Plant-based Q4 revenue increased 9.2%,
excluding the extra week in the year-earlier period
Fiscal year 2021 Plant-based revenue
increased 13.4% over prior year
Strong sequential revenue and gross profit
growth expected in Q1, 2022
SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL)
(TSX:SOY), a leading healthy food and beverage company focused on
plant-based foods and beverages and fruit-based foods and
beverages, today announced financial results for the fourth quarter
and fiscal year ended January 1, 2022.
All amounts are expressed in U.S. dollars and results are
reported in accordance with U.S. GAAP, except where specifically
noted.
Fourth quarter 2021 highlights:
- Revenues of $204.2 million for the fourth quarter of 2021
decreased 0.6% reflecting 5.8% growth in plant-based offset by a
9.4% decline in fruit-based. Adjusting for the 53rd week in fiscal
2020, consolidated revenue growth was 2.5%.
- Gross margin decreased 650 basis points to 9.0% from 15.5% in
the prior year, primarily reflecting production shortfalls and
yield factors stemming from labor productivity and raw material
challenges.
- Loss from continuing operations was $1.9 million compared to a
loss from continuing operations of $34.3 million in the prior
year.
- Adjusted loss¹ attributable to common shareholders was $1.0
million or $0.01 per diluted common share in the fourth quarter of
2021, compared to a loss of $2.5 million or $0.03 per diluted
common share in the fourth quarter of 2020.
- Adjusted EBITDA¹ of $10.7 million, or 5.2% of revenues for the
fourth quarter of 2021, was down 48.2% versus $20.6 million or
10.0% of revenues in the fourth quarter of 2020.
“Fourth quarter results were hampered by issues stemming from
challenges in the macro environment. We had unexpected and
therefore unrecovered inflation, yield related losses in fruit and
higher costs in our plants without a corresponding increase in
production. While staffing levels recovered in the fourth quarter,
we were focused on training 90+ new employees, incurring all the
costs but lacking the corresponding production volume. The good
news is that we are seeing production quickly returning to more
normal levels in the first quarter of 2022. In addition to labor
productivity initiatives, pricing actions and our capacity
expansion in Allentown all point to a solid recovery in
profitability from our fourth quarter of 2021 levels, starting in
the first quarter of 2022. Plant-based revenue rose 9.2%, excluding
the extra week in the year-earlier period. Consumer demand remains
brisk, and we continued to prioritize servicing our customers,
incurring unplanned overtime and additional freight to fulfill
orders, which negatively impacted Q4 profitability,” said Joe
Ennen, Chief Executive Officer. “We also continued to gain from
significant tailwinds stemming from our strong innovation pipeline
especially in oat-based offerings where we realized $80 million of
revenue in 2021. While we are disappointed with our fourth quarter
results, we remain incredibly confident in our long-term value
proposition. We are making great strides standing up our 4th
aseptic plant in Midlothian, TX and early conversations with
customers give us confidence in the acceleration in both revenue
and profit growth it will enable in 2023. Strategically and
competitively, we are well positioned to double our plant-based
revenue and profits in the coming years.”
Fourth Quarter 2021 Results
Revenues of $204.2 million for the fourth quarter of 2021 were
down 0.6% compared to the fourth quarter of 2020 as 5.8% growth in
Plant-Based Foods and Beverages was offset by a 9.4% decrease in
Fruit-Based Foods and Beverages.
The Plant-Based Foods and Beverages segment generated revenues
of $125.1 million during the fourth quarter of 2021, an increase of
5.8% compared to $118.2 million in the fourth quarter of 2020.
Oat-based offerings remained a primary growth driver along with
revenue from Dream and WestSoy, which were acquired in April, 2021.
We also experienced increased demand from foodservice customers and
higher sunflower volumes. Partially offsetting these factors was
softer volume for certain other non-dairy beverages and everyday
broths. Due to supply chain disruptions, we were unable to meet
some customer demand for our plant-based products in the quarter,
and transport shortages prevented certain customers from picking up
their orders prior to year-end.
