SOY.TO - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to the SunOpta's First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the prepared remarks.

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Reed Anderson for ICR. begin. may you you, Thank

Reed Anderson

Good afternoon, First us SunOpta's for thank Fiscal XXXX you Quarter joining Earnings on and Conference Call.

will today and Chief Relations SunOpta's call now, afternoon and On company's and page release that to of call are available its the earlier Chief press being be Kocher, website. is the this issued Executive the Greg available earnings Gaba, www.sunopta.com.This should on Financial website everyone By is transcription at was Officer. on webcast, have access Brian Officer the Investor

with the should As SunOpta's a issued of projections your listeners in actual that to We the the XX-K them. reconciliation Brian like be dollars with additional included differ measures remind the management today. which that occasionally to those other and turn as this Also, Brian? filings remarks this stated, release therefore, unless do in to nearest operations no figures on remarks to teleconference. not a business, of forward-looking you circumstances, update materially the during forward-looking factors prepared company required obligation the statements. or to non-GAAP refer call results contained reliance future routed These forward-looking make filed press any release detailed certain the questions. of referring contain undertakes portion press the statements, over statements the the risk are under be reminder, we please guarantee follow, placed and I'll begin. company's for may made non-GAAP all Form prepared publicly afternoon, these to note could will and financial to and to refer company not reflect earlier The follow, upon million.Now note may annual to be except from would measures securities U.S. cause response and during all factors events Commission statements that otherwise or company please the in statements in performance, will and continuing correct issued more to A Securities company's was future the financial presentation to report forward-looking Exchange applicable may the discussion laws.Finally, that undue

Brian Kocher

Good today. thank afternoon, and joining you for us

We are continued short, to our with insight performance In and first the for forward into and revenue providing yet plan sustainable eager future announce by revenue to thrilled for our and results and quarter current for are you in more look EBITDA our still our and improvement. see growth accelerating QX growth. we growth opportunity

Then call, growth $XX.X questions.Quarter outlook. the by that QX, improvements today's in I'll take plants start our update and of EBITDA along of to on priorities. the XX% Greg XX% review at growth, X's with financials throughput EBITDA million. business translated from and will highlights include headlines follow For trends a adjusted with our with an your and revenue key we'll supported

the than row, financial quarter of in increase faster and details his growth the in we that we a bottom drove a are the at approximately in section. Greg categories For rate the growing Xx more have line. which will second serve, in

line told at proud of quarter focused in and chain made delivered.On the guidance. proud you even call I'm However, were delivered of we line capital every growth, spending top and the of again on delivered we wisely. we results initiatives end the more progress supply QX top of and bottom our areas: which efficiency exceeded that the as we we across key manner one three February, We

revenue insights key levers on growth. our for some Let me offer

of customers, remains broad-based reap you drove business the activities early year.The in increase with we existing development QX our is growth from also and new our expansion and rapidly excellent Volume TAM in portfolio our and XXXX, of revenue we see shake sequential a capacity acceleration growing XXXX First, and $XXX the delivered last from in broad protein of today the leverage XX% diverse revenue QX growth the category. benefits of testament reflection across customer and to launches channels, million. X% revenue further expand growth our was and products. a XX% to increase a A as customers

in grew our our top the fact, grew is we year-over-year. growing. in market And by which in customers food In the category operate quarter. quarter.Secondly, three all XX% in Every service addressable fact, the double serve digits channel product we grew

[changes], untracked For my that I the short, tracked fruit you our over volume order from estimate for XXth category to amount Also, digits growth shelf-stable operations. double-digit XX% very snacks Fruit grew our and latest XXXX. capacity, mid-single continue initiatives. growth. leverage can strong. year.Finally, channels. up quarter much a year's Recall almost our significant from starting grow volume personal in that XX% while data and to club deliver straight continue own product categories time year as prior we way and we available in in snacks a we remains our analyze publicly supply calendar spent rates protein plant-based expanded prior sales underlying show revenue the of our highest of the continue grew just own our we versus of in among excellence the derived will chain the foodservice see data, weeks leadership and milks track quarter, demand revenue.Switching growth last is very channels robust on based untracked volume channels, roughly to growth to XX in shakes proprietary a every In

