10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended July 3, 2021
	OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from              to                .

Commission file number: 001-34198

SUNOPTA INC.

(Exact name of registrant as specified in its charter)

Canada	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7301 Ohms Lane, Suite 600 Edina, Minnesota, 55439	(952) 820-2518
(Address of principal executive offices)	(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):                  

Large accelerated filer ☐ Accelerated filer ☒

Non-accelerated filer ☐ Smaller reporting company ☐

    (Do not check if a smaller reporting company) Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.          ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐                   No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	STKL	The Nasdaq Stock Market
Common Shares	SOY	The Toronto Stock Exchange

The number of the registrant's common shares outstanding as of August 6, 2021 was 107,228,522.

SUNOPTA INC.

FORM 10-Q

For the Quarterly Period Ended July 3, 2021

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Operations for the quarters and two quarters ended July 3, 2021 and June 27, 2020	6
	Consolidated Statements of Comprehensive Earnings (Loss) for the quarters and two quarters ended July 3, 2021 and June 27, 2020	7
	Consolidated Balance Sheets as at July 3, 2021 and January 2, 2021	8
	Consolidated Statements of Shareholders' Equity as at and for the quarters and two quarters ended July 3, 2021 and June 27, 2020	9
	Consolidated Statements of Cash Flows for the quarters and two quarters ended July 3, 2021 and June 27, 2020	11
	Notes to Consolidated Financial Statements	12
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures about Market Risk	43
Item 4	Controls and Procedures	43
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	45
Item 1A	Risk Factors	45
Item 6	Exhibits	45

Basis of Presentation

Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q ("Form 10-Q") to the "Company," "SunOpta," "we," "us," "our" or similar words and phrases are to SunOpta Inc. and its subsidiaries, taken together. 

In this report, all currency amounts presented are expressed in thousands of United States ("U.S.") dollars ("$"), except per share amounts, unless otherwise stated.  Other amounts may be presented in thousands of Canadian dollars ("C$") and Mexican pesos ("M$").  As at July 3, 2021, the closing rates of exchange for the Canadian dollar and Mexican peso, expressed in U.S. dollars, based on Bank of Canada exchange rates, were C$0.8095 and M$0.0505.  These rates are provided solely for convenience and do not necessarily reflect the rates used in the preparation of our financial statements.

Forward-Looking Statements

This Form 10-Q contains forward-looking statements that are based on management's current expectations and assumptions and involve a number of risks and uncertainties.  Generally, forward-looking statements do not relate strictly to historical or current facts and are typically accompanied by words such as "anticipate," "estimate," "target," "intend," "project," "potential," "predict," "continue," "believe," "expect," "can," "could," "would," "should," "may," "might," "plan," "will," "budget," "forecast," the negatives of such terms, and words and phrases of similar impact and include, but are not limited to, references to future financial and operating results, plans, objectives, expectations and intentions; changes in customer demand resulting from or related to the COVID-19 pandemic, as well as supply chain, logistics and other disruptions; fluctuations in foreign currency exchange rates and commodity pricing, and general economic and political conditions globally and in the markets in which we do business; our expectations and intentions regarding the Dream^® and WestSoy^® brands; our plans to expand capacity in our plant-based food and beverage business, and timing to complete expansion projects; our expectations regarding profitability in our frozen fruit business, including our assessment of the margin improvement and cost savings to be realized from our frozen fruit productivity, network optimization and portfolio rationalization initiatives; our expectations regarding the availability of fruit supply, and potential impacts to our revenues; our expectations regarding customer demand, consumer preferences, competition, sales pricing, and availability and pricing of raw material inputs; other expectations related to our businesses, including anticipated results of operations, operational growth and expansion plans, plans to reduce costs and improve profitability; our intentions related to potential sale of selected businesses or assets; liquidity constraints and the availability of alternative financing sources; and other statements that are not historical facts.  These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements are based on certain assumptions, expectations and analyses we make in light of our experience and our interpretation of current conditions, historical trends and expected future developments, as well as other factors that we believe are appropriate in the circumstances.

SUNOPTA INC. 3 July 3, 2021 10-Q

Whether actual results and developments will be consistent with and meet our expectations and predictions is subject to many risks and uncertainties.  Accordingly, there are important factors that could cause our actual results to differ materially from our expectations and predictions.  We believe these factors include, but are not limited to, the following:

• the impact of the COVID-19 pandemic on our business and financial results;

• product liability suits, recalls and threatened market withdrawals that may arise or be brought against us;

• food safety concerns and instances of food-borne illnesses that could harm our business;

• litigation and regulatory enforcement concerning marketing and labeling of food products;

• significant food and health regulations to which we are subject;

• ability to realize some or all of the anticipated benefits of our capital investment or restructuring plans;

• ability to successfully consummate and achieve the anticipated benefits from acquisitions and divestitures;

• ability to obtain additional capital as required to achieve expected growth rates;

• the potential for impairment charges for goodwill or other intangible assets; 

• the highly competitive industry in which we operate;

• that our customers may choose not to buy products from us; 

• the potential loss of one or more key customers; 

• changes and difficulty in predicting consumer preferences; 

• our ability to effectively manage our supply chain; 

• volatility in the prices of raw materials, packaging, freight, fuel, and energy; 

• the availability of organic and non-genetically modified ingredients;

• unfavorable growing and operating conditions due to adverse weather conditions; 

• an interruption at one or more of our manufacturing facilities; 

• technology failures that could disrupt our operations and negatively impact our business;

• the potential for data breaches and the need to comply with data privacy and protection laws and regulations;

• the loss of service of our key executives; 

SUNOPTA INC. 4 July 3, 2021 10-Q

• labor shortages or increased labor costs; 

• technological innovation by our competitors; 

• ability to protect our intellectual property and proprietary rights; 

• changes in laws or regulations governing foreign trade or taxation;

• agricultural policies that influence our operations; 

• substantial environmental regulation and policies to which we are subject;

• new laws or regulations or changes in laws or regulations governing climate change;

• fluctuations in exchange rates, interest rates and the prices of certain commodities; and

• exposure to our foreign operations and suppliers. 

All forward-looking statements made herein are qualified by these cautionary statements, and our actual results or the developments we anticipate may not be realized.  Our forward-looking statements are based only on information currently available to us and speak only as of the date on which they are made. We do not undertake any obligation to publicly update our forward-looking statements, whether written or oral, after the date of this report for any reason, even if new information becomes available or other events occur in the future, except as may be required under applicable securities laws.  The foregoing factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and our Annual Report on Form 10-K for the fiscal year ended January 2, 2021.  Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found under Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended January 2, 2021, under Item 1A. "Risk Factors" of this report, and in our other filings with the U.S. Securities and Exchange Commission and the Canadian Securities Administrators.

SUNOPTA INC. 5 July 3, 2021 10-Q

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

SunOpta Inc.

Consolidated Statements of Operations

For the quarters and two quarters ended July 3, 2021 and June 27, 2020

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars, except per share amounts)

		Quarter ended				Two quarters ended
		July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
		$		$		$		$
				(note 1)				(note 1)
Revenues (note 2)		202,273		184,401		409,913		391,998
Cost of goods sold		175,937		161,142		353,588		341,566
Gross profit		26,336		23,259		56,325		50,432
Selling, general and administrative expenses		22,720		21,880		43,594		41,813
Intangible asset amortization		2,532		2,272		4,726		4,543
Other expense (income), net (note 10)		4,661		(835	)	6,276		(280	)
Foreign exchange loss (gain)		(639	)	(517	)	197		1,693
Earnings (loss) from continuing operations before the following		(2,938	)	459		1,532		2,663
Interest expense, net		1,631		7,413		3,291		15,078
Loss from continuing operations before income taxes		(4,569	)	(6,954	)	(1,759	)	(12,415	)
Income tax benefit		(3,651	)	(1,821	)	(2,513	)	(3,318	)
Earnings (loss) from continuing operations		(918	)	(5,133	)	754		(9,097	)
Earnings from discontinued operations (note 4)		-		6,140		-		13,465
Net earnings (loss)		(918	)	1,007		754		4,368
Dividends and accretion on preferred stock (note 8)		(744	)	(2,604	)	(2,697	)	(4,629	)
Loss attributable to common shareholders		(1,662	)	(1,597	)	(1,943	)	(261	)
Basic and diluted earnings (loss) per share (note 11)
	From continuing operations	(0.02	)	(0.09	)	(0.02	)	(0.15	)
	From discontinued operations	-		0.07		-		0.15
	Basic and diluted loss per share	(0.02	)	(0.02	)	(0.02	)	(0.00	)
Weighted-average common shares outstanding (000s) (note 11)
	Basic	105,676		89,089		100,898		88,625
	Diluted	105,676		89,089		100,898		88,625

(See accompanying notes to consolidated financial statements)

SUNOPTA INC. 6 July 3, 2021 10-Q

SunOpta Inc.

Consolidated Statements of Comprehensive Earnings (Loss)

For the quarters and two quarters ended July 3, 2021 and June 27, 2020

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars)

	Quarter ended				Two quarters ended
	July 3, 2021		June 27, 2020		July 3, 2021	June 27, 2020
	$		$		$	$
			(note 1)			(note 1)
Earnings (loss) from continuing operations	(918	)	(5,133	)	754	(9,097	)
Earnings from discontinued operations	-		6,140		-	13,465
Net earnings (loss)	(918	)	1,007		754	4,368
Currency translation adjustment	-		417		-	108
Comprehensive earnings (loss)	(918	)	1,424		754	4,476

(See accompanying notes to consolidated financial statements)

SUNOPTA INC. 7 July 3, 2021 10-Q

SunOpta Inc.

Consolidated Balance Sheets

As at July 3, 2021 and January 2, 2021

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars)

		July 3, 2021		January 2, 2021
		$		$
ASSETS
Current assets
	Cash and cash equivalents	479		251
	Accounts receivable, net of allowance for credit losses of $862 and $1,257, respectively	83,109		72,724
	Inventories (note 6)	229,856		147,748
	Prepaid expenses and other current assets	15,793		21,665
	Income taxes recoverable	7,088		6,935
Total current assets		336,325		249,323
Property, plant and equipment		187,226		158,048
Operating lease right-of-use assets		46,886		35,172
Goodwill		3,998		3,998
Intangible assets		153,664		133,317
Deferred income taxes		8,328		-
Other assets		5,819		5,757
Total assets		742,246		585,615
LIABILITIES
Current liabilities
	Accounts payable and accrued liabilities	115,841		118,592
	Income taxes payable	1,371		1,431
	Current portion of long-term debt (note 7)	7,597		3,478
	Current portion of operating lease liabilities	13,017		12,750
	Current portion of long-term liabilities	-		200
Total current liabilities		137,826		136,451
Long-term debt (note 7)		198,602		66,245
Operating lease liabilities		35,644		24,582
Deferred income taxes		30,242		25,408
Total liabilities		402,314		252,686
Series A Preferred Stock (note 8)		-		87,305
Series B-1 Preferred Stock (note 8)		27,862		27,595
EQUITY
SunOpta Inc. shareholders' equity
	Common shares, no par value, unlimited shares authorized,
	107,125,928 shares issued (January 2, 2021 - 90,194,220)	435,425		326,545
	Additional paid-in capital	24,966		37,862
	Accumulated deficit	(149,684	)	(147,741	)
	Accumulated other comprehensive income	1,363		1,363
Total equity		312,070		218,029
Total equity and liabilities		742,246		585,615
Commitments and contingencies (note 13)

(See accompanying notes to consolidated financial statements)

SUNOPTA INC. 8 July 3, 2021 10-Q

SunOpta Inc.

Consolidated Statements of Shareholders' Equity

As at and for the quarters ended July 3, 2021 and June 27, 2020 

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars)

 

	Common shares			Additional paid-in capital		Accumulated deficit		Accumulated other com-prehensive income	Non-controlling interests	Total
	000s	$		$		$		$	$	$
Balance at April 3, 2021	103,612	418,822		33,340		(148,022	)	1,363	-	305,503
Share issuance costs (note 8)	-	(25	)	-		-		-	-	(25	)
Employee stock purchase plan	18	207		-		-		-	-	207
Stock incentive plan	3,496	16,421		(12,078	)	-		-	-	4,343
Withholding taxes on stock-based awards	-	-		(666	)	-		-	-	(666	)
Stock-based compensation	-	-		4,370		-		-	-	4,370
Loss from continuing operations	-	-		-		(918	)	-	-	(918	)
Dividends on preferred stock	-	-		-		(609	)	-	-	(609	)
Accretion on preferred stock	-	-		-		(135	)	-	-	(135	)
Balance at July 3, 2021	107,126	435,425		24,966		(149,684	)	1,363	-	312,070

 

	Common shares		Additional paid-in capital		Accumulated deficit		Accumulated other com-prehensive loss		Non-controlling interests		Total
	000s	$	$		$		$		$		$
Balance at March 28, 2020	88,225	318,958	37,813		(213,595	)	(11,580	)	1,877		133,473
Employee stock purchase plan	26	95	-		-		-		-		95
Stock incentive plan	1,152	4,359	(4,105	)	-		-		-		254
Withholding taxes on stock-based awards	-	-	(1,030	)	-		-		-		(1,030	)
Stock-based compensation	-	-	1,932		-		-		-		1,932
Loss from continuing operations	-	-	-		(5,133	)	-		-		(5,133	)
Earnings from discontinued operations	-	-	-		6,140		-		(230	)	5,910
Dividends on preferred stock	-	-	-		(2,181	)	-		-		(2,181	)
Accretion on preferred stock	-	-	-		(423	)	-		-		(423	)
Currency translation adjustment	-	-	-		-		417		(10	)	407
Balance at June 27, 2020	89,403	323,412	34,610		(215,192	)	(11,163	)	1,637		133,304

SUNOPTA INC. 9 July 3, 2021 10-Q

SunOpta Inc.

Consolidated Statements of Shareholders' Equity (continued)

As at and for the two quarters ended June 27, 2020 and July 3, 2021

(Unaudited)

(All dollar amounts expressed in thousands of U.S. dollars)

 

	Common shares		Additional paid-in capital		Accumulated deficit		Accumulated other com-prehensive loss	Non-controlling interests	Total
	000s	$	$		$		$	$	$
Balance at January 2, 2021	90,194	326,545	37,862		(147,741	)	1,363	-	218,029
Exchange of Series A Preferred Stock, net of share issuance costs of $287 (note 8)	12,633	87,188	-		-		-	-	87,188
Employee stock purchase plan	28	333	-		-		-	-	333
Stock incentive plan	4,271	21,359	(14,502	)	-		-	-	6,857
Withholding taxes on stock-based awards	-	-	(6,737	)	-		-	-	(6,737	)
Stock-based compensation	-	-	8,343		-		-	-	8,343
Earnings from continuing operations	-	-	-		754		-	-	754
Dividends on preferred stock	-	-	-		(2,260	)	-	-	(2,260	)
Accretion on preferred stock	-	-	-		(437	)	-	-	(437	)
Balance at July 3, 2021	107,126	435,425	24,966		(149,684	)	1,363	-	312,070

 

	Common shares		Additional paid-in capital		Accumulated deficit		Accumulated other com-prehensive loss		Non-controlling interests		Total
	000s	$	$		$		$		$		$
Balance at December 28, 2019	88,090	318,456	35,767		(214,931	)	(11,271	)	1,888		129,909
Employee stock purchase plan	73	195	-		-		-		-		195
Stock incentive plan	1,240	4,761	(4,385	)	-		-		-		376
Withholding taxes on stock-based awards	-	-	(1,151	)	-		-		-		(1,151	)
Stock-based compensation	-	-	4,379		-		-		-		4,379
Loss from continuing operations	-	-	-		(9,097	)	-		-		(9,097	)
Earnings from discontinued operations	-	-	-		13,465		-		(244	)	13,221
Dividends on preferred stock	-	-	-		(3,881	)	-		-		(3,881	)
Accretion on preferred stock	-	-	-		(748	)	-		-		(748	)
Currency translation adjustment	-	-	-		-		108		(7	)	101
Balance at June 27, 2020	89,403	323,412	34,610		(215,192	)	(11,163	)	1,637		133,304

 

(See accompanying notes to consolidated financial statements)

SUNOPTA INC. 10 July 3, 2021 10-Q

SunOpta Inc.

Consolidated Statements of Cash Flows

For the quarters and two quarters ended July 3, 2021 and June 27, 2020

(Unaudited)

(Expressed in thousands of U.S. dollars)

		Quarter ended				Two quarters ended
		July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
		$		$		$		$
				(note 1)				(note 1)
CASH PROVIDED BY (USED IN)
Operating activities
Net earnings (loss)		(918	)	1,007		754		4,368
Earnings from discontinued operations		-		6,140		-		13,465
Earnings (loss) from continuing operations		(918	)	(5,133	)	754		(9,097	)
Items not affecting cash:
	Depreciation and amortization	8,910		7,655		16,953		15,380
	Amortization of debt issuance costs	349		1,065		634		2,004
	Deferred income taxes	(4,331	)	2,855		(3,494	)	3,199
	Stock-based compensation	4,370		1,779		8,343		3,990
	Impairment of long-lived assets (note 10)	2,962		-		2,962		-
	Other	(167	)	(25	)	(336	)	(27	)
	Changes in operating assets and liabilities (note 12)	(50,322	)	(7,714	)	(71,978	)	8,710
Net cash provided by (used in) operating activities of continuing operations		(39,147	)	482		(46,162	)	24,159
Net cash provided by operating activities of discontinued operations		-		2,183		-		13,255
Net cash provided by (used in) operating activities		(39,147	)	2,665		(46,162	)	37,414
Investing activities
Additions to intangible assets (note 3)		(25,073	)	-		(25,073	)	-
Additions to property, plant and equipment		(7,306	)	(5,905	)	(16,603	)	(14,927	)
Proceeds from sale of assets		-		-		1,350		-
Other		-		41		-		41
Net cash used in investing activities of continuing operations		(32,379	)	(5,864	)	(40,326	)	(14,886	)
Net cash used in investing activities of discontinued operations (note 4)		-		(465	)	(13,380	)	(1,132	)
Net cash used in investing activities		(32,379	)	(6,329	)	(53,706	)	(16,018	)
Financing activities
Increase (decrease) under revolving credit facilities (note 7)		70,244		(19,469	)	111,829		(29,882	)
Borrowings of long-term debt (note 7)		4,155		-		4,641		-
Repayment of long-term debt (note 7)		(5,855	)	(617	)	(9,940	)	(1,078	)
Payment of debt issuance costs		(543	)	(415	)	(2,371	)	(2,488	)
Proceeds from the exercise of stock options and employee share purchases		4,550		470		7,190		571
Payment of withholding taxes on stock-based awards		(666	)	(1,151	)	(6,737	)	(1,151	)
Payment of cash dividends on preferred stock (note 8)		(609	)	-		(4,029	)	(1,700	)
Payment of share issuance costs (note 8)		(25	)	-		(287	)	-
Proceeds from issuance of preferred stock, net of issuance costs (note 8)		-		26,804		-		26,804
Other		-		-		-		(4	)
Net cash provided by (used in) financing activities of continuing operations		71,251		5,622		100,296		(8,928	)
Net cash used in financing activities of discontinued operations (note 4)		-		(3,015	)	(200	)	(12,337	)
Net cash provided by (used in) financing activities		71,251		2,607		100,096		(21,265	)
Increase (decrease) in cash and cash equivalents in the period		(275	)	(1,057	)	228		131
Cash and cash equivalents of discontinued operations:
	Balance at beginning of period	-		2,437		-		1,370
	Foreign exchange gain (loss) on cash and cash equivalents	-		12		-		(4	)
	Less: balance at end of period	-		(1,152	)	-		(1,152	)
Cash and cash equivalent, beginning of the period		754		233		251		128
Cash and cash equivalents, end of the period		479		473		479		473
Non-cash investing and financing activities (note 12)

(See accompanying notes to consolidated financial statements)

SUNOPTA INC. 11 July 3, 2021 10-Q

1. Significant Accounting Policies

Basis of Presentation

These interim consolidated financial statements of SunOpta Inc. (the "Company" or "SunOpta") have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended, and in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information.  Accordingly, these condensed interim consolidated financial statements do not include all of the disclosures required by U.S. GAAP for annual financial statements.  In the opinion of management, all adjustments considered necessary for fair presentation have been included and all such adjustments are of a normal, recurring nature.  Operating results for the quarter and two quarters ended July 3, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending January 1, 2022 or for any other period.  The interim consolidated financial statements include the accounts of the Company and its subsidiaries, and have been prepared on a basis consistent with the annual consolidated financial statements for the year ended January 2, 2021.  For further information, refer to the consolidated financial statements, and notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 2021.

Discontinued Operations

As described in note 4, on December 30, 2020, the Company completed the divestiture of its organic ingredient sourcing and production business, Tradin Organic. With the divestiture, Tradin Organic qualified for reporting as discontinued operations in the consolidated financial statements of the Company.  Accordingly, the operating results and cash flows of Tradin Organic for the quarter and two quarters ended June 27, 2020 have been reclassified to discontinued operations on the consolidated statements of operations and cash flows.  In addition, unless otherwise indicated, the information disclosed below in these notes to the consolidated financial statements is presented on a continuing operations basis, with the comparative period information recast to reflect Tradin Organic as discontinued operations.

Fiscal Year

The fiscal year of the Company consists of a 52- or 53-week period ending on the Saturday closest to December 31. Fiscal year 2021 is a 52-week period ending on January 1, 2022, with quarterly periods ending on April 3, 2021, July 3, 2021, and October 2, 2021. Fiscal year 2020 was a 53-week period ending on January 2, 2021, with quarterly periods ending on March 28, 2020, June 27, 2020, and September 26, 2020.

 

Recent Accounting Pronouncements

In March 2020 and January 2021, the Financial Accounting Standards Board issued Accounting Standard Updates 2020-04 and 2021-01, Reference Rate Reform (Topic 848), that provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the transition away from LIBOR and other reference rates that are expected to be discontinued.  The guidance in Topic 848 is effective upon issuance and can be applied prospectively for contract modifications and hedging relationships through December 31, 2022.  The Company is currently evaluating the impact of the guidance and does not expect it will have a material effect on the Company’s consolidated financial statements.

SUNOPTA INC. 12 July 3, 2021 10-Q

2.  Revenue

The Company procures, processes, and packages plant-based and fruit-based foods and beverages.  The Company's customers include retailers, foodservice operators, branded food companies, and food manufacturers. 

The following table presents a disaggregation of the Company's revenues based on categories used by the Company to evaluate sales performance:

	Quarter ended		Two quarters ended
	July 3, 2021	June 27, 2020	July 3, 2021	June 27, 2020
	$	$	$	$
Plant-Based Foods and Beverages
Beverages and broths	87,494	68,451	182,980	155,221
Plant-based ingredients	7,578	6,284	15,422	12,196
Sunflower and roasted snacks	16,287	16,970	32,408	30,530
Total Plant-Based Foods and Beverages	111,359	91,705	230,810	197,947
Fruit-Based Foods and Beverages
Frozen fruit	64,076	75,079	127,531	150,286
Fruit-based ingredients	11,000	7,946	19,359	19,838
Fruit snacks	15,838	9,671	32,213	23,927
Total Fruit-Based Foods and Beverages	90,914	92,696	179,103	194,051
Total revenues	202,273	184,401	409,913	391,998

3.  Acquisition of Dream^® and WestSoy^® Brands

On April 15, 2021, the Company acquired the Dream and WestSoy plant-based beverage brands and related private label products in North America from The Hain Celestial Group, Inc. for a cash purchase price of $33 million, subject to a closing inventory adjustment.  The final purchase price amounted to $31.7 million, including $0.4 million of direct transaction costs.  The acquired assets included all inventories, trademarks, product formulations, and other intellectual property related to the Dream and WestSoy brands and did not include other working capital, property, plant and equipment, or employees.  The transaction has been accounted for as an asset acquisition.  The purchase price was allocated to the acquired inventories ($6.6 million) and brand name intangible assets ($25.1 million).  The intangible assets will be amortized over their estimated useful life of approximately 15 years.  Revenues and expenses related to the acquired Dream and WestSoy brands are included in the Company's consolidated financial statements from the acquisition date and are reported within the Plant-Based Foods and Beverages operating segment.   

As described in note 7, the Company entered into an amendment to its Credit Agreement on April 15, 2021, to allocate $20 million of the Lenders' revolving commitments to a two-year, first-in-last-out tranche, which was drawn in full to finance a portion of the purchase price for the Dream and WestSoy acquisition. 

SUNOPTA INC. 13 July 3, 2021 10-Q

4.  Discontinued Operations

Tradin Organic

On December 30, 2020, the Company completed the divestiture of its organic ingredient sourcing and production business, Tradin Organic, by selling all of the Company's interests and rights in The Organic Corporation B.V. and Tradin Organics USA LLC to Amsterdam Commodities N.V. (the "Purchaser") for cash consideration of $373.7 million (€305.1 million), net of cash acquired and debt assumed by the Purchaser and subject to certain post-closing adjustments (the "Transaction").  The global operations of Tradin Organic included its organic and non-GMO ingredient sourcing operations centered in Amsterdam, The Netherlands, and Scott's Valley, California, together with its consumer-packaged premium juice co-manufacturing business, and its cocoa, sunflower, sesame, and avocado ingredient processing facilities located in the Netherlands, Bulgaria, and Ethiopia.  Prior to its divestiture, Tradin Organic comprised the Company's former Global Ingredients operating segment. 

The following table reconciles the major components of the results of discontinued operations to the amount reported in the consolidated statement of operations for the quarter and two quarters ended June 27, 2020:

	Quarter ended		Two quarters ended
	June 27, 2020		June 27, 2020
	$		$
Revenues	126,543		254,895
Cost of goods sold	110,110		221,915
Selling, general and administrative expenses(1)	6,419		13,692
Intangible asset amortization	333		783
Other expense (income), net	502		(1,351	)
Foreign exchange loss	473		597
Interest expense(2)	523		1,138
Earnings before gain of sale	8,183		18,121
Earnings from discontinued operations before income taxes	8,183		18,121
Provision for income taxes	2,273		4,900
Loss attributable to non-controlling interests	(230	)	(244	)
Earnings from discontinued operations	6,140		13,465

(1)  Selling, general and administrative expenses exclude management fees charged by SunOpta Corporate Services and include stock-based compensation expense attributable to employees of Tradin Organic. 

(2)  Interest expense reflects interest on debt directly attributable to Tradin Organic including borrowings by Tradin Organic under the Dutch subfacility of the Company's former Global Credit Facility.

During the first half of 2021, the Company paid $13.4 million to settle accrued transaction costs related to the Tradin Organic divestiture and paid $0.2 million to settle the final contingent consideration obligation related to a prior acquisition of a premium juice business included in the disposed operations of Tradin Organic.  These payments were recorded as cash used in investing and financing activities of discontinued operations, respectively, on the consolidated statement of cash flows for the two quarters ended July 3, 2021.

SUNOPTA INC. 14 July 3, 2021 10-Q

5. Derivative Financial Instruments and Fair Value Measurements

Foreign currency forward contracts

As part of its risk management strategy, from time to time the Company enters into foreign currency forward contracts to reduce its exposure to fluctuations in foreign currency exchange rates. For any open contracts at period end, the contract rate is compared to the forward rate, and a gain or loss is recorded. These contracts are included in level 2 of the fair value hierarchy, as the inputs used in making the fair value determination are derived from and are corroborated by observable market data. The Company has not designated these contracts as accounting hedges.

As at July 3, 2021, the Company held a combination of foreign currency put and call option contracts (a zero-cost collar) to economically hedge its exposure to fluctuations in the Mexican peso related to purchases of fruit inventory and operating costs in Mexico. The aggregate notional amount of these contracts was $11.8 million at inception. As at July 3, 2021, contracts with a notional amount of $1.1 million remained open, which matured in July 2021. The collar has a ceiling rate of 24.00 Mexican pesos to the U.S. dollar and a floor rate of 21.14 Mexican pesos to the U.S. dollar. If the spot rate is between the ceiling and floor rates on the date of maturity of each of the contracts, then the Company does not recognize any gain or loss under these contracts. If the spot rate goes below the floor rate of the collar, the Company recognizes a foreign exchange gain, and if the spot rate goes above the ceiling rate of the collar, the Company recognizes a foreign exchange loss. As at July 3, 2021 and January 2, 2021, unrealized gains of $0.1 million and $0.8 million, respectively, related to these contracts were included in other current assets on the consolidated balance sheets. For the quarter and two quarters ended July 3, 2021, the Company recognized unrealized losses of $0.3 million and $0.7 million, respectively, and realized gains of $0.3 million and $0.5 million, respectively, related to these contracts, which were included in foreign exchange on the consolidated statements of operations.

