Phillips 66 profit beats estimates on higher refining margins
Refiner Phillips 66 beat Wall Street estimates for second-quarter profit on Friday, helped by higher refining margins and lower turnaround expenses.
Top U.S. refiners were expected to post higher second-quarter profit, rebounding from losses in the prior quarter as stronger-than-expected diesel margins lifted earnings.
The improved margins helped peers such as Valero Energy surpass Wall Street estimates.
Fuelmakers have seen an unexpected boost in profit from key products in recent months, offering relief as earnings retreated from 2022 highs, driven by a post-pandemic demand rebound and supply disruptions following Russia's invasion of Ukraine.
Analysts cheered stronger refining and marketing margins, which offset a fall in chemicals segment, but flagged concerns about debt as the company expands midstream capabilities.
The refiner's realized margin per barrel rose 12.4 per cent to US$11.25 in the quarter from a year ago, while turnaround expenses fell 47 per cent at US$53 million.
Its crude capacity utilization was 98 per cent, while adjusted earnings from its refining segment rose about 30 per cent at US$392 million.
'During the quarter, Refining ran at the highest utilization since 2018, achieved its lowest cost per barrel since 2021, strong market capture and record year-to-date clean product yield,' CEO Mark Lashier said.
The results come after a board fight in May, where Phillips 66 and activist investor Elliott Investment Management each won two board seats at an annual shareholders meeting.
As part of its argument for actions to boost share price, Elliott had advocated exploring the sale or spin off of its midstream business and other asset divestments, to focus on the company's refining operations.
Earlier this year, the refiner reported a bigger-than-expected loss for the first quarter, hurt by lower refining margins amid heavy turnaround activities in the U.S. refining sector.
In the second quarter, the refiner's quarterly adjusted earnings for its midstream segment was down about three per cent at US$731 million from a year ago.
The company reported an adjusted profit of US$2.38 per share for the three months ended June 30, compared with analysts' average estimate of US$1.71, according to data compiled by LSEG.
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Reporting by Tanay Dhumal in Bengaluru; Editing by Arun Koyyur
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Article content Net cash provided by operating activities totaled $152.8 million for the second quarter, compared to $113.5 million for the three months ended June 30, 2024. The increase was primarily due to higher net cash proceeds received from our stream and royalty interests of $29.3 million, lower income tax payments of $6.1 million and lower debt cash interest payments of $2.0 million when compared to the prior year period. Article content Net cash used in investing activities totaled $112.8 million for the second quarter, compared to $50.9 million for the three months ended June 30, 2024. The period over period change was primarily due to the $100 million payment for the Warintza stream and royalty and the $12.5 million payment for the Lawyers-Ranch royalty in the current period offset by the $51 million acquisition of two Back River Gold District royalties in the prior year period. Article content Net cash used in financing activities totaled $32.6 million for the second quarter, compared to $126.3 million for the three months ended June 30, 2024. The decrease was primarily due to lower debt repayments when compared to the prior year period. This decrease was partially offset by higher dividend payments compared to the prior year period. Article content Other Corporate Updates Article content On June 26, 2025, we entered into the sixth amendment to the revolving credit facility dated June 2, 2017, as amended. The principal changes included in the sixth amendment were the extension of the scheduled maturity date by a further two years from June 28, 2028 to June 30, 2030, and an increase to the size of the accordion feature from $250 million to $400 million. As disclosed on August 5, 2025, we exercised the $400 million accordion feature and the aggregate commitment under the revolving credit facility has increased to $1.4 billion. Article content Additionally, the required leverage ratio was revised to be less than or equal to 4.00:1.00 at all times, rather than 4.00:1.00 for only the two fiscal quarters following the consummation of a material permitted acquisition (as defined) and 3.50:1.00 at all other times. Article content Total Available Liquidity of Approximately $1.25 Billion at the end of the Second Quarter Article content Total liquidity at the end of the second quarter was approximately $1.25 billion, which consisted of $266 million of working capital and $1 billion undrawn and available under the revolving credit facility. Following the draw as part of the Kansanshi gold stream acquisition, $575 million remains available under the revolving credit facility. Article content Outlook for 2025 Article content We are currently forecasting that 2025 metal sales, DD&A and effective tax rate will be within the ranges previously provided. Article content Property Highlights Article content A breakdown of revenue for the Company's stream and royalty portfolio can be found on Table 1 for the quarters and six month periods ended June 30, 2025 and June 30, 2024. Table 2 shows a quarterly breakdown of stream metal sales and metal sales attributable to the Company's royalty interests for the Company's principal stream and royalty properties. Table 3 shows Royal Gold's 2025 sales volume guidance and year to date sales volume achieved. Table 4 shows stream segment purchases and sales for the quarters and six month periods ended June 30, 2025 and June 30, 2024 and inventories at June 30, 2025, March 31, 2025 and December 31, 2024. Highlights at certain of the Company's principal producing and development properties during the quarter ended June 30, 2025, compared to the quarter ended June 30, 2024, are detailed in the Quarterly Report on Form 10-Q. Article content Royal Gold is a high margin, mid-capitalization company that generates strong cash flows from a large and well-diversified portfolio of precious metal streams, royalties and similar production-based interests located in mining-friendly jurisdictions. Royal Gold shares trade under the symbol 'RGLD' and provide growth, value, and income investors exposure to the metals & mining industry. The Company's website is located at Article content Note: Article content Management's conference call reviewing the second quarter results will be held on Thursday, August 7, 2025, at 12:00 pm Eastern Time (10:00 am Mountain Time). The call will be webcast and archived on the Company's website for a limited time. Article content Additional Investor Information: Article content Royal Gold routinely posts important information, including information about upcoming investor presentations and press releases, on its website under the Investor Resources tab. Investors and other interested parties are encouraged to enroll at Article content to receive automatic email alerts for new postings. Article content Forward-Looking Statements: Article content This press release includes 'forward-looking statements' within the meaning of U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from these statements. Forward-looking statements are often identified by words like 'will,' 'may,' 'could,' 'should,' 'would,' 'believe,' 'estimate,' 'expect,' 'anticipate,' 'plan,' 'forecast,' 'potential,' 'intend,' 'continue,' 'project,' or negatives of these words or similar expressions. Forward-looking statements include, among others, statements regarding the following: our expected financial performance and outlook, including our 2025 guidance; operators' expected operating and financial performance and other anticipated developments relating to their properties and operations, including production, deliveries, estimates of mineral resources and mineral reserves, environmental and feasibility studies, technical reports, mine plans, capital requirements, liquidity and capital expenditures; anticipated benefits from investments, acquisitions and other transactions; the receipt and timing of future metal deliveries, including deferred amounts at Pueblo Viejo; anticipated liquidity, capital resources, financing, and stockholder returns; borrowings and repayments under our revolving credit facility; plans and expectations with respect to the proposed Transactions; the expected timetable for completing the proposed Transactions; and prices for gold, silver, copper and other metals. Article content Factors that could cause actual results to differ materially from these forward-looking statements include, among others, the following: changes in the price of gold, silver, copper or other metals; operating activities or financial performance of properties on which we hold stream or royalty interests, including variations between actual and forecasted performance, operators' ability to complete projects on schedule and as planned, operators' changes to mine plans and mineral reserves and mineral resources (including updated mineral reserve and mineral resource information), liquidity needs, mining and environmental hazards, labor disputes, distribution and supply chain disruptions, permitting and licensing issues, other adverse government or court actions, or operational disruptions; the risks that a condition to closing of the Sandstorm and Horizon Transactions may not be satisfied, that a party may terminate an arrangement agreement, or that the closing of the Transactions might be delayed or not occur at all; the ultimate timing, outcome, and results of integrating the operations of Royal Gold, Sandstorm and Horizon; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes of control of properties or operators; contractual issues involving our stream or royalty agreements; the timing of deliveries of metals from operators and our subsequent sales of metal; risks associated with doing business in foreign countries; increased competition for stream and royalty interests; environmental risks, including those caused by climate change; potential cyber-attacks, including ransomware; our ability to identify, finance, value, and complete investments, acquisitions or other transactions; adverse economic and market conditions; effects of health epidemics and pandemics; changes in laws or regulations governing us, operators or operating properties; changes in management and key employees; and other factors described in our reports filed with the Securities and Exchange Commission, including Item 1A, Risk Factors of our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Most of these factors are beyond our ability to predict or control. Other unpredictable or unknown factors not discussed in this release could also have material adverse effects on forward-looking statements. Article content Forward-looking statements speak only as of the date on which they are made. We disclaim any obligation to update any forward-looking statements, except as required by law. Readers are cautioned not to put undue reliance on forward-looking statements. Article content Statement Regarding Third-Party Information: Article content Certain information provided in this press release, including information about historical production, production estimates, property descriptions, and property developments, was provided to us by the operators of the relevant properties or is publicly available information filed by these operators with applicable securities regulatory bodies, including the Securities and Exchange Commission. Royal Gold has not verified, and is not in a position to verify, and expressly disclaims any responsibility for the accuracy, completeness or fairness of any such third-party information and refers the reader to the public reports filed by the operators for information regarding those properties. Article content No Offer or Solicitation: Article content This press release does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed Transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Article content Important Additional Information and Where to Find It: Article content In connection with the proposed Transactions, Royal Gold, Sandstorm, and Horizon intend to file materials with the SEC and on SEDAR+, as applicable. Royal Gold plans to file proxy materials with the SEC in connection with the solicitation of proxies for Royal Gold's special meeting of shareholders (the 'Royal Gold Special Meeting'). Prior to the Royal Gold Special Meeting, Royal Gold will file a definitive proxy statement (the 'Royal Gold Proxy Statement'), together with a proxy card. Sandstorm intends to file a management information circular (the 'Sandstorm Circular') on SEDAR+ in connection with the solicitation of proxies to obtain Sandstorm shareholder approval of the Sandstorm arrangement. Horizon intends to file a management information circular (the 'Horizon Circular') on SEDAR+ in connection with the solicitation of proxies to obtain Horizon securityholder approval of the Horizon arrangement. This press release is not a substitute for the Royal Gold Proxy Statement, the Sandstorm Circular, the Horizon Circular, or for any other document that Royal Gold, Sandstorm or Horizon may file with the SEC or on SEDAR+ and/or send to their respective securityholders in connection with the proposed transactions. INVESTORS AND SECURITYHOLDERS OF ROYAL GOLD, SANDSTORM AND HORIZON ARE URGED TO CAREFULLY AND THOROUGHLY READ THE ROYAL GOLD PROXY STATEMENT, THE SANDSTORM CIRCULAR, AND THE HORIZON CIRCULAR, RESPECTIVELY, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY ROYAL GOLD, SANDSTORM, AND/OR HORIZON WITH THE SEC OR ON SEDAR+ WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ROYAL GOLD, SANDSTORM, HORIZON, THE PROPOSED TRANSACTIONS, THE RISKS RELATED THERETO, AND RELATED MATTERS. Article content Securityholders of Royal Gold, Sandstorm, and Horizon will be able to obtain, free of charge, copies of the Royal Gold Proxy Statement, Sandstorm Circular, and Horizon Circular, as each may be amended from time to time, and other relevant documents filed by Royal Gold, Sandstorm, and/or Horizon with the SEC or on SEDAR+ (when they become available) through the website maintained by the SEC at or at as applicable. Copies of documents filed with the SEC by Royal Gold will be available, free of charge, from Royal Gold's website at under the 'Investor Resources' tab or by contacting Royal Gold at (303) 573-1660 or InvestorRelations@ Copies of documents filed on SEDAR+ by Sandstorm will be available free of charge from Sandstorm's website at under the 'Investors' tab or by contacting Sandstorm at (844) 628-1164 or info@ Copies of documents filed on SEDAR+ by Horizon will be available free of charge from Horizon's website at under the 'Investors' tab or by contacting Horizon at (604) 336-8189 or info@ Article content Certain Information Regarding Participants: Article content Royal Gold, Sandstorm, Horizon and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be 'participants' (as defined in Section 14(a) of the Securities Exchange Act of 1934, as amended) in the solicitation of proxies from Royal Gold shareholders in connection with the Royal Gold Special Meeting. Additional information regarding the identity of these potential participants and their direct or indirect interests, by security holdings or otherwise, will be set forth in the Royal Gold Proxy Statement and other materials to be filed with the SEC in connection with the Royal Gold Special Meeting. Information relating to the foregoing can also be found in Royal Gold's Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 13, 2025, and Royal Gold's definitive proxy statement for its 2025 annual meeting of stockholders filed with the SEC on April 4, 2025. To the extent the holdings of Royal Gold's directors and executive officers in Royal Gold's securities have changed since the amounts described in the April 4, 2025 proxy statement, such changes have been reflected in the following Initial Statements of Beneficial Ownership of Securities on Form 3 and Statements of Change in Ownership on Form 4 filed with the SEC with respect to Royal Gold: Form 4, filed by William Heissenbuttel on April 22, 2025; Form 3, filed by Mark Isto on May 27, 2025; and Form 4, filed by Paul Libner on June 10, 2025. These filings can be found at the SEC's website at Article content Article content . Information regarding the executive officers and directors of Sandstorm and Horizon is included in their respective management information circulars for their 2025 shareholder meetings filed on SEDAR+ on April 22, 2025 and May 1, 2025, respectively. More detailed and updated information regarding the identity of participants in the solicitation and their direct or indirect interests (by security holdings or otherwise), will be set forth in the Royal Gold Proxy Statement and other materials to be filed with the SEC or on SEDAR+. These documents can be obtained free of charge from the sources indicated above. Article content TABLE 1 Revenue by Stream and Royalty Interests for the Three and Six Months Ended June 30, 2025 and June 30, 2024 (In thousands) Three Months Ended June 30, Six Months Ended June 30, Stream: Canada Mount Milligan Gold, copper 35% of payable gold and 18.75% of payable copper $ 63,655 $ 52,139 $ 106,463 $ 87,134 Rainy River Gold, silver 6.5% of gold produced and 60% of silver produced 9,095 10,522 19,517 20,231 Latin America Pueblo Viejo Gold, silver 7.5% of Barrick's interest in payable gold and 75% of Barrick's interest in payable silver $ 25,619 $ 19,801 $ 54,369 $ 37,562 Andacollo Gold 100% of payable gold 9,489 10,608 22,234 22,297 Xavantina Gold 25% of gold produced 4,946 9,486 10,322 18,760 Africa Wassa Gold 10.5% of payable gold $ 10,149 $ 12,002 $ 22,568 $ 23,345 Khoemac au Silver 100% of payable silver 10,238 8,394 20,200 16,152 Total stream revenue $ 133,191 $ 122,952 $ 255,673 $ 225,481 Royalty: Canada Voisey's Bay Copper, nickel, cobalt 2.7% NVR $ 3,165 $ 1,315 $ 5,665 $ 2,453 Red Chris Gold, copper 1.0% NSR — — 4,477 2,617 Côté Gold Gold 1.0% NSR 1,746 — 3,061 — LaRonde Zone 5 Gold 2.0% NSR 929 712 2,102 1,520 Williams Gold 0.97% NSR 502 488 1,354 839 Other-Canada Various Various 577 520 972 737 United States Cortez Legacy Zone Gold Approx. 