Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Financial Information
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the interim consolidated financial statements, and notes thereto, for the quarter ended April 1, 2023 contained under Item 1 of this Quarterly Report on Form 10-Q and in conjunction with the annual consolidated financial statements, and notes thereto, contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the "Form 10-K"). Unless otherwise indicated herein, the discussion and analysis contained in this MD&A includes information available to May 10, 2023.
Certain statements contained in this MD&A may constitute forward-looking statements as defined under securities laws. Forward-looking statements may relate to our future outlook and anticipated events or results and may include statements regarding our future financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives. In some cases, forward-looking statements can be identified by terms such as "anticipate," "estimate," "target," "intend," "project," "potential," "predict," "continue," "believe," "expect," "can," "could," "would," "should," "may," "might," "plan," "will," "budget," "forecast," or other similar expressions concerning matters that are not historical facts, or the negative of such terms are intended to identify forward-looking statements; however, the absence of these words does not necessarily mean that a statement is not forward-looking. To the extent any forward-looking statements contain future-oriented financial information or financial outlooks, such information is being provided to enable a reader to assess our financial condition, material changes in our financial condition, our results of operations, and our liquidity and capital resources. Readers are cautioned that this information may not be appropriate for any other purpose, including investment decisions.
Forward-looking statements contained in this MD&A are based on certain factors and assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. While we consider these assumptions to be reasonable based on information currently available, they may prove to be incorrect. These factors are more fully described in the "Risk Factors" section at Item 1A of the Form 10-K and Item 1A of Part II of this report.
Forward-looking statements contained in this commentary are based on our current estimates, expectations, and projections, which we believe are reasonable as of the date of this report. Forward-looking statements are not guarantees of future performance or events. You should not place undue importance on forward-looking statements and should not rely upon this information as of any other date. Other than as required under securities laws, we do not undertake to update any forward-looking information at any particular time. Neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements, and we hereby qualify all our forward-looking statements by these cautionary statements.
Unless otherwise noted herein, all currency amounts in this MD&A are expressed in U.S. dollars. All tabular dollar amounts are expressed in thousands of U.S. dollars, except per share amounts.
Overview
We procure, process, and package plant-based and fruit-based food and beverage products for sale to retailers, foodservice operators, branded food companies, and food manufacturers. The composition of our operating and reportable segments is as follows:
Plant-Based Foods and Beverages - We offer a full line of plant-based beverages and liquid and powder ingredients, utilizing oat, almond, soy, coconut, rice, hemp, and other bases, as well as broths, teas, and nutritional beverages. In addition, our former sunflower business, which packaged dry- and oil-roasted inshell sunflower and sunflower kernels and processed raw sunflower inshell and kernel for food and feed applications, was part of this segment until it was divested on October 11, 2022.
Fruit-Based Foods and Beverages - We offer individually quick frozen ("IQF") fruit for retail, including strawberries, blueberries, mango, pineapple, and other berries and blends, and IQF and bulk frozen fruit for foodservice, including toppings, purées, and smoothies. In addition, we offer fruit snacks, including bars, twists, ropes, and bite-sized varieties, as well as fruit smoothie bowls.
| SUNOPTA INC. | 19 | April 1, 2023 Form 10-Q |
Global Economic Conditions and Inflationary Cost Environment
Our businesses continue to be exposed to the effects of the current global macroeconomic environment, including elevated inflation, higher interest rates, and shifts in consumer demand.
- Inflation - Inflation in the first quarter of 2023 declined from the highs in 2022 but remains elevated. We expect this inflationary environment to continue throughout 2023. We believe that we will be able to continue to mitigate the impact of inflationary costs increases for raw materials, packaging, labor, energy, fuel, and transportation through pricing actions we have taken with our customers to date and further pricing actions that we may implement as needed. However, the effect of our customers passing on higher prices to the end consumers has impacted and may continue to impact the level of consumption of our products.
- Interest Rates - Loans under our credit agreement bear interest at a variable rate, and the interest rate on our outstanding indebtedness has increased as market interest rates have risen, starting in the second half of 2022. These higher interest rates, together with a higher outstanding debt balance related to capital investments, have led to an increase in our interest expense, which we expect will continue.
- Consumer Demand - Recent economic conditions have reduced household savings and resulted in changes in consumer spending patterns, with a shift to lower-cost retailers and product alternatives, together with a streamlining of purchases. As a result, some of the categories we serve have experienced a softening of demand, which has negatively impacted on our sales volumes and mix. These consumption trends may continue to have an impact on our business.