The Fruit-Based Foods and Beverages segment generated revenues
of $79.2 million during the fourth quarter of 2021, a decrease of
9.4% compared to $87.4 million in the fourth quarter of 2020. The
decline was driven by lower volumes of retail frozen fruit due to
planned rationalization of SKUs and customers, and the impact of
supply constraints for certain fruit varieties on blended frozen
fruit offerings. Pass-through pricing actions provided a partial
offset along with volume gains in fruit snacks and increased
foodservice demand.
Gross profit was $18.4 million for the fourth quarter, a
decrease of $13.4 million compared to $31.8 million in the prior
year period. As a percentage of revenues, gross profit margin was
9.0% in the fourth quarter of 2021 compared to 15.5% in the fourth
quarter of 2020, a decrease of 650 basis points. The Plant-Based
Foods and Beverages segment accounted for $8.4 million of the
decrease in gross profit, reflecting the impact of labor factors
stemming from turnover and wage incentives to retain employees,
inflationary increases in transportation and utility rates, higher
depreciation and lower production volumes. Gross profit in the
Fruit-Based Foods and Beverages segment decreased by $5.0 million
due to decreased revenue and higher fruit inventory yield losses
due to excess spoilage during handling.
Segment operating loss¹ was $1.6 million, or 0.8% of revenues in
the fourth quarter of 2021, compared to segment operating income of
$6.8 million, or 3.3% of revenues in the fourth quarter of 2020.
The decrease in segment operating income was due to lower gross
profit, year-over-year unfavorable foreign exchange impact related
to the remeasurement of our Mexican operations into U.S. dollars
and lower gains on Mexican peso hedging activities, and incremental
amortization expense related to Dream and WestSoy, partially offset
by lower SG&A expense.
Adjusted EBITDA¹ was $10.7 million or 5.2% of revenues in the
fourth quarter of 2021, compared to $20.6 million or 10.0% of
revenues in the fourth quarter of 2020.
Loss from continuing operations attributable to common
shareholders for the fourth quarter of 2021 was $2.6 million, or
$0.02 per diluted common share, compared to a loss of $37.2
million, or $0.41 per diluted common share during the fourth
quarter of 2020.
Adjusted loss¹ in the fourth quarter of 2021 was $1.0 million or
$0.01 per common share, compared to an adjusted loss of $2.5
million or $0.03 per common share in the fourth quarter of
2020.
Please refer to the discussion and table below under “Non-GAAP
Measures”.
Balance Sheet and Cash Flow
As of January 1, 2022, SunOpta had total assets of $755.1
million and total debt of $224.6 million compared to total assets
of $585.6 million and total debt of $69.7 million a year earlier
reflecting investments to accelerate strong growth in Plant-Based
Foods and Beverages and an increase in inventory as we rebuilt our
fruit inventory from the COVID depleted levels of 2020. During the
fourth quarter of 2021, cash provided by operating activities was
$19.7 million from continuing operations compared to cash provided
by operating activities of $19.8 million during the fourth quarter
of 2020. Investing activities from continuing operations consumed
$23.3 million of cash during the fourth quarter of 2021 versus
$11.2 million in the prior year, primarily due to capacity
expansion initiatives.
2022 Outlook2
Consolidated revenue range: $890 million - $930 million
Consolidated adjusted EBITDA1 range: $67 million -$75
million
Conference Call
SunOpta plans to host a conference call at 8:30 A.M. Eastern
time on Thursday, February 24, 2022, to discuss the fourth quarter
financial results. After opening remarks, there will be a question
and answer period. Investors interested in listening the live
webcast can access a link on SunOpta's website at www.sunopta.com
under the "Investor Relations" section or directly here. 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 dial (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 Inc. is a leading company focused on the development and
manufacture of plant-based and fruit-based food and beverage
products.