9.4% GSR Equivalent $ 8,508 $ 11,214 $ 19,650 $ 24,579 CC Zone Gold Approx. 0.45%-2.2% GSR Equivalent 8,088 4,548 11,642 8,959 Robinson Gold, copper 3.0% NSR 4,697 3,764 9,094 5,547 Manh Choh Gold, silver 3.0% NSR, 28% NSR (silver) 6,306 — 11,930 — Marigold Gold 2.0% NSR 2,212 1,303 4,369 2,709 Leeville Gold 1.8% NSR 2,533 2,137 4,160 3,622 Wharf Gold 0.0%-2.0% sliding-scale GSR 1,577 370 2,748 1,191 Goldstrike Gold 0.9% NSR 368 475 612 971 Other-United States Various Various 3,103 1,462 4,193 1,774 Latin America Peñasquito Gold, silver, lead, zinc 2.0% NSR $ 16,306 11,279 $ 31,715 $ 20,508 El Limon Gold 3.0% NSR 3,024 2,077 6,302 3,387 Dolores Gold, silver 3.25% NSR (gold), 2.0% NSR (silver) 1,324 1,609 2,987 3,148 Mara Rosa Gold, silver 2.75% NSR 1,420 739 2,351 739 Other-Latin America Various Various 250 84 250 196 Australia South Laverton Gold 1.5% NSR, 4.0% NPI $ 2,889 $ 2,253 $ 5,380 $ 4,152 King of the Hills Gold 1.5% NSR 1,544 1,494 3,129 2,685 Bellevue Gold 2.0% NSR 2,508 1,210 3,847 1,788 Gwalia Gold 1.5% NSR 1,054 1,042 2,141 1,813 Wonder Gold, silver 1.5% NSR 885 179 1,372 179 Other-Australia Various Various 937 869 1,904 1,405 Total royalty revenue $ 76,452 $ 51,144 $ 147,407 $ 97,518 Total revenue $ 209,643 $ 174,096 $ 403,080 $ 322,999 For a full description of the Company's stream and royalty interests, refer to the 2024 Asset Handbook, published on April 22, 2025 and available on our website. Article content TABLE 2 Stream Metal and Royalty Sales for Principal Properties Reported Production For The Quarter Ended 2 Property Operator Current Stream/ Royalty Interest 1 Metal(s) Jun. 30, 2025 Mar. 31, 2025 Dec. 31, 2024 Sep. 30, 2024 Jun. 30, 2024 Stream: Mount Milligan Centerra 35% of payable gold Gold 16,600 oz 11,800 oz 11,300 oz 17,600 oz 16,100 oz 18.75% of payable copper Copper 2.3 Mlb 2.2 Mlb 2.8 Mlb 3.1 Mlb 3.4 Mlb Pueblo Viejo Barrick (60%) 7.5% of Barrick's interest in payable gold Gold 5,800 oz 7,700 oz 5,900 oz 7,000 oz 5,800 oz 75% of Barrick's interest in payable silver 3 Silver 204,700 oz 219,400 oz 89,500 oz 332,700 oz 218,200 oz Andacollo Teck 100% of payable gold Gold 3,000 oz 4,400 oz 5,800 oz 4,000 oz 4,500 oz Royalty: Cortez Nevada Gold Mines LLC 9.4% GSR on Legacy Zone 4 Gold 27,900 oz 31,100 oz 52,600 oz 45,300 oz 42,600 oz 0.45%-2.2% GSR on CC Zone 4 Gold 149,000 oz 119,700 oz 149,800 oz 116,500 oz 119,800 oz For a full description of the Company's stream and royalty interests, refer to the 2024 Asset Handbook, published on April 22, 2025 and available on our website. Reported production relates to the amount of stream metal sales and the metal sales attributable to the Company's royalty interests for the stated periods and may differ from the operators' public reporting. The Pueblo Viejo silver stream is determined based on a fixed metallurgical recovery of 70% of silver in mill feed. Approximate blended royalty rates as described in the press release 'Royal Gold Announces Acquisition of Additional Royalty Interests on the World-Class Cortez Gold Complex in Nevada and Outlines Simplified Approach to Describing Royal Gold's Multiple Royalty Interests at Cortez' issued January 5, 2023. Article content 2025 Guidance Metal Sales by Segment for the Six Months Ended June 30, 2025 Stream Sales 1 Royalty Sales 2 Total Sales Gold (oz) 210,000 – 230,000 65,400 36,205 101,605 Silver (M oz) 2.7-3.3 1.2 0.3 1.5 Copper (M lb) 13.5 – 16.0 4.5 3.0 7.5 Other Metals (M) $18.0 – $21.0 N/A $13.8 $13.8 1 Stream Sales represents physical metal sold. 2 Royalty Sales represents royalty revenue divided by the average metal price for the period. Article content TABLE 4 Stream Segment Summary Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 As of June 30, 2025 As of March 31, 2025 Gold Stream Purchases (oz) Sales (oz) Purchases (oz) Sales (oz) Inventory (oz) Inventory (oz) Mount Milligan 8,200 16,600 9,800 16,100 400 8,800 Pueblo Viejo 6,100 5,800 7,000 5,800 6,100 5,800 Andacollo 5,100 3,000 5,800 4,500 3,300 1,100 Other 7,100 6,800 11,800 12,800 2,900 2,700 Total 26,500 32,200 34,400 39,200 12,700 18,400 Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 As of June 30, 2025 As of March 31, 2025 Silver Stream Purchases (oz) Sales (oz) Purchases (oz) Sales (oz) Inventory (oz) Inventory (oz) Pueblo Viejo 1 196,900 204,700 332,700 218,200 196,900 204,700 Other 409,600 374,000 361,600 375,000 144,100 108,500 Total 606,500 578,700 694,300 593,200 341,000 313,200 Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 As of June 30, 2025 As of March 31, 2025 Copper Stream Purchases (Mlb) Sales (Mlb) Purchases (Mlb) Sales (Mlb) Inventory (Mlb) Inventory (Mlb) Mount Milligan 1.4 2.3 2.5 3.4 — 0.9 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 As of June 30, 2025 As of December 31, 2024 Gold Stream Purchases (oz) Sales (oz) Purchases (oz) Sales (oz) Inventory (oz) Inventory (oz) Mount Milligan 24,300 28,400 25,100 28,600 400 4,500 Pueblo Viejo 11,900 13,500 12,700 12,000 6,100 7,700 Andacollo 10,600 7,400 10,700 10,200 3,300 — Other 15,900 16,100 25,600 26,500 2,900 3,300 Total 62,700 65,400 74,100 77,300 12,700 15,500 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 As of June 30, 2025 As of December 31, 2024 Silver Stream Purchases (oz) Sales (oz) Purchases (oz) Sales (oz) Inventory (oz) Inventory (oz) Pueblo Viejo 1 401,600 424,200 550,900 441,200 196,900 219,400 Other 777,100 751,900 744,700 787,000 144,100 119,000 Total 1,178,700 1,176,100 1,295,600 1,228,200 341,000 338,400 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 As of June 30, 2025 As of December 31, 2024 Copper Stream Purchases (Mlb) Sales (Mlb) Purchases (Mlb) Sales (Mlb) Inventory (Mlb) Inventory (Mlb) Mount Milligan 4.5 4.5 5.8 5.8 — — 1 Silver stream purchases do not include 165,700 ounces of silver permitted to be deferred in the first quarter and 465,900 ounces of silver permitted to be deferred in the six month period ending June 30, 2025, based on the terms of the Pueblo Viejo stream agreement. Total deferred deliveries were approximately 2.1 million ounces at June 30, 2025, and the timing for the delivery of the entire deferred amount is uncertain. Article content ROYAL GOLD, INC. Consolidated Balance Sheets (Unaudited, in thousands except share data) June 30, 2025 December 31, 2024 ASSETS Cash and equivalents $ 248,180 $ 195,498 Royalty receivables 64,994 63,460 Income tax receivable 13,573 1,139 Stream inventory 13,337 12,973 Prepaid expenses and other 1,929 2,217 Total current assets 342,013 275,287 Stream and royalty interests, net 3,141,548 3,042,804 Other assets 88,892 74,039 Total assets $ 3,572,453 $ 3,392,130 LIABILITIES Accounts payable $ 5,506 $ 10,578 Dividends payable 29,640 29,611 Income tax payable 24,421 23,177 Other current liabilities 16,534 21,785 Total current liabilities 76,101 85,151 Deferred tax liabilities 131,644 132,308 Mount Milligan deferred liability 25,000 25,000 Other liabilities 20,749 18,465 Total liabilities 253,494 260,924 Commitments and contingencies EQUITY Preferred stock, $.01 par value, 10,000,000 shares authorized; and 0 shares issued — — Common stock, $.01 par value, 200,000,000 shares authorized; and 65,760,321 and 65,691,151 shares outstanding, respectively 658 657 Additional paid-in capital 2,229,722 2,228,311 Accumulated earnings 1,076,562 889,989 Total Royal Gold stockholders' equity 3,306,942 3,118,957 Non-controlling interests 12,017 12,249 Total equity 3,318,959 3,131,206 Total liabilities and equity $ 3,572,453 $ 3,392,130 Article content ROYAL GOLD, INC. Consolidated Statements of Operations and Comprehensive Income (Unaudited, in thousands except share data) Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Revenue $ 209,643 $ 174,096 $ 403,080 $ 322,999 Costs and expenses Cost of sales (excludes depreciation, depletion and amortization) 24,180 24,174 48,685 45,924 General and administrative 10,269 10,511 21,333 21,923 Production taxes 2,201 1,581 3,962 3,031 Depreciation, depletion and amortization 31,153 35,747 64,148 74,512 Total costs and expenses 67,803 72,013 138,128 145,390 Operating income 141,840 102,083 264,952 177,609 Fair value changes in equity securities 3 (63 ) (34 ) 383 Interest and