SunOpta Announces Record Second Quarter Results; Revenues Increase 33.5% and Net Earnings Increase 55.4%

SunOpta Inc. (SunOpta or the Company) (Nasdaq:STKL) (TSX:SOY) today announced record results for the second quarter ended June 30, 2007. All amounts are expressed in U.S. dollars. The Company achieved record revenues for the three months ended June 30, 2007, realizing its 39th consecutive quarter of increased revenue growth versus the same quarter in the previous year. Revenues in the quarter increased by 33.5% to $207,977,000 as compared to $155,745,000 in the second quarter of 2007, led by a 37.9% increase in revenues within the Company's vertically integrated natural and organic food operations. The Company's revenue growth in the quarter reflects an internal growth rate of 16.2% on a consolidated basis and includes internal growth of 19.4% within the SunOpta Food Group. Operating income (1) for the quarter increased to $11,402,000 as compared to $8,772,000 in 2006, driven by increases in segment operating income in all groups within the SunOpta Food Group and led by the SunOpta Grains and Foods Group and the SunOpta Distribution Group. Net earnings in the quarter were $6,750,000 or $0.11 per diluted common share as compared to $4,343,000 or $0.08 per diluted common share in the prior year. For the six months ended June 30, 2007 the company has recognized record revenues of $391,417,000 versus $289,057,000 in the same period of the prior year, an increase of 35.4%. Net earnings for the period increased 44.1% to $10,600,000 or $0.17 per diluted common share as compared to $7,355,000 or $0.13 per diluted common share for the same period in 2006. In the quarter, the SunOpta Food Group reported increased revenues of $189,264,000 as compared to $137,287,000 in the second quarter of 2006, a 37.9% increase. Segment operating income increased to $11,411,000 versus $8,168,000 in 2006, an increase of 39.7%. This increase is after additional corporate cost allocations of $1,326,000. Excluding these allocations, segment operating income increased 55.9%. The improved segment operating income was driven by the continued rebound in sales and margins within sunflower product operations, strong volumes and margins in organic grains, packaged soy milk products and food ingredients, strong demand for organic frozen fruit products and improved margins within the SunOpta Distribution Group. During the second quarter the Company’s fruit bar operations continued to implement improvements designed to address ongoing operational issues which have impacted results in the first half of the year. The Company expects significant revenue and margin improvements in these operations as major capacity and equipment upgrades are completed late in the third quarter. Opta Minerals revenue increased to $18,394,000, due primarily to the acquisition of Bimac Corporation late in 2006, offset by cyclical weakness in the foundry and steel industries. Segment operating income for the quarter declined by 14.0% to $2,061,000 from $2,396,000, due primarily to product mix and reduced sales of higher margin desulphurization products. The Group continues to pursue strategic transactions and new product development to complement its existing product portfolio. During the quarter the Company completed a $30 million Dollar financing within SunOpta BioProcess Inc.(SBI) at a post money valuation of $230 million. The funds from this financing will be used to further leverage its technology and invest directly in the production of cellulosic ethanol. SBI is working toward completion of current proprietary pre-treatment and fiber preparation equipment projects and is pursuing a number of exciting cellulosic ethanol projects in both North America and around the world. The Company remains well positioned for future growth with working capital of $155,316,000 and total assets of $525,424,000. Capital additions in the quarter were $6,985,000 as compared to $2,069,000 for the same period in the prior year. The long term debt to equity ratio at June 30, 2007 was 0.31:1:00, providing the Company financial resources to invest in internal growth, capital projects and execute on its acquisition program. Book equity per outstanding common share has grown to $3.94 from $3.72 at March 31, 2007. Steve Bromley, President and Chief Executive Officer of SunOpta commented, "We are very pleased with our second quarter results, driven by solid internal growth of over 19% within our vertically integrated food operations. These earnings are consistent with our expectations for the second quarter and reflect our continued dedication to the growth of our business, both top line and bottom line. Based on these results, we are pleased to increase our annual revenue guidance to $775 to $800 million and confirm our net earnings guidance of $0.35 to $0.40 per share, including the dilutive impact of the additional shares issued during the first quarter.” About SunOpta Inc. SunOpta Inc. is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food, supplements and health and beauty markets. The Company has three business units: the SunOpta Food Group, which specializes in sourcing, processing and distribution of natural and organic food products integrated from seed through packaged products; Opta Minerals