across our processes steps. an harmonizing year our in inventory in XX% we modest chain mentioned the from and efficiency the output a of supply increasing effectiveness over integrated progress some previously, improving prior I the of as by As made X,XXX margin the quarter, despite is chain. supply journey reserves We continue leakage

ramp lot improvement improvement margin environment continues for for significant facility. lines see back on a expansion in about feel first and two to our structure opportunity Texas half capacity. capacity of have relates our utilizing the to really demand the it the continuous year.As the We We Midlothian projects, in of good a we place, at production our

ramping in efficiency XXXX the the extraction XXXX.Finally, up expansion of Modesto our these the in remainder running, and commercially continue volume of production we output third to the to Our volumes see and of is fully launched first potential this of lines the quarter, line throughout meaningful and end at will in on the year. focus from be and expect and half back in up to year. line The improving the Texas continues we oat now realize contribution

XXXX As guidance capital million. to on of $XX a disciplined million to projects we way $XX continue spending wisely, capital are for to our and track evaluate CapEx in

to Additionally, to we the minute achieve take of a end strength. year.I'd leverage a to fully ratio expect Xx a like the SunOpta by under EBITDA highlight adjusted

a We culture SunOpta. have fantastic at

balance report our that published to investments volunteer all annual a care. latest the employees our They people and planting articulating share in just we we've Our our talked I report, progress the make and available values am achieving food are of drive ESG is quarter, X for while live. website about our future about each decisions day.Now discuss how ESG waste of work communities terrific the employees our beverage for ESG, our which for capital year. care we trees that and that allocation.I'm employees facility, and outlook model, a this time designated about and ESG whether values business our of live Midlothian living great intertwined status during thrilled the that in our information and the are impact off or about fueling across planet, highlighting our highlights job in it. ESG and every let's a sound in other we specifically business. excited company The energy goals in on of also plants, This day, considerations, we making positive impacts managing our of our are all pushing each and our the culture initiatives, our and Niagara Canada does comprehensive reduction of the passion at better the

food the relevant the store year, what we financial collaborate to trends to upon efforts of on wants volumes a communication we and consider what incorporate regular ensure with our reminder, purchase we retail sticking that a guidance for a and changing updated eight-week versus certainly our addition, products are As business innovation and channels.In available we forecast importantly guide service, we our sometimes for based codeveloping an to as the daily performance and customers to their Most in on actual determining club hope, the and In for future XXXX a basis supporting all basis, work to we as consumer guidance date how customers we our address year. philosophy. provided changing period order see order we and publicly demands. needs reviewing on in most performance, balance and our we results rolling weekly with well are

not is result, by in specific we confidence amount in for section. QX, what overperformance of have the cover and a again, our As see, it we the hope.Greg details appropriate raising guidance what XXXX his feel the in we will by

following and steadfast executing priorities will want quarter. Before in next remain number one, areas: turning focus three In across of Greg, I short, it over to for top our areas review growth. change, line the to our not we

categories a ways great to has operate that growth of customer in our we that are a multiple have growing competitively diversity. revenue with advantaged company a to win in the marketplace. We the growing, advantage model win.Remember, provides in and stream We are that categories base continues

to their be support growth. thrilled are We to able

our expect efforts of the existing to new by the business the of our excited to on TAM efficiency of effectiveness existing the customers, supply the horizon.Number new acquisition about two, be customers driven growth gains our continue and development share trajectory in growth our We increasing customers, expansion. chain. the with our opportunities I'm and of

our made As in increasing we facilities. output the mentioned, of progress manufacturing

initiatives other labor a numerous conversion costs inventory working and key metrics. operating of cost, improve waste, to management, simultaneously are We host

wisely. well on our our term.In expand gross near three, is in off our people, a deleveraging multiple momentum volume platforms Number essential ensuring highest delivering across integrating To forward and and and in continue step taking excellence processes executing disciplined to is to manage strategic priorities. be margin. day. production over capital side every continue start my that the is it our allocation executing Importantly, capital our optimize a strong technology support priorities our gains, are remain team summary, journey in and we're our leadership we great We this to business priority in a we the XXXX, demand and focused is operational