other income 2,713 807 4,762 3,783 Interest and other expense (1,544 ) (2,516 ) (2,701 ) (7,123 ) Income before income taxes 143,012 100,311 266,979 174,652 Income tax expense (10,538 ) (18,991 ) (20,927 ) (46,025 ) Net income and comprehensive income 132,474 81,320 246,052 128,627 Net income and comprehensive income attributable to non-controlling interests (125 ) (112 ) (205 ) (255 ) Net income and comprehensive income attributable to Royal Gold common stockholders $ 132,349 $ 81,208 $ 245,847 $ 128,372 Net income per share attributable to Royal Gold common stockholders: Basic earnings per share $ 2.01 $ 1.23 $ 3.73 $ 1.95 Basic weighted average shares outstanding 65,748,410 65,650,801 65,726,903 65,644,115 Diluted earnings per share $ 2.01 $ 1.23 $ 3.73 $ 1.95 Diluted weighted average shares outstanding 65,820,530 65,767,538 65,806,160 65,753,899 Cash dividends declared per common share $ 0.45 $ 0.40 $ 0.90 $ 0.80 Article content ROYAL GOLD, INC. Consolidated Statements of Cash Flows (Unaudited, in thousands) Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Cash flows from operating activities: Net income and comprehensive income $ 132,474 $ 81,320 $ 246,052 $ 128,627 Adjustments to reconcile net income and comprehensive income to net cash provided by operating activities: Depreciation, depletion and amortization 31,153 35,747 64,148 74,512 Non-cash employee stock compensation expense 2,714 3,348 5,911 6,336 Fair value changes in equity securities (3 ) 63 34 (383 ) Deferred tax (benefit) expense (2,191 ) 2,771 (11,019 ) 3,419 Other 222 262 446 484 Changes in assets and liabilities: — — Royalty receivables (7,265 ) (1,581 ) (1,534 ) 8,546 Stream inventory 1,220 513 (363 ) (1,116 ) Income tax receivable (12,203 ) (2,528 ) (12,434 ) (2,961 ) Prepaid expenses and other assets (3,870 ) (233 ) (3,525 ) 10,530 Accounts payable 3,043 1,628 3,178 1,786 Income tax payable 9,076 (3,918 ) 1,244 2,547 Mount Milligan deferred liability — — — 25,000 Other liabilities (1,568 ) (3,877 ) (2,967 ) (5,528 ) Net cash provided by operating activities $ 152,802 $ 113,515 $ 289,171 $ 251,799 Cash flows from investing activities: Acquisition of stream and royalty interests (112,733 ) (51,152 ) (170,979 ) (52,256 ) Proceeds from Khoemacau debt facility — — — 25,000 Other (21 ) 220 (70 ) (85 ) Net cash used in investing activities $ (112,754 ) $ (50,932 ) $ (171,049 ) $ (27,341 ) Cash flows from financing activities: Repayment of debt — (100,000 ) — (200,000 ) Net payments from issuance of common stock (1,488 ) (63 ) (4,499 ) (1,432 ) Common stock dividends (29,634 ) (26,311 ) (59,245 ) (52,603 ) Other (1,506 ) 73 (1,696 ) (358 ) Net cash used in financing activities $ (32,628 ) $ (126,301 ) $ (65,440 ) $ (254,393 ) Net increase (decrease) in cash and equivalents 7,420 (63,718 ) 52,682 (29,935 ) Cash and equivalents at beginning of period 240,760 137,950 195,498 104,167 Cash and equivalents at end of period $ 248,180 $ 74,232 $ 248,180 $ 74,232 Article content Schedule A – Non-GAAP Financial Measures and Certain Other Measures Article content Overview of non-GAAP financial measures: Article content Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by U.S. generally accepted accounting principles ('GAAP'). These measures should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP. In addition, because the presentation of these non-GAAP financial measures varies among companies, these non-GAAP financial measures may not be comparable to similarly titled measures used by other companies. Article content We have provided below reconciliations of our non-GAAP financial measures to the comparable GAAP measures. We believe these non-GAAP financial measures provide useful information to investors for analysis of our business. We use these non-GAAP financial measures to compare period-over-period performance on a consistent basis and when planning and forecasting for future periods. We believe these non-GAAP financial measures are used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in our industry. Many investors use the published research reports of these professional research analysts and others in making investment decisions. The adjustments made to calculate our non-GAAP financial measures are subjective and involve significant management judgement. Non-GAAP financial measures used by management in this release or elsewhere include the following: Article content Adjusted earnings before interest, taxes, depreciation, depletion and amortization, or adjusted EBITDA, is a non-GAAP financial measure that is calculated by the Company as net income adjusted for certain items that impact the comparability of results from period to period, as set forth in the reconciliation below. The net income and adjusted EBITDA margins represent net income or adjusted EBITDA divided by total revenue. We consider adjusted EBITDA to be useful because the measure reflects our operating performance before the effects of certain non-cash items and other items that we believe are not indicative of our core operations. Net debt (or net cash) is a non-GAAP financial measure that is calculated by the Company as debt (excluding debt issuance costs) as of a date minus cash and equivalents for that same date. Net debt (or net cash) to trailing twelve months (TTM) adjusted EBITDA is a non-GAAP financial measure that is calculated by the Company as net debt (or net cash) as of a date divided by the TTM adjusted EBITDA (as defined above) ending on that date. We believe that these measures are important to monitor leverage and evaluate the balance sheet. Cash and equivalents are subtracted from the GAAP measure because they could be used to reduce our debt obligations. A limitation associated with using net debt (or net cash) is that it subtracts cash and equivalents and therefore may imply that there is less Company debt than the most comparable GAAP measure indicates. We believe that investors may find these measures useful to monitor leverage and evaluate the balance sheet. Adjusted net income and adjusted net income per share are non-GAAP financial measures that are calculated by the Company as net income and net income per share adjusted for certain items that impact the comparability of results from period to period, as set forth in the reconciliations below. We consider these non-GAAP financial measures to be useful because they allow for period-to-period comparisons of our operating results excluding items that we believe are not indicative of our fundamental ongoing operations. The tax effect of adjustments is computed by applying the statutory tax rate in the applicable jurisdictions to the income or expense items that are adjusted in the period presented. If a valuation allowance exists, the rate applied is zero. Free cash flow is a non-GAAP financial measure that is calculated by the Company as net cash provided by operating activities for a period minus acquisition of stream and royalty interests for that same period. We believe that free cash flow represents an additional way of viewing liquidity as it is adjusted for contractual investments made during such period. Free cash flow does not represent the residual cash flow available for discretionary expenditures. We believe it is important to view free cash flow as a complement to our consolidated statements of cash flows. Cash general and administrative expense, or cash G&A, is a non-GAAP financial measure that is calculated by the Company as general and administrative expenses for a period minus non-cash employee stock compensation expense for the same period. We believe that cash G&A is useful as an indicator of overhead efficiency without regard to non-cash expenses associated with employee stock compensation. Article content Three Months Ended June 30, March 31, December 31, September 30, (amounts in thousands) 2025 2025 2024 2024 Net income and comprehensive income $ 132,474 $ 113,578 $ 107,521 $ 96,330 Depreciation, depletion and amortization 31,153 32,995 33,737 36,177 Non-cash employee stock compensation 2,714 3,198 2,579 2,977 Fair value changes in equity securities (3 ) 37 24 425 Interest and other, net (1,169 ) (893 ) (179 ) 581 Income tax expense 10,538 10,389 26,078 21,510 Non-controlling interests in operating income of consolidated subsidiaries (125 ) (80 ) (113 ) (88 ) Adjusted EBITDA $ 175,582 $ 159,224 $ 169,647 $ 157,912 Net income margin 63 % 59 % 53 % 50 % Adjusted EBITDA margin 84 % 82 % 84 % 81 % TTM adjusted EBITDA $ 662,365 Debt $ — Cash and equivalents (248,180 ) Net debt / (cash) $ (248,180 ) Net debt / (cash) to TTM adjusted EBITDA (0.37)x Article content Cash G&A: Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands) 2025 2024 2025 2024 General and administrative expense $ 10,269 $ 10,511 $ 21,333 $ 21,923 Non-cash employee stock compensation (2,714 ) (3,348 ) (5,911 ) (6,336 ) Cash G&A $ 7,555 $ 7,163 $ 15,422 $ 15,587 Article content Three