Sun-Rype Reports 2011 Financial Results

KELOWNA, BC, March 7, 2012 /CNW/ - (TSX:SRF) ("Sun-Rype" or the "Company") today released its financial results for the fourth quarter and year ended December 31, 2011.

Financial Highlights

Sun-Rype's net sales in 2011 were $147.5 million compared to $138.2 million in 2010. The Company's net loss in 2011 was $5.7 million or $0.53 per share, compared to net income of $4.5 million or $0.42 per share in 2010. In the fourth quarter of 2010, the Company acquired the business and assets of Yakama Juice, LLC (the "Yakama acquisition") and, in the third quarter of 2011, the Company acquired the business and assets of Naumes Concentrates, Inc. (the "Naumes acquisition"). These acquired operations recorded net sales of $21.9 million in 2011 (Yakama acquisition only in 2010: $4.8 million).

Sun-Rype's net sales in both the fourth quarter of 2011 and 2010 were $36.8 million. Net sales in the fourth quarter of 2011 include $2.7 million resulting from the Naumes acquisition. As this acquisition was completed in 2011 there are no comparative sales for the fourth quarter of 2010. Branded beverage net sales were 8% lower than the fourth quarter of 2010, on 13% lower volume. Branded food net sales were 14% higher on 6% lower volume than the fourth quarter of 2010.

"Lower sales of Sun-Rype branded products were offset by growth in non-branded sales, including those attributable to two business acquisitions, resulting in higher net sales in 2011. Higher cost of goods sold due to rising commodity prices and the greater proportion of sales of lower margin, non-branded products reduced gross profit in 2011 compared to 2010", commented Dave McAnerney, President & CEO.  "Despite the loss in branded beverage volume from 2010, the Company has maintained its national market share in the shelf-stable juice category."

The accompanying financial information has been prepared under International Financial Reporting Standards ("IFRS"). An explanation of how the transition to IFRS has affected the financial position, financial performance and cash flows of the Company is included in the notes to the consolidated financial statements for the year ended December 31, 2011 and 2010. Amounts for 2010 included herein reflect amounts determined under IFRS, unless otherwise stated.

Outlook

In 2012 the Company will continue to focus on launching innovative products and broadening geographic distribution of its products. Strong competitive pressures experienced on branded products in 2011 are anticipated to continue in 2012.

Prices of certain concentrates escalated in 2011 to record and near record levels, and are expected to remain at elevated levels through 2012. Prices of apples are also expected to remain high in 2012.

The Company has announced plans for 2012 new product launches to its customers. There is no certainty that the incremental revenue from these new products will exceed the product and launch costs in 2012.

Management anticipates that steps taken in 2011, including the recent acquisitions it has made, and initiatives planned for 2012 will improve financial results in 2012. However a significant improvement in profitability is not anticipated in 2012 without material reductions in the costs of key raw material inputs.

Sun-Rype Products Ltd., based in Kelowna, BC, is a manufacturer and marketer of fruit-based juices and snacks.  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 consolidated financial statements and accompanying notes of Sun-Rype Products Ltd. for the year ended December 31, 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, 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 7, 2012, 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.
Consolidated Statements of Comprehensive Income
For the Years ended December 31
(in thousands of Canadian dollars, except per share amounts)

		2011		2010
Net sales	$	147,529	$	138,185
Cost of sales		(126,311)		(104,867)
Gross profit		21,218		33,318
Sales and marketing expenses		(14,721)		(13,697)
Distribution expenses		(7,352)		(7,882)
General and administrative expenses		(6,410)		(5,315)
Loss on disposal of property, plant and equipment		(57)		-
Results from operating activities		(7,322)		6,424
Finance costs		(714)		(142)
Income (loss) before income tax		(8,036)		6,282
Income tax recovery (expense)		2,349		(1,779)
Net income (loss) for the year		(5,687)		4,503
Other comprehensive income (loss)
Foreign currency translation differences for foreign operations		(53)		-
Total comprehensive income (loss) for the year	$	(5,740)	$	(4,503)
Basic and diluted earnings (loss) per share (in dollars)	$	(0.53)	$	0.42

 

 

Don VanderZwaag, CA 
Vice President, Finance & CFO
Sun-Rype Products Ltd.
1165 Ethel Street
Kelowna, BC  V1Y 2W4
Tel:  [phone]
Fax: [phone]
[email protected]

or

Dave McAnerney
President & Chief Executive Officer
Sun-Rype Products Ltd.
1165 Ethel Street
Kelowna, BC  V1Y 2W4
Tel: [phone]
Fax: [phone]
[email protected]

www.sunrype.com