Inc. (TSX:OPM) (70.4% owned by SunOpta), a producer, distributor, and recycler of environmentally friendly industrial materials; and SunOpta BioProcess Inc. (80% owned by SunOpta), which engineers and markets proprietary steam explosion technology systems for the pulp, bio-fuel and food processing industries. Each of these business units has proprietary products and services that give it a solid competitive advantage in its sector. Forward-Looking Statements Certain statements included in this press release may constitute "forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to references to business strategies, competitive strengths, goals, capital expenditure plans, business and operational growth plans and references to the future growth of the business. These forward looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its interpretation of current conditions, historical trends and expected future developments as well as other factors that the Company believes are appropriate in the circumstance. However, whether actual results and developments will agree with expectations and predications of the Company is subject to many risks and uncertainties including, but not limited to; general economic, business or market risk conditions; competitive actions by other companies; changes in laws or regulations or policies of local governments, provinces and states as well as the governments of United States and Canada, many of which are beyond the control of the Company. Consequently all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized. (1) Operating income and segment operating income are defined as net earnings before other income, interest expense (net), income taxes and minority interest. SunOpta Inc. Condensed Consolidated Statements of Earnings For the three months ended June 30, 2007 and 2006 (Expressed in thousands of U.S. dollars, except per share amounts)   (Unaudited) June 30, June 30,     2007 $     2006 $   % Change Revenues 207,977 155,745 33.5%   Cost of goods sold 167,859     128,399   30.7%   Gross profit 40,118 27,346 46.7%   Warehousing and distribution expenses 4,969 3,834 29.6% Selling, general and administrative expenses 22,962 14,600 57.3% Intangible amortization 1,012     737   37.3%   Earnings before the following 11,175 8,175 36.7%   Interest expense, net (1,817) (1,748) 3.9% Other expense (217) (194) 11.9% Foreign exchange 227     597   (62.0%)   (1,807)     (1,345)   34.3%   Earnings before income taxes 9,368 6,830 37.2%   Provision for income taxes 2,296     2,087   10.0%   Net earnings before minority interest 7,072 4,743 49.1%   Minority interest 322     400   (19.5%)   Net earnings for the period 6,750     4,343   55.4%   Net earnings per share for the period   – Basic 0.11     0.08       – Diluted 0.11     0.08     SunOpta Inc. Condensed Consolidated Statements of Earnings For the six months ended June 30, 2007 and 2006 (Expressed in thousands of U.S. dollars, except per share amounts)   (Unaudited) June 30, June 30,     2007 $   2006 $   % Change Revenues 391,417 289,057 35.4%   Cost of goods sold 316,457   238,083   32.9%   Gross profit 74,960 50,974 47.1%   Warehousing and distribution expenses 9,907 7,492 32.2% Selling, general and administrative expenses 43,989 27,787 58.3% Intangible amortization 1,995   1,281   55.7%   Earnings before the following 19,069 14,414 32.3%   Interest expense, net (3,729) (3,147) 18.5% Other expense (406) (279) 45.5% Foreign exchange 309   389   (20.6%)   (3,826)   (3,037)   26.0%   Earnings before income taxes 15,243 11,377 34.0%   Provision for income taxes 4,119   3,490   18.0%   Net earnings before minority interest 11,124 7,887 41.0%   Minority interest 524   532   (1.5%)   Net earnings for the period 10,600   7,355   44.1%   Net earnings per share for the period   – Basic 0.17   0.13       – Diluted 0.17   0.13     SunOpta Inc. Condensed Consolidated Balance Sheets As at June 30, 2007 and December 31, 2006 (Expressed in thousands of U.S. dollars, except per share amounts)   (Unaudited) June 30, December 31,     2007 $   2006 $   Assets   Current assets Cash and cash equivalents 29,680   954 Accounts receivable 99,708 73,599 Inventories 171,626 126,736 Prepaid expenses and other current assets 7,896 8,129 Current income taxes recoverable - 1,829 Deferred income taxes 1,824   1,824   310,734 213,071   Property, plant and equipment 103,675 87,487 Goodwill 54,433 49,457 Intangible assets, net 48,771 47,943 Deferred income taxes 5,349 5,615 Other assets 2,462   1,157   525,424   404,730 Liabilities   Current liabilities Bank indebtedness 63,813 40,663 Accounts payable and accrued liabilities 81,799 80,851 Customer and other deposits 570 957 Current portion of long-term debt 7,947 8,433 Current portion of long-term payables 1,289   1,736   155,418 132,640   Long-term debt 68,456 69,394 Long-term payables 3,065 3,607 Deferred income taxes 12,268   12,156   239,207   217,797   Preference shares issued by subsidiary 26,890 -   Minority interest 10,809 10,230   Shareholders’ Equity   Capital stock 166,876 112,318 Contributed surplus 4,634 4,188 Retained earnings 61,938 51,338 Cumulative other comprehensive income 15,070   8,859   248,518   176,703   525,424   404,730 SunOpta Inc. Condensed Consolidated Statements of Cash Flow For the three months ended June 30, 2007 and 