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 profitability will recover starting in Q1 2022, our 4th
aseptic plant will enable accelerated revenue and profit growth in
2023 and plant-based revenue and profits will double in the coming
years, as well as our anticipated consolidated revenue and adjusted
EBITDA ranges for fiscal 2022. Generally, forward-looking
statements do not relate strictly to historical or current facts
and are typically accompanied by words such as “expected”, “point
to”, “continued”, “well-positioned”, “believe”, “anticipate”,
“estimates”, “can”, “will”, “target”, "should", "would", "plans",
"becoming", "intend", "confident", "may", "project", "potential",
"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; the factors
identified in footnote 2 above, uninterrupted operations and
service levels to our customers during COVID-19; current customer
demand for the Company’s products, particularly our plant-based
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; improved availability and field prices
for fruit; procurement and logistics savings; freight lane cost
reductions; yield and throughput enhancements; and labor cost
reductions. 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 supply chain, logistics
and other disruptions resulting from or related to COVID-19;
unexpected issues or delays with completion of our 4th aseptic
plant or 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; 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 years ended January
1, 2022 and January 2, 2021
(Unaudited)
(All dollar amounts expressed in thousands
of U.S. dollars, except per share amounts)
Quarter ended
Year ended
January 1, 2022
January 2, 2021
January 1, 2022
January 2, 2021
$
$
$
$
Revenues
204,232
205,556
812,624
789,213
Cost of goods sold
185,828
173,749
714,539
680,136
Gross profit
18,404
31,807
98,085
109,077
Selling, general and administrative
expenses
16,793
25,590
76,874
89,463
Intangible asset amortization
2,612
2,194
9,950
8,946
Other expense, net
1,442
22,604
8,890
23,393
Foreign exchange loss (gain)
579
(2,790
)
1,112
(1,640
)
Earnings (loss) from continuing
operations before the following
(3,022
)
(15,791
)
1,259
(11,085
)
Interest expense, net
2,624
7,605
8,769
30,042
Loss on retirement of debt
-
8,915
-
8,915
Loss from continuing operations before
income taxes
(5,646
)
(32,311
)
(7,510
)
(50,042
)
Income tax expense (benefit)
(3,782
)
2,019
(3,366
)
(2,740
)
Loss from continuing operations
(1,864
)
(34,330
)
(4,144
)
(47,302
)
Earnings from discontinued operations
-
107,391
-
124,820
Net earnings (loss)
(1,864
)
73,061
(4,144
)
77,518
Dividends and accretion on preferred
stock
(752
)
(2,855
)
(4,197
)
(10,328
)
Earnings (loss) attributable to common
shareholders
(2,616
)
70,206
(8,341
)
67,190
Basic and diluted earnings (loss) per
share
From continuing operations
(0.02
)
(0.41
)
(0.08
)
(0.65
)
From discontinued operations
-
1.19
-
1.40
Basic and diluted earnings (loss) per
share
(0.02
)
0.78
(0.08
)
0.75
Weighted-average common shares
outstanding (000s)
Basic
107,341
89,991
104,098
89,234
Diluted
107,341
89,991
104,098
89,234
SunOpta Inc.
Consolidated Balance Sheets
As at January 1, 2022 and January 2,
2021
(Unaudited)
(All dollar amounts expressed in thousands
of U.S. dollars)
January 1, 2022
January 2, 2021
$
$
ASSETS
Current assets
Cash and cash equivalents
227
251
Accounts receivable
84,702
72,724
Inventories
220,143
147,748
Prepaid expenses and other current
assets
16,638
21,665
Current income taxes recoverable
8,259
6,935
Total current assets
329,969
249,323
Property, plant and equipment,
net
219,537
158,048
Operating lease right-of-use
assets
47,245
35,172
Intangible assets, net
148,440
133,317
Goodwill
3,998
3,998
Other assets
5,930
5,757
Total assets
755,119
585,615
LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities
121,430
118,592
Income taxes payable
-
1,431
Current portion of long-term debt
9,760
3,478
Current portion of operating lease
liabilities
12,203
12,750
Current portion of long-term
liabilities
-
200
Total current liabilities
143,393
136,451
Long-term debt
214,843
66,245
Operating lease liabilities
39,028
24,582
Long-term liabilities
2,241
-
Deferred income taxes
22,485
25,408
Total liabilities
421,990
252,686
Series A Preferred Stock
-
87,305
Series B-1 Preferred Stock
28,145
27,595
EQUITY
SunOpta Inc. shareholders’
equity
Common shares
436,463
326,545
Additional paid-in capital
23,240
37,862
Accumulated deficit
(156,082
)
(147,741
)
Accumulated other comprehensive income
1,363
1,363
Total equity
304,984
218,029
Total equity and liabilities
755,119
585,615
SunOpta Inc.
