Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 29, 2019 | Aug. 02, 2019 | |
Entity Registrant Name | SUNOPTA INC. | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Amendment Flag | false | |
Document Period End Date | Jun. 29, 2019 | |
Document Type | 10-Q | |
Entity Common Stock, Shares Outstanding | 87,940,787 | |
Entity Filer Category | Large Accelerated Filer | |
Current Fiscal Year End Date | --12-28 | |
Entity Central Index Key | 0000351834 | |
Entity File Number | 001-34198 | |
Entity Address, Address Line One | 2233 Argentia Road | |
Entity Address, City or Town | Mississauga | |
City Area Code | 905 | |
Local Phone Number | 821-9669 | |
Entity Address, State or Province | ON | |
Entity Interactive Data Current | Yes | |
Entity Tax Identification Number | 00-0000000 | |
Entity Incorporation, State or Country Code | Z4 | |
Entity Address, Postal Zip Code | L5N 2X7 | |
Document Transition Report | false | |
Document Quarterly Report | true | |
Entity Address Country | CA | |
The Nasdaq Stock Market | ||
Trading Symbol | STKL | |
Security Exchange Name | NASDAQ | |
Title of 12(b) Security | Common Shares | |
The Toronto Stock Exchange | ||
Trading Symbol | SOY | |
Title of 12(b) Security | Common Shares |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 293,004 | $ 319,308 | $ 598,279 | $ 631,960 |
Cost of goods sold | 265,677 | 284,962 | 542,746 | 563,930 |
Gross profit | 27,327 | 34,346 | 55,533 | 68,030 |
Selling, general and administrative expenses | 27,262 | 26,948 | 53,510 | 55,236 |
Intangible asset amortization | 2,692 | 2,768 | 5,434 | 5,539 |
Other expense (income), net | 445 | 583 | (43,067) | 181 |
Foreign exchange loss (gain) | (90) | (11) | (1,194) | 951 |
Earnings (loss) before the following | (2,982) | 4,058 | 40,850 | 6,123 |
Interest expense, net | 8,254 | 8,474 | 16,993 | 16,694 |
Earnings (loss) before income taxes | (11,236) | (4,416) | 23,857 | (10,571) |
Provision for (recovery of) income taxes | (2,324) | (1,290) | 7,174 | (2,983) |
Net earnings (loss) | (8,912) | (3,126) | 16,683 | (7,588) |
Earnings (loss) attributable to non-controlling interests | 143 | 48 | 89 | (51) |
Earnings (loss) attributable to SunOpta Inc. | (9,055) | (3,174) | 16,594 | (7,537) |
Dividends and accretion on Series A Preferred Stock | (2,001) | (1,974) | (3,996) | (3,941) |
Earnings (loss) attributable to common shareholders | $ (11,056) | $ (5,148) | $ 12,598 | $ (11,478) |
Earnings (loss) per share | ||||
Basic (in dollars per share) | $ (0.13) | $ (0.06) | $ 0.14 | $ (0.13) |
Diluted (in dollars per share) | $ (0.13) | $ (0.06) | $ 0.14 | $ (0.13) |
Weighted-average common shares outstanding (000s) | ||||
Basic | 87,683 | 86,968 | 87,579 | 86,889 |
Diluted | 87,683 | 86,968 | 87,743 | 86,889 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Earnings (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ (8,912) | $ (3,126) | $ 16,683 | $ (7,588) |
Changes related to cash flow hedges | ||||
Unrealized gains (losses), net | (189) | 384 | ||
Reclassification of gains to earnings | (238) | (104) | ||
Net changes related to cash flow hedges | (427) | 280 | ||
Currency translation adjustment | 243 | (2,653) | (839) | (1,197) |
Other comprehensive earnings (loss), net of income taxes | 243 | (3,080) | (839) | (917) |
Comprehensive earnings (loss) | (8,669) | (6,206) | 15,844 | (8,505) |
Comprehensive earnings attributable to non-controlling interests | 137 | 66 | 91 | 87 |
Comprehensive earnings (loss) attributable to SunOpta Inc. | $ (8,806) | $ (6,272) | $ 15,753 | $ (8,592) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 29, 2019 | Dec. 29, 2018 |
Current assets | ||
Cash and cash equivalents | $ 2,530 | $ 3,280 |
Accounts receivable | 121,084 | 132,131 |
Inventories | 377,377 | 361,957 |
Prepaid expenses and other current assets | 34,224 | 29,024 |
Income taxes recoverable | 7,558 | 7,029 |
Total current assets | 542,773 | 533,421 |
Property, plant and equipment | 168,433 | 171,032 |
Operating lease right-of-use assets | 72,788 | |
Goodwill | 28,488 | 27,959 |
Intangible assets | 155,492 | 160,975 |
Deferred income taxes | 183 | 182 |
Other assets | 3,536 | 3,169 |
Total assets | 971,693 | 896,738 |
Current liabilities | ||
Bank indebtedness | 268,510 | 280,334 |
Accounts payable and accrued liabilities | 148,248 | 155,371 |
Customer and other deposits | 719 | 1,445 |
Income taxes payable | 1,889 | 2,208 |
Other current liabilities | 309 | 862 |
Current portion of long-term debt | 1,524 | 1,840 |
Current portion of operating lease liabilities | 17,402 | |
Current portion of long-term liabilities | 4,286 | 4,286 |
Total current liabilities | 442,887 | 446,346 |
Long-term debt | 228,494 | 227,023 |
Operating lease liabilities | 56,111 | |
Long-term liabilities | 2,192 | 2,079 |
Deferred income taxes | 13,121 | 8,149 |
Total liabilities | 742,805 | 683,597 |
Series A Preferred Stock | 81,898 | 81,302 |
EQUITY SunOpta Inc. shareholders' equity | ||
Common shares, no par value, unlimited shares authorized, 87,856,514 shares issued (December 29, 2018 - 87,423,280) | 317,735 | 314,357 |
Additional paid-in capital | 31,518 | 31,796 |
Accumulated deficit | (193,553) | (206,151) |
Accumulated other comprehensive loss | (10,508) | (9,667) |
Stockholders' Equity Attributable to Parent, Total | 145,192 | 130,335 |
Non-controlling interests | 1,798 | 1,504 |
Total equity | 146,990 | 131,839 |
Total equity and liabilities | $ 971,693 | $ 896,738 |
Consolidated Balance Sheet (par
Consolidated Balance Sheet (parentheticals) - $ / shares | Jun. 29, 2019 | Dec. 29, 2018 |
Statement of Financial Position [Abstract] | ||
Common Stock Shares Issued | 87,856,514 | 87,423,280 |
Common Stock, No Par Value | $ 0 | $ 0 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common shares [Member] | Additional Paid-in Capital [Member] | Accumulated deficit [Member] | Accumulated other comprehensive loss [Member] | Non-controlling interest [Member] | Total |
Balance at Dec. 30, 2017 | $ 308,899 | $ 28,006 | $ (89,291) | $ (7,268) | $ 1,575 | $ 241,921 |
Balance (in shares) at Dec. 30, 2017 | 86,757 | |||||
Employee stock purchase plan | $ 308 | 308 | ||||
Employee stock purchase plan (in shares) | 48 | |||||
Stock incentive plan | $ 3,313 | (2,808) | 505 | |||
Stock incentive plan (in shares) | 339 | |||||
Withholding taxes on stock-based awards | (573) | (573) | ||||
Stock-based compensation | 4,275 | 4,275 | ||||
Dividends on Series A Preferred Stock | (3,400) | (3,400) | ||||
Accretion on Series A Preferred Stock | (541) | (541) | ||||
Net loss | (7,537) | (51) | (7,588) | |||
Currency translation adjustment | (1,335) | 138 | (1,197) | |||
Cash flow hedges, net of income taxes | 280 | 280 | ||||
Balance at Jun. 30, 2018 | $ 312,520 | 28,900 | (100,515) | (8,323) | 1,662 | 234,244 |
Balance (in shares) at Jun. 30, 2018 | 87,144 | |||||
Balance at Mar. 31, 2018 | $ 309,575 | 29,650 | (95,367) | (5,225) | 1,596 | 240,229 |
Balance (in shares) at Mar. 31, 2018 | 86,840 | |||||
Employee stock purchase plan | $ 172 | 172 | ||||
Employee stock purchase plan (in shares) | 25 | |||||
Stock incentive plan | $ 2,773 | (2,281) | 492 | |||
Stock incentive plan (in shares) | 279 | |||||
Withholding taxes on stock-based awards | (573) | (573) | ||||
Stock-based compensation | 2,104 | 2,104 | ||||
Dividends on Series A Preferred Stock | (1,700) | (1,700) | ||||
Accretion on Series A Preferred Stock | (274) | (274) | ||||
Net loss | (3,174) | 48 | (3,126) | |||
Currency translation adjustment | (2,671) | 18 | (2,653) | |||
Cash flow hedges, net of income taxes | (427) | (427) | ||||
Balance at Jun. 30, 2018 | $ 312,520 | 28,900 | (100,515) | (8,323) | 1,662 | 234,244 |
Balance (in shares) at Jun. 30, 2018 | 87,144 | |||||
Cumulative effect of adoption of new revenue accounting standard | 254 | 254 | ||||
Balance at Dec. 29, 2018 | $ 314,357 | 31,796 | (206,151) | (9,667) | 1,504 | 131,839 |
Balance (in shares) at Dec. 29, 2018 | 87,423 | |||||
Employee stock purchase plan | $ 285 | 285 | ||||
Employee stock purchase plan (in shares) | 96 | |||||
Stock incentive plan | $ 3,093 | (2,731) | 362 | |||
Stock incentive plan (in shares) | 338 | |||||
Withholding taxes on stock-based awards | (382) | (382) | ||||
Stock-based compensation | 2,835 | 2,835 | ||||
Dividends on Series A Preferred Stock | (3,400) | (3,400) | ||||
Accretion on Series A Preferred Stock | (596) | (596) | ||||
Net loss | 16,594 | 89 | 16,683 | |||
Currency translation adjustment | (841) | 2 | (839) | |||
Capital contribution to majority-owned subsidiary | 203 | 203 | ||||
Balance at Jun. 29, 2019 | $ 317,735 | 31,518 | (193,553) | (10,508) | 1,798 | 146,990 |
Balance (in shares) at Jun. 29, 2019 | 87,857 | |||||
Balance at Mar. 30, 2019 | $ 315,202 | 31,016 | (182,497) | (10,757) | 1,458 | 154,422 |
Balance (in shares) at Mar. 30, 2019 | 87,575 | |||||
Employee stock purchase plan | $ 137 | 137 | ||||
Employee stock purchase plan (in shares) | 40 | |||||
Stock incentive plan | $ 2,396 | (2,197) | 199 | |||
Stock incentive plan (in shares) | 242 | |||||
Withholding taxes on stock-based awards | (299) | (299) | ||||
Stock-based compensation | 2,998 | 2,998 | ||||
Dividends on Series A Preferred Stock | (1,700) | (1,700) | ||||
Accretion on Series A Preferred Stock | (301) | (301) | ||||
Net loss | (9,055) | 143 | (8,912) | |||
Currency translation adjustment | 249 | (6) | 243 | |||
Capital contribution to majority-owned subsidiary | 203 | 203 | ||||
Balance at Jun. 29, 2019 | $ 317,735 | $ 31,518 | $ (193,553) | $ (10,508) | $ 1,798 | $ 146,990 |
Balance (in shares) at Jun. 29, 2019 | 87,857 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Operating activities | ||||
Net earnings (loss) | $ (8,912) | $ (3,126) | $ 16,683 | $ (7,588) |
Items not affecting cash: | ||||
Depreciation and amortization | 8,186 | 8,189 | 16,488 | 16,330 |
Amortization of debt issuance costs | 684 | 600 | 1,339 | 1,208 |
Deferred income taxes | (2,356) | (865) | 4,971 | (2,151) |
Stock-based compensation | 2,998 | 2,104 | 2,835 | 4,275 |
Unrealized gain on derivative contracts | (400) | (2,764) | (288) | (1,243) |
Loss (gain) on sale of business | 201 | 0 | (45,378) | 0 |
Fair value of contingent consideration | 43 | (2,373) | ||
Impairment of long-lived assets | 70 | 409 | ||
Other | (72) | (148) | (134) | (147) |
Changes in non-cash working capital, net of businesses acquired or sold | (31,989) | (38,324) | (27,188) | (35,435) |
Net cash flows from operations | (31,660) | (34,221) | (30,672) | (26,715) |
Investing activities | ||||
Net proceeds from sale of business | (201) | 64,675 | ||
Purchases of property, plant and equipment | (9,341) | (10,428) | (17,315) | (17,163) |
Acquisition of business, net of cash acquired | (3,341) | (3,341) | ||
Proceeds from sale of assets | 30 | 730 | ||
Other | 389 | 389 | ||
Net cash flows from investing activities | (12,883) | (10,009) | 44,019 | (16,044) |
Financing activities | ||||
Increase (decrease) under line of credit facilities | 43,367 | 49,885 | (11,294) | 50,194 |
Borrowings under long-term debt | 24 | 1,876 | ||
Repayment of long-term debt | (634) | (415) | (1,357) | (937) |
Payment of cash dividends on Series A Preferred Stock | (1,700) | (1,700) | (3,400) | (3,400) |
Proceeds from the exercise of stock options and employee share purchases | 37 | 91 | 265 | 240 |
Payment of debt issuance costs | (81) | (395) | ||
Payment of contingent consideration | (4,399) | (4,399) | ||
Other | (5) | (5) | 216 | (45) |
Net cash flows from financing activities | 41,008 | 43,457 | (14,089) | 41,653 |
Foreign exchange gain (loss) on cash held in a foreign currency | 50 | (64) | (8) | (35) |
Decrease in cash and cash equivalents in the period | (3,485) | (837) | (750) | (1,141) |
Cash and cash equivalents - beginning of the period | 6,015 | 2,924 | 3,280 | 3,228 |
Cash and cash equivalents - end of the period | 2,530 | 2,087 | 2,530 | 2,087 |
Non-cash financing activity | ||||
Accrued cash dividends on Series A Preferred Stock | $ (1,700) | $ (1,700) | $ (1,700) | $ (1,700) |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 6 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Significant Accounting Policies [Text Block] | 1. Description of Business and Significant Accounting Policies SunOpta Inc. (the "Company" or "SunOpta") was incorporated under the laws of Canada on November 13, 1973 . The Company operates businesses focused on a healthy products portfolio that promotes sustainable well-being. The Company’s two reportable segments, Global Ingredients and Consumer Products, operate in the natural, organic and specialty food sectors and utilize an integrated business model to bring cost-effective and quality products to market. Basis of Presentation The interim consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended, and in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information. Accordingly, these condensed interim consolidated financial statements do not include all of the disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included and all such adjustments are of a normal, recurring nature. Operating results for the quarter and two quarters ended June 29, 2019 are not necessarily indicative of the results that may be expected for the full fiscal year ending December 28, 2019 or for any other period. The interim consolidated financial statements include the accounts of the Company and its subsidiaries, and have been prepared on a basis consistent with the annual consolidated financial statements for the year ended December 29, 2018, except as described below under "Recent Accounting Pronouncements – Adoption of New Accounting Standards." For further information, refer to the consolidated financial statements, and notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018. Fiscal Year The fiscal year of the Company consists of a 52- or 53-week period ending on the Saturday closest to December 31. Fiscal year 2019 is a 52-week period ending on December 28, 2019, with quarterly periods ending on March 30, June 29 and September 28, 2019. Fiscal year 2018 was a 52-week period ending on December 29, 2018, with quarterly periods ending on March 31, June 30 and September 29, 2018. Recent Accounting Pronouncements Adoption of New Accounting Standard In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases" ("ASC Topic 842"), which amends various aspects of legacy accounting guidance for leases, including the recognition of right-of-use assets and lease liabilities for leases classified as operating leases. The Company adopted ASC Topic 842 on a modified retrospective basis beginning the first quarter of 2019, and elected the transition option not to apply the new guidance, including disclosure requirements, in comparative reporting periods. Upon adoption, the Company also elected to apply the practical expedients available under the standard to not reassess its prior conclusions about lease identification, lease classification and initial direct costs. As a result, the adoption of ASC Topic 842 did not result in any cumulative-effect adjustment to the Company’s opening accumulated deficit. The adoption of the new guidance resulted in the recognition of operating lease right-of-use assets and lease liabilities on the Company’s consolidated balance sheet as at June 29, 2019, while the accounting for finance leases remained unchanged. The new guidance did not have any impact on the consolidated results of operations or cash flows of the Company for the quarter and two quarters ended June 29, 2019. See note 8 for additional disclosures under ASC Topic 842. Recently Issued Accounting Standard, Not Adopted as at June 29, 2019 |
Revenue
Revenue | 6 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue [Text Block] | 2. Revenue The Company sources, processes and packages organic and natural food products, including specialty and organic raw commodities and value-added ingredients, and consumer-ready beverage, frozen fruit and fruit snack products. The Company’s customers include retailers, foodservice operators, branded food companies and food manufacturers. The following table presents a disaggregation of the Company’s revenues based on categories used by the Company to evaluate sales performance: Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ Global Ingredients Internationally-sourced organic ingredients 101,938 102,607 207,822 204,874 North American-sourced seeds and grains (1) 15,069 44,078 37,228 78,142 Total Global Ingredients 117,007 146,685 245,050 283,016 Consumer Products Beverage products (2) 85,823 80,549 173,892 165,799 Frozen fruit products (3) 78,722 82,135 155,399 159,606 Snack products (4) 11,452 9,939 23,938 23,539 Total Consumer Products 175,997 172,623 353,229 348,944 Total revenues 293,004 319,308 598,279 631,960 (1) Includes revenues from the specialty and organic soy and corn business prior to the sale of this business in the first quarter of 2019 (see note 4). (2) Includes aseptically-packaged products including non-dairy plant-based beverages, broths and teas; refrigerated premium juices; and shelf-stable juices and functional waters. (3) Includes individually quick frozen ("IQF") fruit for retail; IQF and bulk frozen fruit for foodservice; and custom fruit preparations for industrial use. (4) Comprises fruit snack offerings, as well as the sale of flexible resealable pouch and nutrition bar products in the second quarter and first half of 2018 of $0.5 million and $3.1 million, respectively. The Company exited the flexible resealable pouch and nutrition bar product lines and operations in the fourth quarter of 2017 but continued to deliver remaining inventories to customers during the first half of 2018. |