As at June 27, 2020, the Company had $11.5 million notional amount of open Mexican peso foreign currency forward put and call contracts. For the quarter and two quarters ended June 27, 2020, the Company recognized realized gains of $0.2 million related to these contracts and did not recognize any amount of unrealized gains or losses.

6.  Inventories 

	July 3, 2021		January 2, 2021
	$		$
Raw materials and work-in-process	135,892		78,210
Finished goods	98,848		75,280
Inventory reserves	(4,884	)	(5,742	)
	229,856		147,748

7.  Long-Term Debt

	July 3, 2021	January 2, 2021
	$	$
Asset-Based Credit Facilities(1)	159,106	47,277
Finance lease liabilities(2)	42,899	18,813
Other	4,194	3,633
	206,199	69,723
Less: current portion	7,597	3,478
	198,602	66,245

SUNOPTA INC. 15 July 3, 2021 10-Q

(1) Asset-Based Credit Facilities

On December 31, 2020, the Company entered into a second amended and restated credit agreement (the "Credit Agreement"), among the Company, SunOpta Foods Inc. ("SunOpta Foods"), the other borrowers and guarantors party thereto, and the lenders party thereto (the "Lenders"). As part of the Credit Agreement, the Lenders provided a five-year, $250 million asset-based revolving credit facility, subject to borrowing base capacity (the "Tranche A Subfacility," and together with the Tranche B Subfacility defined below, the "Revolving Credit Facilities"), and a five-year $75 million delayed draw term loan facility which can be used for borrowings on or prior to June 30, 2022 (the "Term Loan Facility," and together with the Revolving Credit Facilities, the "Asset-Based Credit Facilities"), to finance certain capital expenditures. The Tranche A Subfacility includes borrowing capacity for letters of credit and provides for borrowings on same-day notice, including in the form of swingline loans. The Tranche A Subfacility and Term Loan Facility mature on December 31, 2025.

On April 15, 2021, the Company entered into a first amendment to the Credit Agreement to allocate $20 million of the Lenders' commitments under the Tranche A Subfacility to a two-year, first-in-last-out tranche (the "Tranche B Subfacility"), which was drawn in full to finance a portion of the purchase price for the Dream and WestSoy brands (see note 3). The material terms governing the remaining $230 million of the Lenders' commitments under the Tranche A Subfacility remain unchanged. The Tranche B Subfacility is subject to a separate borrowing base applicable to certain eligible accounts receivable and inventory with advance rates separate from the Tranche A Subfacility.

Amortization payments on the aggregate principal amount of the Tranche B Subfacility are equal to $2.5 million, payable at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2022, with the remaining amount payable at the maturity thereof. Borrowings repaid under the Tranche B Subfacility may not be borrowed again. Each repayment of Tranche B Subfacility loans will result in an increase of the Lenders' commitments under the Tranche A Subfacility, provided that such increases will not cause the aggregate Lenders' commitments under the Tranche A Subfacility to exceed $250 million.

On July 2, 2021, the Company entered into a second amendment to the Credit Agreement to increase the customer concentration limit included in the borrowing base calculation under the Revolving Credit Facilities.

All obligations under the Asset-Based Credit Facilities are guaranteed by substantially all of the Company's direct and indirect wholly-owned material restricted subsidiaries organized in the U.S. and Canada (the "Guarantors") and, subject to certain exceptions, such obligations are secured by first priority liens on substantially all assets of the Company and the other borrowers and Guarantors.

Borrowings under the Asset-Based Credit Facilities bear interest based on various reference rates including LIBOR plus an applicable margin. With respect to loans under the Tranche A Subfacility, the applicable margin is set quarterly based on average borrowing availability for the preceding fiscal quarter and will range from 0.50% to 1.00% for base rate borrowings and from 1.50% to 2.00% for eurocurrency rate, bankers' acceptance rate and European base rate borrowings, with a reduction of 0.25% when the Company's total leverage ratio is less than a specific threshold on or after the one-year anniversary of the closing date of the Asset-Based Credit Facilities. Borrowings under the Tranche B Subfacility bear interest based on various reference rates including LIBOR plus an applicable margin ranging from 2.50% to 3.00%, with a reduction of 0.25% when the Company's total leverage ratio is less than a specific threshold on or after the one-year anniversary of the closing date of the Asset-Based Credit Facilities. With respect to loans under the Term Loan Facility, the applicable margin will be set quarterly based on average borrowing availability for the preceding fiscal quarter and will range from 1.25% to 1.75% for base rate borrowings and from 2.25% to 2.75% for eurocurrency rate, bankers' acceptance rate and European base rate borrowings. In addition to paying interest on outstanding principal under the Asset-Based Credit Facilities, the Company is required to pay commitment fees quarterly, in arrears, equal to (i) 0.25% of the average daily undrawn portion of the Revolving Credit Facilities and (ii) 0.375% of the undrawn portion of the Term Loan Facility. For the two quarters ended July 3, 2021, the weighted-average interest rate on all outstanding borrowings under the Revolving Credit Facilities was 2.21%.

The Asset-Based Credit Facilities are subject to a number of covenants that, among other things, restrict the Company's ability to create liens on assets; sell assets and enter in sale and leaseback transactions; pay dividends, prepay junior lien and unsecured indebtedness and make other restricted payments; incur additional indebtedness, including finance lease obligations in excess of $150 million, and make guarantees; make investments, loans or advances, including acquisitions; and engage in mergers or consolidations. In addition, the Company and its restricted subsidiaries are required to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 if excess availability is less than the greater of (i) $15.0 million or (ii) 10% of the lesser of (x) the aggregate commitments under the Revolving Credit Facilities and (y) the aggregate borrowing base. As at July 3, 2021, the Company was in compliance with all covenants of the Credit Agreement.

SUNOPTA INC. 16 July 3, 2021 10-Q

(2) Finance lease liabilities

During the first quarter of 2021, the Company recognized additional finance lease liabilities of $29.9 million in the aggregate, together with a corresponding amount of right-of-use assets recorded in property, plant and equipment, related to the addition of new plant-based beverage and ingredient extraction processing and packaging equipment. The finance leases have implicit rates of interest of 8.08% to 8.85% and lease terms of five years.

8. Preferred Stock

Series A Preferred Stock

On October 7, 2016, the Company and SunOpta Foods entered into a subscription agreement (the "Series A Subscription Agreement") with Oaktree Organics, L.P. and Oaktree Huntington Investment Fund II, L.P. (collectively, "Oaktree"). Pursuant to the Series A Subscription Agreement, SunOpta Foods issued an aggregate of 85,000 shares of Series A Preferred Stock (the "Series A Preferred Stock") to Oaktree for consideration in the amount of $85.0 million. In connection with the issuance of the Series A Preferred Stock, the Company incurred direct and incremental expenses of $6.0 million, which reduced the carrying value of the Series A Preferred Stock. The carrying value of the Series A Preferred Stock was being accreted through charges to accumulated deficit over the period preceding October 7, 2021, the date on or after which SunOpta Foods may have redeemed all the Series A Preferred Stock.

On February 22, 2021 (the "Exchange Date"), Oaktree exchanged all of their shares of Series A Preferred Stock for 12,633,427 shares of common stock of the Company ("Common Shares") at an exchange price of $7.00. Prior to the exchange, the Series A Preferred Stock provided for a cumulative dividend of 8.0% per year. On the Exchange Date, the Company paid cash dividends of $1.0 million on the Series A Preferred Stock for the period January 1, 2021 to February 22, 2021. In addition, in the first quarter of 2021, the Company paid cash dividends of $1.8 million on Series A Preferred Stock related to the fourth quarter of 2020. Subsequent to the Exchange Date, the Company is no longer required to pay dividends on the Series A Preferred Stock.

As at the Exchange Date, the carrying amount of the Series A Preferred Stock was $87.5 million, comprised of the initial liquidation preference of $85.0 million in the aggregate, together with $3.4 million of dividends paid in kind for the first and second quarters of 2020, less remaining unamortized issuance costs of $0.9 million. As at the Exchange Date, the Company derecognized the carrying amount of the Series A Preferred Stock and recognized a corresponding amount for the Common Shares issued on exchange, net of share issuance costs of $0.3 million.

In connection with the exchange of the Series A Preferred Stock, all 12,633,427 Special Shares, Series 1 previously issued to Oaktree were redeemed by the Company. The Special Shares, Series 1 entitled Oaktree to one vote per Special Share, Series 1 on all matters submitted to a vote of the holders of Common Shares.

Series B-1 Preferred Stock

On April 15, 2020, the Company and SunOpta Foods entered into a subscription agreement (the "Series B Subscription Agreement") with Oaktree and Engaged Capital, LLC, Engaged Capital Flagship Master Fund, LP and Engaged Capital Co-Invest IV-A, LP (collectively, "Engaged"), On April 24, 2020, pursuant to the Series B Subscription Agreement, SunOpta Foods issued 15,000 shares of Series B-1 Preferred Stock to each of Oaktree and Engaged for aggregate consideration of $30.0 million and 30,000 shares total (the "Series B-1 Preferred Stock"). In connection with the issuance of the Series B-1 Preferred Stock, the Company incurred direct and incremental expenses of $3.2 million, which reduced the carrying value of the Series B-1 Preferred Stock. The carrying value of the Series B-1 Preferred Stock is being accreted through charges to accumulated deficit over the period preceding April 24, 2025. For the quarter and two quarters ended July 3, 2021, these accretion charges amounted to $0.1 million (June 27, 2020 - $0.1 million) and $0.3 million (June 27, 2020 - $0.1 million), respectively.

The Series B-1 Preferred Stock had an initial stated value and liquidation preference of $1,000 per share, which is adjusted for any non-cash dividends declared on the Series B-1 Preferred Stock (the "Series B-1 Liquidation Preference"). Cumulative preferred dividends accrue daily on the Series B-1 Preferred Stock at an annualized rate of 8.0% of the Series B-1 Liquidation Preference prior to September 30, 2029, and 10.0% of the liquidation preference thereafter (subject to an increase of 1.0% per quarter, up to a maximum rate of 5.0% per quarter on the occurrence of certain events of non-compliance). Prior to September 30, 2029, SunOpta Foods may pay dividends in cash or elect, in lieu of paying cash, to add the amount that would have been paid to the Series B-1 Liquidation Preference. The failure to pay dividends in cash for any quarter ending after September 30, 2029 will be an event of non-compliance. For the second quarter of 2020, SunOpta Foods elected to declare dividends on the Series B-1 Preferred Stock to be paid in kind and, as a result, the aggregate Series B-1 Liquidation Preference increased by $0.4 million to $30.4 million, or approximately $1,015 per share. For each of the third and fourth quarters of 2020, and the first quarter of 2021, the Company paid cash dividends of $0.6 million on the Series B-1 Preferred Stock. As at July 3, 2021, the Company accrued unpaid dividends of $0.6 million for the second quarter of 2021, which are recorded in accounts payable and accrued liabilities on the consolidated balance sheet.

SUNOPTA INC. 17 July 3, 2021 10-Q

At any time, the Series B-1 Preferred Stock may be exchanged, in whole or in part, into the number of Common Shares equal to, per share of Series B-1 Preferred Stock, the quotient of the Series B Liquidation Preference divided by $2.50 (such price, the "Series B-1 Exchange Price" and such quotient, the "Series B-1 Exchange Rate"). As at July 3, 2021, the aggregate shares of Series B-1 Preferred Stock outstanding were exchangeable into 12,178,667 Common Shares. The Series B-1 Exchange Price is subject to certain anti-dilution adjustments, including a weighted-average adjustment for issuances of Common Shares below the Series B-1 Exchange Price, provided that the Series B-1 Exchange Price may not be lower than $2.00 (subject to adjustment in certain circumstances).

SunOpta Foods may cause the holders of the Series B-1 Preferred Stock to exchange all of their shares of Series B-1 Preferred Stock into a number of Common Shares equal to the number of shares of Series B-1 Preferred Stock outstanding multiplied by the Series B-1 Exchange Rate if (i) fewer than 10% of the shares of Series B-1 Preferred Stock issued on April 24, 2020 remain outstanding, or (ii) on or after April 24, 2023, the average volume-weighted average price of the Common Shares during the then preceding 20 trading day period is greater than 200% of the Series B-1 Exchange Price then in effect.

At any time, if a holder of Series B-1 Preferred Stock elects to exchange, or SunOpta Foods causes an exchange of Series B Preferred Stock, the number of Common Shares delivered to each applicable holder may not cause such holder's beneficial ownership to exceed 19.99% of the Common Shares that would be outstanding immediately following such exchange (the "Series B-1 Exchange Cap").

At any time on or after April 24, 2025, SunOpta Foods may redeem all of the Series B-1 Preferred Stock for an amount per share equal to the value of the Series B-1 Liquidation Preference at such time, plus accrued and unpaid dividends.

Oaktree and Engaged are entitled to vote the Series B-1 Preferred Stock with the Common Shares on an as-exchanged basis, subject to a permanent 19.99% voting cap. As a result of the voting cap, each of Oaktree and Engaged will only be able to vote its Series B-1 Preferred Stock to the extent that, when taken together with any other voting securities each investor controls, such votes do not exceed 19.99% of the votes eligible to be cast by all security holders of the Company. On April 24, 2020, the Company designated Special Shares, Series 2 to serve as the mechanism for attaching exchanged voting rights to the Series B-1 Preferred Stock. The Special Shares, Series 2 entitle the holder thereof to one vote per Special Share, Series 2 on all matters submitted to a vote of the holders of Common Shares, voting together as a single class, subject to certain exceptions. The Special Shares, Series 2 are not transferrable and the voting rights associated with the Special Shares, Series 2 will terminate upon the transfer of the shares of Series B-1 Preferred Stock to a third party, other than an affiliate of Oaktree or Engaged, as applicable. As at July 3, 2021, 6,089,333 Special Shares, Series 2 were issued to Engaged, equal to the number of Common Shares issuable to Engaged on the exchange of all of the shares of Series B-1 Preferred Stock held by it, and no Special Shares, Series 2 were issued to Oaktree, as Oaktree was subject to the Series B-1 Exchange Cap.

9. Stock-Based Compensation

Short-Term Incentive Plan

In connection with the vesting of outstanding performance share units ("PSUs") previously granted to certain employees under the Company's 2020 Short-Term Incentive Plan, the Company issued 2,742,469 Common Shares during the second quarter of 2021, which included 1,177,397 Common Shares sold to cover the statutory income tax withholding requirements on behalf of the employees.   

On March 30, 2021, the Company granted a total of 612,947 PSUs to certain employees of the Company under its 2021 Short-Term Incentive Plan. The vesting of these PSUs is subject to the Company achieving a predetermined measure of adjusted EBITDA for fiscal 2021 and subject to each employee's continued employment with the Company through March 30, 2022 (the requisite service period). The aggregate grant-date fair value of these PSUs was estimated to be $8.7 million based on a closing price of $14.25 for the Common Shares on the date of grant. Each reporting period, the number of PSUs that are expected to vest is redetermined and the aggregate grant-date fair value of the redetermined number of PSUs is amortized on a straight-line basis over the remaining requisite service period less amounts previously recognized. For the quarter ended July 3, 2021, the Company recognized compensation expense of $2.2 million related to the number of these PSUs expected to vest, and the remaining compensation cost related to these PSUs not yet recognized as an expense was determined to be $6.1 million as at July 3, 2021.

SUNOPTA INC. 18 July 3, 2021 10-Q

Long-Term Incentive Plan

On April 15, 2021, the Company granted 26,305 Restricted Stock Units ("RSUs"), 70,513 PSUs and 135,668 stock options to selected employees under its 2021 Long-Term Incentive Plan.  The RSUs vest in three equal annual installments beginning on April 15, 2022, and each vested RSU entitles the recipient to receive one Common Share without payment of additional consideration. The vesting of the PSUs is dependent on the Company's total shareholder return (the "TSR") performance relative to food and beverage companies in a designated index during the three-year period commencing January 1, 2021 and continuing through December 31, 2023, and the recipient's continued employment with the Company through April 15, 2024. The TSR for the Company and each of the companies in the designated index will be calculated using a 20-trading day average closing price as of December 31, 2023. The percentage of vested PSUs may range from 0% to 200% based on the Company's achievement of predetermined TSR thresholds. Each vested PSU entitles the recipient to receive one Common Share without payment of additional consideration. The stock options vest ratably on each of the first through third anniversaries of the grant date and expire on the tenth anniversary of the grant date.  Each vested stock option entitles the recipient to purchase one Common Share at an exercise price of $14.77, which was the closing price of the Common Shares on April 15, 2021. 

The grant-date fair value of the RSUs was estimated to be $14.77 based on the closing price of the Common Shares on the date of grant. A grant-date fair value of $23.40 was estimated for the PSUs using a Monte Carlo valuation model, and a grant-date fair value of $8.33 was estimated for the stock options using the Black-Scholes option pricing model. The following table summarizes the assumptions used to determine the fair values of the PSUs and stock options granted.

		PSUs		Stock options
Grant-date stock price	$	14.77	$	14.77
Exercise price		NA	$	14.77
Dividend yield		0%		0%
Expected volatility(1)		76.9%		61.7%
Risk-free interest rate(2)		0.3%		1.0%
Expected life (in years)(3)		2.71		6.00

(1) Determined based on the historical volatility of the Common Shares over the performance period of the PSUs and expected life of the stock options.

(2) Determined based on U.S. Treasury yields with a remaining term equal to the performance period of the PSUs and expected life of the stock options.

(3) Determined based on the performance period of the PSUs and the mid-point of vesting (three years) and expiration (ten years) for the stock options. 

The aggregate grant-date fair value of the RSUs, PSUs and stock options was determined to be $3.2 million, which will be recognized on a straight-line basis over the three-year requisite service period ending April 15, 2024.  As at July 3, 2021, total compensation costs not yet recognized as an expense was $2.9 million.

10.  Other Expense, Net

The components of other expense (income) were as follows:

	Quarter ended			Two quarters ended
	July 3, 2021	June 27, 2020		July 3, 2021	June 27, 2020
	$	$		$	$
Facility closure and related costs(1)	2,962	-		4,394	-
Employee termination costs (recovery)(2)	1,161	(377	)	1,161	193
Divestiture costs(3)	291	-		474	-
Settlement loss, net(4)	163	-		163	-
Product withdrawal recovery(5)	-	(322	)	-	(322	)
Other	84	(136	)	84	(151	)
	4,661	(835	)	6,276	(280	)

SUNOPTA INC. 19 July 3, 2021 10-Q

(1)  Facility closure and related costs

For the quarter and two quarters ended July 3, 2021, the Company recognized asset impairment charges of $3.0 million in connection with its decision to exit its leased South Gate, California, fruit ingredient processing facility in July 2021. In addition, for the two quarters ended July 3, 2021, facility closure costs include costs to complete the exit from the Company's Santa Maria, California, frozen fruit processing facility that commenced in the fourth quarter of 2020 and was substantially completed by February 2021.

(2)  Employee termination costs (recovery)

For the quarter ended July 3, 2021, expense represents employee termination costs of $1.2 million for the approximately 60 employees impacted by the closure of the Company's fruit ingredient processing facility.

For the quarter and two quarters ended June 27, 2020, expense includes severance benefits of $0.1 million and $1.1 million, respectively, for employees terminated in connection with the consolidation of the Company's corporate office functions into Minneapolis, Minnesota, net of reversal of $0.4 million and $0.9 million, respectively, of previously recognized stock-based compensation expense related to forfeited awards previously granted to terminated employees.

(3)  Divestiture costs

For the quarter and two quarters ended July 3, 2021, expense relates to professional fees incurred in connection with post-closing matters related to the divestiture of Tradin Organic.

(4)  Settlement loss, net

For the quarter and two quarters ended July 3, 2021, expense represents a $0.5 million loss on the settlement of an employment-related legal matter, partially offset by a gain related to a project cancellation.

(5)  Product withdrawal recovery

For the quarter and two quarters ended June 27, 2020, income represents the reversal of previously accrued costs related to a withdrawal of certain consumer-packaged products. These costs were recognized in other expense in 2016.

SUNOPTA INC. 20 July 3, 2021 10-Q

11. Earnings (Loss) Per Share

Basic and diluted earnings (loss) per share were calculated as follows (shares in thousands):

		Quarter ended						Two quarters ended
		July 3, 2021			June 27, 2020			July 3, 2021			June 27, 2020
Basic Earnings (Loss) Per Share
Numerator for basic earnings (loss) per share:
Earnings (loss) from continuing operations	$	(918	)	$	(5,133	)	$	754		$	(9,097	)
Less: dividends and accretion on Series A Preferred Stock		-			(2,066	)		(1,212	)		(4,091	)
Less: dividends and accretion on Series B-1 Preferred Stock		(744	)		(538	)		(1,485	)		(538	)
Loss from continuing operations attributable to common shareholders		(1,662	)		(7,737	)		(1,943	)		(13,726	)
Earnings from discontinued operations		-			6,140			-			13,465
Loss attributable to common shareholders	$	(1,662	)	$	(1,597	)	$	(1,943	)	$	(261	)
Denominator for basic earnings (loss) per share:
Basic weighted-average number of shares outstanding		105,676			89,089			100,898			88,625
Basic earnings (loss) per share:
From continuing operations	$	(0.02	)	$	(0.09	)	$	(0.02	)	$	(0.15	)
From discontinued operations		-			0.07			-			0.15
Basic loss per share	$	(0.02	)	$	(0.02	)	$	(0.02	)	$	(0.00	)
Diluted Earnings (Loss) Per Share
Numerator for diluted earnings (loss) per share:
Earnings (loss) from continuing operations	$	(918	)	$	(5,133	)	$	754		$	(9,097	)
Less: dividends and accretion on Series A Preferred Stock		-			(2,066	)		(1,212	)		(4,091	)
Less: dividends and accretion on Series B-1 Preferred Stock		(744	)		(538	)		(1,485	)		(538	)
Loss from continuing operations attributable to common shareholders		(1,662	)		(7,737	)		(1,943	)		(13,726	)
Earnings from discontinued operations		-			6,140			-			13,465
Loss attributable to common shareholders	$	(1,662	)	$	(1,597	)	$	(1,943	)	$	(261	)
Denominator for diluted earnings (loss) per share:
Basic weighted-average number of shares outstanding		105,676			89,089			100,898			88,625
Dilutive effect of the following:
Stock options, restricted stock units and performance share units(1)		-			-			-			-
Series B-1 Preferred Stock(2)		-			-			-			-
Series A Preferred Stock(3)		-			-			-			-
Diluted weighted-average number of shares outstanding		105,676			89,089			100,898			88,625
Diluted earnings (loss) per share:
From continuing operations	$	(0.02	)	$	(0.09	)	$	(0.02	)	$	(0.15	)
From discontinued operations		-			0.07			-			0.15
Diluted loss per share	$	(0.02	)	$	(0.02	)	$	(0.02	)	$	(0.00	)

(1)    For the quarter and two quarters ended July 3, 2021, 2,764,865 (June 27, 2020 - 753,645) and 4,317,118 (June 27, 2020 - 876,593) potential common shares, respectively, were excluded from the calculation of diluted loss per share due to their effect of reducing the loss per share from continuing operations. Dilutive potential common shares consist of stock options, RSUs, and certain contingently issuable PSUs. In addition, for the quarter and two quarters ended July 3, 2021, stock options and RSUs to purchase or receive 263,134 (June 27, 2020 - 2,629,179) and 260,634 (June 27, 2020 - 3,079,418) potential common shares, respectively, were anti-dilutive because the assumed proceeds exceeded the average market price of the Common Shares for the respective periods.

SUNOPTA INC. 21 July 3, 2021 10-Q

(2) For the quarter and two quarters ended July 3, 2021 and June 27, 2020, it was more dilutive to assume the Series B-1 Preferred Stock was not converted into Common Shares and, therefore, the numerator of the diluted earnings per share calculation was not adjusted to add back the dividends and accretion on the Series B-1 Preferred Stock and the denominator was not adjusted to include 12,178,667 and 12,000,000 Common Shares issuable on an if-converted basis as at July 3, 2021 and June 27, 2020, respectively.

(3) As described in note 8, on February 22, 2021, all shares of Series A Preferred Stock were exchanged for 12,633,427 Common Shares, representing 12.3% of the Company's issued and outstanding Common Shares on a post-exchange basis as at February 22, 2021. For the quarter and two quarters ended June 27, 2020, it was more dilutive to assume the Series A Preferred Stock was not converted into Common Shares and, therefore, the numerator of the diluted earnings per share calculation was not adjusted to add back the dividends and accretion on the Series A Preferred Stock and the denominator was not adjusted to include 12,385,714 Common Shares issuable on an if-converted basis as at June 27, 2020.

12. Supplemental Cash Flow Information

		Quarter ended				Two quarters ended
		July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
		$		$		$		$
Changes in Operating Assets and Liabilities
Accounts receivable		5,118		17,612		(10,385	)	(251	)
Inventories		(64,514	)	(33,858	)	(82,108	)	(727	)
Accounts payable and accrued liabilities		7,420		7,827		14,920		1,543
Other operating assets and liabilities		1,654		705		5,595		8,145
		(50,322	)	(7,714	)	(71,978	)	8,710
Non-Cash Investing and Financing Activities
Right-of-use assets obtained in exchange for lease liabilities:
	Operating leases(1)	16,275		116		17,289		193
	Finance leases (see note 7(2))	-		-		29,906		-
Change in accrued additions to property, plant and equipment		1,397		3,229		(617	)	2,502
Change in accrued dividends on preferred stock		-		481		(1,769	)	481
Dividends paid in kind on preferred stock		-		1,700		-		1,700
Change in accrued transaction costs related to the divestiture of Tradin Organic(2)		-		-		(13,380	)	-
Change in accrued debt issuance costs		-		-		(1,690	)	-

(1)  For the quarter and two quarters ended July 3, 2021, the Company recognized additional operating right-of-use assets of $16.3 million and $17.3 million, respectively, together with a corresponding amount of operating lease liabilities, mainly related to the addition of a new warehouse facility and related equipment to support the Company's plant-based food and beverage operations. The initial term of the warehouse facility lease is approximately 10 years, and the operating lease liability was measured using the Company's incremental borrowing rate of approximately 4.50%.

(2)  For the two quarters ended July 3, 2021, the settlement of transaction costs related to the divestiture of Tradin Organic is included in investing activities of discontinued operations on consolidated statements of cash flows.

SUNOPTA INC. 22 July 3, 2021 10-Q

13.  Commitments and Contingencies

Various claims and potential claims arising in the normal course of business are pending against the Company. It is the opinion of management that these claims or potential claims are without merit and the amount of potential liability, if any, to the Company is not determinable. Management believes the final determination of these claims or potential claims will not materially affect the financial position or results of operations of the Company. 

14.  Segmented Information

The segment information below is presented on a continuing operations basis, with prior period information recast to reflect the reporting of Tradin Organic as discontinued operations. Following the divestiture of Tradin Organic, the composition of the Company's two continuing operating segments is as follows:

• Plant-Based Foods and Beverages includes plant-based beverages and liquid and dry ingredients (utilizing oat, almond, rice, soy, coconut, hemp, and other bases), as well as broths, teas, and nutritional beverages.  In addition, Plant-Based Foods and Beverages includes packaged dry- and oil-roasted inshell sunflower and sunflower kernels, as well as corn-, soy-, and legume-based roasted snacks, and the processing and sale of raw sunflower inshell and kernel for food and feed applications. 

