SunOpta intends to exit its nutrition bar operations in Nevada, US
Canada-headquartered global speciality foods company SunOpta is planning to discontinue its nutrition bar product lines and operations in Carson City, Nevada, US.
The decision to exit nutrition bar operations is reported to be part of the company’s ongoing portfolio optimisation strategy and value creation plan.
SunOpta CEO Dave Colo said: “The planned discontinuation of our nutrition bar operations reflects our continued efforts to optimise our portfolio to focus on product lines where the company is effectively positioned to generate long-term profitable returns.
“The decision to cease operations at Carson City is accretive to EBITDA and allows us to redeploy both our financial and human resources towards more profitable segments of our business where we have enhanced strategic positioning.”
The nutrition bars business was part of company’s healthy snacks platform within the consumer products segment.
SunOpta anticipates that the discontinuation of the nutrition bar products could lead to a positive EBITDA in future periods.
The company has estimated to incur charges of nearly $8m to $9.5m relating to the facility closure, including $5m to $6m of non-cash charges for asset write-downs, as well as $3m to $3.5m of cash expenditures for severance and other facility closure costs.
The closing of the nutrition bar business is expected to place by the end of this fiscal year.
In fiscal 2016, the company reported its nutrition bars business accounted for $13m in revenue and generated revenues of $11m in the first half of this year.