SOY.TO - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to SunOpta's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Reed Anderson with ICR. Thank you.

You may begin.

Reed Anderson

Good afternoon, and thank you for joining us on SunOpta's Second Quarter Fiscal 2024 Earnings Conference Call.

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

and placed additional afternoon, to undertakes and forward-looking SunOpta's you except no to therefore or prepared the other on in more company's should undue a As a contained company release management press reliance filed which contain cause not and the questions. from may correct events upon forward-looking forward-looking Commission the statements. note them. We required in XX-K factors any future reflect filings the detailed that and update circumstances, made or make results risk not forward-looking be discussion performance Annual your those to refer during this may the reminder, with applicable to remarks could issued statements do Exchange statements securities factors materially presentation differ guarantee Report and be all Form statements under laws. actual the obligation follow for response that statements please Securities projections as These to future of publicly The

may operations of figures referring stated, prepared unless reconciliation the non-GAAP to business press refer company's the U.S. follow, was Finally, million. we the of occasionally are earlier with in to measures certain dollars, company in otherwise financial note, teleconference. all remind issued rounded the today. Also, would non-GAAP the included to company please the release to measures that these during to like financial and listeners will this be A portion nearest the continuing remarks

to call the turn over Brian? Brian begin. I'll to Now,

Brian Kocher

joining Good today. for afternoon, and us thank you

along the and with questions. quarter's an highlights priorities. start we'll follow of your trends Then today's and key outlook. of will update with Greg financials I'll our business our the review call, on performance, latest take For a with

Our operational initiatives. With on of XX% respect of specifically beyond our call, We adjusted like worked on we performance, our our that initiatives see. revenue revenue second revenue exceeded guidance. $XX.X to quarter Both share guided volume-driven growth to EBITDA XX% I'd last our our then to and and focusing revenue known volume-driven And is could we performance, simple. growth. headline overdelivered growth revenue wins, with on we context that very and on million

was row, For fourth quarter panels spread in the categories. volume our customers, and a growth product broadly major across

gave to our We which our our XXXX product outlook. significant confidence well pipelines, continue and our improvement. Remember further across I customers' and quarter to into demand initiatives are growth see and mentioned, generation engine we for portfolio and visibility have executing opportunities in confidence last us increase

Let our a few from on customers. give the top of you provide growth growth. X some me our again each revenue to We depth drove double-digit of data points perspective

X average year-over-year customers revenue XX% Our top growth. posted

least over with by grew streak and quarters continued business snacks XX% fruit a double-digit XX Our at consecutive of growth.

revenue category segment product quarter. grew and and during Foodservice market go-to Our channel increased double-digit every at a major again the rate,

competitive most growth. to continued them our and advantage. than in we more When is faster featured commercial proposition and We have support, items across want market overall growing, we rate our a menu be Unit the plant-based continues in a to want value at innovation is of market. the know differentiated the boards growth on customers significant see foodservice. Volume primary increasingly products sustainable volume of the confirmation continue beverages new menu of and driver and

from is Our coming areas. several growth volume

innovation partner. customers winning are an winning a solution as We provider and with

where they categories Specifically, the outperforming brands we play. support and the are winning

Over measurement over by the XXX the period, points. basis of the we XX-week have category support last performance volume brands majority exceeded

as benefiting launch thirdly, offerings. And leverage growth existing other gaining innovations shakes well participate and from our TAM in products they seek new as markets established foodservice. The and we innovation to talent to new Secondly, our from their are expansion protein which and in business also large in capacity beverage into we as service incremental also support we're are customers addressable and plant-based capabilities, our growing. our

in past channels. Protein with plant-based we to snacks that segment The performance track within much XX club over Midlothian, produce shakes see channels, foodservice continues well across and up channel we in the all share. growth market grow untracked up fastest-growing in and ml over strong. over volume derived remain fruit XXXX, one shelf-stable XX% and weeks, of continues U.S. categories our continue the the snacks, You weeks, commanding of be digits For XX customers the approximately the category, category volume the past in from our nutrition the to fastest-growing comprised subset and of tracked XX% and milks consumer with of of untracked. is estimate over to demand the customer the the Better like Remember format, the segment we over very For mid-single XX% segments, is aggregate is XXX CPGs, fruit in XX% Texas. In

see, significant can line. revenue tailwinds our have we As supporting you

to our operational transition Let me performance.