• Fruit-Based Foods and Beverages includes 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), and custom fruit preparations for industrial use.  In addition, Fruit-Based Foods and Beverages includes fruit snacks, including bars, twists, ropes, and bite-sized varieties.  Prior to the Company's exit from its fruit ingredient processing facility in July 2021 (see note 10), Fruit-Based Foods and Beverages also produced custom fruit preparations for industrial use.

Corporate Services provides a variety of management, financial, information technology, treasury, and administration services to each of the Company's operating segments.

When reviewing the operating results of the Company's operating segments, management uses segment revenues from external customers and segment operating income/loss to assess performance and allocate resources. Total segment operating income/loss includes general and administrative expenses incurred by Corporate Services and excludes other income/expense items and goodwill impairments. In addition, interest on corporate debt and income taxes are not allocated to the operating segments.

SUNOPTA INC. 23 July 3, 2021 10-Q

Segment Revenues and Operating Income

Reportable segment operating results for the quarters and two quarters ended July 3, 2021 and June 27, 2020 were as follows:

	Quarter ended				Two quarters ended
	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
	$		$		$		$
Segment revenues from external customers
Plant-Based Foods and Beverages	111,359		91,705		230,810		197,947
Fruit-Based Foods and Beverages	90,914		92,696		179,103		194,051
Total revenues from external customers	202,273		184,401		409,913		391,998
Segment operating income (loss)
Plant-Based Foods and Beverages	8,641		10,484		21,958		24,337
Fruit-Based Foods and Beverages	(1,447	)	(2,016	)	(3,341	)	(6,718	)
Corporate Services	(5,471	)	(8,844	)	(10,809	)	(15,236	)
Total segment operating income (loss)	1,723		(376	)	7,808		2,383
Other income (expense), net (see note 10)	(4,661	)	835		(6,276	)	280
Interest expense, net	(1,631	)	(7,413	)	(3,291	)	(15,078	)
Loss from continuing operations before income taxes	(4,569	)	(6,954	)	(1,759	)	(12,415	)

Segment Depreciation and Amortization

Depreciation and amortization by reportable segment for the quarters and two quarters ended July 3, 2021 and June 27, 2020 was as follows:

	Quarter ended		Two quarters ended
	July 3, 2021	June 27, 2020	July 3, 2021	June 27, 2020
	$	$	$	$
Plant-Based Foods and Beverages	3,881	2,380	7,015	4,748
Fruit-Based Foods and Beverages	3,861	4,110	7,630	8,246
Corporate Services	1,168	1,165	2,308	2,386
Total depreciation and amortization	8,910	7,655	16,953	15,380

SUNOPTA INC. 24 July 3, 2021 10-Q

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Financial Information

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the interim consolidated financial statements, and notes thereto, for the quarter ended July 3, 2021 contained under Item 1 of this Quarterly Report on Form 10-Q and in conjunction with the annual consolidated financial statements, and notes thereto, contained in the Annual Report on Form 10-K for the fiscal year ended January 2, 2021 ("Form 10-K").  Unless otherwise indicated herein, the discussion and analysis contained in this MD&A includes information available to August 11, 2021. 

Certain statements contained in this MD&A may constitute forward-looking statements as defined under securities laws.  Forward-looking statements may relate to our future outlook and anticipated events or results and may include statements regarding our future financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives.  In some cases, forward-looking statements can be identified by terms such as "anticipate," "estimate," "target," "intend," "project," "potential," "predict," "continue," "believe," "expect," "can," "could," "would," "should," "may," "might," "plan," "will," "budget," "forecast," or other similar expressions concerning matters that are not historical facts, or the negative of such terms are intended to identify forward-looking statements; however, the absence of these words does not necessarily mean that a statement is not forward-looking. To the extent any forward-looking statements contain future-oriented financial information or financial outlooks, such information is being provided to enable a reader to assess our financial condition, material changes in our financial condition, our results of operations, and our liquidity and capital resources.  Readers are cautioned that this information may not be appropriate for any other purpose, including investment decisions. 

Forward-looking statements contained in this MD&A are based on certain factors and assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities.  While we consider these assumptions to be reasonable, based on information currently available, they may prove to be incorrect.  These factors are more fully described in the "Risk Factors" section at Item 1A of the Form 10-K and Item 1A of Part II of this report.

Forward-looking statements contained in this commentary are based on our current estimates, expectations and projections, which we believe are reasonable as of the date of this report.  Forward-looking statements are not guarantees of future performance or events.  You should not place undue importance on forward-looking statements and should not rely upon this information as of any other date.  Other than as required under securities laws, we do not undertake to update any forward-looking information at any particular time. Neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements, and we hereby qualify all our forward-looking statements by these cautionary statements.

Unless otherwise noted herein, all currency amounts in this MD&A are expressed in U.S. dollars.  All tabular dollar amounts are expressed in thousands of U.S. dollars, except per share amounts.

Overview

We procure, process, and package plant-based and fruit-based food and beverage products for sale to retailers, foodservice operators, branded food companies, and food manufacturers.  The composition of our two operating segments is as follows:

• Plant-Based Foods and Beverages - We offer a full line of plant-based beverages and liquid and dry ingredients (utilizing oat, almond, rice, soy, coconut, hemp, and other bases), as well as broths, teas, and nutritional beverages.  In addition, we package dry- and oil-roasted inshell sunflower and sunflower kernels, as well as corn-, soy-, and legume-based roasted snacks, and we process and sell 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).  In addition, we offer fruit snacks, including bars, twists, ropes, and bite-sized varieties.  Prior to the exit from our fruit ingredient processing facility in July 2021 (as described below under "Recent Developments"), we also produced custom fruit preparations for industrial use.

SUNOPTA INC. 25 July 3, 2021 10-Q

Until December 2020, we had a third operating segment referred to as Global Ingredients that comprised our organic ingredient sourcing and production business, Tradin Organic, which we sold on December 30, 2020.  The segment information presented in this MD&A for the quarter and two quarters ended June 27, 2020 has been recast to reflect the reporting of Tradin Organic as discontinued operations.

Acquisition of Dream^® and WestSoy^® Brands

On April 15, 2021, we acquired the Dream and WestSoy plant-based beverage brands and related private label products in North America from The Hain Celestial Group, Inc.  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.  Together, the Dream and WestSoy brands generated revenues from external customers of approximately $40 million in 2020.  We currently produce approximately one-half of the Dream product line and all of the WestSoy products.  We intend to bring production of the remaining Dream products in-house over the 12-month period following the date of acquisition.  We expect these acquired brands will complement our core private label and co-manufacturing plant-based beverage business, while providing a platform for marketing our own plant-based product innovations. 

The $33 million base purchase price for the Dream and WestSoy brands was partially funded by a new $20 million first-in-last-out ("FILO") term loan under our revolving credit facility (as described below under "Liquidity and Capital Resources.")

Exit from Fruit Ingredient Processing Facility

On April 12, 2021, we finalized our decision to exit our leased South Gate, California, fruit ingredient processing facility in July 2021.  We will be transferring production of fruit-based toppings to our Jacona, Mexico, processing facility, while exiting the preparation of fruit-based yogurt and bakery applications.  In the second quarter of 2021, we recognized $3.0 million of asset impairment charges and $1.2 million of employee termination costs in connection with this closure.

Impact of COVID-19

We continue to actively address the impacts of the COVID-19 global pandemic on our operations.  We began to experience impacts to our business and results of operations late in the first quarter of 2020, and these impacts continued throughout the remainder of fiscal 2020.  As a result, during the last nine months of 2020, we saw significant shifts in the mix of our business, resulting in lower demand for our food and beverage products from the foodservice channel due to the full or partial closure of many foodservice outlets, and an increase in demand from retail customers as consumers increased their at-home food and beverage consumption.  With the easing of COVID-19 restrictions, we saw overall higher foodservice demand and lower retail volumes in the second quarter of 2021, compared with the same period last year, as more foodservice outlets reopened and consumer buying patterns adapted to the evolving environment. 

To date, we have not experienced any material interruptions in our plant operations due to employee absences, or to our supply chains as a result of the pandemic.  However, we have seen significant increases in transportation costs due to disruptions caused by or related to the pandemic.

To date, the impacts of the COVID-19 pandemic on our operations have not had a significant impact on our liquidity, cash flows or capital resources.   

SUNOPTA INC. 26 July 3, 2021 10-Q

Consolidated Results of Operations for the Quarters Ended July 3, 2021 and June 27, 2020

		July 3, 2021		June 27, 2020		Change		Change
For the quarter ended		$		$		$		%
Revenues
	Plant-Based Foods and Beverages	111,359		91,705		19,654		21.4%
	Fruit-Based Foods and Beverages	90,914		92,696		(1,782	)	-1.9%
Total revenues		202,273		184,401		17,872		9.7%
Gross Profit
	Plant-Based Foods and Beverages	19,896		16,731		3,165		18.9%
	Fruit-Based Foods and Beverages	6,440		6,528		(88	)	-1.3%
Total gross profit		26,336		23,259		3,077		13.2%
Segment operating income (loss)(1)
	Plant-Based Foods and Beverages	8,641		10,484		(1,843	)	-17.6%
	Fruit-Based Foods and Beverages	(1,447	)	(2,016	)	569		28.2%
	Corporate Services	(5,471	)	(8,844	)	3,373		38.1%
Total segment operating income (loss)		1,723		(376	)	2,099		558.2%
Other expense (income), net		4,661		(835	)	5,496		658.2%
Earnings (loss) from continuing operations before the following		(2,938	)	459		(3,397	)	-740.1%
Interest expense, net		1,631		7,413		(5,782	)	-78.0%
Income tax benefit		(3,651	)	(1,821	)	(1,830	)	-100.5%
Loss from continuing operations(2),(3)		(918	)	(5,133	)	4,215		82.1%
Earnings from discontinued operations		-		6,140		(6,140	)	-100.0%
Net earnings (loss)		(918	)	1,007		(1,925	)	-191.2%
Dividends and accretion on preferred stock		(744	)	(2,604	)	1,860		71.4%
Loss attributable to common shareholders(4)		(1,662	)	(1,597	)	(65	)	-4.1%

(1)  When assessing the financial performance of our operating segments, we use an internal measure of operating income/loss that excludes other income/expense items and goodwill impairments determined in accordance with U.S. GAAP.  This measure is the basis on which management, including the CEO, assesses the underlying performance of our operating segments.

We believe that disclosing this non-GAAP measure assists investors in comparing financial performance across reporting periods on a consistent basis by excluding items that are not indicative of our operating performance.  However, the non-GAAP measure of operating income should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP.  The following table presents a reconciliation of segment operating income/loss to "earnings/loss from continuing operations before the following," which we consider to be the most directly comparable U.S. GAAP financial measure.

	Plant-Based	Fruit-Based
	Foods and	Foods and		Corporate
	Beverages	Beverages		Services		Consolidated
For the quarter ended	$	$		$		$
July 3, 2021
Segment operating income (loss)	8,641	(1,447	)	(5,471	)	1,723
Other income (expense), net	219	(4,112	)	(768	)	(4,661	)
Earnings (loss) from continuing operations before the following	8,860	(5,559	)	(6,239	)	(2,938	)
June 27, 2020
Segment operating income (loss)	10,484	(2,016	)	(8,844	)	(376	)
Other income (expense), net	1	479		355		835
Earnings (loss) from continuing operations before the following	10,485	(1,537	)	(8,489	)	459

We believe that investors' understanding of our financial performance is enhanced by disclosing the specific items that we exclude from segment operating income/loss. However, any measure of operating income/loss excluding any or all of these items is not, and should not be viewed as, a substitute for operating income/loss prepared under U.S. GAAP. These items are presented solely to allow investors to more fully understand how we assess financial performance.

SUNOPTA INC. 27 July 3, 2021 10-Q

(2)  When assessing our financial performance, we use an internal measure of earnings/loss from continuing operations determined in accordance with U.S. GAAP that includes dividends and accretion on preferred stock and excludes specific items recognized in other income/expense, asset impairment charges, and other unusual items that are identified and evaluated on an individual basis, which due to their nature or size, we would not expect to occur as part of our normal business on a regular basis.  We believe that the identification of these excluded items enhances the analysis of the financial performance of our business when comparing those operating results between periods, as we do not consider these items to be reflective of normal business operations.  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.   

		July 3, 2021				June 27, 2020
				Per Share				Per Share
For the quarter ended		$		$		$		$
Loss from continuing operations		(918	)			(5,133	)
Dividends and accretion on preferred stock		(744	)			(2,604	)
Loss from continuing operations attributable to common shareholders		(1,662	)	(0.02	)	(7,737	)	(0.09	)
Adjusted for:
	Costs related to exit from fruit ingredient processing facility(a)	4,123				-
	Acquisition, divestiture, and related costs(b)	1,434				-
	Plant expansion costs(c)	-				92
	Costs related to Value Creation Plan(d)	-				78
	Other(e)	247				(457	)
	Net income tax effect(f)	(4,022	)			170
Adjusted earnings (loss)		120		0.00		(7,854	)	(0.09	)

(a)  Reflects asset impairment charges of $3.0 million and employee termination costs of $1.2 million related to the exit from our fruit ingredient processing facility, which were recorded in the other expense.

(b)  Represents third-party costs associated with completed or potential acquisitions and divestitures, including costs related to the evaluation, execution, and integration of acquisitions or completion of divestitures.  For the second quarter of 2021, these costs were mainly related to the transition and integration of the acquired Dream and WestSoy brands and the assessment of post-closing adjustments related to the divestiture of Tradin Organic, which were recorded in SG&A expenses ($1.1 million) and other expense ($0.3 million).

(c)  Reflects costs related to the expansion of our plant-based extraction capabilities, which were recorded in cost of goods sold.

(d)  Reflects professional fees of $0.2 million and employee retention costs of $0.2 million recorded in SG&A expenses, and employee termination costs of $0.1 million recorded in other expense, partially offset by a $0.4 million reversal of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees recorded in other income.

(e)  For the second quarter of 2021, other mainly reflects a $0.5 million loss on the settlement of employment-related legal matter, partially offset by a gain related to a project cancellation, which were recorded in other expense/income.  For the second quarter of 2020, other includes the reversal of previously accrued costs related to the withdrawal of certain consumer-packaged products in 2016, which was recorded in other income.

(f)   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.  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.

(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.  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)).  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. 

SUNOPTA INC. 28 July 3, 2021 10-Q

		July 3, 2021		June 27, 2020
For the quarter ended		$		$
Loss from continuing operations		(918	)	(5,133	)
Income tax benefit		(3,651	)	(1,821	)
Interest expense, net		1,631		7,413
Other expense (income), net		4,661		(835	)
Total segment operating income (loss)		1,723		(376	)
	Depreciation and amortization	8,910		7,655
	Stock-based compensation(a)	4,370		2,215
	Acquisition, divestiture, and related costs(b)	1,143		-
	Costs related to Value Creation Plan(c)	-		456
	Plant expansion costs(d)	-		92
Adjusted EBITDA		16,146		10,042

(a)  For the second quarter of 2020, stock-based compensation of $2.2 million was recorded in SG&A expenses and the reversal of $0.4 million of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees was recognized in other income.

(b)  For the second quarter of 2021, acquisition, divestiture, and related costs were mainly related to the transition and integration of the acquired Dream and WestSoy brands, which were recorded in SG&A expenses. 

(c)  Reflects professional fees of $0.2 million and employee retention costs of $0.2 million recorded in SG&A expenses.

(d)  Reflects costs related to the expansion of our plant-based extraction capabilities, which were recorded in cost of goods sold.

Although we use adjusted EBITDA as a measure to assess the performance of our business and for the other purposes set forth above, this measure has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for an analysis of our results of operations as reported in accordance with U.S. GAAP.  Some of these limitations are:

• adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest payments on our indebtedness;

• adjusted EBITDA does not include the recovery/payment 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.

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. GAAP and non-GAAP measures, such as revenues, gross profit, segment operating income/loss, net 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 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.  In particular, we evaluate our revenues on a basis that excludes the effects of fluctuations in commodity pricing.  In addition, we exclude specific items from our reported results that due to their nature or size, we do not expect to occur as part of our normal business on a regular basis.  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.

Revenues for the quarter ended July 3, 2021 increased by 9.7% to $202.3 million from $184.4 million for the quarter ended June 27, 2020.  Excluding the impact of incremental revenues from the acquisition of the Dream and WestSoy brands (an increase in revenues of $4.7 million) and changes in commodity-related pricing (an increase in revenues of $2.1 million), revenues increased by 6.0% in the second quarter of 2021, compared with the second quarter of 2020. 

For the quarter ended July 3, 2021, Plant-Based Foods and Beverages segment revenues increased by 21.4% to $111.4 million from $91.7 million for the quarter ended June 27, 2020.  The increase in plant-based product revenues reflected strong sales growth for our oat-based product offerings, together with increased foodservice demand for plant-based beverages due to the easing of COVID-19 restrictions and incremental revenues from the acquisition of the Dream and WestSoy brands, partially offset by softer retail volumes of plant-based beverages and everyday broth offerings as at-home consumption levels continued to normalize.

For the quarter ended July 3, 2021, Fruit-Based Foods and Beverages segment revenues for the quarter ended July 3, 2021 decreased by 1.9% to $90.9 million from $92.7 million for the quarter ended June 27, 2020.  The decrease in fruit-based product revenues reflected lower volumes of retail frozen fruit due to the continued normalization of at-home consumption, together with the rationalization of marginally profitable customers and products, and the impact of supply constraints for certain fruit varieties on blended frozen fruit offerings.  These declines were partially offset by strong growth in fruit snacks, driven by returning consumer demand for portable snacks and new business development, together with increased foodservice demand for fruit-based toppings.

SUNOPTA INC. 29 July 3, 2021 10-Q

Gross profit increased $3.1 million, or 13.2%, to $26.3 million for the quarter ended July 3, 2021, compared with $23.3 million for the quarter ended June 27, 2020.  As a percentage of revenues, gross profit for the quarter ended July 3, 2021 was 13.0% compared to 12.6% for the quarter ended June 27, 2020, an increase of 40 basis points. 

Gross profit for the Plant-Based Foods and Beverages segment increased $3.2 million to $19.9 million for the quarter ended July 3, 2021, compared with $16.7 million for the quarter ended June 27, 2020, while gross profit as a percentage of revenues decreased to 17.9% in the second quarter of 2021 from 18.2% in the second quarter of 2020.  The 30-basis point decrease in the gross profit percentage reflected incremental depreciation expense related to new plant-based processing capacity, together with increased transportation costs.  These factors were partially offset by strong volumes and productivity improvements within our plant-based beverage and ingredient extraction operations, and improved plant utilization and cost reductions within our sunflower and roasting operations.

Gross profit for the Fruit-Based Foods and Beverages segment decreased $0.1 million to $6.4 million for the quarter ended July 3, 2021, compared with $6.5 million for the quarter ended June 27, 2020, while gross profit as a percentage of revenues increased to 7.1% in the second quarter of 2021 from 7.0% in the second quarter of 2020.  The 10-basis point increase in the gross profit percentage reflected strong fruit snack and fruit ingredient volumes, together with increased pass-through sales pricing, rationalization of marginally profitable business, and productivity-driven cost savings in our frozen fruit operations.  These factors were mostly offset by the impacts of higher strawberry commodity prices, a higher cost of fruit inventory from Mexico due to the impact of a strengthening Mexican peso, and increased transportation costs.

For the quarter ended July 3, 2021, we realized total segment operating income of $1.7 million, compared with a total segment operating loss of $0.4 million for the quarter ended June 27, 2020.  The $2.1 million increase in total segment operating income mainly reflected higher gross profit, as described above, partially offset by a $0.8 million increase in SG&A expenses, primarily due to incremental third-party consulting costs related to the transition and integration of the recently acquired Dream and WestSoy brands, together with increased stock-based compensation expense, partially offset by lower employee-related variable compensation costs.  In addition, in the second quarter of 2021, we recorded $0.3 million of incremental amortization expense related to the acquired Dream and WestSoy brand name intangible assets.   

Further details on revenue, gross profit and segment operating income/loss variances are provided below under "Segmented Operations Information."

Other expense of $4.7 million for the quarter ended July 3, 2021 mainly reflected asset impairment charges and employee termination costs related to the exit from our fruit ingredient processing facility.  Other income of $0.8 million for the quarter ended June 27, 2020 mainly reflected the reversal of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees and the reversal of costs that remained accrued related to the withdrawal of certain consumer-packaged products in 2016. 

Net interest expense decreased by $5.8 million to $1.6 million for the quarter ended July 3, 2021, compared with $7.4 million for the quarter ended June 27, 2020, 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.   

We recognized an income tax benefit of $3.7 million for the quarter ended July 3, 2021, compared with $1.8 million for the quarter ended June 27, 2020. 

Loss from continuing operations for the quarter ended July 3, 2021 was $0.9 million, compared with a loss of $5.1 million for the quarter ended June 27, 2020.  Diluted loss per share from continuing operations attributable to common shareholders (after dividends and accretion on preferred stock) was $0.02 for the quarter ended July 3, 2021, compared with a loss per share $0.09 for the quarter ended June 27, 2020. 

Earnings from the discontinued operations of Tradin Organic were $6.1 million for the quarter ended June 27, 2020.

SUNOPTA INC. 30 July 3, 2021 10-Q

On a consolidated basis, we realized a loss attributable to common shareholders of $1.7 million (diluted loss per share of $0.02) for the quarter ended July 3, 2021, compared with loss attributable to common shareholders of $1.6 million (diluted loss per share of $0.02) for the quarter ended June 27, 2020.  The loss attributable to common shareholders for the second quarters of 2021 and 2020 reflected dividends and accretion on preferred stock of $0.7 million and $2.6 million, respectively.  The decline in preferred stock dividends and accretion reflected the exchange of all of the shares of Series A preferred stock for shares of our common stock in February 2021.

For the quarter ended July 3, 2021, adjusted earnings were $0.1 million, or $0.00 per diluted share, compared with an adjusted loss of $7.9 million, or $0.09 per diluted share for the quarter ended June 27, 2020.  Adjusted EBITDA for the quarter ended July 3, 2021 was $16.1 million, compared with $10.0 million for the quarter ended June 27, 2020.  Adjusted loss and adjusted EBITDA are non-GAAP financial measures.  See footnotes (2) and (3) to the table above for a reconciliation of adjusted loss and adjusted EBITDA from earnings/loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure. 

Segmented Operations Information

Plant-Based Foods and Beverages
For the quarter ended		July 3, 2021		June 27, 2020		Change		% Change
Revenues	$	111,359	$	91,705	$	19,654		21.4%
Gross profit		19,896		16,731		3,165		18.9%
Gross profit %		17.9%		18.2%				-0.3%
Operating income	$	8,641	$	10,484	$	(1,843	)	-17.6%
Operating income %		7.8%		11.4%				-3.6%

Plant-Based Foods and Beverages contributed $111.4 million in revenues for the quarter ended July 3, 2021, compared to $91.7 million for the quarter ended June 27, 2020, an increase of $19.7 million, or 21.4%.  Excluding the impact on revenues of incremental revenues from the acquisition of the Dream and WestSoy brands (an increase in revenues of $4.7 million) and changes in sunflower commodity-related pricing (a decrease in revenues of $0.8 million), Plant-Based Foods and Beverages revenues increased approximately 17.2%.  The table below explains the increase in reported revenues:

Plant-Based Foods and Beverages Revenue Changes
Revenues for the quarter ended June 27, 2020		$91,705
	Growth in sales of oat-based product offerings, together with increased foodservice demand for plant-based beverages due to the easing of COVID-19 restrictions, partially offset by softer retail volumes of plant-based beverages and everyday broth offerings as at-home consumption levels continued to normalize	15,657
	Incremental Dream and WestSoy revenues	4,680
	Higher volumes of birdfeed and raw sunflower kernel, largely offset by lower volumes of ready-to-eat snacks and roasted ingredients	81
	Decreased commodity pricing for sunflower	(764)
Revenues for the quarter ended July 3, 2021		$111,359

Gross profit in Plant-Based Foods and Beverages increased by $3.2 million to $19.9 million for the quarter ended July 3, 2021, compared to $16.7 million for the quarter ended June 27, 2020, while the gross profit percentage decreased by 30 basis points to 17.9%.  The decrease in the gross profit percentage reflected incremental depreciation expense and increased transportation costs.  These factors were partially offset by strong volumes within our plant-based beverage and ingredient extraction operations, and improved plant utilization and cost reductions within our sunflower and roasting operations.  The table below explains the increase in gross profit:

SUNOPTA INC. 31 July 3, 2021 10-Q

Plant-Based Foods and Beverages Gross Profit Changes
Gross profit for the quarter ended June 27, 2020		$16,731
	Higher volumes within our plant-based beverage and ingredient extraction operations, together with the incremental contribution from the Dream and WestSoy brands, partially offset by incremental depreciation expense and increased transportation costs	2,174
	Increased volumes for birdfeed and raw sunflower kernel, together with improved plant utilization and cost reductions within our sunflower and roasting operations	991
Gross profit for the quarter ended July 3, 2021		$19,896

Operating income in Plant-Based Foods and Beverages decreased by $1.9 million to $8.6 million for the quarter ended July 3, 2021, compared to $10.5 million for the quarter ended June 27, 2020. The table below explains the decrease in operating income:

Plant-Based Foods and Beverages Operating Income Changes
Operating income for the quarter ended June 27, 2020		$10,484
	Increase in corporate cost allocations	(2,562)
	Increased third-party consulting costs related to the transition and integration of the acquired Dream and WestSoy brands, and incremental amortization of the related brand name intangible assets, together with higher employee compensation costs related to new product development and sales and marketing positions	(2,446)
	Increase in gross profit, as explained above	3,165
Operating income for the quarter ended July 3, 2021		$8,641

Building on the strong performance in the first half of 2021, we expect continued growth in revenues and gross profit from our Plant-Based Foods and Beverages segment in second half of 2021, driven by the completion of three major capital projects in the fourth quarter of 2020, which significantly increased our plant-based beverage processing and ingredient extraction capacity and capabilities.  In addition, the Dream and WestSoy brands are expected to contribute approximately $40 million of annual revenues, of which $15 million to $20 million is incremental given that we produced of all of the WestSoy products, and approximately one-half of the Dream products prior to acquiring the brands.  Assuming conditions associated with the COVID-19 pandemic do not significantly worsen during the second half of 2021, we anticipate a continuation of the trends experienced in the first half of 2021, with strengthening foodservice demand offsetting a normalization of retail volumes.  We expect the gross margin profile of our plant-based operations in 2021 to be comparable to 2020, as planned productivity measures are expected to offset incremental depreciation expense and increased transportation costs.  The statements in this paragraph are forward-looking statements.  See "Forward-Looking Statements" above.  Several factors could adversely impact our ability to meet these forward-looking expectations, including the impact of the ongoing COVID-19 pandemic, unexpected delays in executing on our capital projects, less than anticipated contribution from the Dream and WestSoy brands, less than anticipated benefits from productivity measures, further increases in transportation costs, and unforeseen customer actions, consumer behaviors, competitive pressures, and general economic and political conditions in North America, along with the other factors described above under "Forward-Looking Statements." 

