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What changed in SunOpta Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SunOpta Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+448 added−378 removedSource: 10-K (2023-03-01) vs 10-K (2022-03-02)

Top changes in SunOpta Inc.'s 2023 10-K

448 paragraphs added · 378 removed · 268 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAdditional information regarding our segments is presented in note 25 to the consolidated financial statements at Item 15 of this Form 10-K. Recent Developments Construction of New Plant-Based Beverage Facility We are constructing a new 285,000 square foot plant-based beverage facility in Midlothian, Texas, which will have the ability to be expanded to 400,000 square feet.
Biggest changeIn 2022, we derived 60% (2021 - 58%) of our revenues from the sale of plant-based foods and beverages, and 40% (2021 - 42%) from the sale of fruit-based offerings. Additional information regarding our segments is presented in note 21 to the consolidated financial statements at Item 15 of this Form 10-K.
We generally conduct our business with customers based on purchase orders or pursuant to contracts that are terminable by either party following a designated notice period. Some of our contracts, however, may extend for several years and/or include volume purchase commitments.
We generally conduct our business with customers based on purchase orders or pursuant to contracts that are terminable by either party following a designated notice period. However, some of our contracts may extend for several years and/or include volume purchase commitments.
Our policy is to protect our technology, brands, and trade names by, among other things, filing patent applications for technology relating to the development of our business in the U.S. and in selected foreign jurisdictions, registering trademarks in the U.S., Canada and selected foreign jurisdictions where we sell products, and maintaining confidentiality agreements with outside parties and employees.
Our policy is to protect our technology, brands, and trademarks by, among other things, filing patent applications for technology relating to the development of our business in the U.S. and in selected foreign jurisdictions, registering trademarks in the U.S., Canada and selected foreign jurisdictions where we sell products, and maintaining confidentiality agreements with outside parties and employees.
Operating Segments and Principal Products The following is a description of the principal activities and products that comprise our operating segments: Plant-Based Foods and Beverages - We offer a full line of plant-based beverages and liquid and powder ingredients, utilizing oat, almond, rice, soy, coconut, hemp, and other bases, as well as broths, teas, and nutritional beverages.
Reportable Segments and Principal Products The following is a description of the principal activities and products that comprise our operating and reportable segments: Plant-Based Foods and Beverages - We offer a full line of plant-based beverages and liquid and powder ingredients, utilizing oat, almond, soy, coconut, rice, hemp, and other bases, as well as everyday broths, teas, and nutritional beverages.
We encourage our employees to be guided by our MVB's (Most Valued Behaviors) of speed, dedication, problem solving, passion, entrepreneurship, and customer centricity. We have a peer recognition program which allows employees to recognize others who are demonstrating our MVB's. Our leaders also recognize employees through our quarterly awards program.
We encourage our employees to be guided by our MVBs (Most Valued Behaviors) of speed, dedication, problem solving, passion, entrepreneurship, and customer centricity. We have a peer recognition program which allows employees to recognize others who are demonstrating our MVBs. Our leaders also recognize employees through our quarterly awards program.
Timelines for complying with the SFCR requirements vary by food, activity, and size of the food business. SUNOPTA INC. 8 January 1, 2022 Form 10-K Food and Drug Regulations (under the FADA) - food and drugs are subject to specific regulatory requirements, including composition (such as food additives, fortification, and food standards), packaging, labeling, advertising, and marketing, and licensing requirements.
Timelines for complying with the SFCR requirements vary by food, activity, and size of the food business. SUNOPTA INC. 8 December 31, 2022 Form 10-K Food and Drug Regulations (under the FADA) - food and drugs are subject to specific regulatory requirements, including composition (such as food additives, fortification, and food standards), packaging, labeling, advertising, and marketing, and licensing requirements.
Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), are available free of charge on our website at www.sunopta.com as soon as reasonably practicable after we file such information electronically with, or furnish it to, the SEC and the CSA.
SUNOPTA INC. 9 December 31, 2022 Form 10-K Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), are available free of charge on our website at www.sunopta.com as soon as reasonably practicable after we file such information electronically with, or furnish it to, the SEC and the CSA.
Overall, the demand for most of our products does not typically fluctuate significantly in any particular season; however, sales of broth are generally highest in the first and fourth quarters of each year.
Overall, the demand for most of our products does not typically fluctuate significantly in any particular season; however, sales of everyday broths are generally highest in the first and fourth quarters of each year.
We principally sell our products through the following channels: private label products to retail and foodservice customers; branded products under co-manufacturing agreements to other branded food companies for their distribution; branded products under our own proprietary brands to retail and foodservice customers; and bulk ingredients for use by foodservice customers and other food manufacturers.
We manufacture and sell the following: private label products to retail and foodservice customers; branded products under co-manufacturing agreements to other branded food companies for their distribution; branded products under our own proprietary brands to retail and foodservice customers; and bulk ingredients for use by foodservice customers and other food manufacturers.
SUNOPTA INC. 5 January 1, 2022 Form 10-K Product Development Our 24,000 square foot innovation center and pilot plant located in Eden Prairie, Minnesota, supports our product development team of 28 highly trained and experienced food scientists and technologists that are dedicated to the development of innovative food and beverage offerings and addressing product development opportunities for our customers.
SUNOPTA INC. 5 December 31, 2022 Form 10-K Product Development Our 24,000 square foot innovation center and pilot plant located in Eden Prairie, Minnesota, supports our product development team of 27 highly trained and experienced food scientists and technologists that are dedicated to the development of innovative food and beverage offerings and addressing product development opportunities for our customers.
Generally, organic food products are produced using: agricultural management practices intended to promote and enhance ecosystem health; ingredients produced without genetically engineered seeds or crops, sewage sludge, long-lasting pesticides, herbicides, or fungicides; and SUNOPTA INC. 7 January 1, 2022 Form 10-K food processing practices intended to protect the integrity of the organic product and disallow irradiation, genetically modified organisms, or synthetic preservatives.
Generally, organic food products are produced using: agricultural management practices intended to promote and enhance ecosystem health; ingredients produced without genetically engineered seeds or crops, sewage sludge, long-lasting pesticides, herbicides, or fungicides; and food processing practices intended to protect the integrity of the organic product and disallow irradiation, genetically modified organisms, or synthetic preservatives.
We are committed to identifying and developing the talents of our next generation leaders. On an annual basis, we conduct talent assessments across the organization and succession planning for our most critical roles within the organization to identify high potential employees, gaps in capabilities or skills and bench strength. • We believe in the power of diversity.
On an annual basis, we conduct talent assessments across the organization and succession planning for our most critical roles within the organization to identify high potential employees, gaps in capabilities or skills, and bench strength. We believe in the power of diversity.
Regulations We are subject to a wide range of governmental regulations and policies in the U.S., Canada, and Mexico. These laws, regulations and policies are implemented, as applicable in each jurisdiction, on the national, federal, state, provincial, and local levels.
Securities and Exchange Commission (the "SEC") or Canadian Securities Administrators (the "CSA"). Regulations We are subject to a wide range of governmental regulations and policies in the U.S., Canada, and Mexico. These laws, regulations and policies are implemented, as applicable in each jurisdiction, on the national, federal, state, provincial, and local levels.
As a result, our short-term financing needs are generally highest in those periods due to crop inventory builds, while cash inflows are typically highest in the fourth quarter as inventories are drawn down.
As a result, our short-term financing needs are generally highest in those periods due to crop inventory builds, while cash inflows are typically higher in the second half of the year as inventories are drawn down.
SUNOPTA INC. 9 January 1, 2022 Form 10-K We also rely on trade secrets and proprietary know-how and confidentiality agreements to protect certain technologies and processes. However, even with these steps taken, our outside partners and contract manufacturers could gain access to our proprietary technology and confidential information.
We also rely on trade secrets and proprietary know-how and confidentiality agreements to protect certain technologies and processes. However, even with these steps taken, our outside partners and contract manufacturers could gain access to our proprietary technology and confidential information.
After becoming certified, organic operations must retain records concerning the production, harvesting, and handling of agricultural products that are to be sold as organic for a period of five years.
SUNOPTA INC. 7 December 31, 2022 Form 10-K After becoming certified, organic operations must retain records concerning the production, harvesting, and handling of agricultural products that are to be sold as organic for a period of five years.
We engage in communication efforts such as quarterly town halls and monthly all-company huddles that we believe help employees feel they are a part of SunOpta as a whole, not just their individual department or location. As of December 31, 2021, we employed 1,380 full-time employees and 648 seasonal employees in North America.
We engage in communication efforts such as quarterly town halls and monthly all-company huddles that we believe help employees feel they are a part of SunOpta as a whole, not just their individual department or location.
In 2021, our ten largest customers accounted for approximately 68% of our consolidated revenues, the same percentage of our Plant-Based Foods and Beverages segment revenues, and approximately 69% of our Fruit-Based Foods and Beverages segment revenues. Our plant-based and fruit-based food and beverage operations compete with major branded and private-label food manufacturers.
In 2022, our ten largest customers accounted for approximately 74% of our consolidated revenues, including approximately 72% of our Plant-Based Foods and Beverages segment revenues and approximately 76% of our Fruit-Based Foods and Beverages segment revenues. Our plant-based and fruit-based food and beverage operations compete with major branded and private-label food manufacturers.
Our employees and assets are principally located in the U.S., as well as Mexico and Canada. In late 2021, we opened our new corporate headquarters, together with our expanded innovation center and pilot plant, in Eden Prairie, Minnesota.
Our employees and 10 manufacturing facilities are principally located in the U.S., as well as Mexico and Canada. Our corporate headquarters is located in Eden Prairie, Minnesota, together with our innovation center and pilot plant.
Seasonality We experience seasonality in the procurement, transportation, and processing of strawberries, mainly related to the peak California and Mexico production seasons, which generally occur during the first two quarters of the year. Similarly, we purchase the bulk of our annual sunflower crop requirements from growers following the harvest in the fall of each year.
Seasonality We experience seasonality in the procurement, transportation, and processing of strawberries, mainly related to the peak Mexico and California production seasons, which generally occur during the first two quarters of the year.
SunOpta conducts an organizational health survey three times each year to check the pulse of our workforce and look for areas of improvement through the lens of all our employees.
SunOpta conducts an organizational health survey two times each year to check the pulse of our workforce and look for areas of improvement through the lens of all our employees. The average of our survey scores this year were 4.0 on a five-point scale.
Canadian Food Inspection Agency Act ("CFIAA") - the CFIAA grants power to the CFIA, which is tasked with the administration and enforcement of certain Canadian food legislation.
The amendments to the Food and Drug Regulations are part of the CFIA's initiative to modernize Canada's food labelling system. Canadian Food Inspection Agency Act ("CFIAA") - the CFIAA grants power to the CFIA, which is tasked with the administration and enforcement of certain Canadian food legislation.
Our comprehensive benefits package includes health insurance, company-paid life, accident, and disability insurance, 401(k), employee stock purchase plan, paid time off, paid parental and maternity leave programs, flexible schedules, and a tuition reimbursement program. • We believe it is key to give back to the communities in which we live and work as evidenced by our community service and volunteerism program, which we refer to as "SunOpta Cares." This program provides 24 hours of paid time off for our employees to volunteer with community programs that align with their values.
We believe it is key to give back to the communities in which we live and work as evidenced by our community service and volunteerism program, which we refer to as "SunOpta Cares." This program provides 24 hours of paid time off for our employees to volunteer with community programs that align with their values.
In addition, agricultural commodities and ingredients are subject to price volatility, which can be caused by a variety of economic and environmental factors. Where possible, we mitigate the input price volatility by entering into annual purchase arrangements with our suppliers and by incorporating pass-through pricing adjustment clauses into our contracts with customers.
Agricultural commodities and ingredients are subject to fluctuations in market price caused by weather, growing and harvesting conditions, market conditions, including inflationary cost increases, and other factors beyond our control. Where possible, we mitigate the input price volatility by entering into annual purchase arrangements with our suppliers and by incorporating pass-through pricing adjustment clauses into our contracts with customers.
We believe that our access to an established network of growers and suppliers, the strategic locations of our manufacturing network, our in-house processing and packaging capabilities, and our innovation center and pilot plant, provides us with a competitive advantage over many of our competitors.
We believe that our access to an established network of growers and suppliers, the strategic locations of our manufacturing and distribution facilities, our in-house processing and packaging capabilities, and our innovation center and pilot plant, allows us to compete effectively. Raw Materials Our raw materials primarily consist of agricultural commodities and ingredients.
In addition, we offer dry- and oil-roasted inshell sunflower and sunflower kernels, and raw sunflower inshell and kernel for food and feed applications. Fruit-Based Foods and Beverages - We offer individually quick frozen ("IQF") fruit for retail (including strawberries, blueberries, mango, pineapple, and other berries and blends), IQF and bulk frozen fruit for foodservice (including toppings, purées, and smoothies).
Fruit-Based Foods and Beverages - We offer individually quick frozen ("IQF") fruit for retail, including strawberries, blueberries, mango, pineapple, and other berries and blends, and IQF and bulk frozen fruit for foodservice, including toppings, purées, and smoothies. In addition, we offer fruit snacks, including bars, twists, ropes, and bite-sized varieties, as well as fruit smoothie bowls.
We provide training regarding diversity, equity and inclusion for employees to better understand how we can all work together, and be better, by embracing our differences. We foster inclusion by recognizing and supporting activities and initiatives representative of our workforce such as celebrations of Hispanic Heritage month, PRIDE, and our Women's Leadership Program.
We provide training regarding diversity, equity and inclusion for employees to better understand how we can all work together, and be better, by embracing our differences.
Item 1. Business The Company SunOpta, a corporation organized under the laws of Canada in 1973, is a leading company focused on the development and manufacture of plant-based and fruit-based food and beverage products.
Item 1. Business The Company SunOpta Inc., a corporation organized under the laws of Canada in 1973, is a U.S.-based global pioneer fueling the future of sustainable, plant-based and fruit-based foods and beverages.
SUNOPTA INC. 6 January 1, 2022 Form 10-K 2021 continued to be a challenging year with the continuation of the COVID-19 global pandemic and evolving variants in addition to supply chain issues and labor shortages.
In addition to our safety training and initiatives at our manufacturing facilities, we track our Total Recordable Incident Rate (TRIR) which ended the year at 1.44, compared to a goal of 1.6. 2022 continued to be a challenging year with the continuation of the COVID-19 global pandemic and evolving variants in addition to supply chain issues and labor shortages.
We source other commodities and ingredients directly from a large number of suppliers throughout North America. For critical raw materials, we identify and qualify alternate sources of supply, where possible. For certain organic ingredients, we have a long-term supply agreement with Tradin Organic, which provides us access to Tradin Organic's global sourcing network.
For critical raw materials, we identify and qualify alternate sources of supply, where possible. For certain organic ingredients, we are party to a long-term supply agreement with Tradin Organic, our former global organic ingredients business, which we sold in 2020.
Examples of these initiatives are: • Offering a competitive compensation and benefit package that includes "choices" for each employee to select which works best for them.