you XQ, to effectiveness the been a of addition the also in area supply past for focus as growth X me which, improving major our organization we of revenue guided to know, the we over quarters. committed has chain, and the In

steps. [ a As journey heard a thousand times, this you've me describe is ] many of

strive facilities in prior increased snacks output the output versus by an and output during increased our substantial aseptic than We perspective, fruit with also our over second more by quarter, always the during XX% be XX%. energized are pleased progress both improvement and prospects am quarter we we better. making future. From the the for and I every to by in year, our our in facilities progress day, unit

established new capacity. as well lines from were driven Importantly, these greater increases by as both efficiency our

you the roughly adding increased we new output an assets quarter, line versus by entire unit manufacturing greater capacity, network. of XX% of those equivalent than If to which the the year-ago exclude is

is making creating team significant via Our on capacity operating improvements. progress

expansion extraction volume the both as as quarter, know, Modesto Our we capacity. online progressing In as you in of are throughout the well we future selling aggressively various many and ramping efficiencies during came Midlothian, are plan.

accelerate solid product further to and improvement half and Our this line increasing, sellable our anticipated, producing later is third 'XX to with make achievement commercially ramping second results. Output to growth contribution targeted margin and investments started as in QX year 'XX, expected of drive see the is at XXXX. a opportunities is to Midlothian we and sustainable into end now

at but the As I further our the uncovered in look increase was improvement in satisfying, supply progress for areas chain and the highlighted and output ultimately investment. we've throughout made quarter,

in exceptional As advantage accelerate which we for continue growth short-term are we identifying investments, of revenue will sustainable opportunities to process taking operational improvements. accelerate turn efficiency,

Our of of back In supply and and/or hour continue detailed product and shore for network to so will take growth our place we accompanied help are areas lines Each across either growing by which of steps benefit take plans to making the output improvement are in quarter, day. growth, volume incremental these by to location. have initiatives chain functions, may not plans simultaneously are project varies in pace by projects progress, XX% short-term line discovered In of our we the had step plant, sustainable into and forward. of Rarely or by ]. In third the investment pain project by a need invested we XQ, some quarter. purposely we X progress fuel to magnitude the up and in quantum increases accelerate some QX. the results. The [ the we

opportunity margin revenue improvement QX I'm continue excited commencing our through However, we of XXXX. and profit be and carrying outlook. again, quarterly proud in us results growth about see to long-term and Once sustainable significant our I for

Our continue what on be second outlook the in are our to XXXX hope, time what we we this expectations revenue for raising for we future see, confident not based year. and the on

these actions priorities, to against Our same. initiatives deliver expectations the remain and

our expanding our new relationships, customer and expanding current acquiring First, volume customers grow through TAM.

demand with categories fills Our importantly, innovation and our customers about on and network towards Most of that of significantly over-index capacity business. it provides the side excitement growth. co-development our products great behalf our

expand want to improvements increase operational Secondly, drive both and margins. to sustainable output we

We We efficiency multiple have output by and ramping are day. up in half. gaining increased at XX% our the projects second quarter every in second momentum each is facility and still the capacity newest

in better starting of investments, sustainable expansion With absorption through fixed as as quarter expect cost reduction. our well the margin the support fourth to we variable see short-term cost

relentless disciplined, maintain closely continue on our will stated goal, this year. Every continue delivering we linked our Xx to approach EBITDA, of results. deleveraging and financial of the is execution, business operational end through strong by and under our aspect disciplined Lastly, we our focus

company growth growing in operating customers. categories We growing with a are

and our solve private As label a problems create we and wins solutions co-manufacturing customers. for provider,

As we and for our solve share customers, in create revenue. grow wins we problems