Fruit-Based Foods and Beverages
For the quarter ended		July 3, 2021			June 27, 2020			Change		% Change
Revenues	$	90,914		$	92,696		$	(1,782	)	-1.9%
Gross profit		6,440			6,528			(88	)	-1.3%
Gross profit %		7.1%			7.0%					0.1%
Operating loss	$	(1,447	)	$	(2,016	)	$	569		28.2%
Operating loss %		-1.6%			-2.2%					0.6%

SUNOPTA INC. 32 July 3, 2021 10-Q

Fruit-Based Foods and Beverages contributed $90.9 million in revenues for the quarter ended July 3, 2021, compared to $92.7 million for the quarter ended June 27, 2020, a decrease of $1.8 million, or 1.9%.  Excluding the impact on revenues of changes in raw fruit commodity-related pricing (an increase in revenues of $2.9 million), Fruit-Based Foods and Beverages revenues decreased approximately 5.0%.  The table below explains the decrease in reported revenues:

Fruit-Based Foods and Beverages Revenue Changes
Revenues for the quarter ended June 27, 2020		$92,696
	Lower retail volumes of frozen fruit due to the continued normalization of at-home consumption, together with the rationalization of marginally profitable customers and products, and the impact of supply constraints for certain fruit varieties on blended frozen fruit offerings, partially offset by increased foodservice demand for fruit-based toppings	(10,824)
	Higher sales volumes of fruit snacks products, driven by returning consumer demand for portable snacks and new business development	6,167
	Increased commodity pricing for raw fruit	2,875
Revenues for the quarter ended July 3, 2021		$90,914

Gross profit in Fruit-Based Foods and Beverages decreased by $0.1 million to $6.4 million for the quarter ended July 3, 2021, compared to $6.5 million for the quarter ended June 27, 2020, and the gross profit percentage increased by 10 basis points to 7.1%.  The slight increase in the gross profit percentage reflected strong fruit snack and fruit ingredient volumes, together with increased pass-through sales pricing, rationalization of marginally profitable business, and productivity-driven cost savings in our frozen fruit operations.  These factors were mostly offset by the impacts of higher strawberry commodity prices, unfavorable foreign exchange impacts, and increased transportation costs.  The table below explains the decrease in gross profit:

Fruit-Based Foods and Beverages Gross Profit Changes
Gross profit for the quarter ended June 27, 2020		$6,528
	Lower 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 and increased transportation costs, partially offset by higher pass-through sales pricing for frozen fruit, together with lower processing costs and productivity improvements	(4,047)
	Sales volume growth for fruit snacks, together with increased production volumes and plant utilization	2,152
	Higher sales volumes of fruit-based toppings, together with increased production volumes in advance of the closure of our fruit ingredient processing facility and relocation of certain production lines	1,807
Gross profit for the quarter ended July 3, 2021		$6,440

Operating loss in Fruit-Based Foods and Beverages decreased by $0.6 million to $1.4 million for the quarter ended July 3, 2021, compared to $2.0 million for the quarter ended June 27, 2020. The table below explains the decrease in operating loss:

SUNOPTA INC. 33 July 3, 2021 10-Q

Fruit-Based Foods and Beverages Operating Loss Changes
Operating loss for the quarter ended June 27, 2020		$(2,016)
	Lower reserve levels for credit losses due to improving economic conditions within the foodservice sector, together with an increase in foreign exchange gains within our frozen fruit operations in Mexico	902
	Increase in corporate cost allocations	(245)
	Decrease in gross profit, as explained above	(88)
Operating loss for the quarter ended July 3, 2021		$(1,447)

Assuming conditions associated with the COVID-19 pandemic do not significantly worsen during the second half of 2021, we anticipate a continuation of the trends experienced in the first half of 2021, with the continued normalization of at-home frozen fruit consumption.  We expect this trend, together with the continuing short supply of certain fruit varieties, is expected to have a negative impact on frozen fruit sales volumes for the remainder of the year, partially offset by anticipated strong fruit snack demand.  We completed the exit from our Santa Maria, California, facility in February 2021, and began realizing the resulting cost savings and operational efficiencies in the second quarter of 2021.  In addition, we exited our South Gate, California, fruit ingredient processing facility in July 2021, with the relocation of remaining fruit ingredient production to our Mexican operations expected to be completed in the third quarter of 2021.  Overall, we expect a similar gross margin profile within our fruit-based operations in fiscal 2021, compared to fiscal 2020, driven by profitable fruit snack volumes, together with a reduced manufacturing cost structure and product portfolio rationalization initiatives in frozen fruit and fruit ingredients, offsetting the impacts of lower frozen fruit sales volumes, increased commodity costs, unfavorable foreign exchange impacts, and higher transportation costs.  The statements in this paragraph are forward-looking statements.  See "Forward-Looking Statements" above.  Several factors could adversely impact our ability to meet these forward-looking expectations, including the ongoing COVID-19 pandemic, fruit availability and related impacts on commodity pricing, our assessment of the margin improvement and cost savings to be realized from network optimization and portfolio rationalization initiatives, unexpected costs and delays in the relocation of our remaining fruit ingredient production to Mexico, the outcome of pricing actions with customers, further increases in transportation costs, and unforeseen customer actions, consumer behaviors, competitive pressures, and general economic and political conditions in North America, along with the other factors described above under "Forward-Looking Statements."

Corporate Services
For the quarter ended		July 3, 2021			June 27, 2020			Change	% Change
Operating loss	$	(5,471	)	$	(8,844	)	$	3,373	38.1%

Operating loss at Corporate Services decreased by $3.4 million to $5.5 million for the quarter ended July 3, 2021, compared to a loss of $8.8 million for the quarter ended June 27, 2020. The table below explains the decrease in operating loss:

Corporate Services Operating Loss Changes
Operating loss for the quarter ended June 27, 2020		$(8,844)
	Increase in corporate cost allocations to SunOpta operating segments, as a result of the realignment of resources following the divestiture of Tradin Organic	2,807
	Lower employee-related variable compensation costs, partially offset by an unfavorable foreign exchange impact on Canadian dollar-denominated SG&A expenses	2,778
	Increased stock-based compensation costs related to equity-based short-term and long-term incentive plans for certain employees, mainly due to awarding of grants earlier in 2021 than in 2020	(2,212)
Operating loss for the quarter ended July 3, 2021		$(5,471)

Corporate cost allocations mainly consist of salaries of corporate personnel who directly support the operating segments, as well as costs related to the enterprise resource management system. These expenses are allocated to the operating segments based on (1) specific identification of allocable costs that represent a service provided to each segment and (2) a proportionate distribution of costs based on a weighting of factors such as revenue contribution and the number of people employed within each segment.

SUNOPTA INC. 34 July 3, 2021 10-Q

Consolidated Results of Operations for the two quarters ended July 3, 2021 and June 27, 2020

		July 3, 2021		June 27, 2020		Change		Change
For the two quarters ended		$		$		$		%
Revenues
	Plant-Based Foods and Beverages	230,810		197,947		32,863		16.6%
	Fruit-Based Foods and Beverages	179,103		194,051		(14,948	)	-7.7%
Total revenues		409,913		391,998		17,915		4.6%
Gross Profit
	Plant-Based Foods and Beverages	43,054		37,802		5,252		13.9%
	Fruit-Based Foods and Beverages	13,271		12,630		641		5.1%
Total gross profit		56,325		50,432		5,893		11.7%
Segment operating income (loss)(1)
	Plant-Based Foods and Beverages	21,958		24,337		(2,379	)	-9.8%
	Fruit-Based Foods and Beverages	(3,341	)	(6,718	)	3,377		50.3%
	Corporate Services	(10,809	)	(15,236	)	4,427		29.1%
Total segment operating income		7,808		2,383		5,425		227.7%
Other expense (income), net		6,276		(280	)	6,556		2341.4%
Earnings from continuing operations before the following		1,532		2,663		(1,131	)	-42.5%
Interest expense, net		3,291		15,078		(11,787	)	-78.2%
Income tax benefit		(2,513	)	(3,318	)	805		24.3%
Earnings (loss) from continuing operations(2),(3)		754		(9,097	)	9,851		108.3%
Earnings from discontinued operations		-		13,465		(13,465	)	-100.0%
Net earnings (loss)		754		4,368		(3,614	)	-82.7%
Dividends and accretion on preferred stock		(2,697	)	(4,629	)	1,932		41.7%
Loss attributable to common shareholders(4)		(1,943	)	(261	)	(1,682	)	-644.4%

(1)  The following table presents a reconciliation of segment operating income/loss to "earnings/loss from continuing operations before the following," which we consider to be the most directly comparable U.S. GAAP financial measure (refer to footnote (1) to the "Consolidated Results of Operations for the Quarters Ended July 3, 2021 and June 27, 2020" table regarding the use of this non-GAAP measure).

	Plant-Based		Fruit-Based
	Foods and		Foods and		Corporate
	Beverages		Beverages		Services		Consolidated
For the two quarters ended	$		$		$		$
July 3, 2021
Segment operating income (loss)	21,958		(3,341	)	(10,809	)	7,808
Other income (expense), net	(80	)	(5,477	)	(719	)	(6,276	)
Earnings (loss) from continuing operations before the following	21,878		(8,818	)	(11,528	)	1,532
June 27, 2020
Segment operating income (loss)	24,337		(6,718	)	(15,236	)	2,383
Other income (expense), net	8		(441	)	713		280
Earnings (loss) from continuing operations before the following	24,345		(7,159	)	(14,523	)	2,663

We believe that investors' understanding of our financial performance is enhanced by disclosing the specific items that we exclude from segment operating income. However, any measure of operating income excluding any or all of these items is not, and should not be viewed as, a substitute for operating income prepared under U.S. GAAP. These items are presented solely to allow investors to more fully understand how we assess financial performance.

SUNOPTA INC. 35 July 3, 2021 10-Q

(2)  The following table presents a reconciliation of adjusted loss from earnings/loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure (refer to footnote (2) to the "Consolidated Results of Operations for the Quarters Ended July 3, 2021 and June 27, 2020" table regarding the use of this non-GAAP measure).

		July 3, 2021				June 27, 2020
				Per Share				Per Share
For the two quarters ended		$		$		$		$
Earnings (loss) from continuing operations		754				(9,097	)
Dividends and accretion on preferred stock		(2,697	)			(4,629	)
Loss from continuing operations attributable to common shareholders		(1,943	)	(0.02	)	(13,726	)	(0.15	)
Adjusted for:
	Costs related to exit from fruit ingredient processing facility(a)	4,123				-
	Acquisition, divestiture, and related costs(b)	1,786				-
	Costs related to Value Creation Plan(c)	1,432				1,175
	Plant expansion costs(d)	-				92
	Other(e)	247				(472	)
	Net income tax effect(f)	(4,262	)			(368	)
Adjusted earnings (loss)		1,383		0.01		(13,299	)	(0.15	)

(a)  Reflects asset impairment charges of $3.0 million and employee termination costs of $1.2 million related to the exit from our fruit ingredient processing facility, which were recorded in the other expense.

(b)  Represents third-party costs associated with completed or potential acquisitions and divestitures, including costs related to the evaluation, execution, and integration of acquisitions or completion of divestitures.  For the first two quarters of 2021, these costs were mainly related to the transition and integration of the acquired Dream and WestSoy brands and the assessment of post-closing adjustments related to the divestiture of Tradin Organic, which were recorded in SG&A expenses ($1.3 million) and other expense ($0.5 million).

(c)   For the first two quarters of 2021, represents costs to complete the exit from our Santa Maria, California, frozen fruit processing facility, which were recorded in other expense.  For the first two quarters of 2020, reflects professional fees of $0.5 million and employee retention costs of $0.5 million recorded in SG&A expenses; and employee termination costs of $1.1 million mainly related to the consolidation of our corporate office functions, partially offset by a $0.9 million reversal of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees recorded in other income.

(d)   Reflects costs related to the expansion of our plant-based extraction capabilities, which were recorded in cost of goods sold.

(e)   For the first two quarters of 2021, other mainly reflects a $0.5 million loss on the settlement of employment-related legal matter, partially offset by a gain related to a project cancellation, which were recorded in other expense/income.  For the first two quarters of 2020, other includes the reversal of previously accrued costs related to the withdrawal of certain consumer-packaged products in 2016, which was recorded in other income.

(f)   Reflects the tax effect of the preceding adjustments to earnings calculated based on our estimated annual effective tax rate.

(3)  The following table presents a reconciliation of segment operating income/loss and adjusted EBITDA from earnings/loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure (refer to footnote (3) to the "Consolidated Results of Operations for the Quarters Ended July 3, 2021 and June 27, 2020" table regarding the use of this non-GAAP measure).

		July 3, 2021		June 27, 2020
For the two quarters ended		$		$
Earnings (loss) from continuing operations		754		(9,097	)
Income tax benefit		(2,513	)	(3,318	)
Interest expense, net		3,291		15,078
Other expense (income), net		6,276		(280	)
Total segment operating income		7,808		2,383
	Depreciation and amortization	16,953		15,380
	Stock-based compensation(a)	8,343		4,885
	Acquisition, divestiture, and related costs(b)	1,312		-
	Costs related to Value Creation Plan(c)	-		983
	Plant expansion costs(d)	-		92
Adjusted EBITDA		34,416		23,723

(a)  For the first two quarters of 2020, stock-based compensation of $4.9 million was recorded in SG&A expenses and the reversal of $0.9 million of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees was recognized in other income.

(b)  For the first two quarters of 2021, acquisition, divestiture, and related costs were mainly related to the transition and integration of the acquired Dream and WestSoy brands, which were recorded in SG&A expenses. 

(c)  Reflects professional fees of $0.5 million and employee retention costs of $0.5 million recorded in SG&A expenses.

(d)  Reflects costs related to the expansion of our plant-based extraction capabilities, which were recorded in cost of goods sold.

SUNOPTA INC. 36 July 3, 2021 10-Q

(4)  Refer to footnote (4) to the "Consolidated Results of Operations for the Quarters Ended July 3, 2021 and June 27, 2020" table regarding the use of certain other non-GAAP measures in the discussion of our results of operations below.

Revenues for the two quarters ended July 3, 2021 increased by 4.6% to $409.9 million from $392.0 million for the two quarters ended June 27, 2020.  Excluding the impact of incremental revenues from the acquisition of the Dream and WestSoy brands (an increase in revenues of $4.7 million) and changes in commodity-related pricing (an increase in revenues of $4.4 million), revenues increased by 2.2% in the first two quarters of 2021, compared with the first two quarters of 2020. 

For the two quarters ended July 3, 2021, Plant-Based Foods and Beverages segment revenues increased by 16.6% to $230.8 million from $197.9 million for the two quarters ended June 27, 2020.  The increase in plant-based product revenues reflected strong sales growth for our oat-based product offerings, together with increased foodservice demand for plant-based beverages due to the easing of COVID-19 restrictions, partially offset by softer retail volumes of plant-based beverages as at-home consumption levels continued to normalize.

For the two quarters ended July 3, 2021, Fruit-Based Foods and Beverages segment revenues for the two quarters ended July 3, 2021 decreased by 7.7% to $179.1 million from $194.1 million for the two quarters ended June 27, 2020.  The decrease in fruit-based product revenues reflected lower volumes of retail frozen fruit due to the continued normalization of at-home consumption, together with the rationalization of marginally profitable customers and products, and the impact of supply constraints for certain fruit varieties on blended frozen fruit offerings.  These declines were partially offset by strong growth in fruit snacks, driven by returning consumer demand for portable snacks and new business development.

Gross profit increased $5.9 million, or 11.7%, to $56.3 million for the two quarters ended July 3, 2021, compared with $50.4 million for the two quarters ended June 27, 2020.  As a percentage of revenues, gross profit for the two quarters ended July 3, 2021 was 13.7% compared to 12.9% for the two quarters ended June 27, 2020, an increase of 80 basis points. 

Gross profit for the Plant-Based Foods and Beverages segment increased $5.3 million to $43.1 million for the two quarters ended July 3, 2021, compared with $37.8 million for the two quarters ended June 27, 2020, while gross profit as a percentage of revenues decreased to 18.7% in the first two quarters of 2021 from 19.1% in the first two quarters of 2020.  The 40-basis point decrease in the gross profit percentage reflected incremental depreciation expense related to new plant-based processing capacity, together with increased transportation costs.  These factors were partially offset by strong volumes and productivity improvements within our plant-based beverage and ingredient extraction operations, and improved plant utilization and cost reductions within our sunflower and roasting operations.

Gross profit for the Fruit-Based Foods and Beverages segment increased $0.6 million to $13.3 million for the two quarters ended July 3, 2021, compared with $12.6 million for the two quarters ended June 27, 2020, while gross profit as a percentage of revenues increased to 7.4% in the first two quarters of 2021 from 6.5% in the first two quarters of 2020.  The 90-basis point increase in the gross profit percentage reflected strong fruit snack and fruit ingredient volumes, together with increased pass-through sales pricing, rationalization of marginally profitable business, and productivity-driven cost savings in our frozen fruit operations.  These factors were mostly offset by the impacts of higher strawberry commodity prices, a higher cost of fruit inventory from Mexico due to the impact of a strengthening Mexican peso, and increased transportation costs.

For the two quarters ended July 3, 2021, we realized total segment operating income of $7.8 million, compared with $2.4 million for the two quarters ended June 27, 2020.  The $5.4 million increase in total segment operating income mainly reflected higher gross profit, as described above, together with a $1.5 million decrease in foreign exchange losses within our frozen fruit operations in Mexico, partially offset by a $1.8 million increase in SG&A expenses, primarily due to incremental third-party consulting costs related to the transition and integration of the recently acquired Dream and WestSoy brands, together with higher stock-based compensation costs, partially offset by lower employee-related variable compensation costs and reduced reserves for credit losses due to improving economic conditions within the foodservice sector.  In addition, in the first two quarters of 2021, we recorded $0.3 million of incremental amortization expense related to the acquired Dream and WestSoy brand name intangible assets.   

Further details on revenue, gross profit and segment operating income/loss variances are provided below under "Segmented Operations Information."

Other expense of $6.3 million for the two quarters ended July 3, 2021 mainly reflected asset impairment charges and employee termination costs related to the exit from our fruit ingredient processing facility, together with costs to complete the exit from our Santa Maria, California, frozen fruit processing facility in the first quarter of 2021.  Other income of $0.3 million for the two quarters ended June 27, 2020 mainly reflected the reversal of previously recognized stock-based compensation related to forfeited awards previously granted to terminated employees and the reversal of costs that remained accrued related to the withdrawal of certain consumer-packaged products in 2016, partially offset by employee termination costs associated the consolidation of our corporate office functions into Minneapolis, Minnesota. 

SUNOPTA INC. 37 July 3, 2021 10-Q

Net interest expense decreased by $11.8 million to $3.3 million for the two quarters ended July 3, 2021, compared with $15.1 million for the two quarters ended June 27, 2020, 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.   

We recognized an income tax benefit of $2.5 million for the two quarters ended July 3, 2021, compared with $3.3 million for the two quarters ended June 27, 2020.  Our reported tax rates were 142.9% and 26.7% for the first two quarters of 2021 and 2020, respectively.  Excluding the impact of non-deductible stock-based and executive compensation from pre-tax earnings, our effective tax rate was 24.9% in the first two quarters of 2021, compared with 27.7% in the first two quarters of 2020.

Earnings from continuing operations for the two quarters ended July 3, 2021 was $0.8 million, compared with a loss of $9.1 million for the two quarters ended July 3, 2021.  Diluted loss per share from continuing operations attributable to common shareholders (after dividends and accretion on preferred stock) was $0.02 for the two quarters ended July 3, 2021, compared with a loss per share $0.15 for the two quarters ended June 27, 2020. 

Earnings from the discontinued operations of Tradin Organic were $13.5 million for the two quarters ended June 27, 2020.

On a consolidated basis, we realized a loss attributable to common shareholders of $1.9 million (diluted loss per share of $0.02) for the two quarters ended July 3, 2021, compared with loss attributable to common shareholders of $0.3 million (diluted loss per share of $0.00) for the two quarters ended June 27, 2020.  The loss attributable to common shareholders for the first two quarters of 2021 and 2020 reflected dividends and accretion on preferred stock of $2.7 million and $4.6 million, respectively.  The decline in preferred stock dividends and accretion reflected the exchange of all of the shares of Series A preferred stock for shares of our common stock in February 2021.

For the two quarters ended July 3, 2021, adjusted earnings were $1.4 million, or $0.01 per diluted share, compared with an adjusted loss of $13.3 million, or $0.15 per diluted share for the two quarters ended June 27, 2020.  Adjusted EBITDA for the two quarters ended July 3, 2021 was $34.4 million, compared with $23.7 million for the two quarters ended June 27, 2020.  Adjusted loss and adjusted EBITDA are non-GAAP financial measures.  See footnotes (2) and (3) to the table above for a reconciliation of adjusted loss and adjusted EBITDA from earnings/loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure. 

Segmented Operations Information

Plant-Based Foods and Beverages
For the two quarters ended		July 3, 2021		June 27, 2020		Change		% Change
Revenues	$	230,810	$	197,947	$	32,863		16.6%
Gross profit		43,054		37,802		5,252		13.9%
Gross profit %		18.7%		19.1%				-0.4%
Operating income	$	21,958	$	24,337	$	(2,379	)	-9.8%
Operating income %		9.5%		12.3%				-2.8%

Plant-Based Foods and Beverages contributed $230.8 million in revenues for the two quarters ended July 3, 2021, compared to $197.9 million for the two quarters ended June 27, 2020, an increase of $32.9 million, or 16.6%.  Excluding the impact on revenues of incremental revenues from the acquisition of the Dream and WestSoy brands (an increase in revenues of $4.7 million) and changes in sunflower commodity-related pricing (a decrease in revenues of $0.4 million), Plant-Based Foods and Beverages revenues increased approximately 14.4%.  The table below explains the increase in reported revenues:

SUNOPTA INC. 38 July 3, 2021 10-Q

Plant-Based Foods and Beverages Revenue Changes
Revenues for the two quarters ended June 27, 2020		$197,947
	Growth in sales of oat-based product offerings, together with increased foodservice demand for plant-based beverages due to the easing of COVID-19 restrictions, partially offset by softer retail volumes of plant-based beverages as at-home consumption levels continued to normalize	26,305
	Incremental Dream and WestSoy revenues	4,680
	Higher volumes of birdfeed and raw sunflower kernel, partially offset by lower volumes of ready-to-eat snacks and roasted ingredients	2,238
	Decreased commodity pricing for sunflower	(360)
Revenues for the two quarters ended July 3, 2021		$230,810

Gross profit in Plant-Based Foods and Beverages increased by $5.3 million to $43.1 million for the two quarters ended July 3, 2021, compared to $37.8 million for the two quarters ended June 27, 2020, while the gross profit percentage decreased by 40 basis points to 18.7%.  The decrease in the gross profit percentage reflected incremental depreciation expense and increased transportation costs.  These factors were partially offset by strong volumes within our plant-based beverage and ingredient extraction operations, and improved plant utilization and cost reductions within our sunflower and roasting operations.  The table below explains the increase in gross profit:

Plant-Based Foods and Beverages Gross Profit Changes
Gross profit for the two quarters ended June 27, 2020		$37,802
	Higher volumes within our plant-based beverage and ingredient extraction operations, together with the incremental contribution from the Dream and WestSoy brands, partially offset by incremental depreciation expense and increased transportation costs	3,350
	Increased volumes for birdfeed and raw sunflower kernel, together with improved plant utilization and cost reductions within our sunflower and roasting operations	1,902
Gross profit for the two quarters ended July 3, 2021		$43,054

Operating income in Plant-Based Foods and Beverages decreased by $2.3 million to $22.0 million for the two quarters ended July 3, 2021, compared to $24.3 million for the two quarters ended June 27, 2020. The table below explains the decrease in operating income:

Plant-Based Foods and Beverages Operating Income Changes
Operating income for the two quarters ended June 27, 2020		$24,337
	Increase in corporate cost allocations	(5,124)
	Increased third-party consulting costs related to the transition and integration of the acquired Dream and WestSoy brands, and incremental amortization of the related brand name intangible assets, together with higher employee compensation costs related to new product development and sales and marketing positions	(2,507)
	Increase in gross profit, as explained above	5,252
Operating income for the two quarters ended July 3, 2021		$21,958

SUNOPTA INC. 39 July 3, 2021 10-Q

Fruit-Based Foods and Beverages
For the two quarters ended		July 3, 2021			June 27, 2020			Change		% Change
Revenues	$	179,103		$	194,051		$	(14,948	)	-7.7%
Gross profit		13,271			12,630			641		5.1%
Gross profit %		7.4%			6.5%					0.9%
Operating loss	$	(3,341	)	$	(6,718	)	$	3,377		50.3%
Operating loss %		-1.9%			-3.5%					1.6%

Fruit-Based Foods and Beverages contributed $179.1 million in revenues for the two quarters ended July 3, 2021, compared to $194.1 million for the two quarters ended June 27, 2020, a decrease of $14.9 million, or 7.7%.  Excluding the impact on revenues of changes in raw fruit commodity-related pricing (an increase in revenues of $4.8 million), Fruit-Based Foods and Beverages revenues decreased approximately 10.2%.  The table below explains the decrease in reported revenues:

Fruit-Based Foods and Beverages Revenue Changes
Revenues for the two quarters ended June 27, 2020		$194,051
	Lower retail volumes of frozen fruit due to the continued normalization of at-home consumption, together with the rationalization of marginally profitable customers and products, and the impact of supply constraints for certain fruit varieties on blended frozen fruit offerings	(28,027)
	Higher sales volumes of fruit snacks products, driven by returning consumer demand for portable snacks and new business development	8,286
	Increased commodity pricing for raw fruit	4,793
Revenues for the two quarters ended July 3, 2021		$179,103

Gross profit in Fruit-Based Foods and Beverages increased by $0.7 million to $13.3 million for the two quarters ended July 3, 2021, compared to $12.6 million for the two quarters ended June 27, 2020, and the gross profit percentage increased by 90 basis points to 7.4%.  The increase in the gross profit percentage reflected strong fruit snack and fruit ingredient volumes, together with increased pass-through sales pricing, rationalization of marginally profitable business, and productivity-driven cost savings in our frozen fruit operations.  These factors were mostly offset by the impacts of higher strawberry commodity prices, unfavorable foreign exchange impacts, and increased transportation costs.  The table below explains the increase in gross profit:

Fruit-Based Foods and Beverages Gross Profit Changes
Gross profit for the two quarters ended June 27, 2020		$12,630
	Sales volume growth for fruit snacks, together with increased production volumes and plant utilization	3,105
	Increased production volumes of fruit ingredients in advance of the closure of our fruit ingredient processing facility and relocation of certain production lines	725
	Lower 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 and increased transportation costs, partially offset by higher pass-through sales pricing for frozen fruit, together with lower processing costs and productivity improvements	(3,189)
Gross profit for the two quarters ended July 3, 2021		$13,271

SUNOPTA INC. 40 July 3, 2021 10-Q

Operating loss in Fruit-Based Foods and Beverages decreased by $3.4 million to $3.3 million for the two quarters ended July 3, 2021, compared to $6.7 million for the two quarters ended June 27, 2020. The table below explains the decrease in operating loss:

Fruit-Based Foods and Beverages Operating Loss Changes
Operating loss for the two quarters ended June 27, 2020		$(6,718)
	Decrease in foreign exchange losses within our frozen fruit operations in Mexico, together with lower reserve levels for credit losses due to improving economic conditions within the foodservice sector	3,226
	Increase in gross profit, as explained above	641
	Increase in corporate cost allocations	(490)
Operating loss for the two quarters ended July 3, 2021		$(3,341)

Corporate Services
For the two quarters ended		July 3, 2021			June 27, 2020			Change	% Change
Operating loss	$	(10,809	)	$	(15,236	)	$	4,427	29.1%

Operating loss at Corporate Services decreased by $4.4 million to $10.8 million for the two quarters ended July 3, 2021, compared to a loss of $15.2 million for the two quarters ended June 27, 2020. The table below explains the decrease in operating loss:

Corporate Services Operating Loss Changes
Operating loss for the two quarters ended June 27, 2020		$(15,236)
	Increase in corporate cost allocations to SunOpta operating segments, as a result of the realignment of resources following the divestiture of Tradin Organic	5,614
	Lower employee-related variable compensation costs, partially offset by an unfavorable foreign exchange impact on Canadian dollar-denominated SG&A expenses	2,272
	Increased stock-based compensation costs related to equity-based short-term and long-term incentive plans for certain employees, mainly due to awarding of grants earlier in 2021 than in 2020	(3,459)
Operating loss for the two quarters ended July 3, 2021		$(10,809)

Corporate cost allocations mainly consist of salaries of corporate personnel who directly support the operating segments, as well as costs related to the enterprise resource management system. These expenses are allocated to the operating segments based on (1) specific identification of allocable costs that represent a service provided to each segment and (2) a proportionate distribution of costs based on a weighting of factors such as revenue contribution and the number of people employed within each segment.

