SunOpta (US:STKL)2020-05-09 22:17Financial Data and Key Metrics Changes - The company reported revenue of $335.9 million, representing a 13% adjusted revenue growth year-over-year [7] - Adjusted EBITDA for the quarter was $24.3 million, more than doubling from $11.1 million in the prior year [7] - Gross margin improved by nearly 400 basis points compared to the previous year [7] - Operating cash flow generated was $35 million, with total debt reduced by over $20 million from year-end [8] Business Line Data and Key Metrics Changes - The Plant-Based Food and Beverage business unit achieved 29.7% adjusted revenue growth, with significant growth across all primary product categories [10] - The Fruit-Based Food and Beverage business unit saw 9.1% adjusted revenue growth, driven by pricing efforts and strong volume [11] - Global Ingredients delivered 5.5% adjusted revenue growth, with gross margin improvement [11] Market Data and Key Metrics Changes - Approximately two-thirds of sales are in the grocery retail channel, with one-third in food service [12] - The company estimated an incremental revenue of $7 million to $10 million due to COVID-19, with a $3 million gain in gross profit [12] Company Strategy and Development Direction - The company is focusing on high-return opportunities while deemphasizing lower-margin segments [9] - Continued investment in the plant-based business unit is planned, with a total commitment of $60 million from investors [9] - The company is executing a turnaround plan in its fruit business unit, optimizing operations for further success [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to challenges posed by COVID-19, maintaining operational efficiency [12] - The company anticipates a moderation in growth for the plant-based segment in Q2, with total revenue expected to be roughly flat year-over-year [28] - Management expects adjusted EBITDA to be materially greater on a year-over-year basis for the remainder of the year [28] Other Important Information - The company completed a $30 million preferred equity raise, enhancing liquidity and supporting investments in the plant-based business [9] - Cash generated from operating activities was $34.7 million, a significant increase from $1 million in the prior year [25] Q&A Session Summary Question: Insights on plant-based business growth and extraction capacity - Management noted strong growth across all customer segments, with two-thirds of growth from existing customers and one-third from new customers [35] - The extraction capacity is expected to meet significant customer demand, with commitments in place to utilize the new facility [37] Question: Impact of food service on plant-based business - The plant-based business is approximately 60% retail and 40% food service, with optimism about the reopening of food service outlets [39] Question: Fruit availability and pricing - Management indicated that fruit supply is expected to remain within historical ranges, with no concerns regarding pricing [41] Question: Global Ingredients performance and cocoa processing - The Crown of Holland cocoa processing facility has shown improved productivity, contributing to gross margin increases [46] Question: Forward-looking commentary on EBITDA - Management expects meaningful year-over-year EBITDA dollar improvement despite muted growth in Q2 [48]