Shares of organic- and specialty-food company SunOpta (STKL 1.58%) tumbled on Tuesday after President and CEO David Colo was terminated. That news came with a mixed fourth-quarter report, with SunOpta's bottom line coming up short of expectations. The stock was down about 39.6% at 11:05 a.m. EST.
SunOpta reported fourth-quarter revenue of $320.5 million, up 9.6% year over year and $27.6 million higher than the average analyst estimate. Revenue would have grown by 16% if not for changes in currency exchange rates, commodity price moves, and the discontinuation of certain products.
Non-GAAP earnings per share was a loss of $0.11, down from a loss of $0.10 in the prior-year period and $0.05 below analyst expectations. The company took a noncash goodwill impairment charge of $81.2 million during the quarter related to the healthy fruit platform, which drove down GAAP EPS to a loss of $1.13 per share.
Along with the earnings report, SunOpta disclosed that it had terminated David Colo as president, CEO, and board member. SunOpta Director Katrina Houde takes his place as interim CEO, and the board has formed a search committee to find a permanent replacement.
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The market is not reacting well to the sudden termination of the CEO. SunOpta is struggling with profitability, and the stock was already down more than 40% over the past year before Tuesday's tumble. A leadership change may be the right step, but it introduces uncertainty at a time when the stock is struggling.
Shares of SunOpta have now lost about two-thirds of their value over the past year. With the bottom line in negative territory, and with the balance sheet loaded with about $500 million of debt, the new CEO will have a difficult job turning the company around.