Consolidated Statements of Cash Flows
For the quarters and years ended January
1, 2022 and January 2, 2021
(Unaudited)
(Expressed in thousands of U.S.
dollars)
Quarter ended
Year ended
January 1, 2022
January 2, 2021
January 1, 2022
January 2, 2021
$
$
$
$
CASH PROVIDED BY (USED IN)
Operating activities
Net earnings (loss)
(1,864
)
73,061
(4,144
)
77,518
Earnings from discontinued operations
-
107,391
-
124,820
Loss from continuing operations
(1,864
)
(34,330
)
(4,144
)
(47,302
)
Items not affecting cash:
Depreciation and amortization
8,851
7,415
34,641
30,308
Amortization of debt issuance costs
360
1,055
1,353
4,078
Deferred income taxes
(2,744
)
2,043
(2,923
)
7,553
Stock-based compensation
(493
)
4,251
9,100
11,676
Impairment of long-lived assets
244
7,803
3,206
7,803
Loss on foreign currency forward
contract
-
12,658
-
12,658
Loss on retirement of debt
-
8,915
-
8,915
Other
1,594
(368
)
1,090
(157
)
Changes in operating assets and
liabilities, net of businesses sold
13,717
10,397
(63,755
)
17,131
Net cash provided by (used in) operating
activities of continuing operations
19,665
19,839
(21,432
)
52,663
Net cash provided by operating activities
of discontinued operations
-
14,282
-
39,033
Net cash provided by (used in) operating
activities
19,665
34,121
(21,432
)
91,696
Investing activities
Additions to property, plant and
equipment
(23,308
)
1,473
(58,297
)
(24,754
)
Additions to intangible assets
-
-
(25,073
)
-
Proceeds from sale of assets
-
-
2,300
-
Cash settlement of foreign currency
forward contract
-
(12,658
)
-
(12,658
)
Other
-
-
-
41
Net cash used in investing activities of
continuing operations
(23,308
)
(11,185
)
(81,070
)
(37,371
)
Net cash provided by (used in) investing
activities of discontinued operations
-
363,496
(13,380
)
361,889
Net cash provided by (used in) investing
activities
(23,308
)
352,311
(94,450
)
324,518
Financing activities
Increase (decrease) under revolving credit
facilities
(17,161
)
(149,518
)
106,016
(175,990
)
Borrowings of long-term debt
23,420
5,179
32,800
5,179
Repayment of long-term debt, including
premium paid
(1,882
)
(229,729
)
(13,671
)
(231,431
)
Payment of debt issuance costs
(9
)
(2,397
)
(2,561
)
(4,888
)
Proceeds from the exercise of stock
options and employee share purchases
232
613
7,726
2,048
Payment of withholding taxes on
stock-based awards
(405
)
(1,704
)
(8,718
)
(4,080
)
Payment of cash dividends on preferred
stock
(609
)
(2,378
)
(5,247
)
(4,078
)
Payment of share issuance costs
-
-
(287
)
-
Proceeds on issuance of preferred stock,
net of issuance costs
-
-
-
26,804
Other
-
(181
)
-
(185
)
Net cash provided by (used in) financing
activities of continuing operations
3,586
(380,115
)
116,058
(386,621
)
Net cash used in financing activities of
discontinued operations
-
(7,216
)
(200
)
(31,063
)
Net cash provided by (used in) financing
activities
3,586
(387,331
)
115,858
(417,684
)
Decrease in cash and cash equivalents
during the year
(57
)
(899
)
(24
)
(1,470
)
Cash and cash equivalents of discontinued
operations:
Balance at the beginning of the period
-
678
-
1,370
Foreign exchange gain on cash and cash
equivalents
-
212
-
223
Cash and cash equivalent, beginning of the
period
284
260
251
128
Cash and cash equivalents, end of the
period
227
251
227
251
SunOpta Inc.