Business Acquisition
Business Acquisition | 6 Months Ended |
Jun. 29, 2019 | |
Business Combinations [Abstract] | |
Business Acquisition [Text Block] | 3. Business Acquisition Sanmark B.V. On April 1, 2019, the Company acquired 100 % of the outstanding shares of Sanmark B.V. ("Sanmark") for $3.3 million, net of cash acquired, which was financed through existing credit facilities. Sanmark is a sourcing and trading business focused on organic oils for the food, pharmacy, and cosmetic industries. Sanmark sources raw materials globally and generates most of its sales in the European and Asia-Pacific markets. Net assets acquired comprised working capital of $1.2 million and goodwill of $2.1 million. The goodwill recognized is attributable to operating synergies expected to result from the combining the operations of Sanmark with the existing organic oils business unit within the Company’s international organic ingredients operations, in addition to the opportunity to introduce the Company’s existing organic oils portfolio to new customers and markets, and the ability to leverage the expertise within the Sanmark organization to grow the combined organic oils program. The operations of Sanmark have been integrated into the consolidated organic ingredients operations of the Company’s subsidiary in the Netherlands. The results of operations of Sanmark are included in the Company’s consolidated financial statements from the date of acquisition and are reported within the Global Ingredients reportable segment. The revenues and earnings of Sanmark since the date of acquisition were not material to the results of operations of Global Ingredients or the Company. |
Sale of Soy and Corn Business
Sale of Soy and Corn Business | 6 Months Ended |
Jun. 29, 2019 | |
Sale Of Soy And Corn Business [Abstract] | |
Sale of Soy and Corn Business [Text Block] | 4. Sale of Soy and Corn Business On February 22, 2019, the Company’s subsidiary, SunOpta Grains and Foods Inc., completed the sale of its specialty and organic soy and corn business to Pipeline Foods, LLC ("Pipeline Foods") for $66.5 million, which is subject to certain post-closing adjustments including the finalization of the closing working capital balance. The soy and corn business engaged in seed and grain conditioning and corn milling and formed part of the Company’s Global Ingredients reportable segment. The business included five facilities located in Hope, Minnesota, Blooming Prairie, Minnesota, Ellendale, Minnesota, Moorhead, Minnesota, and Cresco, Iowa. The net proceeds from this transaction were initially used to repay borrowings under the Company’s Global Credit Facility (see note 9). Pending finalization of the post-closing adjustments, the Company recognized a gain on sale of the soy and corn business, which was recorded in other income for the quarter and two quarters ended June 29, 2019, as follows: Quarter ended Two quarters ended June 29, 2019 June 29, 2019 $ $ Cash consideration - 66,500 Transaction and related costs (201 ) (1,825 ) Net proceeds (201 ) 64,675 Current assets - 22,810 Property, plant and equipment - 8,423 Goodwill - 1,526 Current liabilities - (13,462 ) Net assets sold - 19,297 Pre-tax gain (loss) on sale (201 ) 45,378 As the soy and corn business did not qualify for presentation as discontinued operations, operating results for this business prior to February 22, 2019 were reported in continuing operations on the consolidated statements of operations for the current and comparative periods. For the period ended February 22, 2019, the soy and corn business generated revenues of $10.3 million and reported a loss before income taxes of $0.2 million. For the quarter and two quarters ended June 30, 2018, the soy and corn business generated revenues of $29.5 million and $50.9 million, respectively, and reported earnings before income taxes of $2.4 million and $4.7 million, respectively. The reported pre-tax results exclude management fees charged by Corporate Services and do not reflect other cost reduction measures associated with the sale of the soy and corn business that were taken in connection with the Value Creation Plan (see note 5). |
Value Creation Plan
Value Creation Plan | 6 Months Ended |
Jun. 29, 2019 | |
Restructuring and Related Activities [Abstract] | |
Value Creation Plan [Text Block] | 5 . Value Creation Plan Overview In the fourth quarter of 2016, the Company conducted a thorough review of its operations, management and governance, with the objective of maximizing the Company’s ability to deliver long-term value to its shareholders. As a product of this review, the Company developed a Value Creation Plan built on four pillars: portfolio optimization, operational excellence, go-to-market effectiveness, and process sustainability. In addition to the sale of the Company’s soy and corn business (as described in note 4) and related cost reduction measures, other actions taken under the Value Creation Plan have included the rationalization of certain of the Company’s operations and facilities, including the closure of the Company’s juice facility in San Bernardino, California, in the fourth quarter of 2016, the exit from flexible resealable pouch and nutrition bar product lines and operations initiated in the fourth quarter of 2017, and the consolidation of roasted snack operations and related disposal of the Company’s roasting facility in Wahpeton, North Dakota, in the second quarter of 2018, as well as other cost savings initiatives. In addition, other actions taken to-date under the Value Creation Plan include investments in certain of the Company’s operations and facilities to enhance food safety and quality and to improve production efficiencies, as well as investments in personnel, processes and tools. Costs Incurred Under the Value Creation Plan The following table summarizes costs incurred under the Value Creation Plan for the two quarters ended June 29, 2019 and June 30, 2018: Employee Asset recruitment, Consulting impairments retention and fees and and facility termination temporary closure costs (a) costs (b) labor costs Total $ $ $ $ June 29, 2019 Balance payable, December 29, 2018 (1) 477 436 — 913 Costs incurred and charged to expense 308 2,947 278 3,533 Cash payments, net (483 ) (3,886 ) ( 278 ) ( 4,647 ) Non-cash adjustments — 2,102 — 2,102 Balance payable, June 29, 2019 (1) 302 1,599 — 1,901 June 30, 2018 Balance payable (receivable), December 31, 2017 ( 700 ) 4,427 — 3,727 Costs incurred and charged to expense 1,867 557 410 2,834 Cash receipts (payments), net 607 ( 4,115 ) ( 110 ) ( 3,618 ) Non-cash adjustments ( 1,255 ) — — ( 1,255 ) Balance payable, June 30, 2018 519 869 300 1,688 (1) Balance payable as at June 29, 2019 was included in accounts payable and accrued liabilities on the consolidated balance sheet. (a) Asset impairments and facility closure costs For the two quarters ended June 29, 2019, costs incurred included costs to dismantle and move equipment from the Company’s soy extraction facility, in Heuvelton, New York, which was closed in December 2016. As at June 29, 2019, the balance payable represented the remaining lease obligation (net of sublease rentals) related to the Company’s former nutritional bar facility, which was vacated in March 2018. The lease and sublease on this facility extend to December 2020. For the two quarters ended June 30, 2018, costs incurred included the remaining lease obligation related to the former nutrition bar facility, and an impairment loss related to the disposal of the Company’s roasting facility in Wahpeton, North Dakota. Net cash receipts reflected proceeds on the sale of nutrition bar equipment. (b) Employee recruitment, retention and termination costs For the two quarters ended June 29, 2019, costs incurred included severance benefits related to employee terminations, including the Company’s former President and Chief Executive Officer ("CEO") in February 2019 and headcount reductions related to cost rationalizations associated with the sale of the soy and corn business, net of the reversal of $ 2.1 million of previously recognized stock-based compensation related to forfeited awards of terminated employees. In addition, costs incurred included recruitment costs related to the Company’s CEO transition, accrued retention bonuses for certain employees who remain employed by the Company through specified retention dates, and the reimbursement of employee relocation costs. As at June 29, 2019, the balance payable included severance benefits payable to certain employees through salary continuance extending up to 24 months, as well as accrued retention costs. For the two quarters ended June 30, 2018, costs incurred represented severance benefits to terminated employees, and cash payments included retention bonuses that were paid out to certain employees. The following table summarizes costs incurred since the inception of the Value Creation Plan to June 29, 2019: Employee Asset recruitment, Consulting impairments retention and fees and and facility termination temporary closure costs costs labor costs Total $ $ $ $ Costs incurred and charged to expense 34,960 17,928 21,257 74,145 Cash payments, net ( 10,161 ) ( 18,854 ) ( 21,257 ) ( 50,272 ) Non-cash adjustments ( 24,497 ) 2,525 — ( 21,972 ) Balance payable, June 29, 2019 302 1,599 — 1,901 For the quarters and two quarters ended June 29, 2019 and June 30, 2018, costs incurred and charged to expense were recorded in the consolidated statement of operations as follows: Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ $ $ Cost of goods sold (1) — — — 100 Selling, general and administrative expenses (2) 954 300 1,157 613 Other expense (3) 721 339 2,376 2,121 1,675 639 3,533 2,834 (1) For the two quarters ended June 30, 2018, inventory write-downs and facility closure costs recorded in cost of goods sold were allocated to the Consumer Products operating segment. (2) Professional fees and employee retention, recruitment and relocation costs recorded in selling general and administrative expenses were allocated to Corporate Services. (3) For the quarter ended June 29, 2019, costs recorded in other expense, such as employee termination and recruitment costs, and asset impairment, facility closure and lease termination costs, were allocated as follows: Global Ingredients reportable segment – $ 0.1 million (June 30, 2018 – $ 0.3 million); Consumer Products operating segment – $ 0.5 million (June 30, 2018 – $ nil ); and Corporate Services – $ 0.1 million (June 30, 2018 – $ nil ). For the two quarters ended June 29, 2019, costs recorded in other expense were allocated as follows: Global Ingredients reportable segment – $ 0.3 million (June 30, 2018 – $ 0.7 million); Consumer Products operating segment – $ 1.3 million (June 30, 2018 – $ 1.3 million); and Corporate Services – $ 0.8 million (June 30, 2018 – $ 0.1 million). |
Derivative Financial Instrument
Derivative Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jun. 29, 2019 | |
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | |
Derivative Financial Instruments and Fair Value Measurements [Text Block] | 6. Derivative Financial Instruments and Fair Value Measurements The following table presents for each of the fair value hierarchies, the assets and liabilities that are measured at fair value on a recurring basis as of June 29, 2019 and December 29, 2018: June 29, 2019 Fair value asset (liability) Level 1 Level 2 Level 3 $ $ $ $ Commodity futures contracts (1) Unrealized short-term derivative asset 162 162 — — Forward foreign currency contracts (2) Not designated as hedging instruments 190 — 190 — Contingent consideration (3) (4,286 ) — — (4,286 ) December 29, 2018 Fair value asset (liability) Level 1 Level 2 Level 3 $ $ $ $ Commodity futures and forward contracts (1) Unrealized short-term derivative asset 620 — 620 — Unrealized long-term derivative asset 7 — 7 — Unrealized short-term derivative liability (581 ) (94 ) (487 ) — Unrealized long-term derivative liability (17 ) — (17 ) — Forward foreign currency contracts (2) Not designated as hedging instruments 583 — 583 — Contingent consideration (3) (4,286 ) — — (4,286 ) Inventories carried at market (4) 3,239 — 3,239 — (1) Commodity futures and forward contracts As at June 29, 2019, outstanding contracts comprise exchange-traded commodity futures for cocoa and coffee. As at December 29, 2018, outstanding contracts also included exchange-traded commodity futures and forward commodity purchase and sale contracts associated with the Company’s sold soy and corn business. Exchange-traded futures are fair valued based on unadjusted quotes for identical assets priced in active markets and are classified as level 1. Fair value for forward commodity purchase and sale contracts was estimated based on exchange-quoted prices adjusted for differences in local markets and were classified as level 2. Exchange-traded commodity futures for cocoa and coffee are used as part of the Company’s risk management strategy and represent economic hedges to limit risk related to fluctuations in the price of these commodities. These contracts are not designated as hedges for accounting purposes. Gains and losses on changes in fair value of these contracts are included in cost of goods sold on the consolidated statement of operations. For the quarter ended June 29, 2019, the Company recognized a gain of $0.4 million (June 30, 2018 – gain of $1.8 million), and for the two quarters ended June 29, 2019, the Company recognized a gain of $0.3 million (June 30, 2018 – gain of $0.7 million), related to changes in the fair value of these contracts. In addition, for the quarter and two quarters ended June 30, 2018, the Company recognized gains of $0.9 million and $0.5 million, respectively, related to changes in the fair value of soy and corn futures and forward contracts. On the consolidated balance sheets, unrealized gains on short-term and long-term contracts are included in other current assets and other assets, respectively, and unrealized losses on short-term and long-term contracts are included in other current liabilities and long-term liabilities, respectively. As at June 29, 2019, the Company had net open futures contracts to sell 5,490 metric tons ("MT") of cocoa (December 29, 2018 – 6,730 MT sold) and to purchase 187 MT (December 29, 2018 – 85 MT purchased) of coffee. (2) Foreign forward currency contracts As part of its risk management strategy, the Company enters into forward foreign exchange contracts to reduce its exposure to fluctuations in foreign currency exchange rates. For any open forward foreign exchange contracts at period end, the contract rate is compared to the forward rate, and a gain or loss is recorded. These contracts are included in level 2 of the fair value hierarchy, as the inputs used in making the fair value determination are derived from and are corroborated by observable market data. These contracts typically represent economic hedges that are not designated as hedging instruments; however, certain of these contracts may be designated as cash flow hedges for accounting purposes. As at June 29, 2019, the Company had open forward foreign exchange contracts to sell euros to buy U.S. dollars with a notional value of €6.8 million ($8.0 million), to sell British pounds to buy euros with a notional value of £1.1 million (€1.2 million), to sell Swiss francs to buy U.S. dollars with a notional value of CHF 1.5 million ($ 1.5 million), and to sell U.S. dollars to buy Mexican pesos with a notional value of $ 2.9 million (M$ 57.4 million). As these contracts were not designated as hedging instruments, gains and losses on changes in the fair value of the derivative instruments are included in foreign exchange loss or gain on the consolidated statement of operations. For the quarter ended June 29, 2019, the Company recognized a loss of $ 0.4 million (June 30, 2018 – gain of $ 1.1 million), and for the two quarters ended June 29, 2019, the Company recognized a loss of $ 0.4 million (June 30, 2018 – gain of $ 1.4 million), related to changes in the fair value of these contracts. Unrealized gains and losses on these contracts are included in accounts receivable and accounts payable, respectively, on the consolidated balance sheets. As at June 30, 2018, the Company had designated open forward exchange contracts to sell U.S. dollars to buy Mexican pesos as hedging instruments. As a result, effective portion of the gains and losses on changes in the fair value of those contracts was included in other comprehensive earnings and reclassified to cost of goods sold in the same period the hedged transaction affected earnings. For the quarter ended June 30, 2018, the Company recognized a net unrealized loss in other comprehensive earnings of $ 0.3 million, and for the two quarters ended June 30, 2018 the Company recognized a net gain of $ 0.5 million related to changes in the fair value of open contracts. For the quarter and two quarters ended June 30, 2018, the Company reclassified from other comprehensive earnings to cost of goods sold realized gains on closed contracts of $ 0.3 million and $ 0.2 million, respectively. (3) Contingent consideration As at June 29, 2019, the balance represents the remaining contingent consideration obligation under an earn-out arrangement with the former unitholders of Citrusource, LLC ("Citrusource"), under the terms of the Unit Purchase Agreement by which the Company acquired Citrusource in March 2015. The settlement of this obligation is pending the outcome of a dispute between the parties related to the Unit Purchase Agreement. The table below presents a reconciliation of the obligation for the quarters and two quarters ended June 29, 2019 and June 30, 2018. The balance of the obligation is included in the current portion of long-term liabilities on the consolidated balance sheets. Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ $ $ Balance, beginning of period ( 4,286 ) ( 8,904 ) ( 4,286 ) ( 11,320 ) Fair value adjustments (1) — ( 43 ) — 2,373 Payments (2) — 4,399 — 4,399 Balance, end of period ( 4,286 ) ( 4,548 ) ( 4,286 ) ( 4,548 ) (1) For the two quarters ended June 30, 2018, amount included an adjustment of $2.5 million to reduce the fourth and final contingent consideration obligation payable in 2019 based on the results of Citrusource in fiscal 2018. (2) For the two quarters ended June 30, 2018, amount reflected the third installment payment to the former unitholders of Citrusource. (4) Inventories carried at market As at December 29, 2018, inventories carried at market represented inventories of commodity soy and corn associated with the Company’s sold soy and corn business. The fair value of these inventories was determined using quoted market prices from the Chicago Board of Trade, as adjusted for differences in local markets, and broker or dealer quotes, and classified as level 2. Gains and losses on these inventories were included in cost of goods sold on the consolidated statements of operations. Inventories carried at market were included in inventories on the consolidated balance sheet as at December 29, 2018. |
Inventories
Inventories | 6 Months Ended |
Jun. 29, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories [Text Block] | 7 . Inventories December 29 , June 29, 2019 2018 $ $ Raw materials and work-in-process 296,487 278,038 Finished goods 89,688 83,225 Company-owned grain — 10,155 Inventory reserves (8,798 ) (9,461 ) 377,377 361,957 As at December 29, 2018, inventories of the soy and corn business that was sold comprised $2.3 million of the finished goods inventories and all of the company-owned grain inventories. |
Leases
Leases | 6 Months Ended |
Jun. 29, 2019 | |
Leases [Abstract] | |
Leases [Text Block] | 8. Leases The Company has operating leases for manufacturing plants, warehouses, offices, machinery and equipment, and farmland. The Company subleases the farmland to third-party growers under operating leases. The Company’s operating leases have remaining noncancelable lease terms of less than one year to approximately 15 years, and typically require monthly rental payments that may be adjusted annually to give effect to inflation. Real estate operating leases typically include options to extend the leases for up to 10 years. Machinery and equipment operating leases typically include purchase options for the fair market value of the underlying asset at the end of the lease term. Certain other leases for machinery and equipment include nominal purchase options at the end of the lease term that are reasonably certain of being exercised. These leases are classified as finance leases and have remaining lease terms of less than one year to approximately four years. The following tables present supplemental information related to leases recognized in the consolidated financial statements: Quarter ended Two quarters ended June 29, 2019 June 29, 2019 $ $ Lease Costs Operating lease cost 4,748 9,951 Finance lease cost Depreciation of right-of-use assets 294 591 Interest on lease liabilities 32 68 Sublease income (114 ) (234 ) Net lease cost 4,960 10,376 June 29, 2019 $ Balance Sheet Classification Operating leases Operating lease right-of-use assets 72,788 Current portion of operating lease liabilities 17,402 Operating lease liabilities 56,111 Total operating lease liabilities 73,513 Finance leases Property, plant and equipment, gross 9,997 Accumulated depreciation ( 5,176 ) Property, plant and equipment, net 4,821 Current portion of long-term debt 1,028 Long-term debt 1,781 Total finance lease liabilities 2,809 Quarter ended Two quarters ended June 29, 2019 June 29, 2019 $ $ Cash Flow Information Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases 4,862 10,240 Operating cash flows from finance leases 32 68 Financing cash flows from finance leases 391 783 Right-of-use assets obtained in exchange for lease liabilities Operating leases 647 647 Finance Leases — — June 29, 2019 Other Information Weighted-average remaining lease term (years) Operating leases 5.2 Finance leases 1.8 Weighted-average discount rate (1) Operating leases 9.0 % Finance leases 4.1 % (1) In determining the present value of lease payments, the Company uses the implicit rate in the lease when that rate is readily determinable, which is the case for most of the Company’s machinery and equipment leases. In all other cases, including real estate leases, the Company uses its incremental borrowing rate. The Company applied the incremental borrowing rate as at December 30, 2018 (the first day of fiscal 2019) to leases that commenced prior to that date. Discount rates are determined on a lease-by-lease basis Operating leases Finance leases $ $ Maturities of Lease Liabilities Remainder of 2019 9,114 688 2020 17,573 715 2021 14,638 715 2022 12,689 715 2023 8,407 179 Thereafter 47,855 — Total lease payments 110,276 3,012 Less: imputed interest (36,763 ) (203 ) Total lease liabilities 73,513 2,809 As at June 29, 2019, the Company had commitments for approximately $15 million of right-of-use assets for which the leases had not commenced. |
Bank Indebtedness and Long-Term
Bank Indebtedness and Long-Term Debt | 6 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
Bank Indebtedness and Long-Term Debt [Text Block] | 9 . Bank Indebtedness and Long-Term Debt December 29 , June 29, 2019 2018 $ $ Bank indebtedness: Global Credit Facility (1) 265,168 276,776 Bulgarian credit facility 3,342 3,558 268,510 280,334 Long-term debt: Senior Secured Second Lien Notes, net of unamortized debt issuance costs of $5,801 (December 29, 2018 - $6,472 ) (2) 217,697 217,026 Asset-backed term loan 4,712 3,103 Finance lease liabilities (see note 8) 2,809 3,706 Other 4,800 5,028 230,018 228,863 Less: current portion 1,524 1,840 228,494 227,023 ( 1 ) Global Credit Facility On February 11, 2016, the Company entered into a five-year credit agreement for a senior secured asset-based revolving credit facility with a syndicate of banks in the maximum aggregate principal amount of $350.0 million, subject to borrowing base capacity (the "Global Credit Facility"). The Global Credit Facility is used to support the working capital and general corporate needs of the Company’s global operations, in addition to funding future strategic initiatives. The Global Credit Facility also includes borrowing capacity available for letters of credit and provides for borrowings on same-day notice, including in the form of swingline loans. Subject to customary borrowing conditions and the agreement of any such lenders to provide such increased commitments, the Company may request to increase the total lending commitments under the Global Credit Facility to a maximum aggregate principal amount not to exceed $450.0 million. Outstanding principal amounts under the Global Credit Facility are repayable in full on the maturity date of February 10, 2021. Individual borrowings under the Global Credit Facility have terms of six months or less and bear interest based on various reference rates, including prime rate and LIBOR plus an applicable margin. The applicable margin in the Global Credit Facility ranges from 1.25% to 1.75% for loans bearing interest based on LIBOR and from 0.25% to 0.75% for loans bearing interest based on the prime rate and, in each case, is set quarterly based on average borrowing availability for the preceding fiscal quarter. On September 19, 2017, the Company entered into an amendment to the Global Credit Facility to add a $15.0 million U.S. asset-based credit subfacility (the "U.S. Subfacility"). On October 22, 2018, the Global Credit Facility was further amended to increase the commitment under the U.S. Subfacility to $20.0 million. Commencing onMarch 31, 2019 quarterly amortization payments on the aggregate principal amount of the U.S. Subfacility are equal to $3.33 million, and these payments may be funded through borrowings under the revolving facilities of the Global Credit Facility. Borrowings repaid under the U.S. Subfacility may not be borrowed again. As at June 29, 2019, $16.7 million remained drawn on the U.S. Subfacility. Borrowings under the U.S. Subfacility bear interest based on various reference rates plus a margin of 3.50%. The applicable margin for the U.S. Subfacility is set quarterly based on average borrowing availability for the preceding fiscal quarter ranges from 2.00% to 2.50% with respect to base rate and prime rate borrowings and from 3.00% to 3.50% for eurocurrency rate and bankers’ acceptance rate borrowings. As at June 29, 2019, the weighted-average interest rate on all borrowings under the Global Credit Facility was 3.81% . Obligations under the Global Credit Facility are guaranteed by substantially all of the Company’s subsidiaries and, subject to certain exceptions, such obligations are secured by first priority liens on substantially all of the assets of the Company. The Global Credit Facility contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to create liens on assets; sell assets and enter into sale and leaseback transactions; pay dividends, prepay junior lien and unsecured indebtedness and make other restricted payments; incur additional indebtedness and make guarantees; make investments, loans or advances, including acquisitions; and engage in mergers or consolidations. The foregoing covenants are subject to certain threshold amounts and exceptions as set forth in the credit agreement. (2) Senior Secured Second Lien Notes On October 20, 2016 , the Company’s subsidiary, SunOpta Foods Inc. ("SunOpta Foods") issued $231.0 million of 9.5% Senior Secured Second Lien Notes due 2022 (the "Notes"). As at June 29, 2019, the outstanding principal amount of the Notes was $223.5 million, reflecting the redemption of $7.5 million principal amount by SunOpta Foods in October 2017. Debt issuance costs are recorded as a reduction against the principal amount of the Notes and are being amortized over the six-year term of the Notes Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 at a rate of 9.5% per annum. The Notes will mature on October 9, 2022 . Giving effect to the amortization of debt issuance costs, the effective interest rate on the Notes is approximately 10.4% per annum. At any time after October 9, 2018, SunOpta Foods may redeem the Notes, in whole or in part, at a redemption price equal to 107.125% through October 8, 2019, 104.750% from October 9, 2019 through October 8, 2020, 102.375% from October 9, 2020 through October 8, 2021 and at par thereafter, plus accrued and unpaid interest, if any, to but excluding the date of redemption. Certain additional redemption rights were applicable prior to October 9, 2018. In the event of a change of control, SunOpta Foods will be required to make an offer to repurchase the Notes at 101.000% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase The Notes are secured by second-priority liens on substantially all of the assets that secure the credit facilities provided under the Global Credit Facility, subject to certain exceptions and permitted liens. The Notes are senior secured obligations and rank equally in right of payment with SunOpta Foods’ existing and future senior debt and senior in right of payment to any future subordinated debt. The Notes are effectively subordinated to debt under the Global Credit Facility and any future indebtedness secured on a first-priority basis. The Notes are initially guaranteed on a senior secured second-priority basis by the Company and each of its subsidiaries (other than SunOpta Foods) that guarantees indebtedness under the Global Credit Facility, subject to certain exceptions. The Notes are subject to covenants that, among other things, limit the Company’s ability to (i) incur additional debt or issue preferred stock; (ii) pay dividends and make certain types of investments and other restricted payments; (iii) create liens; (iv) enter into transactions with affiliates; (v) sell assets; and (vi) create restrictions on the ability of restricted subsidiaries to pay dividends, make loans or advances or transfer assets to the Company, SunOpta Foods or any guarantor of the Notes. The foregoing covenants are subject to certain threshold amounts and exceptions as set forth in the indenture governing the Notes. In addition, the indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the indenture, certain payment defaults or acceleration of other indebtedness, a failure to pay certain judgments and certain events of bankruptcy and insolvency. If an event of default occurs and is continuing, the trustee or holders of at least 25% in principal amount of the outstanding Notes may declare the principal of and accrued and unpaid interest on, if any, all the Notes to be due and payable. As at June 29, 2019, the estimated fair value of the outstanding Notes was approximately $240 million, based on quoted prices of the most recent over-the-counter transactions (level 2). |
Series A Preferred Stock
Series A Preferred Stock | 6 Months Ended |
Jun. 29, 2019 | |
Temporary Equity [Abstract] | |
