Core Viewpoint - The sustainability of a trend is crucial for successful short-term investing, and confirming fundamental factors is essential to maintain momentum in stocks [1][2]. Group 1: Stock Performance - SunOpta (STKL) has shown a solid price increase of 17.7% over the past 12 weeks, indicating strong investor interest [4]. - The stock has also increased by 16.7% over the last four weeks, suggesting that the upward trend is still intact [5]. - STKL is currently trading at 91.3% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - STKL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks with strong fundamentals that can maintain their upward trends [3]. - In addition to STKL, there are several other stocks that meet the criteria of the "Recent Price Strength" screen, providing additional investment opportunities [8].

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $176 million, up 16% year-over-year, driven by a 21% increase in volume growth [28][8] - Adjusted gross margin improved to 17% from 16.4% in the prior year, reflecting higher sales and production volumes [28][9] - Adjusted EBITDA from continuing operations increased 13% to $21.5 million compared to $19.1 million last year [30] Business Line Data and Key Metrics Changes - The fruit snacks business grew by 42%, with a 40% increase in sales volume [10] - Beverages & Broths product lines saw a revenue growth of 14% [11] - Protein shakes increased by 17% over the last 52-week period [12] Market Data and Key Metrics Changes - Shelf stable plant-based milks grew at a mid-single digit rate, while the better-for-you fruit snacks category grew by 21% [12] - The broth category, typically stable, saw an 8% increase over the last 52 weeks [12] Company Strategy and Development Direction - The company is focused on driving operational improvements to fulfill customer growth and expand sustainable margins [24] - Plans to maintain a disciplined financial approach and continue deleveraging to under three times adjusted EBITDA by the end of the year [24] - The company aims to achieve a midterm target of $125 million adjusted EBITDA run rate by late fiscal 2025 or early fiscal 2026 [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to improve operational efficiencies and unlock capacity within the existing manufacturing network [91] - The company is optimistic about sustaining revenue growth through operational excellence initiatives without significant capital expenditures [66][60] - Management reaffirmed fiscal 2024 revenue guidance in the range of $710 million to $730 million, representing growth of 13% to 16% [32] Other Important Information - The company made temporary operating expense investments in the supply chain to enhance future efficiencies and capacity growth [7][16] - The company reported a decrease in debt to $290 million, with net leverage improving to 3.3 times [31] Q&A Session Summary Question: Impact of removing surcharge on plant-based add-ons - Management believes that any initiative fostering trial penetration or repeat buys is beneficial for the company [36] Question: Factors affecting Q4 guidance - Management maintained guidance for Q4, indicating confidence based on observed data and customer interactions [40][43] Question: Customer growth and underlying trends - Management noted that growth is driven by both gaining incremental business and underlying customer growth trends, with a balanced contribution from both [48] Question: Expansion of Dream brand oat milk - Management clarified that the expansion is not a strategic shift but a response to customer supply chain needs [52] Question: Reinvestment in R&D and sales support - Management expressed confidence in maintaining operating expense leverage while supporting customer growth through R&D and sales initiatives [57] Question: Balancing growth and operational efficiency - Management emphasized the importance of operational efficiencies to satisfy growth initiatives while maintaining margin expansion [68] Question: Manufacturing efficiencies and EBITDA impact - Management indicated that the costs associated with manufacturing inefficiencies are expected to wind down by the end of Q4 [87]

Financial Performance - SunOpta reported quarterly earnings of $0.02 per share, matching the Zacks Consensus Estimate, compared to break-even earnings per share a year ago [1] - The company posted revenues of $176.22 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 2.27% and up from $152.54 million year-over-year [2] - SunOpta has surpassed consensus EPS estimates two times and revenue estimates four times over the last four quarters [1][2] Stock Performance - SunOpta shares have increased approximately 23.4% since the beginning of the year, outperforming the S&P 500's gain of 19.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $193.9 million, and for the current fiscal year, it is $0.14 on revenues of $720 million [7] - The outlook for the Food - Miscellaneous industry, where SunOpta operates, is currently in the bottom 45% of over 250 Zacks industries, which may impact stock performance [8]