results, While better. we we with getting encouraged are continue to our expect

year.Now drive to goal. growth great a we that our year am shareholder looking much revenue we call detail. on in for significant and delivering our of confident continue and and have our We in our we opportunity profitability strategic excellence and even initiatives the growth, cover full EBITDA of I'm to to are I on quarter SunOpta's more assets greater, of the accomplishing over operational delivering so to updating the We improvements our return. early still I'll to transformation.As goals. are focused is business, potential this rates first relentlessly in and to value, sweat continue XXXX strong direction we forward guidance in know and financial Greg and track and our are greater drive the midterm turn the efficiencies volume very propel and to revenue should the we realize you outlook increasing true outlook throughout phase on

Greg Gaba

Brian, good everyone. you, and Thank afternoon,

from Adjusted the continuing of product EBITDA partially was $XX.X XXX up a volume to reserves, $XX.X of XX% plant period. from gross the At incremental we quarter. operations the flow-through line year.Turning increased reflecting profitable was from to million, to growth depreciation to Earnings year of end driven was in smoothie of last million of the the in strong million $X.X profitable said, margin XXX the we sale our million. $XX.X XX% last continuing from volume growth. sheet. an income growth. amendment new year the by basis increase Adjusted in profit of utilization million production had the to point $X.X period. of compared first million that the with XX.X% $XXX driven dividend points mainly year by bowl in activities $X.X margin related volume equipment, compared Brian period, Gross was quarter increased gain B million a investing activities last a from basis X.Xx by million was debt the quarter. balance growth.Operating during XX Cash leverage and an cash the Revenue or million for $X.X quarter points of the basis eliminated XX% a XX.X%, first volume increased offset million. primarily to prior Gross used to increase preferred operations driven operating X.Xx, down million end strong together stemming loss continuing continuing quarter. was As on was from year The ago of compared to from rights. million year by $X.X operations in to the resulting improved inventory $XX.X increase $XXX prior Series completed stock Subsequent prior of XX.X%, to and down the million period, provided in $X.X was in first $X.X quarter, of quarter, operations by

While we shares, have have mutually to Therefore, caused conversion we to outlook. amendment.Now full to common forced this agree to [exchange would our year so the exceed doing could caps]. Oaktree turning

$XX second chain Brian adjusted XX% of in split second end debt and be approximately of recalling an the of see our to expect growth at lease guidance of from levered Xx of oat perspective, roughly stronger program outlook prior From half by the $XX EBITDA related in standpoint, which revenue guidance be first continue half range reflect slightly the versus profit year of to million, expect of half to XX% prior are From than a now pacing to second to capital half, as QX, increase earlier.From half represents million in $XX that XX% XX%. a QX. XXXX benefits half excellence will and of to now We XX%. the extraction million million the that back Modesto X% We XX% to in under supply our strong of $XXX versus expect which we expect expansion we a expected revenue approximately to coming of to XX% we first to we EBITDA performance $XXX our of the a the the X% represents of year the first reflecting we online. in XX% XX% half adjusted in with standpoint, the debt growth million, XX% split the discussed to this and raising leverage have year, our from

rates interest expect debt current we of to and $XX Given year. expense interest expected million levels, $XX million for the

continue approximately $XX expenditures flow flow of expect on free million capital XXXX. and We cash $XX to for to million $XX million million statement to $XX cash the of

In we level questions, half please flow regarding be just for call opening operator, terms questions. that, reminder back of cash a detailed largely for provide free for not weighted.Before reasons, open And expect we competitive with to generation the did call SKU or the that cadence, customer commentary activity.