Consolidated Results of Operations for the Quarters Ended April 1, 2023 and April 2, 2022
| | | April 1, 2023 | | | April 2, 2022 | | | Change | | | Change | |
| For the quarter ended | | $ | | | $ | | | $ | | | % | |
| | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | |
| Plant-Based Foods and Beverages | | 129,350 | | | 135,511 | | | (6,161 | ) | | -4.5% | |
| Fruit-Based Foods and Beverages | | 94,530 | | | 104,662 | | | (10,132 | ) | | -9.7% | |
| Total revenues | | 223,880 | | | 240,173 | | | (16,293 | ) | | -6.8% | |
| | | | | | | | | | | | | |
| Gross Profit | | | | | | | | | | | | |
| Plant-Based Foods and Beverages | | 20,165 | | | 20,345 | | | (180 | ) | | -0.9% | |
| Fruit-Based Foods and Beverages | | 8,038 | | | 8,011 | | | 27 | | | 0.3% | |
| Total gross profit | | 28,203 | | | 28,356 | | | (153 | ) | | -0.5% | |
| | | | | | | | | | | | | |
| Gross Margin(1) | | | | | | | | | | | | |
| Plant-Based Foods and Beverages | | 15.6% | | | 15.0% | | | | | | 0.6% | |
| Fruit-Based Foods and Beverages | | 8.5% | | | 7.7% | | | | | | 0.8% | |
| Total gross margin | | 12.6% | | | 11.8% | | | | | | 0.8% | |
| | | | | | | | | | | | | |
| Segment operating income (loss)(2) | | | | | | | | | | | | |
| Plant-Based Foods and Beverages | | 8,277 | | | 8,461 | | | (184 | ) | | -2.2% | |
| Fruit-Based Foods and Beverages | | 1,785 | | | 784 | | | 1,001 | | | 127.7% | |
| Corporate Services | | (7,524 | ) | | (5,239 | ) | | (2,285 | ) | | -43.6% | |
| Total segment operating income | | 2,538 | | | 4,006 | | | (1,468 | ) | | -36.6% | |
| | | | | | | | | | | | | |
| Other expense, net | | 35 | | | 287 | | | (252 | ) | | -87.8% | |
| Earnings from continuing operations before the following | | 2,503 | | | 3,719 | | | (1,216 | ) | | -32.7% | |
| Interest expense, net | | 5,812 | | | 2,530 | | | 3,282 | | | 129.7% | |
| Income tax expense (benefit) | | (4,686 | ) | | 187 | | | (4,873 | ) | | -2605.9% | |
| Earnings from continuing operations | | 1,377 | | | 1,002 | | | 375 | | | 37.4% | |
| Earnings from discontinued operations | | - | | | 3,566 | | | (3,566 | ) | | - | |
| Net earnings(3),(4) | | 1,377 | | | 4,568 | | | (3,191 | ) | | -69.9% | |
| Dividends and accretion on preferred stock | | (704 | ) | | (755 | ) | | 51 | | | 6.8% | |
| | | | | | | | | | | | | |
| Earnings attributable to common shareholders(5) | | 673 | | | 3,813 | | | (3,140 | ) | | -82.3% | |
| SUNOPTA INC. | 20 | April 1, 2023 Form 10-Q |
(1) Gross margin is a measure of gross profit (equal to revenues less cost of goods sold) as a percentage of revenues. We use a measure of gross margin that excludes non-capitalizable start-up costs included in cost of goods sold that are incurred in connection with capital expansion projects. We are completing the largest capital expansion in our company's history, including the construction of our new plant-based beverage facility in Midlothian, Texas, which officially opened in February 2023, together with other major capital expansion and productivity enhancement projects currently underway. Start-up costs related to these projects have had, and are expected to continue to have, a significant impact on the comparability of reported gross margins, which may obscure trends in our margin performance. As a result, we use this measure of adjusted gross margin to evaluate the underlying profitability of our revenue-generating activities within each reporting period. We believe that disclosing this non-GAAP measure provides investors with a meaningful, consistent comparison of our profitability measure for the periods presented. However, the non-GAAP measure of adjusted gross margin should not be considered in isolation or as a substitute for gross margin calculated based on gross profit determined in accordance with U.S. GAAP. The following table presents a reconciliation of adjusted gross margin from reported gross margin calculated in accordance with U.S. GAAP.
| | | April 1, 2023 | | | April 2, 2022 | |
| | | Plant-Based | | | Fruit-Based | | | | | | Plant-Based | | | Fruit-Based | | | | |
| | | Foods and | | | Foods and | | | | | | Foods and | | | Foods and | | | | |
| For the quarter ended | | Beverages | | | Beverages | | | Consolidated | | | Beverages | | | Beverages | | | Consolidated | |
| Reported gross margin | | 15.6% | | | 8.5% | | | 12.6% | | | 15.0% | | | 7.7% | | | 11.8% | |
| Start-up costs(a) | | 4.4% | | | 0.0% | | | 2.6% | | | 0.3% | | | 0.0% | | | 0.2% | |
| Adjusted gross margin | | 20.0% | | | 8.5% | | | 15.2% | | | 15.3% | | | 7.7% | | | 12.0% | |
(a) Represents incremental direct costs incurred in connection with plant expansion projects and new product introductions before the project or product reaches normal production levels, including costs for the hiring and training of additional personnel, fees for outside services, travel costs, and plant- and production-related expenses. For the first quarter of 2023, start-up costs mainly related to the ramp-up of production at our new plant-based beverage facility in Midlothian, Texas. For 2022, start-up costs mainly related to the hiring and training of new employees for the Midlothian facility, together with the integration of the acquired Dream and West Life brands.
(2) When assessing the financial performance of our operating segments, we use an internal measure of operating income/loss that excludes other income/expense items determined in accordance with U.S. GAAP. This measure is the basis on which management, including the CEO, assesses the underlying performance of our operating segments. We believe that disclosing this non-GAAP measure assists investors in comparing financial performance across reporting periods on a consistent basis by excluding items that are not indicative of our operating performance. However, the non-GAAP measure of operating income/loss should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP. The following table presents a reconciliation of segment operating income/loss to "earnings (loss) from continuing operations before the following" on the consolidated statements of operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
| | | Plant-Based | | | Fruit-Based | | | | | | | |
| | | Foods and | | | Foods and | | | Corporate | | | | |
| | | Beverages | | | Beverages | | | Services | | | Consolidated | |
| For the quarter ended | | $ | | | $ | | | $ | | | $ | |
| April 1, 2023 | | | | | | | | | | | | |
| Segment operating income (loss) | | 8,277 | | | 1,785 | | | (7,524 | ) | | 2,538 | |
| Other income (expense), net | | - | | | 7 | | | (42 | ) | | (35 | ) |
| Earnings (loss) from continuing operations before the following | | 8,277 | | | 1,792 | | | (7,566 | ) | | 2,503 | |
| | | | | | | | | | | | | |
| April 2, 2022 | | | | | | | | | | | | |
| Segment operating income (loss) | | 8,461 | | | 784 | | | (5,239 | ) | | 4,006 | |
| Other expense, net | | (43 | ) | | (10 | ) | | (234 | ) | | (287 | ) |
| Earnings (loss) from continuing operations before the following | | 8,418 | | | 774 | | | (5,473 | ) | | 3,719 | |
| SUNOPTA INC. | 21 | April 1, 2023 Form 10-Q |
We believe that investors' understanding of our financial performance is enhanced by disclosing the specific items that we exclude from segment operating income (loss). However, any measure of segment operating income (loss) excluding any or all of these items is not, and should not be viewed as, a substitute for operating income (loss) prepared under U.S. GAAP. These items are presented solely to allow investors to more fully understand how we assess financial performance.