Revenue and Profitability - Revenue from continuing operations increased 15.5% to $176.2 million compared to $152.5 million in the prior year period, driven by 20.6% volume growth [2] - Adjusted EBITDA from continuing operations increased 12.6% to $21.5 million compared to $19.1 million in the prior year period [10] - Gross profit increased 16.4% to $23.6 million, with a gross profit margin of 13.4% compared to 13.3% in the prior year [7] - 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 [10] - Adjusted gross margin for the third quarter of 2024 was 17.0%, compared to 16.4% in the third quarter of 2023, indicating an improvement of 0.6 percentage points [24] - Adjusted earnings from continuing operations for the first three quarters of 2024 were $7,272 million, representing an increase from $3,390 million in 2023 [35] Loss and Improvement - Loss from continuing operations was $5.5 million, an improvement from a loss of $5.7 million in the prior year period [3] - The company reported a net loss of $7,756 thousand for the three quarters ended September 28, 2024, a significant improvement from a net loss of $163,284 thousand for the same period in 2023 [21] - For the quarter ended September 28, 2024, the loss from continuing operations was $5,498 million, an improvement from a loss of $5,680 million in the same quarter of 2023 [31] - For the first three quarters of 2024, the loss from continuing operations attributable to common shareholders was $5,843 million, compared to $21,710 million for the same period in 2023 [35] Cash Flow and Operating Activities - Cash provided from operating activities of continuing operations was $19.2 million, up from cash used of $8.4 million in the same period last year [11] - Cash provided by operating activities for the three quarters ended September 28, 2024, was $16,911 thousand, compared to $10,413 thousand for the same period in 2023, marking a year-over-year increase of approximately 62.5% [21] - Cash, cash equivalents, and restricted cash at the end of the period increased to $10,636 thousand, up from $3,544 thousand at the end of September 30, 2023, indicating a year-over-year increase of approximately 200% [21] Assets and Liabilities - Total assets as of September 28, 2024, were $699.3 million, with total debt of $289.9 million [11] - Total assets increased to $699,326 thousand as of September 28, 2024, up from $669,424 thousand on December 30, 2023, representing a growth of approximately 4.3% [20] - Current assets rose to $192,922 thousand, compared to $184,245 thousand at the end of 2023, reflecting an increase of about 4.6% [20] - Total liabilities increased to $523,164 thousand as of September 28, 2024, from $493,890 thousand at the end of 2023, representing an increase of about 5.9% [20] Business Operations and Initiatives - The exit from the smoothie bowls category resulted in a 2.3% reduction in revenue [6] - The company continues to have a substantial pipeline of new business opportunities and is focused on driving increasing returns on invested capital [5] - The company incurred start-up costs of $4.1 million in the third quarter of 2024, down from $4.7 million in the same quarter of 2023, indicating a reduction in costs associated with production ramp-up [25] - The company has initiated operational productivity initiatives, incurring $0.8 million in professional fees related to these efforts in the third quarter of 2024 [32] Other Financial Metrics - Interest expense, net for the first three quarters of 2024 was $19,222 million, slightly down from $19,391 million in the same period of 2023 [36] - The company incurred start-up costs of $7,655 million in the first three quarters of 2024, a decrease from $17,855 million in the same period of 2023 [36] - The unrealized foreign exchange loss on restricted cash for the first three quarters of 2024 was $1,363 million, with no such loss reported in the same period of 2023 [36] - The company reported a gain on the sale of the smoothie bowls product line of $1,800 million in the first three quarters of 2024 [36] - Depreciation and amortization expenses for the first three quarters of 2024 totaled $27,005 million, compared to $22,873 million in 2023 [36]

Core Viewpoint - SunOpta (STKL) shares have increased by 16.6% recently, closing at $6.10, with analysts suggesting a potential upside to a mean price target of $9.20, indicating a 50.8% increase from the current price [1] Price Targets - The average price target consists of five estimates ranging from $9 to $10, with a standard deviation of $0.45, suggesting a relatively tight clustering of estimates [2] - The lowest estimate indicates a 47.5% increase, while the highest suggests a 63.9% upside [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement [7] Analyst Sentiment - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price increases [9] - The Zacks Consensus Estimate for the current year has risen by 3.9% over the past month, with no negative revisions [10] - STKL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [11] Caution on Price Targets - Solely relying on price targets for investment decisions may not be prudent, as they can often mislead investors [5][8] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [6]