Series A Preferred Stock [Text Block] | 10. Series A Preferred Stock On October 7, 2016, the Company and SunOpta Foods entered into a subscription agreement (the "Subscription Agreement") with Oaktree Organics, L.P. and Oaktree Huntington Investment Fund II, L.P. (collectively, the "Investors"). Pursuant to the Subscription Agreement, SunOpta Foods issued an aggregate of 85,000 shares of Series A Preferred Stock (the "Preferred Stock") to the Investors for consideration in the amount of $85.0 million. In connection with the issuance of the Preferred Stock, the Company incurred direct and incremental expenses of $6.0 million, which reduced the carrying value of the Preferred Stock. At any time on or after October 7, 2021, SunOpta Foods may redeem all of the Preferred Stock for an amount, per share of Preferred Stock, equal to the value of the liquidation preference at such time. The carrying value of the Preferred Stock is being accreted to the redemption amount of $85.0 million through charges to accumulated deficit over the period preceding October 7, 2021. In connection with the Subscription Agreement, the Company agreed to, among other things (i) ensure SunOpta Foods has sufficient funds to pay its obligations under the terms of the Preferred Stock and (ii) grant each holder of Preferred Stock (the "Holder") the right to exchange the Preferred Stock for shares of common stock of the Company (the "Common Shares"). The Preferred Stock is non-participating with the Common Shares in dividends and undistributed earnings of the Company. The Preferred Stock has a stated value and initial liquidation preference of $1,000 per share. Cumulative preferred dividends accrue daily on the Preferred Stock at an annualized rate of 8.0% of the liquidation preference prior to October 5, 2025 and 12.5% of the liquidation preference thereafter (subject to an increase of 1.0% per quarter, up to a maximum rate of 5.0% per quarter on the occurrence of certain events of non-compliance). Prior to October 5, 2025, SunOpta Foods may pay dividends in cash or elect, in lieu of paying cash, to add the amount that would have been paid to the liquidation preference. After October 4, 2025, the failure to pay dividends in cash will be an event of non-compliance. The Preferred Stock ranks senior to the shares of common stock of SunOpta Foods with respect to dividend rights and rights on the distribution of assets on any liquidation, winding up or dissolution of the Company or SunOpta Foods. SunOpta Foods paid cash dividends on the Preferred Stock of $1.7 million in the quarters ended June 29, 2019 and June 30, 2018, and $3.4 million in the two quarters ended June 29, 2019 and June 30, 2018. As at June 29, 2019, SunOpta Foods had accrued unpaid dividends of $1.7 million, which were recorded in accounts payable and accrued liabilities on the Company’s consolidated balance sheet. At any time, the Holders may exchange their shares of Preferred Stock, in whole or in part, into the number of Common Shares equal to, per share of Preferred Stock, the quotient of the liquidation preference divided by $7.50 (such price, the "Exchange Price" and such quotient, the "Exchange Rate"). As at June 29, 2019, the aggregate shares of Preferred Stock outstanding were exchangeable into 11,333,333 Common Shares. The Exchange Price is subject to certain anti-dilution adjustments, including a weighted-average adjustment for issuances of Common Shares below the Exchange Price, provided that the Exchange Price may not be lower than $7.00 (subject to adjustment in certain circumstances). SunOpta Foods may cause the Holders to exchange all of the Preferred Stock into a number of Common Shares based on the applicable Exchange Price if (i) fewer than 10% of the shares of Preferred Stock issued on October 7, 2016 remain outstanding, or (ii) on or after October 7, 2019, the average volume-weighted average price of the Common Shares during the then preceding 20 trading day period is greater than 200% of the Exchange Price. In connection with the Subscription Agreement, the Company issued 11,333,333 Special Shares, Series 1 (the "Special Voting Shares") to the Investors, which entitle the Investors to one vote per Special Voting Share on all matters submitted to a vote of the holders of Common Shares, together as a single class, subject to certain exceptions. Additional Special Voting Shares will be issued, or existing Special Voting Shares will be redeemed, as necessary to ensure that the aggregate number of Special Voting Shares outstanding is equal to the number of shares of Preferred Stock outstanding from time to time multiplied by the Exchange Rate in effect at such time. As at June 29, 2019, 11,333,333 Special Voting Shares were issued and outstanding, which represented an approximate 11.5% voting interest in the Company. The Special Voting Shares are not transferable, and the voting rights associated with the Special Voting Shares will terminate upon the transfer of the Preferred Stock to a third party, other than a controlled affiliate of the Investors. The Investors are entitled to designate up to two nominees for election to the Board of Directors of the Company (the "Board") and have the right to designate one individual to attend meetings of the Board as a non-voting observer, subject to the Investors maintaining certain levels of beneficial ownership of Common Shares on an as-exchanged basis For so long as the Investors beneficially own or control at least 50% of the Preferred Stock issued on October 7, 2016, including any corresponding Common Shares into which such Preferred Stock are exchanged, the Investors will be entitled to (i) participation rights with respect to future equity offerings of the Company, and (ii) governance rights, including the right to approve certain actions proposed to be taken by the Company and its subsidiaries. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation [Text Block] | 11 Stock-Based Compensation Chief Executive Officer On April 1, 2019, Joseph Ennen was appointed CEO of the Company. In connection with his appointment, the Company granted Mr. Ennen options to purchase 960,061 Common Shares, 297,619 restricted stock units ("RSUs") and 1,785,714 performance stock units ("PSUs"). The stock options vest on April 1, 2022, subject to Mr. Ennen continued employment during the vesting period, and expire on April 1, 2029. Each vested stock option will entitle Mr. Ennen to purchase one Common Share at an exercise price of $3.36 , which was equal to the closing price of the Common Shares on April 1, 2019. The RSUs vest in three equal annual installments beginning on April 1, 2020, and each vested RSU will entitle Mr. Ennen to receive one Common Share of the Company. The vesting of 892,857 of the PSUs granted is subject to the Company achieving annual adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") thresholds during fiscal years 2019 through 2022, as follows: 297,619 PSUs will vest upon the Company achieving annual adjusted EBITDA of $80 million, another 297,619 will vest upon the Company achieving annual adjusted EBITDA of $110 million, and the final 297,619 will vest upon the Company achieving annual adjusted EBITDA of $140 million, and subject to Mr. Ennen continued employment with the Company through the end of the fiscal year the adjusted EBITDA performance condition is achieved. The vesting of the other 892,857 PSUs that were granted is subject to the Common Shares achieving certain volume-weighted average trading prices during a performance period commencing on April 1, 2019 and ending on December 31, 2022, as follows: 297,619 PSUs will vest upon achieving a trading price of $5.00 per share, another 297,619 will vest upon achieving a trading price of $9.00 per share, and the final 297,619 will vest upon achieving a trading price of $14.00 per share, in each case for 20 consecutive trading days, and subject to Mr. Ennen’s continued employment with the Company through the date the stock price performance condition is achieved. Each vested PSU will entitle Mr. Ennen to receive one Common Share without payment of additional consideration. The grant-date fair values of the RSUs and PSUs subject to the adjusted EBITDA performance condition were estimated to be $3.36 based on the closing price of Common Shares on the date of grant. A grant-date fair value of $1.68 was estimated for the stock options using the Black-Scholes option pricing model, and a weighted-average grant-date fair value of $1.77 was estimated for the PSUs subject to the stock price performance condition using a Monte Carlo valuation model. The following table summarizes the inputs to the Black-Scholes option-pricing and Monte Carlo valuation models: Stock Options PSUs Grant-date stock price $ 3.36 $ 3.36 Exercise price $ 3.36 NA Dividend yield 0% 0% Expected volatility (1) 47.87% 55.68% Risk-free interest rate (2) 2.36% 2.30% Expected life (in years) (3) 6.50 1.82 (1) Determined based on the historical volatility of the Common Shares over the expected life of the stock options and performance period of the PSUs. (2) Determined based on U.S. Treasury yields with a remaining term equal to the expected life of the stock options and performance period of the PSUs. (3) Determined based on the mid-point of vesting ( three years ) and expiration ( ten years ) for the stock options and the derived service period for the PSUs. The aggregate grant-date fair value of the stock options, RSUs and PSUs awarded to Mr. Ennen was determined to be $7.2 million, which will be recognized on a straight-line basis over the vesting period for the stock options and RSUs and the derived service period for the PSUs. Each reporting period, the number of PSUs subject to the adjusted EBITDA performance condition that are expected to vest is redetermined and the aggregate grant-date fair value of the redetermined number of those PSUs is amortized over the remaining service period less amounts previously recognized. Short-Term Incentive Plan On April 12, 2019 and June 14, 2019, the Company granted a total of 2,795,525 PSUs to certain employees of the Company under its Short-Term Incentive Plan. The vesting of the PSUs is subject to the Company achieving a predetermined measure of adjusted EBITDA for fiscal 2019, and subject to each employee’s continued employment with the Company through April 12, 2020 (the requisite service period). The weighted-average grant-date fair value of the PSUs was estimated to be $3.46 based on the closing prices of the Common Shares on the dates of grant. Each reporting period, the number of PSUs that are expected to vest is redetermined and the aggregate grant-date fair value of the redetermined number of PSUs is amortized on a straight-line basis over the remaining requisite service period less amounts previously recognized. For the quarter ended June 29, 2019, the Company recognized compensation expense of $0.8 million related to the PSUs expected to vest, and the remaining compensation cost related to those PSUs not yet recognized as an expense was determined to be $3.8 million as at June 29, 2019. |
Other Expense (Income), Net
Other Expense (Income), Net | 6 Months Ended |
Jun. 29, 2019 | |
Other Income and Expenses [Abstract] | |
Other Expense (Income), Net [Text Block] | 12 . Other Expense (Income), Net The components of other expense (income) were as follows: Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ $ $ Gain on sale of soy and corn business (see note 4) 201 — (45,378 ) — Employee termination and recruitment costs (1) 669 122 2,068 354 Facility closure and lease termination costs (2) 52 217 308 1,767 Product withdrawal and recall costs (3) — 122 260 445 Business development costs (4) 26 — 26 — Project cancellation (5) (507 ) — (507 ) — Increase (decrease) in fair value of contingent consideration (see note 6( 3 )) — 43 — (2,373 ) Other 4 79 156 (12 ) 445 583 (43,067 ) 181 (1) Employee termination and recruitment costs For the two quarters ended June 29, 2019, expenses represent severance benefits of $ 3.5 million for employees terminated in connection with the Value Creation Plan, including the Company’s former CEO, net of the reversal of $ 2.1 million of previously recognized stock-based compensation expense related to forfeited awards previously granted to those employees. In addition, expenses include recruitment costs related to the Company’s CEO transition. For the quarter and two quarters ended June 30, 2018, the expense represents severance benefits incurred in connection with the Value Creation Plan. (2) Facility closure and lease termination costs For the two quarters ended June 29, 2019, expenses include costs to dismantle and move equipment from the Company’s former soy extraction facility located in Heuvelton, New York, which was sold in April 2019. For the two quarters ended June 30, 2018, expenses include the recognition of the remaining lease obligation related to the Company’s former nutrition bar facility, and an impairment loss and closure costs related to the disposal of the Company’s former roasting facility located in Wahpeton, North Dakota. (3) Product withdrawal and recall costs For the quarters and two quarters ended June 29, 2019 and June 30, 2018, expenses represent product withdrawal and recall costs that were not eligible for reimbursement under the Company’s insurance policies or exceeded the limits of those policies, including certain costs related to the voluntary recall of certain roasted sunflower kernel products initiated by the Company during the second quarter of 2016. (4) Business development costs For the quarter and two quarters ended June 29, 2019, expenses represent transaction costs incurred in connection with the acquisition of Sanmark (see note 3). (5) Project cancellation For the quarter and two quarters ended June 29, 2019, balance represents a gain related to a project cancellation. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share [Text Block] | 13 . Earnings (Loss) Per Share Basic and diluted earnings (loss) per share were calculated as follows (shares in thousands): Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Numerator for basic earnings (loss) per share: Earnings (loss) attributable to SunOpta Inc. $ (9,055 ) $ (3,174 ) $ 16,594 $ (7,537 ) Less: dividends and accretion on Series A Preferred Stock (2,001 ) (1,974 ) (3,996 ) (3,941 ) Earnings (loss) attributable to common shareholders $ (11,056 ) $ (5,148 ) $ 12,598 $ (11,478 ) Denominator for basic earnings (loss) per share: Basic weighted-average number of shares outstanding 87,683 86,968 87,579 86,889 Basic earnings (loss) per share $ (0.13 ) $ (0.06 ) $ 0.14 $ (0.13 ) Numerator for diluted earnings (loss) per share: Earnings (loss) attributable to SunOpta Inc. $ (9,055 ) $ (3,174 ) $ 16,594 $ (7,537 ) Less: dividends and accretion on Series A Preferred Stock (1) (2,001 ) (1,974 ) (3,996 ) (3,941 ) Earnings (loss) attributable to common shareholders $ (11,056 ) $ (5,148 ) $ 12,598 $ (11,478 ) Denominator for diluted earnings (loss) per share: Basic weighted-average number of shares outstanding 87,683 86,968 87,579 86,889 Dilutive effect of the following: Series A Preferred Stock (1) — — — — Stock options and restricted stock units (2) — — 164 — Diluted weighted-average number of shares outstanding 87,683 86,968 87,743 86,889 Diluted earnings (loss) per share $ (0.13 ) $ (0.06 ) $ 0.14 $ (0.13 ) (1) For the quarters and two quarters ended June 29, 2019 and June 30, 2018, it was more dilutive to assume the Preferred Stock was not converted into Common Shares and, therefore, the numerator of the diluted earnings/loss per share calculation was not adjusted to add back the dividends and accretion on the Preferred Stock and the denominator was not adjusted to include 11,333,333 Common Shares issuable on an if-converted basis. (2) For the quarters ended June 29, 2019 and June 30, 2018, stock options and restricted stock units to purchase or receive 187,516 and 574,865 Common Shares, respectively, were excluded from the calculation of diluted loss per share due to their anti-dilutive effect of reducing the loss per share, and for the two quarters ended June 30, 2018, 641,857 Common Shares were likewise excluded. In addition, for the quarter and two quarters ended June 29, 2019, options to purchase 3,176,284 (June 30, 2018 – 1,850,009 ) and 3,176,284 (June 30, 2018 – 2,032,158 ) Common Shares, respectively, were anti-dilutive because the exercise prices of these options were greater than the average market price. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 29, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information [Text Block] | 14 . Supplemental Cash Flow Information Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ $ $ Changes in non-cash working capital: Accounts receivable 1,525 5,398 5,736 (6,961 ) Inventories (45,868 ) (53,256 ) (30,221 ) (34,954 ) Income tax recoverable/payable (2,819 ) (1,134 ) (848 ) 2,207 Prepaid expenses and other current assets (3,350 ) 4,322 (7,971 ) (1,054 ) Accounts payable and accrued liabilities 19,348 5,650 6,841 6,031 Customer and other deposits (825 ) 696 (725 ) (704 ) (31,989 ) (38,324 ) (27,188 ) (35,435 ) |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies [Text Block] | 15 . Commitments and Contingencies Product Recall On November 20, 2017, Treehouse Foods, Inc., several of its related entities, and its insurer filed a lawsuit against the Company in the Circuit Court of Cook County, Illinois titled Treehouse Foods, Inc. et al. v. SunOpta Grains and Food, Inc. The Company was served with the Summons and Complaint on January 24, 2018. After the Company removed the case to the United States District Court for the Northern District of Illinois, the plaintiffs filed an Amended Complaint on April 23, 2018 and a second Amended Complaint on October 12, 2018. The plaintiffs allege economic damages resulting from the Company’s 2016 voluntary recall of certain roasted sunflower kernel products due to the potential for listeria monocytogenes contamination. The plaintiffs brought claims for breach of contract, express and implied warranties and product guarantees, negligence, strict liability, negligent misrepresentation, and indemnity seeking $16.2 million in damages. There are no allegations of personal injury. On March 29, 2019, the court dismissed the plaintiffs’ claims for negligence, strict liability, negligent misrepresentation, and common law indemnity. The Company is vigorously defending itself against the remaining contract and warranty-based claims. The Company cannot reasonably predict the outcome of this claim, nor can it estimate the amount of loss, or range of loss, if any, that may result from this claim. Other Claims In addition, various claims and potential claims arising in the normal course of business are pending against the Company. It is the opinion of management that these claims or potential claims are without merit and the amount of potential liability, if any, to the Company is not determinable. Management believes the final determination of these claims or potential claims will not materially affect the financial position or results of the Company. |
