Business Wire | Oct 29, 2020 07:30AM EDT

SunOpta Announces Third Quarter Fiscal 2020 Financial Results

Oct. 29, 2020

TORONTO--(BUSINESS WIRE)--Oct. 29, 2020--SunOpta Inc. ("SunOpta" or the "Company") (Nasdaq:STKL) (TSX:SOY), a leading global company focused on plant-based foods and beverages, fruit-based foods and beverages, and organic ingredient sourcing and production, today announced financial results for the third quarter ended September 26, 2020.

All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.

Third Quarter 2020 Highlights:

* Revenues of $315.0 million for the third quarter of 2020, compared to $295.9 million in the third quarter of 2019, an increase of 6.4%. Adjusted for foreign exchange and commodity prices, revenues grew by 5.4%. * Gross margin increased 440 basis points to 13.3% from 8.9% in the prior year. * Earnings attributable to common shareholders was a loss of $2.8 million or $0.03 per diluted common share in the third quarter of 2020, compared to a loss of $13.8 million or $0.16 per diluted common share in the third quarter of 2019. * Adjusted EBITDA? of $22.8 million, or 7.2% of revenues for the third quarter of 2020, versus $9.9 million or 3.4% of revenues in the third quarter of 2019.

"A 6.4% increase in revenue combined with our best gross margin percentage in over eight years, produced a 129% gain in adjusted EBITDA versus the prior year. We are proud of the fact that we have doubled adjusted EBITDA four quarters in a row. With this accomplishment as a backdrop, and the momentum we feel we have going forward, we believe it is safe to say that SunOpta is no longer a turnaround story, we are quite simply a sustainable growth story. We are having a great year. For three consecutive quarters, all three of our business segments have delivered topline growth and margin expansion, led once again by the very strong performance of our plant-based business unit. The execution of our plan is showing in our results, and we are investing for future growth to ensure consistent, sustainable results," said Joe Ennen, Chief Executive Officer of SunOpta. "Consumer demand in our core categories continues to be impressive. Our focus and investment in plant-based foods continues to be a source of strength and recent investments that come on-line during the fourth quarter set us up for continued strong growth over the coming years. With a strong pipeline of new business opportunities, strong consumer demand and a continued focus on execution, we are confident in our ability to continue to drive growth and shareholder value."

Third Quarter 2020 Results

Revenues for the third quarter of 2020 were $315.0 million, an increase of 6.4% compared to $295.9 million in the third quarter of 2019. Excluding the impact of changes in commodity-related pricing and foreign exchange rates, revenues in the third quarter of 2020 increased by 5.4% compared with the third quarter of 2019.

The Global Ingredients segment generated revenues of $123.3 million, an increase of 8.8% compared to $113.4 million in the third quarter of 2019. Excluding the impact of changes in commodity-related pricing and foreign exchange rates, Global Ingredients revenue in the third quarter of 2020 increased 8.3% compared to the prior year period, which reflected higher volumes in certain organic ingredient product categories and for premium juice products.

The Plant-Based Foods and Beverages segment generated revenues of $99.0 million during the third quarter of 2020, an increase of 7.9% compared to $91.8 million in the third quarter of 2019. Excluding sunflower commodity price variances, Plant-Based segment revenues in the third quarter increased 6.6% compared to the prior year period, reflecting higher volumes of aseptic beverages, broth offerings, and ingredient extraction, partially offset by reduced sales volumes of plant-based beverage products to foodservice customers as a result of COVID-19 and lower sales of sunflower seeds.

The Fruit-Based Foods and Beverages segment generated revenues of $92.6 million during the third quarter of 2020, an increase of 2.0% compared to $90.8 million in the third quarter of 2019. Excluding the impact of commodity price fluctuations, Fruit-Based segment revenues in the third quarter increased 0.7% compared to the prior year period, primarily reflecting increased retail volumes of fruit snacks and frozen fruit, partially offset by lower foodservice demand for frozen fruit and fruit preparations as a result of COVID-19.

Gross profit was $41.9 million for the quarter ended September 26, 2020, an increase of $15.6 million compared to $26.3 million for the quarter ended September 28, 2019. As a percentage of revenues, gross profit for the quarter ended September 26, 2020 was 13.3% compared to 8.9% for the quarter ended September 28, 2019, an increase of 440 basis points. The Fruit-Based Foods and Beverages segment increased gross profit by $9.1 million (+990 basis points) in the quarter, reflecting increased sales, pricing, a favorable sales mix of higher-margin retail versus foodservice sales and higher yields and throughput resulting from the automation and productivity initiatives implemented in our frozen fruit manufacturing facilities. This was partially offset by lower sales volumes and plant utilization for fruit ingredients. The Plant-Based Foods and Beverages segment accounted for $3.4 million of the increase in gross profit (+210 basis points), primarily due to higher sales and production volumes of plant-based beverages, broths and plant-based ingredients, and improved plant utilization and productivity-driven cost savings, partially offset by lower sales volumes and plant utilization within the sunflower and roasting operations. The Global Ingredients segment accounted for $3.1 million of the increased gross profit (+160 basis points) in the quarter primarily due to increased sales, pricing spreads and higher-margin product mix for certain organic ingredients, manufacturing efficiencies and throughput increases for cocoa and sunflower ingredients, and higher pricing and lower production costs for premium juice products, partially offset by lower margin sales to reduce inventory positions in certain organic ingredients, an unfavorable cocoa commodity hedging result, and manufacturing inefficiencies related to organic avocado oil production.

Segment operating income? was $9.4 million, or 3.0% of revenues in the third quarter of 2020, compared to operating loss of $3.5 million, or 1.2% of revenues in the third quarter of 2019. The increase in operating income year-over-year was primarily attributable to the $15.6 million increase in gross profit, partially offset by a year-over-year $1.6 million increase in SG&A primarily related to higher employee-related variable compensation and benefit costs, and increased reserves for credit losses due to weaker economic conditions, partially offset by the benefit from headcount reductions and other cost savings measures taken in 2019, together with lower travel and marketing costs.

Adjusted EBITDA? was $22.8 million or 7.2% of revenues in the third quarter of 2020, compared to $9.9 million or 3.4% of revenues in the third quarter of 2019.