Examples of these initiatives are: Offering a competitive compensation and benefit package that includes "choices" for each employee to select which works best for them. Our comprehensive benefits package includes health insurance, company-paid life, accident, and disability insurance, 401(k), employee stock purchase plan, paid time off, paid parental and maternity leave programs, flexible schedules, and a tuition reimbursement program.
Our average employee has six years of service and our annual voluntary turnover of employees at the director level or above was 1%. In 2021, our voluntary turnover was 20% across the Company. Except for our employees at our Jacona, Mexico, facility, none of our employees are represented by a collective bargaining group.
In 2022, our voluntary turnover was 22% across the Company. Except for our employees at our Jacona, Mexico, facility, none of our employees are represented by a collective bargaining group. We continue to focus on increasing employee retention by implementing retention programs and initiatives to increase employee engagement. Employee health and safety is paramount to our success.
Our 2020 CSR Report and, when issued, the 2021 ESG Report, are not, and shall not be deemed to be, a part of this Form 10-K or incorporated into any of our other filings made with the U.S. Securities and Exchange Commission (the "SEC") and Canadian Securities Administrators (the "CSA").
The Corporate Governance Committee of our Board of Directors provides oversight on ESG matters. Details on our ESG commitments and progress are set out in our most recent ESG report (available at sunopta.com/sustainability ), which shall not be deemed to be a part of this Form 10-K or incorporated into any of our other filings made with the U.S.
In addition, we have reduced our carbon footprint by consolidating manufacturing facilities and corporate offices, and we are strategically locating new facilities, such as our plant-based beverage facility under construction in Midlothian, Texas, to be nearer to the markets we serve in order to lower transportation usage and reduce emissions.
Together with our existing plant-based production facilities in California, Minnesota, and Pennsylvania, the Texas location completes our "diamond-shaped" manufacturing network within the U.S., allowing us to be nearer to the markets we serve in order to lower transportation usage and reduce carbon emissions.
New requirements regarding nutrition and ingredient labeling and food color were introduced in 2016. In 2020, the Canadian Food Inspection Agency (the "CFIA") announced that in connection with its initiative to develop a more modern food labeling system, it will be moving forward with additional provisions that facilitate innovation and remove duplicative requirements.
New requirements regarding nutrition and ingredient labeling and food color were introduced in 2016. In 2022, the Government of Canada, with support from the Canadian Food Inspection Agency (the "CFIA"), amended the Food and Drug Regulations to update the requirements for labelling pre-packaged food products.
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In addition, we offer fruit snacks, including bars, twists, ropes, and bite-sized varieties, as well as recently introduced fruit-based smoothie bowls. In 2021, we derived 58% (2020 - 53%) of our revenues from the sale of plant-based foods and beverages, and 42% (2020 - 47%) from the sale of fruit-based food and beverage offerings.
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With a focus on health and sustainability, the core of our diverse product portfolio is our range of non-genetically modified ("non-GMO"), organic, and gluten-free plant-based beverages, including oat, almond, soy, coconut and rice milks and creamers, which have a favorable climate profile relative to traditional dairy milks in terms of lower carbon emissions and water usage.
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Until December 2020, we had a third operating segment referred to as Global Ingredients that comprised of our organic ingredient sourcing and production business, Tradin Organic, which we sold in December 2020, and our soy and corn business, which we sold February 2019.
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In addition, our former sunflower business, which packaged dry- and oil-roasted inshell sunflower and sunflower kernels and processed raw sunflower inshell and kernel for food and feed applications, was part of this segment until it was sold on October 11, 2022.
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This facility will significantly increase our plant-based beverage production capacity, including the addition of 330 ml packaging options. The location of this facility will complement our existing network of beverage plants in California, Minnesota, and Pennsylvania. The facility will be occupied under a 15-year building lease, with extension options, which will commence after completion of the building by the landlord.
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Recent Developments Midlothian, Texas, Manufacturing Facility In February 2023, we officially opened our newly constructed, 285,000 square foot plant-based beverage manufacturing facility in Midlothian, Texas.
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We expect to incur capital expenditures of approximately $118 million related to the build-out of the facility and the purchase of manufacturing equipment for the facility, which we expect to principally finance through existing lease commitments and term loan borrowings under our asset-based credit facilities.
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As part of a three-year, approximately $200 million capital investment into our plant-based manufacturing operations, this facility significantly increases our plant-based beverage production capacity and capabilities, including the addition of 330 milliliter packaging options, which is the common format for nutritional beverages.
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The facility is expected to be operational in late 2022, with cash flow generation commencing in the first quarter of 2023. SUNOPTA INC. 4 January 1, 2022 Form 10-K Acquisition of Dream ® and WestSoy ® Brands In April 2021, we acquired the Dream and WestSoy plant-based beverage brands and related private label products in North America.
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Additionally, the Midlothian facility was constructed using recycled and recyclable materials where feasible and has been fitted with resource efficient heating and cooling, water treatment, and lighting systems.
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The Dream brand comprises shelf-stable, plant-based milks, including rice, soy, almond, coconut, and oat varieties, and the WestSoy brand comprises shelf-stable soy beverages that are organic certified. These brands complement our core private label and co-manufacturing plant-based beverage business and provide a potential platform for marketing our own plant-based product innovations.
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SUNOPTA INC. 4 December 31, 2022 Form 10-K We commenced commercial production on the first high-speed aseptic processing and packaging line in February 2023, with the start-up of the 330-milliliter packaging line planned for the second quarter of 2023.
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Raw Materials Our raw materials primarily consist of agricultural commodities and ingredients, as well as packaging materials. We utilize an established network of growers and suppliers for raw material commodities and ingredients to support our plant-based and fruit-based food and beverage processing operations. Strawberries is the single largest commodity used in the products we produce.
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Production levels and plant utilization within the facility are expected to ramp-up through 2024, as we continue our business development efforts to fill remaining open capacity.
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Fresh and frozen berries are sourced directly from a large number of growers and suppliers throughout the U.S., Mexico, and South America. Our scale and location close to growing areas in California and Mexico make us an attractive customer for fruit growers. Sunflower is another important commodity that we source directly from approximately 250 growers located in the U.S. Midwest.
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Sale of Sunflower Business On October 11, 2022, we completed the sale of 100% of the assets and liabilities of our sunflower business and related roasted snacks operations, which operated from three processing facilities located in Minnesota and North Dakota.
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Because weather conditions and other factors can limit the availability of raw materials in a specific geography, we have expanded our sourcing outside of North America to provide additional sources of supply in years when local production is below normal levels.
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The sale of the sunflower commodity business was consistent with our strategic priority of optimizing our non-core businesses and focusing on high-growth, high-return opportunities.
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Trademarks We do not extensively market our own consumer brands under trademarks that we own, other than under the recently acquired Dream and WestSoy trademarks in North America, as well as our internally developed SOWN ® brand of plant-based organic oat creamers.
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Principal commodities included in our products include strawberries, oats, almonds, and soybeans. Fresh and frozen berries are sourced directly from growers and suppliers primarily located in Mexico, the U.S., and South America. We source oats, almonds, and soybeans directly from established suppliers mainly within the U.S. and Canada.
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We continue to focus on increasing employee retention by implementing retention programs and initiatives to increase employee engagement. Employee health and safety is paramount to our success. In addition to our safety training and initiatives at our manufacturing facilities, we track our Total Recordable Incident Rate (TRIR) which ended the year at 1.93, compared to a goal of 1.94.
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Over 95% of our packaging by weight is recyclable, and we are committed to working with our suppliers to innovate and develop new packaging technologies to further reduce the impact on the environment, while maintaining the quality and safety of our products.
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In addition to continuing our risk mitigation measures that began in March 2020 (daily health screening questionnaires, temperature screening, social distancing and mask requirements), we provided education on the COVID-19 vaccine and held onsite vaccine clinics to encourage employees to protect themselves with the vaccination.
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Natural gas and electricity are the primary sources of energy used to power our plants and processing equipment, and water is the principal ingredient in many of our products and is essential to our production processes.
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Our management team continued to hold regular meetings to discuss health and safety protocols, best practices, and address employee concerns. As our vaccinated population increased and local government restrictions expired, employees who had been working remotely were brought back to the office.
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Diesel fuel is used in connection with the distribution of our products, and we rely on third-party transportation providers to deliver raw materials, as well as our products to our customers.
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In addition, we continued special pay and leave policies and made emergency assistance grants available to mitigate financial implications to our employees impacted by COVID-19 or childcare issues. Sustainability We offer sustainable, non-genetically modified ("non-GMO") and organic plant-based beverage alternatives, plant-based ingredients, frozen whole fruit, and healthy fruit-based snacks.
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Trademarks We market our own consumer brands under trademarks that we own, including SOWN™, Dream™, West Life™ (formerly WestSoy™) and Sunrise Growers™.
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Through our efforts to lower costs, and improve operating profits, we aim to conserve natural resources in the manufacture of our products by lowering electricity, natural gas, and water consumption, and reducing food and landfill waste.
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While we consider these trademarks to be valuable to the marketing and sale of our proprietary brands, we do not consider any trademark to be of such material importance that its absence would cause a material disruption of our business.
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We also remain committed to ensuring the quality and safety of our products, and the development of sustainable packaging options in conjunction with our packaging suppliers. Our sustainability goals are set out in our fiscal 2020 Corporate Social Responsibility ("CSR") Report.
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At the end of 2022, we announced two additional paid personal holidays for our regular, full-time employees called "You Days," which can be taken in recognition of an employee's birthday and work anniversary date.
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Going forward, we are committed to incorporating environmental, social and governance ("ESG") principles into our business strategies and organizational culture. We intend to make it easier for our stakeholders to find details on our ESG commitments and progress, beginning with our upcoming fiscal 2021 ESG Report.
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In 2022, we implemented a new Foundational Manager Program created for managers and supervisors with a focus on cross-functional leadership, effective communication, leading through change, influencing with integrity, negotiating, and creative problem solving. We are committed to identifying and developing the talents of our next generation leaders.
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We foster inclusion by recognizing and supporting activities and initiatives representative of our workforce such as celebrations of Black History month, Hispanic Heritage month, PRIDE, National Native American Heritage month, and our Women's Leadership Program. In 2022, we also kicked off programming for our Hispanic Employee Resource Group.
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SUNOPTA INC. 6 December 31, 2022 Form 10-K As of December 31, 2022, we employed 1,453 full-time employees and 493 seasonal employees in North America. Excluding our newly constructed Midlothian facility, our average employee has four years of service and our annual voluntary turnover of employees at the director level or above was 1%.
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Our operations teams continued to hold regular meetings to discuss health and safety protocols, best practices, and address employee concerns. In addition, we continued special pay and leave policies related to COVID-19 through the end of 2022. Environmental, Social and Governance We are committed to incorporating environmental, social and governance ("ESG") principles into our business strategies and organizational culture.
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Additionally, the SEC and CSA maintain internet sites that contain reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC and CSA, which can be found at http://www.sec.gov and http://www.sedar.com , respectively.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

78 edited+59 added−22 removed80 unchanged
Biggest changeRisks Related to Our Business The COVID-19 pandemic has significantly impacted worldwide economic conditions and could have a material adverse effect on our business and financial results Our business and financial results may be negatively impacted by the 2019 coronavirus (COVID-19) pandemic, which could cause significant volatility in customer demand for our products, changes in consumer behavior and preference, disruptions in our supply chain operations, disruptions to our business expansion plans, limitations on our employees' ability to work and travel, significant changes in the economic conditions in markets in which we operate and related currency and commodity volatility, and pressure on our liquidity.
Biggest changeThe ongoing implications of the COVID-19 pandemic could adversely impact our business in a number of ways, including but not limited to, significant volatility in customer demand for our products, changes in consumer behavior and preferences, increases in raw material and energy costs, disruptions in our supply chain and manufacturing operations, disruptions to our business expansion plans, limitations on our employees' ability to work and travel due to illness or government restrictions, significant changes in the economic conditions in markets in which we operate, currency and commodity volatility, and pressure on our liquidity.
Although we have a business continuity plan, our business continuity might not address all of the issues we may encounter in the event of a disaster or other unanticipated issues. Our business interruption insurance may not adequately compensate us for losses that may occur from any of the foregoing.
Although we have a business continuity plan, our plan might not address all of the issues we may encounter in the event of a disaster or other unanticipated issues. Our business interruption insurance may not adequately compensate us for losses that may occur from any of the foregoing.
If we lose the services of our key executives, our business could suffer Our prospects depend to a significant extent on the continued service of our key executives, and our continued growth depends on our ability to identify, recruit, and retain and motivate key management personnel. We do not typically carry key person life insurance on our executive officers.
If we lose the services of our key executives, our business could suffer Our prospects depend to a significant extent on the continued service of our key executives, and our continued growth depends on our ability to identify, recruit, and retain key management personnel. We do not typically carry key person life insurance on our executive officers.
Capital investment plans often require a substantial amount of management, operational, and financial resources, which may divert our attention and resources from existing core businesses, potentially disrupting our operations and adversely affecting our relationships with suppliers and customers.
Our capital investment plans often require a substantial amount of management, operational, and financial resources, which may divert our attention and resources from existing businesses, potentially disrupting our operations and adversely affecting our relationships with customers and suppliers.
In addition, any changes to current regulations may impact the development, manufacturing, and marketing of our products, and may have a negative impact on our future results.
In addition, any changes to current regulations may impact the development, manufacturing, and marketing of our products, and may have a negative impact on our future results of operations.
Changes in immigration laws or policies that discourage migration to the U.S. and political or other events (such as war, terrorism or health emergencies) that make it more difficult for individuals to immigrate to or migrate throughout the U.S. could adversely affect the migrant worker population and reduce the workforce available for farms and production facilities in the U.S.
Changes in immigration laws or policies that discourage migration to the U.S. and political or other events (such as war, terrorism, or health crises) that make it more difficult for individuals to immigrate to or migrate throughout the U.S. could adversely affect the migrant worker population and reduce the workforce available for farms and production facilities in the U.S.
For example, Oaktree and Engaged Capital may have an interest in directly or indirectly pursuing acquisitions, divestitures, financings, or other transactions that, in their judgment, could enhance their other equity investments, even though such transactions might involve risks to us, including risks to our liquidity and financial condition.
For example, Oaktree may have an interest in directly or indirectly pursuing acquisitions, divestitures, financings, or other transactions that, in their judgment, could enhance their other equity investments, even though such transactions might involve risks to us, including risks to our liquidity and financial condition.
Moreover, future claims or liabilities of this sort might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others. Further, we may incur claims or liabilities for which we are not insured or that exceed the amount of our insurance coverage.
Furthermore, future claims or liabilities of this sort might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others. Further, we may incur claims or liabilities for which we are not insured or that exceed the amount of our insurance coverage.
If the financial performance of the acquired businesses or assets does not meet our expectations, we could be required to record significant impairments to long-lived assets and/or goodwill, which could materially and adversely impact our business, financial condition and results of operations.