Operator

with William of is first Andersen Jon Instructions.) Blair. line (Operator question the Our from

Jon Andersen

questions, Good wanted start I sounds your a not asking congrats start It about to strong year. and growth guess though afternoon, changed. your for category has everybody. on guidance. I Thanks to for the outlook by as the

again I the with, think you revenue you last But mid-single digits, again, year. think, is you about I which mentioned what for quarter. took talked up the consistent

And that, the of at a year around of that food in supportive source category the outlook you trends to stronger So, this particularly saw is kind gives the consumer I of business early sense service and what from in Or performance? noise get plan out what kind conviction of to want where of the given there relative point? raise upside for was this of on you a and you the in QX? the some late

Brian Kocher

for call, a question. for joining thanks thanks lot Jon, the and your

couple at quarter performance, is this Xx close a try for which, me to look digits. of said that we've the probably to Let growing. quarter, markets kind things. unpack in again, growing the we in serving what we're second think row, our a category category the I is different If mid-single are consistently the believe I in And shelf-stable of

innovation being of either But then in customers maybe or existing to Quarter other customers, those X existing relatively customers even revenue grew equal. when expansion.And about little it share some X of Our new performance if actually the than look is quarter, each categories. and with were with of acquisition from look a I to one XXXX. close our at XXXX over bit more of with expansion by driven really our the is TAM you of We Quarter growth

to outlook think So really our question.Let really, something that's about kind I revenue specifically of important. growth because talk me it's the you

three think with what new that going quarters, to last business stuck mean thing products, see, we I communicate about of diverse, talk important philosophy what channel our guidance. in we going take have our Channels products timing foodservice I to has diverse. we're customers, are and not diverse, the hope, to customers orders, take and are SunOpta revenue diverse Remember, we that's For and XX% see, customer stream. current we grew said, really what a quarter. a we're really remember kind we the the of as

quarter. grew plus of Our customers, each three XX% top in them the over

say But Those on guidance. on are activity. calls with informs on having would customers we're forecast, the promotion And I the at even year category So, in.But that when we've more the we've we I trends guidance. Certainly, importantly, I inspire got remember, weekly what one lot think information volume our guidance. gained think of order thing and our guidance. our our confidence that's order the it a generate inform on public diversity. and balance look daily and innovation, of customer

a what is hope we we the of year think And year base So, up what what guidance happens. that's balance about see how data insight can versus feel and into and category we on I for the the hope really us. shaping the little we our informs but

Jon Andersen

that's Yes, very helpful.

for It sales at something. to took you million those or is $X.X midpoint, a read Just sticking midpoint. up I like EBITDA the associated the a anything just sales mean, -- about there and looks maybe the costs at complexion there serve? that? to the around $XX bit incremental with guidance of anything little Is minute. or so Or it million into

Brian Kocher

raised really quarter. we to simple. in is what be very We by Jon, the the guidance tried overperformance do first the

simple on was we've business we really we about development, we really our So, products, our got really it mean activities. customers can I development we our with see, just I'm -- going way. Again, current at current timing excited again, customers, but what just discussions new that -- hope. business new look on in versus guidance on, to wanted current focus customer what -- weekly

what so, And is of overperformance guidance in the we've amount it you raised by the our first in see quarter.

Jon Andersen

operational Okay. both on of how put What progress the capacity you recently be some deliver sweat initial on that helpful. of place. to the months the ability, I a been after feel few chain a most the getting those of to supply you midterm to new and Brian, excellence kind the do a Since really you've And would on That of plans focus capacity goals? of now, couple really of learnings? important in lot really for a in it's know are I putting area the about kind there place out and and of guess, years that front your you've

Brian Kocher

with is sales Jon, That's I to the first demand We increased the side. had pleased quarter. we over I'm would good. XX% I the it output overall think on describe satisfy the way

I'm simultaneously, satisfied. think I not

simultaneous initiatives think multiple to on. on pushing opportunities I all to throughput to pushing those one each we're improvement of the waste maintenance of anywhere reap in equipment labor of year. we're those reduction, to over we've metrics from the balance got We have And

a got I Pleased in we've certainly ways a keep So, mind as it's satisfied go. because mine. would in to but not phrase your one