Segmented Information
Segmented Information | 6 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Segmented Information [Text Block] | 16. Segmented Information The composition of the Company’s reportable segments is as follows: • Global Ingredients aggregates the Company’s North American-based sunflower and roasted snack operations and international organic ingredients operations. Global Ingredients included the operations of the specialty and organic soy and corn business that was sold in first quarter of 2019 (see note 4). • Consumer Products consists of three main commercial platforms: Healthy Beverages, Healthy Fruit and Healthy Snacks. Healthy Beverages includes aseptically-packaged products including non-dairy plant-based beverages, broths and teas; refrigerated premium juices; and shelf-stable juices and functional waters. Healthy Fruit includes IQF fruits for retail; IQF and bulk frozen fruit for foodservice; and custom fruit preparations for industrial use. Healthy Snacks is focused on fruit snack offerings and included the ending contribution from the exited flexible resealable pouch and nutrition bar product lines in the first quarter of 2018. In addition, Corporate Services provides a variety of management, financial, information technology, treasury and administration services to each of the Company’s operating segments from the Company’s headquarters in Mississauga, Ontario and administrative office in Edina, Minnesota. When reviewing the operating results of the Company’s operating segments, management uses segment revenues from external customers and segment operating income/loss to assess performance and allocate resources. Segment operating income/loss excludes other income/expense items. In addition, interest expense and income taxes are not allocated to the operating segments. Quarter ended June 29, 2019 Global Consumer Ingredients Products Consolidated $ $ $ Segment revenues from external customers 117,007 175,997 293,004 Segment operating income (loss) 3,345 (1,213 ) 2,132 Corporate Services (4,669 ) Other expense, net (see note 12) (445 ) Interest expense, net (8,254 ) Loss before income taxes (11,236 ) Quarter ended June 30, 2018 Global Consumer Ingredients Products Consolidated $ $ $ Segment revenues from external customers 146,685 172,623 319,308 Segment operating income 2,965 4,762 7,727 Corporate Services (3,086 ) Other expense, net (see note 12) (583 ) Interest expense, net (8,474 ) Loss before income taxes (4,416 ) Two quarters ended June 29, 2019 Global Consumer Ingredients Products Consolidated $ $ $ Segment revenues from external customers 245,050 353,229 598,279 Segment operating income 8,068 ( 2,551 ) 5,517 Corporate Services ( 7,734 ) Other income, net (see note 12) 43,067 Interest expense, net ( 16,993 ) Earnings before income taxes 23,857 Two quarters ended June 30, 2018 Global Consumer Ingredients Products Consolidated $ $ $ Segment revenues from external customers 283,016 348,944 631,960 Segment operating income 6,067 8,078 14,145 Corporate Services ( 7,841 ) Other expense, net (see note 12) ( 181 ) Interest expense, net ( 16,694 ) Loss before income taxes ( 10,571 ) |
Description of Business and S_2
Description of Business and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation [Text Block] | Basis of Presentation The interim consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended, and in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information. Accordingly, these condensed interim consolidated financial statements do not include all of the disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included and all such adjustments are of a normal, recurring nature. Operating results for the quarter and two quarters ended June 29, 2019 are not necessarily indicative of the results that may be expected for the full fiscal year ending December 28, 2019 or for any other period. The interim consolidated financial statements include the accounts of the Company and its subsidiaries, and have been prepared on a basis consistent with the annual consolidated financial statements for the year ended December 29, 2018, except as described below under "Recent Accounting Pronouncements – Adoption of New Accounting Standards." For further information, refer to the consolidated financial statements, and notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018. |
Fiscal Year [Policy Text Block] | Fiscal Year The fiscal year of the Company consists of a 52- or 53-week period ending on the Saturday closest to December 31. Fiscal year 2019 is a 52-week period ending on December 28, 2019, with quarterly periods ending on March 30, June 29 and September 28, 2019. Fiscal year 2018 was a 52-week period ending on December 29, 2018, with quarterly periods ending on March 31, June 30 and September 29, 2018. |
Recent Accounting Pronouncements [Policy Text Block] | Recent Accounting Pronouncements Adoption of New Accounting Standard In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases" ("ASC Topic 842"), which amends various aspects of legacy accounting guidance for leases, including the recognition of right-of-use assets and lease liabilities for leases classified as operating leases. The Company adopted ASC Topic 842 on a modified retrospective basis beginning the first quarter of 2019, and elected the transition option not to apply the new guidance, including disclosure requirements, in comparative reporting periods. Upon adoption, the Company also elected to apply the practical expedients available under the standard to not reassess its prior conclusions about lease identification, lease classification and initial direct costs. As a result, the adoption of ASC Topic 842 did not result in any cumulative-effect adjustment to the Company’s opening accumulated deficit. The adoption of the new guidance resulted in the recognition of operating lease right-of-use assets and lease liabilities on the Company’s consolidated balance sheet as at June 29, 2019, while the accounting for finance leases remained unchanged. The new guidance did not have any impact on the consolidated results of operations or cash flows of the Company for the quarter and two quarters ended June 29, 2019. See note 8 for additional disclosures under ASC Topic 842. Recently Issued Accounting Standard, Not Adopted as at June 29, 2019 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation Of Revenue [Table Text Block] | Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ Global Ingredients Internationally-sourced organic ingredients 101,938 102,607 207,822 204,874 North American-sourced seeds and grains (1) 15,069 44,078 37,228 78,142 Total Global Ingredients 117,007 146,685 245,050 283,016 Consumer Products Beverage products (2) 85,823 80,549 173,892 165,799 Frozen fruit products (3) 78,722 82,135 155,399 159,606 Snack products (4) 11,452 9,939 23,938 23,539 Total Consumer Products 175,997 172,623 353,229 348,944 Total revenues 293,004 319,308 598,279 631,960 |
Sale of Soy and Corn Business (
Sale of Soy and Corn Business (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Sale Of Soy And Corn Business [Abstract] | |
Schedule of gain on sale of the soy and corn business [Table Text Block] | Quarter ended Two quarters ended June 29, 2019 June 29, 2019 $ $ Cash consideration - 66,500 Transaction and related costs (201 ) (1,825 ) Net proceeds (201 ) 64,675 Current assets - 22,810 Property, plant and equipment - 8,423 Goodwill - 1,526 Current liabilities - (13,462 ) Net assets sold - 19,297 Pre-tax gain (loss) on sale (201 ) 45,378 |
Value Creation Plan (Tables)
Value Creation Plan (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule Of Restructuring And Related Costs [Table Text Block] | Employee Asset recruitment, Consulting impairments retention and fees and and facility termination temporary closure costs (a) costs (b) labor costs Total $ $ $ $ June 29, 2019 Balance payable, December 29, 2018 (1) 477 436 — 913 Costs incurred and charged to expense 308 2,947 278 3,533 Cash payments, net (483 ) (3,886 ) ( 278 ) ( 4,647 ) Non-cash adjustments — 2,102 — 2,102 Balance payable, June 29, 2019 (1) 302 1,599 — 1,901 June 30, 2018 Balance payable (receivable), December 31, 2017 ( 700 ) 4,427 — 3,727 Costs incurred and charged to expense 1,867 557 410 2,834 Cash receipts (payments), net 607 ( 4,115 ) ( 110 ) ( 3,618 ) Non-cash adjustments ( 1,255 ) — — ( 1,255 ) Balance payable, June 30, 2018 519 869 300 1,688 (1) Balance payable as at June 29, 2019 was included in accounts payable and accrued liabilities on the consolidated balance sheet. (a) Asset impairments and facility closure costs For the two quarters ended June 29, 2019, costs incurred included costs to dismantle and move equipment from the Company’s soy extraction facility, in Heuvelton, New York, which was closed in December 2016. As at June 29, 2019, the balance payable represented the remaining lease obligation (net of sublease rentals) related to the Company’s former nutritional bar facility, which was vacated in March 2018. The lease and sublease on this facility extend to December 2020. For the two quarters ended June 30, 2018, costs incurred included the remaining lease obligation related to the former nutrition bar facility, and an impairment loss related to the disposal of the Company’s roasting facility in Wahpeton, North Dakota. Net cash receipts reflected proceeds on the sale of nutrition bar equipment. (b) Employee recruitment, retention and termination costs For the two quarters ended June 29, 2019, costs incurred included severance benefits related to employee terminations, including the Company’s former President and Chief Executive Officer ("CEO") in February 2019 and headcount reductions related to cost rationalizations associated with the sale of the soy and corn business, net of the reversal of $ 2.1 million of previously recognized stock-based compensation related to forfeited awards of terminated employees. In addition, costs incurred included recruitment costs related to the Company’s CEO transition, accrued retention bonuses for certain employees who remain employed by the Company through specified retention dates, and the reimbursement of employee relocation costs. As at June 29, 2019, the balance payable included severance benefits payable to certain employees through salary continuance extending up to 24 months, as well as accrued retention costs. For the two quarters ended June 30, 2018, costs incurred represented severance benefits to terminated employees, and cash payments included retention bonuses that were paid out to certain employees. The following table summarizes costs incurred since the inception of the Value Creation Plan to June 29, 2019: Employee Asset recruitment, Consulting impairments retention and fees and and facility termination temporary closure costs costs labor costs Total $ $ $ $ Costs incurred and charged to expense 34,960 17,928 21,257 74,145 Cash payments, net ( 10,161 ) ( 18,854 ) ( 21,257 ) ( 50,272 ) Non-cash adjustments ( 24,497 ) 2,525 — ( 21,972 ) Balance payable, June 29, 2019 302 1,599 — 1,901 For the quarters and two quarters ended June 29, 2019 and June 30, 2018, costs incurred and charged to expense were recorded in the consolidated statement of operations as follows: Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ $ $ Cost of goods sold (1) — — — 100 Selling, general and administrative expenses (2) 954 300 1,157 613 Other expense (3) 721 339 2,376 2,121 1,675 639 3,533 2,834 (1) For the two quarters ended June 30, 2018, inventory write-downs and facility closure costs recorded in cost of goods sold were allocated to the Consumer Products operating segment. (2) Professional fees and employee retention, recruitment and relocation costs recorded in selling general and administrative expenses were allocated to Corporate Services. (3) For the quarter ended June 29, 2019, costs recorded in other expense, such as employee termination and recruitment costs, and asset impairment, facility closure and lease termination costs, were allocated as follows: Global Ingredients reportable segment – $ 0.1 million (June 30, 2018 – $ 0.3 million); Consumer Products operating segment – $ 0.5 million (June 30, 2018 – $ nil ); and Corporate Services – $ 0.1 million (June 30, 2018 – $ nil ). For the two quarters ended June 29, 2019, costs recorded in other expense were allocated as follows: Global Ingredients reportable segment – $ 0.3 million (June 30, 2018 – $ 0.7 million); Consumer Products operating segment – $ 1.3 million (June 30, 2018 – $ 1.3 million); and Corporate Services – $ 0.8 million (June 30, 2018 – $ 0.1 million). |
Derivative Financial Instrume_2
Derivative Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | June 29, 2019 Fair value asset (liability) Level 1 Level 2 Level 3 $ $ $ $ Commodity futures contracts (1) Unrealized short-term derivative asset 162 162 — — Forward foreign currency contracts (2) Not designated as hedging instruments 190 — 190 — Contingent consideration (3) (4,286 ) — — (4,286 ) December 29, 2018 Fair value asset (liability) Level 1 Level 2 Level 3 $ $ $ $ Commodity futures and forward contracts (1) Unrealized short-term derivative asset 620 — 620 — Unrealized long-term derivative asset 7 — 7 — Unrealized short-term derivative liability (581 ) (94 ) (487 ) — Unrealized long-term derivative liability (17 ) — (17 ) — Forward foreign currency contracts (2) Not designated as hedging instruments 583 — 583 — Contingent consideration (3) (4,286 ) — — (4,286 ) Inventories carried at market (4) 3,239 — 3,239 — |
Schedule Of Business Acquisitions By Acquisition Contingent Consideration [Table Text Block] | Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ $ $ Balance, beginning of period ( 4,286 ) ( 8,904 ) ( 4,286 ) ( 11,320 ) Fair value adjustments (1) — ( 43 ) — 2,373 Payments (2) — 4,399 — 4,399 Balance, end of period ( 4,286 ) ( 4,548 ) ( 4,286 ) ( 4,548 ) (1) For the two quarters ended June 30, 2018, amount included an adjustment of $2.5 million to reduce the fourth and final contingent consideration obligation payable in 2019 based on the results of Citrusource in fiscal 2018. (2) For the two quarters ended June 30, 2018, amount reflected the third installment payment to the former unitholders of Citrusource. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | December 29 , June 29, 2019 2018 $ $ Raw materials and work-in-process 296,487 278,038 Finished goods 89,688 83,225 Company-owned grain — 10,155 Inventory reserves (8,798 ) (9,461 ) 377,377 361,957 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Leases [Abstract] | |
Schedule of lease costs [Table Text Block] | Quarter ended Two quarters ended June 29, 2019 June 29, 2019 $ $ Lease Costs Operating lease cost 4,748 9,951 Finance lease cost Depreciation of right-of-use assets 294 591 Interest on lease liabilities 32 68 Sublease income (114 ) (234 ) Net lease cost 4,960 10,376 |