Liquidity and Capital Resources

On December 31, 2020, we entered into a five-year credit agreement for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $250 million, subject to borrowing base capacity.  In addition, the credit agreement provides a five-year, $75 million delayed draw term loan, to be used for capital expenditures.  The delayed draw term loan can be borrowed within 18 months from closing.  As at July 3, 2021, we had outstanding borrowings of $159.1 million (January 2, 2021 - $47.3 million), including the FILO term loan discussed below, and available borrowing capacity of approximately $42 million (January 2, 2021 - $116 million) under the revolving credit facility.  The $111.8 million increase in outstanding borrowings since the prior year-end reflected the seasonal build of fruit inventory, together with the acquisition of the Dream and WestSoy brands.  The weighted-average interest rate on all outstanding borrowings was 2.21% in the first two quarters of 2021. 

SUNOPTA INC. 41 July 3, 2021 10-Q

On April 15, 2021, we entered into a first amendment to the credit agreement for a two-year, $20 million FILO term loan at LIBOR plus 250 to 300 basis points, which was drawn in full to finance a portion of the purchase price for the acquisition of the Dream and WestSoy brands.  Amortization payments on the aggregate principal amount of the FILO term loan are equal to $2.5 million, payable at the end of each fiscal quarter, commencing with the second quarter of 2022, with the remaining amount payable at the maturity thereof on April 15, 2023.  On July 2, 2021, we entered into a second amendment to the credit agreement to increase the customer concentration limit included in the borrowing base calculation under the revolving credit facility.

For more information on the credit agreement and FILO term loan, see note 7(1) to the unaudited consolidated financial statements included in this report.

During the first two quarters of 2021, we recognized additional finance lease liabilities of $29.9 million in the aggregate related to the addition of new plant-based beverage and ingredient extraction processing and packaging equipment.  These leases have implicit interest rates of 8.08% to 8.85% and lease terms of five years.  As at July 3, 2021, we had commitments under certain master lease agreements that provide for up to approximately $10 million of additional financing.

On February 22, 2021, all shares of Series A Preferred Stock issued by our subsidiary, SunOpta Food Inc. ("SunOpta Foods") were exchanged by the holders for 12,633,427 shares of our common stock, representing 12.3% of our issued and outstanding common shares on a post-exchange basis.  Following the exchange, we are no longer required to pay the 8.0% per year dividend on the Series A Preferred Stock, representing approximately $7.1 million of annual dividend savings.

On April 24, 2020, SunOpta Foods issued 30,000 shares of Series B-1 Preferred Stock (the "Series B-1 Preferred Stock") for $30.0 million.  The Series B-1 Preferred Stock currently has a current 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.  Cumulative preferred dividends accrue daily on the Series B-1 Preferred Stock at an annualized rate of 8.0% of the liquidation preference prior to September 30, 2029, which presently equates to quarterly dividend distributions of approximately $0.6 million, and 10.0% of the liquidation preference thereafter.

For more information on the Series A and Series B-1 Preferred Stock, see note 8 to the unaudited consolidated financial statements included in this report.

We believe that our operating cash flows, together with our revolving and term loan facilities, will be adequate to meet our operating, investing, and financing needs in the foreseeable future.  However, in order to finance significant investments in our existing businesses, or significant business acquisitions, if any, that may arise in the future, we may need additional sources of cash that we could attempt to obtain through a combination of additional bank or subordinated financing, a private or public offering of debt or equity securities, or the issuance of common stock.  There can be no assurance that these types of financing would be available at all or, if so, on terms that are acceptable to us.  In addition, we may explore the sale of selected non-core businesses or assets from time to time to reduce our indebtedness and/or improve our position to obtain additional financing.

Cash Flows

Operating cash flows

Cash used in operating activities of continuing operations was $39.1 million and $46.2 million in the second quarter and first half of 2021, respectively, compared with cash provided of $0.5 million and $24.2 million in the second quarter and first half of 2020, respectively.  The period-over-period increases in cash used of $39.6 million and $70.4 million in the second quarter and first half of 2021, respectively, mainly reflected increases in seasonal fruit purchases, reflecting a shortfall in frozen strawberry supply in 2020 related to COVID-19-driven demand for fresh fruit, together with the impacts of higher commodity prices and lower retail sales demand for frozen fruit in 2021.  In addition, we acquired $6.6 million of Dream and WestSoy inventories in connection with the closing of the brand acquisition.  These inventory impacts were partially offset by the period-over-period increases in our operating results.

Investing cash flows

Cash used in investing activities of continuing operations for the second quarter and first half of 2021 included $25.1 million related to the acquired Dream and WestSoy brand name intangible assets.  Capital expenditures were $7.3 million and $16.6 million in the second quarter and first half of 2021, respectively, net of proceeds of $1.4 million in the first quarter of 2021 from the disposal of frozen fruit processing equipment from our exited Santa Maria, California, facility, compared with capital expenditures of $5.9 million and $14.9 million in the second quarter and first half of 2020, respectively.  Capital expenditures to-date in 2021 have been mainly related to capacity expansion projects within our plant-based operations.  Cash used in investing activities of discontinued operations was $13.4 million in the first half of 2021, which was related to the settlement of accrued transaction costs incurred in connection with the divestiture of Tradin Organic in December 2020.

SUNOPTA INC. 42 July 3, 2021 10-Q

Financing cash flows

Cash provided by financing activities of continuing operations was $71.3 million and $100.3 million in the second quarter and first half of 2021, respectively, compared with cash provided of $5.6 million in the second quarter of 2020 and cash used of $8.9 million in the first half of 2020.  The period-over-period increases in cash provided of $65.7 million and $109.2 million in the second quarter and first half of 2021, respectively, mainly reflected increases in revolver borrowings, including the FILO term loan, to fund seasonal inventory purchases and the acquisition of the Dream and WestSoy brands.  In addition, revolver borrowings in the first half of 2021 were used to settle the Tradin Organic transaction costs and the payment of tax withholdings on certain vested stock-based awards. 

Off-Balance Sheet Arrangements

There are currently no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition.

Contractual Obligations

There have been no material changes outside the normal course of business in our contractual obligations since January 2, 2021.

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, related revenues and expenses, and disclosure of gain and loss contingencies at the date of the financial statements. The estimates and assumptions made require us to exercise our judgment and are based on historical experience and various other factors that we believe to be reasonable under the circumstances. We continually evaluate the information that forms the basis of our estimates and assumptions as our business and the business environment generally changes.

There have been no material changes to the critical accounting estimates disclosed under the heading "Critical Accounting Estimates" in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of the Form 10-K.  For a discussion of new accounting standards, see note 1 to the unaudited consolidated financial statements included in this report.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, see Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," of the Form 10-K.  There have been no material changes to our exposures to market risks since January 2, 2021.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management has established disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within time periods specified in the Securities and Exchange Commission's rules and forms. Such disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

SUNOPTA INC. 43 July 3, 2021 10-Q

Under the supervision and with the participation of our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), we conducted an evaluation of our disclosure controls and procedures (as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act) as of the end of the period covered by this quarterly report. Based on this evaluation, our CEO and our CFO concluded that our disclosure controls and procedures were effective as of July 3, 2021.

Changes in Internal Control Over Financial Reporting

Our management, with the participation of our CEO and CFO, has evaluated whether any change in our internal control over financial reporting (as such term is defined under Rule 13a-15(f) promulgated under the Exchange Act) occurred during the quarter ended July 3, 2021. Based on that evaluation, management concluded that there were no changes in our internal control over financial reporting during the quarter ended July 3, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

SUNOPTA INC. 44 July 3, 2021 10-Q

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

For a discussion of legal proceedings, see note 13 to the unaudited consolidated financial statements included under Part I, Item 1 of this report.

Item 1A.  Risk Factors

Certain risks associated with our operations are discussed in Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended January 2, 2021.  There have been no material changes to the previously reported risk factors as of the date of this quarterly report.  Our previously reported risk factors should be carefully reviewed in connection with an evaluation of our Company.

Item 6.  Exhibits

The following exhibits are included as part of this report.

10.1+	First Amendment, dated as of April 15, 2021, amending the Second Amended and Restated Credit Agreement, dated as of December 31, 2020, among SunOpta Inc., SunOpta Foods Inc., the other borrowers and guarantors party thereto, the lenders party thereto, Bank of America, N.A., as administrative agent, collateral agent, an issuing bank and the swingline lender, and JPMorgan Chase Bank, N.A., as term loan administrative agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 19, 2021).
10.2*	Second Amendment, dated as of July 2, 2021, amending the Second Amended and Restated Credit Agreement dated as of December 31, 2020 (as amended by the First Amendment, dated as of April 15, 2021), among SunOpta Inc., SunOpta Foods Inc., the other borrowers and guarantors party thereto, the lenders party thereto, Bank of America, N.A., as administrative agent, collateral agent, an issuing bank and the swingline lender, and JPMorgan Chase Bank, N.A., as term loan administrative agent.
31.1*	Certification by Joseph D. Ennen, Chief Executive Officer, pursuant to Rule 13a - 14(a) under the Securities Exchange Act of 1934, as amended.
31.2*	Certification by Scott Huckins, Chief Financial Officer, pursuant to Rule 13a - 14(a) under the Securities Exchange Act of 1934, as amended.
32*	Certifications by Joseph D. Ennen, Chief Executive Officer, and Scott Huckins, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SUNOPTA INC. 45 July 3, 2021 10-Q

+   Exhibits and schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K.  SunOpta will furnish copies of the omitted exhibits and schedules to the Securities and Exchange Commission upon its request.

*   Filed herewith.

SUNOPTA INC. 46 July 3, 2021 10-Q

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SUNOPTA INC.
Date: August 11, 2021	/s/ Scott Huckins
	Scott Huckins
	Chief Financial Officer (Authorized Signatory and Principal Financial Officer)

SUNOPTA INC. 47 July 3, 2021 10-Q

EX-10.2

Exhibit 10.2

SECOND AMENDMENT

SECOND AMENDMENT, dated as of July 2, 2021 (this "Amendment"), to the Second Amended and Restated Credit Agreement, dated as of December 31, 2020 (as amended by the First Amendment, dated as of April 15, 2021, and as further amended, supplemented or modified from time to time prior to the date hereof, the "Credit Agreement"; and the Credit Agreement as amended by this Amendment, the "Amended Credit Agreement"), among SunOpta Inc. (the "Company"), SunOpta Foods Inc., each of the other Borrowers and Guarantors party thereto, the Lenders party thereto, the Issuing Banks party thereto, Bank of America, N.A., as Administrative Agent, as an Issuing Bank and as the Swingline Lender, Bank of America, N.A, as Collateral Agent, and JPMorgan Chase Bank, N.A., as Term Loan Administrative Agent. 

Recitals

WHEREAS, the Company has requested that the Credit Agreement be amended as set forth herein; and

WHEREAS, Lenders constituting the Supermajority Tranche A Revolving Lenders and the Supermajority Tranche B Revolving Lenders, the Administrative Agent and the Term Loan Administrative Agent hereby agree to this Amendment, subject to the terms and conditions set forth in Article IV and relying upon the representations and warranties herein set forth in Article III.

NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

ARTICLE I
DEFINED TERMS

Capitalized terms used in this Amendment but not defined herein shall have the meanings assigned to them in the Amended Credit Agreement.

ARTICLE II
AMENDMENT

Effective as of the Second Amendment Effective Date (as defined below), clause (n) of the definition of "Eligible Account" in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:

"(n)that, when aggregated with all other Accounts of the same Account Debtor, is not in excess of (x) solely in the case of Accounts owing by an Account Debtor that has a corporate family rating that is an Investment Grade Rating or an equivalent rating, 30.0% or (y) in the case of all other Accounts, 15.0%, in each case, of all Eligible Accounts (but, in each case, the portion of the Accounts not in excess of such applicable concentration limit shall not be deemed ineligible due to this clause (n));"

ARTICLE III
REPRESENTATIONS AND WARRANTIES; NO DEFAULTS

Each Credit Party makes the following representations and warranties:

(a)no Default or Event of Default exists pursuant to the Credit Agreement as of the Second Amendment Effective Date, and immediately after giving effect to this Amendment; and

(b)each of the representations and warranties made by any Credit Party set forth in Section 7 of the Credit Agreement, and in any Credit Document, are true and correct in all material respects (without duplication of any materiality standard set forth in any such representation or warranty) on and as of the Second Amendment Effective Date (after giving effect to this Amendment) with the same effect as though made on and as of such date, except to the extent such representations and warranties relate to an earlier date, in which event such representations and warranties were true in all material respects as of such earlier date (without duplication of any materiality standard set forth in any such representation or warranty).

ARTICLE IV
CONDITIONS

This Amendment shall become effective on the date (such date, the "Second Amendment Effective Date") that the following conditions have been satisfied:

(a)Counterparts of Amendment. The Administrative Agent shall have received counterparts of this Amendment executed by (i) the Administrative Agent and the Term Loan Administrative Agent, (ii) the Credit Parties and (iii) Lenders constituting the Supermajority Tranche A Revolving Lenders and the Supermajority Tranche B Revolving Lenders (each such consenting Lender, a "Consenting Lender" and, collectively, the "Consenting Lenders").

(b)Expenses.  The Company (or its designee) shall have paid, or caused to be paid, all reasonable documented out of pocket costs and expenses of the Administrative Agent in connection with the preparation, negotiation and execution of this Amendment (including the fees and expenses of Cahill Gordon & Reindel LLP as counsel to the Administrative Agent) for which invoices have been presented to the Company at least two business days prior to the Second Amendment Effective Date.

(c)Fees.  The Company (or its designee) shall have paid, or caused to be paid to the Administrative Agent, for the account of Consenting Lenders, the fees separately agreed in writing.

(d)Absence of Default or Event of Default. No Default or Event of Default shall exist pursuant to the Credit Agreement as of the Second Amendment Effective Date and immediately after giving effect to this Amendment.

(e)Representations and Warranties. Each of the representations and warranties made by any Credit Party set forth in Section 7 of the Credit Agreement, and in any Credit Document, shall be true and correct in all material respects (without duplication of any materiality standard set forth in any such representation or warranty) on and as of the Second Amendment Effective Date (after giving effect to this Amendment) with the same effect as though made on and as of such date, except to the extent such representations and warranties relate to an earlier date, in which event such representations and warranties shall be true in all material respects as of such earlier date (without duplication of any materiality standard set forth in any such representation or warranty).

- 2 -

ARTICLE V
MISCELLANEOUS

(a)Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts (including by facsimile or other electronic transmission (i.e., a "pdf" or "tif"), each of which when so executed and delivered shall be deemed to be an original, but all of which shall together constitute one and the same instrument.  This Amendment and any document, amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to this Amendment (each a "Communication"), including Communications required to be in writing, may be in the form of an Electronic Record and may be executed using Electronic Signatures.  The parties hereto agree that any Electronic Signature on or associated with any Communication shall be valid and binding on the parties hereto to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature, will constitute the legal, valid and binding obligation of the parties hereto enforceable against such party in accordance with the terms thereof to the same extent as if a manually executed original signature was delivered.  Any Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication.  For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Borrowers, the other Credit Parties, the Administrative Agent and each of the Lenders of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format), or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. Each party hereto may, at its option, create one or more copies of any Communication in the form of an imaged Electronic Record ("Electronic Copy"), which shall be deemed created in the ordinary course of the such Person's business, and destroy the original paper document.  All Communications in the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record.  Notwithstanding anything contained herein to the contrary, the Administrative Agent is under no obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent the Administrative Agent has agreed to accept such Electronic Signature, the Borrowers, the other Credit Parties, the Administrative Agent and each of the Lenders shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of any other party without further verification and (b) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by such manually executed counterpart.  For purposes hereof, "Electronic Record" and "Electronic Signature" shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.

(b)Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial. 

(i)THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(ii)EACH PARTY TO THIS AMENDMENT CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO THIS AMENDMENT, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT.  EACH PARTY TO THIS AMENDMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT'S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM.  EACH PARTY TO THIS AMENDMENT IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 12.03 OF THE CREDIT AGREEMENT.  A FINAL JUDGMENT IN ANY PROCEEDING OF ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR ANY OTHER MANNER PROVIDED BY APPLICABLE REQUIREMENT OF LAW. 

- 3 -

(iii)EACH OF THE PARTIES TO THIS AMENDMENT  HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(c)Headings.  The headings of the several Articles and subsections of this Amendment are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Amendment.

(d)Effect of this Amendment. 

(i)Except as expressly set forth herein, (i) this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative Agent or the Collateral Agent, in each case under the Credit Agreement or any other Credit Document, (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Credit Document and (iii) each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement or any other Credit Document is hereby ratified and re-affirmed in all respects and shall continue in full force and effect.

(ii)Each of the Credit Parties hereby consents to this Amendment and confirms and reaffirms (i) that all obligations of such Credit Party under the Credit Documents to which such Credit Party is a party shall continue to apply to the Credit Agreement as amended hereby, (ii) its Guarantees of the Obligations, (iii) its pledges and grants of security interests and Liens on the Collateral to secure the Obligations pursuant to the Security Documents and (iv) such Guarantees, pledges and grants of security interests, as applicable, shall continue to be in full force and effect and shall continue to inure to the benefit of the Lenders and the other Secured Creditors.

(iii)This Amendment shall constitute a Credit Document for purposes of the Amended Credit Agreement. On and after the Second Amendment Effective Date, each reference in any Credit Document to "the Credit Agreement" shall mean and be a reference to the Amended Credit Agreement and each reference in the Credit Agreement to "this Agreement," "hereunder," "hereof" or words of like import shall mean and be a reference to the Amended Credit Agreement. The parties hereto acknowledge and agree that the amendment of the Credit Agreement pursuant to this Amendment and all other Credit Documents amended and/or executed and delivered in connection herewith shall not constitute a novation of the Credit Agreement or of any other Credit Documents as in effect prior to the Second Amendment Effective Date.

[Remainder of page intentionally left blank]

- 4 -

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

SUNOPTA INC.
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Chief Financial Officer
SUNOPTA FOODS INC.
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President
SUNOPTA GRAINS AND FOODS INC.
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President
CITRUSOURCE, LLC
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President
SUNOPTA COMPANIES INC.
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President
SUNOPTA GLOBAL ORGANIC INGREDIENTS INC.
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President

[Signature Page to Second Amendment]

SUNOPTA INVESTMENTS LTD.
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President
SUNRISE HOLDINGS (DELAWARE), INC.
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President
SUNRISE GROWERS, INC.
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President
FARM CAPITAL INCORPORATED
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President
PACIFIC RIDGE FARMS, LLC
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President
SUNOPTA FINANCING 2017 LLC
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Chief Financial Officer

[Signature Page to Second Amendment]

SUNOPTA HOLDINGS LLC
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President - CFO
SUNOPTA FINANCING CANADA ULC
By:	/s/ Scott Huckins
	Name: Scott Huckins
	Title: Vice President - CFO

[Signature Page to Second Amendment]

BANK OF AMERICA N.A., as Administrative Agent, a Tranche A Revolving Lender and a Tranche B Revolving Lender
By:	/s/ Monirah J. Masud
	Name:  Monirah J. Masud
	Title: Senior Vice President

[Signature Page to Second Amendment]

JPMORGAN CHASE BANK, N.A., as Term Loan Administrative Agent
By:	/s/ Farhan Lodhi
	Name: Farhan Lodhi
	Title: Authorized Officer

[Signature Page to Second Amendment]

JPMORGAN CHASE BANK, N.A., as a Tranche A Revolving Lender and a Tranche B Revolving Lender
By:	/s/ Farhan Lodhi
	Name: Farhan Lodhi
	Title: Authorized Officer

[Signature Page to Second Amendment]

BANK OF MONTREAL, as a Tranche A Revolving Lender and a Tranche B Revolving Lender
By:	/s/ Anthony Lam
	Name: Anthony Lam
	Title: Director, Asset Based Lending
By:	/s/ Sahil Khullar
	Name: Sahil Khullar
	Title: Director, Asset Based Lending

[Signature Page to Second Amendment]

BMO OF MONTREAL CHICAGO, as a Tranche A Revolving Lender and a Tranche B Revolving Lender
By:	/s/ Laura Ullman
	Name: Laura Ullman
	Title: SVP

[Signature Page to Second Amendment]

Rabobank Canada, as a Tranche A Revolving Lender and a Tranche B Revolving Lender
By:	/s/ Kimberley Fobert
	Name: Kimberley Fobert
	Title: Managing Director
By:	/s/ Sandra Seaton Barnes
	Name: Sandra Seaton Barnes
	Title: Executive Director

[Signature Page to Second Amendment]

WELLS FARGO BANK, N.A., as a Tranche A Revolving Lender and a Tranche B Revolving Lender
By:	/s/ Raymond Eghobamien
	Name: Raymond Eghobamien
	Title: Vice President

[Signature Page to Second Amendment]

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph D. Ennen, certify that:

(1)	I have reviewed this quarterly report on Form 10-Q of SunOpta Inc. for the quarter ended July 3, 2021;
(2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4)	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d -15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Joseph D. Ennen

Joseph D. Ennen

Chief Executive Officer

SunOpta Inc.

Date: August 11, 2021

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Scott Huckins, certify that:

(1)	I have reviewed this quarterly report on Form 10-Q of SunOpta Inc. for the quarter ended July 3, 2021;
(2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4)	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d -15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Scott Huckins

Scott Huckins

Chief Financial Officer

SunOpta Inc.

Date:  August 11, 2021

EX-32.1

Exhibit 32

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of SunOpta Inc. (the "Company") on Form 10-Q for the quarter ended July 3, 2021 as filed with the Securities and Exchange Commission (the "Report"), I, Joseph D. Ennen, Chief Executive Officer of the Company, and I, Scott Huckins, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, that to our knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date:  August 11, 2021

/s/ Joseph D. Ennen

Joseph D. Ennen

Chief Executive Officer

SunOpta Inc.

/s/ Scott Huckins

Scott Huckins

Chief Financial Officer

SunOpta Inc.

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and should not be deemed to be filed under the Exchange Act by the Company or the certifying officer.

XML

Document and Entity Information - shares	6 Months Ended
	Jul. 03, 2021	Aug. 06, 2021
Entity Registrant Name	SUNOPTA INC.
Entity Central Index Key	0000351834
Document Type	10-Q
Document Period End Date	Jul. 03, 2021
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--01-01
Document Transition Report	false
Document Quarterly Report	true
Entity Common Stock, Shares Outstanding		107,228,522
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Shell Company	false
Entity File Number	001-34198
Entity Address, Address Line One	7301 Ohms Lane, Suite 600
Entity Address, City or Town	Edina
City Area Code	952
Local Phone Number	820-2518
Entity Address, State or Province	MN
Entity Interactive Data Current	Yes
Entity Tax Identification Number	00-0000000
Entity Incorporation, State or Country Code	Z4
Entity Address, Postal Zip Code	55439
Entity Incorporation, Date of Incorporation	Nov. 13, 1973
The Nasdaq Stock Market | Common Shares
Trading Symbol	STKL
Security Exchange Name	NASDAQ
Title of 12(b) Security	Common Shares
The Toronto Stock Exchange | Common Shares
Trading Symbol	SOY
Title of 12(b) Security	Common Shares

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Income Statement [Abstract]
Revenues	$ 202,273	$ 184,401	$ 409,913	$ 391,998
Cost of goods sold	175,937	161,142	353,588	341,566
Gross profit	26,336	23,259	56,325	50,432
Selling, general and administrative expenses	22,720	21,880	43,594	41,813
Intangible asset amortization	2,532	2,272	4,726	4,543
Other expense (income), net	4,661	(835)	6,276	(280)
Foreign exchange loss (gain)	(639)	(517)	197	1,693
Earnings (loss) from continuing operations before the following	(2,938)	459	1,532	2,663
Interest expense, net	1,631	7,413	3,291	15,078
Loss from continuing operations before income taxes	(4,569)	(6,954)	(1,759)	(12,415)
Income tax benefit	(3,651)	(1,821)	(2,513)	(3,318)
Earnings (loss) from continuing operations	(918)	(5,133)	754	(9,097)
Earnings from discontinued operations	0	6,140	0	13,465
Net earnings (loss)	(918)	1,007	754	4,368
Dividends and accretion on preferred stock	(744)	(2,604)	(2,697)	(4,629)
Loss attributable to common shareholders	$ (1,662)	$ (1,597)	$ (1,943)	$ (261)
Basic and diluted earnings (loss) per share
From continuing operations	$ (0.02)	$ (0.09)	$ (0.02)	$ (0.15)
From discontinued operations	0	0.07	0	0.15
Basic and diluted loss per share	$ (0.02)	$ (0.02)	$ (0.02)	$ (0.00)
Weighted-average common shares outstanding (000s)
Basic	105,676	89,089	100,898	88,625
Diluted	105,676	89,089	100,898	88,625

XML

Consolidated Statements of Comprehensive Earnings (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Statement of Comprehensive Income [Abstract]
Earnings (loss) from continuing operations	$ (918)	$ (5,133)	$ 754	$ (9,097)
Earnings from discontinued operations	0	6,140	0	13,465
Net earnings (loss)	(918)	1,007	754	4,368
Currency translation adjustment	0	417	0	108
Comprehensive earnings (loss)	$ (918)	$ 1,424	$ 754	$ 4,476

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Current assets
Cash and cash equivalents	$ 479	$ 251
Accounts receivable, net of allowance for credit losses of $862 and $1,257, respectively	83,109	72,724
Inventories	229,856	147,748
Prepaid expenses and other current assets	15,793	21,665
Income taxes recoverable	7,088	6,935
Total current assets	336,325	249,323
Property, plant and equipment	187,226	158,048
Operating lease right-of-use assets	46,886	35,172
Goodwill	3,998	3,998
Intangible assets	153,664	133,317
Deferred income taxes	8,328	0
Other assets	5,819	5,757
Total assets	742,246	585,615
Current liabilities
Accounts payable and accrued liabilities	115,841	118,592
Income taxes payable	1,371	1,431
Current portion of long-term debt	7,597	3,478
Current portion of operating lease liabilities	13,017	12,750
Current portion of long-term liabilities	0	200
Total current liabilities	137,826	136,451
Long-term debt	198,602	66,245
Operating lease liabilities	35,644	24,582
Deferred income taxes	30,242	25,408
Total liabilities	402,314	252,686
SunOpta Inc. shareholders' equity
Common shares, no par value, unlimited shares authorized, 107,125,928 shares issued (January 2, 2021 - 90,194,220)	435,425	326,545
Additional paid-in capital	24,966	37,862
Accumulated deficit	(149,684)	(147,741)
Accumulated other comprehensive income	1,363	1,363
Total equity	312,070	218,029
Total equity and liabilities	742,246	585,615
Series A Preferred Stock [Member]
Current liabilities
Preferred stock	0	87,305
Series B Preferred Stock [Member]
Current liabilities
Preferred stock	$ 27,862	$ 27,595

XML

Consolidated Balance Sheet (Parentheticals) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Statement of Financial Position [Abstract]
Allowance for credit losses	$ 862	$ 1,257
Common Stock, No Par Value	$ 0	$ 0
Common Stock Shares Issued	107,125,928	90,194,220