If the financial performance of the acquired businesses or assets does not meet our expectations, we could be required to record subsequent impairments to the acquired long-lived assets and/or goodwill, which could materially and adversely impact our business, financial condition, and results of operations.
If we do not generate sufficient cash flows to satisfy our debt service obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing, or delaying capital investments or seeking to raise additional capital.
If we do not generate sufficient cash flows to satisfy our debt service obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital expenditures, or seeking to raise additional capital.
Our ability to comply with the financial covenant under the credit agreement will depend on the success of our businesses, our operating results, and our ability to achieve our financial forecasts. Various risks, uncertainties and events beyond our control could affect our ability to comply with the financial covenant and terms of the credit agreement.
Our ability to comply with the financial covenants under the credit agreement will depend on the success of our businesses, our operating results, and our ability to achieve our financial forecasts. Various risks, uncertainties and events beyond our control could affect our ability to comply with the financial covenants and terms of the credit agreement.
Failure to comply with the financial covenant and other terms could result in an event of default and the acceleration of amounts owing under the credit agreement unless we are able to negotiate a waiver.
Failure to comply with the financial covenants and other terms could result in an event of default and the acceleration of amounts owing under the credit agreement unless we are able to negotiate a waiver.
These laws and regulations affect various aspects of our business. For example, certain food ingredient products manufactured by SunOpta may require pre-market approval by the FDA that the ingredient is "generally recognized as safe," or "GRAS." We believe that most food ingredients for which we have commercial rights are GRAS.
These laws and regulations affect various aspects of our business. For example, certain food ingredient products that we manufacture may require pre-market approval by the FDA that the ingredient is "generally recognized as safe," or "GRAS." We believe that most food ingredients for which we have commercial rights are GRAS.
If our supplies of non-GMO and organic ingredients are reduced, we may not be able to find enough supplemental supply sources on favorable terms, if at all, which could impact our ability to supply product to our customers and adversely affect our business, financial condition and results of operations.
If our supplies of non-GMO and organic raw materials are reduced, we may not be able to find enough supplemental supply sources on favorable terms, if at all, which could impact our ability to supply product to our customers and adversely affect our business, financial condition, and results of operations.
Item 1A. Risk Factors Our business, operations and financial condition are subject to various risks and uncertainties, including those described below and elsewhere in this report.
Item 1A. Risk Factors Our business, financial condition and results of operations are subject to various risks and uncertainties, including those described below and elsewhere in this report.
Furthermore, to the extent common shares are issued pursuant to the exchange of outstanding convertible preferred stock, exercise of stock-based awards, participation in our employee stock purchase plan, and issuance of additional securities, our share price may decrease due to the additional amount of common shares available in the market.
Furthermore, to the extent common shares are issued pursuant to the exchange of outstanding convertible preferred stock, vesting of equity-based awards, participation in our employee stock purchase plan, and issuance of additional securities, our share price may decrease due to the additional amount of common shares available in the market.
Potential risks associated with these transactions include the inability to consummate a transaction on favorable terms, the diversion of management's attention from other business concerns, the potential loss of key employees and customers of current or acquired companies, the inability to integrate or divest operations successfully, the possible assumptions of unknown liabilities, potential disputes with buyers or sellers, potential impairment charges if purchase assumptions are not achieved, and the inherent risks in entering markets or lines of business in which the Company has limited or no prior experience.
Potential risks associated with these transactions include the inability to consummate a transaction on favorable terms, the diversion of management's attention from other business concerns, the potential loss of key employees and customers of current or acquired companies, the inability to integrate or divest operations successfully, the possible assumptions of unknown liabilities, potential disputes with buyers or sellers, potential impairment charges, and the inherent risks in entering markets or lines of business in which the Company has limited or no prior experience.
The exchange of outstanding convertible preferred stock, exercise of stock-based awards, participation in our employee stock purchase plan, and issuance of additional securities in connection with acquisitions or otherwise could result in dilution in the value of our common shares and the voting power represented thereby.
The exchange of outstanding convertible preferred stock, vesting of equity-based awards, participation in our employee stock purchase plan, and issuance of additional securities in connection with acquisitions or otherwise could result in dilution in the value of our common shares and the voting power represented thereby.
If we fail to comply with the financial covenant and we are unable to negotiate a covenant waiver or replace or refinance the credit agreement on favorable terms, our business, financial condition and results of operations will be materially and adversely impacted.
If we fail to comply with the financial covenants and we are unable to negotiate a covenant waiver or replace or refinance the credit agreement on favorable terms, our business, financial condition and results of operations could be materially and adversely impacted.
We must continuously monitor our inventory and product mix against forecasted demand to reduce the risk of not having adequate supplies to meet consumer demand or the risk of having too much inventory that may reach its expiration date.
We must continually monitor our inventory and product sales mix against forecasted demand to reduce the risk of not having adequate supplies to meet consumer demand or the risk of having too much inventory that may reach its expiration date.
These factors can increase acquisition and production costs, decrease our sales volumes and revenues, and lead to additional charges to earnings, which could have a material adverse effect on our business, financial condition and results of operations.
These factors may increase raw material acquisition and production costs, decrease our sales volumes and revenues, and lead to additional charges to earnings, which could have a material adverse effect on our business, financial condition, and results of operations.
Product liability suits, recalls and threatened market withdrawals, could have a material adverse effect on our business Many of our products are susceptible to harmful bacteria, and the sale of food products for human consumption involves the risk of injury or illness to consumers.
Risks Related to Regulations and Litigation Product liability suits, recalls and threatened market withdrawals, could have a material adverse effect on our business Many of our products are susceptible to harmful bacteria, and the sale of food products for human consumption involves the risk of injury or illness to consumers.
In the event that a natural disaster, or other catastrophic event were to destroy any part of any of our facilities or interrupt our operations for any extended period of time, or if harsh weather or epidemics prevent us from delivering products in a timely manner, our business, financial condition and results of operations could be materially adversely affected.
In the event that a disaster, or other catastrophic event were to destroy any part of any of our facilities or interrupt our operations for any extended period of time, or if harsh weather or health crises prevent us from producing and/or delivering products in a timely manner, our business, financial condition and results of operations could be materially and adversely affected.
Risks Related to Significant Investors and Shareholder Activism Our significant investors may have interests that conflict with those of our debtholders and other stakeholders As at January 1, 2022, Oaktree Capital Management L.P., a private equity investor (together with its affiliates, "Oaktree") held an approximately 18% voting interest in the Company and has nominated two members of our Board of Directors.
Risks Related to Significant Investors and Shareholder Activism Our significant investor may have interests that conflict with those of our debtholders and other stakeholders As at December 31, 2022, Oaktree Capital Management L.P., a private equity investor (together with its affiliates, "Oaktree") held an approximately 19% voting interest in the Company and has nominated two members of our Board of Directors.
The non-GMO and organic commodities and ingredients that we use in the production of our products (including, among others, fruits, grains, seeds, nuts, sweeteners, and flavorings) are vulnerable to adverse weather conditions and natural disasters, such as floods, droughts, water scarcity, temperature extremes, frosts, earthquakes, and pestilences.
The non-GMO and organic raw materials that we use in the production of our products, including, among others, fruits, grains, nuts, sweeteners, and flavorings, are vulnerable to adverse weather conditions and natural disasters, such as floods, droughts, water scarcity, temperature extremes, frosts, earthquakes, and pestilences.
SUNOPTA INC. 19 January 1, 2022 Form 10-K If securities or industry research analysts do not publish or cease publishing research or reports about our business or if they issue unfavorable commentary or downgrade our common shares, our share price and trading volume could decline The trading market for our common shares relies in part on the research and reports that securities and industry research analysts publish about us, our industry, our competitors and our business.
SUNOPTA INC. 21 December 31, 2022 Form 10-K If securities or industry research analysts do not publish or cease publishing research or reports about our business or if they issue unfavorable commentary or downgrade our common shares, our share price and trading volume could decline The trading market for our common shares relies in part on the research and reports that securities and industry research analysts publish about us, our industry, our competitors and our business.
Oaktree and Engaged Capital are in the business of making or advising on investments in companies, including businesses that may directly or indirectly compete with certain portions of our business. They may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.
Oaktree is in the business of making or advising on investments in companies, including businesses that may directly or indirectly compete with certain portions of our business. Oaktree may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.
SUNOPTA INC. 17 January 1, 2022 Form 10-K Our foreign operations and suppliers expose us to additional risks Our operations and raw material suppliers outside of the U.S. and Canada expose us to certain risks inherent in doing business abroad, including exposure to local laws and regulations, political and civil unrest, and economic conditions.
SUNOPTA INC. 16 December 31, 2022 Form 10-K Our foreign operations and suppliers expose us to additional risks Our operations and raw material suppliers outside of the U.S. and Canada expose us to certain risks inherent in doing business abroad, including exposure to local laws and regulations, political and civil unrest, and economic conditions.
We rely on protection of our intellectual property and proprietary rights Our success depends in part on our ability to protect our intellectual property rights. We rely primarily on patent, copyright, trademark, and trade secret laws to protect our proprietary technologies.
Risks Related to Intellectual Property and Information Technology We rely on protection of our intellectual property and proprietary rights Our success depends in part on our ability to protect our intellectual property rights. We rely primarily on patent, copyright, trademark, and trade secret laws to protect our proprietary technologies.
SUNOPTA INC. 18 January 1, 2022 Form 10-K Our other large investors do not have specific rights beyond those of smaller holders of our common shares. However, a concentration of ownership within our large investors could potentially be disadvantageous to, or conflict with, interests of our debtholders or smaller shareholders.
SUNOPTA INC. 20 December 31, 2022 Form 10-K Our other large investors do not have specific rights beyond those of smaller holders of our common shares. However, a concentration of ownership within our large investors could potentially be disadvantageous to, or conflict with, interests of our debtholders or smaller shareholders.
If we are unable to manage our supply chain effectively and ensure that our products are available to meet consumer demand, our operating costs could increase and our margins could fall, which could have a material adverse effect on our business, financial condition and results of operations. Some of our operations are subject to seasonal supply fluctuations.
If we are unable to manage our supply chain effectively and ensure that our products are available to meet consumer demand, our operating costs could increase and our margins could decline, which could have a material adverse effect on our business, financial condition, and results of operations.
We may be unable to accept and fulfill customer orders as a result of disasters, epidemics, business interruptions or other similar events. Some of our inventory and manufacturing facilities are located in areas that are susceptible to harsh weather, and the production of certain of our products is concentrated in a few geographic areas.
We may be unable to accept and fulfill customer orders as a result of disasters, health crises (such as the COVID-19 pandemic), business interruptions, or other similar events. Some of our inventory and manufacturing facilities are located in areas that are susceptible to harsh weather, and the production of certain of our products is concentrated in a few geographic areas.
Our business could be materially and adversely affected if we are unable to meet the financial covenants of our credit agreement Our credit agreement requires us to maintain a minimum fixed charge coverage ratio if excess availability is below certain thresholds and a maximum senior funded leverage ratio covenant with respect to the delayed draw term loan facility.
SUNOPTA INC. 14 December 31, 2022 Form 10-K Our business could be materially and adversely affected if we are unable to meet the financial covenants of our credit agreement Our credit agreement requires us to maintain a minimum fixed charge coverage ratio if excess availability is below certain thresholds and a maximum senior funded leverage ratio covenant with respect to the delayed draw term loan facility.
Our ten largest customers accounted for approximately 68% of consolidated revenues for the year ended January 1, 2022. The loss, decrease or cancellation of business with any of our large customers could materially and adversely affect our business, financial condition and results of operations.
Our ten largest customers accounted for approximately 74% of consolidated revenues for the year ended December 31, 2022. The loss, decrease or cancellation of business with any of our large customers could materially and adversely affect our business, financial condition, and results of operations.
We have little control over and cannot otherwise affect these competitive factors. If we are unable to effectively respond to these competitive factors or if the competition in any of our product markets results in price reductions or decreased demand for our products, our business, financial condition and results of operations may be materially and adversely affected.
If we are unable to effectively respond to these competitive factors or if the competition in any of our product markets results in price reductions or decreased demand for our products, our business, financial condition and results of operations may be materially and adversely affected.
The future issuance of additional common shares in connection with the exchange of convertible preferred stock, exercise of stock options, participation in our employee stock purchase plan and issuance of additional securities could dilute the value of our common shares We have unlimited common shares authorized but unissued.
The future issuance of additional common shares in connection with the exchange of convertible preferred stock, vesting of equity-based awards, participation in our employee stock purchase plan and issuance of additional securities could dilute the value of our common shares We have unlimited common shares authorized but unissued.
Our ability to raise capital, through debt or equity financing, is directly related to our ability to both continue to grow and improve returns from our operations. Debt or equity financing may not be available to us on favorable terms or at all.
Our ability to raise capital, through debt or equity financing, is directly related to our ability to both continue to grow our revenues and improve the profitability of our operations. Debt or equity financing may not be available to us on favorable terms or at all.
Any or all of these risks could impact our financial results and business reputation. In addition, acquisitions outside the U.S. or Canada may present unique challenges and increase our exposure to the risks associated with foreign operations.
Any or all of these risks could have a material and adverse impact on our business, financial condition, and results of operations. In addition, acquisitions outside the U.S. or Canada may present unique challenges and increase our exposure to the risks associated with foreign operations.
Consumer food preferences are difficult to predict and may change Our success depends, in part, on our ability and our customers' ability to offer products that anticipate the tastes and dietary habits of consumers and appeal to their preferences on a timely and affordable basis.
Consumer food preferences are difficult to predict and may change Our success depends, in part, on our ability to predict, identify, and interpret the tastes and dietary habits of consumers and to offer products to our customers that appeal to those preferences on a timely and affordable basis.
We believe the most significant of these risks and uncertainties are described below, any of which could adversely affect our business, financial condition and results of operations and could cause actual results to differ materially from the results contemplated by the forward-looking statements contained in this report.
We believe the most significant of these risks and uncertainties are described below, any of which could adversely affect our business, financial condition and results of operations, as well as our cash flows, liquidity, stock price and/or reputation, and could cause actual results to differ materially from the results contemplated by the forward-looking statements contained in this report.
In addition, delays and unexpected costs or changes in demand and pricing may occur that could result in our not realizing all or any of the anticipated benefits on our expected timetable or at all, and there can be no assurance that any benefits we realize from our capital investments will be sufficient to offset the costs that we may incur.
In addition, delays and unexpected costs in connection with the completion of capital expansion projects, or changes in demand and pricing for our products may occur that could result in us not realizing all or any of the anticipated benefits of our capital investment plans on our expected timetable or at all, and there can be no assurance that any benefits we realize from our capital investments will be sufficient to offset the costs that we may incur.
Such changes could increase the costs of doing business for the Company, our customers, or suppliers, or restrict our actions, causing our results of operations to be adversely affected. SUNOPTA INC. 16 January 1, 2022 Form 10-K Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied.
Such changes could increase the costs of doing business for the Company, our customers, or suppliers, or restrict our actions, causing our results of operations to be adversely affected. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied.
