Good morning and welcome to SunOpta's Fourth Quarter 2015 Earnings Conference Call. By now everyone should have access to the earnings press release that was issued this morning. The releases, as well as the accompanying slides are available on the Investor Relations page of SunOpta's website at www.sunopta.com. This call is being webcast and its transcription will be available on the company’s website. As a reminder, please note that the prepared remarks which will follow contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. We refer you to all risk factors contained in SunOpta's press release issued this morning, the company's Annual Report filed on Form 10-K and other filings with the Securities and Exchange Commission for a more detailed discussion of the factors that could cause actual results to differ materially from those projections and any forward-looking statements. Finally, we would like to remind listeners that the company may refer to certain non-GAAP financial measures during the teleconference. A reconciliation of these non-GAAP financials measures was included with the company's press release issued earlier today. Also, please note that unless otherwise stated, all figures discussed today are in U.S. dollars and are occasionally rounded to the nearest million. And now, I’d like to turn the conference call over to SunOpta's CEO, Rik Jacobs.

Good morning and thank you for joining us today. With me on the call today is Rob McKeracher, our CFO. We have just completed the transformational year for SunOpta and I'd like to begin by briefly discussing our investment highlights, Q4 and how we reshaped our business during 2015 as well as where we stand strategically today. I'll then discuss our operational goal for 2016 as we build upon our investments and our production capabilities, people and processes. After that Rob will take you through our fourth quarter results, update you on our expanded financial capacity and then we look forward to taking your questions. I'd like to remind those on the call that there is an accompanying presentation on the Investor Relations page of our website, which we’ll reference today in our prepared remarks. Also note that unless otherwise noted all of our financial commentary on this call refers to continuing operations which is now just our food operations. So, Slide 2 is regarding forward-looking statements which the operator already covered, so if you could kindly turn to Slide 3. With the pending divestiture of Opta Minerals we are now truly a pure play organic and non-GMO Food Company. It was a particular focus on private label, in healthy beverages, healthy fruit and healthy snacks. Supporting our consumer product segment, we’ve built the largest supply chain in organic raw materials and ingredients in the world. And what truly sets as a part of our unique fully integrated Field to Table business model, in fact roughly 40% of our consumable product offerings before factoring in Sunrise Growers are already two touch a day, meaning we source the raw material and package the product from final consumption. We have leading positions in numerous segments including non-dairy aseptic beverages, private label frozen…

Thanks Rik and good morning everyone. I recognize that there are a lot of moving parts to our financials given the Sunrise acquisition, onetime cost and Opta Minerals been reclassified as a discontinued operation held for sale. So I’ll take you through revenue margins and earnings as well as highlight our EBITDA and cash flow performance during the fourth quarter. Adjusted EBITDA was 14.2 million during the fourth quarter and we generated cash from our continuing operations of 26.1 million, before a number of costs that I’ll explain in a few moments. Please be advised unless otherwise noted I’ll be referring only to our food operations. Please turn the Slide 10. Slide 10 shows, our revenue breakdown by segment. Revenues for fourth quarter of 2015 was 316 million, an increase of 26% from the year ago period. Much of this growth is driven by the acquisition of Sunrise. After adjusting for the impact of changes including commodity prices, foreign exchange rates, product rationalizations and acquired businesses on a normalized basis, consolidated revenues increase 5.5% compared to the fourth quarter of 2014. Global Ingredients reported revenues were 143.5 million growth of 1% over the fourth quarter of '14, however on a normalize basis revenues in Global Ingredients grew 4.2%, this growth was driven by robust market demand for organic fruits and vegetable, coco, seeds and nuts. Compared to the fourth quarter of 2014, we experienced 33% normalize growth in our Global Ingredients platform that is focused on international sourced organic raw materials. On the domestic side of Global Ingredients, revenues decline 24% in normalized basis due mainly to the strong U.S. dollar pressuring our export business and lower domestic sales of seed. During the quarter Global Ingredients recognize approximately 2 million in cost primarily related to inventory reserves and low margin…

Thanks Rob. And if I can leave you all with five key takeaways as we look ahead, it will be the ones laid out on Slide 14. We've continue to operate in strong and growing markets that are on trend with consumer focus on healthier lifestyle. We have a well-defined strategy to drive our business to higher margins. The Sunrise Growers acquisition makes sense both strategically and financially and it is performing to plan. We have committed financing on our second lien debt through 2022 at capture rates and our new AVL has a five year terms through 2021 giving us ample capital flexibility, exclusion continues to be paramount, especially in our consumer product segment and we have work to do in this regard. With that, I'd ask the operator to please open up the floor for questions.