The Company reported a loss attributable to common shareholders for the third quarter of 2020 of $2.8 million, or $0.03 per diluted common share, compared to a loss of $13.8 million, or $0.16 per diluted common share for the third quarter of 2019.

Adjusted loss? in the third quarter of 2020 was $1.3 million or $0.01 per common share, compared to an adjusted loss of $9.9 million or $0.11 per common share in the third quarter of 2019. Please refer to the discussion and table below under "Non-GAAP Measures - Adjusted Earnings/Loss".

Balance Sheet and Cash Flow

At September 26, 2020, SunOpta's balance sheet reflected total assets of $921.4 million and total debt of $443.8 million. During the third quarter of 2020, cash generated by operating activities was $20.2 million, compared to $4.3 million during the third quarter of 2019. The $15.9 million improvement in operating cash flow primarily reflects the improved year-over-year operating results. Cash used in investing activities in the third quarter of 2020 was $11.8 million, compared with $7.6 million in the third quarter of 2019, an increase in cash used of $4.2 million, mainly related to the expansion of plant-based manufacturing capacity.

Conference Call

SunOpta plans to host a conference call at 9:00 A.M. Eastern time on Thursday, October 29, 2020, to discuss the third quarter financial results. After opening remarks, there will be a question and answer period. Investors interested in listening to a live webcast of the conference call can access a link on SunOpta's website at www.sunopta.com under the "Investors" section or directly here. Investors interested in listening to the live call over the telephone must pre-register for the conference call via a link on SunOpta's website at www.sunopta.com under the "Investors Relations" section or directly at http://www.directeventreg.com/registration/event/4696702. Upon registration, investors will be provided with the dial-in information, passcode and individual ID. Investors will also receive a confirmation email. Investors are encouraged to register at least 15 minutes prior to the scheduled call time and can register earlier at any time to receive the conference details. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days at the company's website.

? See discussion of non-GAAP measures

About SunOpta Inc.

SunOpta Inc. is a leading global company focused on plant-based foods and beverages, fruit-based foods and beverages, and organic ingredient sourcing and production. SunOpta specializes in the sourcing, processing and packaging of organic, natural and non-GMO food products, integrated from seed through packaged products, with a focus on strategic vertically integrated business models.

Forward-Looking Statements

Certain statements included in this press release may be considered "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, which are based on information available to us on the date of this release. These forward-looking statements include, but are not limited to, our belief that the Company is no longer a turnaround story and that our investment in plant-based foods and beverages and our strong pipeline of new business opportunities, strong consumer demand and focus on execution will continue to be a significant driver of revenue and margin growth and shareholder value. Generally, forward-looking statements do not relate strictly to historical or current facts and are typically accompanied by words such as "believe" "continue", "expect", "anticipate", "estimates", "can", "will", "target", "should", "would", "plans", "becoming", "intend", "confident", "may", "project", "potential", "intention", "might", "predict", "budget", "forecast" or other similar terms and phrases intended to identify these forward-looking statements. Forward-looking statements are based on information available to the Company on the date of this release and are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments including, but not limited to, the Company's actual financial results; uninterrupted operations and service levels to our customers during COVID-19; current customer demand for the Company's products and the additional anticipated demand due to COVID-19; general economic conditions; continued consumer interest in health and wellness; the Company's ability to maintain product pricing levels; planned facility and operational expansions, closures and divestitures; cost rationalization and product development initiatives; alternative potential uses for the Company's capital resources; portfolio optimization and productivity efforts; the sustainability of the Company's sales pipeline; the Company's expectations regarding commodity pricing, margins and hedging results; improved availability and field prices for fruit; procurement and logistics savings; freight lane cost reductions; yield and throughput enhancements; and labor cost reductions. Whether actual timing and results will agree with expectations and predictions of the Company is subject to many risks and uncertainties including, but not limited to, potential loss of suppliers and customers as well as supply chain, logistics and other disruptions resulting from or related to COVID-19; unexpected issues or delays with the Company's structural improvements and automation investments; failure or inability to implement portfolio changes, process improvements, go-to-market improvements and process sustainability strategies in a timely manner; changes in the level of capital investment; local and global political and economic conditions; consumer spending patterns and changes in market trends; decreases in customer demand; delayed or unsuccessful product development efforts; potential product recalls; working capital management; availability and pricing of raw materials and supplies; potential covenant breaches under the Company's credit facilities; and other risks described from time to time under "Risk Factors" in the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q (available at www.sec.gov). Consequently, all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized. The Company undertakes no obligation to publicly correct or update the forward-looking statements in this document, in other documents, or on its website to reflect future events or circumstances, except as may be required under applicable securities laws.

SunOpta Inc.

Consolidated Statements of Operations

For the quarters and three quarters ended September 26, 2020 and September28, 2019

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars, except per share amounts)



Quarter ended Three quarters ended

September September September September 26, 2020 28, 2019 26, 2020 28, 2019

$ $ $ $



Revenues 314,981 295,941 961,874 894,220



Cost of goods sold 273,102 269,616 836,583 812,362



Gross profit 41,879 26,325 125,291 81,858



Selling, general and 29,278 27,674 84,783 81,184 administrative expenses

Intangible asset 2,543 2,768 7,869 8,202 amortization

Other expense (income), net 1,030 3,323 (601 ) (39,744 )

Foreign exchange loss 679 (590 ) 2,969 (1,784 )(gain)



Earnings (loss) before the 8,349 (6,850 ) 30,271 34,000 following



Interest expense, net 8,017 8,864 24,233 25,857



Earnings (loss) before 332 (15,714 ) 6,038 8,143 income taxes



Provision for (recovery of) 41 (3,935 ) 1,623 3,239 income taxes



Net earnings (loss) 291 (11,779 ) 4,415 4,904



Earnings (loss)attributable to 202 (30 ) (42 ) 59 non-controlling interests



Earnings (loss)attributable to SunOpta 89 (11,749 ) 4,457 4,845 Inc.



Dividends and accretion on (2,844 ) (2,009 ) (7,473 ) (6,005 )preferred stock



Loss attributable to common (2,755 ) (13,758 ) (3,016 ) (1,160 )shareholders



Loss per share

Basic (0.03 ) (0.16 ) (0.03 ) (0.01 )

Diluted (0.03 ) (0.16 ) (0.03 ) (0.01 )



Weighted-average common shares outstanding (000s)

Basic 89,635 87,928 88,962 87,695

Diluted 89,635 87,928 88,962 87,695

SunOpta Inc.