SUNOPTA INC. 15 January 1, 2022 Form 10-K Changes in laws and regulations of privacy and protection of user data could adversely affect our business We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage, and use of proprietary information and personally-identifying information, including the California Consumer Privacy Act of 2018.
Changes in laws and regulations of privacy and protection of user data could adversely affect our business We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage, and use of proprietary information and personally-identifying information, including the California Consumer Privacy Act of 2018.
The production levels, markets and prices of the grains and other raw products that we use in our business are materially affected by government programs, which include acreage control and price support programs of the USDA.
The production levels, markets and prices of the agricultural products that we use in our business may be materially affected by government programs, which include acreage control and price support programs of the USDA.
Examples of laws and regulations that affect us include laws and regulations applicable to: the use of seed, fertilizer and pesticides; the purchasing, harvesting, transportation and warehousing of agricultural products; the processing and sale of food, including wholesale operations; and SUNOPTA INC. 11 January 1, 2022 Form 10-K the product labeling and marketing of food and food products, food safety and food defense.
Examples of laws and regulations that affect us include laws and regulations applicable to: the use of seed, fertilizer and pesticides; the purchasing, harvesting, transportation and warehousing of agricultural products; the processing and sale of food, including wholesale operations; and the product labeling and marketing of food and food products, food safety and food defense.
An interruption at one or more of our manufacturing facilities could negatively affect our business, and our business continuity plan may prove inadequate We own or lease, manage and operate a number of manufacturing, processing, packaging, storage and office facilities.
SUNOPTA INC. 11 December 31, 2022 Form 10-K An interruption at one or more of our manufacturing facilities could negatively affect our business, and our business continuity plan may prove inadequate We own or lease, manage and operate a number of manufacturing, processing, packaging, storage and office facilities.
The COVID-19 pandemic has increased the challenges of managing our supply chain, and the pandemic could continue to cause unpredictable supply-chain interruptions or other adverse effects on our supply chain.
General macroeconomic conditions and the COVID-19 pandemic have increased the challenges of managing our supply chain, and these factors could continue to cause unpredictable supply chain interruptions or other adverse effects on our supply chain.
Risks Related to Our Indebtedness Our level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our debt obligations An increase in the level of our indebtedness and the degree to which we are leveraged could adversely affect our business, financial condition and results of operations, including, without limitation, impairing our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions, or other general corporate purposes.
The level of our indebtedness and the degree to which we are leveraged could adversely affect our business, financial condition, and results of operations, including, without limitation, increasing our exposure to interest rate fluctuations and impairing our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions, or other general corporate purposes.
Adverse weather conditions and natural disasters could impose costs on our business Raw materials for our products are vulnerable to adverse weather conditions and natural disasters, including windstorms, hurricanes, earthquakes, floods, droughts, fires, and temperature and precipitation extremes, some of which are common but difficult to predict, as well as crop disease and infestation.
Risks Related to Weather, Climate Change, and Other External Factors Adverse weather conditions and natural disasters could impose costs on our business Agricultural commodities and ingredients for our products are vulnerable to adverse weather conditions and natural disasters, including windstorms, hurricanes, earthquakes, floods, droughts, fires, and temperature and precipitation extremes, some of which are recurring but difficult to predict, as well as crop disease and infestation.
Technological innovation by our competitors could make our food products less competitive Our competitors include major food ingredient and consumer-packaged food companies that also engage in the development and sale of food and food ingredients. Many of these companies are engaged in the development of food ingredients and other packaged food products and frequently introduce new products into the market.
Product innovations by our competitors could make our food products less competitive Our competitors include major food manufacturers and consumer-packaged food companies. Many of these companies are engaged in the development of food ingredients and packaged food products and frequently introduce new products into the market.
Fluctuations in exchange rates and interest rates could adversely affect our business, financial condition, results of operations or liquidity We are exposed to foreign exchange rate fluctuations as our non-U.S.-based operations purchase raw materials and incur operating costs in local currencies.
Fluctuations in foreign currency exchange rates could adversely affect our business We are exposed to foreign currency exchange rate fluctuations in our non-U.S.-based operations located in Mexico and Canada, as these operations purchase raw materials and incur operating costs in local currencies.
We could also be forced to temporarily close one or more production facilities. SUNOPTA INC. 10 January 1, 2022 Form 10-K Even if a situation does not necessitate a recall or withdrawal, product liability claims might be asserted against us.
We could also be forced to temporarily close one or more of our manufacturing facilities. Even if a situation does not necessitate a recall or withdrawal, product liability claims might be asserted against us.
SUNOPTA INC. 13 January 1, 2022 Form 10-K If we do not manage our supply chain effectively, our operating results may be adversely affected Our supply chain is complex. We rely on suppliers for our raw materials and for the packaging and distribution of many of our products.
If we do not manage our supply chain effectively, our operating results may be adversely affected Our supply chain is complex. We rely on third-party suppliers for our raw materials and packaging, as well as the distribution of our products.
Natural disasters and adverse weather conditions (including the potential effects of climate change) can lower crop yields and reduce crop size and crop quality, which in turn could reduce our supplies of non-GMO and organic commodities and ingredients or increase the prices of non-GMO and organic commodities and ingredients.
Natural disasters and adverse weather conditions can reduce crop size and crop quality, which in turn could reduce our supplies of and/or increase the price of non-GMO and organic raw materials.
Our future results of operations may be adversely affected by the availability of non-GMO and organic commodities and ingredients Our ability to ensure a continuing supply of non-GMO and organic commodities and ingredients at competitive prices depends on many factors beyond our control, such as the number and size of farms that grow non-GMO and organic crops, climate conditions, changes in national and world economic conditions, currency fluctuations, and forecasting adequate need of seasonal ingredients.
Our business may be adversely affected by the availability of non-GMO and organic commodities and ingredients Our ability to ensure a continuing supply of non-GMO and organic commodities and ingredients at competitive prices depends on many factors beyond our control, including the number and size of farms that grow non-GMO and organic crops.
Our operations are subject to the general risks associated with acquisitions and divestitures We have made several acquisitions and divestitures in recent years that align with our strategic initiative of delivering long-term value to shareholders. We regularly review strategic opportunities to grow through acquisitions and to divest unprofitable or non-strategic assets.
Our operations are subject to the general risks associated with acquisitions and divestitures We have made several business and asset acquisitions and divestitures in recent years that align with our strategic priority of optimizing our non-core businesses and focusing on high-growth, high-return opportunities. We regularly review strategic opportunities to grow through acquisitions and to divest non-core businesses and/or underperforming assets.
The subsequent sales of these shares could encourage short sales by our shareholders and others, which could place further downward pressure on our share price. Moreover, the holders of our stock options may hedge their positions in our common shares by short selling our common shares, which could further adversely affect our stock price.
The subsequent sales of these shares could encourage short sales by our shareholders and others, which could place further downward pressure on our share price.
Revisions in these and other comparable programs, in the U.S. and elsewhere, could have a material and adverse effect on our business, financial condition and results of our operations. We are subject to substantial environmental regulation and policies We are, and expect to continue to be, subject to substantial federal, state, provincial and local environmental regulations.
Revisions in these and other comparable programs, in the U.S. and elsewhere, could have a material and adverse effect on our business, financial condition, and results of our operations.
If our safety procedures for handling and disposing of potentially hazardous materials in certain of our businesses were to fail, we could be held liable for any damages that result, and any such liability could exceed our resources. We may be required to incur significant costs to comply with environmental laws and regulations in the future.
SUNOPTA INC. 18 December 31, 2022 Form 10-K If our safety procedures for handling and disposing of potentially hazardous materials in certain of our businesses were to fail, we could be held liable for any damages that result, and any such liability could exceed our resources.
Consequently, you should not consider the following to be a complete discussion of all possible risks or uncertainties applicable to our business. These risk factors should be read in conjunction with the other information in this report and in the other documents that we file from time to time with the SEC and the CSA.
These risk factors should be read in conjunction with the other information in this report and in the other documents that we file from time to time with the SEC and the CSA.
In addition, changes to environmental regulations may require us to modify our existing plant and processing facilities and could significantly increase the cost of those operations. The foregoing environmental regulations, as well as others common to the industries in which we participate, can present delays and costs that can adversely affect business development and growth.
The foregoing environmental regulations, as well as others common to the industries in which we participate, can present delays and costs that can adversely affect business development and growth.
If we face labor shortages or increased labor costs, our results of operations and our growth could be adversely affected Labor is a significant component of the cost of operating our business.
Additionally, increased competition from other industries for migrant workers could increase our costs and adversely affect our business, financial condition, and results of operations. If we face labor shortages or increased labor costs, our business, financial condition, and results of operations could be adversely affected Labor is a primary component of operating our business.
We are required to perform impairment tests of our long-lived assets and goodwill annually, or at any time when events occur that could affect the value of these assets. We may engage in additional acquisitions, which could result in our recognition of additional long-lived assets and goodwill.
In addition, prior to fiscal 2019, we recognized accumulated impairment losses of $213.8 million related to goodwill that arose from business acquisitions. We perform impairment tests of our long-lived assets annually, or at any time when events occur that could affect the value of these assets.
These competitors may have financial resources larger than ours and may be able to benefit from economies of scale, pricing advantages, and greater resources to launch new products that compete with our offerings. In addition, we may have to compete for limited supplies of certain raw materials with competitors having greater resources than we have.
In addition, we may have to compete for limited supplies of certain raw materials with competitors having greater resources and stronger supplier relationships than we have.
SUNOPTA INC. 12 January 1, 2022 Form 10-K We may require additional capital, which may not be available on favorable terms or at all We have grown via a combination of internal growth and acquisitions requiring significant financial resources.
SUNOPTA INC. 13 December 31, 2022 Form 10-K We may require additional capital, which may not be available on favorable terms or at all Our working capital requirements, capital investment plans, and our ability to acquire complementary businesses or assets often require significant financial resources.
Further, failures by us or our competitors to deliver quality products could erode consumer trust. These changes could lead to, among other things, reduced demand and price decreases, which could have a material adverse effect on our business, financial condition and results of operations.
Our failure to anticipate and respond to changing consumer preferences on a timely basis could result in reduced demand and price decreases for our products, which could have a material adverse effect on our business, financial condition, and results of operations.
As a result of these exposures, fluctuations in exchange rates and interest rates could adversely affect our business, financial condition, results of operations or liquidity.
From time to time, we enter into foreign currency exchange contracts to manage our exposure to fluctuations in foreign currency exchange rates; however, these contracts may not effectively limit or eliminate our foreign exchange risk exposure. As a result, future foreign exchange rate fluctuations could adversely affect our business, financial condition, and results of operations.
Any such adverse effect could cause the trading price of our common shares to decline, and our shareholders may lose all or part of their investment. There may be additional risks and uncertainties not presently known to us or that we currently consider immaterial.
There may be additional risks and uncertainties not presently known to us or that we currently consider immaterial. Consequently, you should not consider the following to be a complete discussion of all possible risks or uncertainties applicable to our business.
In addition, any future equity financing would dilute our current shareholders and may result in a decrease in our share price if we are unable to realize adequate returns. We may not be able to continue to fund internal growth and/or acquire complementary businesses without continued access to capital resources.
In addition, any potential debt financing could adversely affect our financial condition and increase our exposure to interest rate changes, while any potential equity financing would dilute our current shareholders and may result in a decrease in our share price if we are unable to realize adequate returns.
Severe weather conditions may occur with higher frequency or may be less predictable in the future due to the effects of climate change. Unfavorable growing conditions could reduce both crop size and crop quality. In extreme cases, entire harvests may be lost in some geographic areas.
Unfavorable growing and harvesting conditions could reduce both crop size and crop quality. In extreme cases, entire harvests may be lost in some geographic areas. Adverse weather conditions or natural disasters may adversely affect our supply of raw materials or prevent or impair our ability to ship products as planned.
We are subject to significant food and health regulations We are affected by a wide range of governmental regulations in the U.S., Canada, and Mexico.
Loss of customers as a result of these health concerns or negative publicity could harm our business, financial condition, and results of operations. SUNOPTA INC. 17 December 31, 2022 Form 10-K We are subject to significant food and health laws and regulations We are affected by a wide range of governmental regulations in the U.S., Canada, and Mexico.
If our input costs increase due to any of the above factors, we may not be able to pass along the increased costs to our customers, which could have a material adverse effect on our business, financial condition and results of operations.
If we are unable to anticipate or respond to all implications of the COVID-19 pandemic, i ncluding any of the above factors and others that are currently unknown, it could have a material adverse effect on our business, financial condition and results of operations .
As a result, we cannot reasonably estimate the impact of the COVID-19 pandemic on our business and financial results, but the impact could be material and last for an extended period.
A pandemic, including COVID-19, could have an adverse impact on our business, financial condition, and results of operations The severity, magnitude and duration of the current COVID-19 pandemic continues to be uncertain and rapidly changing as a result of new variants and vaccines.
Existing products or products under development by our competitors could prove to be more effective or less costly than our products, which could have a material adverse effect on the competitiveness of our products and our business.
If our competitors introduce products that are more appealing to the tastes and dietary habits of consumers or considered to be of higher quality or value than our products, our sales and market share could decline, which may have a material adverse effect on our profitability.
We may not realize some or all of the anticipated benefits of our capital investment plans in the anticipated time frame or at all We depend on our ability to evolve and grow, and as changes in our business environments occur, we may adjust our strategic business plans, from time to time, to meet these changes.
We may not realize some or all of the anticipated benefits of our capital investment plans in the anticipated time frame or at all We are currently undergoing the largest capital expansion in our company's history, including the construction of our new plant-based beverage facility in Midlothian, Texas.
Impairment charges related to long-lived assets or goodwill could adversely impact our financial condition and results of operations A significant portion of our total assets is comprised of property, plant and equipment and intangible assets. In addition, prior to fiscal 2019, we recognized accumulated impairment losses of $213.8 million related to goodwill that arose from business acquisitions.
SUNOPTA INC. 12 December 31, 2022 Form 10-K Impairment charges related to long-lived assets or goodwill could adversely impact our financial condition and results of operations As at December 31, 2022, we had $321.4 million of property, plant and equipment, $135.6 million of intangible assets, and $82.6 million of operating lease right-of-use assets, as well as $4.0 million of goodwill.
We may not be successful in counteracting or smoothing out the effects of seasonality, and we expect that certain parts of our operations will continue to remain subject to significant supply seasonality. Part of our supply source also depends in part on a seasonal, temporary workforce comprised primarily of migrant workers.
Part of our supply chain depends in part on a seasonal, temporary workforce comprised primarily of migrant workers.
In addition, if we fail to maintain our labor force at one or more of our facilities, we could experience delays in production or delivery of our products, which could have a material adverse effect on our business, financial condition and results of operations.
An overall labor shortage, lack of skilled labor, increased turnover, labor inflation, and changes in applicable employment laws and regulations, could lead to increased labor costs and/or reduced operating efficiencies, which could have a material adverse impact on our business, financial condition, and results of operations.