(3) When assessing our financial performance, we use an internal measure of adjusted earnings that excludes specific items recognized in other income or expense, and other unusual items that are identified and evaluated on an individual basis, which due to their nature or size, we would not expect to occur as part of our normal business on a regular basis. We believe that the identification of these excluded items enhances the analysis of the financial performance of our business when comparing those operating results between periods, as we do not consider these items to be reflective of normal business operations. The following table presents a reconciliation of adjusted earnings from earnings from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
| | | April 1, 2023 | | | April 2, 2022 | |
| | | | | | Per Share | | | | | | Per Share | |
| For the quarter ended | | $ | | | $ | | | $ | | | $ | |
| Earnings from continuing operations | | 1,377 | | | | | | 1,002 | | | | |
| Dividends and accretion on preferred stock | | (704 | ) | | | | | (755 | ) | | | |
| Earnings attributable to common shareholders | | 673 | | | 0.01 | | | 247 | | | 0.00 | |
| Adjusted for: | | | | | | | | | | | | |
| Start-up costs(a) | | 6,425 | | | | | | 440 | | | | |
| Business development costs(b) | | 731 | | | | | | 183 | | | | |
| Other expense, net | | 35 | | | | | | 287 | | | | |
| Net income tax effect(c) | | (1,873 | ) | | | | | (239 | ) | | | |
| Adjusted earnings | | 5,991 | | | 0.05 | | | 918 | | | 0.01 | |
(a) For the first quarter of 2023, start-up costs mainly related to the ramp-up of production at our new plant-based beverage facility in Midlothian, Texas, which were recorded in cost of goods sold ($5.8 million) and SG&A expenses ($0.6 million). For the first quarter of 2022, start-up costs mainly related to the hiring and training of new employees for the Midlothian facility, together with the integration of the Dream and West Life brands, which were recorded in cost of goods sold and SG&A expenses.
(b) Represents third-party costs associated with business development activities, including costs related to the evaluation, execution, and integration of external acquisitions and divestitures, internal expansion projects, and other strategic initiatives. For the first quarters of 2023 and 2022, these costs were recorded in SG&A expenses.
(c) Reflects the tax effect of the preceding adjustments to earnings calculated based on the statutory tax rates applicable in the tax jurisdiction of the underlying adjustment.
We believe that investors' understanding of our financial performance is enhanced by disclosing the specific items that we exclude to compute adjusted earnings. However, adjusted earnings is not, and should not be viewed as, a substitute for earnings from continuing operations prepared under U.S. GAAP. Adjusted earnings is presented solely to allow investors to more fully understand how we assess our financial performance.
(4) We use a measure of adjusted EBITDA when assessing the performance of our operations, which we believe is useful to investors' understanding of our operating profitability because it excludes non-operating expenses, such as interest and income taxes, and non-cash expenses, such as depreciation, amortization, and stock-based compensation, as well as other unusual items that affect the comparability of operating performance. We also use this measure to assess operating performance in connection with our employee incentive programs. We define adjusted EBITDA as segment operating income plus depreciation, amortization, and stock-based compensation, and excluding other unusual items as identified in the determination of adjusted earnings (refer above to footnote (3)). The following table presents a reconciliation of segment operating income and adjusted EBITDA from earnings from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
| SUNOPTA INC. | 22 | April 1, 2023 Form 10-Q |
| | | April 1, 2023 | | | April 2, 2022 | |
| For the quarter ended | | $ | | | $ | |
| Earnings from continuing operations | | 1,377 | | | 1,002 | |
| Income tax expense (benefit) | | (4,686 | ) | | 187 | |
| Interest expense, net | | 5,812 | | | 2,530 | |
| Other expense, net | | 35 | | | 287 | |
| Total segment operating income | | 2,538 | | | 4,006 | |
| Depreciation and amortization | | 9,998 | | | 9,413 | |
| Stock-based compensation | | 3,892 | | | 1,629 | |
| Start-up costs(a) | | 6,425 | | | 440 | |
| Business development costs(b) | | 731 | | | 183 | |
| Adjusted EBITDA | | 23,584 | | | 15,671 | |
(a) For the first quarter of 2023, start-up costs mainly related to the ramp-up of production at our new plant-based beverage facility in Midlothian, Texas, which were recorded in cost of goods sold ($5.8 million) and SG&A expenses ($0.6 million). For the first quarter of 2022, start-up costs mainly related to the hiring and training of new employees for the Midlothian facility, together with the integration of the Dream and West Life brands, which were recorded in cost of goods sold and SG&A expenses.
(b) For the first quarters of 2023 and 2022, business development costs were recorded in SG&A expenses.
Although we use adjusted EBITDA as a measure to assess the performance of our business and for the other purposes set forth above, this measure has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for an analysis of our results of operations as reported in accordance with U.S. GAAP. Some of these limitations are:
- adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness;
- adjusted EBITDA does not include the recovery/payment of taxes, which is a necessary element of our operations;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements; and
- adjusted EBITDA does not include non-cash stock-based compensation, which is an important component of our total compensation program for employees and directors.
Because of these limitations, adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing adjusted EBITDA in isolation, and specifically by using other U.S. GAAP and non-GAAP measures, such as revenues, gross profit, segment operating income (loss), net earnings, and adjusted earnings to measure our operating performance. Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP and should not be considered as an alternative to our results of operations or cash flows from operations determined in accordance with U.S. GAAP, and our calculation of adjusted EBITDA may not be comparable to the calculation of a similarly titled measure reported by other companies.