Segmented Information
For the quarters and years ended January
1, 2022 and January 2, 2021
Unaudited
(Expressed in thousands of U.S.
dollars)
Quarter ended
Year ended
January 1, 2022
January 2, 2021
January 1, 2022
January 2, 2021
$
$
$
$
Segment revenues from external
customers:
Plant-Based Foods and Beverages
125,074
118,179
470,754
415,164
Fruit-Based Foods and Beverages
79,158
87,377
341,870
374,049
Total segment revenues from external
customers
204,232
205,556
812,624
789,213
Segment gross profit:
Plant-Based Foods and Beverages
14,585
22,980
76,336
80,497
Fruit-Based Foods and Beverages
3,819
8,827
21,749
28,580
Total segment gross profit
18,404
31,807
98,085
109,077
Segment operating income
(loss):
Plant-Based Foods and Beverages
6,967
13,324
36,981
50,780
Fruit-Based Foods and Beverages
(2,462
)
1,185
(9,320
)
(7,321
)
Corporate Services
(6,085
)
(7,696
)
(17,512
)
(31,151
)
Total segment operating income (loss)
(1,580
)
6,813
10,149
12,308
Segment gross profit
percentage:
Plant-Based Foods and Beverages
11.7
%
19.4
%
16.2
%
19.4
%
Fruit-Based Foods and Beverages
4.8
%
10.1
%
6.4
%
7.6
%
Total segment gross profit percentage
9.0
%
15.5
%
12.1
%
13.8
%
Segment operating income (loss)
percentage:
Plant-Based Foods and Beverages
5.6
%
11.3
%
7.9
%
12.2
%
Fruit-Based Foods and Beverages
-3.1
%
1.4
%
-2.7
%
-2.0
%
Total segment operating income (loss)
percentage
-0.8
%
3.3
%
1.2
%
1.6
%
Non-GAAP Measures
In addition to reporting financial results in accordance with
U.S. GAAP, the Company provides additional information about its
operating results regarding segment operating income, adjusted
earnings and adjusted earnings before interest, taxes, depreciation
and amortization (“Adjusted EBITDA”), which are not measures in
accordance with U.S. GAAP. The Company believes that segment
operating income, adjusted earnings and adjusted EBITDA assist
investors in comparing performance across reporting periods on a
consistent basis by excluding items that management believes are
not indicative of its operating performance. The non-GAAP measures
of segment operating income, adjusted earnings and adjusted EBITDA
should not be considered in isolation or as a substitute for
performance measures calculated in accordance with U.S. GAAP.
In order to evaluate its results of operations, the Company uses
certain other non-GAAP measures that it believes enhance an
investor’s ability to derive meaningful period-over-period
comparisons and trends from the results of operations. In
particular, the Company evaluates its revenues on a basis that
excludes the effects of fluctuations in commodity pricing and the
impacts of acquisitions and divestitures. In addition, the Company
excludes specific items from its reported results that due to their
nature or size, it does not expect to occur as part of its normal
business on a regular basis. These items are identified in the
tables below. 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.
Adjusted Earnings/Loss
When assessing its financial performance, the Company uses an
internal measure that excludes charges and gains that it believes
are not reflective of normal operations. This information is
provided to allow investors to make meaningful comparisons of the
Company’s operating performance between periods and to view the
Company’s business from the same perspective as the Company’s
management. Adjusted earnings/loss and adjusted earnings/loss per
diluted share should not be considered in isolation or as a
substitute for performance measures calculated in accordance with
U.S. GAAP.