Removed
During 2021, we began to experience more incidents of supply chain disruptions that we believe are related to the continuing impact of COVID-19 pandemic, including reduced labor productivity due to higher-than-normal labor turnover and increased health related absenteeism, and raw material and packaging supply and transportation challenges that impacted the efficiency of our operations and our ability to fulfill customer orders for our products.
Added
Risks Related to Our Company, Business and Operations Deterioration of global economic conditions, an economic recession, periods of inflation, or economic uncertainty in our key markets may adversely affect customer and consumer spending, as well as demand for our products Global economic conditions can be uncertain and volatile.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following table lists the location, description, ownership and operating segment of our production facilities and corporate headquarters: Location Facility Description Owned/Leased Lease End Date Plant-Based Foods and Beverages Alexandria, Minnesota Aseptic beverage processing Owned Alexandria, Minnesota Ingredient processing Owned Allentown, Pennsylvania Aseptic beverage processing Leased April 2027 (1) Modesto, California Aseptic beverage processing Leased May 2024 (1) Breckenridge, Minnesota Sunflower processing Owned Crookston, Minnesota Sunflower processing and roasting operations Owned Grace City, North Dakota Sunflower processing Owned Fruit-Based Foods and Beverages Omak, Washington Fruit snack processing Leased May 2027 St.
Biggest changeProperties The following table lists the location, description, ownership and operating segment of our production facilities and corporate headquarters: Location Facility Description Owned/Leased Noncancellable Lease Term End Date Plant-Based Foods and Beverages Alexandria, Minnesota Aseptic beverage processing Owned Alexandria, Minnesota Ingredient processing Owned Allentown, Pennsylvania Aseptic beverage processing Leased April 2027 (1) Midlothian, Texas Aseptic beverage processing Leased September 2037 (2) Modesto, California Aseptic beverage and ingredient processing Leased May 2024 (1) Fruit-Based Foods and Beverages Omak, Washington Fruit snack processing Leased May 2027 St.
David's, Ontario Fruit snack processing Leased December 2026 (2) Edwardsville, Kansas Frozen fruit processing Owned Oxnard, California Frozen fruit processing Owned Oxnard, California Frozen fruit processing Leased December 2029 Jacona, Mexico Frozen fruit processing Owned Corporate Services Eden Prairie, Minnesota Executive office, innovation center and pilot plant Leased December 2033 (1) (1) Lease includes two five-year renewal options.
David's, Ontario Fruit snack processing Leased December 2026 (3) Edwardsville, Kansas Frozen fruit processing Owned Oxnard, California Frozen fruit processing Leased December 2029 Jacona, Mexico Frozen fruit processing Owned Corporate Services Eden Prairie, Minnesota Executive office, innovation center, and pilot plant Leased December 2033 (1) (1) Lease includes two five-year renewal options. (2) Lease includes three five-year renewal options.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following graph compares the five-year cumulative shareholder return on our common shares to the cumulative total return of the S&P/TSX Composite and the NASDAQ Industrial Indices for the period which commenced January 1, 2017. 2016 2017 2018 2019 2020 2021 SunOpta Inc. 100.00 109.93 54.47 35.32 165.53 98.58 Nasdaq Industrial Index 100.00 124.05 120.54 154.02 233.91 254.52 S&P/TSX Composite Index 100.00 106.03 93.03 112.30 114.04 138.82 Assumes that $100.00 was invested in our common shares and in each index on January 1, 2017.
Biggest changeThe following graph compares the five-year cumulative shareholder return on our common shares to the cumulative total return of the S&P/TSX Composite and the NASDAQ Industrial Indices for the period which commenced December 31, 2017. 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 SunOpta Inc. 100.00 49.55 32.13 150.58 89.68 108.90 Nasdaq Industrial Index 100.00 97.17 124.15 188.55 205.17 133.25 S&P/TSX Composite Index 100.00 87.74 105.92 107.55 130.93 119.59 Assumes that $100.00 was invested in our common shares and in each index on December 31, 2017.
(2) Represents common shares of the Company issuable in respect of 1,222,243 stock options, 309,236 RSUs and 710,784 PSUs granted to the Chief Executive Officer and Chief Financial Officer of the Company (3) Vested RSUs and PSUs entitle the holder to receive one common share per unit without payment of additional consideration.
(2) Represents common shares of the Company issuable in respect of 1,222,243 stock options, 19,393 RSUs and 710,784 PSUs granted to the Chief Executive Officer and Chief Financial Officer of the Company (3) Vested RSUs and PSUs entitle the holder to receive one common share per unit without payment of additional consideration.
SUNOPTA INC. 22 January 1, 2022 Form 10-K Shareholder Return Performance Graph This performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or incorporated by reference into any filing of SunOpta under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
SUNOPTA INC. 24 December 31, 2022 Form 10-K Shareholder Return Performance Graph This performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or incorporated by reference into any filing of SunOpta under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common shares trade in U.S. dollars on The NASDAQ Global Select Market under the symbol "STKL," and in Canadian dollars on the TSX under the symbol "SOY." As at January 1, 2022, we had approximately 340 shareholders of record.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common shares are listed in U.S. dollars on The Nasdaq Stock Market LLC under the symbol "STKL," and in Canadian dollars on the Toronto Stock Exchange ("TSX") under the symbol "SOY." As at December 31, 2022, we had approximately 334 shareholders of record.
Equity Compensation Plan Information The following table provides information as at January 1, 2022, with respect to our common shares that may be issued under the Company's stock incentive and employee share purchase plans: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (a) (b) (c) Equity compensation plans approved by securities holders: 2013 Stock Incentive Plan 2,306,906 (1) $7.75 (3) 4,373,448 Employee Stock Purchase Plan - 634,082 Equity compensation plans not approved by securities holders: CEO Plan 2,242,263 (2) $3.15 (3) - Total 4,549,169 $5.29 (3) 5,007,530 (1) Represents common shares of the Company issuable in respect of 1,059,378 stock options, 506,011 restricted stock units ("RSUs") and 741,517 performance share units ("PSUs") granted to selected employees and directors of the Company.
Equity Compensation Plan Information The following table provides information as at December 31, 2022, with respect to our common shares that may be issued under the Company's stock incentive and employee share purchase plans: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (a) (b) (c) Equity compensation plans approved by securities holders: 2013 Stock Incentive Plan 5,578,133 (1) $6.58 (3) 114,398 Employee Stock Purchase Plan - 546,232 Equity compensation plans not approved by securities holders: CEO and CFO Plan 1,952,420 (2) $3.15 (3) - Total 7,530,553 $5.51 (3) 660,630 (1) Represents common shares of the Company issuable in respect of 2,698,357 stock options, 640,256 restricted stock units ("RSUs") and 2,239,520 performance share units ("PSUs") granted to selected employees and directors of the Company.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe table below explains the increase in operating loss: SUNOPTA INC. 40 January 1, 2022 Form 10-K Corporate Services Operating Loss Changes Operating loss for the year ended December 28, 2019 $(26,471) Increased stock-based compensation costs related to short-term and long-term incentive plans for certain employees (2,099) Higher incentive compensation, based on performance, and increased employee benefit costs, together with higher professional fees, partially offset by the impact of headcount reductions and lower employee retention and travel costs, together with realized and unrealized mark-to-market gains on Mexican peso hedging activities (1,424) Decrease in corporate cost allocations to SunOpta operating segments, as a result of lower corporate headcount and overhead costs (1,157) Operating loss for the year ended January 2, 2021 $(31,151) Liquidity and Capital Resources On December 31, 2020, we entered into a five-year credit agreement, as amended, for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $250 million, subject to borrowing base capacity.
Biggest changeSUNOPTA INC. 46 December 31, 2022 Form 10-K On December 31, 2020, we entered into a five-year credit agreement, as amended, for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $250 million, subject to borrowing base capacity.
The following table presents a reconciliation of adjusted earnings/loss from loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
The following table presents a reconciliation of adjusted earnings from loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
GAAP and non-GAAP measures, such as revenues, gross profit, segment operating income/loss, earnings and adjusted earnings/loss to measure our operating performance. Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP and should not be considered as an alternative to our results of operations or cash flows from operations determined in accordance with U.S.
GAAP and non-GAAP measures, such as revenues, gross profit, segment operating income (loss), net earnings (loss), and adjusted earnings (loss) to measure our operating performance. Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP and should not be considered as an alternative to our results of operations or cash flows from operations determined in accordance with U.S.
The composition of our operating segments is as follows: Plant-Based Foods and Beverages - We offer a full line of plant-based beverages and liquid and powder ingredients (utilizing oat, almond, rice, soy, coconut, hemp, and other bases), as well as broths, teas, and nutritional beverages.
The composition of our operating and reportable segments is as follows: Plant-Based Foods and Beverages - We offer a full line of plant-based beverages and liquid and powder ingredients, utilizing oat, almond, soy, coconut, rice, hemp, and other bases, as well as broths, teas, and nutritional beverages.
Adjusted EBITDA for the year ended January 1, 2022 was $60.7 million, compared with $58.7 million for the year ended January 2, 2021. Adjusted earnings/loss and adjusted EBITDA are non-GAAP financial measures.
Adjusted EBITDA for the year ended January 1, 2022 was $60.6 million, compared with $58.7 million for the year ended January 2, 2021. Adjusted earnings (loss) and adjusted EBITDA are non-GAAP financial measures.
The 120-basis point decrease in the gross profit percentage reflected the impacts to our frozen fruit operations of higher strawberry commodity prices and a higher cost of fruit inventory from Mexico due to the impact of a strengthening Mexican peso (approximately $4.6 million or 1.0% gross margin impact), together with higher fruit inventory losses due to excess spoilage during handling, and increased transportation costs.
The 120-basis point decrease in gross margin reflected the impacts to our frozen fruit operations of higher strawberry commodity prices and a higher cost of fruit inventory from Mexico due to the impact of a strengthening Mexican peso (approximately $4.6 million or 1.0% gross margin impact), together with higher fruit inventory losses due to excess spoilage during handling, and increased transportation costs.
Our evaluation is based on an assessment of potential indicators of impairment, such as an adverse change in the business climate that could affect the value of an asset, the loss of a significant customer, current or forecasted operating or cash flow losses that demonstrate continuing losses associated with the use of an asset, the introduction of a competing product that results in a significant loss of market share, and a current expectation that, more likely than not, an intangible asset will be disposed of before the end of its previously estimated useful life, such as a plan to exit a product line or business in the near term.
Our evaluation is based on an assessment of potential indicators of impairment, such as an adverse change in the business climate that could affect the value of an asset, the loss of a significant customer, current or forecasted operating or cash flow losses that demonstrate continuing losses associated with the use of an asset, the introduction of a competing product that results in a significant loss of market share, and a current expectation that, more likely than not, a long-lived asset will be disposed of before the end of its previously estimated useful life, such as a plan to exit a product line or business in the near term.
Note 19 of the consolidated financial statements at Item 15 of this Form 10-K provides an analysis of the changes in the valuation allowance and the components of our deferred tax assets. While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could differ from our accrued position.
Note 16 of the consolidated financial statements at Item 15 of this Form 10-K provides an analysis of the changes in the valuation allowance and the components of our deferred tax assets. While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could differ from our accrued position.
GAAP, and our calculation of adjusted EBITDA may not be comparable to the calculation of a similarly titled measure reported by other companies. (4) In order to evaluate our results of operations, we use certain non-GAAP measures that we believe enhance an investor's ability to derive meaningful period-over-period comparisons and trends from our results of operations.
GAAP, and our calculation of adjusted EBITDA may not be comparable to the calculation of a similarly titled measure reported by other companies. (5) In order to evaluate our results of operations, we use certain non-GAAP measures that we believe enhance an investor's ability to derive meaningful period-over-period comparisons and trends from our results of operations.
These items are identified above under footnote (2), and in the discussion of our results of operations below. These non-GAAP measures are presented solely to allow investors to more fully assess our results of operations and should not be considered in isolation of, or as substitutes for an analysis of our results as reported under U.S. GAAP.
These items are identified above under footnote (3), and in the discussion of our results of operations below. These non-GAAP measures are presented solely to allow investors to more fully assess our results of operations and should not be considered in isolation of, or as substitutes for an analysis of our results as reported under U.S. GAAP.
Fruit-Based Foods and Beverages - We offer individually quick frozen ("IQF") fruit for retail (including strawberries, blueberries, mango, pineapple, and other berries and blends), IQF and bulk frozen fruit for foodservice (including toppings, purées, and smoothies). In addition, we offer fruit snacks, including bars, twists, ropes, and bite-sized varieties, as well as recently introduced fruit-based smoothie bowls.
Fruit-Based Foods and Beverages - We offer individually quick frozen ("IQF") fruit for retail, including strawberries, blueberries, mango, pineapple, and other berries and blends, and IQF and bulk frozen fruit for foodservice, including toppings, purées, and smoothies. In addition, we offer fruit snacks, including bars, twists, ropes, and bite-sized varieties, as well as fruit smoothie bowls.
We believe the assumptions we apply in our projections are reasonable in light of the historical performance of the frozen fruit operations and appropriately reflect our current plans and expectations for the business, including the expected benefits from pricing actions and cost savings measures that we have implemented to improve the gross margin performance of the business.
We believe the assumptions we apply in our projections are reasonable in light of the historical performance of the frozen fruit operations and appropriately reflect our current plans and expectations for the business, including the expected benefits from pricing actions and cost savings measures that we have taken to improve the gross margin performance of the business.
The table below explains the decrease in gross profit: Fruit-Based Foods and Beverages Gross Profit Changes Gross profit for the year ended January 2, 2021 $28,580 Lower sales volumes of retail frozen fruit, together with higher strawberry commodity prices, a higher cost of fruit inventory from Mexico due to the impact of a strengthening Mexican peso, inventory losses, and increased transportation costs, partially offset by the effects of pass-through customer pricing actions and portfolio rationalizations for frozen fruit and fruit ingredients, together with lower manufacturing costs and productivity improvements in our frozen fruit operations (8,452) Sales volume growth for fruit snacks, partially offset by higher raw material and transportation costs, together with incremental start-up costs for smoothie bowls 1,621 Gross profit for the year ended January 1, 2022 $21,749 SUNOPTA INC. 33 January 1, 2022 Form 10-K Operating loss in Fruit-Based Foods and Beverages increased by $2.0 million to $9.3 million for the year ended January 1, 2022, compared to $7.3 million for the year ended January 2, 2021.
The table below explains the decrease in gross profit: Fruit-Based Foods and Beverages Gross Profit Changes Gross profit for the year ended January 2, 2021 $28,580 Lower sales volumes of retail frozen fruit, together with higher strawberry commodity prices, a higher cost of fruit inventory from Mexico due to the impact of a strengthening Mexican peso, inventory losses, and increased transportation costs, partially offset by the effects of pass-through pricing actions and portfolio rationalizations for frozen fruit and fruit ingredients, together with lower manufacturing costs and productivity improvements in our frozen fruit operations (8,452) Sales volume growth for fruit snacks, partially offset by higher raw material and transportation costs, together with incremental start-up costs for smoothie bowls 1,621 Gross profit for the year ended January 1, 2022 $21,749 SUNOPTA INC. 45 December 31, 2022 Form 10-K Operating loss in Fruit-Based Foods and Beverages increased by $2.0 million to $9.3 million for the year ended January 1, 2022, compared to $7.3 million for the year ended January 2, 2021.