We grow efficiency. by operational share revenue also improving in

the and the As incremental of which and we and balance half leads delivered for in and of extend growth we well capital first efficiency value investments beyond. invested believe output increase deferred on we we deployed higher through shareholders. In for the our CapEx, results gains, to capacity strong positioned returns XXXX are summary, drives

service necessary robust delivering demonstrating operational several propelled volume of growth averages times by needs, top are overcoming efficiency. the are line than improving and growth, while We're challenges our simultaneously peer that faster rates We and business resilience the gain. operational

to confident our value for business accelerate, along which result, significant improving growth, helps the margins I'm and cash our XXXX, higher driving as for traction in drive revenue flow with are initiatives direction for term. supply outlook a As profitability and potential we cash of increased the free flow. all over our sustainable shareholder and and of longer gain poised chain

call full in Now, Greg the over quarter to second I'll cover more the year turn and detail. to outlook

Greg Gaba

growth. afternoon, strong everyone. Brian, another was had driven by We Revenue to year, you, compared last good million up volume and Thank $XXX exceptional XX% of quarter.

partially million was addition prior compensation. as million Adjusted year incentive million operating by offset growth in year. was from $X.X to operations continuing incremental $XX.X million volume XX% utilization, period. and million by investments $X.X volume this XX.X%. Adjusted Brian profit or some doubled As sustainable and for more by highlighted, offset depreciation and gross production short-term in assets. Operating was $XX.X board. in income efficiencies, loss in tax expense. to than future last of to to XX% compared with profitable incremental quarter driven income the and to and $X.X plant inefficiencies was in reported to a was Loss margin newly million second Gross variable continuing $XX.X increased reduced improvement increased quarter discretionary XX.X% compared from higher reflects supply income margin operations This the million, chain EBITDA manufacturing across growth gross the the better increased launched $XX.X

the fully $XXX Turning At to million. quarter an oat second in activities extraction of under operating the increase being of operations Remember, to due Xx our expansion in Year-to-date $XX.X was and cash target in used continuing year-to-date Net operations activities the million, balance Modesto debt the sheet. the expected was year. achieve was of million. and by end in capacity coming of leverage to online. cash quarter was the X.Xx expect end we our $X investing levered continuing provided of by debt was

our turning to full-year outlook. Now

with the category represents our maintaining result run are rate, when $XX EBITDA we adjusted expect to slight pacing growth look in to you revenue to higher $XXX We adjusted Xx third revenue of We to making with strong half. of expectations the this the chain million in growth time perspective, improvement we and revenue quarter. and performance to and the range XX%. From outlook to QX XX%. From a second to are are our and both growing second-half the represents expect the million of which million outlook XX% XX% the natural million, quarter a short-term fourth standpoint, EBITDA the are a XXXX the profit for reflect in that second raising $XX of quarter increasing which in for business growth similar now supply challenges the we the second $XXX in year investments

in Brian the our accelerating in profitability are to XXXX expected shareholder we value As quarter, deliver significant term. great growth chain supply the and and entering delivering are top rates improve discussed, provide over are fourth sustainable line higher, longer deliver exceptional margins initiatives momentum investments that and

activity. And with for Before do call regarding or provide please that not questions. open detailed a competitive reminder questions, just customer reasons level operator, opening call for the commentary we SKU for that, the

Operator

with Instructions] first comes the [Operator line question Jon Your from of William Andersen Blair.

Jon Andersen

more if So were, very your sales in ] more get little story They ramping I'm little in was Or you the the base? the more the about part sales quarter talk exceeded expectations better own the street's bit drove [ TAM But customer wondering the a the exceeded it a volume-driven. as for, clearly out, upside? expectations. quickly? I'd the sense and you additions of the strong pointed existing could that in kind that? it of to quarter. new like Was that was growth Presumably,

Brian Kocher

question. thanks a the really Jon, lot appreciate for it. I

excited with were expansion that this everything. the our had our of it plant-based certainly of growth well was quarter saw product customers, behalf the initiatives out a came protein that some we bit little we we did and really beverage think fact I our shakes If some on TAM in by new launches and second quarter initiatives. either of of

think you untracked of overall, the that brands and that I continue channels, more is the also are things important We winning. growing. And category see we one to when is a include support

and label we out work trying brand. day private their brands solutions provider, they a provider, and are As a to co-manufacturer own grow every there with

at If they brands look performing than better you at the whole. the we are category all support,

And across provided really were that and volume of was very think all areas with can strength particular. in about grow, all always the the we happy That's you so, growth great areas it as a sign. we we the