Consolidated Balance Sheets

As at September 26, 2020 and December 28, 2019

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars)

September 26, 2020

December 28, 2019

$

$

ASSETS

Current assets

Cash and cash equivalents

938

1,498

Accounts receivable

138,968

121,445

Inventories

310,344

323,546

Prepaid expenses and other current assets

30,112

35,985

Income taxes recoverable

8,409

7,480

Total current assets

488,771

489,954

Property, plant and equipment

194,141

184,550

Operating lease right-of-use assets

61,071

68,433

Goodwill

28,799

28,422

Intangible assets

142,136

150,009

Deferred income taxes

3,650

-

Other assets

2,794

1,991

Total assets

921,362

923,359

LIABILITIES

Current liabilities

Bank indebtedness

199,908

245,536

Accounts payable and accrued liabilities

144,477

133,529

Customer and other deposits

98

37

Income taxes payable

753

1,272

Other current liabilities

733

802

Current portion of long-term debt

3,292

2,987

Current portion of operating lease liabilities

15,593

17,215

Current portion of long-term liabilities

600

4,286

Total current liabilities

365,454

405,664

Long-term debt

240,582

242,204

Operating lease liabilities

45,984

52,020

Long-term liabilities

1,929

2,011

Deferred income taxes

18,188

9,027

Total liabilities

672,137

710,926

Series A Preferred Stock

86,956

82,524

Series B Preferred Stock

27,467

-

EQUITY

SunOpta Inc. shareholders' equity

Common shares

325,471

318,456

Additional paid-in capital

35,726

35,767

Accumulated deficit

(217,947

)

(214,931

)

Accumulated other comprehensive loss

(10,270

)

(11,271

)

132,980

128,021

Non-controlling interests

1,822

1,888

Total equity

134,802

129,909

Total equity and liabilities

921,362

923,359

SunOpta Inc.

Consolidated Balance Sheets

As at September 26, 2020 and December 28, 2019

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars)



September 26, 2020 December 28, 2019

$ $



ASSETS

Current assets

Cash and cash equivalents 938 1,498

Accounts receivable 138,968 121,445

Inventories 310,344 323,546

Prepaid expenses and other 30,112 35,985 current assets

Income taxes recoverable 8,409 7,480

Total current assets 488,771 489,954



Property, plant and equipment 194,141 184,550

Operating lease right-of-use assets 61,071 68,433

Goodwill 28,799 28,422

Intangible assets 142,136 150,009

Deferred income taxes 3,650 -

Other assets 2,794 1,991



Total assets 921,362 923,359



LIABILITIES

Current liabilities

Bank indebtedness 199,908 245,536

Accounts payable and accrued 144,477 133,529 liabilities

Customer and other deposits 98 37

Income taxes payable 753 1,272

Other current liabilities 733 802

Current portion of long-term 3,292 2,987 debt

Current portion of operating 15,593 17,215 lease liabilities

Current portion of long-term 600 4,286 liabilities

Total current liabilities 365,454 405,664



Long-term debt 240,582 242,204

Operating lease liabilities 45,984 52,020

Long-term liabilities 1,929 2,011

Deferred income taxes 18,188 9,027

Total liabilities 672,137 710,926



Series A Preferred Stock 86,956 82,524

Series B Preferred Stock 27,467 -



EQUITY

SunOpta Inc. shareholders' equity

Common shares 325,471 318,456

Additional paid-in capital 35,726 35,767

Accumulated deficit (217,947 ) (214,931 )

Accumulated other comprehensive (10,270 ) (11,271 ) loss

132,980 128,021

Non-controlling interests 1,822 1,888

Total equity 134,802 129,909



Total equity and liabilities 921,362 923,359

SunOpta Inc.

Consolidated Statements of Cash Flows

For the quarters and three quarters ended September 26, 2020 and September 28, 2019

(Unaudited)

(Expressed in thousands of U.S. dollars)

Quarter ended

Three quarters ended

September 26,

2020

September 28,

2019

September 26,

2020

September 28,

2019

$

$

$

$

CASH PROVIDED BY (USED IN)

Operating activities

Net earnings (loss)

291

(11,779

)

4,415

4,904

Items not affecting cash:

Depreciation and amortization

8,669

8,517

26,342

25,005

Amortization of debt issuance costs

1,019

683

3,023

2,022

Deferred income taxes

2,293

(2,732

)

5,511

2,239

Stock-based compensation

3,536

2,558

7,915

5,393

Unrealized loss on derivative contracts

629

865

779

577

Gain on settlement of contingent consideration obligation

-

-

(2,286

)

-

Loss (gain) on sale of business

-

1,109

-

(44,269

)

Other

219

26

118

(108

)

Changes in non-cash working capital, net of businesses

acquired or sold

3,505

5,042

11,758

(22,146

)

Net cash flows from operating activities

20,161

4,289

57,575

(26,383

)

Investing activities

Purchases of property, plant and equipment

(11,842

)

(7,592

)

(27,901

)

(24,907

)

Net proceeds from sale of business

-

(3

)

-

64,672

Acquisition of business, net of cash acquired

-

-

-

(3,341

)

Other

67

-

108

-

Net cash flows from investing activities

(11,775

)

(7,595

)

(27,793

)

36,424

Financing activities

Increase (decrease) under line of credit facilities

(7,549

)

4,603

(48,560

)

(6,691

)

Borrowings under long-term debt

-

565

155

2,441

Repayment of long-term debt

(809

)

(556

)

(2,150

)

(1,913

)

Payment of debt issuance costs

(3

)

-

(2,491

)

(395

)

Proceeds on issuance of preferred stock, net of issuance costs

-

-

26,804

-

Payment of cash dividends on preferred stock

-

(1,700

)

(1,700

)

(5,100

)

Proceeds from the exercise of stock options and employee

share purchases

864

166

1,435

813

Payment of withholding taxes on stock-based awards

(1,225

)

(2

)

(2,376

)

(384

)

Payment of contingent consideration

(300

)

-

(1,400

)

-

Dividend paid by subsidiary to non-controlling interest

(66

)

(31

)

(66

)

(31

)

Other

-

(5

)

(4

)

211

Net cash flows from financing activities

(9,088

)

3,040

(30,353

)

(11,049

)

Foreign exchange gain (loss) on cash held in a foreign currency

15

(55

)

11

(63

)

Decrease in cash and cash equivalents in the period

(687

)

(321

)

(560

)

(1,071

)

Cash and cash equivalents - beginning of the period

1,625

2,530

1,498

3,280

Cash and cash equivalents - end of the period

938

2,209

938

2,209

SunOpta Inc.

