Sunora Foods Inc. Year End Results (December 31, 2015)
Price: $0.12
Common Shares: 42,254,332
Insider Holdings: 31 million (73% as per Sedi)
April 2016 Presentation: sunora.com
February 2016 Radio interview: thestockradio.com
Financials
Assets
Cash: $2,620,566 (2014 - $1,784,147)
Accounts Receivable: $920,001
Inventory: $497,798
Prepaid Expenses: $32,826
Deferred Tax Asset: $147,974
Total Assets: $4,219,165 (2014 - $4,139,409)
Liabilities
Accounts Payable: $468,226
Income Tax: $66,638
Customer Deposits: $13,066
Total Liabilities: $547,930 (2014 - $1,072,936)
2015 Sales
Revenue: $10,815,959
Gross Margin: $1,157,932
Net Income: $502,182
MD&A Highlights
The $502,182 of net income and comprehensive income in the year ended December 31, 2015 compared to $189,073 for the previous year – an increase of 166%, was due to an increase in the average gross margin of 3.7% despite a drop in sales of 18%. These stronger gross margins can be attributed to a higher percentage of sales in packaged products which have higher value added. Another factor that contributed positively to the net income and comprehensive income was foreign exchange gains associated with a weaker Canadian dollar.
Sunora's current assets consist of cash, term deposits, accounts receivable, prepaid expenses and inventory. Cash is held for working capital requirements and to fund expansion costs for new markets and customers. A policy of conserving cash is rigorously followed by management in order to sustain operations and not hamper its marketing strategies. Accounts receivable was reduced due to reduced sales and continuing efforts by management to improve the Company’s collections. The decrease in inventories was due to changes in customer demand and stronger controls.
Sunora maintains strong relationships with strategically located customersin North America and overseas. These relationships continue to drive demand for food oil products from Canada, with Sunora well positioned to meet existing and additional demand. Management has focused on increasing visibility in emerging markets, with a specific focus on the economies in Asia, with a view to meet this increased demand for Canadian manufactured food oil products. Sunora’s operations are impacted by geopolitical situations that may hold up deliveries as was experienced in the fourth quarter of 2015. As the middle class in these emerging economies demands higher quality and healthier foods, Sunora is well positioned to meet additional demand.
Management is actively identifying and analyzing operations that might increase gross margins for the Company. Prospective businesses considered include packagers and suppliers in the food oil industry. With each operation identified, a detailed review and analysis is undertaken by management. Specific focus is currently on packagers with operations in Canada that are looking for a strategic partner to expand international operations.
The financial position of the Company is strong relative to its financial requirements and commitments. Management maintains a conservative approach to day-to-day operations, monitoring the timing of its inventory turnover and meeting its obligations to suppliers within their credit facilities. Collections from customers were stringently managed as that substantially all receivables at December 31, 2015 were less than 60 days old. Sunora's Current Ratio (Current Assets divided by Current Liabilities) target as set by management is 2.0:1. Including its cash balance of $2,620,566 at December 31, 2015, Sunora's Current Ratio at December 31, 2015 was 7.4:1. The Company has continued to have a strong working capital position. Additionally, the Company has neither debt nor any financial obligations other than to fund its operations. |