Jon Andersen

there large broadly there's have customers, traffic is you that I business material sounds lift like full hasn't But many revenue you for the but tell noise a a it obviously, put don't what year pressure date, establishments. your in expect it large on on makes as can foodservice you and your customer customer, business overall So about been to trends mean, us -- some around that any you Because it and perhaps to different? basis, year? outlook a your

Brian Kocher

there's our of think customer to I things base. with couple respect remember Well, a to

of diversity have We channels.

if club co-manufacturing, in So there. I foodservice channel, broad-based. label Again, private channel, a it the growth, have you we both support we we've about there's retail think got diversity was have so think and of lot

double-digits, Our customers grew top X customers grew our our foodservice double-digits, top aggregate XX%. X customers the in grew

some TAM Now, where development and where happening. category is is with expansion happening, that comes the some some innovation where is growing,

that to have bit this last either talked we really time with The of in potentially those participate the I a the customers grow some about us items and position often things of limited think offers best that way than or some different we or little nature. the And quarter. channels it. unique of describe stream innovation in menu overall index categories. on opportunity work at the co-development revenue an is to probably of our And to that's gives that a

Jon Andersen

squeeze I lot third questions. to a I'll one I can. going if of I'm get in know a

So volumes were extremely strong.

the more, you of strong The in yet fruit bit margin and to of snacks how business the little get on of in that, And that little to some talk is a in that inflection pointing saw us we your there. confident quarter You're about Midlothian. maybe that is you're you are year-over-year. that visibility making, good volumes is, gross terms on really degradation some delivering Could you're ramping some fire these that? short-term inefficiencies And more explain production fourth bit investments surfaced? a just

Brian Kocher

No Look, of the think things problem, about. Jon. Couple love to question.

Let's for about the outlook of margin margin. it gross talk gross in terms and

is all, this of there good in story. all news First

take quarter and very growth, that supplied in, a with in came it's thing not I when share, posted We big share and when volume it's you it. one that growth volume. with starts available, happened here. We story that's network margin positive gross convenient. Our big took mean, when volume our

in to the good produce and deliver growth, you, to is volume story, first that that would it. news the had margin I the volume we of we tell So did that's bit

In let's ingenuity, of line. our fact, full ] [ of assets increased full capacity of In we our on some the output assets, -- of a sweat the Midlothian we to enough and essentially out manufacturing newer existing put line, exclude be a and place. equity some equivalent manufacturing existing in

excited that. we really were So about

test certainly of I'm like when And going and The you growing, chain. and that it's is supply growth to identifying take as fast your news, expectedly available good you from quarters this this efficient. chain grow and The supply as your be good news opportunities now opposed we're volume routinely identify some as where opposed X more quarters to share you good now second convenient, in to or bit X now. you could call we're when news, as is from

-- you Because some we're can and areas can maintenance investing equipment [ management. more -- We're make think continuously. systems more, procurement we in the us can to these that uptime. management news So to investing investing in got is inventory We're pack this flow is in areas the we've labor never in the see we areas give the good in all together just around I got output. we we're make take. volume we of run important? beginning volume fluidly and efficiencies. processes ] to in downline investing our and and we've from if to specificity, labor don't Why out for We're investing the short-term Remember, chain. Again, efficient end supply that

make maybe floor resources the terms in labor, some volume, systems. as got So potentially a and these Think in on of reporting it temporary we to in systems and investments small surge opportunities us here help of investments investments. investment metric efficiency shop initiatives, or took to we've there escalation

unit as of data at we quarter can second look just better those produced, I produce A, that produced at cost volume, few confident, 'XX. And better volume, than can labor we overall a per really produce if we we're and B, points, it. the the So the overall get were unit

doing what and but other some the supply some suffered chain challenges, opportunities to our that Now, I'm excited areas we're we grow. in have about

Operator

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

James Salera

represent of kind of among categories. But Brian, the some meaningful customers, other especially channels, really very the tracked wanted it stark. what I in appreciate of channels share be seems larger I be continues your down to drill to of in piece can visible your maybe kind the the for your foodservice -- on a pretty what relative sustainability untracked business, the and customers much gains and channels the to to outperformance because is

it expect structured, tracked is the should to we these track really that untracked so, channels about filter the speak? strength market's into way eventually some to end and And about the worry so of Or unseen, that investors really shouldn't of kind in all channels? the see channels it's growth that's just