(5) In order to evaluate our results of operations, we use certain non-GAAP measures that we believe enhance an investor's ability to derive meaningful period-over-period comparisons and trends from our results of operations. For example, as described above under footnote (1), we evaluate our gross margins on a basis that excludes the impact of start-up costs. In addition, we exclude specific items from our reported results that due to their nature or size, we do not expect to occur as part of our normal business on a regular basis. These items are identified above under footnote (3), and in the discussion of our results of operations below. These non-GAAP measures are presented solely to allow investors to more fully assess our results of operations and should not be considered in isolation of, or as substitutes for an analysis of our results as reported under U.S. GAAP.
Inclusive of the impact of the divestiture of our sunflower business in the fourth quarter of 2022, total revenues for the quarter ended April 1, 2023 decreased by 6.8% to $223.9 million from $240.2 million for the quarter ended April 2, 2022, reflecting a 4.5% revenue decline in the Plant-Based Foods and Beverages segment and a 9.7% revenue decline in the Fruit-Based Foods and Beverages segment. The change in revenues from the first quarter of 2022 to the first quarter of 2023 was due to the following:
| SUNOPTA INC. | 23 | April 1, 2023 Form 10-Q |
| | | Plant-Based | | | Fruit-Based | | | | | | | |
| | | Foods and Beverages | | | Foods and Beverages | | | Consolidated | |
| | | $ | | | % | | | $ | | | % | | | $ | | | % | |
| 2022 revenues | | 135,511 | | | | | | 104,662 | | | | | | 240,173 | | | | |
| Price | | 12,064 | | | 8.9% | | | 1,339 | | | 1.3% | | | 13,403 | | | 5.6% | |
| Volume/Mix | | (1,062 | ) | | -0.8% | | | (11,471 | ) | | -11.0% | | | (12,533 | ) | | -5.2% | |
| Divestiture of sunflower business | | (17,163 | ) | | -12.7% | | | - | | | - | | | (17,163 | ) | | -7.1% | |
| 2023 revenues | | 129,350 | | | -4.5% | | | 94,530 | | | -9.7% | | | 223,880 | | | -6.8% | |
Note: percentages may not add due to rounding.
For the quarter ended April 1, 2023, the 4.5% decrease in revenues for the Plant-Based Foods and Beverages segment reflected a 12.7% revenue loss related to the divestiture of the sunflower business, together with an unfavorable volume/mix impact of 0.8%, partially offset by an 8.9% overall increase in pricing. The unfavorable volume/mix was mainly due to lower external sales of plant-based ingredients due to a customer transferring part of its business to a second-source supplier and increased internal demand for oat base (a $7.9 million decrease to revenues). On the other hand, we saw strong year-over-year growth in our plant-based beverage portfolio, mainly from oat milks and creamers, and coconut and soy milks, along with strong growth in teas, partially offset by lower volumes of everyday broths (a $6.8 million net increase to revenues). The increase in pricing mainly reflects the wrap-around benefit of pricing actions taken with customers in 2022 to offset inflationary cost increases.
For the quarter ended April 1, 2023, the 9.7% decrease in revenues for the Fruit-Based Foods and Beverages segment reflected an unfavorable volume/mix impact of 11.0%, partially offset by a 1.3% increase in pricing. The volume/mix impact reflected lower volumes of frozen fruit, as retail customers manage inventories in response to softer consumer demand and foodservice customers experiencing slower traffic in light of current economic conditions, together with the impact of one-time incremental volumes from a frozen fruit customer in the first quarter of 2022 that did not recur, partially offset by strong demand for fruit snacks and new business for our line of smoothie bowls. The increase in pricing mainly reflected pricing actions taken with customers in 2022 to offset commodity inflation incurred on fruit inventories and other inflationary cost increases.
Consolidated gross profit decreased $0.2 million, or 0.5%, to $28.2 million for the quarter ended April 1, 2023, compared with $28.4 million for the quarter ended April 2, 2022. Consolidated gross margin for the quarter ended April 1, 2023 was 12.6% compared to 11.8% for the quarter ended April 2, 2022, an increase of 80 basis points. Adjusted gross margin on a consolidated basis for the quarter ended April 1, 2023 was 15.2% compared to 12.0% for the quarter ended April 2, 2022, an increase of 320 basis points.
Gross profit for the Plant-Based Foods and Beverages segment decreased $0.1 million to $20.2 million for the quarter ended April 1, 2023, compared with $20.3 million for the quarter ended April 2, 2022, while gross margin increased 60 basis points to 15.6% in the first quarter of 2023 from 15.0% in the first quarter of 2022. In the first quarter of 2023, we incurred start-up costs of $5.8 million (4.4% gross margin impact) related to our new plant in Midlothian, Texas, compared with $0.4 million (0.3% gross margin impact) of start-up costs incurred in the first quarter of 2022. Excluding the impact of these costs, adjusted gross margin for the Plant-Based Food and Beverages segment was 20.0% in the first quarter of 2023, compared to 15.3% in the first quarter of 2022. The 470-basis point increase in adjusted gross margin reflected an approximately 170-basis point improvement following the divestiture of our lower-margin sunflower commodity business, together with the wrap-around benefit of pricing actions taken in 2022 to recover input cost inflation, and the positive gross margin impact of a mix shift in our plant-based ingredient operations, with increased internal use of oat base to support our beverage business and lower external sales.
Gross profit for the Fruit-Based Foods and Beverages segment was $8.0 million for each of the quarters ended April 1, 2023 and April 2, 2022, while gross margin increased to 8.5% in the first quarter of 2023 from 7.7% in the first quarter of 2022. The 80-basis point improvement in gross margin reflected the strong sales and production performance of our fruit snacks business, together with improved pricing and reduced inventory losses within our frozen fruit operations due to improved handling processes. These factors were partially offset by a higher mix of lower margin bulk fruit sales to right-size frozen fruit inventories and improve working capital efficiency, together with manufacturing inefficiencies and inventory losses related to smoothie bowl production.
