Why Plant-Based Foods And Beverages Company SunOpta's Shares Are Rising Today

SunOpta Inc STKL shares are trading higher by over 26% after the company disclosed Q3 FY23 preliminary results, asset sales, and CFO transition details.

The company disclosed selling certain frozen fruit assets to Nature's Touch for $141 million. The move marks its exit from the frozen fruit business.

The sale transaction, which includes facilities in Edwardsville, Kansas, and Mexico and a significant quantity of inventory, closed yesterday.

The company will use the net cash proceeds from the divestiture to reduce debt and other liabilities, thereby lowering its net leverage to 3.4x (on a pro forma basis) at closing and to 3.2x factoring in the collection of the seller notes (from 3.7x as of Q2 2023).

STKL sees revenue from continuing operations of about $152 million, up 6% Y/Y, and adjusted EBITDA from continuing operations of around $18.5 million - $19 million. 

For FY 2023, the company maintained its outlook as communicated on the second quarter earnings call, adjusting for the sale of the frozen assets. The company's prior outlook was for revenue of $880 million-$900 million and adjusted EBITDA at $87 million-$91 million. 

STKL disclosed the appointment of Greg Gaba as Chief Financial Officer (CFO), effective October 13, 2023. He will replace Scott Huckins, who resigned from the company.

Gaba has been with the company for over six years and most recently served as Deputy CFO.

The company expects to release Q3 FY23 results in early November 2023.  

Price Action: STKL shares are trading higher by 25.87% at $3.60 on the last check Friday.