Financial Data and Key Metrics Changes - Revenue for Q2 2024 was $171 million, representing a 21% increase year-over-year, driven by strong volume growth [19] - Adjusted EBITDA from continuing operations increased by 12% to $20.6 million compared to $18.4 million in the prior year [20] - Gross profit rose by $3.2 million or 17% to $21.8 million, with reported gross margin at 12.8% and adjusted gross margin at 16.2% [19] Business Line Data and Key Metrics Changes - The fruit snacks business grew over 24%, marking 16 consecutive quarters of at least double-digit growth [6] - The foodservice segment also saw double-digit revenue growth, with all major product categories contributing positively [6][19] - The top five customers experienced an average revenue growth of 23% year-over-year [6] Market Data and Key Metrics Changes - The U.S. shelf-stable plant-based milks market is expected to grow in the mid-single digits across all channels [8] - The protein shakes category is one of the fastest-growing in CPG, with track channel volume up approximately 18% over the past 13 weeks [9] - The better-for-you segment within fruit snacks is growing over 30% year-over-year, with customers commanding over 75% market share [9] Company Strategy and Development Direction - The company aims to grow volume through expanding customer relationships and acquiring new customers while focusing on operational improvements to increase output and sustainable margins [14][15] - Investments are being made in supply chain initiatives to enhance efficiency and support future growth, with expectations for sustainable margin expansion starting in Q4 2024 [15][16] - The company is committed to maintaining a disciplined financial approach, targeting a net leverage of under 3 times EBITDA by the end of the year [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand generation engine and the potential for further growth, raising the 2024 revenue outlook for the second time this year [14][21] - The company is optimistic about its long-term revenue and profit growth outlook, supported by strong volume growth and operational resilience [17] - Management highlighted that all categories served are experiencing growth, indicating a positive outlook despite broader consumer softness in some areas [48] Other Important Information - The company has increased unit output in aseptic facilities by over 24% and in fruit snacks facilities by more than 33% compared to the prior year [10] - The oat extraction expansion in Modesto has come online, contributing to increased volume and future capacity sales [11] - The company is focused on identifying operational efficiencies and making short-term investments to support long-term growth [12][13] Q&A Session Summary Question: What drove the strong sales performance this quarter? - Management indicated that growth was driven by a combination of new product launches, TAM expansion initiatives, and overall category growth, with supported brands outperforming their categories [23][24] Question: How is the company managing challenges in the foodservice channel? - The company benefits from a diverse customer base across various channels, with top customers showing double-digit growth, indicating resilience in the foodservice segment [25][26] Question: What are the reasons for gross margin degradation despite strong volume growth? - Management explained that while volume growth tested the supply chain, they are investing in operational efficiencies to improve margins moving forward [27][28] Question: How does the company view the sustainability of customer share gains? - Management noted that tracked channels represent less than a fifth of the market, and they are seeing positive trends in untracked channels, which are more significant for their business [34][35] Question: What is the outlook for supply chain investments and margin targets? - Management clarified that investments are aimed at enhancing efficiency and driving towards a long-term gross margin target of over 20% [39][40] Question: How is the company addressing potential new business opportunities? - Management emphasized that they are focused on visible growth opportunities while continuing to explore various initiatives for expansion [50][51] Question: What is the tone of customer conversations in the current environment? - Management reported that all categories served are growing, and they are actively helping customers innovate and grow, indicating a positive outlook despite consumer pressures [48][49]

Company Performance - SunOpta reported quarterly earnings of $0.02 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, compared to a loss of $0.03 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $171 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 11.76%, although this is a decrease from year-ago revenues of $207.81 million [2] - Over the last four quarters, SunOpta has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Outlook - SunOpta shares have underperformed the market, losing about 7% since the beginning of the year, while the S&P 500 has gained 9.9% [3] - The current consensus EPS estimate for the coming quarter is $0.02 on revenues of $163.3 million, and for the current fiscal year, it is $0.13 on revenues of $685 million [7] - The estimate revisions trend for SunOpta is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Zacks Industry Rank for Food - Miscellaneous is currently in the bottom 42% of over 250 Zacks industries, suggesting that the industry outlook can materially impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

SunOpta Inc. (NASDAQ:STKL) Q1 2024 Earnings Conference Call May 8, 2024 5:30 PM ET Company Participants Reed Anderson - IR Brian Kocher - CEO Greg Gaba - CFO Conference Call Participants Jon Andersen - William Blair Jim Salera - Stephens John Baumgartner - Mizuho Securities Brian Holland - D.A. Davidson Ryan Myers - Lake Street Capital Markets Andrew Strelzik - BMO Daniel Biolsi - Hedgeye Operator Greetings and welcome to the SunOpta's First Quarter 2024 Earnings Conference Call. At this time, all participa ...