For the quarter ended April 1, 2023, we realized total segment operating income of $2.5 million, compared with $4.0 million for the quarter ended April 2, 2022. The $1.5 million decrease in total segment operating income reflected a $3.2 million increase in SG&A expenses, together with slightly lower gross profit, as described above. The increase in SG&A expenses was mainly due to higher employee compensation costs, including variable stock-based compensation expense based on performance, and higher business development costs. These factors were partially offset by a favorable year-over-year foreign exchange impact related to our Mexican operations of $1.7 million.
| SUNOPTA INC. | 24 | April 1, 2023 Form 10-Q |
Further details on revenue, gross profit and segment operating income/loss variances are provided below under "Operating Segment Information."
Net interest expense increased by $3.3 million to $5.8 million for the quarter ended April 1, 2023, compared with $2.5 million for the quarter ended April 2, 2022, resulting from an increase in outstanding debt to finance capital expansion projects, together with the impact of higher interest rates. Interest expense capitalized as part of the construction cost of property, plant and equipment was $0.3 million and $0.1 million in the first quarters of 2023 and 2022, respectively.
We recognized an income tax benefit of $4.7 million on a pre-tax loss of $3.3 million for the quarter ended April 1, 2023, compared with an income tax provision of $0.2 million on pre-tax earnings of $1.2 million for the quarter ended April 2, 2022. Excluding the impact of non-deductible executive and stock-based compensation and the recognition of excess tax benefits related to the vesting of stock-based awards in the first quarter of 2023, our effective tax rate was approximately 25% in each of the first quarters of 2023 and 2022.
Earnings from continuing operations for the quarter ended April 1, 2023 were $1.4 million, compared with earnings of $1.0 million for the quarter ended April 2, 2022. Diluted earnings per share from continuing operations attributable to common shareholders (after dividends and accretion on preferred stock) was $0.01 for the quarter ended April 1, 2023, compared with a diluted earnings per share of $0.00 for the quarter ended April 2, 2022.
Earnings from discontinued operations of $3.6 million (diluted earnings per share of $0.03) for the quarter ended April 2, 2022, were related to the settlement of the purchase price allocation and other post-closing matters in connection with the 2020 divestiture of our global ingredients business, Tradin Organic.
We realized earnings attributable to common shareholders of $0.7 million (diluted earnings per share of $0.01) for the quarter ended April 1, 2023, compared with earnings attributable to common shareholders of $3.8 million (diluted earnings per share of $0.04) for the quarter ended April 2, 2022. Earnings attributable to common shareholders included dividends and accretion on preferred stock of $0.7 million and $0.8 million in the first quarters of 2023 and 2022, respectively.
For the quarter ended April 1, 2023, adjusted earnings were $6.0 million, or $0.05 earnings per diluted share, compared with adjusted earnings of $0.9 million, or $0.01 earnings per diluted share for the quarter ended April 2, 2022. Adjusted EBITDA increased $7.9 million, or 50.5%, for the quarter ended April 1, 2023 to $23.6 million, compared with $15.7 million for the quarter ended April 2, 2022. Adjusted earnings and adjusted EBITDA are non-GAAP financial measures. See footnotes (3) and (4) to the table above for a reconciliation of adjusted earnings and adjusted EBITDA from earnings from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
Operating Segment Information
| Plant-Based Foods and Beverages | | | | | | | | | | | | |
| For the quarter ended | | April 1, 2023 | | | April 2, 2022 | | | Change | | | % Change | |
| | | | | | | | | | | | | |
| Revenues | $ | 129,350 | | $ | 135,511 | | $ | (6,161 | ) | | -4.5% | |
| Gross profit | | 20,165 | | | 20,345 | | | (180 | ) | | -0.9% | |
| Gross margin | | 15.6% | | | 15.0% | | | | | | 0.6% | |
| | | | | | | | | | | | | |
| Operating income | $ | 8,277 | | $ | 8,461 | | $ | (184 | ) | | -2.2% | |
| Operating margin | | 6.4% | | | 6.2% | | | | | | 0.2% | |
| SUNOPTA INC. | 25 | April 1, 2023 Form 10-Q |
Plant-Based Foods and Beverages contributed $129.4 million in revenues for the quarter ended April 1, 2023, compared to $135.5 million for the quarter ended April 2, 2022, a decrease of $6.1 million, or 4.5%. The table below explains the decrease in revenues:
| Plant-Based Foods and Beverages Revenue Changes | |
| Revenues for the quarter ended April 2, 2022 | $135,511 |
| Impact of the divestiture of the sunflower business in the fourth quarter of 2022 | (17,163) |
| Lower external sales of plant-based ingredients due to a customer transferring part of its business to a second-source supplier and increased internal demand for oat base | (7,695) |
| Wrap-around benefit of pricing actions taken in 2022 to offset inflationary cost increases, together with sales volume growth for oat milks and creamers, coconut and soy milks, and teas, partially offset by lower volumes of everyday broths | 18,697 |
| Revenues for the quarter ended April 1, 2023 | $129,350 |
Gross profit in Plant-Based Foods and Beverages decreased by $0.1 million to $20.2 million for the quarter ended April 1, 2023, compared to $20.3 million for the quarter ended April 2, 2022. The table below explains the decrease in gross profit:
| Plant-Based Foods and Beverages Gross Profit Changes | |
| Gross profit for the quarter ended April 2, 2022 | $20,345 |
| Increase in start-up costs related to our new plant in Midlothian, Texas | (5,354) |
| Impact of the divestiture of the sunflower business | (239) |
| Higher volumes and pricing for plant-based beverages, together with increased internal use of oat base to support our beverage business, partially offset by higher input costs, increased inventory reserves, and incremental depreciation of new production equipment for capital expansion projects | 5,413 |
| Gross profit for the quarter ended April 1, 2023 | $20,165 |
Operating income in Plant-Based Foods and Beverages decreased by $0.2 million to $8.3 million for the quarter ended April 1, 2023, compared to $8.5 million for the quarter ended April 2, 2022. The table below explains the decrease in operating income:
| Plant-Based Foods and Beverages Operating Income Changes | |
| Operating income for the quarter ended April 2, 2022 | $8,461 |
| Increase in corporate cost allocation | (510) |
| Decrease in gross profit, as explained above | (180) |
| Lower employee compensation costs, partially offset by higher research and development and sales and marketing expenses | 506 |
| Operating income for the quarter ended April 1, 2023 | $8,277 |
Despite the revenue headwind of lower external sales volumes of plant-based ingredients and the impact of the divestiture of the sunflower business in 2022, we anticipate year-over-year revenue growth for our Plant-Based Foods and Beverages operating segment for fiscal 2023, compared with fiscal 2022. Revenue growth is expected in the second half of 2023 with capacity gains across our aseptic network, including the commencement of commercial production on the 330-milliliter packaging line at our Midlothian, Texas, facility, together with the start-up of other capacity expansion projects at our other aseptic facilities. In addition, we expect the wrap-around benefit of pricing actions taken in 2022, and potential pricing actions in 2023 as needed, will effectively offset input cost inflation. We expect these pricing actions, together with improved plant utilization and the divestiture of the lower-margin sunflower commodity business, to drive year-over-year gross margin improvements in our plant-based operations in 2023, excluding the impact of start-up costs related to the Midlothian facility, as well as other capacity expansion projects expected to come online in 2023. The statements in this paragraph are forward-looking statements. See "Forward-Looking Statements" above. Various factors could adversely impact our ability to meet these forward-looking expectations, including the extent and duration of inflation headwinds; our ability to continue to pass through price increases to our customers to offset inflationary pressures; the impact of price inflation on consumer buying behavior and demand for plant-based beverages; our ability to successfully execute on our capital expansion projects, including the ramp-up of commercial production at our Midlothian facility, and the viability of those projects; and other factors described above under "Forward-Looking Statements."