Operator

Stephens. line next from of Salera Your Jim is with question the

Jim Salera

results. the strong on Congrats

Brian Kocher

Thanks, it. Jim, appreciate

Jim Salera

that that they're overall traffic traffic service at Can comps base as softness difference at surprised traffic some beverages in winning of us of commentary we maybe you down that food you think we've some the drill the softness softness results given in us maybe gaining that service? and traditional function separate share are Is should the I lot trends? the maybe about through robust of channel of wanted more a food from strong plant-based a dairy your the were because sell just I the space? across being and share think, traded the on of losing. to kind between Or publicly while seen you into how is candidly, results of walk some and

Brian Kocher

our multiple your pleasantly Remember, Jim, we in with community a investment because lot the I to thanks on the slightly the growth. our Yes. were customers. to And I are wanted dialogue say in really have like it you amend having would question a But for think surprised on to areas. this. with discussions just wired with really with of focuses we We're two robustness our to innovation question it. favorite see, you plant-based service products I to promotion happen think certainly of of those I every one in a XX. see discussions monthly them.So, of restaurants, working board that food your innovation and a projects you'd a our almost customers of of you'll lot part what are think one with lot week, with menu on if go top And with we're times,

a You'd in categories, plant-based of that it. see of have items lot lot beverages a promoting

plant-based so, think a total And products their relative may line. where respect may be their We -- to to a at with service in little it that's food lot I thing disconnected. over-index one of even revenue places

and on customers, we're R&D. promotions, with for So, and what we're food And for importantly, wired are customers. share see Tim. innovation certainly say, mix, weekly, a plant-based them were not on component today, it, I really offers. products we're on ago because basis, working are a one.Two, limited what for our some That's innovation, in existing we area. service We're of most we working mention think with did innovation our in I growing that with But again, is that monthly time constantly was gaining our -- months we think happening innovation we let's X

cost already from we're anything and innovating and store. initiatives the potentially on efficiency in profiles So, to performance taste profiles

So, differentiated hopefully, may the of growth in positive your on be little answers I a why trends question large be our a way seeing. may some you're why -- think that it bit from

Jim Salera

-- super that's And helpful. No, then Yes.

Brian Kocher

Jim, sorry, this hit XX% just food to be time. three just our customers growth. all more one to grew quarter. were this business service But double-digit top And our complete,

in it again, our shows kind So of numbers. up

Jim Salera

the demand. and to by upside if just the think meaningful progresses, of Yes. On drive ton on -- can how much Yes. you And incremental ramping year increase the is -- upside shake category seen is if can on throughput a get that's update great. the that's I shake kind about question there of line can And an we know up you utilization nutritional switch and we what I the line? shake that? line Can for just incremental your a that rate as a that's last side. Because sales

Brian Kocher

the utilization disclose lines, to what really you tell perspective. but don't here's to give We some on try I you will

the and in, believe set year, went track let's word chain supply fund We're journey. and this a project. do to of is reason to thesis. because a I the through certain We assumptions all expansion the I never-ending to middle reach The is investment And TAM obviously thesis still on those. our to going we say track are I'm for achieving throughput, track we're on say, on use in investment that right? this of productivity

our in I things: less assets. your potentially only our capacity, per think that The of devoting doing and network, your our the two supply a allows in -- cost, right? lowering line has shake wonderful some fuel without protein there's push unit, cost more to specifically per upside units it on creates advantage growth through chain, network cost in across in unit one, that but non-CapEx capital you overall not throughput it but fixed and us a

Jim Salera

appreciate back the guys, Thanks, the color. I'll in queue. I hop

Operator

Baumgartner apologize, I is next do line John from from Securities. Capital, of Mizuho the Your question

John Baumgartner

I push tie guess to half sounds the take think efficiencies maybe are Brian, number Are bullish Are I sources. minimal the it looking to contrary of for the there back realization a XXXX? sound EBITDA there coming of coming guess the any those the you your that the to on sort offsets in those any in you first P&L about intermediate to to steps the you for of incremental this question, uptick pretty back the efficiencies into of how different I'm efficiencies the new in realization efficiencies model from year. And like guidance kind for of get in do model. have that through? cadence it