2006 (Expressed in thousands of U.S. dollars, except per share amounts)   (Unaudited)   June 30, 2007 $   June 30, 2006 $ Cash provided by (used in)   Operating activities Net earnings for the period 6,750 4,343 Items not affecting cash Amortization 3,496 2,731 Deferred income taxes 983 115 Minority interest 322 400 Other 307 449 Changes in non-cash working capital (21,997)   229   (10,139)   8,267 Investing activities Purchase of property, plant and equipment (6,985) (2,069) Acquisition of companies, net of cash acquired (13,380) - Other (88)   182   (20,453)   (1,887) Financing activities Increase (decrease) in bank indebtedness 32,306 (7,478) Borrowings under long-term debt - 258 Repayment of long-term debt (1,518) (1,160) Repayment of deferred purchase consideration - (260) Proceeds from the issuance of common shares 887 2,107 Proceeds from the issuance of preference shares by subsidiary 27,880 - Other 54   (241) 59,609 (6,774)     Foreign exchange gain on cash held in a foreign currency 214   2   Increase (decrease) in cash and cash equivalents during the period 29,231 (392) Cash and cash equivalents – Beginning of the period 449   5,068   Cash and cash equivalents – End of the period 29,680   4,676 SunOpta Inc. Condensed Consolidated Statements of Cash Flow For the six months ended June 30, 2007 and 2006 (Expressed in thousands of U.S. dollars, except per share amounts)   (Unaudited)   June 30, 2007 $   June 30, 2006 $ Cash provided by (used in)   Operating activities Net earnings for the period 10,600 7,355 Items not affecting cash Amortization 6,927 5,346 Deferred income taxes 1,311 436 Minority interest 524 532 Other 544 557 Changes in non-cash working capital (58,323)   (6,467)   (38,417)   7,759 Investing activities Purchase of property, plant and equipment (12,362) (4,824) Acquisition of companies, net of cash acquired (13,380) (12,197) Acquisition of patents, trademarks and licences (887) - Other (1,331)   171   (27,960)   (16,850) Financing activities Increase in bank indebtedness 21,734 5,358 Borrowings under long-term debt 1,500 2,800 Repayment of term debt (7,504) (2,304) Repayment of deferred purchase consideration (1,089) (260) Proceeds from the issuance of common shares 52,616 2,977 Proceeds from the issuance of preference shares by subsidiary 27,880 - Other -   (370) 95,137 8,201     Foreign exchange (loss) gain on cash held in a foreign currency (34)   111   Increase (decrease) in cash and cash equivalents during the period 28,726 (779) Cash and cash equivalents – Beginning of the period 954   5,455   Cash and cash equivalents – End of the period 29,680   4,676 SunOpta Inc. Segmented Operations For the three months ended June 30, 2007 and 2006 (Expressed in thousands of U.S. dollars, except per share amounts) (Unaudited)       Three months ended        June 30, 2007 SunOpta Food Group $ Opta Minerals Inc. $ SunOpta BioProcess and Corporate $ Consolidated $   Total revenue 189,264   18,394   319   207,977   Segment operating income 11,411   2,061   (2,070)   11,402 The SunOpta Food Group has the following segmented reporting:     Three months ended June 30, 2007 SunOpta Grains & Foods $ SunOpta Ingredients $ SunOpta Fruit $ SunOpta Distribution Group $ SunOpta Food Group $   Total revenues from external customers 64,618   18,495   54,908   51,243   189,264   Segment operating income 4,695   1,972   2,955   1,789   11,411       Three months ended        June 30, 2006 SunOpta Food Group $ Opta Minerals Inc. $ SunOpta BioProcess and Corporate $ Consolidated $   Total revenue 137,287   18,260   198   155,745   Segment operating income 8,168   2,396   (1,792)   8,772 The SunOpta Food Group has the following segmented reporting:     Three months ended June 30, 2006 SunOpta Grains & Foods $ SunOpta Ingredients $ SunOpta Fruit $ SunOpta Distribution Group $ SunOpta Food Group $   Total revenue 49,862   17,138   39,491   30,796   137,287   Segment operating income 2,273   1,774   2,870   1,251   8,168 SunOpta Inc. Segmented Operations For the six months ended June 30, 2007 and 2006 (Expressed in thousands of U.S. dollars, except per share amounts) (Unaudited)   Six months ended        June 30, 2007 SunOpta Food Group $ Opta Minerals Inc. $ SunOpta BioProcess and Corporate $ Consolidated $   Total revenue 355,526   34,857   1,034   391,417   Segment operating income 19,346   3,508   (3,476)   19,378 The SunOpta Food Group has the following segmented reporting:     Six months ended June 30, 2007 SunOpta Grains & Foods $ SunOpta Ingredients $ SunOpta Fruit $ SunOpta Distribution Group $ SunOpta Food Group $   Total revenue 117,209   36,473   96,342   105,502   355,526   Segment operating income 7,403   2,991   4,410   4,542   19,346 Six months ended        June 30, 2006 SunOpta Food Group $ Opta Minerals Inc. $ SunOpta BioProcess and Corporate $ Consolidated $   Total revenue 256,558   31,305   1,194   289,057   Segment operating income 14,997   3,394   (3,588)   14,803 The SunOpta Food Group has the following segmented reporting:     Six months ended June 30, 2006 SunOpta Grains & Foods $ SunOpta Ingredients $ SunOpta Fruit $ SunOpta Distribution Group $ SunOpta Food Group $   Total revenues from external customers 89,016   35,251   70,587   61,704   256,558   Segment operating income 4,066   3,480   4,370   3,081   14,997