| SUNOPTA INC. | 26 | April 1, 2023 Form 10-Q |
| Fruit-Based Foods and Beverages | | | | | | | | | | | | |
| For the quarter ended | | April 1, 2023 | | | April 2, 2022 | | | Change | | | % Change | |
| | | | | | | | | | | | | |
| Revenues | $ | 94,530 | | $ | 104,662 | | $ | (10,132 | ) | | -9.7% | |
| Gross profit | | 8,038 | | | 8,011 | | | 27 | | | 0.3% | |
| Gross margin | | 8.5% | | | 7.7% | | | | | | 0.8% | |
| | | | | | | | | | | | | |
| Operating income (loss) | $ | 1,785 | | $ | 784 | | $ | 1,001 | | | 127.7% | |
| Operating margin | | 1.9% | | | 0.7% | | | | | | 1.2% | |
Fruit-Based Foods and Beverages contributed $94.5 million in revenues for the quarter ended April 1, 2023, compared to $104.7 million for the quarter ended April 2, 2022, a decrease of $10.2 million, or 9.7%. The table below explains the decrease in revenues:
| Fruit-Based Foods and Beverages Revenue Changes | |
| Revenues for the quarter ended April 2, 2022 | $104,662 |
| Lower sales volumes of frozen fruit to retail and foodservice customers, together with the impact of one-time incremental volumes from a frozen fruit customer in the first quarter of 2022 that did not recur, partially offset by increased bulk fruit sales | (14,582) |
| Higher sales volumes and pricing for fruit snacks and incremental volumes of smoothie bowls | 4,450 |
| Revenues for the quarter ended April 1, 2023 | $94,530 |
Gross profit in Fruit-Based Foods and Beverages was $8.0 million for each of the quarters ended April 1, 2023 and April 2, 2022. The table below explains the slight increase in gross profit:
| Fruit-Based Foods and Beverages Gross Profit Changes | |
| Gross profit for the quarter ended April 2, 2022 | $8,011 |
| Higher sales volumes and pricing for fruit snacks, together with increased production volumes and plant efficiencies in our fruit snack operations, partially offset by manufacturing inefficiencies and inventory losses related to the ramp-up of smoothie bowl production | 251 |
| Lower sales and production volumes of frozen fruit for retail and foodservice customers, together with a higher mix of lower margin bulk fruit sales, partially offset by improved pricing and reduced inventory losses due to excess spoilage during handling | (224) |
| Gross profit for the quarter ended April 1, 2023 | $8,038 |
| SUNOPTA INC. | 27 | April 1, 2023 Form 10-Q |
Operating income in Fruit-Based Foods and Beverages increased by $1.0 million to $1.8 million for the quarter ended April 1, 2023, compared to $0.8 million for the quarter ended April 2, 2022. The table below explains the increase in operating income:
| Fruit-Based Foods and Beverages Operating Income Changes | |
| Operating income for the quarter ended April 2, 2022 | $784 |
| Favorable foreign exchange impact within our frozen fruit operations in Mexico, partially offset by higher SG&A expenses | 1,628 |
| Increase in gross profit, as explained above | 27 |
| Increase in corporate cost allocation | (654) |
| Operating income for the quarter ended April 1, 2023 | $1,785 |
While we experienced a softening of demand for retail frozen fruit in the first quarter of 2023, we anticipate higher revenues and gross profit for our Fruit-Based Foods and Beverages operating segment for fiscal 2023, compared with fiscal 2022, driven by the expected completion of capacity expansion projects in our fruit snacks operations in the second half of 2023 to meet unfilled demand, together with overall stable frozen fruit volumes. The statements in this paragraph are forward-looking statements. See "Forward-Looking Statements" above. Various factors could adversely impact our ability to meet these forward-looking expectations, including the extent and duration of inflation headwinds, and the impact on consumer buying behavior and overall demand for our fruit-based products; our ability to successfully execute on our capital expansion projects, and the viability of those projects; our ability to successfully migrate our smoothie bowl production and achieve anticipated volume gains and cost savings; and other factors described above under "Forward-Looking Statements."