Schedule of Balance Sheet Classification, Cash Flow Information, Other Information [Table Text Block] | June 29, 2019 $ Balance Sheet Classification Operating leases Operating lease right-of-use assets 72,788 Current portion of operating lease liabilities 17,402 Operating lease liabilities 56,111 Total operating lease liabilities 73,513 Finance leases Property, plant and equipment, gross 9,997 Accumulated depreciation ( 5,176 ) Property, plant and equipment, net 4,821 Current portion of long-term debt 1,028 Long-term debt 1,781 Total finance lease liabilities 2,809 Quarter ended Two quarters ended June 29, 2019 June 29, 2019 $ $ Cash Flow Information Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases 4,862 10,240 Operating cash flows from finance leases 32 68 Financing cash flows from finance leases 391 783 Right-of-use assets obtained in exchange for lease liabilities Operating leases 647 647 Finance Leases — — June 29, 2019 Other Information Weighted-average remaining lease term (years) Operating leases 5.2 Finance leases 1.8 Weighted-average discount rate (1) Operating leases 9.0 % Finance leases 4.1 % |
Schedule of lease liabilities maturities [Table Text Block] | Operating leases Finance leases $ $ Maturities of Lease Liabilities Remainder of 2019 9,114 688 2020 17,573 715 2021 14,638 715 2022 12,689 715 2023 8,407 179 Thereafter 47,855 — Total lease payments 110,276 3,012 Less: imputed interest (36,763 ) (203 ) Total lease liabilities 73,513 2,809 |
Bank Indebtedness and Long-Te_2
Bank Indebtedness and Long-Term Debt (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities [Table Text Block] | December 29 , June 29, 2019 2018 $ $ Bank indebtedness: Global Credit Facility (1) 265,168 276,776 Bulgarian credit facility 3,342 3,558 268,510 280,334 Long-term debt: Senior Secured Second Lien Notes, net of unamortized debt issuance costs of $5,801 (December 29, 2018 - $6,472 ) (2) 217,697 217,026 Asset-backed term loan 4,712 3,103 Finance lease liabilities (see note 8) 2,809 3,706 Other 4,800 5,028 230,018 228,863 Less: current portion 1,524 1,840 228,494 227,023 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock options granted using the Black-Scholes option pricing model [Table Text Block] | Stock Options PSUs Grant-date stock price $ 3.36 $ 3.36 Exercise price $ 3.36 NA Dividend yield 0% 0% Expected volatility (1) 47.87% 55.68% Risk-free interest rate (2) 2.36% 2.30% Expected life (in years) (3) 6.50 1.82 (1) Determined based on the historical volatility of the Common Shares over the expected life of the stock options and performance period of the PSUs. (2) Determined based on U.S. Treasury yields with a remaining term equal to the expected life of the stock options and performance period of the PSUs. (3) Determined based on the mid-point of vesting ( three years ) and expiration ( ten years ) for the stock options and the derived service period for the PSUs. |
Other Expense (Income), Net (Ta
Other Expense (Income), Net (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ $ $ Gain on sale of soy and corn business (see note 4) 201 — (45,378 ) — Employee termination and recruitment costs (1) 669 122 2,068 354 Facility closure and lease termination costs (2) 52 217 308 1,767 Product withdrawal and recall costs (3) — 122 260 445 Business development costs (4) 26 — 26 — Project cancellation (5) (507 ) — (507 ) — Increase (decrease) in fair value of contingent consideration (see note 6( 3 )) — 43 — (2,373 ) Other 4 79 156 (12 ) 445 583 (43,067 ) 181 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Numerator for basic earnings (loss) per share: Earnings (loss) attributable to SunOpta Inc. $ (9,055 ) $ (3,174 ) $ 16,594 $ (7,537 ) Less: dividends and accretion on Series A Preferred Stock (2,001 ) (1,974 ) (3,996 ) (3,941 ) Earnings (loss) attributable to common shareholders $ (11,056 ) $ (5,148 ) $ 12,598 $ (11,478 ) Denominator for basic earnings (loss) per share: Basic weighted-average number of shares outstanding 87,683 86,968 87,579 86,889 Basic earnings (loss) per share $ (0.13 ) $ (0.06 ) $ 0.14 $ (0.13 ) Numerator for diluted earnings (loss) per share: Earnings (loss) attributable to SunOpta Inc. $ (9,055 ) $ (3,174 ) $ 16,594 $ (7,537 ) Less: dividends and accretion on Series A Preferred Stock (1) (2,001 ) (1,974 ) (3,996 ) (3,941 ) Earnings (loss) attributable to common shareholders $ (11,056 ) $ (5,148 ) $ 12,598 $ (11,478 ) Denominator for diluted earnings (loss) per share: Basic weighted-average number of shares outstanding 87,683 86,968 87,579 86,889 Dilutive effect of the following: Series A Preferred Stock (1) — — — — Stock options and restricted stock units (2) — — 164 — Diluted weighted-average number of shares outstanding 87,683 86,968 87,743 86,889 Diluted earnings (loss) per share $ (0.13 ) $ (0.06 ) $ 0.14 $ (0.13 ) |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Quarter ended Two quarters ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 $ $ $ $ Changes in non-cash working capital: Accounts receivable 1,525 5,398 5,736 (6,961 ) Inventories (45,868 ) (53,256 ) (30,221 ) (34,954 ) Income tax recoverable/payable (2,819 ) (1,134 ) (848 ) 2,207 Prepaid expenses and other current assets (3,350 ) 4,322 (7,971 ) (1,054 ) Accounts payable and accrued liabilities 19,348 5,650 6,841 6,031 Customer and other deposits (825 ) 696 (725 ) (704 ) (31,989 ) (38,324 ) (27,188 ) (35,435 ) |
Segmented Information (Tables)
Segmented Information (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Quarter ended June 29, 2019 Global Consumer Ingredients Products Consolidated $ $ $ Segment revenues from external customers 117,007 175,997 293,004 Segment operating income (loss) 3,345 (1,213 ) 2,132 Corporate Services (4,669 ) Other expense, net (see note 12) (445 ) Interest expense, net (8,254 ) Loss before income taxes (11,236 ) Quarter ended June 30, 2018 Global Consumer Ingredients Products Consolidated $ $ $ Segment revenues from external customers 146,685 172,623 319,308 Segment operating income 2,965 4,762 7,727 Corporate Services (3,086 ) Other expense, net (see note 12) (583 ) Interest expense, net (8,474 ) Loss before income taxes (4,416 ) Two quarters ended June 29, 2019 Global Consumer Ingredients Products Consolidated $ $ $ Segment revenues from external customers 245,050 353,229 598,279 Segment operating income 8,068 ( 2,551 ) 5,517 Corporate Services ( 7,734 ) Other income, net (see note 12) 43,067 Interest expense, net ( 16,993 ) Earnings before income taxes 23,857 Two quarters ended June 30, 2018 Global Consumer Ingredients Products Consolidated $ $ $ Segment revenues from external customers 283,016 348,944 631,960 Segment operating income 6,067 8,078 14,145 Corporate Services ( 7,841 ) Other expense, net (see note 12) ( 181 ) Interest expense, net ( 16,694 ) Loss before income taxes ( 10,571 ) |
Description of Business and S_3
Description of Business and Significant Accounting Policies (Narrative) (Details) | 6 Months Ended |
Jun. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Entity Incorporation, Date of Incorporation | Nov. 13, 1973 |
Operating Cycle | The fiscal year of the Company consists of a 52- or 53-week period ending on the Saturday closest to December 31. Fiscal year 2019 is a 52-week period ending on December 28, 2019, with quarterly periods ending on March 30, June 29 and September 28, 2019. Fiscal year 2018 was a 52-week period ending on December 29, 2018, with quarterly periods ending on March 31, June 30 and September 29, 2018. |
Year Founded | 1973 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | $ 293,004 | $ 319,308 | $ 598,279 | $ 631,960 |
Flexible resealable pouch and nutrition bar products | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | $ 500 | $ 3,100 |
Business Acquisition (Narrative
Business Acquisition (Narrative) (Details) - Sanmark B V [Member] $ in Millions | Apr. 01, 2019USD ($) |
Business Acquisition [Line Items] | |
Percentage of outstanding shares acquired | 100.00% |
Payments to Acquire Businesses, Gross | $ 3.3 |
Working capital acquired | 1.2 |
Goodwill, Acquired During Period | $ 2.1 |
Sale of Soy and Corn Business_2
Sale of Soy and Corn Business (Narrative) (Details) - Sunopta Grains And Foods Inc [Member] - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Feb. 22, 2019 | Jun. 30, 2018 | Jun. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from sale of business | $ 66.5 | ||
Revenue | 10.3 | $ 29.5 | $ 50.9 |
Earnings (loss) before income taxes | $ (0.2) | $ 2.4 | $ 4.7 |
Value Creation Plan (Narrative)
Value Creation Plan (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Reversal of previously recognized stock-based compensation related to forfeited awards of terminated employees | $ 2.1 | |||
Consumer Products [Member] | Employee termination, recruitment and relocation costs [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other expense | $ 0.5 | $ 0 | 1.3 | $ 1.3 |
Corporate Services [Member] | Employee termination, recruitment and relocation costs [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other expense | 0.1 | 0 | 0.8 | 0.1 |
Global Ingredients [Member] | Employee termination, recruitment and relocation costs [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other expense | $ 0.1 | $ 0.3 | $ 0.3 | $ 0.7 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Fair Value Measurements (Narrative) (Details) $ in Thousands, € in Millions, £ in Millions, SFr in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 29, 2019USD ($)T | Jun. 30, 2018USD ($) | Dec. 29, 2018T | Jun. 29, 2019CHF (SFr) | Jun. 29, 2019EUR (€) | Jun. 29, 2019GBP (£) | Jun. 29, 2019MXN ($) | Jun. 29, 2019USD ($) | |
Derivative [Line Items] | ||||||||||
Unrealized loss (gain) on derivative instrument | $ 400 | $ 2,764 | $ 288 | $ 1,243 | ||||||
Not designated as hedging instruments [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | (400) | 1,100 | $ (400) | 1,400 | ||||||
Not designated as hedging instruments [Member] | Cocoa [Member] | Future And Forward Contracts [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative, Nonmonetary Notional Amount | T | 5,490 | 6,730 | ||||||||
Not designated as hedging instruments [Member] | Coffee [Member] | Future And Forward Contracts [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative, Nonmonetary Notional Amount | T | 187 | 85 | ||||||||
Not designated as hedging instruments [Member] | Recurring basis [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Unrealized loss (gain) on derivative instrument | $ 400 | 1,800 | $ 300 | 700 | ||||||
Not designated as hedging instruments [Member] | Recurring basis [Member] | Forward Foreign Exchange Contracts To Swiss francs To Buy U. S. Dollars Member | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative, notional amount | SFr 1.5 | $ 1,500 | ||||||||
Not designated as hedging instruments [Member] | Recurring basis [Member] | Forward Foreign Exchange Contracts To Sell Euros To Buy U.S. Dollars [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative, notional amount | € 6.8 | 8,000 | ||||||||
Not designated as hedging instruments [Member] | Recurring basis [Member] | Forward Foreign Exchange Contracts To Sell British Pounds To Buy Euros [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative, notional amount | € 1.2 | £ 1.1 | ||||||||
Not designated as hedging instruments [Member] | Recurring basis [Member] | Forward Foreign Exchange Contracts To Sell U. S. Dollars To Buy Mexican Pesos | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative, notional amount | $ 57.4 | $ 2,900 | ||||||||
Not designated as hedging instruments [Member] | Recurring basis [Member] | Soy And Corn [Member] | Future And Forward Contracts [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Unrealized loss (gain) on derivative instrument | 900 | 500 | ||||||||
Designated as hedging instruments [Member] | Recurring basis [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | (300) | 500 | ||||||||
Gain (Loss) on Components Excluded from Assessment of Foreign Currency Cash Flow Hedge Effectiveness | $ 300 | $ 200 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 29, 2018USD ($) | |
Inventory Disclosure [Abstract] | |
Decline in finished goods inventories due to sale of the soy and corn business | $ 2.3 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | 6 Months Ended |
Jun. 29, 2019 | |
Operating Leased Assets [Line Items] | |
Right-of-Use Asset for which lease had not commenced | As at June 29, 2019, the Company had commitments for approximately $15 million of right-of-use assets for which the leases had not commenced |
Minimum | |
Operating Leased Assets [Line Items] | |
Lessee, Operating Lease, Term of Contract | 1 year |
Maximum | |
Operating Leased Assets [Line Items] | |
Lessee, Operating Lease, Term of Contract | 15 years |
Real estate operating leases | |
Operating Leased Assets [Line Items] | |
Lessee, Operating Lease, Renewal Term | 10 years |
Bank Indebtedness and Long-Te_3
Bank Indebtedness and Long-Term Debt (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Oct. 22, 2018 | Sep. 19, 2017 | Jun. 29, 2019 | Oct. 20, 2016 | |
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Initiation Date | Feb. 11, 2016 | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 350,000 | |||
Line Of Credit Facility, Increased Maximum Borrowing Capacity | $ 450,000 | |||
Line of Credit Facility, Description | On February 11, 2016, the Company entered into a five-year credit agreement for a senior secured asset-based revolving credit facility with a syndicate of banks in the maximum aggregate principal amount of $350.0 million, subject to borrowing base capacity (the "Global Credit Facility"). The Global Credit Facility is used to support the working capital and general corporate needs of the Company’s global operations, in addition to funding future strategic initiatives. The Global Credit Facility also includes borrowing capacity available for letters of credit and provides for borrowings on same-day notice, including in the form of swingline loans. Subject to customary borrowing conditions and the agreement of any such lenders to provide such increased commitments, the Company may request to increase the total lending commitments under the Global Credit Facility to a maximum aggregate principal amount not to exceed $450.0 million. Outstanding principal amounts under the Global Credit Facility are repayable in full on the maturity date of February 10, 2021. Individual borrowings under the Global Credit Facility have terms of six months or less and bear interest based on various reference rates, including prime rate and LIBOR plus an applicable margin. The applicable margin in the Global Credit Facility ranges from 1.25% to 1.75% for loans bearing interest based on LIBOR and from 0.25% to 0.75% for loans bearing interest based on the prime rate and, in each case, is set quarterly based on average borrowing availability for the preceding fiscal quarter. | |||
Line of Credit Facility, Expiration Date | Feb. 10, 2021 | |||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate During Period | 1.25% | |||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate During Period | 1.75% | |||
Revolving Credit Facility [Member] | Prime Rate [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate During Period | 0.25% | |||
Revolving Credit Facility [Member] | Prime Rate [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate During Period | 0.75% | |||
US Subfacility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Description | On September 19, 2017, the Company entered into an amendment to the Global Credit Facility to add a $15.0 million U.S. asset-based credit subfacility (the "U.S. Subfacility"). | |||
Line of Credit Facility, Increase (Decrease), Net | $ 15,000 | |||
Proceeds from Lines of Credit | $ 20,000 | |||
Line of Credit Facility, Date of First Required Payment | Mar. 31, 2019 | |||
Line of Credit Facility, Periodic Payment, Principal | $ 3,330 | |||
Line of Credit Facility, Interest Rate Description | Borrowings under the U.S. Subfacility bear interest based on various reference rates plus a margin of 3.50%. The applicable margin for the U.S. Subfacility is set quarterly based on average borrowing availability for the preceding fiscal quarter ranges from 2.00% to 2.50% with respect to base rate and prime rate borrowings and from 3.00% to 3.50% for eurocurrency rate and bankers’ acceptance rate borrowings. | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | |||
Drawdown credit facility | $ 16,700 | |||
US Subfacility [Member] | Base Rate And Prime Rate [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | |||
US Subfacility [Member] | Base Rate And Prime Rate [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 2.50% | |||
US Subfacility [Member] | Eurocurrency Rate And Bankers Acceptance Rate [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | |||
US Subfacility [Member] | Eurocurrency Rate And Bankers Acceptance Rate [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | |||
Senior Secured Second Lien Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 9.50% | |||