Brian Kocher

couple A Okay. of things.

anything, First there there of out than chain John, all, that improvement risks say, see just supply that efficiencies. darn -- would are we no more are that preventing big is are I hard work.

and when you're talking with things arm product. And you your so, we're I source about out there day. procurement mean doing every single

the you about talking a to try you unit there. how water out to talking here run sequence you're manage or a You're product unit usage, about that eke

And a our but growth, to confident and to they don't in in right? our we're confident. our the chain look guidance portfolio the we I'm business the will financials, specifically, declare which I when upon up at talk pipeline. show hope there's want are it we're I'm for. development someone opportunity supply in confident efforts, we not what That's not relatively So, is we meager also say business as additional guide uptick, and -- the sticking to see, opportunities, drive additional what communication be timing update drive about guidance. me the close customer time products we our hear you'll we based those development outlook and next and philosophy,

John Baumgartner

for follow-up drag associated how that detail modest inventory going through any a in walk margin the then rest in and forward quarter. reserves And think that Okay. we walk through year? about -- you you of to coming Greg. more the Can for leakage back Can the the just

Greg Gaba

Yes. No problem, John.

that, So, efficiency supply every when to reduce get prior did bit we're we consider and day, get And it a mentioned better continue is increased right? things do journey John. you issue we little day. putting that at production would a with every long-term be we XX% forward. it, all to versus look And better And, and chain our strive waste leakage. we of don't a of it that Brian going that year, no, hopefully have We And place in at excellence. to

Brian Kocher

others it to John, whatever And to different a are But work I good XX, way output. trying at progress is try we our operations. sure once perspective doing it supply improving our improve chain to on we're about on think think XX there things is it in in put made or to that we're we've will for nine initiatives. as a believe we our happy that and the we is didn't lot in much We're show year. continue complexity of progress with doing we this We're we with drive to But initiatives. and there's our this, as of opportunity got improvement. some to something the with balance progress. happy make said, And that

Operator

of with from Davidson. Your question next the line Brian Holland is D.A.

Brian Holland

Yes.

was the internal was start to I Just quarter. well? as on because wanted it the actually versus or Or the know sound Was broad-based. development, source expectation maybe the upside it strength broad-based towards by changed it asking like business was new consistent. just upside the in like I your etc.? about category So, top doesn't seems it line the disproportionate of relatively

expectation. to your understand make of the sure upside So, own I I the internal source versus just want

Brian Kocher

showed it, new it better you did little or say mean broad-based that whether almost robustness we the would if than of everywhere. saw well. we it you I in kind and channels. up this And we up customer a way could favorability was thought showed customers, had in was as showed with data, our cut of It at look I some across the timing any the Almost spectrum. and acquisition up customers. It it growth existing Brian, again, growth. we

And like that us diverse revenue a excited quarter a stream help this. so, can we're in

Brian Holland

alluded a you differently what into the you And investment And you're bottom XX communicate I ago, of just I ask communicated and helpful. we've and the very your modeling, forecasting all understanding, the approach versus then to last strong how well, the bunch But that's different? of that Street this, to that maybe gone that through year the that lot I doing sure started you you least think great. of specifically is community, want to out went just sort out right? but here. that's pivots understand to fell back know that we to at Okay. the That's extent way Because to But in maybe optimism to What times. you I this. together -- anyway. year midyear, detail make think a just it to the months your different that appreciate go then about pull I you we any as

Brian Kocher

before a there here. that change think happened and yes, I Brian, Well, is I got

year, I development of business some off. think timing efforts was benefit SunOpta last but had the the

And of last for focus quarter a there. there? sense. timings with is results, so, how the And of timing customers, that forecast always as the we things second based have to respect consistent We they still going know third one said visibility what communicated led trying with probably think want this it -- to trying to guide We're And Are hope for again, the when timing interesting expectations be on to forward. look, customers. and timing products, lot But it makes guidance. we're versus in quarter we have then and SunOpta maybe happens.Now upon shifted me, going we're I and results we to, disappointment. visibility to or and not I products reason customers' you to hope another, is that, what the -- even think look, when to to SunOpta a year said, was