Thank you. [Operator Instructions] Our first question is comes from the line of Amit Sharma with BMO Capital Markets. Your line is open.

Rik you talk about getting two multiyear contract in the uptake beverage segment, can you just help us to understand where are we with capacity utilization and in terms of as you win these contracts should we expect you to have more consistent margin improvement in this business?

Yes, so breaking down, they are significant contracts, they are with us -- few of our largest customers today. And with that our assets utilization, given the capacity expansion is about at 60% and we think we have a still about north of the 100 million revenue run rate build in this platform. So we obviously have more work to do I'm excited about some of our proactive innovations coming to market and that should already start happening in the first quarter. Obviously that volume should help drive utilization at the facility.

And what about the margins structure, when do we expect that you will return to in historical margin in this segment?

I mean as 2016 progresses and we fill up this revenue runway we have every confidence that it should return to the historical margin rates as you can imagine, it is not the best if you have a 60% utilization, but again I'd like to remind everybody that little bit over a year ago we will completely tapped and we have decided to make a big move in terms of adding capacity. You cannot just add 1/3 of process for example you have to add a full process. So as a result we have some of the utilization asset underutilization is eaten up, we will get back to the historical margins.

And then one more Rik on -- and you've talked about the number of initiatives within the organization then to the cost structure in terms of maybe more efficient logistic and then we look at this aseptic beverage, maybe a little bit more visibility from customer pipeline. Sunrise the PL should be on track and is Global Ingredient more focused on the key organic business as well. If you combine all this, should we expect a little bit more consistent, a little bit more predictable operating performance in SunOpta going forward?

Amit that is always our goal. We've had some of these unfortunate operational events in the fourth quarter if you look at our growth rates overall 5.5 in the fourth quarter, high than what we've achieved on the full year basis. If you look at consumer products growing at 7% I think that is one of the highest that we've had in the year. And obviously in Global Ingredients as you rightly pointed out organic raw materials that we source from all of the world rolling at an incredible pace and that is somewhat offset by domestic which is the storing of sunflower and the corn products. And so yes predictability is what we want and obviously is also what our investors want and I think with all the actions that we are putting in place when it comes through the strategy, when it comes to the people and when it comes to the processors and that's what we’re driving towards and there should become some more and more impairers as we progress the 2016. Again what the three key things that we are bonusing if you like are management team on, is improved CPG margins, grow the EBITDA and reduce the leverage. Those are the three key metrics that we are focused on in 2016.

Got it, thank you very much.

Thank you. [Operator Instructions]. Our next question comes from the line of Mark Siegel with Canaccord Genuity. Your line is open.

Rik can you talk a little bit more on aseptic, not so much the customers that you announced today but progress you are making on selling the capacity with new customers to SunOpta. And then can you also provide us an update on the premium juice facility and what timeframe you believed is a fair one in terms of assessing progress towards reaching breakeven in that operation?

Yes. So on the aseptic business we have traditionally very much been focused on non-dairy beverages and what we are now doing is we are expanding the product categories in which we would operate, think about broth for example, which is a large category and it is growing. Think about nutritional beverages and even think about dairy. We are packing all of those today and so that is part of what we believe is going to fuel our capacity. The next part of that is as you go into new product categories and as we have new geographic locations both of those put us in a good position to attract new customers and in fact again we are not in a position to discuss specific customer names, but our aseptic facility later this year in Allentown, we will be packed a significant amount of other well-known dairy products with the new customer that we have never packed for it before.

