SunOpta (US:STKL)2021-11-10 19:37Financial Data and Key Metrics Changes - Total company revenues in Q3 increased 3.6% to $198.5 million, impacted by supply chain disruptions [13][33] - Adjusted EBITDA increased 8.4% to $15.6 million, reflecting proactive management of SG&A [13][39] - Gross profit was $23.4 million, a decrease of $3.5 million compared to the prior year, with consolidated gross margin declining 220 basis points to 11.8% [34][39] Business Line Data and Key Metrics Changes - Plant-based revenue reached $114.9 million, up 16% year-over-year, marking the highest Q3 in plant-based history [17][33] - Fruit-based revenue was $83.6 million, down 9.7% year-over-year, attributed to SKU rationalization and shortages of certain fruit types [27][33] Market Data and Key Metrics Changes - Retail sales data for the plant-based milks category showed 6% growth over the last 13 weeks, with oat milk revenue up 65% [18][19] - The fruit snack category increased by 16% over the same period, with strong demand noted [29] Company Strategy and Development Direction - The company aims to double the size of its plant-based business, focusing on capacity expansion and innovation [23][31] - Strategic priorities include portfolio transformation, customer-centric innovation, and enhancing competitive advantages in the plant-based segment [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges in labor and raw material availability but expressed confidence in overcoming these issues [12][84] - The outlook for Q4 anticipates mid- to high-single-digit growth, with expectations for sequential margin improvement [43][44] Other Important Information - The company is investing in new facilities to enhance production capabilities, including a new oat extraction facility [21][24] - Significant pricing adjustments are being implemented to address cost inflation in the fruit segment [30][76] Q&A Session Summary Question: Q4 outlook and segment margins - Management indicated that pricing actions are expected to benefit the fruit business, with different growth profiles for the segments [48] Question: Retail vs. food service growth - Stronger growth was observed on the retail side, particularly in oat milk, with confidence in long-term relationships with major customers [50][51] Question: Organic growth deceleration in plant-based - Management noted that labor and raw material supply issues impacted growth, but improvements are expected in Q4 [65][66] Question: Integration of recent acquisitions - Integration has gone smoothly, with a focus on driving accelerated growth post-integration [84] Question: Transportation costs and availability - Transportation costs have increased, but management has effectively managed these challenges through strategic contracting [86]