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) SunOpta reported strong Q1 2024 results with significant revenue growth, improved profitability, and an increased fiscal year outlook [First Quarter 2024 Performance Overview](index=1&type=section&id=First%20Quarter%202024%20Performance%20Overview) SunOpta reported strong Q1 2024 results, with revenue from continuing operations increasing 18% to $182.8 million, earnings turning positive to $3.8 million, and Adjusted EBITDA rising 21% to $22.6 million | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :-------------------------------- | :-------- | :-------- | :----------- | | Revenue from continuing operations | $182.8M | $155.0M | +18% | | Earnings from continuing operations | $3.8M | -$2.8M | Turnaround | | Adjusted EBITDA from continuing operations | $22.6M | $18.7M | +21% | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Brian Kocher highlighted excellent broad-based revenue growth, driven by capacity investments and operational improvements, leading to an increased 2024 outlook - Excellent **revenue growth** across products, customers, and channels, driven by healthy, broad-based demand[6](index=6&type=chunk) - Progress in **capacity investments** and **operational improvement initiatives** supporting significant **volume growth** and **gross margin improvement**[6](index=6&type=chunk) - **Increased 2024 outlook** based on strong Q1 results, operational excellence, robust pipeline, and business momentum[6](index=6&type=chunk) [First Quarter 2024 Financial Results](index=1&type=section&id=First%20Quarter%202024%20Financial%20Results) This section details SunOpta's first-quarter 2024 financial performance, including revenue, profitability, earnings, and Adjusted EBITDA analysis [Revenue Analysis](index=1&type=section&id=Revenue%20Analysis) Revenues increased 18.0% to $182.8 million, primarily driven by a 23.5% favorable volume/mix impact, partially offset by price reductions and the exit of the smoothie bowls category | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :----- | :-------- | :-------- | :----------- | | Revenues | $182.8M | $155.0M | +18.0% | - **Revenue increase** driven by **23.5% favorable volume/mix impact**, partially offset by **5.0% price reduction** due to commodity pass-throughs and **0.6%** from smoothie bowls exit[7](index=7&type=chunk) - **Volume growth** observed in oat milks, creamers, protein shakes, broths, teas, and fruit snacks[7](index=7&type=chunk) [Profitability](index=1&type=section&id=Profitability) Gross profit increased to $31.7 million with a 17.4% margin, while operating income significantly improved to $10.2 million, despite a decrease in adjusted gross margin due to depreciation and reserves | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :-------------------- | :-------- | :-------- | :----------- | | Gross Profit | $31.7M | $24.1M | +31.8% | | Gross Profit Margin | 17.4% | 15.5% | +1.9 pp | | Operating Income | $10.2M | $0.5M | +$9.7M | | Operating Income Margin | 5.6% | 0.3% | +5.3 pp | - **Adjusted gross margin decreased by 180 basis points to 17.5%** due to incremental depreciation of new production equipment and higher inventory reserves, partially offset by favorable plant utilization[9](index=9&type=chunk) [Earnings Performance](index=2&type=section&id=Earnings%20Performance) Earnings from continuing operations turned positive to $3.8 million, with diluted EPS at $0.03, despite a loss from discontinued operations, while adjusted earnings slightly increased to $1.9 million | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :------------------------------------------------ | :-------- | :-------- | :----------- | | Earnings (loss) from continuing operations | $3.8M | -$2.8M | Turnaround | | Diluted EPS from continuing operations | $0.03 | -$0.03 | Turnaround | | Loss (earnings) from discontinued operations | -$1.4M | $4.2M | -$5.6M | | Adjusted earnings from continuing operations | $1.9M | $1.8M | +$0.1M | [Adjusted EBITDA](index=1&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA from continuing operations increased by 20.8% to $22.6 million, representing 12.3% of revenues, up from $18.7 million (12.0% of revenues) in the prior year period | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :--------------------------------------- | :-------- | :-------- | :----------- | | Adjusted EBITDA from continuing operations | $22.6M | $18.7M | +20.8% | | Adjusted