Okay, that's helpful. And then just on the juice side.

When it comes to the premium juice side, we've been very clear this business needs to be above breakeven in 2016 on the bottling side I'm very confident with the additional Citrusource, by the way are also the people that have 30 years of juice experience that we have managing our facility, that we’re doing all of the right things in the bottling facility. The bottling facility is now 75% filled and that should be a major driver of improve profitability in 2016 where we are only about 305 filled today is in our what we have rename Fresh Pressed Industries, which is really the juice extraction that we sell in tankers to leading manufactures around the United States. And the reason for that market is quite simple, we have been out of that, out of sourcing oranges and sourcing lemons for about three years as we have been rebuilding this facility. And we just have to basically get ourselves back into that market and that just takes time building the relationship -- rebuilding the relationship with all the California citrus growers.

Okay that’s helpful. And then we’ve heard some instances of quality issues and produce including berries in California early this year, is there any -- did that impact Sunrise or your legacy fruit business? Or does the diversification -- the geographic diversification at Sunrise brings really insulate you from this?

Yes I mean I think what you are referring to is mostly on the fresh product side. We obviously are only operating in the frozen produce side and we have -- they have been investing, in fact what we’re going to be getting in terms of berries out of Mexico will double versus what we were able to do last year. They’ve already installed a second line there to be able to freeze berries so that is very much on track. And of course these are international Global Ingredients platform, we are expanding to our areas of the world. That same strawberry is been grown in Morocco and in Spain as well and we already have feet on the ground over there, so should there be a shortage developing on strawberries specifically, which is still by far the number one product in the Frozen Food category. We believe that we have ample ability to fulfill the demand of our retails.

Okay great. And then I think you called that a number -- a revenue number for Sunrise, I believe its 53 million or 54 million in the quarter. Do you have an EBIT or EBITDA contribution?

Rob?

Yes, I mean Mark what we disclosed, they were on target, so I think what you can see if you go back for the filings is that, the revenues is certainly -- we commented that they took at market and that did have a temporary velocity impact. But the important thing is that there margin raise has extended back to really more traditional level. So on targeted and I’d say in-line, with what the previous guidance was for Sunrise.

So remember this, it was not a full quarter for us, so you have adjust for that. But net-net about the same revenue was last year, higher EBITDA margins than last year as a result of passing through the food cost.

Okay great. And then just lastly for me, obviously you called out the one-timers in the quarter around inventory downtime at Allentown, startup costs, et cetera. Can you talk about which of those truly go way and I think Allentown is obviously up and running, but just we can't dealt with this through 2015 and part of the thesis for margin improving is that a lot of these kind of near term transitory issues don’t continue into 2016, can you comment on that?

Yes, I mean look I think we have more than our fair share of what I call unfortunate operational events. I called unfortunate because I think they shouldn't happen in the first place. Quite frankly the equipment failure was obviously a significant impact not only when it comes to -- you don’t get your absorption if you don’t produce and you don’t get the margin if you don’t produce, you also don’t get the revenue, when you don’t produce. So that is truly a onetime event that should not occur again and then when it come to the inventory we have been selling through a lot of the product in the Q4 inside of Global Ingredients. And this is not necessarily on the organic raw material, this is more on the byproduct streams where we have some long positions and we just wanted to make sure that we didn’t carry those long positions too long because commodity prices are not bouncing back as everybody knows.

And the other one Mark just to point out, it was grouped in as the adjustments as part of the cost related business acquisitions, when you acquire companies a common to the $4 million of non-cash cost related to the inventory that we acquire. That 4 million added essentially 19 million, so there is another 15 million of bad costs, it really is a purchase accounting matter to let's just say come through our P&L in 2016 most likely in the first three quarters.

Okay. Thanks for that.

Thank you. Our next question comes from line of Eric Gottlieb with D.A. Davidson. Your line is now open.

I am looking at Sunrise Growers synergies, 5 million to 7 million that’s what we said before but what's the variability in there that would make you go at the lower high-end?