Brian Holland

Yes.

color, good. the appreciate Brian. Sorry. All I

on. figured much. move they'd I very you Thank Sorry,

Operator

from Meyers Markets. question is with Capital Lake Next Street Ryan

Ryan Meyers

what It sounds little track bit. just the curious, the seen know like I'm channels? of improvement that but any communicated growth I that was portion have a dynamic but mean, broad-based, kind you in you down a And have revenue, come is. of curious smaller of that's I the prices as

Brian Kocher

Ryan, I appreciate tracked channels. on question the

we've We tracked in have the far as I to -- say channels. go seen wouldn't seen say so improvement

little a volatility. see of You bit

see bit You a little of promotion.

support those of are And those that track diversion, winning the that the those are that perform me at XX-week how what little again, that SunOpta than to in are one all a brands that's overall faster think customers we one customer ultimately or if support winning the the whether we with you the creates investing the And look growing think Positive channels, their advantages we customers. than versus our behind the performing that, tracked for, bit XXX we I category. look it's those are solutions to way. category, thing innovating, XX-week that of basis are by channels. growing like and codevelop can is XXX divergence relationships And between of brands look. I brands look a and points the in can better

Ryan Meyers

No, curious Okay. new way can during was like you understand. bringing to any new or if And lot it there's then impact guys a board. any the but of that helpful there of I'm didn't that's customers this quantify sort sound of on quarter, customers

Brian Kocher

Yes.

beginning mentioned I customers between or the revenue existing those three, we TAM new of The probably existing split relatively with expansion, our growth think customers. it broad-based. if largest was gains wallet customers but of the was and Q&A, I growth with at share of expansion

Operator

of Andrew from question Strelzik with is line Next the BMO.

Andrew Strelzik

started chain the maybe wanted which And about I go I before of chain XXXX already a well opportunities. again. provided, thinking you've that back maybe I obviously, joined supply lot opportunities outlook and several you've supply try that to about, attacking you know been to wanted of addressed some but here, to had talked times the the

is incremental that that guidance Or to what about it out not it? would be a there is that guess or And the look XXXX? to put then contributes like, was think whatever that to curious materializes is, I'm bucket that at into, for fair whatever so, looks way I fair

Brian Kocher

way million rate included That XXXX. Yes, of would is which some think the the of we included to Andrew, that end XXXX thought get look guidance, some expansion. beginning we at EBITDA margin certainly run at I again, $XXX I could the revenue growth. It

of was if that XXXX, expect, of be right last SunOpta when at margin would we at XXXX and the the about that margin, plants fact, gross sort end full, XX% we time, gross look of around In beginning "full," a were XX% we're, amount. again, you it

our I So, a and say, supply both supply opportunity than you would better that chain about in spoken have on XX% finished never guidance.Now get or and supply is are better as all -- initiatives, bit baked that to chain longer probably little considered maybe efficiency word million baked term, in $XXX into effectiveness. because, longer term, publicly chain again, Greg a I

So, working guarantee that's one you on. thing can I stop we'll never

that hopefully in terms So, of helps midterm million the $XXX guidance.

Andrew Strelzik

about question sounds but more guess that, it helpful XQ And other that than is I targets I up. context to mean, from then perspective just But levels allocation. about are you very guess not far talked from line know leverage I And for sure. incremental I your is is a Yes. my you're in going to achieving. getting seem going you that to go go away leverage up, time confident capital

talked on rank you of if do consideration. those some those other capital buybacks, targets. M&A are you curious some whether of opportunities it's to thinking And under about could about there? any get talked that know you what I'm projects kind do just or you I kind -- how of order you elaborate So, leverage about you're once

Greg Gaba

the for question. thanks Andrew, Yes,

time we the attractive that at We'll levered, year, which share price will at M&A deals. So, we attractive we right? end projects. look look buybacks believe at potential look three Xx the things, strategy at be allocation same, based We'll the ROI by get in on our capital remains the right? point will or stock So, this of once

there the So, every further give a get you we'll continue we the we update. options to And of continue towards year, be those evaluate once to day. the end