XML

Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common shares [Member]	Additional paid-in Capital [Member]	Accumulated deficit [Member]	Accumulated other comprehensive loss [Member]	Non-controlling interests [Member]	Total
Balance at Dec. 28, 2019	$ 318,456	$ 35,767	$ (214,931)	$ (11,271)	$ 1,888	$ 129,909
Balance (in shares) at Dec. 28, 2019	88,090
Share issuance costs						0
Employee stock purchase plan	$ 195					195
Employee stock purchase plan (in shares)	73
Stock incentive plan	$ 4,761	(4,385)				376
Stock incentive plan (in shares)	1,240
Withholding taxes on stock-based awards		(1,151)				(1,151)
Stock-based compensation		4,379				4,379
Earnings (Loss) from continuing operations			(9,097)			(9,097)
Earnings from discontinued operations			13,465		(244)	13,221
Dividends on preferred stock			(3,881)			(3,881)
Accretion on preferred stock			(748)			(748)
Currency translation adjustment				108	(7)	101
Balance at Jun. 27, 2020	$ 323,412	34,610	(215,192)	(11,163)	1,637	133,304
Balance (in shares) at Jun. 27, 2020	89,403
Balance at Mar. 28, 2020	$ 318,958	37,813	(213,595)	(11,580)	1,877	133,473
Balance (in shares) at Mar. 28, 2020	88,225
Share issuance costs						0
Employee stock purchase plan	$ 95					95
Employee stock purchase plan (in shares)	26
Stock incentive plan	$ 4,359	(4,105)				254
Stock incentive plan (in shares)	1,152
Withholding taxes on stock-based awards		(1,030)				(1,030)
Stock-based compensation		1,932				1,932
Earnings (Loss) from continuing operations			(5,133)			(5,133)
Earnings from discontinued operations			6,140		(230)	5,910
Dividends on preferred stock			(2,181)			(2,181)
Accretion on preferred stock			(423)			(423)
Currency translation adjustment				417	(10)	407
Balance at Jun. 27, 2020	$ 323,412	34,610	(215,192)	(11,163)	1,637	133,304
Balance (in shares) at Jun. 27, 2020	89,403
Balance at Jan. 02, 2021	$ 326,545	37,862	(147,741)	1,363	0	218,029
Balance (in shares) at Jan. 02, 2021	90,194
Share issuance costs						(287)
Exchange of Series A Preferred Stock, net of share issuance costs of $287	$ 87,188					87,188
Exchange of Series A Preferred Stock, net of share issuance costs of $287 (in shares)	12,633
Employee stock purchase plan	$ 333					333
Employee stock purchase plan (in shares)	28
Stock incentive plan	$ 21,359	(14,502)				6,857
Stock incentive plan (in shares)	4,271
Withholding taxes on stock-based awards		(6,737)				(6,737)
Stock-based compensation		8,343				8,343
Earnings (Loss) from continuing operations			754			754
Dividends on preferred stock			(2,260)			(2,260)
Accretion on preferred stock			(437)			(437)
Balance at Jul. 03, 2021	$ 435,425	24,966	(149,684)	1,363	0	312,070
Balance (in shares) at Jul. 03, 2021	107,126
Balance at Apr. 03, 2021	$ 418,822	33,340	(148,022)	1,363	0	305,503
Balance (in shares) at Apr. 03, 2021	103,612
Share issuance costs	$ (25)					(25)
Employee stock purchase plan	$ 207					207
Employee stock purchase plan (in shares)	18
Stock incentive plan	$ 16,421	(12,078)				4,343
Stock incentive plan (in shares)	3,496
Withholding taxes on stock-based awards		(666)				(666)
Stock-based compensation		4,370				4,370
Earnings (Loss) from continuing operations			(918)			(918)
Dividends on preferred stock			(609)			(609)
Accretion on preferred stock			(135)			(135)
Balance at Jul. 03, 2021	$ 435,425	$ 24,966	$ (149,684)	$ 1,363	$ 0	$ 312,070
Balance (in shares) at Jul. 03, 2021	107,126

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Consolidated Statements of Shareholders' Equity (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Statement of Stockholders' Equity [Abstract]
Share issuance costs	$ 25	$ 0	$ 287	$ 0

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Operating activities
Net earnings (loss)	$ (918)	$ 1,007	$ 754	$ 4,368
Earnings from discontinued operations	0	6,140	0	13,465
Earnings (loss) from continuing operations	(918)	(5,133)	754	(9,097)
Items not affecting cash:
Depreciation and amortization	8,910	7,655	16,953	15,380
Amortization of debt issuance costs	349	1,065	634	2,004
Deferred income taxes	(4,331)	2,855	(3,494)	3,199
Stock-based compensation	4,370	1,779	8,343	3,990
Impairment of long-lived assets	2,962	0	2,962	0
Other	(167)	(25)	(336)	(27)
Changes in operating assets and liabilities	(50,322)	(7,714)	(71,978)	8,710
Net cash provided by (used in) operating activities of continuing operations	(39,147)	482	(46,162)	24,159
Net cash provided by operating activities of discontinued operations	0	2,183	0	13,255
Net cash provided by (used in) operating activities	(39,147)	2,665	(46,162)	37,414
Investing activities
Additions to intangible assets	(25,073)	0	(25,073)	0
Additions to property, plant and equipment	(7,306)	(5,905)	(16,603)	(14,927)
Proceeds from sale of assets	0	0	1,350	0
Other	0	41	0	41
Net cash used in investing activities of continuing operations	(32,379)	(5,864)	(40,326)	(14,886)
Net cash used in investing activities of discontinued operations	(0)	(465)	(13,380)	(1,132)
Net cash used in investing activities	(32,379)	(6,329)	(53,706)	(16,018)
Financing activities
Increase (decrease) under revolving credit facilities	70,244	(19,469)	111,829	(29,882)
Borrowings of long-term debt	4,155	0	4,641	0
Repayment of long-term debt	(5,855)	(617)	(9,940)	(1,078)
Payment of debt issuance costs	(543)	(415)	(2,371)	(2,488)
Proceeds from the exercise of stock options and employee share purchases	4,550	470	7,190	571
Payment of withholding taxes on stock-based awards	(666)	(1,151)	(6,737)	(1,151)
Payment of cash dividends on preferred stock	(609)	0	(4,029)	(1,700)
Payment of share issuance costs	(25)	0	(287)	0
Proceeds from issuance of preferred stock, net of issuance costs	0	26,804	0	26,804
Other	0	(0)	0	(4)
Net cash provided by (used in) financing activities of continuing operations	71,251	5,622	100,296	(8,928)
Net cash used in financing activities of discontinued operations	(0)	(3,015)	(200)	(12,337)
Net cash provided by (used in) financing activities	71,251	2,607	100,096	(21,265)
Increase (decrease) in cash and cash equivalents in the period	(275)	(1,057)	228	131
Cash and cash equivalents of discontinued operations:
Balance at beginning of period	0	2,437	0	1,370
Foreign exchange gain (loss) on cash and cash equivalents	0	12	0	(4)
Less: balance at end of period	0	(1,152)	0	(1,152)
Cash and cash equivalent, beginning of the period	754	233	251	128
Cash and cash equivalents, end of the period	$ 479	$ 473	$ 479	$ 473

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Significant Accounting Policies

6 Months Ended

Jul. 03, 2021

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

1. Significant Accounting Policies

Basis of Presentation

These interim consolidated financial statements of SunOpta Inc. (the "Company" or "SunOpta") have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended, and in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information.  Accordingly, these condensed interim consolidated financial statements do not include all of the disclosures required by U.S. GAAP for annual financial statements.  In the opinion of management, all adjustments considered necessary for fair presentation have been included and all such adjustments are of a normal, recurring nature.  Operating results for the quarter and two quarters ended July 3, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending January 1, 2022 or for any other period.  The interim consolidated financial statements include the accounts of the Company and its subsidiaries, and have been prepared on a basis consistent with the annual consolidated financial statements for the year ended January 2, 2021.  For further information, refer to the consolidated financial statements, and notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 2021.

Discontinued Operations

As described in note 4, on December 30, 2020, the Company completed the divestiture of its organic ingredient sourcing and production business, Tradin Organic. With the divestiture, Tradin Organic qualified for reporting as discontinued operations in the consolidated financial statements of the Company.  Accordingly, the operating results and cash flows of Tradin Organic for the quarter and two quarters ended June 27, 2020 have been reclassified to discontinued operations on the consolidated statements of operations and cash flows.  In addition, unless otherwise indicated, the information disclosed below in these notes to the consolidated financial statements is presented on a continuing operations basis, with the comparative period information recast to reflect Tradin Organic as discontinued operations.

Fiscal Year

The fiscal year of the Company consists of a 52- or 53-week period ending on the Saturday closest to December 31. Fiscal year 2021 is a 52-week period ending on January 1, 2022, with quarterly periods ending on April 3, 2021, July 3, 2021, and October 2, 2021. Fiscal year 2020 was a 53-week period ending on January 2, 2021, with quarterly periods ending on March 28, 2020, June 27, 2020, and September 26, 2020.

 

Recent Accounting Pronouncements

In March 2020 and January 2021, the Financial Accounting Standards Board issued Accounting Standard Updates 2020-04 and 2021-01, Reference Rate Reform (Topic 848), that provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the transition away from LIBOR and other reference rates that are expected to be discontinued.  The guidance in Topic 848 is effective upon issuance and can be applied prospectively for contract modifications and hedging relationships through December 31, 2022.  The Company is currently evaluating the impact of the guidance and does not expect it will have a material effect on the Company’s consolidated financial statements.

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Revenue

6 Months Ended

Jul. 03, 2021

Revenue from Contract with Customer [Abstract]

Revenue [Text Block]

2.  Revenue

The Company procures, processes, and packages plant-based and fruit-based foods and beverages.  The Company's customers include retailers, foodservice operators, branded food companies, and food manufacturers. 

The following table presents a disaggregation of the Company's revenues based on categories used by the Company to evaluate sales performance:

	Quarter ended		Two quarters ended
	July 3, 2021	June 27, 2020	July 3, 2021	June 27, 2020
	$	$	$	$
Plant-Based Foods and Beverages
Beverages and broths	87,494	68,451	182,980	155,221
Plant-based ingredients	7,578	6,284	15,422	12,196
Sunflower and roasted snacks	16,287	16,970	32,408	30,530
Total Plant-Based Foods and Beverages	111,359	91,705	230,810	197,947
Fruit-Based Foods and Beverages
Frozen fruit	64,076	75,079	127,531	150,286
Fruit-based ingredients	11,000	7,946	19,359	19,838
Fruit snacks	15,838	9,671	32,213	23,927
Total Fruit-Based Foods and Beverages	90,914	92,696	179,103	194,051
Total revenues	202,273	184,401	409,913	391,998

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Acquisition of Dream and WestSoy Brands

6 Months Ended

Jul. 03, 2021

Asset Acquisition [Abstract]

Acquisition of Dream® and WestSoy® Brands [Text Block]

3.  Acquisition of Dream^® and WestSoy^® Brands

On April 15, 2021, the Company acquired the Dream and WestSoy plant-based beverage brands and related private label products in North America from The Hain Celestial Group, Inc. for a cash purchase price of $33 million, subject to a closing inventory adjustment.  The final purchase price amounted to $31.7 million, including $0.4 million of direct transaction costs.  The acquired assets included all inventories, trademarks, product formulations, and other intellectual property related to the Dream and WestSoy brands and did not include other working capital, property, plant and equipment, or employees.  The transaction has been accounted for as an asset acquisition.  The purchase price was allocated to the acquired inventories ($6.6 million) and brand name intangible assets ($25.1 million).  The intangible assets will be amortized over their estimated useful life of approximately 15 years.  Revenues and expenses related to the acquired Dream and WestSoy brands are included in the Company's consolidated financial statements from the acquisition date and are reported within the Plant-Based Foods and Beverages operating segment.   

As described in note 7, the Company entered into an amendment to its Credit Agreement on April 15, 2021, to allocate $20 million of the Lenders' revolving commitments to a two-year, first-in-last-out tranche, which was drawn in full to finance a portion of the purchase price for the Dream and WestSoy acquisition. 

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Discontinued Operations

6 Months Ended

Jul. 03, 2021

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations [Text Block]

4.  Discontinued Operations

Tradin Organic

On December 30, 2020, the Company completed the divestiture of its organic ingredient sourcing and production business, Tradin Organic, by selling all of the Company's interests and rights in The Organic Corporation B.V. and Tradin Organics USA LLC to Amsterdam Commodities N.V. (the "Purchaser") for cash consideration of $373.7 million (€305.1 million), net of cash acquired and debt assumed by the Purchaser and subject to certain post-closing adjustments (the "Transaction").  The global operations of Tradin Organic included its organic and non-GMO ingredient sourcing operations centered in Amsterdam, The Netherlands, and Scott's Valley, California, together with its consumer-packaged premium juice co-manufacturing business, and its cocoa, sunflower, sesame, and avocado ingredient processing facilities located in the Netherlands, Bulgaria, and Ethiopia.  Prior to its divestiture, Tradin Organic comprised the Company's former Global Ingredients operating segment. 

The following table reconciles the major components of the results of discontinued operations to the amount reported in the consolidated statement of operations for the quarter and two quarters ended June 27, 2020:

	Quarter ended		Two quarters ended
	June 27, 2020		June 27, 2020
	$		$
Revenues	126,543		254,895
Cost of goods sold	110,110		221,915
Selling, general and administrative expenses(1)	6,419		13,692
Intangible asset amortization	333		783
Other expense (income), net	502		(1,351	)
Foreign exchange loss	473		597
Interest expense(2)	523		1,138
Earnings before gain of sale	8,183		18,121
Earnings from discontinued operations before income taxes	8,183		18,121
Provision for income taxes	2,273		4,900
Loss attributable to non-controlling interests	(230	)	(244	)
Earnings from discontinued operations	6,140		13,465

(1)  Selling, general and administrative expenses exclude management fees charged by SunOpta Corporate Services and include stock-based compensation expense attributable to employees of Tradin Organic. 

(2)  Interest expense reflects interest on debt directly attributable to Tradin Organic including borrowings by Tradin Organic under the Dutch subfacility of the Company's former Global Credit Facility.

During the first half of 2021, the Company paid $13.4 million to settle accrued transaction costs related to the Tradin Organic divestiture and paid $0.2 million to settle the final contingent consideration obligation related to a prior acquisition of a premium juice business included in the disposed operations of Tradin Organic.  These payments were recorded as cash used in investing and financing activities of discontinued operations, respectively, on the consolidated statement of cash flows for the two quarters ended July 3, 2021.

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Derivative Financial Instruments and Fair Value Measurements

6 Months Ended

Jul. 03, 2021

Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]

Derivative Financial Instruments and Fair Value Measurements [Text Block]

5. Derivative Financial Instruments and Fair Value Measurements

Foreign currency forward contracts

As part of its risk management strategy, from time to time the Company enters into foreign currency forward contracts to reduce its exposure to fluctuations in foreign currency exchange rates. For any open contracts at period end, the contract rate is compared to the forward rate, and a gain or loss is recorded. These contracts are included in level 2 of the fair value hierarchy, as the inputs used in making the fair value determination are derived from and are corroborated by observable market data. The Company has not designated these contracts as accounting hedges.

As at July 3, 2021, the Company held a combination of foreign currency put and call option contracts (a zero-cost collar) to economically hedge its exposure to fluctuations in the Mexican peso related to purchases of fruit inventory and operating costs in Mexico. The aggregate notional amount of these contracts was $11.8 million at inception. As at July 3, 2021, contracts with a notional amount of $1.1 million remained open, which matured in July 2021. The collar has a ceiling rate of 24.00 Mexican pesos to the U.S. dollar and a floor rate of 21.14 Mexican pesos to the U.S. dollar. If the spot rate is between the ceiling and floor rates on the date of maturity of each of the contracts, then the Company does not recognize any gain or loss under these contracts. If the spot rate goes below the floor rate of the collar, the Company recognizes a foreign exchange gain, and if the spot rate goes above the ceiling rate of the collar, the Company recognizes a foreign exchange loss. As at July 3, 2021 and January 2, 2021, unrealized gains of $0.1 million and $0.8 million, respectively, related to these contracts were included in other current assets on the consolidated balance sheets. For the quarter and two quarters ended July 3, 2021, the Company recognized unrealized losses of $0.3 million and $0.7 million, respectively, and realized gains of $0.3 million and $0.5 million, respectively, related to these contracts, which were included in foreign exchange on the consolidated statements of operations.

As at June 27, 2020, the Company had $11.5 million notional amount of open Mexican peso foreign currency forward put and call contracts. For the quarter and two quarters ended June 27, 2020, the Company recognized realized gains of $0.2 million related to these contracts and did not recognize any amount of unrealized gains or losses.

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Inventories

6 Months Ended

Jul. 03, 2021

Inventory Disclosure [Abstract]

Inventories [Text Block]

6.  Inventories 

	July 3, 2021		January 2, 2021
	$		$
Raw materials and work-in-process	135,892		78,210
Finished goods	98,848		75,280
Inventory reserves	(4,884	)	(5,742	)
	229,856		147,748

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Long-Term Debt

6 Months Ended

Jul. 03, 2021

Debt Disclosure [Abstract]

Long-Term Debt [Text Block]

7.  Long-Term Debt

	July 3, 2021	January 2, 2021
	$	$
Asset-Based Credit Facilities(1)	159,106	47,277
Finance lease liabilities(2)	42,899	18,813
Other	4,194	3,633
	206,199	69,723
Less: current portion	7,597	3,478
	198,602	66,245

(1) Asset-Based Credit Facilities

On December 31, 2020, the Company entered into a second amended and restated credit agreement (the "Credit Agreement"), among the Company, SunOpta Foods Inc. ("SunOpta Foods"), the other borrowers and guarantors party thereto, and the lenders party thereto (the "Lenders"). As part of the Credit Agreement, the Lenders provided a five-year, $250 million asset-based revolving credit facility, subject to borrowing base capacity (the "Tranche A Subfacility," and together with the Tranche B Subfacility defined below, the "Revolving Credit Facilities"), and a five-year $75 million delayed draw term loan facility which can be used for borrowings on or prior to June 30, 2022 (the "Term Loan Facility," and together with the Revolving Credit Facilities, the "Asset-Based Credit Facilities"), to finance certain capital expenditures. The Tranche A Subfacility includes borrowing capacity for letters of credit and provides for borrowings on same-day notice, including in the form of swingline loans. The Tranche A Subfacility and Term Loan Facility mature on December 31, 2025.

On April 15, 2021, the Company entered into a first amendment to the Credit Agreement to allocate $20 million of the Lenders' commitments under the Tranche A Subfacility to a two-year, first-in-last-out tranche (the "Tranche B Subfacility"), which was drawn in full to finance a portion of the purchase price for the Dream and WestSoy brands (see note 3). The material terms governing the remaining $230 million of the Lenders' commitments under the Tranche A Subfacility remain unchanged. The Tranche B Subfacility is subject to a separate borrowing base applicable to certain eligible accounts receivable and inventory with advance rates separate from the Tranche A Subfacility.

Amortization payments on the aggregate principal amount of the Tranche B Subfacility are equal to $2.5 million, payable at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2022, with the remaining amount payable at the maturity thereof. Borrowings repaid under the Tranche B Subfacility may not be borrowed again. Each repayment of Tranche B Subfacility loans will result in an increase of the Lenders' commitments under the Tranche A Subfacility, provided that such increases will not cause the aggregate Lenders' commitments under the Tranche A Subfacility to exceed $250 million.

On July 2, 2021, the Company entered into a second amendment to the Credit Agreement to increase the customer concentration limit included in the borrowing base calculation under the Revolving Credit Facilities.

All obligations under the Asset-Based Credit Facilities are guaranteed by substantially all of the Company's direct and indirect wholly-owned material restricted subsidiaries organized in the U.S. and Canada (the "Guarantors") and, subject to certain exceptions, such obligations are secured by first priority liens on substantially all assets of the Company and the other borrowers and Guarantors.

Borrowings under the Asset-Based Credit Facilities bear interest based on various reference rates including LIBOR plus an applicable margin. With respect to loans under the Tranche A Subfacility, the applicable margin is set quarterly based on average borrowing availability for the preceding fiscal quarter and will range from 0.50% to 1.00% for base rate borrowings and from 1.50% to 2.00% for eurocurrency rate, bankers' acceptance rate and European base rate borrowings, with a reduction of 0.25% when the Company's total leverage ratio is less than a specific threshold on or after the one-year anniversary of the closing date of the Asset-Based Credit Facilities. Borrowings under the Tranche B Subfacility bear interest based on various reference rates including LIBOR plus an applicable margin ranging from 2.50% to 3.00%, with a reduction of 0.25% when the Company's total leverage ratio is less than a specific threshold on or after the one-year anniversary of the closing date of the Asset-Based Credit Facilities. With respect to loans under the Term Loan Facility, the applicable margin will be set quarterly based on average borrowing availability for the preceding fiscal quarter and will range from 1.25% to 1.75% for base rate borrowings and from 2.25% to 2.75% for eurocurrency rate, bankers' acceptance rate and European base rate borrowings. In addition to paying interest on outstanding principal under the Asset-Based Credit Facilities, the Company is required to pay commitment fees quarterly, in arrears, equal to (i) 0.25% of the average daily undrawn portion of the Revolving Credit Facilities and (ii) 0.375% of the undrawn portion of the Term Loan Facility. For the two quarters ended July 3, 2021, the weighted-average interest rate on all outstanding borrowings under the Revolving Credit Facilities was 2.21%.

The Asset-Based Credit Facilities are subject to a number of covenants that, among other things, restrict the Company's ability to create liens on assets; sell assets and enter in sale and leaseback transactions; pay dividends, prepay junior lien and unsecured indebtedness and make other restricted payments; incur additional indebtedness, including finance lease obligations in excess of $150 million, and make guarantees; make investments, loans or advances, including acquisitions; and engage in mergers or consolidations. In addition, the Company and its restricted subsidiaries are required to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 if excess availability is less than the greater of (i) $15.0 million or (ii) 10% of the lesser of (x) the aggregate commitments under the Revolving Credit Facilities and (y) the aggregate borrowing base. As at July 3, 2021, the Company was in compliance with all covenants of the Credit Agreement.

(2) Finance lease liabilities

During the first quarter of 2021, the Company recognized additional finance lease liabilities of $29.9 million in the aggregate, together with a corresponding amount of right-of-use assets recorded in property, plant and equipment, related to the addition of new plant-based beverage and ingredient extraction processing and packaging equipment. The finance leases have implicit rates of interest of 8.08% to 8.85% and lease terms of five years.

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Preferred Stock

6 Months Ended

Jul. 03, 2021

Temporary Equity [Abstract]

Preferred Stock [Text Block]

8. Preferred Stock

Series A Preferred Stock

On October 7, 2016, the Company and SunOpta Foods entered into a subscription agreement (the "Series A Subscription Agreement") with Oaktree Organics, L.P. and Oaktree Huntington Investment Fund II, L.P. (collectively, "Oaktree"). Pursuant to the Series A Subscription Agreement, SunOpta Foods issued an aggregate of 85,000 shares of Series A Preferred Stock (the "Series A Preferred Stock") to Oaktree for consideration in the amount of $85.0 million. In connection with the issuance of the Series A Preferred Stock, the Company incurred direct and incremental expenses of $6.0 million, which reduced the carrying value of the Series A Preferred Stock. The carrying value of the Series A Preferred Stock was being accreted through charges to accumulated deficit over the period preceding October 7, 2021, the date on or after which SunOpta Foods may have redeemed all the Series A Preferred Stock.

On February 22, 2021 (the "Exchange Date"), Oaktree exchanged all of their shares of Series A Preferred Stock for 12,633,427 shares of common stock of the Company ("Common Shares") at an exchange price of $7.00. Prior to the exchange, the Series A Preferred Stock provided for a cumulative dividend of 8.0% per year. On the Exchange Date, the Company paid cash dividends of $1.0 million on the Series A Preferred Stock for the period January 1, 2021 to February 22, 2021. In addition, in the first quarter of 2021, the Company paid cash dividends of $1.8 million on Series A Preferred Stock related to the fourth quarter of 2020. Subsequent to the Exchange Date, the Company is no longer required to pay dividends on the Series A Preferred Stock.

As at the Exchange Date, the carrying amount of the Series A Preferred Stock was $87.5 million, comprised of the initial liquidation preference of $85.0 million in the aggregate, together with $3.4 million of dividends paid in kind for the first and second quarters of 2020, less remaining unamortized issuance costs of $0.9 million. As at the Exchange Date, the Company derecognized the carrying amount of the Series A Preferred Stock and recognized a corresponding amount for the Common Shares issued on exchange, net of share issuance costs of $0.3 million.

In connection with the exchange of the Series A Preferred Stock, all 12,633,427 Special Shares, Series 1 previously issued to Oaktree were redeemed by the Company. The Special Shares, Series 1 entitled Oaktree to one vote per Special Share, Series 1 on all matters submitted to a vote of the holders of Common Shares.

Series B-1 Preferred Stock

On April 15, 2020, the Company and SunOpta Foods entered into a subscription agreement (the "Series B Subscription Agreement") with Oaktree and Engaged Capital, LLC, Engaged Capital Flagship Master Fund, LP and Engaged Capital Co-Invest IV-A, LP (collectively, "Engaged"), On April 24, 2020, pursuant to the Series B Subscription Agreement, SunOpta Foods issued 15,000 shares of Series B-1 Preferred Stock to each of Oaktree and Engaged for aggregate consideration of $30.0 million and 30,000 shares total (the "Series B-1 Preferred Stock"). In connection with the issuance of the Series B-1 Preferred Stock, the Company incurred direct and incremental expenses of $3.2 million, which reduced the carrying value of the Series B-1 Preferred Stock. The carrying value of the Series B-1 Preferred Stock is being accreted through charges to accumulated deficit over the period preceding April 24, 2025. For the quarter and two quarters ended July 3, 2021, these accretion charges amounted to $0.1 million (June 27, 2020 - $0.1 million) and $0.3 million (June 27, 2020 - $0.1 million), respectively.

The Series B-1 Preferred Stock had an initial stated value and liquidation preference of $1,000 per share, which is adjusted for any non-cash dividends declared on the Series B-1 Preferred Stock (the "Series B-1 Liquidation Preference"). Cumulative preferred dividends accrue daily on the Series B-1 Preferred Stock at an annualized rate of 8.0% of the Series B-1 Liquidation Preference prior to September 30, 2029, and 10.0% of the liquidation preference thereafter (subject to an increase of 1.0% per quarter, up to a maximum rate of 5.0% per quarter on the occurrence of certain events of non-compliance). Prior to September 30, 2029, SunOpta Foods may pay dividends in cash or elect, in lieu of paying cash, to add the amount that would have been paid to the Series B-1 Liquidation Preference. The failure to pay dividends in cash for any quarter ending after September 30, 2029 will be an event of non-compliance. For the second quarter of 2020, SunOpta Foods elected to declare dividends on the Series B-1 Preferred Stock to be paid in kind and, as a result, the aggregate Series B-1 Liquidation Preference increased by $0.4 million to $30.4 million, or approximately $1,015 per share. For each of the third and fourth quarters of 2020, and the first quarter of 2021, the Company paid cash dividends of $0.6 million on the Series B-1 Preferred Stock. As at July 3, 2021, the Company accrued unpaid dividends of $0.6 million for the second quarter of 2021, which are recorded in accounts payable and accrued liabilities on the consolidated balance sheet.

At any time, the Series B-1 Preferred Stock may be exchanged, in whole or in part, into the number of Common Shares equal to, per share of Series B-1 Preferred Stock, the quotient of the Series B Liquidation Preference divided by $2.50 (such price, the "Series B-1 Exchange Price" and such quotient, the "Series B-1 Exchange Rate"). As at July 3, 2021, the aggregate shares of Series B-1 Preferred Stock outstanding were exchangeable into 12,178,667 Common Shares. The Series B-1 Exchange Price is subject to certain anti-dilution adjustments, including a weighted-average adjustment for issuances of Common Shares below the Series B-1 Exchange Price, provided that the Series B-1 Exchange Price may not be lower than $2.00 (subject to adjustment in certain circumstances).

SunOpta Foods may cause the holders of the Series B-1 Preferred Stock to exchange all of their shares of Series B-1 Preferred Stock into a number of Common Shares equal to the number of shares of Series B-1 Preferred Stock outstanding multiplied by the Series B-1 Exchange Rate if (i) fewer than 10% of the shares of Series B-1 Preferred Stock issued on April 24, 2020 remain outstanding, or (ii) on or after April 24, 2023, the average volume-weighted average price of the Common Shares during the then preceding 20 trading day period is greater than 200% of the Series B-1 Exchange Price then in effect.

At any time, if a holder of Series B-1 Preferred Stock elects to exchange, or SunOpta Foods causes an exchange of Series B Preferred Stock, the number of Common Shares delivered to each applicable holder may not cause such holder's beneficial ownership to exceed 19.99% of the Common Shares that would be outstanding immediately following such exchange (the "Series B-1 Exchange Cap").