Consolidated Statements of Cash Flows

For the quarters and three quarters ended September 26, 2020 and September 28, 2019

(Unaudited)

(Expressed in thousands of U.S. dollars)



Quarter ended Three quarters ended

September September September September 26, 28, 26, 28,

2020 2019 2020 2019

$ $ $ $



CASH PROVIDED BY (USED IN)



Operating activities

Net earnings (loss) 291 (11,779 ) 4,415 4,904

Items not affecting cash:

Depreciation and 8,669 8,517 26,342 25,005 amortization

Amortization of debt 1,019 683 3,023 2,022 issuance costs

Deferred income taxes 2,293 (2,732 ) 5,511 2,239

Stock-based compensation 3,536 2,558 7,915 5,393

Unrealized loss on 629 865 779 577 derivative contracts

Gain on settlement of contingent consideration - - (2,286 ) - obligation

Loss (gain) on sale of - 1,109 - (44,269 ) business

Other 219 26 118 (108 )

Changes in non-cash working capital, net of businesses

acquired or sold 3,505 5,042 11,758 (22,146 )

Net cash flows from operating 20,161 4,289 57,575 (26,383 )activities



Investing activities

Purchases of property, plant and (11,842 ) (7,592 ) (27,901 ) (24,907 )equipment

Net proceeds from sale of - (3 ) - 64,672 business

Acquisition of business, net of - - - (3,341 )cash acquired

Other 67 - 108 -

Net cash flows from investing (11,775 ) (7,595 ) (27,793 ) 36,424 activities



Financing activities

Increase (decrease) under line of (7,549 ) 4,603 (48,560 ) (6,691 )credit facilities

Borrowings under long-term debt - 565 155 2,441

Repayment of long-term debt (809 ) (556 ) (2,150 ) (1,913 )

Payment of debt issuance costs (3 ) - (2,491 ) (395 )

Proceeds on issuance of preferred - - 26,804 - stock, net of issuance costs

Payment of cash dividends on - (1,700 ) (1,700 ) (5,100 )preferred stock

Proceeds from the exercise of stock options and employee

share purchases 864 166 1,435 813

Payment of withholding taxes on (1,225 ) (2 ) (2,376 ) (384 )stock-based awards

Payment of contingent (300 ) - (1,400 ) - consideration

Dividend paid by subsidiary to (66 ) (31 ) (66 ) (31 )non-controlling interest

Other - (5 ) (4 ) 211

Net cash flows from financing (9,088 ) 3,040 (30,353 ) (11,049 )activities



Foreign exchange gain (loss) on 15 (55 ) 11 (63 )cash held in a foreign currency



Decrease in cash and cash (687 ) (321 ) (560 ) (1,071 )equivalents in the period





Cash and cash equivalents - 1,625 2,530 1,498 3,280 beginning of the period



Cash and cash equivalents - end 938 2,209 938 2,209 of the period

SunOpta Inc.

Segmented Information

For the quarters and three quarters ended September 26, 2020 and September 28, 2019

Unaudited

(Expressed in thousands of U.S. dollars)

Quarter ended

Three quarters ended

September 26,

2020

September 28,

2019

September 26,

2020

September 28,

2019

$

$

$

$

Segment revenues from external customers:

Global Ingredients

123,322

113,356

378,217

369,090

Plant-Based Foods and Beverages

99,038

91,811

296,985

255,027

Fruit-Based Foods and Beverages

92,621

90,774

286,672

270,103

Total segment revenues from external customers

314,981

295,941

961,874

894,220

Segment gross profit:

Global Ingredients

15,041

11,975

48,021

38,744

Plant-Based Foods and Beverages

19,715

16,321

57,517

38,931

Fruit-Based Foods and Beverages

7,123

(1,971

)

19,753

4,183

Total segment gross profit

41,879

26,325

125,291

81,858

Segment operating income (loss):

Global Ingredients

5,851

3,400

22,003

13,610

Plant-Based Foods and Beverages

13,119

8,707

37,456

15,731

Fruit-Based Foods and Beverages

(1,788

)

(10,639

)

(8,506

)

(22,204

)

Corporate Services

(7,803

)

(4,995

)

(21,283

)

(12,881

)

Total segment operating income (loss)

9,379

(3,527

)

29,670

(5,744

)

Segment gross profit percentage:

Global Ingredients

12.2

%

10.6

%

12.7

%

10.5

%

Plant-Based Foods and Beverages

19.9

%

17.8

%

19.4

%

15.3

%

Fruit-Based Foods and Beverages

7.7

%

-2.2

%

6.9

%

1.5

%

Total segment gross profit percentage

13.3

%

8.9

%

13.0

%

9.2

%

Segment operating income (loss) percentage:

Global Ingredients

4.7

%

3.0

%

5.8

%

3.7

%

Plant-Based Foods and Beverages

13.2

%

9.5

%

12.6

%

6.2

%

Fruit-Based Foods and Beverages

-1.9

%

-11.7

%

-3.0

%

-8.2

%

Total segment operating income (loss) percentage

3.0

%

-1.2

%

3.1

%

-0.6

%

Non-GAAP Measures

In addition to reporting financial results in accordance with U.S. GAAP, the Company provides additional information about its operating results regarding segment operating income, adjusted earnings and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), which are not measures in accordance with U.S. GAAP. The Company believes that segment operating income, adjusted earnings and adjusted EBITDA assist investors in comparing performance across reporting periods on a consistent basis by excluding items that are not indicative of its operating performance. The non-GAAP measures of segment operating income, adjusted earnings and adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP.