Months Ended June 30, March 31, December 31, September 30, (amounts in thousands) 2025 2025 2024 2024 General and administrative expense $ 10,269 $ 11,063 $ 8,909 $ 10,102 Non-cash employee stock compensation (2,714 ) (3,198 ) (2,579 ) (2,977 ) Cash G&A $ 7,555 $ 7,865 $ 6,330 $ 7,125 TTM cash G&A $ 28,875 Article content Adjusted net income and adjusted net income per share: Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands, except per share data) 2025 2024 2025 2024 Net income and comprehensive income attributable to Royal Gold common stockholders $ 132,349 $ 81,208 $ 245,847 $ 128,372 Fair value changes in equity securities (3 ) 63 34 (383 ) Discrete tax expense related to Mount Milligan Cost Support Agreement — 30 — 13,008 Discrete tax benefit for basis adjustment, net of valuation allowance — — (12,008 ) — Withholding tax refund (9,302 ) — (11,017 ) — Other discrete tax expense (benefit) (4,256 ) 1,279 (4,256 ) 1,279 Tax effect of adjustments 1 (17 ) (9 ) 102 Adjusted net income and comprehensive income attributable to Royal Gold common stockholders $ 118,789 $ 82,563 $ 218,591 $ 142,378 Net income attributable to Royal Gold common stockholders per diluted share $ 2.01 $ 1.23 $ 3.73 $ 1.95 Fair value changes in equity securities — — — (0.01 ) Discrete tax expense related to Mount Milligan Cost Support Agreement — — — 0.20 Discrete tax benefit for basis adjustment, net of valuation allowance — — (0.18 ) — Withholding tax refund (0.14 ) — (0.17 ) — Other discrete tax expense (benefit) (0.06 ) 0.02 (0.06 ) 0.02 Tax effect of adjustments — — — — Adjusted net income attributable to Royal Gold common stockholders per diluted share $ 1.81 $ 1.25 $ 3.32 $ 2.16 Article content Free cash flow: Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands) 2025 2024 2025 2024 Net cash provided by operating activities $ 152,802 $ 113,515 $ 289,171 $ 251,799 Acquisition of stream and royalty interests (112,733 ) (51,152 ) (170,979 ) (52,256 ) Free cash flow $ 40,069 $ 62,363 $ 118,192 $ 199,543 Net cash used in investing activities $ (112,754 ) $ (50,932 ) $ (171,049 ) $ (27,341 ) Net cash used in financing activities $ (32,628 ) $ (126,301 ) $ (65,440 ) $ (254,393 ) Article content Other measures Article content We use certain other measures in managing and evaluating our business. We believe these measures may provide useful information to investors for analysis of our business. We use these measures to compare period-over-period performance and liquidity on a consistent basis and when planning and forecasting for future periods. We believe these measures are used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in our industry. Many investors use the published research reports of these professional research analysts and others in making investment decisions. Other measures used by management in this release and elsewhere include the following: Article content Gold equivalent ounces, or GEOs, is calculated by the Company as revenue (in total or by reportable segment) for a period divided by the average LBMA PM fixing price for gold for that same period. Depreciation, depletion, and amortization, or DD&A, per GEO is calculated by the Company as depreciation, depletion, and amortization for a period divided by GEOs (as defined above) for that same period. Working capital is calculated by the Company as current assets as of a date minus current liabilities as of that same date. Liquidity is calculated by the Company as working capital plus available capacity under the Company's revolving credit facility. Dividend payout ratio is calculated by the Company as dividends paid during a period divided by net cash provided by operating activities for that same period. Article content Article content Article content Article content View source version on Article content Article content Article content Contacts Article content For further information, please contact: Article content Article content Alistair Baker Article content Article content Senior Vice President, Investor Relations and Business Development Article content Article content (303) 573-1660 Article content Article content Article content
National Post
an hour ago
- National Post
SunOpta Announces Second Quarter Fiscal 2025 Financial Results
Article content Article content Adjusted EBITDA from continuing operations increased 14% to $22.7 million Article content Adjusted EPS of $0.04 compared to $0.02 in the prior year Article content Reaffirms 2025 Adjusted EBITDA Outlook Article content MINNEAPOLIS — SunOpta Inc. ('SunOpta' or the 'Company') (Nasdaq: STKL) (TSX:SOY), a company that delivers customized supply chain solutions and innovation for top brands, retailers and foodservice providers across a broad portfolio of beverages, broths and better-for-you snacks today announced financial results for the second quarter ended June 28, 2025. Article content All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted. Article content Second Quarter 2025 highlights: Article content Revenues of $191.5 million increased 12.9% compared to $169.5 million in the prior year period, driven by 14.4% volume growth partially offset by a 1.4% price reduction for pass-through pricing for certain raw material cost savings Earnings from continuing operations of $4.4 million compared to a loss of $4.4 million in the prior year period Adjusted earnings¹ from continuing operations of $4.4 million compared to $2.2 million in the prior year period Adjusted earnings per share¹ from continuing operations of $0.04 compared to $0.02 in the prior year period Adjusted EBITDA¹ from continuing operations increased 13.9% to $22.7 million, or 11.9% of revenues, compared to $20.0 million, or 11.8% of revenues, in the prior year period Article content 'Second quarter results were outstanding, reflecting the strength of our competitive position and sharp execution by our team,' said Brian Kocher, Chief Executive Officer of SunOpta. 'Both revenue and Adjusted EBITDA growth continued their double-digits trajectory, driven by robust volume gains across the breadth of our diverse portfolio. Earnings growth was equally strong. We also made significant progress advancing our operational initiatives to improve margins, including unlocking capacity and improving yields, which we expect to gain additional traction over the balance of 2025.' Article content Kocher continued, 'Our new business pipeline has never been stronger and we are exceptionally well positioned to capitalize on these opportunities to drive sustainable growth and profitability. Across beverages and fruit snacks we can meet our growth requirements through 2026 with existing assets. Especially in the better-for-you fruit snack category, powerful tailwinds have significantly increased customer demand. Accordingly, we are announcing a new fruit snack manufacturing line at our Omak, Washington facility, that is already over-subscribed and is anticipated to come online in late 2026 to meet this demand for 2027 and beyond.' Article content Second Quarter 2025 Results Article content Revenues increased 12.9% to $191.5 million for the second quarter of 2025. The increase was driven by 14.4% volume growth partially offset by a 1.4% price reduction for pass-through pricing for certain raw material cost savings. Growth in volume/mix reflected volume growth for plant-based beverages, broth and fruit snacks as well as new product launches. Article content Gross profit increased $7.2 million, or 34.0%, to $28.4 million for the quarter ended June 28, 2025, compared with $21.2 million for the quarter ended June 29, 2024. Gross margin was 14.8% for the quarter ended June 28, 2025, compared with 12.5% for the quarter ended June 29, 2024, an increase of 230 basis points. Adjusted gross margin¹, was 15.2% for the quarter ended June 28, 2025, compared with 16.0% for the quarter ended June 29, 2024. The 80-basis point decrease in adjusted gross margin reflects the timing lag on the pass-through of incremental tariff costs, investments in labor and infrastructure to improve long-term margins and incremental depreciation related to assets recently placed in service. These factors were partially offset by higher sales and production volumes for beverages, broths and fruit snacks driving improved plant utilization. Article content Operating income increased by $8.5 million, to $10.5 million, compared to $2.0 million in the second quarter of 2024, reflecting higher gross profit and a favorable foreign exchange impact. Article content Earnings from continuing operations increased 198% to $4.4 million for the second quarter of 2025 compared with a loss of $4.4 million in the prior year period. Diluted earnings per share from continuing operations attributable to common shareholders (after dividends and accretion on preferred stock) was $0.03 for the second quarter compared with diluted loss per share of $0.04 in the prior year period. Article