Debt Instrument, Description | On October 20, 2016 , the Company’s subsidiary, SunOpta Foods Inc. ("SunOpta Foods") issued $231.0 million of 9.5% Senior Secured Second Lien Notes due 2022 (the "Notes"). As at June 29, 2019, the outstanding principal amount of the Notes was $223.5 million, reflecting the redemption of $7.5 million principal amount by SunOpta Foods in October 2017. Debt issuance costs are recorded as a reduction against the principal amount of the Notes and are being amortized over the six-year term of the Notes | |||
Debt Instrument, Issuance Date | Oct. 20, 2016 | |||
Debt Instrument, Face Amount | $ 223,500 | $ 231,000 | ||
Debt Instrument, Redemption, Amount | $ 7,500 | |||
Debt Instrument, Frequency of Periodic Payment | Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 at a rate of 9.5% per annum. | |||
Debt Instrument, Maturity Date | Oct. 9, 2022 | |||
Debt Instrument, Redemption, Description | At any time after October 9, 2018, SunOpta Foods may redeem the Notes, in whole or in part, at a redemption price equal to 107.125% through October 8, 2019, 104.750% from October 9, 2019 through October 8, 2020, 102.375% from October 9, 2020 through October 8, 2021 and at par thereafter, plus accrued and unpaid interest, if any, to but excluding the date of redemption. Certain additional redemption rights were applicable prior to October 9, 2018. In the event of a change of control, SunOpta Foods will be required to make an offer to repurchase the Notes at 101.000% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase The Notes are secured by second-priority liens on substantially all of the assets that secure the credit facilities provided under the Global Credit Facility, subject to certain exceptions and permitted liens. The Notes are senior secured obligations and rank equally in right of payment with SunOpta Foods’ existing and future senior debt and senior in right of payment to any future subordinated debt. The Notes are effectively subordinated to debt under the Global Credit Facility and any future indebtedness secured on a first-priority basis. The Notes are initially guaranteed on a senior secured second-priority basis by the Company and each of its subsidiaries (other than SunOpta Foods) that guarantees indebtedness under the Global Credit Facility, subject to certain exceptions. The Notes are subject to covenants that, among other things, limit the Company’s ability to (i) incur additional debt or issue preferred stock; (ii) pay dividends and make certain types of investments and other restricted payments; (iii) create liens; (iv) enter into transactions with affiliates; (v) sell assets; and (vi) create restrictions on the ability of restricted subsidiaries to pay dividends, make loans or advances or transfer assets to the Company, SunOpta Foods or any guarantor of the Notes. The foregoing covenants are subject to certain threshold amounts and exceptions as set forth in the indenture governing the Notes. In addition, the indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the indenture, certain payment defaults or acceleration of other indebtedness, a failure to pay certain judgments and certain events of bankruptcy and insolvency. If an event of default occurs and is continuing, the trustee or holders of at least 25% in principal amount of the outstanding Notes may declare the principal of and accrued and unpaid interest on, if any, all the Notes to be due and payable. As at June 29, 2019, the estimated fair value of the outstanding Notes was approximately $240 million, based on quoted prices of the most recent over-the-counter transactions (level 2). | |||
Debt Instrument, Interest Rate, Effective Percentage | 10.40% | |||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 240,000 | |||
Senior Secured Second Lien Notes [Member] | from October 9, 2018 through October 8, 2019 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Redemption Price, Percentage | 107.125% | |||
Senior Secured Second Lien Notes [Member] | from October 9, 2019 through October 8, 2020 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Redemption Price, Percentage | 104.75% | |||
Senior Secured Second Lien Notes [Member] | from October 9, 2020 through October 8, 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Redemption Price, Percentage | 102.375% | |||
Global Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt, Weighted Average Interest Rate | 3.81% |
Series A Preferred Stock (Narra
Series A Preferred Stock (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Temporary Equity [Line Items] | ||||
Dividends, Preferred Stock, Cash | $ 1,700 | $ 1,700 | $ 3,400 | $ 3,400 |
Accrued Unpaid Dividends | 1,700 | 1,700 | 1,700 | 1,700 |
Preferred stock accretion to redemption value | $ 301 | 274 | $ 596 | 541 |
Series A Preferred Stock [Member] | Oaktree Organics, L.P. and Oaktree Huntington Investment Fund II, L.P. | ||||
Temporary Equity [Line Items] | ||||
Preferred Stock, Shares Issued | 85,000 | 85,000 | ||
Preferred Stock, Value, Issued | $ 85,000 | $ 85,000 | ||
Preferred Stock Issuance Costs | 6,000 | 6,000 | ||
Preferred Stock, Redemption Amount | $ 85,000 | $ 85,000 | ||
Preferred Stock, Redemption Terms | At any time on or after October 7, 2021, SunOpta Foods may redeem all of the Preferred Stock for an amount, per share of Preferred Stock, equal to the value of the liquidation preference at such time. The carrying value of the Preferred Stock is being accreted to the redemption amount of $85.0 million through charges to accumulated deficit over the period preceding October 7, 2021. | |||
Preferred Stock, Dividend Preference or Restrictions | In connection with the Subscription Agreement, the Company agreed to, among other things (i) ensure SunOpta Foods has sufficient funds to pay its obligations under the terms of the Preferred Stock and (ii) grant each holder of Preferred Stock (the "Holder") the right to exchange the Preferred Stock for shares of common stock of the Company (the "Common Shares"). The Preferred Stock is non-participating with the Common Shares in dividends and undistributed earnings of the Company. | |||
Preferred Stock, Liquidation Preference Per Share | $ 1,000 | $ 1,000 | ||
Preferred Stock Annualized Rate | 8.00% | |||
Preferred Stock, Dividend Payment Terms | Cumulative preferred dividends accrue daily on the Preferred Stock at an annualized rate of 8.0% of the liquidation preference prior to October 5, 2025 and 12.5% of the liquidation preference thereafter (subject to an increase of 1.0% per quarter, up to a maximum rate of 5.0% per quarter on the occurrence of certain events of non-compliance). Prior to October 5, 2025, SunOpta Foods may pay dividends in cash or elect, in lieu of paying cash, to add the amount that would have been paid to the liquidation preference. After October 4, 2025, the failure to pay dividends in cash will be an event of non-compliance. The Preferred Stock ranks senior to the shares of common stock of SunOpta Foods with respect to dividend rights and rights on the distribution of assets on any liquidation, winding up or dissolution of the Company or SunOpta Foods. | |||
Dividends, Preferred Stock, Cash | $ 1,700 | $ 1,700 | $ 3,400 | $ 3,400 |
Accrued Unpaid Dividends | $ 1,700 | |||
Convertible Preferred Stock, Terms of Conversion | At any time, the Holders may exchange their shares of Preferred Stock, in whole or in part, into the number of Common Shares equal to, per share of Preferred Stock, the quotient of the liquidation preference divided by $7.50 (such price, the "Exchange Price" and such quotient, the "Exchange Rate"). As at June 29, 2019, the aggregate shares of Preferred Stock outstanding were exchangeable into 11,333,333 Common Shares. The Exchange Price is subject to certain anti-dilution adjustments, including a weighted-average adjustment for issuances of Common Shares below the Exchange Price, provided that the Exchange Price may not be lower than $7.00 (subject to adjustment in certain circumstances). | |||
Convertible Preferred Stock, Settlement Terms | SunOpta Foods may cause the Holders to exchange all of the Preferred Stock into a number of Common Shares based on the applicable Exchange Price if (i) fewer than 10% of the shares of Preferred Stock issued on October 7, 2016 remain outstanding, or (ii) on or after October 7, 2019, the average volume-weighted average price of the Common Shares during the then preceding 20 trading day period is greater than 200% of the Exchange Price. | |||
Preferred Stock, Voting Rights | In connection with the Subscription Agreement, the Company issued 11,333,333 Special Shares, Series 1 (the "Special Voting Shares") to the Investors, which entitle the Investors to one vote per Special Voting Share on all matters submitted to a vote of the holders of Common Shares, together as a single class, subject to certain exceptions. Additional Special Voting Shares will be issued, or existing Special Voting Shares will be redeemed, as necessary to ensure that the aggregate number of Special Voting Shares outstanding is equal to the number of shares of Preferred Stock outstanding from time to time multiplied by the Exchange Rate in effect at such time. As at June 29, 2019, 11,333,333 Special Voting Shares were issued and outstanding, which represented an approximate 11.5% voting interest in the Company. The Special Voting Shares are not transferable, and the voting rights associated with the Special Voting Shares will terminate upon the transfer of the Preferred Stock to a third party, other than a controlled affiliate of the Investors. The Investors are entitled to designate up to two nominees for election to the Board of Directors of the Company (the "Board") and have the right to designate one individual to attend meetings of the Board as a non-voting observer, subject to the Investors maintaining certain levels of beneficial ownership of Common Shares on an as-exchanged basis | |||
Preferred Stock, Participation Rights | For so long as the Investors beneficially own or control at least 50% of the Preferred Stock issued on October 7, 2016, including any corresponding Common Shares into which such Preferred Stock are exchanged, the Investors will be entitled to (i) participation rights with respect to future equity offerings of the Company, and (ii) governance rights, including the right to approve certain actions proposed to be taken by the Company and its subsidiaries. | |||
Special Voting Shares, issued and outstanding | 11,333,333 | 11,333,333 | ||
Special Voting Shares, voting interest of the company | 11.50% | 11.50% |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 14, 2019 | Apr. 12, 2019 | Apr. 01, 2019 | Jun. 29, 2019 |
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Trading price | $ 3.36 | $ 3.36 | ||
Weighted-average grant-date fair value of options | $ 1.68 | |||
Vesting period | 3 years | |||
Expiration period | 10 years | |||
Performance stock units ("PSUs") [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Trading price | $ 3.36 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 892,857 | |||
Weighted-average grant-date fair value of equity instruments other than options | $ 1.77 | |||
Performance stock units ("PSUs") [Member] | Fiscal Years 2019 Through 2022 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 892,857 | |||
Performance stock units ("PSUs") [Member] | Vest upon the Company achieving annual adjusted EBITDA of $80 million | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Adjusted Earnings Before Interest Tax Depreciation And Amortization | $ 80 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 297,619 | |||
Performance stock units ("PSUs") [Member] | Vest upon the Company achieving annual adjusted EBITDA of $110 million | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Adjusted Earnings Before Interest Tax Depreciation And Amortization | $ 110 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 297,619 | |||
Performance stock units ("PSUs") [Member] | Vest upon the Company achieving annual adjusted EBITDA of $140 million | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Adjusted Earnings Before Interest Tax Depreciation And Amortization | $ 140 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 297,619 | |||
Performance stock units ("PSUs") [Member] | Vest upon achieving a trading price of $5.00 per share [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Trading price | $ 5 | |||
Number of consecutive trading days | 20 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 297,619 | |||
Performance stock units ("PSUs") [Member] | Vest upon achieving a trading price of $9.00 per share [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Trading price | $ 9 | |||
Number of consecutive trading days | 20 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 297,619 | |||
Performance stock units ("PSUs") [Member] | Vest upon achieving a trading price of $14.00 per share [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Trading price | $ 14 | |||
Number of consecutive trading days | 20 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 297,619 | |||
Restricted stock units ("RSUs") [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Trading price | $ 3.36 | |||
Mr. Ennen [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate grant-date fair value of stock awards | $ 7.2 | |||
Mr. Ennen [Member] | Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 960,061 | |||
Exercise price of stock option to purchase one common share | $ 3.36 | |||
Mr. Ennen [Member] | Performance stock units ("PSUs") [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Trading price | $ 3.36 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,785,714 | |||
Mr. Ennen [Member] | Restricted stock units ("RSUs") [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 297,619 | |||
Short Term Incentive Plan [Member] | Performance stock units ("PSUs") [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average grant-date fair value of options | $ 3.46 | |||
Aggregate grant-date fair value of stock awards | $ 3.8 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 2,795,525 | 2,795,525 | ||
Compensation expense | $ 0.8 |
Other Expense (Income), Net (Na
Other Expense (Income), Net (Narrative) (Details) $ in Millions | 6 Months Ended |
Jun. 29, 2019USD ($) | |
Other Income and Expenses [Abstract] | |
Employee termination and recruitment costs in connection with Value Creation Plan | $ 3.5 |
Reversal of previously recognized stock-based compensation expense related to forfeited awards | $ 2.1 |
Earnings (Loss) Per Share (Narr
Earnings (Loss) Per Share (Narrative) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 641,857 | |||
Common shares issuable on an if-converted basis adjusted to diluted EPS | 11,333,333 | |||
Options Held [Member] | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,176,284 | 1,850,009 | 3,176,284 | 2,032,158 |
Stock Options And Restricted Stock Units [Member] | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 187,516 | 574,865 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - Product Recall [Member] $ in Millions | 6 Months Ended |
Jun. 29, 2019USD ($) | |
Loss Contingencies [Line Items] | |
Loss Contingency Damages Sought | On November 20, 2017, Treehouse Foods, Inc., several of its related entities, and its insurer filed a lawsuit against the Company in the Circuit Court of Cook County, Illinois titled Treehouse Foods, Inc. et al. v. SunOpta Grains and Food, Inc. The Company was served with the Summons and Complaint on January 24, 2018. After the Company removed the case to the United States District Court for the Northern District of Illinois, the plaintiffs filed an Amended Complaint on April 23, 2018 and a second Amended Complaint on October 12, 2018. The plaintiffs allege economic damages resulting from the Company’s 2016 voluntary recall of certain roasted sunflower kernel products due to the potential for listeria monocytogenes contamination. The plaintiffs brought claims for breach of contract, express and implied warranties and product guarantees, negligence, strict liability, negligent misrepresentation, and indemnity seeking $16.2 million in damages. There are no allegations of personal injury. On March 29, 2019, the court dismissed the plaintiffs’ claims for negligence, strict liability, negligent misrepresentation, and common law indemnity. The Company is vigorously defending itself against the remaining contract and warranty-based claims. The Company cannot reasonably predict the outcome of this claim, nor can it estimate the amount of loss, or range of loss, if any, that may result from this claim. |
Loss Contingency Damages Sought Value | $ 16.2 |