In order to evaluate its results of operations, the Company uses certain other non-GAAP measures that it believes enhance an investor's ability to derive meaningful period-over-period comparisons and trends from the results of operations. In particular, the Company evaluates its revenues on a basis that excludes the effects of fluctuations in commodity pricing and foreign exchange rates, and the impacts of acquired or disposed operations. In addition, the Company excludes specific items from its reported results that due to their nature or size, it does not expect to occur as part of its normal business on a regular basis. These items are identified in the tables below. These non-GAAP measures are presented solely to allow investors to more fully assess the Company's results of operations and should not be considered in isolation of, or as substitutes for an analysis of the Company's results as reported under U.S. GAAP.

Adjusted Loss

When assessing its financial performance, the Company uses an internal measure that excludes charges and gains that it believes are not reflective of normal operations. This information is provided to allow investors to make meaningful comparisons of the Company's operating performance between periods and to view the Company's business from the same perspective as the Company's management. Adjusted loss and adjusted loss per diluted share should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP.

The following is a tabular presentation of adjusted loss and adjusted loss per diluted share, including a reconciliation from net earnings/loss, which the Company believes to be the most directly comparable U.S. GAAP financial measure. In addition, in recognition of the sale of the soy and corn business in the first quarter of 2019, the Company has prepared these tables in a columnar format to present the effect of the disposal of these operations on the Company's consolidated results for the comparative periods. The Company believes this presentation assists investors in assessing the results of the operations the Company has disposed and the effect of those operations on its financial performance.

SunOpta Inc.

Segmented Information

For the quarters and three quarters ended September 26, 2020 and September 28,2019

Unaudited

(Expressed in thousands of U.S. dollars)



Quarter ended Three quarters ended

September September September September 26, 28, 26, 28,

2020 2019 2020 2019

$ $ $ $

Segment revenues from external customers:

Global Ingredients 123,322 113,356 378,217 369,090

Plant-Based Foods and 99,038 91,811 296,985 255,027 Beverages

Fruit-Based Foods and 92,621 90,774 286,672 270,103 Beverages

Total segment revenues 314,981 295,941 961,874 894,220 from external customers



Segment gross profit:

Global Ingredients 15,041 11,975 48,021 38,744

Plant-Based Foods and 19,715 16,321 57,517 38,931 Beverages

Fruit-Based Foods and 7,123 (1,971 ) 19,753 4,183 Beverages

Total segment gross 41,879 26,325 125,291 81,858 profit



Segment operating income (loss):

Global Ingredients 5,851 3,400 22,003 13,610

Plant-Based Foods and 13,119 8,707 37,456 15,731 Beverages

Fruit-Based Foods and (1,788 ) (10,639 ) (8,506 ) (22,204 ) Beverages

Corporate Services (7,803 ) (4,995 ) (21,283 ) (12,881 )

Total segment operating 9,379 (3,527 ) 29,670 (5,744 ) income (loss)



Segment gross profit percentage:

Global Ingredients 12.2 % 10.6 % 12.7 % 10.5 %

Plant-Based Foods and 19.9 % 17.8 % 19.4 % 15.3 % Beverages

Fruit-Based Foods and 7.7 % -2.2 % 6.9 % 1.5 % Beverages

Total segment gross 13.3 % 8.9 % 13.0 % 9.2 % profit percentage



Segment operating income (loss) percentage:

Global Ingredients 4.7 % 3.0 % 5.8 % 3.7 %

Plant-Based Foods and 13.2 % 9.5 % 12.6 % 6.2 % Beverages

Fruit-Based Foods and -1.9 % -11.7 % -3.0 % -8.2 % Beverages

Total segment operating 3.0 % -1.2 % 3.1 % -0.6 % income (loss) percentage

Non-GAAP Measures

In addition to reporting financial results in accordance with U.S. GAAP, the Company provides additional information about its operating results regarding segment operating income, adjusted earnings and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), which are not measures in accordance with U.S. GAAP. The Company believes that segment operating income, adjusted earnings and adjusted EBITDA assist investors in comparing performance across reporting periods on a consistent basis by excluding items that are not indicative of its operating performance. The non-GAAP measures of segment operating income, adjusted earnings and adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP.

In order to evaluate its results of operations, the Company uses certain other non-GAAP measures that it believes enhance an investor's ability to derive meaningful period-over-period comparisons and trends from the results of operations. In particular, the Company evaluates its revenues on a basis that excludes the effects of fluctuations in commodity pricing and foreign exchange rates, and the impacts of acquired or disposed operations. In addition, the Company excludes specific items from its reported results that due to their nature or size, it does not expect to occur as part of its normal business on a regular basis. These items are identified in the tables below. These non-GAAP measures are presented solely to allow investors to more fully assess the Company's results of operations and should not be considered in isolation of, or as substitutes for an analysis of the Company's results as reported under U.S. GAAP.

Adjusted Loss

When assessing its financial performance, the Company uses an internal measure that excludes charges and gains that it believes are not reflective of normal operations. This information is provided to allow investors to make meaningful comparisons of the Company's operating performance between periods and to view the Company's business from the same perspective as the Company's management. Adjusted loss and adjusted loss per diluted share should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP.

The following is a tabular presentation of adjusted loss and adjusted loss per diluted share, including a reconciliation from net earnings/loss, which the Company believes to be the most directly comparable U.S. GAAP financial measure. In addition, in recognition of the sale of the soy and corn business in the first quarter of 2019, the Company has prepared these tables in a columnar format to present the effect of the disposal of these operations on the Company's consolidated results for the comparative periods. The Company believes this presentation assists investors in assessing the results of the operations the Company has disposed and the effect of those operations on its financial performance.

Excluding

disposed Disposed Consolidated operations operations

Per Per Per Diluted Diluted Diluted Share Share Share

For the quarter $ $ $ $ $ $ ended



September 26, 2020

Net earnings 291 - 291

Earnings attributable to (202 ) - (202 ) non-controlling interests

Dividends and accretion on (2,844 ) - (2,844 ) preferred stock

Loss attributable to (2,755 ) (0.03 ) - - (2,755 ) (0.03 ) common shareholders



Adjusted for:

Costs related to the Value Creation 989 - 989 Plan^(a)

Legal settlements^ 721 - 721 (b)

Plant expansion 245 - 245 costs^(c)

Other^(d) 255 - 255

Net income tax (721 ) - (721 ) effect^(e)

Adjusted loss (1,266 ) (0.01 ) - - (1,266 ) (0.01 )



September 28, 2019

Net loss (10,974 ) (805 ) (11,779 )

Loss attributable to non-controlling 30 - 30 interests

Dividends and accretion on (2,009 ) - (2,009 ) preferred stock

Loss attributable to (12,953 ) (0.15 ) (805 ) (0.01 ) (13,758 ) (0.16 ) common shareholders



Adjusted for:

Costs related to Value Creation 4,837 - 4,837 Plan^(f)

Post-closing adjustments and other costs related to

sale of soy and corn - 1,109 1,109 business^(g)

Contract manufacturer 159 - 159 transition costs^ (h)

Other^(i) (1,166 ) - (1,166 )

Net income tax (764 ) (304 ) (1,068 ) effect^(e)

Adjusted loss (9,887 ) (0.11 ) - - (9,887 ) (0.11 )

(a)

Reflects professional fees of $0.8 million and employee retention costs of $0.1 million recorded in SG&A expenses, and employee termination costs of $0.1 million recorded in other expense.

