Sun-Rype Reports Q3 2011 Financial Results

TSX: SRF

KELOWNA, BC, Nov. 2, 2011 /CNW/ - Sun-Rype Products Ltd. (TSX:SRF) ("Sun-Rype" or the "Company") today released its financial results for the quarter ended September 24, 2011.

Financial Highlights

Sun-Rype's net sales in the third quarter of 2011 were $39.3 million, $4.5 million or 13% higher than the same period in 2010. In the fourth quarter of 2010 the Company acquired the business and assets of Yakama Juice, LLC, and in the third quarter of 2011 the Company acquired the business and assets of Naumes Concentrates, Inc. (collectively "the acquisitions"). Net sales from the acquisitions totalled $5.5 million in the third quarter of 2011. As these acquisitions were completed after the third quarter of 2010, there are no sales in the comparable period of 2010. The Company's net loss in the third quarter of 2011 was $3.0 million or $0.28 per share, compared to net income of $1.1 million or $0.10 per share in the third quarter of 2010.

The Company's net sales in the first three quarters of 2011 were $110.8 million compared to $101.4 million in the first three quarters of 2010. Net sales from the acquisitions totalled $14.3 million in the first three quarters of 2011. Net loss in the first three quarters of 2011 was $4.0 million or $0.37 per share, compared to net income of $3.0 million or $0.28 per share in the first three quarters of 2010.

"Growth in non-branded sales, including sales attributable to our two business acquisitions, was partially offset by lower sales of branded products, resulting in higher net sales in the third quarter and first three quarters of 2011," says Dave McAnerney, President & CEO.  "Higher cost of goods sold due to rising commodity prices and a greater proportion of sales of lower margin, non-branded sales led to reduced gross profit in 2011 compared to the same periods of 2010." After deducting operating expenses from gross profit, income from operating activities in the first three quarters of 2011 was $9.4 million lower than the same period of 2010. Earnings in 2011 were also impacted by increased interest costs incurred on debt, primarily borrowed to fund the acquisitions made by the Company in the past year.

Outlook

Management anticipates that the factors contributing to losses in the third quarter and three quarters ended September 24, 2011, will continue for the balance of 2011 and result in net losses in the fourth quarter of 2011.

Sun-Rype Products Ltd., based in Kelowna, BC, is a manufacturer and marketer of 100% juices and 100% fruit snacks under the SunRype brand, and is also a manufacturer of food, beverage and ingredients for other companies to distribute under their own brand or private label name or for use in their products.  Sun-Rype is a publicly traded Canadian company with its common shares listed on the Toronto Stock Exchange under the symbol SRF.

Additional Information
The foregoing are financial highlights only. Management's discussion and analysis, and the condensed consolidated interim financial statements and accompanying notes of Sun-Rype Products Ltd. for the quarter and three quarters ended September 24, 2011, are available on the Canadian Securities Administrator's website at www.sedar.com and on the Company's website at www.sunrype.com.  Additional information relating to Sun-Rype's operations can be found in the Company's Annual Information Form dated March 18, 2011, filed with all applicable Canadian securities commissions and available for viewing on the Canadian Securities Administrator's website at www.sedar.com and on the Company's website at www.sunrype.com.

Forward Looking Statements
Statements contained in this press release, which are not based on historical fact, including without limitation, statements containing the words "may", "will", "plans", "intends", "expects", "anticipates", "believes", "estimate", "continue" and similar expressions, constitute "forward looking information" within the meaning of applicable Canadian securities laws.  Forward looking statements contained in this document may involve, but are not limited to, statements relating to the Company's objectives, priorities, strategies, actions, targets, expectations and outlook.  Forward looking statements are necessarily based upon assumptions and predictions with respect to the future, including but not limited to the factors referred to below.  As a result, forward looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied thereby.  These risks, uncertainties and other factors include, but are not limited to, changes in the consumer packaged goods industry and external market factors, as well as the factors referred to in the Company's Annual Information Form dated March 18, 2011, and its other filings with the applicable Canadian securities regulatory authorities.  In light of these uncertainties, assumptions and risks, readers are cautioned not to place undue reliance on such forward looking statements.  Except as required by law, the Company assumes no obligation to update or revise such information to reflect later events or developments.

Sun-Rype Products Ltd.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands of Canadian dollars)
                   
                   
      For the quarters ended   For the three quarters ended
      September 24,
2011
  September 25,
2010
  September 24,
2011
  September 25,
2010
                   
Net sales $ 39,314 $ 34,835 $ 110,750 $ 101,392
  Cost of sales   (35,545)   (27,085)   (94,656)   (76,479)
Gross profit   3,769   7,750   16,094   24,913
                   
  Sales and marketing expenses   (4,292)   (3,286)   (11,743)   (11,112)
  Distribution expenses   (1,923)   (1,714)   (5,734)   (5,079)
  General and administrative expenses   (1,398)   (1,216)   (3,776)   (4,438)
Results from operating activities   (3,844)   1,534   (5,159)   4,284
                   
  Borrowing costs   (215)   (26)   (459)   (90)
Income (loss) before income tax   (4,059)   1,508   (5,618)   4,194
                   
  Income tax recovery (expense)   1,082   (428)   1,620   (1,191)
                   
Net income (loss) and comprehensive
income (loss) for the period
$ (2,977) $ 1,080 $ (3,998) $ 3,003
                   
Basic and diluted earnings (loss) per
share (in dollars)
$ (0.28) $ 0.10 $ (0.37) $ 0.28

 

 

SOURCE Sun-Rype Products Ltd.

For further information:

Don VanderZwaag, CA          or          Dave McAnerney
Chief Financial Officer                    Chief Executive Officer
Sun-Rype Products Ltd.                    Sun-Rype Products Ltd.
1165 Ethel Street                    1165 Ethel Street
Kelowna, BC  V1Y 2W4                    Kelowna, BC  V1Y 2W4
Tel:  (250) 860-7973                    Tel: (250) 860-7973
Fax: (250) 762-3611                    Fax: (250) 762-3611
cfo@sunrype.com                    ceo@sunrype.com
www.sunrype.com


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