EBITDA Margin | 12.3% | 12.0% | +0.3 pp | [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) Total assets stood at $671.8 million and total debt at $258.8 million, with operating cash flow increasing to $7.4 million and investing activities significantly reduced to $4.2 million | Metric | March 30, 2024 | Dec 30, 2023 | | :------------------------------------ | :------------- | :------------- | | Total Assets | $671.8M | $669.4M | | Total Debt | $258.8M | $263.2M | - **Cash provided by operating activities of continuing operations increased to $7.4 million** (Q1 2024) from $6.7 million (Q1 2023), mainly due to **higher operating income**[14](index=14&type=chunk) - **Cash consumed by investing activities of continuing operations decreased significantly to $4.2 million** (Q1 2024) from $25.4 million (Q1 2023), reflecting completion of major capital projects (e.g., Midlothian facility) and **$3.3 million from smoothie bowls sale**[14](index=14&type=chunk) [2024 Outlook](index=2&type=section&id=2024%20Outlook) SunOpta is raising its fiscal 2024 outlook, now expecting revenue between $685-$715 million and Adjusted EBITDA between $88-$92 million, reflecting stronger growth projections | Metric | Prior Outlook (millions) | Revised Outlook (millions) | | :-------------------------------- | :----------------------- | :----------------------- | | Revenue | $670 - $700 | $685 - $715 | | Adj. EBITDA from continuing operations | $87 - $92 | $88 - $92 | | Revenue growth | 6% - 11% | 9% - 13% | | Adj. EBITDA from continuing operations growth | 11% - 17% | 12% - 17% | [Company Overview](index=3&type=section&id=Company%20Overview) SunOpta Inc. is an innovative and sustainable manufacturer specializing in organic, plant-based products, serving various channels and producing its own brands - **SunOpta** is an innovative and sustainable manufacturer of organic, plant-based beverages, fruit snacks, nutritional beverages, broths, and tea products[18](index=18&type=chunk) - Products are sold through **retail, club, foodservice, and e-commerce channels**, serving leading brands, retailers, and coffee shops[18](index=18&type=chunk) - Company also produces its own brands: **Sown, Dream, and West Life**[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section defines SunOpta's non-GAAP financial measures and provides reconciliations for adjusted gross margin, adjusted earnings, and Adjusted EBITDA [Definition and Exclusions](index=3&type=section&id=Definition%20and%20Exclusions) SunOpta uses non-GAAP measures to provide consistent performance comparisons by excluding items not indicative of operating performance, such as acquisition costs, start-up costs, and restructuring charges - **Non-GAAP measures** (adjusted gross margin, adjusted earnings, Adjusted EBITDA) are used to provide consistent performance comparison by excluding items not indicative of operating performance[25](index=25&type=chunk)[28](index=28&type=chunk) - Excluded items may include **acquisition/divestiture costs, start-up costs of new facilities, restructuring charges, asset impairment charges, legal settlements**, and related tax effects[17](index=17&type=chunk)[19](index=19&type=chunk) [Adjusted Gross Margin Reconciliation](index=8&type=section&id=Adjusted%20Gross%20Margin%20Reconciliation) Q1 2024 reported gross margin was 17.4%, adjusted to 17.5% after accounting for 0.2% in start-up costs related to plant expansions | For the quarter ended | March 30, 2024 | April 1, 2023 | | :-------------------- | :------------- | :------------ | | Reported gross margin | 17.4% | 15.5% | | Start-up costs | 0.2% | 3.7% | | Adjusted gross margin | 17.5% | 19.3% | - **Q1 2024 start-up costs (0.2%)** related to the ramp-up of a third line at the Midlothian plant and expansion at the Modesto facility[27](index=27&type=chunk) [Adjusted Earnings and Adjusted EBITDA Reconciliation](index=8&type=section&id=Adjusted%20Earnings%20and%20Adjusted%20EBITDA%20Reconciliation) Adjusted earnings from continuing operations for Q1 2024 were $1.9 million, primarily adjusted by excluding a $1.8 million gain on sale and adding back $0.3 million in start-up costs, leading to an Adjusted EBITDA of $22.6 million | For the quarter ended | March 30, 2024 | April 1, 2023 | | :------------------------------------------------ | :------------- | :------------ | | Earnings (loss) from continuing operations | $3,837 | -$2,827 | | Adjusted earnings from continuing operations | $1,931 | $1,794 | | Adjusted EBITDA from continuing operations | $22,566 | $18,673 | - Key adjustments for Q1 2024 included a **$1.8 million gain on sale of smoothie bowls product line** (excluded) and **$0.3 million in start-up costs** (added back)[30](index=30&type=chunk)[31](index=31&type=chunk) [Additional Information](index=3&type=section&id=Additional%20Information) This section provides details on the conference call, forward-looking statements disclaimer, and company contacts [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) SunOpta hosted a conference call on May 8, 2024, at 5:30 P.M. Eastern time to discuss the first quarter financial results, with a live webcast available on their website and a replay archived for approximately 90 days - Conference call held on **May 8, 2024, at 5:30 P.M. ET** to discuss Q1 financial results[16](index=16&type=chunk) - Live webcast accessible via SunOpta's investor relations website; replay available for **~90 days**[16](index=16&type=chunk) [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section contains forward-looking statements about fiscal 2024 financial performance, subject to various risks and uncertainties, with no obligation for the company to update them - **Forward-looking statements** include expectations for **strong growth in revenue and Adjusted EBITDA** from continuing operations for fiscal 2024[20](index=20&type=chunk) - Statements are based on estimates and assumptions, subject to risks such as **supply chain disruptions, customer demand changes, commodity pricing, and operational issues**[20](index=20&type=chunk) - Company undertakes **no obligation to publicly correct or update forward-looking statements**, except as required by law[20](index=20&type=chunk) [Contacts](index=4&type=section&id=Contacts) Contact information for investor relations and media relations is provided - Investor Relations: **Reed Anderson, ICR, 646-277-1260, investors@sunopta.com**[21](index=21&type=chunk) - Media Relations: **Claudine Galloway, SunOpta, 952-295-9579, press.inquiries@sunopta.com**[21](index=21&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited consolidated statements of operations, balance sheets, and cash flows for the specified periods [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Presents the unaudited consolidated statements of operations for the quarters ended March 30, 2024, and April 1, 2023, detailing revenues, costs, profits, and earnings per share Consolidated Statements of Operations (in thousands) | | Quarter ended | | :--- | :--- | | | March 30, 2024 | April 1, 2023 | | | $ | $ | | Revenues | 182,848 | 154,969 | | Cost of goods sold | 151,101 | 130,890 | | Gross profit | 31,747 | 24,079 | | Selling, general and administrative expenses | 22,988 | 23,069 | | Intangible asset amortization | 446 | 446 | | Other expense (income), net | (1,800) | 42 | | Foreign exchange gain | (51) | (11) | | Operating income | 10,164 | 533 | | Interest expense, net | 6,050 | 5,664 | | Earnings (loss) from continuing operations before income taxes | 4,114 | (5,131) | | Income tax expense (benefit) | 277 | (2,304) | | Earnings (loss) from continuing operations | 3,837 | (2,827) | | Earnings (loss) from discontinued operations | (1,417) | 4,204 | | Net earnings | 2,420 | 1,377 | | Dividends and accretion on preferred stock | (433) | (704) | | Earnings attributable to common shareholders | 1,987 | 673 | | Basic and diluted earnings (loss) per share | | | | Earnings (loss) from continuing operations | 0.03 | (0.03) | | Earnings (loss) from discontinued operations | (0.01) | 0.04 | | Earnings attributable to common shareholders | 0.02 | 0.01 | | Weighted-average common shares outstanding (000s) | | | | Basic | 116,033 | 110,014 | | Diluted | 117,558 | 110,014 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Presents the unaudited consolidated balance sheets as of March 30, 2024, and December 30, 2023, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheets (in thousands) | | March 30, 2024 | December 30, 2023 | | :--- | :--- | :--- | | | $ | $ | | ASSETS | | | | Current assets | | | | Cash and cash equivalents | 1,487 | 306 | | Accounts receivable | 67,823 | 64,862 | | Inventories | 92,000 | 83,215 | | Prepaid expenses and other current assets | 20,435 | 25,235 | | Income taxes recoverable | 4,070 | 4,717 | | Current assets held for sale | 2,542 | 5,910 | | Total current assets | 188,357 | 184,245 | | Restricted