These factors were partially offset by the effects of pass-through sales pricing actions in the second half of 2021 and portfolio rationalizations for frozen fruit, together with manufacturing cost structure savings and productivity improvements in our frozen fruit operations.
These factors were partially offset by the effects of pass-through sales pricing actions in 2021 and portfolio rationalizations for frozen fruit, together with manufacturing cost structure savings and productivity improvements in our frozen fruit operations.
The 320-basis point decrease in the gross profit percentage reflected the impact of lower plant utilization and manufacturing inefficiencies in our plant-based beverage and ingredient operations, due to reduced labor productivity and logistical challenges, together with increased manufacturing plant spend, including inflationary increases in transportation and utility rates, and wage incentives paid to retain employees, as well as increased depreciation expense related to new production equipment ($4.3 million or 0.9% gross margin impact).
The 330-basis point decrease in gross margin reflected the impact of lower plant utilization and manufacturing inefficiencies in our plant-based beverage and ingredient operations, due to reduced labor productivity and logistical challenges, together with increased manufacturing plant spend, including inflationary increases in transportation and utility rates, and wage incentives paid to retain employees, as well as increased depreciation expense related to new production equipment ($4.3 million or 0.9% gross margin impact).
For 2020, reflects the write-down of owned and right-of-use assets related to the consolidation of roasting lines at our Crookston, Minnesota, facility, which was recorded in other expense.
For 2020, reflects the write-down of owned and right-of-use assets related to the consolidation of roasting lines at our former sunflower facility in Crookston, Minnesota, which was recorded in other expense.
Excluding the impact of incremental revenues from changes in commodity-related pricing (an increase in revenues of $14.8 million) and the acquisition of the Dream and WestSoy brands (an increase in revenues of $13.4 million), partially offset by the impact of the 53rd week of sales in fiscal 2020 (a decrease in revenues of $6.2 million), revenues increased by 0.2% in 2021, compared with 2020.
Excluding the impact of incremental revenues from changes in commodity-related pricing (an increase in revenues of $14.8 million) and the acquisition of the Dream and West Life brands (an increase in revenues of $13.4 million), partially offset by the impact of the 53rd week of sales in fiscal 2020 (a decrease in revenues of $6.2 million), revenues increased by 0.2% in 2021, compared with 2020.
The $2.2 million decrease in total segment operating income mainly reflected lower gross profit, as described above, together with a $2.8 million year-over-year unfavorable foreign exchange impact related to the remeasurement of our Mexican operations into U.S. dollars and lower gains on Mexican peso hedging activities, and $1.0 million of incremental amortization expense related to the acquired Dream and WestSoy brand name intangible assets, partially offset by a $12.6 million decrease in SG&A expenses.
The $2.2 million decrease in total segment operating income mainly reflected lower gross profit, as described above, together with a $2.8 million year-over-year unfavorable foreign exchange impact related to the remeasurement of our Mexican operations into U.S. dollars and lower gains on Mexican peso hedging activities, and $1.0 million of incremental amortization expense related to the acquired Dream and West Life brand name intangible assets, partially offset by a $12.9 million decrease in SG&A expenses.
The table below explains the decrease in reported revenues: Fruit-Based Foods and Beverages Revenue Changes Revenues for the year ended January 2, 2021 $374,049 Lower retail volumes of frozen fruit due to the rationalization of marginally profitable customers and products, including custom fruit preparations for industrial use, and the impact of supply constraints for certain fruit varieties on blended frozen fruit offerings, partially offset by the effect of pass-through customer pricing actions taken in the second half of 2021 for frozen fruit, and increased foodservice demand for fruit-based ingredients (58,219) Higher sales volumes of fruit snacks products, driven by returning consumer demand for portable snacks and new business development 13,795 Increased commodity pricing for raw fruit 12,245 Revenues for the year ended January 1, 2022 $341,870 Gross profit in Fruit-Based Foods and Beverages decreased by $6.8 million to $21.7 million for the year ended January 1, 2022, compared to $28.6 million for the year ended January 2, 2021, and the gross profit percentage decreased by 120 basis points to 6.4%.
The table below explains the decrease in reported revenues: Fruit-Based Foods and Beverages Revenue Changes Revenues for the year ended January 2, 2021 $374,049 Lower retail volumes of frozen fruit due to the rationalization of marginally profitable customers and products, including custom fruit preparations for industrial use, and the impact of supply constraints for certain fruit varieties on blended frozen fruit offerings, partially offset by the effect of pass-through pricing actions taken in 2021 for frozen fruit, and increased foodservice demand for fruit-based ingredients (58,219) Higher sales volumes of fruit snacks products, driven by returning consumer demand for portable snacks and new business development 13,795 Increased commodity pricing for raw fruit 12,245 Revenues for the year ended January 1, 2022 $341,870 Gross profit in Fruit-Based Foods and Beverages decreased by $6.8 million to $21.7 million for the year ended January 1, 2022, compared to $28.6 million for the year ended January 2, 2021.
The table below explains the increase in reported revenues: Plant-Based Foods and Beverages Revenue Changes Revenues for the year ended January 2, 2021 $415,164 Growth in sales of oat-based product offerings and teas, together with increased foodservice demand for plant-based beverages due to the easing of COVID-19 restrictions, partially offset by softer volumes for certain other non-dairy beverage varieties and everyday broths 33,752 Incremental Dream and WestSoy revenues 13,362 Higher sales of birdfeed and raw sunflower kernel, partially offset by lower volumes of ready-to-eat snacks and roasted ingredients 5,888 Increased commodity pricing for sunflower 2,588 Revenues for the year ended January 1, 2022 $470,754 Gross profit in Plant-Based Foods and Beverages decreased by $4.2 million to $76.3 million for the year ended January 1, 2022, compared to $80.5 million for the year ended January 2, 2021, and the gross profit percentage decreased by 320 basis points to 16.2%.
The table below explains the increase in reported revenues: Plant-Based Foods and Beverages Revenue Changes Revenues for the year ended January 2, 2021 $415,164 Growth in sales of oat-based product offerings and teas, together with increased foodservice demand for plant-based beverages due to the easing of COVID-19 restrictions, partially offset by softer volumes for certain other non-dairy beverage varieties and everyday broths 33,752 Incremental Dream and West Life revenues 13,362 Higher sales of birdfeed and raw sunflower kernel, partially offset by lower volumes of ready-to-eat snacks and roasted ingredients 5,888 Increased commodity pricing for sunflower 2,588 Revenues for the year ended January 1, 2022 $470,754 Gross profit in Plant-Based Foods and Beverages decreased by $4.2 million to $76.3 million for the year ended January 1, 2022, compared to $80.5 million for the year ended January 2, 2021.
(b) For 2021, reflects closure costs related to the exit from our fruit ingredient processing facility, including long-lived asset impairment charges ($3.0 million), equipment relocation costs ($0.8 million) and employee termination costs ($1.1 million) recorded in other expense, and inventory write-offs of $0.6 million recorded in cost of goods sold.
(b) For 2021, reflects closure costs related to the exit from our former South Gate, California, fruit ingredient processing facility, including long-lived asset impairment charges ($3.0 million), equipment relocation costs ($0.8 million) and employee termination costs ($1.1 million) recorded in other expense, and inventory write-offs of $0.6 million recorded in cost of goods sold.
However, adjusted earnings/loss is not, and should not be viewed as, a substitute for earnings prepared under U.S. GAAP. Adjusted earnings/loss is presented solely to allow investors to more fully understand how we assess our financial performance.
However, adjusted earnings is not, and should not be viewed as, a substitute for loss from continuing operations prepared under U.S. GAAP. Adjusted earnings is presented solely to allow investors to more fully understand how we assess our financial performance.
We recognized an income tax benefit of $3.4 million for the year ended January 1, 2022, compared with a benefit of $2.7 million for the year ended January 2, 2021.
We recognized an income tax benefit of $6.4 million for the year ended January 1, 2022, compared with a benefit of $7.7 million for the year ended January 2, 2021.
GAAP financial measure (refer to footnote (2) to the "Consolidated Results of Operations for Fiscal Years 2021 and 2020" table regarding the use of this non-GAAP measure).
GAAP financial measure (refer to footnote (2) to the "Consolidated Results of Operations for Fiscal Years 2022 and 2021" table regarding the use of this non-GAAP measure).
We update our annual assessment each interim reporting period based on an analysis of business performance and other qualitative factors arising in each period. Our annual assessment as of January 1, 2022, indicated that the aggregate carrying value of the frozen fruit long-lived assets was recoverable.
We update our annual assessment each interim reporting period based on an analysis of business performance and other qualitative factors arising in each period. Our annual assessment as of December 31, 2022, indicated that the aggregate carrying value of the frozen fruit long-lived assets was recoverable.
The SG&A savings primarily reflected lower incentive compensation, based on financial performance, together with reduced reserves for credit losses due to improving economic conditions within the foodservice sector and lower employee compensation costs related to headcount reductions in our frozen fruit operations, partially offset by $4.9 million of incremental costs related to business development activities, including the transition and integration of the recently acquired Dream and WestSoy brands and project costs related to our new plant-based beverage facility under construction in Texas.
The SG&A savings primarily reflected lower incentive compensation, based on financial performance, together with reduced reserves for credit losses due to improving economic conditions within the foodservice sector and lower employee compensation costs related to headcount reductions in our frozen fruit operations, partially offset by $4.9 million of incremental costs related to business development activities, including the transition and integration of the acquired Dream and West Life brands and project costs related to our new plant-based beverage facility in Midlothian, Texas.
The increase in plant-based product revenues reflected strong sales growth for our oat-based product offerings and teas, and incremental revenues from the acquisition of the Dream and WestSoy brands, together with increased foodservice demand for plant-based beverages due to the easing of COVID-19 restrictions, and higher sales of birdfeed and raw sunflower kernels, partially offset by softer volumes for certain other non-dairy beverage varieties and everyday broths.
The increase in plant-based product revenues reflected strong sales growth for our oat-based product offerings and teas, and incremental revenues from the acquisition of the Dream and West Life brands, together with increased foodservice demand for plant-based beverages due to the easing of COVID-19 restrictions, and higher sales of sunflower, partially offset by softer volumes for certain other non-dairy beverage varieties and everyday broths.
We also use this measure to assess operating performance in connection with our employee incentive programs. We define adjusted EBITDA as segment operating income/loss plus depreciation, amortization, and non-cash stock-based compensation, and excluding other unusual items as identified in the determination of adjusted earnings/loss (refer above to footnote (2)).
We also use this measure to assess operating performance in connection with our employee incentive programs. We define adjusted EBITDA as segment operating income plus depreciation, amortization, and stock-based compensation, and excluding other unusual items as identified in the determination of adjusted earnings (refer above to footnote (3)).
Diluted loss per share from continuing operations attributable to common shareholders (after dividends and accretion on preferred stock) was $0.08 for the year ended January 1, 2022, compared with a loss per share $0.65 for the year ended January 2, 2021.
Diluted loss per share from continuing operations attributable to common shareholders (after dividends and accretion on preferred stock) was $0.05 for the year ended January 1, 2022, compared with a diluted loss per share $0.59 for the year ended January 2, 2021.
Adjusted loss and adjusted EBITDA are non-GAAP financial measures. See footnotes (3) and (4) to the table above for a reconciliation of adjusted loss and adjusted EBITDA from loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
See footnotes (3) and (4) to the table above for a reconciliation of adjusted earnings and adjusted EBITDA from loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
For fiscal 2022, the estimated amount of interest payments we expect to make on borrowings under our asset-based credit facilities, together with commitment fees on the expected undrawn portion of these facilities, is approximately $6 million.
For fiscal 2023, the estimated amount of interest payments we expect to make on borrowings under our asset-based credit facilities, together with commitment fees on the expected undrawn portion of these facilities, is approximately $15 million.
We consider this history of operating losses to be an indicator that the carrying amount of the long-lived assets of the frozen fruit operations may not be recoverable.
We consider this history of fluctuating operating profitability to be an indicator that the carrying amount of the long-lived assets of the frozen fruit operations may not be recoverable.
Impairment exists when the carrying amount of an amortizable intangible asset is not recoverable through undiscounted future cash flows and its carrying value exceeds its estimated fair value. A discounted cash flow analysis is typically used to determine fair value using estimates and assumptions that market participants would apply.
Impairment exists when the carrying amount of a long-lived asset is not recoverable through undiscounted future cash flows and its carrying value exceeds its estimated fair value. A discounted cash flow analysis is typically used to determine fair value using estimates and assumptions that market participants would apply.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Financial Information This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") section provides analysis of our operations and financial position for the fiscal year ended January 1, 2022 and includes information available to March 2, 2022, unless otherwise indicated herein.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Financial Information This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") section provides analysis of our operations and financial position for the fiscal year ended December 31, 2022 and includes information available to March 1, 2023, unless otherwise indicated herein.
Some of these limitations are: adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; SUNOPTA INC. 28 January 1, 2022 Form 10-K adjusted EBITDA does not include the payment/recovery of taxes, which is a necessary element of our operations; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements; and adjusted EBITDA does not include non-cash stock-based compensation, which is an important component of our total compensation program for employees and directors.
Some of these limitations are: adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness; adjusted EBITDA does not include the payment/recovery of taxes, which is a necessary element of our operations; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements; and adjusted EBITDA does not include non-cash stock-based compensation, which is an important component of our total compensation program for employees and directors.
On April 15, 2021, we financed a portion of the purchase price of the Dream and WestSoy brands with a $20 million FILO term loan.
On April 15, 2021, we financed a portion of the purchase price of the Dream and West Life brands with a $20 million FILO term loan.
Loss from continuing operations for the year ended January 1, 2022 was $4.1 million, compared with a loss of $47.3 million for the year ended January 2, 2021.
Loss from continuing operations for the year ended January 1, 2022 was $1.2 million, compared with a loss of $42.4 million for the year ended January 2, 2021.
Segmented Operations Information Plant-Based Foods and Beverages January 1, 2022 January 2, 2021 Change % Change Revenues $ 470,754 $ 415,164 $ 55,590 13.4% Gross profit 76,336 80,497 (4,161 ) -5.2% Gross profit % 16.2% 19.4% -3.2% Operating income $ 36,981 $ 50,780 $ (13,799 ) -27.2% Operating income % 7.9% 12.2% -4.3% Plant-Based Foods and Beverages contributed $470.8 million in revenues for the year ended January 1, 2022, compared to $415.2 million for the year ended January 2, 2021, an increase of $55.6 million, or 13.4%.