| Corporate Services | | | | | | | | | | | | |
| For the quarter ended | | April 1, 2023 | | | April 2, 2022 | | | Change | | | % Change | |
| | | | | | | | | | | | | |
| Operating loss | $ | (7,524 | ) | $ | (5,239 | ) | $ | (2,285 | ) | | -43.6% | |
Operating loss at Corporate Services increased by $2.3 million to $7.5 million for the quarter ended April 1, 2023, compared to a loss of $5.2 million for the quarter ended April 2, 2022. The table below explains the increase in operating loss:
| Corporate Services Operating Loss Changes | |
| Operating loss for the quarter ended April 2, 2022 | $(5,239) |
| Higher variable stock-based compensation, based on improved performance | (2,263) |
| Higher employee compensation and business development costs | (1,186) |
| Increase in corporate cost allocations, mainly related to headcount and salary increases | 1,164 |
| Operating loss for the quarter ended April 1, 2023 | $(7,524) |
Corporate cost allocations mainly consist of salaries of corporate personnel who directly support the operating segments, as well as costs related to our enterprise resource management system. These expenses are allocated to the operating segments based on (1) specific identification of allocable costs that represent a service provided to each segment and (2) a proportionate distribution of costs based on a weighting of factors such as revenue contribution and the number of people employed within each segment.
Liquidity and Capital Resources
From time to time, as part of our ongoing efforts to improve working capital efficiency, we utilize, at our sole discretion, supplier finance programs offered by some of our major customers that allow us to sell our receivables from the customers to such customers' financial institutions, on a non-recourse basis, in order to be paid earlier than our payment terms with the customer provide at a discount rate that leverages those customers' favorable credit ratings. Utilizing these programs reduces our accounts receivable balances, improves our cash flows, and reduces the cost of servicing these receivables with our revolving credit facility.
| SUNOPTA INC. | 28 | April 1, 2023 Form 10-Q |
In connection with our efforts to extend payment terms with our major suppliers to enhance cash flows, we facilitate our own voluntary supplier finance program through a third-party financial institution, by which a participating supplier may elect to sell an invoice to the financial institution in order to be paid earlier than the contractual payment terms provide (see note 4 to the unaudited consolidated financings statements included in this report.) Additionally, we are financing certain other purchases of goods and services through an extended payables facility, by which a third-party intermediary settles the supplier invoice on the contractual due date, and we pay the intermediary the face amount of the invoice, together with interest, at a later date (see note 5 to the unaudited consolidated financial statements included in this report.)
On December 31, 2020, we entered into a five-year credit agreement, as amended, for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $250 million, subject to borrowing base capacity. As at April 1, 2023, we had outstanding borrowings under the revolving credit facility of $142.9 million (December 31, 2022 - $137.3 million), including a $17.5 million FILO term loan (December 31, 2022 - $20.0 million), and available borrowing capacity of approximately $41 million (January 1, 2022 - $50 million). Commencing in the first quarter of 2023, we are making amortization payments on the principal amount of the FILO term loan of $2.5 million each quarter, with the remaining amount payable at the maturity thereof on April 15, 2024.
The credit agreement also provided a five-year, up to $75 million delayed draw term loan, to be used for capital expenditures, which could be drawn upon up to March 31, 2023. As at March 31, 2023, we had utilized $57.0 million on the term loan facility to partially finance the purchase of equipment for our new plant-based beverage facility in Midlothian, Texas, as well as certain other equipment purchases. Commencing in March 2023, we are repaying the term loan facility in monthly installments of $0.7 million, with the remaining amount payable at the maturity thereof on December 31, 2025. As at April 1, 2023, the principal amount outstanding under the term loan facility was $56.4 million (December 31, 2022 - $43.7 million).
For the quarter ended April 1, 2023, the weighted-average interest rate on all outstanding borrowings under our asset-based credit facilities was 6.95% (April 2, 2022 - 2.42%), reflecting increases in short-term interest rates.
For more information on our asset-based credit facilities, see note 6 to the unaudited consolidated financial statements included in this report.
As at April 1, 2023, we had outstanding finance lease liabilities of $120.1 million (December 31, 2022 - $124.1 million), with a weighted-average implicit interest rate of 8.25% and a weighted-average remaining lease term of 3.5 years. Additions to finance leases in the first quarter of 2023 were related to the final buildout of our Midlothian, Texas, facility. For more information on our operating and finance lease obligations, including maturity dates, see note 3 to the unaudited consolidated financial statements included in this report.
As at April 1, 2023, our subsidiary, SunOpta Foods Inc. ("SunOpta Foods") had 15,000 shares of Series B-1 preferred stock issued and outstanding. The Series B-1 preferred stock currently has a liquidation preference of approximately $1,015 per share and is exchangeable into shares of our common stock at an exchange price of $2.50 per share, which presently equates to approximately 6,089,333 common shares. Cumulative preferred dividends accrue daily on the Series B-1 preferred stock at an annualized rate of 8.0% of the liquidation preference, which equates to quarterly dividend distributions of approximately $0.3 million. At any time, the holders of the Series B-1 preferred stock may elect to exchange their shares of Series B-1 preferred stock into shares of our common stock. In addition, since April 24, 2023, SunOpta Foods may cause the holders of the Series B-1 Preferred Stock to exchange all of their shares of Series B-1 preferred stock into shares of our common stock if the volume-weighted average trading price of our common shares during the then preceding 20 trading day period is greater than 200% of the $2.50 exchange price per share.
For more information on the Series B-1 preferred stock, see note 7 to the unaudited consolidated financial statements included in this report.
We estimate cash expenditures of $35 million to $45 million on identified capital projects in fiscal 2023, including $25.8 million spent in the first quarter of 2023, mainly related to the completion of our Midlothian, Texas, facility. We funded our cash capital expenditures in the first quarter of 2023 using our term loan facility, together with cash advances under finance leases and our revolving credit facility. In addition, we estimate approximately $20 million of non-cash capital investments in 2023, consisting of capitalized finance lease right-of-use assets.
