SunOpta Inc. (NASDAQ:STKL) Q4 2022 Earnings Call Transcript

Brian Holland: Got it. Appreciate that. And then last one for me. Obviously, you stuck with the $100 million EBITDA guidance for 2023. I think when you first provided that 12 months ago, on your initial 2022 guide, it would have implied 40% growth with the 18% upside you’ve delivered in 2022. We’re now suggesting that it’s closer to 20% growth, and I certainly don’t want to – nothing bad to say about 20% EBITDA growth. Having said that, though, I’m curious whether there’s anything to interpret from sticking with that guidance in light of the over delivery in 2022 or the outperformance in 2022, whether that there’s something here that we need to be mindful of that maybe has gotten a little bit worse or there’s a headwind here that you’re factoring in certainly, it’s okay, we’re being conservative or if we’re mindful of the Midlothian ramp.

But just want to understand in the context of the outperformance in 2022, sticking with the $100 million, what is to be interpreted from that? Thanks.

Scott Huckins: Yes. No problem, Brian. I think I’ll start with the answer, we center cut 2023 really consistent with what we outlined really going back almost a year’s time. I think it’s important to remember, and you hit it, I think, on the head as you when you asked your question, that a lot of the growth in 2023 is a function of: one, onboarding new customers; and two, commercializing additional visits for existing customers. And so to me, that’s inherently some level of volatility in how that works and requires cooperation between SunOpta and the customer base. So, I think could things go better, of course, they could. But I think, as usual, we want to set or cut the estimate.

Operator: Thank you. We go next now to Ryan Meyers of Lake Street Capital Markets.

Ryan Meyers: Hi, guys. Thanks for taking my questions. First one for me. I know you’ve kind of talked about this in the past, and you kind of alluded to it at the beginning of the call, kind of growth from new and existing customers. Just curious if you could provide some sort of commentary on growth that you guys saw this quarter during — from new customers and then kind of how much of it was from existing customers?

Joe Ennen: Yes, the beauty of the quarter, Ryan, was a virtual clean sweep across every cut and dimension of the business. So, as I said several times in the prepared remarks, the highlight and the story of the quarter was exceptionally broad-based growth, especially on the plant-based side, new customers, existing customers, almost every single product type every single channel, every single go-to-market mechanism we have, all saw double-digit growth. So, we saw consistent with our plans and expectations, contribution from new customers. But incredibly importantly, when you can get your big giant existing core customer base growing double-digit, that is just an incredible amplifier to add new business on top of.

Ryan Meyers: Got it. Makes sense. And I know over the past few quarters, inventory at customers has kind of been sporadic. Do you feel like we’ve now kind of hit a normalized level and they’re kind of returning to normal buying patterns?

Joe Ennen: Yes. We — one might go so far as to describe the quarter as unerratic. We saw incredibly consistent, steady order pattern felt really good about it. And really, the quarter came in exactly as expected.

Ryan Meyers: Good to hear. Thanks for taking my questions.

Operator: Thank you. We’ll go next now to Andrew Strelzik at BMO Capital Markets.