Juice and snack-maker Sun-Rype Products Ltd. (TSX:SRF) has reported a 36-per-cent profit decline for 2007, squeezed by a strike late in the year, and expects losses to continue this year.
Sun-Rype's sales for 2007 were up 3.5 per cent to $135.1 million from $130.6 million. Net earnings of $4.6 million, 43 cents per share, compared with a 2006 profit of $7.3 million, 67 cents per share.
The fourth quarter produced a net loss of $200,000, two cents per share, down from year-ago net income of $1.2 million, 11 cents per share.
October-December sales declined 18.5 per cent to $27.1 million from $33.3 million, as 266 workers at Sun-Rype's Okanagan production complex went on strike Nov. 6.
The Teamsters members ratified a new contract in late February, providing wage increases of 12 per cent over four years retroactive to August 2006.
The company says it expects "significant losses" in the first half of 2008 because of ongoing labour-related expenses, along with higher commodity costs and spending to launch new products.
"A return to profitability is anticipated later in the year but this is not expected to offset the earlier losses," Sun-Rype stated.
The strike "compromised our abilities to manufacture, distribute and promote our products," said CEO Eric Sorensen.
"Despite this, overall sales of both beverage and food products increased in 2007 as consumers connected with Sun-Rype's emphasis on the wholesome goodness of 100-per-cent fruit juices and 100-per-cent fruit snacks coupled with continued product innovation."
Sun-Rype Products is headquartered in Kelowna.