I don’t believe in lot of variability especially we announced this by the way internal at the end of January already that we will be closing the facility by the end of March. The teams are hard at work making sure that there is no hiccup when it comes to customer service or operations. That is the vast majority of the 5 million to 7 million because not only are we -- of course are we reducing at the fix cost that we have to incur, we are also getting a lot of logistic benefit especially as we transfer the volume to the Kansas City, part of it going to the Kansas City facility which is a lots more efficient when you ship to the East Coast. So, that in its own already is -- should gave us 90% of the way there and there are other things that we're working on. So I am confident that we will be more to the high end, suppose to the low end of that 5% a million.

And looking at to '17, is there any indication one way the other as to how that shaping up, I know it's a far way off.

Look, we've been -- since the acquisition we said that there should be a minimum of $10 million of total synergies, in fact when we said that we stated that we should see about $3 million out of reducing our fixed cost and $7 million out of sourcing. We are getting more than the $3 million out of the closure of the facility and in '17 is when we’re really going to start realizing a lot more of the sourcing because quite frankly by the time we were finally able to acquire Sunrise Growers on the October 9 and most of the contracting had already be done for 2016. So, that's you should expect a similar or larger number than what we are going to able to achieve in 2016 for 2017.

Okay. Moving on for leverage reduction, how much is debt pay down versus EBITDA growth?

So for 2016, the majority of the leverage reduction will come from EBITDA growth. If I was to range that I’d suggested three quarters EBITDA growth and maybe one quarter to debt reduction.

And then how much was FX, if you can take that out?

Sorry, said it again there.

FX in the quarter, the impact, you lumped it in with a bunch of other thing.

Yes, sure. Foreign exchange, it was a $600,000 gain in the quarter.

Okay and last questions, you also mentioned that extraction and ingredients will take some time to materialize, do you have time table on that?

Look I think that should be ramping up towards we end the 2016 and by 2017 we should get at least a 50% utilization out of the effects of the facility. But let there be no mistake, the improvements that we are talking about in terms of achieving inside of San Bernardino, they are mostly on the bottling sides, the opportunity for sustainable long-term profitability is going to add extraction to that because not only do you then end up selling tankers of juice, you also get the organic lemon oil, organic orange oil and those are in very high demand in the end markets right now.

Thank you. Our next question is comes from the line of Jon Andersen with William Blair. Your line is open.

I wanted to ask you a question on Sunrise and Frozen Fruit more broadly. I think you indicated the sales were in value terms relatively flat year-over-year what are your growth expectations for the Sunrise business or your frozen fruit business in aggregate and where are the white spaces or the opportunities for SunOpta to grow that business over the next 24 months to 36 months?

Yes, sure, look that the frozen fruit business at retail has grown in double-digit rates and we actually expect that to continue, what you need to remember when you looking at Sunrise is that about 2/3 of the revenue come from retailer and 1/3 of their revenue comes from food service and food service, where the product that's being used in smoothie mixes, et cetera. That is not growing at double-digit growth. So in aggregates we are looking at Sunrise Growers growing between 8% and 10% basically, in line or slightly higher than what the end markets are. Where do we believe that there are further opportunities for growth, we believe that is obviously with new and unique blends and packaging. We also believe that there is packaging innovation opportunities in the retail and one of the big ones that Sunrise has invested in is basically with the USDA that really, it's been utilized for school lunches, it's utilize all over the world -- all over the country. And they have just installed two high speed lines to be able to satisfy that demand with USDA and there's lot of incremental demand that we think we can filled for the USDA.

From a capacity standpoint in that business, what capacity do you have to growth that business with the current assets that you have and are there capacity additional capital needs, as you do grow in that 8% to 10% level?

They have invested a lot in incremental capacity, incremental freezing capacity in Mexico, incremental packing capacity in Kansas City primarily. We will obviously be utilizing some of the assets that we have in our Buena Park facility, be in Mexico or in Kansas City and Santa Maria. They have had a -- so they have invested a lot and they will not require a lot of incremental investment on a go forward basis. The only thing that we are investigating John to be fair is, are there opportunities for further automation and those obviously will only make sense if you believe it leads us to way to a lower cost. And one last thing I would like to point out when you talked about the Healthy Fruit category we need to all remember that the penetration of this category today is at less of 30%, so therefore it should be a sustainable runway as household penetration increases.