The following is a tabular presentation of adjusted
earnings/loss and adjusted earnings/loss per diluted share,
including a reconciliation from earnings/loss from continuing
operations, which the Company believes to be the most directly
comparable U.S. GAAP financial measure.
January 1, 2022
January 2, 2021
Per Share
Per Share
For the quarter ended
$
$
$
$
Loss from continuing operations
(1,864
)
(34,330
)
Dividends and accretion on preferred
stock
(752
)
(2,855
)
Loss from continuing operations
attributable to common shareholders
(2,616
)
(0.02
)
(37,185
)
(0.41
)
Adjusted for:
Business development costs(a)
2,641
-
Long-lived asset impairments and facility
closure costs(b)
1,063
2,676
Costs related to exit from fruit
ingredient processing facility(c)
902
-
Start-up costs(d)
745
1,546
Loss on foreign currency forward
contract(e)
-
12,658
Loss on retirement of debt(f)
-
8,915
Restructuring costs(g)
-
8,548
Other(h)
(26
)
(732
)
Net income tax effect(i)
(3,686
)
1,118
Adjusted loss
(977
)
(0.01
)
(2,456
)
(0.03
)
(a)
Represents third-party costs associated
with business development activities, including costs related to
the evaluation, execution, and integration of external acquisitions
and divestitures, and internal expansion projects and other
strategic initiatives. For the fourth quarter of 2021, these costs
included the transition and integration of the acquired Dream and
WestSoy brands and the exploration of other potential strategic
opportunities, which were recorded in cost of goods sold ($0.5
million) and SG&A expenses ($2.0 million), as well as the
assessment of post-closing adjustments related to the divestiture
of Tradin Organic, which were recorded in other expense ($0.1
million).
(b)
For the fourth quarter of 2021, mainly
reflects costs related to the relocation of our executive office
and innovation center into Eden Prairie, Minnesota, and the
vacating of our former leased facility, which were recorded in
other expense. For the fourth quarter of 2020, reflects the
write-down of owned and right-of-use assets related to the
consolidation of roasting lines at our Crookston, Minnesota,
facility, which was recorded in other expense.
(c)
For the fourth quarter of 2021, reflects
closure costs related to the exit from our fruit ingredient
processing facility, including inventory write-offs of $0.6 million
and equipment relocation costs of $0.3 million, which were recorded
in cost of goods sold and other expense, respectively.
(d)
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 fourth quarters of
2021 and 2020, start-up costs related to expansion projects within
our plant-based beverage and ingredient operations, which were
recorded in cost of goods sold.
(e)
For the fourth quarter of 2020, reflects a
loss on a foreign currency forward contract to economically hedge
the cash consideration from the sale of Tradin Organic, which was
recorded in other expense.
(f)
For the fourth quarter of 2020, reflects
the premium paid ($5.3 million) and write-off of unamortized debt
issuance costs ($3.6 million) on the redemption and retirement of
our second lien notes, which were recorded in non-operating
expenses.
(g)
For the fourth quarter of 2020, reflects
professional fees of $0.5 million recorded in SG&A expenses;
and long-lived asset impairment and facility closure costs of $6.4
million mainly related to the exit from our Santa Maria,
California, frozen fruit processing facility, together with
employee termination costs of $1.6 million, which were recorded in
other expense.
(h)
For the fourth quarter of 2020, other
includes a reversal of previously accrued costs related to the
withdrawal of certain consumer-packaged products, which was
recorded in other income/expense.
(i)
Reflects the tax effect of the preceding
adjustments to earnings calculated based on our estimated annual
effective tax rate.
