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Discontinued Operations | 12 Months Ended
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Dec. 30, 2023
Divestiture of Frozen Fruit [Member] |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] |
Discontinued Operations [Text Block] | 2. Discontinued Operations Divestiture of Frozen Fruit On October 12, 2023, the Company, together with its subsidiaries Sunrise Growers, Inc. ("Sunrise Growers"), Sunrise Growers Mexico, S. de R.L. de C.V. ("Sunrise Mexico") and SunOpta Mx, S.A. de C.V. ("SunOpta Mexico"), entered into an Asset Purchase Agreement ("APA") with Natures Touch Mexico, S. de R.L. de C.V. and Nature's Touch Frozen Fruits, LLC (the "Purchasers") to sell to the Purchasers certain assets and liabilities of Frozen Fruit (the "Transaction"). On October 12, 2023 (the "Closing Date"), the Company completed the Transaction in accordance with the terms of the APA. The Transaction represents the Company's exit from the processing, packaging and selling of individually quick frozen fruit for retail, foodservice and industrial applications. Frozen Fruit was previously identified as a reporting unit within the Company's former Fruit-Based Foods and Beverages operating and reportable segment. Included with the Transaction are owned facilities of Frozen Fruit located in Edwardsville, Kansas, and Jacona, Mexico. A leased frozen fruit facility located in Oxnard, California and certain inventories of frozen fruit were not acquired by the Purchasers as part of the Transaction; however, the Company's plan for the divestiture of Frozen Fruit included the immediate liquidation of these assets, as they have no use to the Company's continuing operations. At the Closing Date, the estimated aggregate purchase price comprised cash consideration of $95.3 million; a short-term note receivable of $10.5 million, payable in five consecutive monthly installments of $2.1 million beginning 30 days following the Closing Date; secured seller promissory notes due in three years and with stated principal amounts of $15.0 million entered into by Sunrise Growers and $5.0 million entered into by SunOpta Mexico (the "Seller Promissory Notes"); and the assumption by the Purchasers of $15.7 million of accounts payable and accrued liabilities of Frozen Fruit. At the Closing Date, $20.5 million of the cash consideration was used to make required repayments of certain bank loans and other liabilities of Frozen Fruit not assumed by the Purchasers. The Company realized a $0.4 million loss on a foreign currency forward contract entered into to hedge the repayment of Mexican peso-denominated bank loans, which is included in other expense of continuing operations. The Company utilized the remaining cash consideration of $74.8 million to repay a portion of the outstanding borrowings under its credit agreement. As at December 30, 2023, $6.3 million of the short-term note receivable remained outstanding, which is included in other current assets on the consolidated balance sheet. The estimated aggregate purchase price is subject to post-closing adjustments based on a determination of the final net working capital and resulting aggregate purchase price as of the Closing Date (the "Closing Statement"), with adjustments to the aggregate purchase price determined on a separate and individual basis for each of Sunrise Growers, Sunrise Mexico and SunOpta Mexico. Any downward adjustment will be deducted from the principal amount of the Seller Promissory Notes entered into by Sunrise Growers and/or SunOpta Mexico, as the case may be, in an amount up to $5.0 million in the aggregate, with any additional downward adjustment payable by the Company to the Purchasers in cash. The portion of any upward adjustment in the aggregate purchase price not paid to the Company by the Purchasers in cash will be added to the principal amount of the Seller Promissory Notes entered into by Sunrise Growers and/or SunOpta Mexico, as applicable. As at December 30, 2023, the Company recorded a $0.5 million net receivable from the Purchasers based on the Company's estimate of the final net working capital and post-closing adjustments, which is included in other current assets on the consolidated balance sheet. However, this estimate may be subject to change, which could be material, as the parties are currently in the process of reconciling the final aggregate purchase price, including the resolution of certain disputed items in accordance with the procedures set forth in the APA. The Seller Promissory Notes bear interest at a rate per annum equal to the Secured Overnight Financing Rate ("SOFR"), determined quarterly in advance, plus a margin of 4.00% for the first year and 7.00% for the second and third years. Interest is payable quarterly in-kind. The Seller Promissory Notes mature on October 12, 2026, and outstanding principal and accrued and unpaid interest is payable on the maturity date. The Seller Promissory Notes are measured at fair value on a nonrecurring basis (Level 3 within the fair value hierarchy) and will be assessed for credit losses periodically. The Company determined that the fair values of the Seller Promissory Notes approximate their principal values upon initial recognition and no premium or discount was recognized. As described above, the final principal amount of the Sellers Promissory Notes may change as a result of any upward or downward adjustment to the aggregate purchase price in connection with the resolution of the Closing Statement. As at December 30, 2023, the Company has not recorded any allowance for credit losses related to the Seller Promissory Notes. The Seller Promissory Notes are secured by a second-priority lien on certain assets of Frozen Fruit acquired by the Purchasers. The principal amount of the Seller Promissory Notes, together with accrued and unpaid in-kind interest, is recorded in other long-term assets on the consolidated balance as at December 30, 2023. On the Closing Date, the Company entered into post-closing transitional services agreements with the Purchasers to facilitate an orderly transfer of the business operations. The services provided under the agreements include, but are not limited to, information technology and financial shared services, payroll and benefits administration, supply chain transition services, and contract manufacturing. These services terminate at various times up to nine months from the Closing Date and certain services may be extended up to an additional three months. Internal labor and third-party costs incurred by the Company to provide these services are recoverable from the Purchasers as incurred, including a mark-up on manufacturing services. Reverse transition services to be provided by the Purchasers include, but are not limited to, support for the sell-through of the frozen fruit inventory that was not acquired by the Purchasers, in exchange for a broker fee on sales of the retained inventory to third parties. The Company recognized a pre-tax loss on divestiture of $119.8 million, including costs to sell, related to the net assets of the Transaction disposal group, which is recognized as part of the loss from discontinued operations in the consolidated statement of operations for the year ended December 30, 2023. The table below presents the major components of the results of discontinued operations reported in the consolidated statement of operations for each of the three years in the period ended December 30, 2023. The results of operations for the years ended December 31, 2022 and January 1, 2022 include the results of Sunflower, which prior to the divestiture of Frozen Fruit did not qualify on a quantitative basis for reporting as discontinued operations on a standalone basis.