Brian Kocher

couple of A to themes apart. there, those and in let break Jim, try me

important First remember of is serve. it's perspective, to from of channels than that tracked market X/X all, we I our think the less

opportunity pay attention But when that's at when that's untracked we ] foodservice, more the and course, we look -- you other club, meaningful us. to the really channels, of So opportunity on look that to you [ is certainly address and at it.

So that one is thing.

actually turn, a tracked let's see the the starting in or bit are On it channel a deceleration stable. call of side, we to shelf softness of little

will customers innovation some where I month to what that. back their our to on So see and efforts. starting call guidance every setting. get communicate week, work of every see, with We we on we're philosophy understand But our, it expectation and let's we

in innovation think the in also clubs. foodservice can't in because I area tracked it investment happens channels an community is that and see

positive available. which channel might very it another the area a publicly from data there's that's be divergence So tracked

and go things into those factor in performance. the of All

that our growing Both I never challenges way. would weighted for solving world opportunities volumes. and and heavily our inconsequential, absolutely say So share to more but it's customer is

James Salera

overall foodservice by positively particular, to given softness foodservice. continue see in kind I'm I that strength side see you guys there, we guess of the consumer in obviously surprised the On the

broader you I degree in higher color success what's that see give so could sees we just relative driving such it foodservice? on your wonder that the to us foodservice, of And if sub-segment in some a of kind slowdown

Brian Kocher

we're really tight in with to say that wired that. Remember, Yes. X our things contribute customers. would I

monthly planning Our weekly on customers, and team, their and basis. a top innovation we're to meetings, that's supply talking in XX a their we're happening

just there's brands channels, or real you say, either are we the promotional in products things customers. I of points support foodservice we think that One, offers, the items, menu focus as are support time the So or volume growth that tracked I category. Think that and plant-based see would in ingredients overall with or limited for about items where mentioned over-indexed X outperforming that. that our the

that. can see You

it can the true grow the are our so or be And pace be true. foodservice rest can product of the product some potentially of of customers. a That than of portfolio portfolio faster over-indexed our versus at that rest products the

innovate. The other thing is, remember, we

have also So channel. and new we and product the foodservice showing several our customers, co-developed that is in that with launches we up launched

Operator

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

Brian Holland

of about supply of got ask So parts long-term. know chain XX% lot if I of reshaping, in just target, this a there's of I it's kind it kind moving a forward, Maybe of I some it, of with and context can of the like right, have the wanted correct -- to the I've but rolling me kind investments. portfolio you gross divestitures last and margin

network, with be would it to the correct be to this upside I that ultimately me to your or to that that expensive chain XX% would way, maybe coming to would wrong in it's maybe be, investments that of these get what margin question that guess gross target? supply asking are drive I'm great volume can it is, through you're if that's address way discovering You another intended there. But possible If to more hear.

Brian Kocher

I this Yes, Brian, that costing more. previously. them in heck, Think absolutely outlined faster is second the would guidance. a this it way. as we're we growing quarter mean, not We're simply raising row characterize than had of

We're test in X a or the also some quarter from we're bit, following and supply that areas these identifying of you faster, next would identified little now. we grow or quarter you When your faster. growing are we So quarters the chain them identifying have sooner.

then investments, opportunity, mid-term the that long-term for we XX% make accelerate So we margin. target target which them to we're short-term enhancement. We sooner, -- for and drive of believe some our has margin addressing to kind

the very in about I I have was look be and from network time full is full close been that at and both network derived the Greg the our XX% that margin was or next time will achievable. we our If margin, think saying XX% to thinking last public full.

we some really to be that ourselves something be with think to investments think, we now. the upside, -- I want would push hold north However, of But I and we would XX%. make, ourselves right get of

