

 

 

Earnings (loss) from continuing operations

56

 

 

(14,478

)

 

Dividends and accretion on preferred stock

(264

)

 

(1,126

)

 

Loss from continuing operations attributable to common

 

 

 

 

shareholders

(208

)

(0.00

)

(15,604

)

(0.14

)

Adjusted for:

 

 

 

 

Start-up costs(a)

4,101

 

 

13,122

 

 

Product withdrawal costs(b)

2,145

 

 

-

 

 

Unrealized foreign exchange loss on restricted cash(c)

838

 

 

-

 

 

Business development costs(d)

-

 

 

1,462

 

 

Gain on sale of smoothie bowls product line(e)

(1,800

)

 

-

 

 

Other(f)

(304

)

 

(20

)

 

Change in valuation allowance for deferred tax assets(g)

-

 

 

3,978

 

 

Adjusted earnings from continuing operations

4,772

 

0.04

 

2,938

 

0.03

 

 

June 29, 2024

July 1, 2023

For the two quarters ended

$

$

Earnings (loss) from continuing operations

56

 

(14,478

)

Income tax expense

260

 

3,978

 

Interest expense, net

12,460

 

12,229

 

Depreciation and amortization

17,686

 

14,890

 

Stock-based compensation

7,742

 

5,921

 

Adjusted for:

 

 

Start-up costs(a)

4,101

 

13,122

 

Product withdrawal costs(b)

2,145

 

-

 

Unrealized foreign exchange loss on restricted cash(c)

838

 

-

 

Business development costs(d)

-

 

1,462

 

Gain on sale of smoothie bowls product line(e)

(1,800

)

-

 

Other(f)

(304

)

(20

)

Adjusted EBITDA from continuing operations

43,184

 

37,104

 

(a)

Refer to footnote (a) to the Adjusted Gross Margin table above for a description of start-up costs included in cost of goods sold. Additionally, for the first two quarters of 2023, start-up costs included $1.5 million of professional fees related to productivity initiatives, which are recorded in SG&A expenses.

 

 

(b)

Refer to footnote (b) to the Adjusted Gross Margin table above for a description of product withdrawal costs included in cost of goods sold.

 

 

(c)

For the first two quarters of 2024, reflects an unrealized foreign exchange loss associated with peso-denominated bank accounts in Mexico that were retained following the divestiture of Frozen Fruit. These accounts are currently subject to a judicial hold in connection with a litigation matter.

 

 

(d)

For the first two quarters of 2023, business development costs related to the divestiture of Frozen Fruit and are recorded in SG&A expenses.

 

 

(e)

For the first two quarters of 2024, reflects the pre-tax gain on sale of the smoothie bowls product line, which is recorded in other income.

 

 

(f)

For the first two quarters of 2024, other reflects gains on the settlement of certain legal matters.

 

 

(g)

For the first two quarters of 2023, reflects an increase to the valuation allowance for U.S. deferred tax assets based on an assessment of the future realizability of the related tax benefits.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240807114548/en/

Investor Relations: Reed Anderson ICR 646-277-1260 reed.anderson@icrinc.com

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