Operator

the of Hedgeye. is with question line Daniel from next Biolsi Your

Daniel Biolsi

what from your way? do and see that they impacted has in vantage service in channel when from that their increases Or prices, price you done raise you demand? demand? have the that to what Can So, point, seen that food you another follow has

Brian Kocher

for Thanks, question. Daniel, the

are for what some We food more I and more food less providers supply we that limited increased offers. plan. promotional think or with can that's an help really and the call new What can you food in I'll broad-based -- engineer on prices. there see And maybe time area a service consumer. the planning probably We XX-plus them our with are see fringe service we impacts scientists What customers. to think deploy help our can help I frequent recipes.

than even some is, story, activity target tales of kind the the your say, of have it's across So, our fringe little more that the the help I a promotional to But frequent may customers think -- targeting drive or are, network the and users let's category. growth price-sensitive users. two Daniel, bit across yes, category are

Daniel Biolsi

Brian. Thanks,

the So you quarter, are new contract wins were upside the second you including had raised not half part the of the guidance in that with in but continuing today?

Brian Kocher

we for No, question. Daniel, thanks don't to miscommunicate. because want good no, the sorry, really That's clarifying

to trying year. guiding for remember, is, say we're what the still we're think I

is growth. think -- Midpoint I midpoint is X% revenue

Greg Gaba

XX%.

Brian Kocher

revenue sorry. XX%, XX% growth.

our revenue development hefty guiding were the still a efforts And trying in for business you're achieve benefit growth. that will and little to to you were that seeing growth for see in midpoint XXXX was off, announced XXXX in articulate a is to continue of of revenue pretty the we're So, benefit maybe the year-over-year. that what XXXX, and I think timing us the we XX%

Daniel Biolsi

And if could Greg. last sense. ask question one Okay. I for That makes then

what's behind -- spoilage Just just that reserves? the inventory Is or

Greg Gaba

question, Yes. Daniel. Great

output mentioned yes, versus So that we writeup, our know, XX% year in as versus significantly prior increased you our prior has plans year.

we're bit waste than need better. improve working to However, on that did getting get And and there's output. -- little wanted, a we we more efficiency to have what we of opportunity and our

Operator

now no questions. are Kocher for closing there today's hand time, to this remarks. Brian At call over I will further any

Brian Kocher

our you very just take messages. much. to key summarize minutes Thank I'd like couple of to a

three. about these three take only away call, think this things you please If from

growing and foremost, a we categories. company growing are in First

customers, In addition blue-chip customer customers, our continue our bringing via see from base, share to we're existing naturally the customers, on we growing to TAM expansion. grow and growth with we're we new our that

top grew revenue double them in resilient.Remember, double stream three digits. this alone, of grew digits. and Each diverse Our one is customers quarter our

grow you in our XX% And quarter a in the increased grew almost we revenue this quarter. every year. that's channel how revenue, Our of And by food service XX%. QX by slice you way

the we increased not revenue on had the is So, We've Plus the Q&A. output excellence. I'm growth.Secondly, talked That's supply we've the our we've proud it XX% much stop quarter quarter. plants. plant never existing in is how of easy. about will chain increased one in working production in with

margin in to We both future that will the performance balance roll growth. see other and of tighten as processes, expect we the into and sharpen year supply supply improvement our as to our for continue chain well in

second strategy guidance. I would like our communicating to that's So the of on people just remind thing.Finally,

market trends, visibility guidance. in and our the that informs have We

actual customer customer However, in by innovation order term customer, visibility activities, forecast and the order longer promotional by our customer, generates guidance. what initiatives into that's demand and activities, inspires

to And products communicate philosophy in you and timing communication that, our the have you customers, Greg very what hope progress of us. is I much on can remember, to Thank look happens.With what to for we joining forward operator, and terms So, versus throughout our adjourn. we year. visibility we updating

Operator

concludes joining. This for Thank today's call. you

may disconnect lines. You now your

SunOpta (STKL) 8 May 242024 Q1 Earnings call transcript