Brian Holland

then And as so outlined expansion, if in decide Midlothian already at we months about question, what not ago. point X the like, lines was opportunity dedicated we're allocated to to those lines close, other think, are I for I the for or to. we're going or think X, getting where need out to it if suspect the potentially be we XX

what So we've provide there? plant-based the capability discussed beverage we're protein XXX obviously shake obviously, lot as and talked I'm certainly well assessment if about Because shelf-stable have category. milliliter seeing any you curious on you you category, but can and have a the now, the

I capacity infrastructure months? So or that just level maybe look we over know, category sense a filled XX, of next, out the as a gets that XX out don't how at

Brian Kocher

deleverage, just So So the right? right? end levered. be 'XX, end fully Xx So by our that but expect XXXX, Midlothian be full, under one online is at rate priority Brian, increasing a an and additional item. and our be air future be over other in we're as run created by still will of believe, of by to line. of in We seeing early this goal when growth. year, of be network continues and said short-term. Hey, here thin of see manufacturing to our we focus to capacity. the the non-CapEx We've to we there you our third that to quite we I before, first line Effectively, equivalent don't bit had you fact Midlothian for the gloss our to QX, create come at want recall, just output the we out

Now, our the but feeling. out that you was through network, get spread

on to opportunity for output analogy. us focus non-CapEx There that's and efficiency the tremendous understand creating continue You short-term. where is capital. is our and And improving the

Operator

comes from of question Capital Strelzik Markets. with Andrew BMO next Your line the

Andrew Strelzik

'XX guess, prior to accelerating and I'm to, My margin you're and revenue want question. talking the I kind answer about of and run a rate to improvements first implications exiting of into the one about for to EBITDA what growth, I -- you've trying the faster based that Is means a revisit the like the think little should dynamics, given pointed think timeline I but the that about timeline the at around or 'XX. pulling I those the the same? changing I investments just with guess stays timeline was we feels -- that it forward, is answer. net it's on all, the guess the unclear

Brian Kocher

guidance not focused that can need see make supply in year. Yes, to see want now. and be blatant we the and the what we which make hope short-term way confidence in more clear more really bluntly see we to I time investments We than with I'll demand opportunity this Andrew, quarter than and you. communicating we We see of have excited we can best chain. our think the We're We're can expansion. generation -- now have was what before. quarter, last midterm on end is did right We the can that engine, to about it through and we more confidence the the say for margin confident the

I look midterm about that as a more timing time potentially we magnitude. would changing capacity in than worrying giving each or have at that target acceleration or So creation, confidence us revenue

Andrew Strelzik

a We've a conversations seeing or But environment? beverage customer places, a of they're their across the slowdowns for number variety reasons. consumer I in are obviously change curious about environment. concern and none of the curious in lot other guess approaching that food broadly? then tone And how under you're of there's progressing? just kind question, the aggressive of those in conversations categories really seen the of any I'm businesses? aggressive my less your of getting more Are way they you about Are sensing Just hood which this

Brian Kocher

about the So in that Shelf-stable, which digits, problem, that that growing and we win, understand, protein so and the categories thing think the untracked, growing. the tea, that we are category category. is Fruit categories break in right? mid-single down we as all We consumer which even No which our beverages, shakes, helping digits. Ready-to-drink talking in how snacks, let's customers mind in less to. we mainstream that's But visibility one broth in our are we're and in And our growing growing. we service, all the to I we think play. in is particular we're at that, have those keep the with, Heck, believe growing. plant-based tracked Andrew. customers ones the growing, you across products, in see those believe look mid-single

also a unit Now, It size. transportation It new new innovation. pack always It could are with customers or we is a could could or methodology configuration. flavor be Not size. mode. innovation efficient or more a better product grow helping be be that a

those when all provider. are customers you're into things a So that for providing solutions and innovating go solutions

pressure prospects I that in stream, is consumer, say, you therefore So growing. some hey, category And growing. the think about at little you we remember the aren't just I as revenue our would look Every there's for it's on growth. least our at a narrow, think to categories play as

Operator

from line the comes question Street with Ryan Capital Lake of Markets. Meyers next Your

Ryan Meyers

for one question me. Just

about or the what we guys as think for into for for should should be upside you visibility that I opportunities next for about talk we have I about business then to. maybe year, thinking areas in, any potential how curious know you potential really this adding could maybe think additional communicating about well? Just and year the But as come mean, we new pipeline? the that potential how