January 1, 2022
January 2, 2021
Per Share
Per Share
For the years ended
$
$
$
$
Loss from continuing operations
(4,144
)
(47,302
)
Dividends and accretion on preferred
stock
(4,197
)
(10,328
)
Loss from continuing operations
attributable to common shareholders
(8,341
)
(0.08
)
(57,630
)
(0.65
)
Adjusted for:
Business development costs(a)
6,209
-
Costs related to exit from fruit
ingredient processing facility(b)
5,504
-
Restructuring costs(c)
1,432
9,897
Long-lived asset impairments and facility
closure costs(d)
1,063
2,676
Start-up costs(e)
745
1,883
Workforce reduction charges(f)
499
-
Loss on foreign currency forward
contract(g)
-
12,658
Loss on retirement of debt(h)
-
8,915
Other(i)
261
(189
)
Net income tax effect(j)
(5,827
)
255
Adjusted earnings (loss)
1,545
0.01
(21,535
)
(0.24
)
(a)
Represents third-party costs associated
with business development activities, including costs related to
the evaluation, execution, and integration of external acquisitions
and divestitures, and internal expansion projects and other
strategic initiatives. For 2021, these costs included the
transition and integration of the acquired Dream and WestSoy
brands, project development activities related to our new
plant-based beverage facility under construction in Texas, and the
exploration of other potential strategic opportunities, which were
recorded in cost of goods sold ($0.6 million) and SG&A expenses
($4.9 million), as well as the assessment of post-closing
adjustments related to the divestiture of Tradin Organic, which
were recorded in other expense ($0.7 million).
(b)
For 2021, reflects closure costs related
to the exit from our fruit ingredient processing facility,
including long-lived asset impairment charges ($3.0 million),
equipment relocation costs ($0.8 million) and employee termination
costs ($1.1 million) recorded in other expense, and inventory
write-offs of $0.6 million recorded in cost of goods sold.
(c)
For 2021, represents costs to complete the
exit from our Santa Maria, California, frozen fruit processing
facility, which were recorded in other expense. For 2020, reflects
professional fees of $1.0 million and employee retention costs of
$0.6 million recorded in SG&A expenses; and long-lived asset
impairment and facility closure costs of $6.4 million, mainly
related to the Santa Maria facility exit, together with employee
termination costs of $2.8 million (offset by the reversal of $0.9
million of previously recognized stock-based compensation related
to forfeited awards previously granted to terminated employees),
which were recorded in other expense.
(d)
For 2021, mainly reflects costs related to
the relocation of our executive office and innovation center into
Eden Prairie, Minnesota, and the vacating of our former leased
facility, which were recorded in other expense. For 2020, reflects
the write-down of owned and right-of-use assets related to the
consolidation of roasting lines at our Crookston, Minnesota,
facility, which was recorded in other expense.
(e)
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 2021 and 2020, start-up
costs related to expansion projects within our plant-based beverage
and ingredient operations, which were recorded in cost of goods
sold.
(f)
For 2021, represents severance and related
benefit charges related to workforce reduction actions in our
frozen fruit operations to reduce overhead costs, which were
recorded in other expense.
(g)
For 2020, reflects a loss on a foreign
currency forward contract to economically hedge the cash
consideration from the sale of Tradin Organic, which was recorded
in other expense.
(h)
For 2020, reflects the premium paid ($5.3
million) and write-off of unamortized debt issuance costs ($3.6
million) on the redemption and retirement of our second lien notes,
which were recorded in non-operating expenses.
(i)
For 2021, other includes a $0.5 million
loss from the settlement of employment-related legal matter,
partially offset by a gain related to a project cancellation, which
were recorded in other expense/income. For 2020, other includes a
loss of $2.4 million from the settlement of a customer claim
related to the recall of certain sunflower products in 2016, net of
gains of $2.2 million from the settlement of unrelated matters, and
reversal of previously accrued costs related to the withdrawal of
certain consumer-packaged products, which was recorded in other
income/expense.
(j)
Reflects the tax effect of the preceding
adjustments to earnings calculated based on our estimated annual
effective tax rate.
Segment Operating Income/Loss and Adjusted
EBITDA
The Company defines segment operating income/loss as net
earnings/loss before income taxes, interest expense and other
income/expense items, and adjusted EBITDA as segment operating
income/loss plus depreciation, amortization, non-cash stock-based
compensation, and other unusual items that affect the comparability
of operating performance as identified above in the determination
of adjusted earnings/loss. The following is a tabular presentation
of segment operating income/loss and adjusted EBITDA, including a
reconciliation to earnings/loss from continuing operations, which
the Company believes to be the most directly comparable U.S. GAAP
financial measure.