That's helpful last one for me is on the Healthy Snack business, its sounds like there is quite a bit of focus here from an innovation standpoint what could you highlight there, maybe a little bit more in terms of innovation that’s coming to market you talk about providing a turnkey platform for customers and what kind of visibility do you have at this point to -- maybe some new business wins in the Healthy Snacks the way that you’ve been able to articulate a couple of new business wins in aseptic and dairy? Thanks.

Yes. So look our Healthy Snacks category consists really a three products right it's the pouches, which is where we have that equipment breakdown, it is nutritional bars and it is in fruit snacks. If I start with the last one, in fruit snacks there is a lot of opportunity to -- we believe to innovate where we haven’t done so in the past and in fact we are -- we will be launching, it's kind of like the fruits/nut crossover. Totally new concepts, very exciting and we will be launching that with the national retailers. So that is really where we think we have a lot of innovation capability. When it comes to bars what was hot six months ago a nutritional bars is no longer hot today. I mean if you go to the grocery shelf you continuously see a completely new array of bars. That is very difficult for retailers to keep up with, I think with their in house innovation capabilities so what we are saying to retailers is like look you can’t keep up with your in house capabilities, you have a huge array of private label to manage this category is ever changing let us manage that on your behalf. We will make sure that you stay totally on trend, we will come in with a certain set of bar that we can put into your store and we will guarantee you that in six months we’ll come out with a new innovation that will be hot at the particular point in time. That's kind of how we are helping our retail customers stay on trend and ahead of the curve.

And then pouches?

In the pouches, look we have a very good capacity utilization right now. I'm just not happy with the profitability that we are making over there that is partially as a result of some over capacity in the market which basically has led everybody to reduce their sales rises. So again there it is about how do we innovate appropriately and how do we make sure that we what we feel, we actually two touch that. So we provide in ingredients as well as the manufacturing capabilities so our attention more and more there is also shifting towards the large retailers and in facts in the fourth quarter we did launch with the two largest retailers in the country under their private label names with new pouches that offer us a higher, I would say, just an opportunity for profitability because we didn’t reach it in the fourth quarter due to the equipment breakdown.

Okay, that's helpful. Last one for me, the change in management incentive compensation metrics towards margins and debt reduction or deleveraging, is this something -- how is this different then prior program and is this something you are viewing as kind of a one year more short term type of focus given just some of the operational challenges and given the leverage right now or is this, you see this is more of the long-term system and where do you want to focus longer-term? Thanks.

I think that -- so we have basically three metrics and anybody who in the company is on a bonus program, at least 60% of their bonus will be based on this three metrics. For the management team, the senior management team it is basically a 100% of their bonus and it is really about improving the margins, are really trying for 2016 is CPG obviously we believe that CPG inherently where we add more value, we should be able to make a higher margin then what we are making in our raw materials and ingredients business and that is flip-flopped in 2016, which is -- that's just basically wrong. The second one is the EBITDA, so margin improvement and EBITDA. I believe are two that we will consistently have as we go forward. The third one because we are adamant about the fact that we do need to deliver from the current five times 1:1.5 in a 12 to 18 months period. The third one I think is more of a short-term one just to make sure that everybody is totally focused on this deleverage and so I would say that the third one has the potential to change, as we have, as we are proving that to be true so to speak.

Great, thank you so much. Look forward to seeing in the Expo next week.

Thank you. I'm showing no further questions. I'd like to turn the call back to management for closing remarks.

So thanks everybody for joining us on the call, we do look forward to hopefully meeting with many of you as we are at Expo West and sharing some of these innovative products that we have been working on in a live fashion with you and we hoping that you will be encouraged by what you see there. So with that thank you for joining and we look forward to your continue support.