Brian Kocher

We continue hope -- don't else. on hate going that quarter work let to to and quarter, before, we incredibly an we Ryan, boring on grow I'm don't XX% opportunities. different anything If but be lot you with. the you, communicate we what to before, see, for. tell what XX% XX% a confused not Don't the you initiatives without focusing answer, quarter business look, I of this a give

growing [ with we're from new customers ]. continue initiatives working to share innovating with wide of on customers a to hope range So to acquiring going

Operator

Alex with of Group. Fuhrman Craig-Hallum line question next Capital Your from comes the

Alex Fuhrman

been your you a Is taking margin. your another something Congratulations strong of sense from It growing supply has theme that you quarter. customers to by on stockouts? more of to sounds that hoping really faster a consistent having unpack I than Would What's driving plant-based little a your what or that? bit you like about the access their just been pretty that categories get could Brian, effect to just remarks. something fewer said there? talked dairy, more common love significant was customers share and prepared in

Brian Kocher

management tools. category of is think it. it's I piece for Innovation and availability more participants. never a Certainly, piece of all supply of Yes, category consistency it. a is equal traditional is The

that winners customers grow our I that's again, also And for their provider helping solutions out component is winning. team every reiterate a are you We but to We're them, You And brand. their benefit successful. be have not they our have I there others working day They can't as customers. think some that enough. and a we're where we a this support grow brand. also have

Operator

Risk the Biolsi question next Management. Hedgeye comes of with Your line from Daniel

Daniel Biolsi

to it's revenue Greg, and higher. going see expectations really nice Brian

of same Your was going? growth trends or and by the channel. a customer type looks I secular sounds by share it there market, it you of very still the there any Are in changes is little how could plant-based diversified milk? hoping sort

Brian Kocher

differ that spectrum plant-based occasions the across they're the and the say secular spectrum. seen. that we've trends same across SunOpta an of would participate with Again, beverages. we usage And our model advantage I is their

provider, So as of full disposal. solutions deploy the when fact your at beverages I'm spectrum the got to a plant-based us you work excited that you've to with

Daniel Biolsi

you I you hit how results share leverage, the new Xx compare going When with the today. CapEx investments you price are to put to it with up have where follow being is?

Brian Kocher

let's do, growing there's do. with our focused. stay Xx now, deleveraging, lever. to and their When think we Well, getting executing, evaluations Daniel, a really we're customers, solving of that problems worried and Right about I ton

I one absolutely a first the don't put the list. cart And First that our host of foremost, want That's But to and on to capital investments. is then whole there's other relative returning before horse. shareholders.

focus got of third deleverage after Let's we've opportunities and the that. fourth then a quarter, on quarter, the then lot delivering

Operator

I the Brian turn our question-and-answer session. over Kocher to conference And that will remarks. now closing for concludes

Brian Kocher

appreciate we the really model Thanks to our today. And opportunity for explain joining everyone our us results. to and

The all best we segments. across call, proposition three only we product across remember major sign the SunOpta, category largest and every please of these sustainable in are which customers At growing channels channel with you for with our across in customers value are X this a market and volume is things things. If we winning away winning take and volume significant all play. growth

thing. So that's one

supply to growth. our Secondly, up accelerated the is of challenge chain

year-to-date first I'm combination We of by but capacity, also a I'm over assets. during proud, we satisfied. the progress existing have XX% second specifically and increased half, our but quarter. through new stretching not of the in the made output proud

has and the some about have opportunities And about excited where the demand co-development with we short-term, to horizon, we're extremely we tremendous will. the really that customers invest excited and our acquire Our grow we growth customers existing opportunities our potentially can generation, areas with about new identified in that. our customers. We're highlighted on further and share about

can result next of for forward are so to what support. every And guidance. Thank Remember, again, confidence, the a we opportunity see, then We our we relentlessly to again raising participating your hope. guide we work we deliver. you thanks again not find As we much during at revenue to you look what updating that today. for quarter. And we --

Operator

call. conference disconnect. may today's concludes you your for participation, This and you Thank now

SunOpta (STKL) 7 Aug 242024 Q2 Earnings call transcript