content Adjusted earnings¹ from continuing operations were $4.4 million or $0.04 per diluted share in the second quarter of 2025 compared to adjusted earnings from continuing operations of $2.2 million or $0.02 per diluted share in the second quarter of 2024. Article content Adjusted EBITDA¹ from continuing operations was $22.7 million in the second quarter of 2025 compared to $20.0 million in the second quarter of 2024 driven by strong volume growth. Article content Please refer to the discussion and table below under 'Non-GAAP Measures'. Article content Balance Sheet and Cash Flow Article content As of June 28, 2025, SunOpta had total assets of $704.9 million and total debt of $273.4 million compared to total assets of $668.5 million and total debt of $265.2 million at year end fiscal 2024. During the first two quarters of fiscal 2025, cash provided by operating activities of continuing operations was $17.8 million compared to $2.0 million during the first two quarters of fiscal 2024. The increase mainly reflected improved working capital efficiency, together with increased operating income, driven by revenue growth. Investing activities of continuing operations consumed $18.6 million of cash during the first two quarters of fiscal 2025 compared to $13.9 million in the first two quarters of fiscal 2024, reflecting higher capital expenditures together with non-recurring proceeds from the sale of the smoothie bowl product line. Net leverage 1 was 2.9x, compared to 3.0x at the end of fiscal 2024 and we continue to expect to achieve our 2.5x net leverage target by the end of this fiscal year. Article content During the second quarter, the Company repurchased 163,227 common shares at an average price per share of $6.04, for total consideration of $1.0 million. As at June 28, 2025, there was $24.0 million of the authorized amount remained available under the Share Repurchase Program. Article content Tariffs Article content Tariffs continue to be an evolving situation that we continue to monitor. While our employees, production facilities, and customers are predominately located in the U.S. (in 2024, 98% of revenue was to U.S.-based customers), we source a portion of our raw material ingredients and packaging globally, and a portion of our fruit snack products are imported into the U.S. from our Niagara, Ontario, facility that are not exempt under USMCA. In response to these tariffs, at the beginning of the year we started communications with our customers regarding our intention to pass-through substantially all the incremental costs to our customers, similar to our pass-through pricing of raw material cost increases. By the middle of July, we successfully implemented new pricing arrangements with all of our customers to mitigate the full amount of known tariff exposure at that time. Due to the timing lag in passing through the tariff pricing adjustments, gross profit was negatively impacted by $1.6 million, reducing gross margin by 90 basis points in the second quarter. We expect to have a similar fiscal third quarter timing lag impact as we recover the recently announced tariff changes on August 1, 2025. While our pass-through mechanisms may have a timing lag, we continue to expect to recover substantially all additional costs of tariffs. Article content 2025 Outlook 2 Article content For fiscal 2025, the Company is raising its revenue outlook reflecting both the strong performance in Q2 and the expected impact of pass-through tariff pricing, and is reaffirming its adjusted EBITDA outlook: Article content The revised outlook includes an increase of approximately $8 million in revenue and $10 million in cost of goods sold in the second half of 2025 simply due to the expected tariff expense, related pass-through pricing to our customers, and timing lag on implementing the pricing. Article content Conference Call Article content SunOpta plans to host a conference call at 5:30 P.M. Eastern time on Wednesday, August 6, 2025, to discuss the second quarter financial results. After prepared remarks, there will be a question and answer period. Investors interested in listening to the live webcast can access a link on SunOpta's website at under the 'Investor Relations' section or directly. A replay of the webcast will be archived and can be accessed for approximately 90 days on the Company's website. Article content This call may be accessed with the toll free dial-in number (800) 715-9871 or international dial-in number (646) 307-1963 using Conference ID: 8323651. Article content The quarterly earnings presentation, including the long-term grow algorithm and capital allocation priorities, can be accessed through the live webcast referenced above, and on SunOpta's website at under the 'Investor Relations' section or directly. Article content 2 Article content The Company has included certain forward-looking statements about the future financial performance that include non-GAAP financial measures, including Adjusted EBITDA. These non–GAAP financial measures are derived by excluding certain amounts, expenses or income, from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts that are excluded from these non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period. We are unable to present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because management cannot reliably predict all of the necessary components of such GAAP measures. Historically, management has excluded the following items from certain of these non-GAAP measures, and such items may also be excluded in future periods and could be significant amounts. Article content Expenses related to the acquisition or divestiture of a business, including business development costs, impairment of assets, integration costs, severance, retention costs and transaction costs; Charges associated with restructuring and cost saving initiatives, including but not limited to asset impairments, accelerated depreciation, severance costs and lease abandonment charges; Asset impairment charges and facility closure costs; Legal settlements or awards; and The tax effect of the above items. Article content About SunOpta Article content SunOpta (Nasdaq: STKL) (TSX: SOY) delivers customized supply chain solutions and innovation for top brands, retailers and foodservice providers across a broad portfolio of beverages, broths and better-for-you snacks. With over 50 years of expertise, SunOpta fuels customers' growth with high-quality, sustainability-forward solutions distributed through retail, club, foodservice and e-commerce channels across North America. For more information, visit or follow us on LinkedIn. Article content Forward-Looking Statements Article content Certain statements included in this press release may be considered 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, which are based on information available to us on the date of this release. These forward-looking statements include, but are not limited to, our intention to maintain our disciplined financial approach to deliver sustainable gross margin improvement and continue to generate significant free cash flow, our expectation to continue de-levering our balance sheet, achieve net leverage targets and drive increasing returns on invested capital, share repurchases, our expectations to recover tariff impacts through pass-through pricing, and our anticipated Revenue, Adjusted EBITDA, Revenue growth and Adjusted EBITDA growth for fiscal 2025. Generally, forward-looking statements do not relate strictly to historical or current facts and are typically accompanied by words such as 'potential', 'expect', 'believe', 'anticipate', 'estimates', 'can', 'will', 'target', 'should', 'would', 'plans', 'continue', 'becoming', 'intend', 'confident', 'may', 'project', 'intention', 'might', 'predict', 'budget', 'forecast' or other similar terms and phrases intended to identify these forward-looking statements. Forward-looking statements are based on information available to the Company on the date of this release and are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments including, but not limited to, the Company's actual financial results; uninterrupted operations and service levels to our customers; current customer demand for the Company's products; general economic conditions; continued consumer interest in health and wellness; the Company's ability to maintain product pricing levels; planned facility and operational expansions, closures and divestitures; cost rationalization and product development initiatives; alternative potential uses for the Company's capital resources; portfolio optimization and productivity efforts; the sustainability of the Company's sales pipeline; the Company's expectations regarding commodity pricing, margins and hedging results; procurement and logistics savings; freight lane cost reductions; yield and throughput enhancements; labor cost reductions; and the terms