Disaggregation Of Revenue (Deta
Disaggregation Of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | $ 293,004 | $ 319,308 | $ 598,279 | $ 631,960 |
Global Ingredients [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | 117,007 | 146,685 | 245,050 | 283,016 |
Global Ingredients [Member] | Internationally Sourced Organic Ingredients [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | 101,938 | 102,607 | 207,822 | 204,874 |
Global Ingredients [Member] | North American Sourced Grains And Seeds [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | 15,069 | 44,078 | 37,228 | 78,142 |
Consumer Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | 175,997 | 172,623 | 353,229 | 348,944 |
Consumer Products [Member] | Beverage Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | 85,823 | 80,549 | 173,892 | 165,799 |
Consumer Products [Member] | Frozen Fruit Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | 78,722 | 82,135 | 155,399 | 159,606 |
Consumer Products [Member] | Snack Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenues from external customers | $ 11,452 | $ 9,939 | $ 23,938 | $ 23,539 |
Sale of Soy and Corn Business_3
Sale of Soy and Corn Business (Details) - Sunopta Grains And Foods Inc [Member] - Disposal Group, Not Discontinued Operations [Member] $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 29, 2019USD ($) | Jun. 29, 2019USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash consideration | $ 66,500 | $ 66,500 |
Transaction and related costs | (201) | (1,825) |
Net proceeds | (201) | 64,675 |
Current assets | 22,810 | 22,810 |
Property, plant and equipment | 8,423 | 8,423 |
Goodwill | 1,526 | 1,526 |
Current liabilities | (13,462) | (13,462) |
Net assets sold | 19,297 | 19,297 |
Pre-tax gain (loss) on sale | $ (201) | $ 45,378 |
Disclosure of costs incurred un
Disclosure of costs incurred under the Value Creation Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Restructuring Reserve [Roll Forward] | ||||
Cost of goods sold | $ 265,677 | $ 284,962 | $ 542,746 | $ 563,930 |
Selling, general and administrative expenses | 27,262 | 26,948 | 53,510 | 55,236 |
Value Creation Plan [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance payable (receivable), Beginning | 913 | 3,727 | ||
Costs incurred and charged to expense | 1,675 | 639 | 3,533 | 2,834 |
Cash receipts (payments), net | (4,647) | (3,618) | ||
Non-cash adjustments | 2,102 | (1,255) | ||
Balance payable, Ending | 1,901 | 1,688 | 1,901 | 1,688 |
Cost of goods sold | 0 | 0 | 0 | 100 |
Selling, general and administrative expenses | 954 | 300 | 1,157 | 613 |
Other Expense | 721 | 339 | 2,376 | 2,121 |
Costs incurred and charged to expense to date | 74,145 | 74,145 | ||
Cash payments, net to date | (50,272) | (50,272) | ||
Non-cash adjustments to date | (21,972) | (21,972) | ||
Value Creation Plan [Member] | Asset impairments and facility closure costs [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance payable (receivable), Beginning | 477 | (700) | ||
Costs incurred and charged to expense | 308 | 1,867 | ||
Cash receipts (payments), net | (483) | 607 | ||
Non-cash adjustments | 0 | (1,255) | ||
Balance payable, Ending | 302 | 519 | 302 | 519 |
Costs incurred and charged to expense to date | 34,960 | 34,960 | ||
Cash payments, net to date | (10,161) | (10,161) | ||
Non-cash adjustments to date | (24,497) | (24,497) | ||
Value Creation Plan [Member] | Employee recruitment, retention and termination costs [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance payable (receivable), Beginning | 436 | 4,427 | ||
Costs incurred and charged to expense | 2,947 | 557 | ||
Cash receipts (payments), net | (3,886) | (4,115) | ||
Non-cash adjustments | 2,102 | 0 | ||
Balance payable, Ending | 1,599 | 869 | 1,599 | 869 |
Costs incurred and charged to expense to date | 17,928 | 17,928 | ||
Cash payments, net to date | (18,854) | (18,854) | ||
Non-cash adjustments to date | 2,525 | 2,525 | ||
Value Creation Plan [Member] | Consulting fees and temporary labor costs [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance payable (receivable), Beginning | 0 | 0 | ||
Costs incurred and charged to expense | 278 | 410 | ||
Cash receipts (payments), net | (278) | (110) | ||
Non-cash adjustments | 0 | 0 | ||
Balance payable, Ending | 0 | $ 300 | 0 | $ 300 |
Costs incurred and charged to expense to date | 21,257 | 21,257 | ||
Cash payments, net to date | (21,257) | (21,257) | ||
Non-cash adjustments to date | $ 0 | $ 0 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Fair Value Measurement (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 |
Derivative [Line Items] | ||||||
Unrealized short-term derivative liability | $ 309 | $ 862 | ||||
Contingent Consideration | (4,286) | $ (4,286) | (4,286) | $ (4,548) | $ (8,904) | $ (11,320) |
Recurring basis [Member] | ||||||
Derivative [Line Items] | ||||||
Contingent Consideration | (4,286) | (4,286) | ||||
Inventories carried at market | 3,239 | |||||
Recurring basis [Member] | Commodity futures and forward contracts [Member] | ||||||
Derivative [Line Items] | ||||||
Unrealized short-term derivative asset | 162 | 620 | ||||
Unrealized long-term derivative asset | 7 | |||||
Unrealized short-term derivative liability | (581) | |||||
Unrealized long-term derivative liability | (17) | |||||
Recurring basis [Member] | Level 1 [Member] | ||||||
Derivative [Line Items] | ||||||
Contingent Consideration | 0 | 0 | ||||
Inventories carried at market | 0 | |||||
Recurring basis [Member] | Level 1 [Member] | Commodity futures and forward contracts [Member] | ||||||
Derivative [Line Items] | ||||||
Unrealized short-term derivative asset | 162 | 0 | ||||
Unrealized long-term derivative asset | 0 | |||||
Unrealized short-term derivative liability | (94) | |||||
Unrealized long-term derivative liability | 0 | |||||
Recurring basis [Member] | Level 2 [Member] | ||||||
Derivative [Line Items] | ||||||
Contingent Consideration | 0 | 0 | ||||
Inventories carried at market | 3,239 | |||||
Recurring basis [Member] | Level 2 [Member] | Commodity futures and forward contracts [Member] | ||||||
Derivative [Line Items] | ||||||
Unrealized short-term derivative asset | 0 | 620 | ||||
Unrealized long-term derivative asset | 7 | |||||
Unrealized short-term derivative liability | (487) | |||||
Unrealized long-term derivative liability | (17) | |||||
Recurring basis [Member] | Level 3 [Member] | ||||||
Derivative [Line Items] | ||||||
Contingent Consideration | (4,286) | (4,286) | ||||
Inventories carried at market | 0 | |||||
Recurring basis [Member] | Level 3 [Member] | Commodity futures and forward contracts [Member] | ||||||
Derivative [Line Items] | ||||||
Unrealized short-term derivative asset | 0 | 0 | ||||
Unrealized long-term derivative asset | 0 | |||||
Unrealized short-term derivative liability | 0 | |||||
Unrealized long-term derivative liability | 0 | |||||
Recurring basis [Member] | Not designated as hedging instruments [Member] | Forward foreign currency contracts [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative asset, notional amount | 190 | 583 | ||||
Recurring basis [Member] | Not designated as hedging instruments [Member] | Level 1 [Member] | Forward foreign currency contracts [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative asset, notional amount | 0 | 0 | ||||
Recurring basis [Member] | Not designated as hedging instruments [Member] | Level 2 [Member] | Forward foreign currency contracts [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative asset, notional amount | 190 | 583 | ||||
Recurring basis [Member] | Not designated as hedging instruments [Member] | Level 3 [Member] | Forward foreign currency contracts [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative asset, notional amount | $ 0 | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Fair Value Measurements (Contingent Consideration) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Derivative [Line Items] | ||||
Balance, beginning of period | $ (4,286) | $ (8,904) | $ (4,286) | $ (11,320) |
Fair value adjustments | 0 | (43) | 0 | 2,373 |
Payments | 0 | 4,399 | 0 | 4,399 |
Balance, end of period | $ (4,286) | $ (4,548) | $ (4,286) | $ (4,548) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Dec. 29, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and work-in-process | $ 296,487 | $ 278,038 |
Finished goods | 89,688 | 83,225 |
Company-owned grain | 0 | 10,155 |
Inventory reserves | (8,798) | (9,461) |
Total Inventory, Net | $ 377,377 | $ 361,957 |
Lease, Cost (Details)
Lease, Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 29, 2019 | Jun. 29, 2019 | |
Lease Costs | ||
Operating lease cost | $ 4,748 | $ 9,951 |
Finance lease cost, Depreciation of right-of-use assets | 294 | 591 |
Finance lease cost, Interest on lease liabilities | 32 | 68 |
Sublease income | (114) | (234) |
Net lease cost | $ 4,960 | $ 10,376 |
Leases, Balance Sheet Classific
Leases, Balance Sheet Classification (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Dec. 29, 2018 |
Operating leases | ||
Operating lease right-of-use assets | $ 72,788 | |
Current portion of operating lease liabilities | 17,402 | |
Operating lease liabilities | 56,111 | |
Total operating lease liabilities | 73,513 | |
Finance leases | ||
Property, plant and equipment, net | 168,433 | $ 171,032 |
Current portion of long-term finance leases | 1,028 | |
Long-term finance leases | 1,781 | |
Total finance lease liabilities | 2,809 | $ 3,706 |
Finance Leases [Member] | ||
Finance leases | ||
Property, plant and equipment, gross | 9,997 | |
Accumulated depreciation | (5,176) | |
Property, plant and equipment, net | $ 4,821 |
Leases, Cash Flow Information (
Leases, Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 29, 2019 | Jun. 29, 2019 | |
Cash paid for amounts included in measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 4,862 | $ 10,240 |
Operating cash flows from finance leases | 32 | 68 |
Financing cash flows from finance leases | 391 | 783 |
Right-of-use assets obtained in exchange for lease liabilities | ||
Operating leases | 647 | 647 |
Finance Leases | $ 0 | $ 0 |
Leases, Other Information (Deta
Leases, Other Information (Details) | Jun. 29, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term (years), Operating leases | 5 years 2 months 12 days |
Weighted-average remaining lease term (years), Finance leases | 1 year 9 months 18 days |
Weighted-average discount rate, Operating leases | 9.00% |
Weighted-average discount rate, Finance leases | 4.10% |
Lessee, Operating Lease, Liabil
Lessee, Operating Lease, Liability, Maturity (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Dec. 29, 2018 |
Operating leases | ||
Remainder of 2019 | $ 9,114 | |
2020 | 17,573 | |
2021 | 14,638 | |
2022 | 12,689 | |
2023 | 8,407 | |
Thereafter | 47,855 | |
Total lease payments | 110,276 | |
Less: imputed interest | (36,763) | |
Total operating lease liabilities | 73,513 | |
Finance leases | ||
Remainder of 2019 | 688 | |
2020 | 715 | |
2021 | 715 | |
2022 | 715 | |
2023 | 179 | |
Thereafter | 0 | |
Total lease payments | 3,012 | |
Less: imputed interest | (203) | |
Total lease liabilities | $ 2,809 | $ 3,706 |
Bank Indebtedness and Long-Te_4
Bank Indebtedness and Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Dec. 29, 2018 |
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Amount Outstanding | $ 268,510 | $ 280,334 |
Senior Secured Second Lien Notes, net of unamortized debt issuance costs | 217,697 | 217,026 |
Asset-backed term loan | 4,712 | 3,103 |
Total finance lease liabilities | 2,809 | 3,706 |
Other | 4,800 | 5,028 |
Total Long-term and Current Term Debt | 230,018 | 228,863 |
Less: current portion | 1,524 | 1,840 |
Long-term Debt, Excluding Current Maturities, Total | 228,494 | 227,023 |
Unamortized Debt Issuance Expense | 5,801 | 6,472 |
Global Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Amount Outstanding | 265,168 | 276,776 |
Bulgarian Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Amount Outstanding | $ 3,342 | $ 3,558 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | 6 Months Ended | |
Jun. 29, 2019 | Apr. 01, 2019 | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grant-date stock price | $ 3.36 | $ 3.36 |
Exercise price | $ 3.36 | |
Dividend yield | 0.00% | |
Expected volatility | 47.87% | |
Risk-free interest rate | 2.36% | |
Expected life (in years) | 6 years 6 months | |
PSUs [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grant-date stock price | $ 3.36 | |
Dividend yield | 0.00% | |
Expected volatility | 55.68% | |
Risk-free interest rate | 2.30% | |
Expected life (in years) | 1 year 9 months 25 days |
Other Expense (Income), Net (De
Other Expense (Income), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Other Income and Expenses [Abstract] | ||||
Gain on sale of soy and corn business (see note 4) | $ 201 | $ 0 | $ (45,378) | $ 0 |
Employee termination and recruitment costs | 669 | 122 | 2,068 | 354 |
Facility closure and lease termination costs | 52 | 217 | 308 | 1,767 |
Product withdrawal and recall costs | 0 | 122 | 260 | 445 |
Business development costs | 26 | 0 | 26 | 0 |
Project cancellation | (507) | 0 | (507) | 0 |
Increase (decrease) in fair value of contingent consideration (see note 6( 3 )) | 0 | 43 | 0 | (2,373) |
Other | 4 | 79 | 156 | 12 |
Total Other Expense, net | $ 445 | $ 583 | $ (43,067) | $ 181 |
Basic and diluted loss per shar
Basic and diluted loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Numerator for basic earnings (loss) per share: | ||||
Earnings (loss) attributable to SunOpta Inc. | $ (9,055) | $ (3,174) | $ 16,594 | $ (7,537) |
Less: dividends and accretion on Series A Preferred Stock | (2,001) | (1,974) | (3,996) | (3,941) |
Earnings (loss) attributable to common shareholders | $ (11,056) | $ (5,148) | $ 12,598 | $ (11,478) |
Denominator for basic earnings (loss) per share: | ||||
Basic weighted-average number of shares outstanding | 87,683 | 86,968 | 87,579 | 86,889 |
Basic earnings (loss) per share | $ (0.13) | $ (0.06) | $ 0.14 | $ (0.13) |
Numerator for diluted earnings (loss) per share: | ||||
Earnings (loss) attributable to SunOpta Inc. | $ (9,055) | $ (3,174) | $ 16,594 | $ (7,537) |
Less: dividends and accretion on Series A Preferred Stock | (2,001) | (1,974) | (3,996) | (3,941) |
Earnings (loss) attributable to common shareholders | $ (11,056) | $ (5,148) | $ 12,598 | $ (11,478) |
Denominator for diluted earnings (loss) per share: | ||||
Basic weighted-average number of shares outstanding | 87,683 | 86,968 | 87,579 | 86,889 |
Dilutive effect of the following: | ||||
Diluted weighted-average number of shares outstanding | 87,683 | 86,968 | 87,743 | 86,889 |
Diluted earnings (loss) per share | $ (0.13) | $ (0.06) | $ 0.14 | $ (0.13) |
Series A Preferred Stock [Member] | ||||
Dilutive effect of the following: | ||||
Dilutive Securities, Effect on Basic Earnings Per Share | 0 | 0 | 0 | 0 |
Stock Options And Restricted Stock Units [Member] | ||||
Dilutive effect of the following: | ||||
Dilutive Securities, Effect on Basic Earnings Per Share | 0 | 0 | 164 | 0 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Accounts receivable | $ 1,525 | $ 5,398 | $ 5,736 | $ (6,961) |
Inventories | (45,868) | (53,256) | (30,221) | (34,954) |
Income tax recoverable/payable | (2,819) | (1,134) | (848) | 2,207 |
Prepaid expenses and other current assets | (3,350) | 4,322 | (7,971) | (1,054) |
Accounts payable and accrued liabilities | 19,348 | 5,650 | 6,841 | 6,031 |
Customer and other deposits | (825) | 696 | (725) | (704) |
Increase (Decrease) in Operating Capital | $ (31,989) | $ (38,324) | $ (27,188) | $ (35,435) |
Segmented Information (Details)
Segmented Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Segment revenues from external customers | $ 293,004 | $ 319,308 | $ 598,279 | $ 631,960 |
Segment operating income (loss) | 2,132 | 7,727 | 5,517 | 14,145 |
Other income, net | (445) | (583) | 43,067 | (181) |
Interest expense, net | (8,254) | (8,474) | (16,993) | (16,694) |
Loss before income taxes | (11,236) | (4,416) | 23,857 | (10,571) |
Global Ingredients [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Segment revenues from external customers | 117,007 | 146,685 | 245,050 | 283,016 |
Segment operating income (loss) | 3,345 | 2,965 | 8,068 | 6,067 |
Consumer Products [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Segment revenues from external customers | 175,997 | 172,623 | 353,229 | 348,944 |
Segment operating income (loss) | (1,213) | 4,762 | (2,551) | 8,078 |
Corporate Segment [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Segment operating income (loss) | $ (4,669) | $ (3,086) | $ (7,734) | $ (7,841) |