At any time on or after April 24, 2025, SunOpta Foods may redeem all of the Series B-1 Preferred Stock for an amount per share equal to the value of the Series B-1 Liquidation Preference at such time, plus accrued and unpaid dividends.

Oaktree and Engaged are entitled to vote the Series B-1 Preferred Stock with the Common Shares on an as-exchanged basis, subject to a permanent 19.99% voting cap. As a result of the voting cap, each of Oaktree and Engaged will only be able to vote its Series B-1 Preferred Stock to the extent that, when taken together with any other voting securities each investor controls, such votes do not exceed 19.99% of the votes eligible to be cast by all security holders of the Company. On April 24, 2020, the Company designated Special Shares, Series 2 to serve as the mechanism for attaching exchanged voting rights to the Series B-1 Preferred Stock. The Special Shares, Series 2 entitle the holder thereof to one vote per Special Share, Series 2 on all matters submitted to a vote of the holders of Common Shares, voting together as a single class, subject to certain exceptions. The Special Shares, Series 2 are not transferrable and the voting rights associated with the Special Shares, Series 2 will terminate upon the transfer of the shares of Series B-1 Preferred Stock to a third party, other than an affiliate of Oaktree or Engaged, as applicable. As at July 3, 2021, 6,089,333 Special Shares, Series 2 were issued to Engaged, equal to the number of Common Shares issuable to Engaged on the exchange of all of the shares of Series B-1 Preferred Stock held by it, and no Special Shares, Series 2 were issued to Oaktree, as Oaktree was subject to the Series B-1 Exchange Cap.

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Stock-Based Compensation

6 Months Ended

Jul. 03, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation [Text Block]

9. Stock-Based Compensation

Short-Term Incentive Plan

In connection with the vesting of outstanding performance share units ("PSUs") previously granted to certain employees under the Company's 2020 Short-Term Incentive Plan, the Company issued 2,742,469 Common Shares during the second quarter of 2021, which included 1,177,397 Common Shares sold to cover the statutory income tax withholding requirements on behalf of the employees.   

On March 30, 2021, the Company granted a total of 612,947 PSUs to certain employees of the Company under its 2021 Short-Term Incentive Plan. The vesting of these PSUs is subject to the Company achieving a predetermined measure of adjusted EBITDA for fiscal 2021 and subject to each employee's continued employment with the Company through March 30, 2022 (the requisite service period). The aggregate grant-date fair value of these PSUs was estimated to be $8.7 million based on a closing price of $14.25 for the Common Shares on the date of grant. Each reporting period, the number of PSUs that are expected to vest is redetermined and the aggregate grant-date fair value of the redetermined number of PSUs is amortized on a straight-line basis over the remaining requisite service period less amounts previously recognized. For the quarter ended July 3, 2021, the Company recognized compensation expense of $2.2 million related to the number of these PSUs expected to vest, and the remaining compensation cost related to these PSUs not yet recognized as an expense was determined to be $6.1 million as at July 3, 2021.

Long-Term Incentive Plan

On April 15, 2021, the Company granted 26,305 Restricted Stock Units ("RSUs"), 70,513 PSUs and 135,668 stock options to selected employees under its 2021 Long-Term Incentive Plan.  The RSUs vest in three equal annual installments beginning on April 15, 2022, and each vested RSU entitles the recipient to receive one Common Share without payment of additional consideration. The vesting of the PSUs is dependent on the Company's total shareholder return (the "TSR") performance relative to food and beverage companies in a designated index during the three-year period commencing January 1, 2021 and continuing through December 31, 2023, and the recipient's continued employment with the Company through April 15, 2024. The TSR for the Company and each of the companies in the designated index will be calculated using a 20-trading day average closing price as of December 31, 2023. The percentage of vested PSUs may range from 0% to 200% based on the Company's achievement of predetermined TSR thresholds. Each vested PSU entitles the recipient to receive one Common Share without payment of additional consideration. The stock options vest ratably on each of the first through third anniversaries of the grant date and expire on the tenth anniversary of the grant date.  Each vested stock option entitles the recipient to purchase one Common Share at an exercise price of $14.77, which was the closing price of the Common Shares on April 15, 2021. 

The grant-date fair value of the RSUs was estimated to be $14.77 based on the closing price of the Common Shares on the date of grant. A grant-date fair value of $23.40 was estimated for the PSUs using a Monte Carlo valuation model, and a grant-date fair value of $8.33 was estimated for the stock options using the Black-Scholes option pricing model. The following table summarizes the assumptions used to determine the fair values of the PSUs and stock options granted.

		PSUs		Stock options
Grant-date stock price	$	14.77	$	14.77
Exercise price		NA	$	14.77
Dividend yield		0%		0%
Expected volatility(1)		76.9%		61.7%
Risk-free interest rate(2)		0.3%		1.0%
Expected life (in years)(3)		2.71		6.00

(1) Determined based on the historical volatility of the Common Shares over the performance period of the PSUs and expected life of the stock options.

(2) Determined based on U.S. Treasury yields with a remaining term equal to the performance period of the PSUs and expected life of the stock options.

(3) Determined based on the performance period of the PSUs and the mid-point of vesting (three years) and expiration (ten years) for the stock options. 

The aggregate grant-date fair value of the RSUs, PSUs and stock options was determined to be $3.2 million, which will be recognized on a straight-line basis over the three-year requisite service period ending April 15, 2024.  As at July 3, 2021, total compensation costs not yet recognized as an expense was $2.9 million.

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Other Expense, Net

6 Months Ended

Jul. 03, 2021

Other Income and Expenses [Abstract]

Other Expense, Net [Text Block]

10.  Other Expense, Net

The components of other expense (income) were as follows:

	Quarter ended			Two quarters ended
	July 3, 2021	June 27, 2020		July 3, 2021	June 27, 2020
	$	$		$	$
Facility closure and related costs(1)	2,962	-		4,394	-
Employee termination costs (recovery)(2)	1,161	(377	)	1,161	193
Divestiture costs(3)	291	-		474	-
Settlement loss, net(4)	163	-		163	-
Product withdrawal recovery(5)	-	(322	)	-	(322	)
Other	84	(136	)	84	(151	)
	4,661	(835	)	6,276	(280	)

(1)  Facility closure and related costs

For the quarter and two quarters ended July 3, 2021, the Company recognized asset impairment charges of $3.0 million in connection with its decision to exit its leased South Gate, California, fruit ingredient processing facility in July 2021. In addition, for the two quarters ended July 3, 2021, facility closure costs include costs to complete the exit from the Company's Santa Maria, California, frozen fruit processing facility that commenced in the fourth quarter of 2020 and was substantially completed by February 2021.

(2)  Employee termination costs (recovery)

For the quarter ended July 3, 2021, expense represents employee termination costs of $1.2 million for the approximately 60 employees impacted by the closure of the Company's fruit ingredient processing facility.

For the quarter and two quarters ended June 27, 2020, expense includes severance benefits of $0.1 million and $1.1 million, respectively, for employees terminated in connection with the consolidation of the Company's corporate office functions into Minneapolis, Minnesota, net of reversal of $0.4 million and $0.9 million, respectively, of previously recognized stock-based compensation expense related to forfeited awards previously granted to terminated employees.

(3)  Divestiture costs

For the quarter and two quarters ended July 3, 2021, expense relates to professional fees incurred in connection with post-closing matters related to the divestiture of Tradin Organic.

(4)  Settlement loss, net

For the quarter and two quarters ended July 3, 2021, expense represents a $0.5 million loss on the settlement of an employment-related legal matter, partially offset by a gain related to a project cancellation.

(5)  Product withdrawal recovery

For the quarter and two quarters ended June 27, 2020, income represents the reversal of previously accrued costs related to a withdrawal of certain consumer-packaged products. These costs were recognized in other expense in 2016.

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Earnings (Loss) Per Share

6 Months Ended

Jul. 03, 2021

Earnings Per Share [Abstract]

Loss Per Share [Text Block]

11. Earnings (Loss) Per Share

Basic and diluted earnings (loss) per share were calculated as follows (shares in thousands):

		Quarter ended						Two quarters ended
		July 3, 2021			June 27, 2020			July 3, 2021			June 27, 2020
Basic Earnings (Loss) Per Share
Numerator for basic earnings (loss) per share:
Earnings (loss) from continuing operations	$	(918	)	$	(5,133	)	$	754		$	(9,097	)
Less: dividends and accretion on Series A Preferred Stock		-			(2,066	)		(1,212	)		(4,091	)
Less: dividends and accretion on Series B-1 Preferred Stock		(744	)		(538	)		(1,485	)		(538	)
Loss from continuing operations attributable to common shareholders		(1,662	)		(7,737	)		(1,943	)		(13,726	)
Earnings from discontinued operations		-			6,140			-			13,465
Loss attributable to common shareholders	$	(1,662	)	$	(1,597	)	$	(1,943	)	$	(261	)
Denominator for basic earnings (loss) per share:
Basic weighted-average number of shares outstanding		105,676			89,089			100,898			88,625
Basic earnings (loss) per share:
From continuing operations	$	(0.02	)	$	(0.09	)	$	(0.02	)	$	(0.15	)
From discontinued operations		-			0.07			-			0.15
Basic loss per share	$	(0.02	)	$	(0.02	)	$	(0.02	)	$	(0.00	)
Diluted Earnings (Loss) Per Share
Numerator for diluted earnings (loss) per share:
Earnings (loss) from continuing operations	$	(918	)	$	(5,133	)	$	754		$	(9,097	)
Less: dividends and accretion on Series A Preferred Stock		-			(2,066	)		(1,212	)		(4,091	)
Less: dividends and accretion on Series B-1 Preferred Stock		(744	)		(538	)		(1,485	)		(538	)
Loss from continuing operations attributable to common shareholders		(1,662	)		(7,737	)		(1,943	)		(13,726	)
Earnings from discontinued operations		-			6,140			-			13,465
Loss attributable to common shareholders	$	(1,662	)	$	(1,597	)	$	(1,943	)	$	(261	)
Denominator for diluted earnings (loss) per share:
Basic weighted-average number of shares outstanding		105,676			89,089			100,898			88,625
Dilutive effect of the following:
Stock options, restricted stock units and performance share units(1)		-			-			-			-
Series B-1 Preferred Stock(2)		-			-			-			-
Series A Preferred Stock(3)		-			-			-			-
Diluted weighted-average number of shares outstanding		105,676			89,089			100,898			88,625
Diluted earnings (loss) per share:
From continuing operations	$	(0.02	)	$	(0.09	)	$	(0.02	)	$	(0.15	)
From discontinued operations		-			0.07			-			0.15
Diluted loss per share	$	(0.02	)	$	(0.02	)	$	(0.02	)	$	(0.00	)

(1)    For the quarter and two quarters ended July 3, 2021, 2,764,865 (June 27, 2020 - 753,645) and 4,317,118 (June 27, 2020 - 876,593) potential common shares, respectively, were excluded from the calculation of diluted loss per share due to their effect of reducing the loss per share from continuing operations. Dilutive potential common shares consist of stock options, RSUs, and certain contingently issuable PSUs. In addition, for the quarter and two quarters ended July 3, 2021, stock options and RSUs to purchase or receive 263,134 (June 27, 2020 - 2,629,179) and 260,634 (June 27, 2020 - 3,079,418) potential common shares, respectively, were anti-dilutive because the assumed proceeds exceeded the average market price of the Common Shares for the respective periods.

(2) For the quarter and two quarters ended July 3, 2021 and June 27, 2020, it was more dilutive to assume the Series B-1 Preferred Stock was not converted into Common Shares and, therefore, the numerator of the diluted earnings per share calculation was not adjusted to add back the dividends and accretion on the Series B-1 Preferred Stock and the denominator was not adjusted to include 12,178,667 and 12,000,000 Common Shares issuable on an if-converted basis as at July 3, 2021 and June 27, 2020, respectively.

(3) As described in note 8, on February 22, 2021, all shares of Series A Preferred Stock were exchanged for 12,633,427 Common Shares, representing 12.3% of the Company's issued and outstanding Common Shares on a post-exchange basis as at February 22, 2021. For the quarter and two quarters ended June 27, 2020, it was more dilutive to assume the Series A Preferred Stock was not converted into Common Shares and, therefore, the numerator of the diluted earnings per share calculation was not adjusted to add back the dividends and accretion on the Series A Preferred Stock and the denominator was not adjusted to include 12,385,714 Common Shares issuable on an if-converted basis as at June 27, 2020.

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Supplemental Cash Flow Information

6 Months Ended

Jul. 03, 2021

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information [Text Block]

12. Supplemental Cash Flow Information

		Quarter ended				Two quarters ended
		July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
		$		$		$		$
Changes in Operating Assets and Liabilities
Accounts receivable		5,118		17,612		(10,385	)	(251	)
Inventories		(64,514	)	(33,858	)	(82,108	)	(727	)
Accounts payable and accrued liabilities		7,420		7,827		14,920		1,543
Other operating assets and liabilities		1,654		705		5,595		8,145
		(50,322	)	(7,714	)	(71,978	)	8,710
Non-Cash Investing and Financing Activities
Right-of-use assets obtained in exchange for lease liabilities:
	Operating leases(1)	16,275		116		17,289		193
	Finance leases (see note 7(2))	-		-		29,906		-
Change in accrued additions to property, plant and equipment		1,397		3,229		(617	)	2,502
Change in accrued dividends on preferred stock		-		481		(1,769	)	481
Dividends paid in kind on preferred stock		-		1,700		-		1,700
Change in accrued transaction costs related to the divestiture of Tradin Organic(2)		-		-		(13,380	)	-
Change in accrued debt issuance costs		-		-		(1,690	)	-

(1)  For the quarter and two quarters ended July 3, 2021, the Company recognized additional operating right-of-use assets of $16.3 million and $17.3 million, respectively, together with a corresponding amount of operating lease liabilities, mainly related to the addition of a new warehouse facility and related equipment to support the Company's plant-based food and beverage operations. The initial term of the warehouse facility lease is approximately 10 years, and the operating lease liability was measured using the Company's incremental borrowing rate of approximately 4.50%.

(2)  For the two quarters ended July 3, 2021, the settlement of transaction costs related to the divestiture of Tradin Organic is included in investing activities of discontinued operations on consolidated statements of cash flows.

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Commitments and Contingencies

6 Months Ended

Jul. 03, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies [Text Block]

13.  Commitments and Contingencies

Various claims and potential claims arising in the normal course of business are pending against the Company. It is the opinion of management that these claims or potential claims are without merit and the amount of potential liability, if any, to the Company is not determinable. Management believes the final determination of these claims or potential claims will not materially affect the financial position or results of operations of the Company. 

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Segmented Information

6 Months Ended

Jul. 03, 2021

Segment Reporting [Abstract]

Segmented Information [Text Block]

14.  Segmented Information

The segment information below is presented on a continuing operations basis, with prior period information recast to reflect the reporting of Tradin Organic as discontinued operations. Following the divestiture of Tradin Organic, the composition of the Company's two continuing operating segments is as follows:

• Plant-Based Foods and Beverages includes plant-based beverages and liquid and dry ingredients (utilizing oat, almond, rice, soy, coconut, hemp, and other bases), as well as broths, teas, and nutritional beverages.  In addition, Plant-Based Foods and Beverages includes packaged dry- and oil-roasted inshell sunflower and sunflower kernels, as well as corn-, soy-, and legume-based roasted snacks, and the processing and sale of raw sunflower inshell and kernel for food and feed applications. 

• Fruit-Based Foods and Beverages includes 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), and custom fruit preparations for industrial use.  In addition, Fruit-Based Foods and Beverages includes fruit snacks, including bars, twists, ropes, and bite-sized varieties.  Prior to the Company's exit from its fruit ingredient processing facility in July 2021 (see note 10), Fruit-Based Foods and Beverages also produced custom fruit preparations for industrial use.

Corporate Services provides a variety of management, financial, information technology, treasury, and administration services to each of the Company's operating segments.

When reviewing the operating results of the Company's operating segments, management uses segment revenues from external customers and segment operating income/loss to assess performance and allocate resources. Total segment operating income/loss includes general and administrative expenses incurred by Corporate Services and excludes other income/expense items and goodwill impairments. In addition, interest on corporate debt and income taxes are not allocated to the operating segments.

Segment Revenues and Operating Income

Reportable segment operating results for the quarters and two quarters ended July 3, 2021 and June 27, 2020 were as follows:

	Quarter ended				Two quarters ended
	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
	$		$		$		$
Segment revenues from external customers
Plant-Based Foods and Beverages	111,359		91,705		230,810		197,947
Fruit-Based Foods and Beverages	90,914		92,696		179,103		194,051
Total revenues from external customers	202,273		184,401		409,913		391,998
Segment operating income (loss)
Plant-Based Foods and Beverages	8,641		10,484		21,958		24,337
Fruit-Based Foods and Beverages	(1,447	)	(2,016	)	(3,341	)	(6,718	)
Corporate Services	(5,471	)	(8,844	)	(10,809	)	(15,236	)
Total segment operating income (loss)	1,723		(376	)	7,808		2,383
Other income (expense), net (see note 10)	(4,661	)	835		(6,276	)	280
Interest expense, net	(1,631	)	(7,413	)	(3,291	)	(15,078	)
Loss from continuing operations before income taxes	(4,569	)	(6,954	)	(1,759	)	(12,415	)

Segment Depreciation and Amortization

Depreciation and amortization by reportable segment for the quarters and two quarters ended July 3, 2021 and June 27, 2020 was as follows:

	Quarter ended		Two quarters ended
	July 3, 2021	June 27, 2020	July 3, 2021	June 27, 2020
	$	$	$	$
Plant-Based Foods and Beverages	3,881	2,380	7,015	4,748
Fruit-Based Foods and Beverages	3,861	4,110	7,630	8,246
Corporate Services	1,168	1,165	2,308	2,386
Total depreciation and amortization	8,910	7,655	16,953	15,380

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Significant Accounting Policies (Policies)

6 Months Ended

Jul. 03, 2021

Accounting Policies [Abstract]

Basis of Presentation [Text Block]

Basis of Presentation

These interim consolidated financial statements of SunOpta Inc. (the "Company" or "SunOpta") have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended, and in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information.  Accordingly, these condensed interim consolidated financial statements do not include all of the disclosures required by U.S. GAAP for annual financial statements.  In the opinion of management, all adjustments considered necessary for fair presentation have been included and all such adjustments are of a normal, recurring nature.  Operating results for the quarter and two quarters ended July 3, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending January 1, 2022 or for any other period.  The interim consolidated financial statements include the accounts of the Company and its subsidiaries, and have been prepared on a basis consistent with the annual consolidated financial statements for the year ended January 2, 2021.  For further information, refer to the consolidated financial statements, and notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 2021.

Discontinued Operations [Policy Text Block]

Discontinued Operations

As described in note 4, on December 30, 2020, the Company completed the divestiture of its organic ingredient sourcing and production business, Tradin Organic. With the divestiture, Tradin Organic qualified for reporting as discontinued operations in the consolidated financial statements of the Company.  Accordingly, the operating results and cash flows of Tradin Organic for the quarter and two quarters ended June 27, 2020 have been reclassified to discontinued operations on the consolidated statements of operations and cash flows.  In addition, unless otherwise indicated, the information disclosed below in these notes to the consolidated financial statements is presented on a continuing operations basis, with the comparative period information recast to reflect Tradin Organic as discontinued operations.

Fiscal Year [Policy Text Block]

Fiscal Year

The fiscal year of the Company consists of a 52- or 53-week period ending on the Saturday closest to December 31. Fiscal year 2021 is a 52-week period ending on January 1, 2022, with quarterly periods ending on April 3, 2021, July 3, 2021, and October 2, 2021. Fiscal year 2020 was a 53-week period ending on January 2, 2021, with quarterly periods ending on March 28, 2020, June 27, 2020, and September 26, 2020.

Recent Accounting Pronouncements [Policy Text Block]

Recent Accounting Pronouncements

In March 2020 and January 2021, the Financial Accounting Standards Board issued Accounting Standard Updates 2020-04 and 2021-01, Reference Rate Reform (Topic 848), that provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the transition away from LIBOR and other reference rates that are expected to be discontinued.  The guidance in Topic 848 is effective upon issuance and can be applied prospectively for contract modifications and hedging relationships through December 31, 2022.  The Company is currently evaluating the impact of the guidance and does not expect it will have a material effect on the Company’s consolidated financial statements.

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Revenue (Tables)

6 Months Ended

Jul. 03, 2021

Revenue from Contract with Customer [Abstract]

Schedule of disaggregation of revenue [Table Text Block]

	Quarter ended		Two quarters ended
	July 3, 2021	June 27, 2020	July 3, 2021	June 27, 2020
	$	$	$	$
Plant-Based Foods and Beverages
Beverages and broths	87,494	68,451	182,980	155,221
Plant-based ingredients	7,578	6,284	15,422	12,196
Sunflower and roasted snacks	16,287	16,970	32,408	30,530
Total Plant-Based Foods and Beverages	111,359	91,705	230,810	197,947
Fruit-Based Foods and Beverages
Frozen fruit	64,076	75,079	127,531	150,286
Fruit-based ingredients	11,000	7,946	19,359	19,838
Fruit snacks	15,838	9,671	32,213	23,927
Total Fruit-Based Foods and Beverages	90,914	92,696	179,103	194,051
Total revenues	202,273	184,401	409,913	391,998

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Discontinued Operations (Tables)

6 Months Ended

Jul. 03, 2021

Discontinued Operations and Disposal Groups [Abstract]

Schedule of disposal groups including discontinued operations income statement, balance sheet and additional disclosures [Table Text Block]

	Quarter ended		Two quarters ended
	June 27, 2020		June 27, 2020
	$		$
Revenues	126,543		254,895
Cost of goods sold	110,110		221,915
Selling, general and administrative expenses(1)	6,419		13,692
Intangible asset amortization	333		783
Other expense (income), net	502		(1,351	)
Foreign exchange loss	473		597
Interest expense(2)	523		1,138
Earnings before gain of sale	8,183		18,121
Earnings from discontinued operations before income taxes	8,183		18,121
Provision for income taxes	2,273		4,900
Loss attributable to non-controlling interests	(230	)	(244	)
Earnings from discontinued operations	6,140		13,465

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Inventories (Tables)

6 Months Ended

Jul. 03, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	July 3, 2021		January 2, 2021
	$		$
Raw materials and work-in-process	135,892		78,210
Finished goods	98,848		75,280
Inventory reserves	(4,884	)	(5,742	)
	229,856		147,748

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Long-Term Debt (Tables)

6 Months Ended

Jul. 03, 2021

Debt Disclosure [Abstract]

Schedule of Line of Credit Facilities [Table Text Block]

	July 3, 2021	January 2, 2021
	$	$
Asset-Based Credit Facilities(1)	159,106	47,277
Finance lease liabilities(2)	42,899	18,813
Other	4,194	3,633
	206,199	69,723
Less: current portion	7,597	3,478
	198,602	66,245

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Stock-Based Compensation (Tables)

6 Months Ended

Jul. 03, 2021

Share-based Payment Arrangement [Abstract]

Schedule of stock options granted using the Black-Scholes option pricing model [Table Text Block]

		PSUs		Stock options
Grant-date stock price	$	14.77	$	14.77
Exercise price		NA	$	14.77
Dividend yield		0%		0%
Expected volatility(1)		76.9%		61.7%
Risk-free interest rate(2)		0.3%		1.0%
Expected life (in years)(3)		2.71		6.00

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Other Expense, Net (Tables)

6 Months Ended

Jul. 03, 2021

Other Income and Expenses [Abstract]

Schedule of Other Nonoperating Expense (Income) [Table Text Block]

	Quarter ended			Two quarters ended
	July 3, 2021	June 27, 2020		July 3, 2021	June 27, 2020
	$	$		$	$
Facility closure and related costs(1)	2,962	-		4,394	-
Employee termination costs (recovery)(2)	1,161	(377	)	1,161	193
Divestiture costs(3)	291	-		474	-
Settlement loss, net(4)	163	-		163	-
Product withdrawal recovery(5)	-	(322	)	-	(322	)
Other	84	(136	)	84	(151	)
	4,661	(835	)	6,276	(280	)

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Earnings (Loss) Per Share (Tables)

6 Months Ended

Jul. 03, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

		Quarter ended						Two quarters ended
		July 3, 2021			June 27, 2020			July 3, 2021			June 27, 2020
Basic Earnings (Loss) Per Share
Numerator for basic earnings (loss) per share:
Earnings (loss) from continuing operations	$	(918	)	$	(5,133	)	$	754		$	(9,097	)
Less: dividends and accretion on Series A Preferred Stock		-			(2,066	)		(1,212	)		(4,091	)
Less: dividends and accretion on Series B-1 Preferred Stock		(744	)		(538	)		(1,485	)		(538	)
Loss from continuing operations attributable to common shareholders		(1,662	)		(7,737	)		(1,943	)		(13,726	)
Earnings from discontinued operations		-			6,140			-			13,465
Loss attributable to common shareholders	$	(1,662	)	$	(1,597	)	$	(1,943	)	$	(261	)
Denominator for basic earnings (loss) per share:
Basic weighted-average number of shares outstanding		105,676			89,089			100,898			88,625
Basic earnings (loss) per share:
From continuing operations	$	(0.02	)	$	(0.09	)	$	(0.02	)	$	(0.15	)
From discontinued operations		-			0.07			-			0.15
Basic loss per share	$	(0.02	)	$	(0.02	)	$	(0.02	)	$	(0.00	)
Diluted Earnings (Loss) Per Share
Numerator for diluted earnings (loss) per share:
Earnings (loss) from continuing operations	$	(918	)	$	(5,133	)	$	754		$	(9,097	)
Less: dividends and accretion on Series A Preferred Stock		-			(2,066	)		(1,212	)		(4,091	)
Less: dividends and accretion on Series B-1 Preferred Stock		(744	)		(538	)		(1,485	)		(538	)
Loss from continuing operations attributable to common shareholders		(1,662	)		(7,737	)		(1,943	)		(13,726	)
Earnings from discontinued operations		-			6,140			-			13,465
Loss attributable to common shareholders	$	(1,662	)	$	(1,597	)	$	(1,943	)	$	(261	)
Denominator for diluted earnings (loss) per share:
Basic weighted-average number of shares outstanding		105,676			89,089			100,898			88,625
Dilutive effect of the following:
Stock options, restricted stock units and performance share units(1)		-			-			-			-
Series B-1 Preferred Stock(2)		-			-			-			-
Series A Preferred Stock(3)		-			-			-			-
Diluted weighted-average number of shares outstanding		105,676			89,089			100,898			88,625
Diluted earnings (loss) per share:
From continuing operations	$	(0.02	)	$	(0.09	)	$	(0.02	)	$	(0.15	)
From discontinued operations		-			0.07			-			0.15
Diluted loss per share	$	(0.02	)	$	(0.02	)	$	(0.02	)	$	(0.00	)

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jul. 03, 2021

Supplemental Cash Flow Elements [Abstract]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

		Quarter ended				Two quarters ended
		July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
		$		$		$		$
Changes in Operating Assets and Liabilities
Accounts receivable		5,118		17,612		(10,385	)	(251	)
Inventories		(64,514	)	(33,858	)	(82,108	)	(727	)
Accounts payable and accrued liabilities		7,420		7,827		14,920		1,543
Other operating assets and liabilities		1,654		705		5,595		8,145
		(50,322	)	(7,714	)	(71,978	)	8,710
Non-Cash Investing and Financing Activities
Right-of-use assets obtained in exchange for lease liabilities:
	Operating leases(1)	16,275		116		17,289		193
	Finance leases (see note 7(2))	-		-		29,906		-
Change in accrued additions to property, plant and equipment		1,397		3,229		(617	)	2,502
Change in accrued dividends on preferred stock		-		481		(1,769	)	481
Dividends paid in kind on preferred stock		-		1,700		-		1,700
Change in accrued transaction costs related to the divestiture of Tradin Organic(2)		-		-		(13,380	)	-
Change in accrued debt issuance costs		-		-		(1,690	)	-

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Segmented Information (Tables)

6 Months Ended

Jul. 03, 2021

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Quarter ended				Two quarters ended
	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
	$		$		$		$
Segment revenues from external customers
Plant-Based Foods and Beverages	111,359		91,705		230,810		197,947
Fruit-Based Foods and Beverages	90,914		92,696		179,103		194,051
Total revenues from external customers	202,273		184,401		409,913		391,998
Segment operating income (loss)
Plant-Based Foods and Beverages	8,641		10,484		21,958		24,337
Fruit-Based Foods and Beverages	(1,447	)	(2,016	)	(3,341	)	(6,718	)
Corporate Services	(5,471	)	(8,844	)	(10,809	)	(15,236	)
Total segment operating income (loss)	1,723		(376	)	7,808		2,383
Other income (expense), net (see note 10)	(4,661	)	835		(6,276	)	280
Interest expense, net	(1,631	)	(7,413	)	(3,291	)	(15,078	)
Loss from continuing operations before income taxes	(4,569	)	(6,954	)	(1,759	)	(12,415	)

Schedule of Segment Depreciation and Amortization [Table Text Block]

	Quarter ended		Two quarters ended
	July 3, 2021	June 27, 2020	July 3, 2021	June 27, 2020
	$	$	$	$
Plant-Based Foods and Beverages	3,881	2,380	7,015	4,748
Fruit-Based Foods and Beverages	3,861	4,110	7,630	8,246
Corporate Services	1,168	1,165	2,308	2,386
Total depreciation and amortization	8,910	7,655	16,953	15,380

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Significant Accounting Policies (Narrative) (Details)	6 Months Ended
	Jul. 03, 2021
Accounting Policies [Abstract]
Operating cycle of company	The fiscal year of the Company consists of a 52- or 53-week period ending on the Saturday closest to December 31. Fiscal year 2021 is a 52-week period ending on January 1, 2022, with quarterly periods ending on April 3, 2021, July 3, 2021, and October 2, 2021. Fiscal year 2020 was a 53-week period ending on January 2, 2021, with quarterly periods ending on March 28, 2020, June 27, 2020, and September 26, 2020.