(b)

Reflects a loss of $2.4 million on the settlement of a customer claim related to the recall of certain sunflower products in 2016, net of a $1.7 million gain on the settlement of an unrelated legal matter, which were recorded in other expense/income.

(c)

Reflects costs related to the expansion of our plant-based extraction capabilities at our Alexandria, Minnesota, facility, which were recorded in cost of goods sold.

(d)

Other includes a loss on the disposal of assets, which was recorded in other expense.

(e)

Reflects the tax effect of the preceding adjustments to earnings and reflects an overall estimated annual effective tax rate of approximately 30% for the quarter ended September 26, 2020 (September 28, 2019 - 27%) on adjusted loss before tax.

(f)

Reflects employee retention and relocation costs of $0.9 million, and professional fees of $0.7 million recorded in SG&A expenses; and employee termination costs of $3.4 million (offset by a reversal of $0.8 million of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees), and CFO recruitment costs of $0.6 million recorded in other expense.

(g)

Reflects post-closing adjustments and transaction costs incurred in connection with the sale of the soy and corn business, which reduced the gain on sale recorded in other income.

(h)

Reflects the write-down of assets related to the transition of premium juice production activities to new contract manufacturers, which was recorded in other expense.

(i)

Other includes a legal settlement gain of $1.3 million, offset by losses on disposal of assets, which were recorded in other income/expense.

Reflects professional fees of $0.8 million and employee retention costs of(a) $0.1 million recorded in SG&A expenses, and employee termination costs of $0.1 million recorded in other expense.

Reflects a loss of $2.4 million on the settlement of a customer claim(b) related to the recall of certain sunflower products in 2016, net of a $1.7 million gain on the settlement of an unrelated legal matter, which were recorded in other expense/income.

Reflects costs related to the expansion of our plant-based extraction(c) capabilities at our Alexandria, Minnesota, facility, which were recorded in cost of goods sold.

(d) Other includes a loss on the disposal of assets, which was recorded in other expense.

Reflects the tax effect of the preceding adjustments to earnings and(e) reflects an overall estimated annual effective tax rate of approximately 30% for the quarter ended September 26, 2020 (September 28, 2019 - 27%) on adjusted loss before tax.

Reflects employee retention and relocation costs of $0.9 million, and professional fees of $0.7 million recorded in SG&A expenses; and employee(f) termination costs of $3.4 million (offset by a reversal of $0.8 million of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees), and CFO recruitment costs of $0.6 million recorded in other expense.

Reflects post-closing adjustments and transaction costs incurred in(g) connection with the sale of the soy and corn business, which reduced the gain on sale recorded in other income.

Reflects the write-down of assets related to the transition of premium(h) juice production activities to new contract manufacturers, which was recorded in other expense.

(i) Other includes a legal settlement gain of $1.3 million, offset by losses on disposal of assets, which were recorded in other income/expense.

Excluding

disposed operations

Disposed operations

Consolidated

Per Diluted Share

Per Diluted Share

Per Diluted Share

For the three quarters ended

$

$

$

$

$

$

September 26, 2020

Net earnings

4,415

-

4,415

Loss attributable to non-controlling interests

42

-

42

Dividends and accretion on preferred stock

(7,473

)

-

(7,473

)

Loss attributable to common shareholders

(3,016

)

(0.03

)

-

-

(3,016

)

(0.03

)

Adjusted for:

Costs related to the Value Creation Plan(a)

3,463

-

3,463

Legal settlements(b)

721

-

721

Plant expansion costs(c)

337

-

337

Contingent consideration settlement(d)

(2,286

)

-

(2,286

)

Other(e)

(65

)

-

(65

)

Net income tax effect(f)

(839

)

-

(839

)

Adjusted loss

(1,685

)

(0.02

)

-

-

(1,685

)

(0.02

)

September 28, 2019

Net earnings (loss)

(26,941

)

31,845

4,904

Earnings attributable to non-controlling interests

(59

)

-

(59

)

Dividends and accretion on preferred stock

(6,005

)

-

(6,005

)

Earnings (loss) attributable to common shareholders

(33,005

)

(0.38

)

31,845

0.36

(1,160

)

(0.01

)

Adjusted for:

Gain on sale of soy and corn business(g)

-

(44,269

)

(44,269

)

Costs related to Value Creation Plan(h)

8,370

-

8,370

Contract manufacturer transition costs(i)

448

-

448

Plant expansion costs(j)

311

-

311

Product withdrawal and recall costs(k)

260

-

260

Other(l)

(1,491

)

-

(1,491

)

Net income tax effect(f)

(1,379

)

12,130

10,751

Adjusted loss

(26,486

)

(0.30

)

(294

)

(0.00

)

(26,780

)

(0.31

)

Excluding

disposed Disposed Consolidated operations operations

Per Per Per Diluted Diluted Diluted Share Share Share

For the three $ $ $ $ $ $ quarters ended



September 26, 2020

Net earnings 4,415 - 4,415

Loss attributable to 42 - 42 non-controlling interests

Dividends and accretion on (7,473 ) - (7,473 ) preferred stock

Loss attributable to (3,016 ) (0.03 ) - - (3,016 ) (0.03 ) common shareholders



Adjusted for:

Costs related to the Value 3,463 - 3,463 Creation Plan^ (a)

Legal settlements^ 721 - 721 (b)

Plant expansion 337 - 337 costs^(c)

