SunOpta (STKL) to Streamline Operations, Reduce Workforce; Will Take Q4 Non-Cash Charge
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Financial Fact:
-from continuing operations: 0.01
Today's EPS Names:
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Financial Fact:
-from continuing operations: 0.01
Today's EPS Names:
BTTX, VAXX, ELYS, More
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SunOpta Inc. (Nasdaq: STKL) announced that the Company has undertaken a process to streamline its operations and organizational structure, addressing underperforming food based operations and targeting improved earnings, predictability and return on assets.
In order to streamline operations, drive efficiencies and better align product innovation and commercial activities, the Company has commenced restructuring SunOpta Foods to align its operating segments with the markets and customers serviced, rather than by product groupings.
As a result, the former Fruit Group has been eliminated and a new Consumer Products Group has been created to focus on non-grains based consumer packaged goods. The Consumer Products Group will be comprised of the Frozen Foods and Healthy Snacks operations, which were part of the former Fruit Group, and the Food Solutions operations which were formerly part of the International Foods Group. As part of this restructuring the Fruit Ingredient operations of the former Fruit Group have been consolidated with the existing Ingredients Group.
The International Foods Group will now be comprised of the Company's international sourcing and supply operations (Tradin Organic) and the operations of Purity Life Health Products. The Grains and Foods Group will remain unchanged.
With this realignment, SunOpta Foods will consist of four operating segments; Grains and Foods, Ingredients, Consumer Products and International Foods. The Company will begin reporting segmented information based on its new operating segments for the quarter ending March 31, 2012.
The Company is also in the process of rationalizing a number of operations and functions. As part of this process, the Company will be reducing its salaried workforce by approximately 6% and reducing annual operating costs by approximately $3.0 million before tax, once fully implemented. One-time severance costs of approximately $0.5 million before tax are expected to be incurred as a result of these reductions during the first half of fiscal 2012.
The Company is also actively working to address certain underperforming business operations in the Food Group and is taking specific measures which are expected to improve future earnings and generate positive cash flow over the course of the year. This undertaking is consistent with the Company's objective of focusing on value-added food businesses which align with established operating income targets.
In hand with the Company's efforts to improve operations in the Food Group, the Company will report a primarily non-cash charge of approximately $8.6 million after tax or $0.13 per diluted common share in the Company's results of operations for the fourth quarter of fiscal 2011, reflecting the write-down of intangible and other long-lived assets and certain inventory at our Purity Life Health Products and Frozen Foods operations. Including the impact of these charges and the accrual for the previously reported Colorado Sun Oil Processors arbitration ruling, the Company expects to report a loss of $0.11 per diluted common share and a loss from continuing operations of $0.06 per diluted common share for the fourth quarter of 2011. Adjusted for the aforementioned write-down of intangible and other long-lived assets and certain inventory, which are not reflective of normal operations, the Company expects to report adjusted earnings from continuing operations1 of approximately $0.07 per diluted common share for the fourth quarter of 2011. The financial results provided in this press release are preliminary and subject to completion and review of the 2011 financial statements by the Company.
In order to streamline operations, drive efficiencies and better align product innovation and commercial activities, the Company has commenced restructuring SunOpta Foods to align its operating segments with the markets and customers serviced, rather than by product groupings.
As a result, the former Fruit Group has been eliminated and a new Consumer Products Group has been created to focus on non-grains based consumer packaged goods. The Consumer Products Group will be comprised of the Frozen Foods and Healthy Snacks operations, which were part of the former Fruit Group, and the Food Solutions operations which were formerly part of the International Foods Group. As part of this restructuring the Fruit Ingredient operations of the former Fruit Group have been consolidated with the existing Ingredients Group.
The International Foods Group will now be comprised of the Company's international sourcing and supply operations (Tradin Organic) and the operations of Purity Life Health Products. The Grains and Foods Group will remain unchanged.
With this realignment, SunOpta Foods will consist of four operating segments; Grains and Foods, Ingredients, Consumer Products and International Foods. The Company will begin reporting segmented information based on its new operating segments for the quarter ending March 31, 2012.
The Company is also in the process of rationalizing a number of operations and functions. As part of this process, the Company will be reducing its salaried workforce by approximately 6% and reducing annual operating costs by approximately $3.0 million before tax, once fully implemented. One-time severance costs of approximately $0.5 million before tax are expected to be incurred as a result of these reductions during the first half of fiscal 2012.
The Company is also actively working to address certain underperforming business operations in the Food Group and is taking specific measures which are expected to improve future earnings and generate positive cash flow over the course of the year. This undertaking is consistent with the Company's objective of focusing on value-added food businesses which align with established operating income targets.
In hand with the Company's efforts to improve operations in the Food Group, the Company will report a primarily non-cash charge of approximately $8.6 million after tax or $0.13 per diluted common share in the Company's results of operations for the fourth quarter of fiscal 2011, reflecting the write-down of intangible and other long-lived assets and certain inventory at our Purity Life Health Products and Frozen Foods operations. Including the impact of these charges and the accrual for the previously reported Colorado Sun Oil Processors arbitration ruling, the Company expects to report a loss of $0.11 per diluted common share and a loss from continuing operations of $0.06 per diluted common share for the fourth quarter of 2011. Adjusted for the aforementioned write-down of intangible and other long-lived assets and certain inventory, which are not reflective of normal operations, the Company expects to report adjusted earnings from continuing operations1 of approximately $0.07 per diluted common share for the fourth quarter of 2011. The financial results provided in this press release are preliminary and subject to completion and review of the 2011 financial statements by the Company.
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