January 1, 2022
January 2, 2021
For the quarter ended
$
$
Loss from continuing operations
(1,864
)
(34,330
)
Income tax expense (benefit)
(3,782
)
2,019
Loss on retirement of debt(a)
-
8,915
Interest expense, net
2,624
7,605
Other expense, net
1,442
22,604
Total segment operating income (loss)
(1,580
)
6,813
Depreciation and amortization
8,851
7,415
Stock-based compensation(b)
(493
)
4,250
Business development costs(c)
2,566
-
Start-up costs(d)
745
1,546
Costs related to exit from fruit
ingredient processing facility(e)
572
-
Restructuring costs(f)
-
546
Adjusted EBITDA
10,661
20,570
(a)
For the fourth quarter of 2020, reflects
the premium paid ($5.3 million) and write-off of unamortized debt
issuance costs ($3.6 million) on the redemption and retirement of
our second lien notes, which were recorded in non-operating
expenses.
(b)
For the fourth quarter of 2021, reflects
the reversal of stock-based compensation for unvested awards
granted under the Company’s short-term incentive plan based on
financial performance.
(c)
For the fourth quarter of 2021,
third-party business development costs reflected the transition and
integration of the acquired Dream and WestSoy brands, and the
exploration of other potential strategic opportunities, which were
recorded in cost of goods sold ($0.5 million) and SG&A expenses
($2.0 million).
(d)
For fourth quarters of 2021 and 2020,
reflects start-up costs related to expansion projects within our
plant-based beverage and ingredient operations, which were recorded
in cost of goods sold.
(e)
For the fourth quarter of 2021, reflects
inventory write-offs related to the exit from our fruit ingredient
processing facility, which were recorded in cost of goods sold.
(f)
For the fourth quarter of 2020, reflects
professional fees of $0.5 million recorded in SG&A
expenses.
January 1, 2022
January 2, 2021
For the years ended
$
$
Loss from continuing operations
(4,144
)
(47,302
)
Income tax benefit
(3,366
)
(2,740
)
Loss on retirement of debt(a)
-
8,915
Interest expense, net
8,769
30,042
Other expense, net
8,890
23,393
Total segment operating income
10,149
12,308
Depreciation and amortization
34,641
30,308
Stock-based compensation(b)
9,100
12,570
Business development costs(c)
5,506
-
Start-up costs(d)
745
1,883
Costs related to exit from fruit
ingredient processing facility(e)
572
-
Restructuring costs(f)
-
1,649
Adjusted EBITDA
60,713
58,718
(a)
For 2020, reflects the premium paid ($5.3
million) and write-off of unamortized debt issuance costs ($3.6
million) on the redemption and retirement of our second lien notes,
which were recorded in non-operating expenses.
(b)
For 2020, stock-based compensation of
$12.6 million was recorded in SG&A expenses and the reversal of
$0.9 million of previously recognized stock-based compensation
related to forfeited awards previously granted to terminated
employees was recognized in other income.
(c)
For 2021, third-party business development
costs reflected the transition and integration of the acquired
Dream and WestSoy brands, project development activities related to
our new plant-based beverage facility under construction in Texas,
and the exploration of other potential strategic opportunities,
which were recorded in cost of goods sold ($0.6 million) and
SG&A expenses ($4.9 million).
(d)
For 2021 and 2020, reflects start-up costs
related to expansion projects within our plant-based beverage and
ingredient operations, which were recorded in cost of goods
sold.
(e)
For 2021, reflects inventory write-offs
related to the exit from our fruit ingredient processing facility,
which were recorded in cost of goods sold.
(f)
For 2020, reflects professional fees of
$1.0 million and employee retention costs of $0.6 million recorded
in SG&A expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220224005366/en/
Reed Anderson ICR 646-277-1260 reed.anderson@icrinc.com
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