SunOpta's Fourth Quarter: A Sip of Growth Amidst the Challenges

Toronto, February 27, 2020 - SunOpta Inc. (Nasdaq: STKL) reports its fourth-quarter fiscal 2019 earnings, showcasing adjusted EBITDA growth as it navigates a complex landscape of challenges and opportunities.

Financial Snapshot: Adjusted EBITDA Takes Center Stage

SunOpta's latest earnings reveal a tale of resilience, with adjusted EBITDA doubling year-over-year when excluding disposed operations. For the fourth quarter, adjusted EBITDA reached $16.4 million, representing a notable 5.5% of revenues. This improvement is a welcome surprise, especially when juxtaposed against the backdrop of a revenue decline to $295.8 million from $320.5 million in Q4 2018.

Revenue Forecasts and the Journey Ahead

The revenue forecast may sound a bit less optimistic at first glance. A decrease of 7.7% year-over-year raises eyebrows, but a closer look reveals that when adjusted for disposed operations and other factors, revenues actually grew by 0.8%. This nuanced perspective is crucial for investors, especially as the EPS consensus sometimes fails to capture the underlying dynamics of a company's operational shifts.

Losses Narrowed: A Silver Lining?

While the loss attributable to common shareholders shrank to $7.6 million, or $0.09 per share, from a staggering $99 million, or $1.13 per share, in the previous year, it highlights a significant turnaround. Adjusted losses also improved, with the fourth quarter showing an adjusted loss of $5.6 million compared to $9.3 million in Q4 2018. Investors should take note: a trend towards narrowing losses might be a precursor to profitability down the line.

Strategic Shifts and Operational Realignment

SunOpta's restructuring efforts have manifested in a new operational structure, splitting its offerings into distinct segments?Plant-Based Foods and Beverages, and Fruit-Based Foods and Beverages. This realignment aims to better capture synergies and streamline operations, reflecting a forward-thinking approach amidst industry volatility. The company is clearly hedging its bets on plant-based foods, which are experiencing a surge in consumer demand.

Looking Ahead: Industry Trends and Company Prospects

As we glance into the future, SunOpta's management remains optimistic. CEO Joe Ennen pointed to strong industry tailwinds for plant-based products, suggesting that the company could leverage these trends to optimize margins and drive profitability. The recent extension of their $360 million revolving asset-based credit facility is not just a safety net; it also positions the company to seize growth opportunities, ensuring it can weather potential storms.