Contingent consideration (2,286 ) - (2,286 ) settlement^(d)

Other^(e) (65 ) - (65 )

Net income tax (839 ) - (839 ) effect^(f)

Adjusted loss (1,685 ) (0.02 ) - - (1,685 ) (0.02 )



September 28, 2019

Net earnings (26,941 ) 31,845 4,904 (loss)

Earnings attributable to (59 ) - (59 ) non-controlling interests

Dividends and accretion on (6,005 ) - (6,005 ) preferred stock

Earnings (loss) attributable to (33,005 ) (0.38 ) 31,845 0.36 (1,160 ) (0.01 ) common shareholders



Adjusted for:

Gain on sale of soy and - (44,269 ) (44,269 ) corn business^ (g)

Costs related to Value 8,370 - 8,370 Creation Plan^ (h)

Contract manufacturer 448 - 448 transition costs^(i)

Plant expansion 311 - 311 costs^(j)

Product withdrawal and 260 - 260 recall costs^ (k)

Other^(l) (1,491 ) - (1,491 )

Net income tax (1,379 ) 12,130 10,751 effect^(f)

Adjusted loss (26,486 ) (0.30 ) (294 ) (0.00 ) (26,780 ) (0.31 )

(a)

Reflects professional fees of $1.6 million and employee retention costs of $0.9 million recorded in SG&A expenses; and employee termination costs of $1.6 million (offset by a $0.9 million reversal of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees), and facility closure costs of $0.4 million recorded in other expense.

(b)

Reflects a loss of $2.4 million on the settlement of a customer claim related to the recall of certain sunflower products in 2016, net of a $1.7 million gain on the settlement of an unrelated legal matter, which were recorded in other expense/income.

(c)

Reflects costs related to the expansion of our plant-based extraction capabilities at our Alexandria, Minnesota, facility, which were recorded in cost of goods sold.

(d)

Reflects a gain on the settlement of the remaining earn-out obligation related to our acquisition of Citrusource in 2015, which was recorded in other income.

(e)

Other includes the reversal of previously accrued costs related to the withdrawal of certain consumer-packaged products, partially offset by a loss on the disposal of assets, which were recorded in other income/expense.

(f)

Reflects the tax effect of the preceding adjustments to earnings and reflects an overall estimated annual effective tax rate of approximately 30% for the three quarters ended September 26, 2020 (September 28, 2019 - 27%) on adjusted loss before tax.

(g)

Reflects the gain on sale of the soy and corn business, net of transaction costs and post-closing adjustments, which was recorded in other income.

(h)

Reflects employee retention and relocation costs of $1.8 million, and professional fees of $1.0 million recorded in SG&A expenses; and employee termination costs of $6.9 million (offset by the reversal of $2.9 million of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees), CEO and CFO recruitment costs of $1.2 million, and facility closure costs of $0.3 million, all recorded in other expense.

(i)

Reflects costs to transition premium juice production activities to new contract manufacturers, which were recorded in cost of goods sold and other expense.

(j)

Reflects costs related to the expansion of our Allentown, Pennsylvania, plant-based beverage facility, which were recorded in cost of goods sold.

(k)

Reflects product withdrawal and recall costs that were not eligible for reimbursement under insurance policies or exceeded the limits of those policies, including costs related to the 2016 sunflower product recall, which were recorded in other expense.

(l)

Other includes settlement gains resulting from a legal matter and a project cancellation, offset by losses on disposal of assets, and insurance deductibles, which were recorded in other income/expense.

Segment Operating Income/Loss and Adjusted EBITDA

The Company defines segment operating income/loss as net earnings/loss before income taxes, interest expense and other income/expense items, and adjusted EBITDA as segment operating income/loss plus depreciation, amortization, non-cash stock-based compensation, and other unusual items that affect the comparability of operating performance as identified above in the determination of adjusted loss. The following is a tabular presentation of segment operating income/loss and adjusted EBITDA, including a reconciliation to net earnings/loss, which the Company believes to be the most directly comparable U.S. GAAP financial measure. In addition, as with adjusted loss presented above, the Company has prepared these tables in a columnar format to present the effect of the disposals of the soy and corn business on the Company's consolidated results for the comparative periods. The Company believes this presentation assists investors in assessing the results of the operations the Company has disposed and the effect of those operations on its financial performance.

Reflects professional fees of $1.6 million and employee retention costs of $0.9 million recorded in SG&A expenses; and employee termination costs of(a) $1.6 million (offset by a $0.9 million reversal of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees), and facility closure costs of $0.4 million recorded in other expense.

Reflects a loss of $2.4 million on the settlement of a customer claim(b) related to the recall of certain sunflower products in 2016, net of a $1.7 million gain on the settlement of an unrelated legal matter, which were recorded in other expense/income.

Reflects costs related to the expansion of our plant-based extraction(c) capabilities at our Alexandria, Minnesota, facility, which were recorded in cost of goods sold.

Reflects a gain on the settlement of the remaining earn-out obligation(d) related to our acquisition of Citrusource in 2015, which was recorded in other income.

Other includes the reversal of previously accrued costs related to the(e) withdrawal of certain consumer-packaged products, partially offset by a loss on the disposal of assets, which were recorded in other income/ expense.

Reflects the tax effect of the preceding adjustments to earnings and(f) reflects an overall estimated annual effective tax rate of approximately 30% for the three quarters ended September 26, 2020 (September 28, 2019 - 27%) on adjusted loss before tax.

(g) Reflects the gain on sale of the soy and corn business, net of transaction costs and post-closing adjustments, which was recorded in other income.

Reflects employee retention and relocation costs of $1.8 million, and professional fees of $1.0 million recorded in SG&A expenses; and employee termination costs of $6.9 million (offset by the reversal of $2.9 million(h) of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees), CEO and CFO recruitment costs of $1.2 million, and facility closure costs of $0.3 million, all recorded in other expense.

Reflects costs to transition premium juice production activities to new(i) contract manufacturers, which were recorded in cost of goods sold and other expense.

(j) Reflects costs related to the expansion of our Allentown, Pennsylvania, plant-based beverage facility, which were recorded in cost of goods sold.

Reflects product withdrawal and recall costs that were not eligible for(k) reimbursement under insurance policies or exceeded the limits of those policies, including costs related to the 2016 sunflower product recall, which were recorded in other expense.