We believe that our operating cash flows, including the selective use of supplier finance programs and the extended payables facility to improve payment terms, together with our revolving credit facility, and access to lease financing, will be adequate to meet our operating, investing, and financing needs for the foreseeable future, including the 12-month period following the fiscal period end of our financial statements included in this report. However, in order to finance significant investments in our existing businesses, or significant business acquisitions, if any, that may arise in the future, we may need additional sources of cash that we could attempt to obtain through a combination of additional bank or subordinated financing, a private or public offering of debt or equity securities, or the issuance of common stock. There can be no assurance that these types of financing would be available at all or, if so, on terms that are acceptable to us. In addition, we may explore the sale of selected operations or assets from time to time to improve our profitability, reduce our indebtedness, and/or improve our position to obtain additional financing.
| SUNOPTA INC. | 29 | April 1, 2023 Form 10-Q |
Cash Flows
Summarized cash flow information for the periods ended April 1, 2023 and April 2, 2022 is as follows:
| | | For the quarter ended | |
| | | April 1, 2023 | | | April 2, 2022 | | | Change | |
| | | $ | | | $ | | | $ | |
| Net cash flows provided by (used in): | | | | | | | | | |
| Operating activities of continuing operations | | 3,867 | | | 15,543 | | | (11,676 | ) |
| Investing activities of continuing operations | | (25,457 | ) | | (24,518 | ) | | (939 | ) |
| Financing activities of continuing operations | | 21,821 | | | 9,243 | | | 12,578 | |
Operating Activities
Cash provided by operating activities decreased $11.7 million from the first quarter of 2022 to the first quarter of 2023. The decrease in cash provided mainly reflected an unfavorable working capital change of $10.8 million, together with the impact in the first quarter of 2023 of start-up costs related to our Midlothian, Texas, facility, and higher cash interest expense on borrowings to finance capital expenditures.
Investing Activities of Continuing Operations
Cash used in investing activities increased $0.9 million from the first quarter of 2022 to the first quarter of 2023. Investing cash flows mainly reflected additions to property, plant and equipment, including the construction of our new plant-based beverage facility in Midlothian, Texas.
Financing Activities of Continuing Operations
Cash provided by financing activities of continuing operations increased $12.6 million from the first quarter of 2022 to the first quarter of 2023. The increase in cash provided mainly reflected an increased level of borrowings under our revolving credit facility and net proceeds from notes payable associated with the extended payables facility to fund changes in working capital in the first quarter of 2023, partially offset by a reduced level of borrowings of long-term debt, as capital projects are completed and repayments commence on the related term loan and lease financing.
Critical Accounting Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, related revenues and expenses, and disclosure of gain and loss contingencies at the date of the financial statements. The estimates and assumptions made require us to exercise our judgment and are based on historical experience and various other factors that we believe to be reasonable under the circumstances. We continually evaluate the information that forms the basis of our estimates and assumptions as our business and the business environment generally changes.
There have been no material changes to the critical accounting estimates disclosed under the heading "Critical Accounting Estimates" in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of the Form 10-K.
| SUNOPTA INC. | 30 | April 1, 2023 Form 10-Q |
Item 3. Quantitative and Qualitative Disclosures about Market Risk
For quantitative and qualitative disclosures about market risk, see Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," of the Form 10-K. There have been no material changes to our exposures to market risks since December 31, 2022.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management has established disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within time periods specified in the Securities and Exchange Commission's rules and forms. Such disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), we conducted an evaluation of our disclosure controls and procedures (as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act) as of the end of the period covered by this quarterly report. As a result of the material weaknesses in internal control over financial reporting identified and described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, our disclosure controls and procedures were not effective as of April 1, 2023.
Notwithstanding the identified material weaknesses, management has concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.
Remediation Plan for Material Weaknesses in Internal Control over Financial Reporting
The Company is in the process of improving its policies and procedures relating to the preparation and review of the consolidated income tax provision and recognition of deferred tax assets related to stock-based compensation. Management plans to enhance its internal controls by adding controls to ensure proper review and assessment of business activities impacting the provision and completeness and accuracy of data used in preparing the consolidated tax provision and deferred tax assets.
The material weaknesses will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. As a result of the material weakness relating to the annual consolidated income tax provision and recognition of deferred tax assets, we believe the remediation will occur in the fourth quarter of fiscal 2023 and will strengthen our internal control over financial reporting and will prevent a reoccurrence of the material weaknesses described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Changes in Internal Control over Financial Reporting
Other than the actions taken under "Remediation Plan for Material Weaknesses in Internal Control over Financial Reporting" discussed above, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended April 1, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| SUNOPTA INC. | 31 | April 1, 2023 Form 10-Q |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
For a discussion of legal proceedings, see note 12 to the unaudited consolidated financial statements included under Part I, Item 1 of this report.
Item 1A. Risk Factors
Certain risks associated with our operations are discussed in Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to the previously reported risk factors as of the date of this quarterly report. Our previously reported risk factors should be carefully reviewed in connection with an evaluation of our Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
See note 7 to our financial statements under Item 1 of Part I above for a description of our March 3, 2023 issuance of 6,089,331 common shares in exchange for shares of Series B-1 Preferred Stock of SunOpta Foods Inc. The issuance was exempt from registration pursuant to Rule 506(b) promulgated under the Securities Act of 1933, as amended, because all the of the purchasers were accredited investors.
Item 6. Exhibits
The following exhibits are included as part of this report.
| Exhibit | Description |
| | |
| 31.1* | Certification by Joseph D. Ennen, Chief Executive Officer, pursuant to Rule 13a - 14(a) under the Securities Exchange Act of 1934, as amended. |
| | |
| 31.2* | Certification by Scott Huckins, Chief Financial Officer, pursuant to Rule 13a - 14(a) under the Securities Exchange Act of 1934, as amended. |
| | |
| 32* | Certifications by Joseph D. Ennen, Chief Executive Officer, and Scott Huckins, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350. |
| | |
| 101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
| | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document |
| | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
| SUNOPTA INC. | 32 | April 1, 2023 Form 10-Q |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | SUNOPTA INC. |
| | |
| Date: May 10, 2023 | /s/ Scott Huckins |
| | Scott Huckins |
| | Chief Financial Officer
(Authorized Signatory and Principal Financial Officer) |
| SUNOPTA INC. | 33 | April 1, 2023 Form 10-Q |