cash | 9,066 | 8,448 | | Property, plant and equipment, net | 317,084 | 319,898 | | Operating lease right-of-use assets | 106,667 | 105,919 | | Intangible assets, net | 21,415 | 21,861 | | Goodwill | 3,998 | 3,998 | | Other assets | 25,174 | 25,055 | | Total assets | 671,761 | 669,424 | | LIABILITIES | | | | Current liabilities | | | | Accounts payable and accrued liabilities | 95,900 | 96,650 | | Notes payable | 16,648 | 17,596 | | Current portion of long-term debt | 24,882 | 24,346 | | Current portion of operating lease liabilities | 16,403 | 15,808 | | Total current liabilities | 153,833 | 154,400 | | Long-term debt | 233,874 | 238,883 | | Operating lease liabilities | 100,500 | 100,102 | | Deferred income taxes | 378 | 505 | | Total liabilities | 488,585 | 493,890 | | Series B-1 preferred stock | 14,637 | 14,509 | | SHAREHOLDERS' EQUITY | | | | Common shares | 464,817 | 464,169 | | Additional paid-in capital | 32,413 | 27,534 | | Accumulated deficit | (330,700) | (332,687) | | Accumulated other comprehensive income | 2,009 | 2,009 | | Total shareholders' equity | 168,539 | 161,025 | | Total liabilities and shareholders' equity | 671,761 | 669,424 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Presents the unaudited consolidated statements of cash flows for the quarters ended March 30, 2024, and April 1, 2023, detailing cash flows from operating, investing, and financing activities Consolidated Statements of Cash Flows (in thousands) | | | Quarter ended | | :--- | :--- | :--- | | | March 30, 2024 | April 1, 2023 | | | $ | $ | | CASH PROVIDED BY (USED IN) | | | | Operating activities | | | | Net earnings | 2,420 | 1,377 | | Earnings (loss) from discontinued operations | (1,417) | 4,204 | | Earnings (loss) from continuing operations | 3,837 | (2,827) | | Items not affecting cash: | | | | Depreciation and amortization | 8,576 | 7,050 | | Amortization of debt issuance costs | 229 | 407 | | Deferred income taxes | - | (4,850) | | Stock-based compensation | 5,299 | 3,892 | | Gain on sale of smoothie bowls product line | (1,800) | - | | Other | (97) | 603 | | Changes in operating assets and liabilities, net of divestitures | (8,642) | 2,389 | | Net cash provided by operating activities of continuing operations | 7,402 | 6,664 | | Net cash used in operating activities of discontinued operations | (2,133) | (2,797) | | Net cash provided by operating activities | 5,269 | 3,867 | | Investing activities | | | | Additions to property, plant and equipment | (7,548) | (25,395) | | Proceeds received from sale of smoothie bowls product line | 3,336 | - | | Net cash used in investing activities of continuing operations | (4,212) | (25,395) | | Net cash provided by (used in) investing activities of discontinued operations | 6,300 | (62) | | Net cash provided by (used in) investing activities | 2,088 | (25,457) | | Financing activities | | | | Increase in borrowings under revolving credit facilities | 250 | 5,573 | | Repayment of long-term debt | (4,782) | (9,899) | | Borrowings of long-term debt | - | 18,693 | | Proceeds from notes payable | 33,424 | 10,662 | | Repayment of notes payable | (34,373) | (5,433) | | Proceeds from the exercise of stock options and employee share purchases | 314 | 289 | | Payment of withholding taxes on stock-based awards | (86) | (249) | | Payment of cash dividends on preferred stock | (305) | (818) | | Payment of share issuance costs | - | (87) | | Net cash provided by (used in) financing activities of continuing operations | (5,558) | 18,731 | | Net cash provided by financing activities of discontinued operations | - | 3,090 | | Net cash provided by (used in) financing activities | (5,558) | 21,821 | | Increase in cash, cash equivalents and restricted cash in the period | 1,799 | 231 | | Cash, cash equivalents and restricted cash, beginning of the period | 8,754 | 679 | | Cash, cash equivalents and restricted cash, end of the period | 10,553 | 910 |

Focus on Sustainability 80% 15% 3% 2% % of Revenue(1) $630 Million 2023 RevenuesBeverages and broths Smoothie bowls 5 Reasons to Invest in SunOpta ③ ⑤ Sun®pta Company founded as Stake Technologies Ltd (STKL) on patented technology designed to convert agricultural by-products into usable products such as animal feed and biofuels. 2003 - 2015 2017 Sun@pta Company focused on divestitures of non-core businesses, building a new leadership team and executing on operational improvements to the business. Company co ...