Segmented Operations Information Plant-Based Foods and Beverages January 1, 2022 January 2, 2021 Change % Change Revenues $ 470,754 $ 415,164 $ 55,590 13.4% Gross profit 76,336 80,497 (4,161 ) -5.2% Gross margin 16.2% 19.4% -3.2% Operating income $ 36,981 $ 50,780 $ (13,799 ) -27.2% Operating margin 7.9% 12.2% -4.3% SUNOPTA INC. 43 December 31, 2022 Form 10-K Plant-Based Foods and Beverages contributed $470.8 million in revenues for the year ended January 1, 2022, compared to $415.2 million for the year ended January 2, 2021, an increase of $55.6 million, or 13.4%.
The table below explains the decrease in gross profit: SUNOPTA INC. 31 January 1, 2022 Form 10-K Plant-Based Foods and Beverages Gross Profit Changes Gross profit for the year ended January 2, 2021 $80,497 Impact of lower plant utilization and manufacturing inefficiencies in our plant-based beverage and ingredient operations, due to reduced labor productivity and logistical challenges, together with increased manufacturing plant spend, including inflationary increases in transportation and utility rates, and wage incentives paid to retain employees, as well as increased depreciation expense related to new production equipment, partially offset by higher sales volumes of plant-based beverages and ingredients, including the incremental contribution from the Dream and WestSoy brands, and lower start-up costs related to capital expansion projects (7,930) Increased volumes and pricing for birdfeed and raw sunflower kernel, together with improved plant utilization and cost reductions within our sunflower and roasting operations 3,769 Gross profit for the year ended January 1, 2022 $76,336 Operating income in Plant-Based Foods and Beverages decreased by $13.8 million to $37.0 million for the year ended January 1, 2022, compared to $50.8 million for the year ended January 2, 2021.
The table below explains the decrease in gross profit: Plant-Based Foods and Beverages Gross Profit Changes Gross profit for the year ended January 2, 2021 $80,497 Impact of lower plant utilization and manufacturing inefficiencies in our plant-based beverage and ingredient operations, due to reduced labor productivity and logistical challenges, together with increased manufacturing plant spend, including inflationary increases in transportation and utility rates, and wage incentives paid to retain employees, as well as increased depreciation expense related to new production equipment, partially offset by higher sales volumes of plant-based beverages and ingredients, including the incremental contribution from the Dream and West Life brands, and lower start-up costs related to capital expansion projects (8,295) Increased volumes and pricing for birdfeed and raw sunflower kernel, together with improved plant utilization and cost reductions within our sunflower and roasting operations 3,769 Gross profit for the year ended January 1, 2022 $75,971 Operating income in Plant-Based Foods and Beverages decreased by $13.8 million to $37.0 million for the year ended January 1, 2022, compared to $50.8 million for the year ended January 2, 2021.
January 1, 2022 January 2, 2021 For the years ended $ $ Loss from continuing operations (4,144 ) (47,302 ) Income tax benefit (3,366 ) (2,740 ) Loss on retirement of debt (a) - 8,915 Interest expense, net 8,769 30,042 Other expense, net 8,890 23,393 Total segment operating income 10,149 12,308 Depreciation and amortization 34,641 30,308 Stock-based compensation (b) 9,100 12,570 Business development costs (c) 5,506 - Start-up costs (d) 745 1,883 Costs related to exit from fruit ingredient processing facility (e) 572 - Restructuring costs (f) - 1,649 Adjusted EBITDA 60,713 58,718 (a) For 2020, reflects the premium paid ($5.3 million) and write-off of unamortized debt issuance costs ($3.6 million) on the redemption and retirement of our second lien notes, which were recorded in non-operating expenses.
January 1, 2022 January 2, 2021 For the years ended $ $ Loss from continuing operations (1,172 ) (42,392 ) Income tax benefit (6,428 ) (7,650 ) Loss on retirement of debt (a) - 8,915 Interest expense, net 8,769 30,042 Other expense, net 8,890 23,393 Total segment operating income 10,059 12,308 Depreciation and amortization 34,641 30,308 Stock-based compensation (b) 9,100 12,570 Business development costs (c) 5,506 - Start-up costs (d) 745 1,883 Costs related to exit from fruit ingredient processing facility (e) 572 - Restructuring costs (f) - 1,649 Adjusted EBITDA 60,623 58,718 (a) For 2020, reflects the premium paid ($5.3 million) and write-off of unamortized debt issuance costs ($3.6 million) on the redemption and retirement of our second lien notes, which were recorded in non-operating expenses.
Net interest expense decreased by $21.2 million to $8.8 million for the year ended January 1, 2022, compared with $30.0 million for the year ended January 2, 2021, which mainly reflected reduced cash interest payments as a result of a reduction in outstanding debt following the divestiture of Tradin Organic in December 2020, including the redemption in full of the $223.5 million outstanding principal amount of our 9.5% second lien notes.
SUNOPTA INC. 42 December 31, 2022 Form 10-K Net interest expense decreased by $21.2 million to $8.8 million for the year ended January 1, 2022, compared with $30.0 million for the year ended January 2, 2021, which mainly reflected reduced cash interest payments as a result of a reduction in outstanding debt following the divestiture of Tradin Organic in December 2020, including the redemption in full of the $223.5 million outstanding principal amount of our 9.5% senior secured second lien notes.
We believe that our operating cash flows, together with our revolving and term loan credit facilities, and access to lease financing, will be adequate to meet our operating, investing, and financing needs for the foreseeable future including the 12-month period following the issuance of our financial statements.
We believe that our operating cash flows, including the selective use of SCF programs to improve payment terms, together with our revolving and term loan credit facilities, and access to lease financing, will be adequate to meet our operating, investing, and financing needs for the foreseeable future, including the 12-month period following the issuance of our financial statements.
Earnings from the discontinued operations of Tradin Organic were $124.8 million for the year ended January 2, 2021, which included a pre-tax gain on sale of $111.8 million.
Earnings from the discontinued operations of Tradin Organic were $124.8 million (diluted earnings per share of $1.40) for the year ended January 2, 2021, which included a pre-tax gain on sale of $111.8 million.
For more information on the Series A and Series B-1 preferred stock, see note 15 to the consolidated financial statements at Item 15 of this Form 10-K.
For more information on the Series B-1 preferred stock, see notes 12 and 22 to the consolidated financial statements at Item 15 of this Form 10-K.
A change in any of these estimates and assumptions could produce a different fair value, which could have a material impact on our results of operations. In addition, an intangible asset's expected useful life can increase estimation risk, as longer-lived assets necessarily require longer-term cash flow forecasts, which for some of our long-lived assets can be up to 20 years.
A change in any of these estimates and assumptions could produce a different fair value, which could have a material impact on our results of operations. In addition, a long-lived asset's expected useful life can increase estimation risk, as longer-lived assets necessarily require longer-term cash flow forecasts.
January 1, 2022 January 2, 2021 Per Share Per Share For the years ended $ $ $ $ Loss from continuing operations (4,144 ) (47,302 ) Dividends and accretion on preferred stock (4,197 ) (10,328 ) Loss from continuing operations attributable to common shareholders (8,341 ) (0.08 ) (57,630 ) (0.65 ) Adjusted for: Business development costs (a) 6,209 - Costs related to exit from fruit ingredient processing facility (b) 5,504 - Restructuring costs (c) 1,432 9,897 Long-lived asset impairments and facility closure costs (d) 1,063 2,676 Start-up costs (e) 745 1,883 Workforce reduction charges (f) 499 - Loss on foreign currency forward contract (g) - 12,658 Loss on retirement of debt (h) - 8,915 Other (i) 261 (189 ) Net income tax effect (j) (5,827 ) 255 Adjusted earnings (loss) 1,545 0.01 (21,535 ) (0.24 ) (a) Represents third-party costs associated with business development activities, including costs related to the evaluation, execution, and integration of external acquisitions and divestitures, and internal expansion projects and other strategic initiatives.
January 1, 2022 January 2, 2021 Per Share Per Share For the years ended $ $ $ $ Loss from continuing operations (1,172 ) (42,392 ) Dividends and accretion on preferred stock (4,197 ) (10,328 ) Loss from continuing operations attributable to common shareholders (5,369 ) (0.05 ) (52,720 ) (0.59 ) Adjusted for: Business development costs (a) 6,209 - Costs related to exit from fruit ingredient processing facility (b) 5,504 - Restructuring costs (c) 1,432 9,897 Long-lived asset impairments and facility closure costs (d) 1,063 2,676 Start-up costs (e) 745 1,883 Workforce reduction charges (f) 499 - Loss on foreign currency forward contract (g) - 12,658 Loss on retirement of debt (h) - 8,915 Other (i) 261 (189 ) Net income tax effect (j) (5,827 ) 255 Adjusted earnings (loss) 4,517 0.04 (16,625 ) (0.19 ) (a) Represents third-party costs associated with business development activities, including costs related to the evaluation, execution, and integration of external acquisitions and divestitures, and internal expansion projects and other strategic initiatives.
The Series B-1 preferred stock currently has a liquidation preference of approximately $1,015 per share and is exchangeable into shares of our common stock at an exchange price of $2.50 per share.
The Series B-1 preferred stock currently has a liquidation preference of approximately $1,015 per share and is exchangeable into shares of our common stock at an exchange price of $2.50 per share, which presently equates to approximately 12,178,667 common shares.
Because of these limitations, adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing adjusted EBITDA in isolation, and specifically by using other U.S.
SUNOPTA INC. 32 December 31, 2022 Form 10-K Because of these limitations, adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing adjusted EBITDA in isolation, and specifically by using other U.S.
Gross profit for the Plant-Based Foods and Beverages segment decreased $4.2 million to $76.3 million for the year ended January 1, 2022, compared with $80.5 million for the year ended January 2, 2021, and gross profit as a percentage of revenues decreased to 16.2% in 2021 from 19.4% in 2020.
Gross profit for the Plant-Based Foods and Beverages segment decreased $4.5 million to $76.0 million for the year ended January 1, 2022, compared with $80.5 million for the year ended January 2, 2021, and gross margin decreased to 16.1% in 2021 from 19.4% in 2020.
Net cash provided by discontinued operations was $369.9 million for the year ended January 1, 2022, mainly reflected the cash consideration received from the sale of Tradin Organic. Critical Accounting Estimates The preparation of financial statements in conformity with U.S.
Net cash provided by discontinued operations was $369.9 million in 2020, which mainly reflected the cash consideration received from the sale of Tradin Organic. Critical Accounting Estimates The preparation of financial statements in conformity with U.S.
We re-evaluate all contingencies as additional information becomes available; however, given the inherent uncertainties, the ultimate amount paid could differ from our estimates. SUNOPTA INC. 44 January 1, 2022 Form 10-K Income Taxes We are liable for income taxes in the U.S., Canada, and Mexico.
We re-evaluate all contingencies as additional information becomes available; however, given the inherent uncertainties, the ultimate amount paid could differ from our estimates. Income Taxes We are liable for income taxes in Canada, the U.S., and Mexico.
We intend to fund our capital expenditure plans using our term loan facility (as described above) and committed lease financing, together with additional lease financing (as available), our revolving credit facility, and operating cash flows. For information regarding our finance lease and plant acquisition commitments, see note 23 to the consolidated financial statements at Item 15 of this Form 10-K.
We intend to fund our cash capital expenditures using our term loan facility (as described above), our revolving credit facility, and operating cash flows. For information regarding our finance lease and plant acquisition commitments, see note 20 to the consolidated financial statements at Item 15 of this Form 10-K.
(3) We use a measure of adjusted EBITDA when assessing the performance of our operations, which we believe is useful to investors' understanding of our operating profitability because it excludes non-operating expenses, such as interest and income taxes, and non-cash expenses, such as depreciation, amortization, stock-based compensation, and asset impairment charges, as well as other unusual items that affect the comparability of operating performance.
SUNOPTA INC. 31 December 31, 2022 Form 10-K (4) We use a measure of adjusted EBITDA when assessing the performance of our operations, which we believe is useful to investors' understanding of our operating profitability because it excludes non-operating expenses, such as interest and income taxes, and non-cash expenses, such as depreciation, amortization, and stock-based compensation, as well as other unusual items that affect the comparability of operating performance.
(4) The following table presents a reconciliation of segment operating income/loss and adjusted EBITDA from loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
The following table presents a reconciliation of segment operating income/loss to "loss from continuing operations before the following" on the consolidated statements of operations, which we consider to be the most directly comparable U.S. GAAP financial measure.
These contingencies include accrued but unpaid bonuses, tax-related matters, and claims or litigation. In establishing our estimates, we consider historical experience with similar contingencies and the progress of each contingency, as well as the recommendations of internal and external advisors and legal counsel.
Contingencies We make estimates for payments that are contingent on the outcome of uncertain future events. These contingencies include accrued but unpaid bonuses, tax-related matters, and claims or litigation. In establishing our estimates, we consider historical experience with similar contingencies and the progress of each contingency, as well as the recommendations of internal and external advisors and legal counsel.
As at January 1, 2022, we had approximately $134 million of purchase commitments related to inventories to be used in our production processes over the next 12 months, which we intend to fund through operating cash flows, supplemented with seasonal borrowings under our revolving credit facility to finance crop inventory builds.
SUNOPTA INC. 47 December 31, 2022 Form 10-K As at December 31, 2022, we had approximately $124 million of purchase commitments related to inventories to be used in our production processes over the next 12 months, which we intend to fund through operating cash flows, supplemented with seasonal borrowings under our revolving credit facility to finance fruit crop inventory builds.
For 2021, these costs included the transition and integration of the acquired Dream and WestSoy brands, project development activities related to our new plant-based beverage facility under construction in Texas, and the exploration of other potential strategic opportunities, which were recorded in cost of goods sold ($0.6 million) and SG&A expenses ($4.9 million), as well as the assessment of post-closing adjustments related to the divestiture of Tradin Organic, which were recorded in other expense ($0.7 million).
For 2021, these costs included the transition and integration of the acquired Dream and West Life brands, project development activities related to our new plant-based beverage facility in Midlothian, Texas, and costs related to other actions undertaken to optimize non-core assets, which were recorded in cost of goods sold ($0.6 million) and SG&A expenses ($4.9 million), as well as the assessment of post-closing adjustments related to the divestiture of Tradin Organic, which were recorded in other expense ($0.7 million).
For the year ended January 1, 2022, Plant-Based Foods and Beverages segment revenues increased by 13.4% to $470.8 million from $415.2 million for the year ended January 2, 2021.
SUNOPTA INC. 41 December 31, 2022 Form 10-K For the year ended January 1, 2022, Plant-Based Foods and Beverages segment revenues increased by 13.4% to $470.8 million from $415.2 million for the year ended January 2, 2021.
In addition, as described above under "Impact of COVID-19," due to supply chain disruptions experienced in the second half of 2021, we were unable to meet some customer demand for our plant-based products, and transport shortages prevented certain customers from picking up their orders prior to year-end.
In addition, due to supply chain disruptions experienced in 2021, we were unable to meet some customer demand for our plant-based products, and transport shortages prevented certain customers from picking up their orders prior to year-end.