Other includes settlement gains resulting from a legal matter and a(l) project cancellation, offset by losses on disposal of assets, and insurance deductibles, which were recorded in other income/expense.

Segment Operating Income/Loss and Adjusted EBITDA

The Company defines segment operating income/loss as net earnings/loss before income taxes, interest expense and other income/expense items, and adjusted EBITDA as segment operating income/loss plus depreciation, amortization, non-cash stock-based compensation, and other unusual items that affect the comparability of operating performance as identified above in the determination of adjusted loss. The following is a tabular presentation of segment operating income/loss and adjusted EBITDA, including a reconciliation to net earnings/loss, which the Company believes to be the most directly comparable U.S. GAAP financial measure. In addition, as with adjusted loss presented above, the Company has prepared these tables in a columnar format to present the effect of the disposals of the soy and corn business on the Company's consolidated results for the comparative periods. The Company believes this presentation assists investors in assessing the results of the operations the Company has disposed and the effect of those operations on its financial performance.

Excluding

disposed Disposed Consolidated operations operations

For the quarter ended $ $ $



September 26, 2020

Net earnings 291 - 291

Provision for income taxes 41 - 41

Interest expense, net 8,017 - 8,017

Other expense, net 1,030 - 1,030

Total segment operating income 9,379 - 9,379

Depreciation and amortization 8,669 - 8,669

Stock-based compensation 3,536 - 3,536

Costs related to Value 935 - 935 Creation Plan^(a)

Plant expansion costs^(b) 245 - 245

Adjusted EBITDA 22,764 - 22,764



September 28, 2019

Net loss (10,974 ) (805 ) (11,779 )

Recovery of income taxes (3,631 ) (304 ) (3,935 )

Interest expense, net 8,864 - 8,864

Other expense, net 2,214 1,109 3,323

Total segment operating loss (3,527 ) - (3,527 )

Depreciation and amortization 8,517 - 8,517

Stock-based compensation 3,327 - 3,327

Costs related to Value 1,615 - 1,615 Creation Plan^(a)

Adjusted EBITDA 9,932 - 9,932

(a)

For the third quarters of 2020 and 2019, reflects professional fees and employee retention costs of $0.9 million and $1.6 million, respectively, recorded in SG&A expenses.

(b)

For the third quarter of 2020, reflects costs related to the expansion of our plant-based extraction capabilities at our Alexandria, Minnesota, facility, which were recorded in cost of goods sold.

For the third quarters of 2020 and 2019, reflects professional fees and(a) employee retention costs of $0.9 million and $1.6 million, respectively, recorded in SG&A expenses.

For the third quarter of 2020, reflects costs related to the expansion of(b) our plant-based extraction capabilities at our Alexandria, Minnesota, facility, which were recorded in cost of goods sold.

Excluding

disposed operations

Disposed operations

Consolidated

For the three quarters ended

$

$

$

September 26, 2020

Net earnings

4,415

-

4,415

Provision for income taxes

1,623

-

1,623

Interest expense, net

24,233

-

24,233

Other income, net

(601

)

-

(601

)

Total segment operating income

29,670

-

29,670

Depreciation and amortization

26,342

-

26,342

Stock-based compensation(a)

8,810

-

8,810

Costs related to Value Creation Plan(b)

2,434

-

2,434

Plant expansion costs(c)

337

-

337

Adjusted EBITDA

67,593

-

67,593

September 28, 2019

Net earnings (loss)

(26,941

)

31,845

4,904

Provision for (recovery of) income taxes

(8,779

)

12,018

3,239

Interest expense, net

25,857

-

25,857

Other expense (income), net

4,525

(44,269

)

(39,744

)

Total segment operating loss

(5,338

)

(406

)

(5,744

)

Depreciation and amortization

24,876

129

25,005

Stock-based compensation(a)

8,265

-

8,265

Costs related to Value Creation Plan(b)

2,772

-

2,772

Plant expansion costs(c)

311

-

311

Contract manufacturer transition costs(d)

289

-

289

Adjusted EBITDA

31,175

(277

)

30,898

Excluding

disposed Disposed Consolidated operations operations

For the three quarters ended $ $ $



September 26, 2020

Net earnings 4,415 - 4,415

Provision for income taxes 1,623 - 1,623

Interest expense, net 24,233 - 24,233

Other income, net (601 ) - (601 )

Total segment operating income 29,670 - 29,670

Depreciation and amortization 26,342 - 26,342

Stock-based compensation^(a) 8,810 - 8,810

Costs related to Value 2,434 - 2,434 Creation Plan^(b)

Plant expansion costs^(c) 337 - 337

Adjusted EBITDA 67,593 - 67,593



September 28, 2019

Net earnings (loss) (26,941 ) 31,845 4,904

Provision for (recovery of) income (8,779 ) 12,018 3,239 taxes

Interest expense, net 25,857 - 25,857

Other expense (income), net 4,525 (44,269 ) (39,744 )

Total segment operating loss (5,338 ) (406 ) (5,744 )

Depreciation and amortization 24,876 129 25,005

Stock-based compensation^(a) 8,265 - 8,265

Costs related to Value 2,772 - 2,772 Creation Plan^(b)

Plant expansion costs^(c) 311 - 311

Contract manufacturer 289 - 289 transition costs^(d)

Adjusted EBITDA 31,175 (277 ) 30,898

(a)

For the first three quarters of 2020 and 2019, stock-based compensation of $8.8 million and $8.3 million, respectively, was recorded in SG&A expenses, and the reversal of $0.9 million and $2.9 million, respectively, of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees was recognized in other income.

(b)

For the first three quarters of 2020 and 2019, reflects professional fees, and employee retention and relocation costs of $2.4 million and $2.8 million, respectively, recorded in SG&A expenses.

(c)

For the first three quarters of 2020, reflects costs related to the expansion of our plant-based extraction capabilities at our Alexandria, Minnesota, facility, and, for the first three quarters of 2019, reflects costs related to the expansion of our Allentown, Pennsylvania, plant-based beverage facility, which were recorded in cost of goods sold.

(d)

Reflects costs to transition premium juice production activities to new contract manufacturers, which were recorded in cost of goods sold.

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CONTACT: Scott Van Winkle ICR 617-956-6736 scott.vanwinkle@icrinc.com