of our insurance policies. Whether actual timing and results will agree with expectations and predictions of the Company is subject to many risks and uncertainties including, but not limited to, potential loss of suppliers and customers as well as the possibility of supply chain, logistics and other disruptions; unexpected issues or delays with the Company's structural improvements and automation investments; failure or inability to implement portfolio changes, process improvements, go-to-market improvements and process sustainability strategies in a timely manner; changes in the level of capital investment; local and global political and economic conditions; consumer spending patterns and changes in market trends; decreases in customer demand; delayed or unsuccessful product development efforts; potential product recalls; working capital management; availability and pricing of raw materials and supplies; potential covenant breaches under the Company's credit facilities; the impact of the imposition of tariffs, including increases in food prices and inflation, and any resulting negative impacts on the macro-economic environment; and other risks described from time to time under 'Risk Factors' in the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q (available at Consequently, all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized. The Company undertakes no obligation to publicly correct or update the forward-looking statements in this document, in other documents, or on its website to reflect future events or circumstances, except as may be required under applicable securities laws. Article content SunOpta Inc. Consolidated Statements of Operations For the quarters and two quarters ended June 28, 2025 and June 29, 2024 (Unaudited) (All dollar amounts expressed in thousands of U.S. dollars, except per share amounts) Quarter ended Two quarters ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 $ $ $ $ Revenues 191,489 169,541 393,117 353,963 Cost of goods sold 163,082 148,349 334,391 301,719 Gross profit 28,407 21,192 58,726 52,244 Selling, general and administrative expenses 17,727 17,784 36,923 40,118 Intangible asset amortization 526 446 972 892 Other income, net (131 ) (304 ) (56 ) (2,104 ) Foreign exchange loss (gain) (248 ) 1,310 (133 ) 1,259 Operating income 10,533 1,956 21,020 12,079 Interest expense, net 5,301 6,410 10,408 12,460 Other non-operating expense 537 – 959 – Earnings (loss) from continuing operations before income taxes 4,695 (4,454 ) 9,653 (381 ) Income tax expense (benefit) 344 (17 ) 491 260 Earnings (loss) from continuing operations 4,351 (4,437 ) 9,162 (641 ) Net loss from discontinued operations – (897 ) – (1,814 ) Net earnings (loss) 4,351 (5,334 ) 9,162 (2,455 ) Dividends and accretion on preferred stock (35 ) 169 (175 ) (264 ) Earnings (loss) attributable to common shareholders 4,316 (5,165 ) 8,987 (2,719 ) Basic earnings (loss) per share Earnings (loss) from continuing operations attributable to common shareholders 0.04 (0.04 ) 0.08 (0.01 ) Loss from discontinued operations – (0.01 ) – (0.02 ) Earnings (loss) attributable to common shareholders (1) 0.04 (0.04 ) 0.08 (0.02 ) Diluted earnings (loss) per share Earnings (loss) from continuing operations attributable to common shareholders 0.03 (0.04 ) 0.07 (0.01 ) Loss from discontinued operations – (0.01 ) – (0.02 ) Earnings (loss) attributable to common shareholders (1) 0.03 (0.04 ) 0.07 (0.02 ) Weighted-average common shares outstanding (000s) Basic 118,168 116,640 117,685 116,336 Diluted 124,676 116,640 124,700 116,336 (1) The sum of individual per share amounts may not add due to rounding. Article content SunOpta Inc. Consolidated Balance Sheets As at June 28, 2025 and December 28, 2024 (Unaudited) (All dollar amounts expressed in thousands of U.S. dollars) June 28, 2025 December 28, 2024 $ $ ASSETS Current assets Cash and cash equivalents 2,161 1,552 Accounts receivable 58,851 46,314 Inventories 109,945 92,798 Prepaid expenses and other current assets 12,346 14,680 Income taxes recoverable 780 4,114 Total current assets 184,083 159,458 Restricted cash 8,003 7,460 Property, plant and equipment, net 345,968 343,618 Operating lease right-of-use assets 112,138 105,692 Intangible assets, net 22,041 20,077 Goodwill 3,998 3,998 Other long-term assets 28,709 28,224 Total assets 704,940 668,527 LIABILITIES Current liabilities Accounts payable 109,560 93,362 Accrued liabilities 15,189 17,876 Income taxes payable 70 638 Notes payable 8,211 11,110 Short-term debt 10,115 – Current portion of long-term debt 30,176 29,393 Current portion of operating lease liabilities 17,491 17,055 Total current liabilities 190,812 169,434 Long-term debt 233,080 235,798 Operating lease liabilities 105,684 99,328 Deferred income taxes 325 325 Total liabilities 529,901 504,885 Series B-1 Preferred Stock 15,223 15,048 SHAREHOLDERS' EQUITY Common shares 478,064 471,792 Additional paid-in capital 27,070 30,775 Accumulated deficit (347,327 ) (355,982 ) Accumulated other comprehensive income 2,009 2,009 Total shareholders' equity 159,816 148,594 Total liabilities and shareholders' equity 704,940 668,527 Article content SunOpta Inc. Consolidated Statements of Cash Flows For the two quarters ended June 28, 2025 and June 29, 2024 (Unaudited) (All dollar amounts expressed in thousands of U.S. dollars) Two quarters ended June 28, 2025 June 29, 2024 $ $ CASH PROVIDED BY (USED IN) Operating activities Net earnings (loss) 9,162 (2,455 ) Net loss from discontinued operations – (1,814 ) Earnings (loss) from continuing operations 9,162 (641 ) Items not affecting cash: Depreciation and amortization 19,686 17,686 Amortization of debt issuance costs 477 457 Deferred income taxes – (368 ) Stock-based compensation 3,735 7,088 Gain on sale of smoothie bowls product line – (1,800 ) Gain on sale of property, plant and equipment (244 ) – Other (194 ) (193 ) Changes in operating assets and liabilities, net of divestitures (14,844 ) (20,216 ) Net cash provided by operating activities of continuing operations 17,778 2,013 Net cash used in operating activities of discontinued operations – (2,310 ) Net cash provided by (used in) operating activities 17,778 (297 ) Investing activities Additions to property, plant and equipment (17,438 ) (17,259 ) Proceeds from sale of property, plant and equipment 1,284 – Addition to intangible assets (2,419 ) – Proceeds from sale of smoothie bowls product line – 3,336 Net cash used in investing activities of continuing operations (18,573 ) (13,923 ) Net cash provided by investing activities of discontinued operations – 6,300 Net cash used in investing activities (18,573 ) (7,623 ) Financing activities Proceeds from notes payable 80,070 70,477 Repayment of notes payable (82,969 ) (71,709 ) Net increase in borrowings under revolving credit facilities 6,762 26,350 Borrowings of short-term and long-term debt 18,600 – Repayment of long-term debt (19,016 ) (12,320 ) Proceeds from the exercise of stock options and employee share purchases 1,880 749 Payment of withholding taxes on stock-based awards (2,389 ) (2,659 ) Repurchase of common shares (991 ) – Payment of cash dividends on preferred stock – (305 ) Net cash provided by financing activities of continuing operations 1,947 10,583 Increase in cash, cash equivalents and restricted cash in the period 1,152 2,663 Cash, cash equivalents and restricted cash, beginning of the period 9,012 8,754 Cash, cash equivalents and restricted cash, end of the period 10,164 11,417 Article content Non-GAAP Measures Article content Adjusted Gross Margin Article content Gross margin is a measure of gross profit (equal to revenues less cost of goods sold) as a percentage of revenues. The Company uses a measure of adjusted gross margin that excludes unusual items that are identified and evaluated on an individual basis, which due to their nature or size, the Company would not expect to occur as part of our normal business on a regular basis. The Company uses the measure of adjusted gross margin to evaluate the underlying profitability of our revenue-generating activities within each reporting period. The Company believes that disclosing this non-GAAP measure provides users with a meaningful, consistent comparison of its profitability measure for the periods presented. However, the non-GAAP measure of adjusted gross margin should not be considered in isolation or as a substitute for gross margin calculated based on gross profit determined in accordance with U.S. GAAP. The following tables present a reconciliation of adjusted gross margin from reported gross margin calculated in accordance with U.S. GAAP (all dollar amounts expressed in thousands of U.S. dollars). Article content Second Quarter Ended Revenues Cost of Goods Sold Gross Profit June 28, 2025 $ $ $ As reported 191,489 163,082 28,407 Adjusted for: Wastewater haul-off charges (a) – (752 ) 752 As adjusted 191,489 162,330 29,159 Reported gross