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Revenue (Disclosure of disaggregation of revenue) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Disaggregation of Revenue [Line Items]
Segment revenues from external customers	$ 202,273	$ 184,401	$ 409,913	$ 391,998
Plant-Based Foods And Beverages [Member]
Disaggregation of Revenue [Line Items]
Segment revenues from external customers	111,359	91,705	230,810	197,947
Plant-Based Foods And Beverages [Member] | Beverages and broths [Member]
Disaggregation of Revenue [Line Items]
Segment revenues from external customers	87,494	68,451	182,980	155,221
Plant-Based Foods And Beverages [Member] | Plant-based ingredients [Member]
Disaggregation of Revenue [Line Items]
Segment revenues from external customers	7,578	6,284	15,422	12,196
Plant-Based Foods And Beverages [Member] | Sunflower and roasted snacks [Member]
Disaggregation of Revenue [Line Items]
Segment revenues from external customers	16,287	16,970	32,408	30,530
Fruit-Based Foods And Beverages [Member]
Disaggregation of Revenue [Line Items]
Segment revenues from external customers	90,914	92,696	179,103	194,051
Fruit-Based Foods And Beverages [Member] | Frozen Fruit [Member]
Disaggregation of Revenue [Line Items]
Segment revenues from external customers	64,076	75,079	127,531	150,286
Fruit-Based Foods And Beverages [Member] | Fruit-based ingredients [Member]
Disaggregation of Revenue [Line Items]
Segment revenues from external customers	11,000	7,946	19,359	19,838
Fruit-Based Foods And Beverages [Member] | Fruit snacks [Member]
Disaggregation of Revenue [Line Items]
Segment revenues from external customers	$ 15,838	$ 9,671	$ 32,213	$ 23,927

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Acquisition of Dream and WestSoy Brands (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 15, 2021	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Asset Acquisition [Line Items]
Purchase price allocated to acquired inventories		$ 64,514	$ 33,858	$ 82,108	$ 727
Purchase price allocated to acquired brand name intangible assets		$ 25,073	$ 0	$ 25,073	$ 0
Dream and WestSoy plant-based beverage brands [Member] | Hain Celestial Group, Inc. [Member]
Asset Acquisition [Line Items]
Cash purchase price	$ 33,000
Final purchase price	31,700
Transaction costs	400
Purchase price allocated to acquired inventories	6,600
Purchase price allocated to acquired brand name intangible assets	$ 25,100
Estimated useful life of intangible assets	15 years
Tranche B Subfacility [Member]
Asset Acquisition [Line Items]
Line of credit facility, maximum borrowing capacity	$ 20,000
Revolving credit facility, term	2 years

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Discontinued Operations (Narrative) (Details) - Tradin Organic [Member] € in Millions, $ in Millions	6 Months Ended
	Jul. 03, 2021 USD ($)	Dec. 30, 2020 EUR (€)	Dec. 30, 2020 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash consideration		€ 305.1	$ 373.7
Divestiture transaction costs	$ 13.4
Contingent consideration	$ 0.2

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Discontinued Operations - (Disclosure of disposal groups including discontinued operations income statement, balance sheet and additional disclosures) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Earnings from discontinued operations	$ 0	$ 6,140	$ 0	$ 13,465
Tradin Organic [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues		126,543		254,895
Cost of goods sold		110,110		221,915
Selling, general and administrative expenses		6,419		13,692
Intangible asset amortization		333		783
Other expense (income), net		502		(1,351)
Foreign exchange loss		473		597
Interest expense		523		1,138
Earnings before gain of sale		8,183		18,121
Earnings from discontinued operations before income taxes		8,183		18,121
Provision for income taxes		2,273		4,900
Loss attributable to non-controlling interests		(230)		(244)
Earnings from discontinued operations		$ 6,140		$ 13,465

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Derivative Financial Instruments and Fair Value Measurements (Narrative) (Details) $ in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 03, 2021 USD ($)	Jun. 27, 2020 MXN ($)	Jul. 03, 2021 USD ($)	Jun. 27, 2020 MXN ($)	Jan. 02, 2021 USD ($)	Sep. 26, 2020 USD ($)
Forward foreign currency contracts [Member]
Derivative [Line Items]
Derivative notional amount		$ 11.5		$ 11.5
Realized gain on derivative contracts		$ 0.2		$ 0.2
Not designated as hedging instruments [Member] | Foreign currency put and call option contracts (a zero-cost collar) [Member]
Derivative [Line Items]
Derivative notional amount	$ 1.1		$ 1.1			$ 11.8
Collar ceiling rate of Mexican pesos to US dollar	24.00		24.00
Floor rate of Mexican pesos to US dollar	21.14		21.14
Unrealized gains included in other current assets	$ 0.1		$ 0.1		$ 0.8
Unrealized gain (loss) on derivative contracts	(0.3)		(0.7)
Derivative instruments gain (loss) recognized in income net	$ 0.3		$ 0.5

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Inventories (Disclosure of inventory, current) (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Inventory Disclosure [Abstract]
Raw materials and work-in-process	$ 135,892	$ 78,210
Finished goods	98,848	75,280
Inventory reserves	(4,884)	(5,742)
Total Inventory, Net	$ 229,856	$ 147,748

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Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Apr. 15, 2021	Jul. 03, 2021
Debt Instrument [Line Items]
Lessee, finance lease, description		During the first quarter of 2021, the Company recognized additional finance lease liabilities of $29.9 million in the aggregate, together with a corresponding amount of right-of-use assets recorded in property, plant and equipment, related to the addition of new plant-based beverage and ingredient extraction processing and packaging equipment. The finance leases have implicit rates of interest of 8.08% to 8.85% and lease terms of five years.
Tranche A Subfacility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 250.0
Line of credit facility, interest rate description		Borrowings under the Asset-Based Credit Facilities bear interest based on various reference rates including LIBOR plus an applicable margin. With respect to loans under the Tranche A Subfacility, the applicable margin is set quarterly based on average borrowing availability for the preceding fiscal quarter and will range from 0.50% to 1.00% for base rate borrowings and from 1.50% to 2.00% for eurocurrency rate, bankers' acceptance rate and European base rate borrowings, with a reduction of 0.25% when the Company's total leverage ratio is less than a specific threshold on or after the one-year anniversary of the closing date of the Asset-Based Credit Facilities. Borrowings under the Tranche B Subfacility bear interest based on various reference rates including LIBOR plus an applicable margin ranging from 2.50% to 3.00%, with a reduction of 0.25% when the Company's total leverage ratio is less than a specific threshold on or after the one-year anniversary of the closing date of the Asset-Based Credit Facilities. With respect to loans under the Term Loan Facility, the applicable margin will be set quarterly based on average borrowing availability for the preceding fiscal quarter and will range from 1.25% to 1.75% for base rate borrowings and from 2.25% to 2.75% for eurocurrency rate, bankers' acceptance rate and European base rate borrowings. In addition to paying interest on outstanding principal under the Asset-Based Credit Facilities, the Company is required to pay commitment fees quarterly, in arrears, equal to (i) 0.25% of the average daily undrawn portion of the Revolving Credit Facilities and (ii) 0.375% of the undrawn portion of the Term Loan Facility. For the two quarters ended July 3, 2021, the weighted-average interest rate on all outstanding borrowings under the Revolving Credit Facilities was 2.21%.
Line of Credit Facility, Covenant Terms		The Asset-Based Credit Facilities are subject to a number of covenants that, among other things, restrict the Company's ability to create liens on assets; sell assets and enter in sale and leaseback transactions; pay dividends, prepay junior lien and unsecured indebtedness and make other restricted payments; incur additional indebtedness, including finance lease obligations in excess of $150 million, and make guarantees; make investments, loans or advances, including acquisitions; and engage in mergers or consolidations. In addition, the Company and its restricted subsidiaries are required to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 if excess availability is less than the greater of (i) $15.0 million or (ii) 10% of the lesser of (x) the aggregate commitments under the Revolving Credit Facilities and (y) the aggregate borrowing base. As at July 3, 2021, the Company was in compliance with all covenants of the Credit Agreement.
Tranche A Subfacility [Member] | Amendment To Credit Agreement [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 230.0
Tranche A Subfacility [Member] | Amendment To Credit Agreement [Member] | Maximum [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		250.0
Term Loan Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 75.0
Tranche B Subfacility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 20.0
Debt instrument, term	2 years
Line of Credit Facility, Periodic Payment, Principal	$ 2.5

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Long-Term Debt (Disclosure of long-term debt) (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Debt Disclosure [Abstract]
Asset-Based Credit Facilities	$ 159,106	$ 47,277
Finance lease liabilities	42,899	18,813
Other	4,194	3,633
Total Long-term and Current Term Debt	206,199	69,723
Less: current portion	7,597	3,478
Long-term Debt, Excluding Current Maturities, Total	$ 198,602	$ 66,245

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Preferred Stock (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	2 Months Ended	3 Months Ended				6 Months Ended
	Feb. 22, 2021	Jul. 03, 2021	Apr. 03, 2021	Sep. 26, 2020	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020	Apr. 24, 2020	Oct. 07, 2016
Temporary Equity [Line Items]
Preferred stock accretion to redemption value		$ 135			$ 423	$ 437	$ 748
Payments of Dividends		609			0	4,029	1,700
Dividends, Preferred Stock, Paid-in-kind		0			1,700	0	1,700
Series A Preferred Stock [Member] | Oaktree Organics, L.P. and Oaktree Huntington Investment Fund II, L.P.
Temporary Equity [Line Items]
Convertible Preferred Stock, Shares Issued upon Conversion	12,633,427
Preferred Stock, Shares Issued									85,000
Preferred Stock, Value, Issued	$ 87,500								$ 85,000
Preferred Stock, Convertible, Conversion Price	$ 7.00
Preferred Stock, Dividend Rate, Percentage	8.00%
Preferred Stock Issuance Costs	$ 300								$ 6,000
Remaining Unamortized Issuance Costs	900
Payments of Dividends	1,000					$ 1,800
Dividends, Preferred Stock, Paid-in-kind	3,400
Preferred Stock, Liquidation Preference, Value	$ 85,000
Conversion of Stock, Description						On February 22, 2021 (the "Exchange Date"), Oaktree exchanged all of their shares of Series A Preferred Stock for 12,633,427 shares of common stock of the Company ("Common Shares") at an exchange price of $7.00. Prior to the exchange, the Series A Preferred Stock provided for a cumulative dividend of 8.0% per year. On the Exchange Date, the Company paid cash dividends of $1.0 million on the Series A Preferred Stock for the period January 1, 2021 to February 22, 2021. In addition, in the first quarter of 2021, the Company paid cash dividends of $1.8 million on Series A Preferred Stock related to the fourth quarter of 2020. Subsequent to the Exchange Date, the Company is no longer required to pay dividends on the Series A Preferred Stock. As at the Exchange Date, the carrying amount of the Series A Preferred Stock was $87.5 million, comprised of the initial liquidation preference of $85.0 million in the aggregate, together with $3.4 million of dividends paid in kind for the first and second quarters of 2020, less remaining unamortized issuance costs of $0.9 million. As at the Exchange Date, the Company derecognized the carrying amount of the Series A Preferred Stock and recognized a corresponding amount for the Common Shares issued on exchange, net of share issuance costs of $0.3 million. In connection with the exchange of the Series A Preferred Stock, all 12,633,427 Special Shares, Series 1 previously issued to Oaktree were redeemed by the Company. The Special Shares, Series 1 entitled Oaktree to one vote per Special Share, Series 1 on all matters submitted to a vote of the holders of Common Shares.
Series B-1 Preferred Stock [Member] | Stock issued to each recipient [Member]
Temporary Equity [Line Items]
Preferred Stock, Shares Issued								15,000
Series B-1 Preferred Stock [Member] | Oaktree and Engaged [Member]
Temporary Equity [Line Items]
Preferred Stock, Shares Issued								30,000
Preferred Stock, Value, Issued								$ 30,000
Preferred Stock Issuance Costs								$ 3,200
Preferred stock accretion to redemption value		$ 100			$ 100	$ 300	$ 100
Preferred Stock, Liquidation Preference Per Share					$ 1,015		$ 1,015	$ 1,000
Preferred Stock, Dividend Payment Terms						Cumulative preferred dividends accrue daily on the Series B-1 Preferred Stock at an annualized rate of 8.0% of the Series B-1 Liquidation Preference prior to September 30, 2029, and 10.0% of the liquidation preference thereafter (subject to an increase of 1.0% per quarter, up to a maximum rate of 5.0% per quarter on the occurrence of certain events of non-compliance).
Payments of Dividends			$ 600	$ 600
Dividends, Preferred Stock, Paid-in-kind					$ 400
Preferred Stock, Liquidation Preference, Value					$ 30,400		$ 30,400
Accrued Unpaid Dividends						$ 600
Preferred Stock, Convertible, Terms						At any time, the Series B-1 Preferred Stock may be exchanged, in whole or in part, into the number of Common Shares equal to, per share of Series B-1 Preferred Stock, the quotient of the Series B Liquidation Preference divided by $2.50 (such price, the "Series B-1 Exchange Price" and such quotient, the "Series B-1 Exchange Rate").
Convertible Preferred Stock, Settlement Terms						SunOpta Foods may cause the holders of the Series B-1 Preferred Stock to exchange all of their shares of Series B-1 Preferred Stock into a number of Common Shares equal to the number of shares of Series B-1 Preferred Stock outstanding multiplied by the Series B-1 Exchange Rate if (i) fewer than 10% of the shares of Series B-1 Preferred Stock issued on April 24, 2020 remain outstanding, or (ii) on or after April 24, 2023, the average volume-weighted average price of the Common Shares during the then preceding 20 trading day period is greater than 200% of the Series B-1 Exchange Price then in effect. At any time, if a holder of Series B-1 Preferred Stock elects to exchange, or SunOpta Foods causes an exchange of Series B Preferred Stock, the number of Common Shares delivered to each applicable holder may not cause such holder's beneficial ownership to exceed 19.99% of the Common Shares that would be outstanding immediately following such exchange (the "Series B-1 Exchange Cap").
Preferred Stock, Convertible, Shares Issuable		12,178,667				12,178,667
Preferred stock exchange, description of exchange price						The Series B-1 Exchange Price is subject to certain anti-dilution adjustments, including a weighted-average adjustment for issuances of Common Shares below the Series B-1 Exchange Price, provided that the Series B-1 Exchange Price may not be lower than $2.00 (subject to adjustment in certain circumstances).
Series B Preferred Stock [Member] | Oaktree and Engaged [Member]
Temporary Equity [Line Items]
Preferred Stock, Convertible, Terms						Oaktree and Engaged are entitled to vote the Series B-1 Preferred Stock with the Common Shares on an as-exchanged basis, subject to a permanent 19.99% voting cap. As a result of the voting cap, each of Oaktree and Engaged will only be able to vote its Series B-1 Preferred Stock to the extent that, when taken together with any other voting securities each investor controls, such votes do not exceed 19.99% of the votes eligible to be cast by all security holders of the Company. On April 24, 2020, the Company designated Special Shares, Series 2 to serve as the mechanism for attaching exchanged voting rights to the Series B-1 Preferred Stock. The Special Shares, Series 2 entitle the holder thereof to one vote per Special Share, Series 2 on all matters submitted to a vote of the holders of Common Shares, voting together as a single class, subject to certain exceptions. The Special Shares, Series 2 are not transferrable and the voting rights associated with the Special Shares, Series 2 will terminate upon the transfer of the shares of Series B-1 Preferred Stock to a third party, other than an affiliate of Oaktree or Engaged, as applicable. As at July 3, 2021, 6,089,333 Special Shares, Series 2 were issued to Engaged, equal to the number of Common Shares issuable to Engaged on the exchange of all of the shares of Series B-1 Preferred Stock held by it, and no Special Shares, Series 2 were issued to Oaktree, as Oaktree was subject to the Series B-1 Exchange Cap.
Special Voting Shares, issued and outstanding		6,089,333				6,089,333

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Stock-Based Compensation (Narrative) (Details) - USD ($)	1 Months Ended		3 Months Ended	6 Months Ended
	Apr. 15, 2021	Mar. 30, 2021	Jul. 03, 2021	Jul. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate grant-date fair value				$ 3,200,000
Vesting period				3 years
Compensation costs related to awards not yet recognized			$ 2,900	$ 2,900
Performance Share Units ("PSUs") | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of vesting PSU's				0.00%
Performance Share Units ("PSUs") | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of vesting PSU's				200.00%
2020 Short-Term Incentive Plan [Member] | Performance Share Units ("PSUs")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued during period, shares, vesting of performance share units			2,742,469
Stock issued during period, shares, shares sold to cover statutory income tax withholding			1,177,397
2021 Short-Term Incentive Plan [Member] | Performance Share Units ("PSUs")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units granted to certain employees		612,947
Description of award vesting rights		The vesting of these PSUs is subject to the Company achieving a predetermined measure of adjusted EBITDA for fiscal 2021 and subject to each employee's continued employment with the Company through March 30, 2022 (the requisite service period). The aggregate grant-date fair value of these PSUs was estimated to be $8.7 million based on a closing price of $14.25 for the Common Shares on the date of grant. Each reporting period, the number of PSUs that are expected to vest is redetermined and the aggregate grant-date fair value of the redetermined number of PSUs is amortized on a straight-line basis over the remaining requisite service period less amounts previously recognized.
Aggregate grant-date fair value		$ 8,700
Weighted-average grant-date fair value		$ 14.25
Compensation expense			$ 2,200,000
Compensation costs related to awards not yet recognized			$ 6,100,000	$ 6,100,000
2021 Long-Term Incentive Plan [Member] | Performance Share Units ("PSUs")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units granted to certain employees	70,513
Weighted-average grant-date fair value	$ 23.40
2021 Long-Term Incentive Plan [Member] | Restricted Stock Units ("RSUs") [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units granted to certain employees	26,305
Weighted-average grant-date fair value	$ 14.77
2021 Long-Term Incentive Plan [Member] | Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock options granted to selected employees	135,668
Exercise price of vested options to purchase common shares	$ 14.77
Weighted-average grant-date fair value	$ 8.33

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Stock-Based Compensation (Disclosure of stock options granted using Black-Scholes option pricing model) (Details)	6 Months Ended
	Jul. 03, 2021 $ / shares
PSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant-date stock price	$ 14.77
Dividend yield	0.00%
Expected volatility	76.90%
Risk-free interest rate	0.30%
Expected life of options (in years)	2 years 8 months 15 days
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant-date stock price	$ 14.77
Exercise price	$ 14.77
Dividend yield	0.00%
Expected volatility	61.70%
Risk-free interest rate	1.00%
Expected life of options (in years)	6 years

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Other Expense, Net (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Other Income And Expenses [Line Items]
Impairment of long-lived assets	$ 2,962	$ 0	$ 2,962	$ 0
Employee termination costs (recovery)	1,161	(377)	1,161	193
Reversal of previously recognized stock-based compensation expense related to forfeited awards		400		900
Loss on the settlement of employment-related legal matter	$ 500		$ 500
Value Creation Plan [Member]
Other Income And Expenses [Line Items]
Employee termination costs (recovery)		$ 100		$ 1,100

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Other Expense, Net (Disclosure of other expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Other Income and Expenses [Abstract]
Facility closure and related costs	$ 2,962	$ 0	$ 4,394	$ 0
Employee termination costs (recovery)	1,161	(377)	1,161	193
Divestiture costs	291	0	474	0
Settlement loss, net	163	0	163	0
Product withdrawal recovery	0	(322)	0	(322)
Other	84	(136)	84	(151)
Total Other Expense, net	$ 4,661	$ (835)	$ 6,276	$ (280)

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Earnings (Loss) Per Share (Narrative) (Details) - shares	1 Months Ended	3 Months Ended		6 Months Ended
	Feb. 22, 2021	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Stock options, restricted stock units and performance share units [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount		2,764,865	753,645	4,317,118	876,593
Stock options and restricted stock units [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount		263,134	2,629,179	260,634	3,079,418
Series B Preferred Stock [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Common shares issuable on an if-converted basis adjusted to diluted EPS		12,178,667	12,000,000	12,178,667	12,000,000
Series A Preferred Stock [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Common shares issuable on an if-converted basis adjusted to diluted EPS			12,385,714		12,385,714
Series A Preferred Stock [Member] | Oaktree Capital Management L.P. [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Series A Preferred Stock exchanged for common shares	12,633,427
Percentage of issued and outstanding common shares on a post-exchange basis	12.30%

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Earnings (Loss) Per Share (Disclosure of basic and diluted earnings (loss) per share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Numerator for basic earnings (loss) per share:
Earnings (loss) from continuing operations	$ (918)	$ (5,133)	$ 754	$ (9,097)
Less: dividends and accretion	(744)	(2,604)	(2,697)	(4,629)
Loss from continuing operations attributable to common shareholders	(1,662)	(7,737)	(1,943)	(13,726)
Earnings from discontinued operations	0	6,140	0	13,465
Loss attributable to common shareholders	$ (1,662)	$ (1,597)	$ (1,943)	$ (261)
Denominator for basic earnings (loss) per share:
Basic weighted-average number of shares outstanding	105,676	89,089	100,898	88,625
From continuing operations	$ (0.02)	$ (0.09)	$ (0.02)	$ (0.15)
From discontinued operations	0	0.07	0	0.15
Basic earnings (loss) per share	$ (0.02)	$ (0.02)	$ (0.02)	$ (0.00)
Numerator for diluted earnings (loss) per share:
Earnings (loss) from continuing operations	$ (918)	$ (5,133)	$ 754	$ (9,097)
Loss from continuing operations attributable to common shareholders	(1,662)	(7,737)	(1,943)	(13,726)
Earnings from discontinued operations	0	6,140	0	13,465
Earnings (loss) attributable to common shareholders	$ (1,662)	$ (1,597)	$ (1,943)	$ (261)
Denominator for diluted earnings (loss) per share:
Basic weighted-average number of shares outstanding	105,676	89,089	100,898	88,625
Dilutive effect of the following:
Diluted weighted-average number of shares outstanding	105,676	89,089	100,898	88,625
From continuing operations	$ (0.02)	$ (0.09)	$ (0.02)	$ (0.15)
From discontinued operations	0	0.07	0	0.15
Diluted loss per share	$ (0.02)	$ (0.02)	$ (0.02)	$ (0.00)
Series A Preferred Stock [Member]
Numerator for basic earnings (loss) per share:
Less: dividends and accretion	$ 0	$ (2,066)	$ (1,212)	$ (4,091)
Numerator for diluted earnings (loss) per share:
Less: dividends and accretion on Preferred Stock	$ 0	$ (2,066)	$ (1,212)	$ (4,091)
Dilutive effect of the following:
Diluted weighted-average number of shares outstanding	0	0	0	0
Series B Preferred Stock [Member]
Numerator for basic earnings (loss) per share:
Less: dividends and accretion	$ (744)	$ (538)	$ (1,485)	$ (538)
Numerator for diluted earnings (loss) per share:
Less: dividends and accretion on Preferred Stock	$ (744)	$ (538)	$ (1,485)	$ (538)
Dilutive effect of the following:
Diluted weighted-average number of shares outstanding	0	0	0	0
Stock options and restricted stock units [Member]
Dilutive effect of the following:
Diluted weighted-average number of shares outstanding	0	0	0	0

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Supplemental Cash Flow Information (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Condensed Cash Flow Statements, Captions [Line Items]
Additional operating right-of-use assets	$ 16,275	$ 116	$ 17,289	$ 193
Initial term of warehouse facility lease	10 years		10 years
Operating lease, incremental borrowing rate	4.50%		4.50%

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Supplemental Cash Flow Information (Disclosure of supplemental cash flow information) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Changes in Operating Assets and Liabilities
Accounts receivable	$ (5,118)	$ 17,612	$ (10,385)	$ (251)
Inventories	(64,514)	(33,858)	(82,108)	(727)
Accounts payable and accrued liabilities	7,420	7,827	14,920	1,543
Other operating assets and liabilities	1,654	705	5,595	8,145
Changes in Operating Assets and Liabilities, Total	(50,322)	(7,714)	(71,978)	8,710
Non-Cash Investing and Financing Activities
Right-of-use assets obtained in exchange for lease liabilities: Operating leases	16,275	116	17,289	193
Right-of-use assets obtained in exchange for lease liabilities: Finance leases	0	0	29,906	0
Change in accrued additions to property, plant and equipment	1,397	3,229	(617)	2,502
Change in accrued dividends on preferred stock	0	481	(1,769)	481
Dividends paid in kind on preferred stock	0	1,700	0	1,700
Change in accrued transaction costs related to the divestiture of Tradin Organic	0	0	(13,380)	0
Change in accrued debt issuance costs	$ 0	$ 0	$ (1,690)	$ 0

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Segmented Information (Disclosure of segment revenues and operating income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Segment Reporting, Revenue Reconciling Item [Line Items]
Segment revenues from external customers	$ 202,273	$ 184,401	$ 409,913	$ 391,998
Segment operating income (loss)	1,723	(376)	7,808	2,383
Other income (expense), net	(4,661)	835	(6,276)	280
Interest expense, net	(1,631)	(7,413)	(3,291)	(15,078)
Loss from continuing operations before income taxes	(4,569)	(6,954)	(1,759)	(12,415)
Plant-Based Foods And Beverages [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Segment revenues from external customers	111,359	91,705	230,810	197,947
Segment operating income (loss)	8,641	10,484	21,958	24,337
Fruit-Based Foods And Beverages [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Segment revenues from external customers	90,914	92,696	179,103	194,051
Segment operating income (loss)	(1,447)	(2,016)	(3,341)	(6,718)
Corporate Services [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Segment operating income (loss)	$ (5,471)	$ (8,844)	$ (10,809)	$ (15,236)

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Segmented Information (Disclosure of segment depreciation and amortization) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Segment Reporting, Revenue Reconciling Item [Line Items]
Total depreciation and amortization	$ 8,910	$ 7,655	$ 16,953	$ 15,380
Plant-Based Foods And Beverages [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total depreciation and amortization	3,881	2,380	7,015	4,748
Fruit-Based Foods And Beverages [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total depreciation and amortization	3,861	4,110	7,630	8,246
Corporate Services [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total depreciation and amortization	$ 1,168	$ 1,165	$ 2,308	$ 2,386