|  | December 30, 2023 |  |  | December 31, 2022 |  |  | January 1, 2022 |
|  | $ |  |  | $ |  |  | $ |
Revenues |  | 200,029 |  |  | 343,267 |  |  | 316,169 |
Cost of goods sold(1) |  | 211,467 |  |  | 320,143 |  |  | 299,593 |
Selling, general and administrative expenses(2) |  | 8,683 |  |  | 10,843 |  |  | 11,821 |
Intangible asset amortization |  | 6,000 |  |  | 8,498 |  |  | 8,664 |
Other expense (income), net(3) |  | 10,112 |  |  | (2,746 | ) |  | 2,145 |
Foreign exchange loss (gain) |  | (3,333 | ) |  | (1,641 | ) |  | 1,018 |
Interest expense, net(4) |  | 554 |  |  | 1,578 |  |  | 1,217 |
Earnings (loss) before loss on divestiture |  | (33,454 | ) |  | 6,592 |  |  | (8,289 | )
Pre-tax loss on divestiture(5) |  | (119,821 | ) |  | (31,468 | ) |  | - |
Loss from discontinued operations before income taxes |  | (153,275 | ) |  | (24,876 | ) |  | (8,289 | )
Income tax benefit(6) |  | (167 | ) |  | (16,154 | ) |  | (1,574 | )
Loss from discontinued operations |  | (153,108 | ) |  | (8,722 | ) |  | (6,715 | )
(1) Cost of goods sold for the year ended December 30, 2023, includes a $12.9 million charge to write down the carrying value of frozen fruit inventory that was not acquired by the Purchasers to its estimated net realizable value. (2) For all periods presented, selling, general and administrative expenses exclude the allocation of corporate costs. (3) Other expense for the year ended December 30, 2023, includes asset impairment charges and contract cancellation costs of $10.0 million related to the Company's disposal of the Oxnard, California, facility that was not acquired by the Purchasers. Other income for the year ended December 31, 2022, includes a $3.8 million gain on the sale of a former frozen fruit facility sold in August 2022. (4) Interest expense, net, reflects interest on bank loans and other interest-bearing liabilities directly attributable to Frozen Fruit, net of interest income on tax refunds. (5) For the year ended December 31, 2022, reflects the pre-tax loss of $23.2 million recognized on the divestiture of Sunflower, together with a pre-tax loss of $8.2 million on the settlement of the purchase price allocation related to the 2020 divestiture of the Company's global ingredients business, Tradin Organic. (6) For the year ended December 31, 2022, includes $12.9 million of tax benefits resulting from the settlement of the purchase price allocation related to divestiture of Tradin Organic. The table below presents the net assets of Frozen Fruit that have been reclassified and reported as held for sale on the consolidated balance sheets as at December 30, 2023 and December 31, 2022.
|  | December 30, 2023 |  |  | December 31, 2022 |
|  | $ |  |  | $ |
Assets |  |  |  |  |  |
Accounts receivable |  | - |  |  | 15,358 |
Inventories(1) |  | 5,910 |  |  | 132,608 |
Other current assets |  | - |  |  | 153 |
Property, plant and equipment, net |  | - |  |  | 30,085 |
Operating lease right-of-use assets |  | - |  |  | 3,803 |
Intangible assets, net |  | - |  |  | 112,000 |
Total assets held for sale |  | 5,910 |  |  | 294,007 |
Liabilities |  |  |  |  |  |
Accounts payable and accrued liabilities |  | - |  |  | 12,632 |
Operating lease liabilities |  | - |  |  | 3,803 |
Total liabilities held for sale |  | - |  |  | 16,435 |
(1) As at December 30, 2023, inventories held for sale reflect the remaining carrying value of the frozen fruit inventory that was not acquired by the Purchasers.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent + Details
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