margin 14.8 % Adjusted gross margin 15.2 % Second Quarter Ended Revenues Cost of Goods Sold Gross Profit June 29, 2024 $ $ $ As reported 169,541 148,349 21,192 Adjusted for: Wastewater haul-off charges (a) – (1,426 ) 1,426 Start-up costs (b) 61 (2,287 ) 2,348 Product withdrawal costs (c) – (2,145 ) 2,145 As adjusted 169,602 142,491 27,111 Reported gross margin 12.5 % Adjusted gross margin 16.0 % Article content First Two Quarters Ended Revenues Cost of Goods Sold Gross Profit June 28, 2025 $ $ $ As reported 393,117 334,391 58,726 Adjusted for: Wastewater haul-off charges (a) – (1,295 ) 1,295 As adjusted 393,117 333,096 60,021 Reported gross margin 14.9 % Adjusted gross margin 15.3 % First Two Quarters Ended Revenues Cost of Goods Sold Gross Profit June 29, 2024 $ $ $ As reported 353,963 301,719 52,244 Adjusted for: Wastewater haul-off charges (a) – (1,426 ) 1,426 Start-up costs (b) 61 (2,614 ) 2,675 Product withdrawal costs (c) – (2,145 ) 2,145 As adjusted 354,024 295,534 58,490 Reported gross margin 14.8 % Adjusted gross margin 16.5 % Article content Adjusted Earnings Article content When assessing financial performance, the Company uses an internal measure of adjusted earnings that excludes specific items recognized in other income or expense, and other unusual items that are identified and evaluated on an individual basis, which due to their nature or size, the Company would not expect to occur as part of its normal business on a regular basis. The Company believes that the identification of these excluded items enhances the analysis of the financial performance of its business when comparing those operating results between periods, as the Company does not consider these items to be reflective of normal business operations. The following tables present a reconciliation of adjusted earnings from earnings (loss) from continuing operations, which the Company considers to be the most directly comparable U.S. GAAP financial measure (all dollar amounts expressed in thousands of U.S. dollars, except per share amounts). Article content Second Quarter Ended June 28, 2025 June 29, 2024 Per Share Per Share $ $ $ $ Earnings (loss) from continuing operations 4,351 (4,437 ) Dividends and accretion on preferred stock (35 ) 169 Earnings (loss) from continuing operations attributable to common shareholders 4,316 0.03 (4,268 ) (0.04 ) Adjusted for: Wastewater haul-off charges (a) 752 1,426 Start-up costs (b) – 2,348 Product withdrawal costs (c) – 2,145 Unrealized foreign exchange loss (gain) on restricted cash (d) (562 ) 838 Other (e) (131 ) (304 ) Adjusted earnings from continuing operations 4,375 0.04 2,185 0.02 Article content First Two Quarters Ended June 28, 2025 June 29, 2024 Per Share Per Share $ $ $ $ Earnings (loss) from continuing operations 9,162 (641 ) Accretion on preferred stock (175 ) (264 ) Earnings (loss) from continuing operations attributable to common shareholders 8,987 0.07 (905 ) (0.01 ) Adjusted for: Wastewater haul-off charges (a) 1,295 1,426 Start-up costs (b) – 2,675 Product withdrawal costs (c) – 2,145 Unrealized foreign exchange loss (gain) on restricted cash (d) (543 ) 838 Other (e) (56 ) (304 ) Gain on sale of smoothie bowls product line (f) – (1,800 ) Adjusted earnings from continuing operations 9,683 0.08 4,075 0.03 Article content Adjusted EBITDA Article content The Company uses a measure of adjusted EBITDA from continuing operations when assessing the performance of its operations, which the Company believes is useful to users' understanding of the Company's operating profitability because it excludes non-operating expenses, such as interest, loss on sale of receivables, and income taxes, as well as non-cash expenses, such as depreciation, amortization, and stock-based compensation. In addition, the Company's measure of adjusted EBITDA excludes other unusual items that affect the comparability of its operating performance, as identified in the preceding determination of adjusted earnings from continuing operations. The Company also uses this measure of adjusted EBITDA to assess operating performance in connection with its employee incentive programs. The following tables present a reconciliation of adjusted EBITDA from continuing operations from earnings (loss) from continuing operations, which the Company considers to be the most directly comparable U.S. GAAP financial measure (all dollar amounts expressed in thousands of U.S. dollars). Article content Second Quarter Ended June 28, 2025 June 29, 2024 $ $ Earnings (loss) from continuing operations 4,351 (4,437 ) Interest expense, net 5,301 6,410 Loss on sale of receivables* 537 – Income tax expense (benefit) 344 (17 ) Depreciation and amortization 9,960 9,110 Stock-based compensation 2,192 2,443 Adjusted for: Wastewater haul-off charges (a) 752 1,426 Start-up costs (b) – 2,348 Product withdrawal costs (c) – 2,145 Unrealized foreign exchange loss (gain) on restricted cash (d) (562 ) 838 Other (e) (131 ) (304 ) Adjusted EBITDA from continuing operations 22,744 19,962 * Included in other non-operating expense. Article content First Two Quarters Ended June 28, 2025 June 29, 2024 $ $ Earnings (loss) from continuing operations 9,162 (641 ) Interest expense, net 10,408 12,460 Loss on sale of receivables* 959 – Income tax expense 491 260 Depreciation and amortization 19,686 17,686 Stock-based compensation 3,735 7,088 Adjusted for: Wastewater haul-off charges (a) 1,295 1,426 Start-up costs (b) – 2,675 Product withdrawal costs (c) – 2,145 Unrealized foreign exchange loss (gain) on restricted cash (d) (543 ) 838 Other (e) (56 ) (304 ) Gain on sale of smoothie bowls product line (f) – (1,800 ) Adjusted EBITDA from continuing operations 45,137 41,833 * Included in other non-operating expense. Article content Footnotes (a) Reflects temporary third-party haul-off charges for excess wastewater produced at our Midlothian, Texas, facility due to volume constraints within our current treatment system. (b) Start-up costs mainly reflect the scale-up of production over the course of fiscal 2024 at our plant-based beverage facility in Midlothian, Texas. (c) Reflects certain direct costs, net of expected insurance recoveries, related to the voluntary withdrawal from customers in the second quarter of 2024 of certain batches of aseptically-packaged products. (d) Reflects unrealized foreign exchange (gains) or losses associated with peso-denominated restricted cash held in Mexico. (e) For the second quarter and first two quarters of 2025, other mainly reflects a gain on sale of property, plant and equipment, partially offset by a legal settlement loss. For the second quarter and first two quarters of 2024, other mainly reflects legal settlement gains. These other amounts are recorded in other income or expense. (f) Reflects the pre-tax gain on sale of the smoothie bowls product line in the first quarter of 2024, which is recorded in other income. Article content Net Leverage Article content Net leverage is a non-GAAP financial measure that is calculated by dividing net debt (non-GAAP) by trailing four quarters adjusted EBITDA (non-GAAP). Net debt is defined by the Company as short-term debt plus current portion of long-term debt plus long-term debt less cash and cash equivalents. The Company uses net leverage as an assessment of its operating performance relative to its debt levels. The following tables present reconciliations of trailing four quarters adjusted EBITDA from continuing operations from loss from continuing operations and total debt to net debt, and the calculation of net leverage (all dollar amounts expressed in thousands of U.S. dollars). Article content Trailing Four Quarters Ended June 28, 2025 December 28, 2024 $ $ Loss from continuing operations (1,671 ) (11,474 ) Interest expense, net 22,856 24,908 Loss on sale of receivables* 1,645 686 Income tax expense 1,701 1,470 Depreciation and amortization 38,497 36,497 Stock-based compensation 7,837 11,190 Adjusted for: Wastewater haul-off charges 4,230 4,361 Start-up costs 16,474 19,149 Product withdrawal costs – 2,145 Unrealized foreign exchange loss on restricted cash 226 1,607 Other 215 (33 ) Gain on sale of smoothie bowls product line – (1,800 ) Adjusted EBITDA from continuing operations 92,010 88,706 * Included in other non-operating expense. Article content $ As at June 28, 2025 Short-term debt 10,115 Current portion of long-term debt 30,176 Long-term debt 233,080 Total debt 273,371 Cash and cash equivalents (2,161 ) Net debt 271,210 For the trailing four quarters ended June 28, 2025 Adjusted EBITDA 92,010 Net leverage 2.9x As at December 28, 2024 Current portion of long-term debt 29,393 Long-term debt 235,798 Total debt 265,191 Cash and cash equivalents (1,552 ) Net debt 263,639 For the trailing four quarters ended December 28, 2024 Adjusted EBITDA 88,706 Net leverage 3.0x Article content Article content Article content Article content Article content Contacts Article content