These declines were partially offset by the effect of pass-through customer pricing actions taken during the second half of 2021 for frozen fruit, with the full benefit of these actions expected to be realized in 2022, together with volume growth for fruit snacks and increased foodservice demand for fruit-based ingredients.
These declines were partially offset by the effect of pass-through customer pricing actions taken in 2021 for frozen fruit, together with volume growth for fruit snacks and increased foodservice demand for fruit-based ingredients.
As at January 1, 2022, we had $11.6 million drawn on the term loan facility to partially finance the purchase of equipment for our new plant-based beverage facility under construction in Midlothian, Texas.
As at December 31, 2022, we had $43.7 million (January 1, 2022 - $11.6 million) drawn on the term loan facility to partially finance the purchase of equipment for our new plant-based beverage facility in Midlothian, Texas, as well as certain other equipment purchases.
On a consolidated basis, we realized a loss attributable to common shareholders of $8.3 million (diluted loss per share of $0.08) for the year ended January 1, 2022, compared with earnings attributable to common shareholders of $67.2 million (diluted earnings per share of $0.75) for the year ended January 2, 2021.
On a consolidated basis, we realized a loss attributable to common shareholders of $5.4 million (diluted loss per share of $0.05) for the year ended January 1, 2022, compared with earnings attributable to common shareholders of $72.1 million (diluted earnings per share of $0.81) for the year ended January 2, 2021.
The year-over-year increase in cash provided of $502.7 million, mainly reflected increases in revolver and term loan borrowings under our asset-based credit facilities to finance inventory purchases, capital expenditures, and the acquisition of the Dream and WestSoy brands in 2021, compared to the use of the proceeds from the sale of Tradin Organic to repay approximately $355 million of indebtedness in 2020.
The increase in cash provided mainly reflected increases in revolver and term loan borrowings to finance inventory purchases, capital expenditures, and the acquisition of the Dream and West Life brands in 2021, compared to the use of the proceeds from the sale of Tradin Organic to repay approximately $355 million of indebtedness in 2020.
SUNOPTA INC. 24 January 1, 2022 Form 10-K Fiscal Year We operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to December 31.
Fiscal Year We operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to December 31.
(c) For 2021, third-party business development costs reflected the transition and integration of the acquired Dream and WestSoy brands, project development activities related to our new plant-based beverage facility under construction in Texas, and the exploration of other potential strategic opportunities, which were recorded in cost of goods sold ($0.6 million) and SG&A expenses ($4.9 million).
(c) For 2021, third-party business development costs reflected the transition and integration of the acquired Dream and West Life brands, project development activities related to our new plant-based beverage facility in Midlothian, Texas, and costs related to other actions undertaken to optimize non-core assets, which were recorded in cost of goods sold ($0.6 million) and SG&A expenses ($4.9 million).
Gross profit decreased $11.0 million, or 10.1%, to $98.1 million for the year ended January 1, 2022, compared with $109.1 million for the year ended January 2, 2021. As a percentage of revenues, gross profit for the year ended January 1, 2022 was 12.1% compared to 13.8% for the year ended January 2, 2021, a decrease of 170 basis points.
Consolidated gross profit decreased $11.4 million, or 10.4%, to $97.7 million for the year ended January 1, 2022, compared with $109.1 million for the year ended January 2, 2021. Consolidated gross margin for the year ended January 1, 2022 was 12.0% compared to 13.8% for the year ended January 2, 2021, a decrease of 180 basis points.
Diluted loss per share from continuing operations attributable to common shareholders (after dividends and accretion on preferred stock) was $0.65 for the year ended January 2, 2021, compared with a loss per share $0.24 for the year ended December 28, 2019.
Diluted loss per share from continuing operations attributable to common shareholders (after dividends and accretion on preferred stock) was $0.12 for the year ended December 31, 2022, compared with a diluted loss per share $0.05 for the year ended January 1, 2022.
SUNOPTA INC. 29 January 1, 2022 Form 10-K Gross profit for the Fruit-Based Foods and Beverages segment decreased $6.8 million to $21.7 million for the year ended January 1, 2022, compared with $28.6 million for the year ended January 2, 2021, and gross profit as a percentage of revenues decreased to 6.4% in 2021 from 7.6% in 2020.
Gross profit for the Fruit-Based Foods and Beverages segment decreased $6.8 million to $21.7 million for the year ended January 1, 2022, compared with $28.6 million for the year ended January 2, 2021, and gross margin decreased to 6.4% in 2021 from 7.6% in 2020.
Some of the estimates and assumptions inherent in a discounted cash flow model include the amount and timing of the projected future cash flows, and the discount rate used to reflect the risks inherent in the future cash flows.
Some of the estimates and assumptions inherent in a discounted cash flow model include the amount and timing of the projected future cash flow to be generated from the use of the long-lived asset and its eventual disposal, and the discount rate used to reflect the risks inherent in the future cash flows.
SUNOPTA INC. 27 January 1, 2022 Form 10-K (c) For 2021, represents costs to complete the exit from our Santa Maria, California, frozen fruit processing facility, which were recorded in other expense.
(c) For 2021, represents costs to complete the exit from our former Santa Maria, California, frozen fruit processing facility, which were recorded in other expense.
(d) For 2021 and 2020, reflects start-up costs related to expansion projects within our plant-based beverage and ingredient operations, which were recorded in cost of goods sold. (e) For 2021, reflects inventory write-offs related to the exit from our fruit ingredient processing facility, which were recorded in cost of goods sold.
(d) For 2021 and 2020, reflects start-up costs related to expansion projects within our plant-based beverage and ingredient operations, as well as the introduction of fruit smoothie bowls in 2021, which were recorded in cost of goods sold.
Fiscal year 2021 was a 52-week period ending on January 1, 2022, fiscal year 2020 was a 53-week period ending on January 2, 2021, and fiscal year 2019 was a 52-week period ending on December 28, 2019.
Fiscal years 2022 and 2021 were each 52-week periods ending on December 31, 2022 and January 1, 2022, respectively, and fiscal year 2020 was a 53-week period ending on January 2, 2021.
(h) For 2020, reflects the premium paid ($5.3 million) and write-off of unamortized debt issuance costs ($3.6 million) on the redemption and retirement of our second lien notes, which were recorded in non-operating expenses.
SUNOPTA INC. 40 December 31, 2022 Form 10-K (h) For 2020, reflects the premium paid ($5.3 million) and write-off of unamortized debt issuance costs ($3.6 million) on the redemption and retirement of the $223.5 million principal amount of our 9.5% senior secured second lien notes, which were recorded in non-operating expenses.
Other expense of $23.4 million for the year ended January 2, 2021, mainly reflected a loss on the foreign currency economic hedge of the cash consideration from the sale of Tradin Organic, together with employee termination and facility closure costs, and asset impairments, related to the exit from our Santa Maria facility.
Other expense of $23.4 million for the year ended January 2, 2021, mainly reflected a loss on the foreign currency economic hedge of the cash consideration from the sale of Tradin Organic, together with plant closure costs within our frozen fruit operations.
Further details on revenue, gross profit and segment operating income/loss variances are provided below under "Segmented Operations Information." Other expense of $8.9 million for the year ended January 1, 2022, mainly reflected asset impairment charges and other closure costs related to the exit from our fruit ingredient processing facility in July 2021, together with costs to complete the exit from our Santa Maria, California, frozen fruit processing facility in the first quarter of 2021.
Further details on revenue, gross profit and segment operating income/loss variances are provided below under "Segmented Operations Information." Other expense of $8.9 million for the year ended January 1, 2022, mainly reflected plant closure costs related to the consolidation of our fruit processing facilities, together with employee termination costs related to the workforce reduction in our frozen fruit operations.
In connection with an impairment evaluation, we also reassess the remaining useful life of the intangible asset and modify it, as appropriate. As at January 1, 2022, our frozen fruit operations included property, plant and equipment of $42.0 million and customer relationship intangible assets of $120.0 million. The intangible assets have a weighted-average remaining useful life of approximately 15 years.
In connection with an impairment evaluation, we also reassess the remaining useful life of an amortizable long-lived asset and modify it, as appropriate. As at December 31, 2022, our frozen fruit operations included property, plant and equipment of approximately $30 million and customer relationship intangible assets of $112 million.
The use of estimates is pervasive throughout our financial statements. The following are the accounting estimates which we believe to be most significant to our business. SUNOPTA INC. 43 January 1, 2022 Form 10-K Inventory Inventory is our largest current asset and consists primarily of raw materials and finished goods held for sale.
The use of estimates is pervasive throughout our financial statements. The following are the accounting estimates which we believe to be most significant to our business. Inventory Inventory is our largest current asset and consists primarily of raw materials and finished goods held for sale. Inventories are valued at the lower of cost and estimated net realizable value.
Commencing in March 2023, the term loan facility is repayable in monthly installments equal to 1/84th of the then-outstanding principal amount of the term loan facility, with the remaining amount payable at the maturity thereof on December 31, 2025. The weighted-average interest rate on all outstanding borrowings under our asset-based credit facilities was 2.36% in 2021.
Commencing in March 2023, the term loan facility is repayable in monthly installments equal to 1/84th of the then-outstanding principal amount of the term loan facility, with the remaining amount payable at the maturity thereof on December 31, 2025.
Investing Activities of Continuing Operations Additions to property, plant and equipment were $58.3 million for the year ended January 1, 2022, net of proceeds of $2.3 million from the disposal of assets from our exited fruit processing facilities, compared with additions of $24.8 million for the year ended January 2, 2021.
Cash used in investing activities of continuing operations increased $43.7 million from 2020 to 2021. Investing cash flows reflected additions to property, plant and equipment of $58.3 million in 2021, net of proceeds of $2.3 million from the disposal of assets from our exited fruit processing facilities, compared with additions of $24.8 million in 2020.
(j) Reflects the tax effect of the preceding adjustments to earnings calculated based on our estimated annual effective tax rate. We believe that investors' understanding of our financial performance is enhanced by disclosing the specific items that we exclude to compute adjusted earnings/loss.
(j) For 2022 and 2021, reflects the tax effect of the preceding adjustments to earnings calculated based on the statutory tax rates applicable in the tax jurisdiction of the underlying adjustment. We believe that investors' understanding of our financial performance is enhanced by disclosing the specific items that we exclude to compute adjusted earnings.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur ability to pass through higher input costs to our customers on a timely basis depends on how we go-to-market, that is private label, co-manufacturing, or branded products. In our private label contracts, which are concentrated in our fruit-based business, the timing of pass-through pricing adjustments tends to lag impacts from cost inflation.
Biggest changeIf we are unable to increase our prices to offset increasing costs, our gross margins, operating results, and cash flows could be materially affected. Our ability to pass through higher input costs to our customers on a timely basis depends on how we go-to-market, that is private label, co-manufacturing, or branded products.
As at January 1, 2022, a 10% change in foreign exchange rates would not have a material impact on our consolidated financial position, results of operations, or cash flows. Our operations based in the U.S. and Canada have limited exposure to other currencies since almost all sales and purchases are made in U.S. dollars.
As at December 31, 2022, a 10% change in foreign exchange rates would not have a material impact on our consolidated financial position, results of operations, or cash flows. Our operations based in the U.S. and Canada have limited exposure to other currencies since almost all sales and purchases are made in U.S. dollars.
A one percent, or 100 basis-point, change in interest rates would have a pre-tax effect of approximately $1.7 million on our results of operations and cash flows, based on current outstanding borrowings of variable rate debt, and the fair value of the fixed-rate finance leases would increase or decrease by approximately $1.2 million.
A one percent, or 100 basis-point, change in interest rates would have a pre-tax effect of approximately $1.8 million on our results of operations and cash flows, based on current outstanding borrowings of variable rate debt, and the fair value of the fixed-rate finance lease liabilities would increase or decrease by approximately $2.3 million.
In addition, other inputs, such as packaging materials, fuel, energy, storage, and freight, are exposed to price fluctuations due to weather conditions, regulations, industry and general U.S. and global economic conditions, fuel prices, energy costs, transportation and storage demands, or other factors that are beyond our control.
In addition, other inputs, such as packaging materials, energy, fuel, storage, and freight, are exposed to price fluctuations due to weather conditions, regulations, industry conditions, energy costs, fuel prices, transportation and storage demands, or other factors that are beyond our control.
As at January 1, 2022, we had approximately $172 million of variable rate debt, mainly comprised of our asset-based credit facilities, and approximately $53 million principal amount of fixed rate debt, comprised of finance lease liabilities.
As at December 31, 2022, we had approximately $184 million of variable rate debt, mainly comprised of our asset-based credit facilities, and approximately $124 million principal amount of fixed rate debt, comprised of finance lease obligations.
As a result, with private label we have greater exposure to price risk, including the impact of changing freight rates as these products are typically delivered to the customers.
In our private label contracts, which are concentrated in our fruit-based business, the timing of pass-through pricing adjustments tends to lag impacts from cost inflation. As a result, with private label we have greater exposure to price risk, including the impact of changing freight rates as these products are typically delivered to the customers.
SUNOPTA INC. 45 January 1, 2022 Form 10-K Price risk Certain commodities and ingredients we use in the production of our products are exposed to market price risk, including fruits, grains, seeds, nuts, sweeteners, and flavorings.
As at December 31, 2022, we did not have any open foreign currency forward contracts. Price risk Certain agricultural commodities and ingredients we use in the production of our products are exposed to market price risk, including fruits, grains, nuts, sweeteners, and flavorings.
In addition, the impacts of the COVID-19 pandemic, including governmental responses, and associated supply chain disruptions experienced in 2021 have resulted in higher commodity inflation and input costs. We currently do not utilize derivative contracts to hedge our exposure to fluctuations in input prices.
In addition, as described above under "Recent Events," the impacts of global economic conditions, the COVID-19 pandemic, and the conflict between Russia and Ukraine have each contributed to higher commodity inflation and input costs over the past two years. We currently do not utilize derivative contracts to hedge our exposure to fluctuations in input prices.
Changes in the prices of our products may lag changes in the costs to produce and ship our products due to contractual restrictions in our revenue contracts with customers, or competitive pressures. If we are unable to increase our prices to offset increasing costs, our gross margins, operating results, and cash flows could be materially affected.
SUNOPTA INC. 51 December 31, 2022 Form 10-K Changes in the prices of our products may lag changes in the costs to produce and ship our products due to contractual restrictions in our revenue contracts with customers, or competitive pressures.
Removed
As at January 1, 2022, we did not have any open foreign currency forward contracts. In 2021, compared with 2020, the average rate of exchange for the Mexican peso strengthened approximately 6% versus the U.S. dollar, which negatively impacted our results of operations and cash flows measured in U.S. dollar by approximately $4.6 million.
Removed
A 10% change in the exchange rate between the Mexican peso and U.S. dollar would have a pre-tax effect of approximately $6.0 million on our results of operations and cash flows measured in U.S. dollars.

Other STKL 10-K year-over-year comparisons