Good morning, and welcome to SunOpta Inc. Second Quarter Fiscal 2013 Earnings Conference Call. By now, everyone should have had access to the earnings press release that was issued after the close of business yesterday. If you have not received the release, it is available on the Investor Relations portion of SunOpta's website at www.sunopta.com. This call is being webcast and a transcription will be available on the company's website. Before we begin, we would like to remind everyone that the prepared remarks 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 all to the risk factors contained in SunOpta's press release issued yesterday, the company's Second Quarter Fiscal 2013 quarterly report on Form 10-Q that will be issued at the close of the business today 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 also like to remind listeners that the company may refer to certain non-GAAP financial measures during this teleconference. A reconciliation of these non-GAAP financial measures was included in the company's press release issued yesterday. And now, I'd like to turn the call over to SunOpta's CEO, Steve Bromley.

Thank you, and good morning, everyone. Thanks for joining us today. On the call with me today are Rob McKeracher, our Vice President and Chief Financial Officer; Rik Jacobs, our President and Chief Operating Officer; and John Ruelle, our Senior Vice President of Corporate Development and Chief Administrative Officer. On today's call, I will provide you with a brief overview of our second quarter 2013 financial results and the status of our key strategic initiatives, then Rob will discuss our second quarter financial results in more detail and Rick will provide an update on our segment operational developments. Finally, I will provide a few closing remarks and then we will open up the call to questions. In the second quarter of 2013, we continued to see strong demand for organic grains and feed products continued growth across our Consumer Packaged categories, including aseptic non-dairy beverages and resealable pouch products and increased demand in the U.S. market for internationally sourced organic food ingredients. Each of these businesses outperformed our internal expectations for the quarter. This strong growth across our key product categories enabled us to achieve record quarterly revenues of $311 million, an increase of 10.2% versus the second quarter last year. We accomplished this improvement on top of our first quarter record revenue performance of $283 million. More importantly, we generated operating income of $13.3 million or 4.3% of revenues. And despite seeing some contraction versus the second quarter last year as we expected, we generated our second sequential quarter of operating margin improvement. Operating margin -- operating earnings, sorry, were driven by solid results across the company's grains, feed, international ingredients and consumer products operations, partially offset by the negative effect of sunflower processing yields and by-product values. In Opta Minerals, we faced cyclical weakness in both the steel…

Thanks, Steve, and good morning, everyone. I'll take the next few minutes to review our financial results for the second quarter and 6 months ended June 29, 2013. Please note that unless otherwise noted, all figures discussed today are in U.S. dollars and are occasionally rounded to the nearest million. For the second quarter of 2013, the company reported record revenues of $311 million, an increase of 10.2% compared to revenues of $282 million during the second quarter last year. Excluding the impact of changes, including acquisitions, foreign exchange, commodity pricing and rationalized product lines, the consolidated base growth rate for the company was approximately 6% and over 7% in SunOpta Foods. All operating segments of the company reported increased revenues versus the second quarter of 2012. Operating income for the second quarter of 2013 was $13.3 million or 4.3% of revenues versus $14.3 million or 5.1% of revenues in the prior year and versus $10.7 million or 3.8% of revenues in the first quarter of this year. This represents the second sequential quarter of operating margin improvement while continuing to invest in our business. As anticipated, margins in the Grains & Foods Group were unfavorably affected by the crop quality associated with the poor growing conditions experienced in 2012, especially in our sunflower operations where we continue to experience lower-than-normal processing yields and by-product values. In addition, Opta Minerals continued to face cyclical weakness in both the steel and infrastructure sectors, as well as the cost of integrating recent acquisitions, although expectations for the second half of 2013 are improved based on feedback from the key markets that they serve. On the positive side, the Consumer Products Group realized a 350 basis point improvement in operating margins compared to the second quarter of 2012 and reported a $2.1 million…

Thanks, Rob, and good morning, everyone. In the second quarter, we've continued to focus on a strategy to expand and enhance our Consumer Packaged and Ingredient capabilities. These efforts have enabled us to generate another quarter of higher margins in the Consumer Packaged and Ingredients segments versus the prior year period. We believe that Consumer Packaged goods and Value-Added Ingredients offers a stronger growth of profitability potential for the company and we will continue to invest in these areas long term. We will also leverage our integrated foods platform for -- via proactive sharing of best practices from procurement through manufacturing and logistics. We just hired a senior operations leader to oversee these efforts, but we're still in the early stages of realizing these sizable benefits. Over the next few minutes, I will comment briefly on the Grains & Foods, Ingredients, Consumer Products and International Foods groups. In the Grains & Foods Group, revenue grew approximately 7% compared to the same quarter last year. The biggest drivers were increased sales of raw grains, including soybean, corn and organic feed, as well as higher revenues in the Consumer Packaged aseptic business. As Steve mentioned, we realized strong demand for our products. In organic feeds, we experienced solid pricing and maintained our double-digit margins versus the prior year. As a reminder, last year, we generated exceptional margins in organic feed during Q2 and Q3 due to the drought conditions, which drove up prices of raw input materials while we were carrying lower profit inventory. Going forward, we do expect organic feed to generate somewhat leveled margins as the new crop comes in at a lower commodity pricing and market prices are therefore adjusted. Our aseptically packaged nondairy beverages continued to grow in the quarter and we continue to realize strengths in this…

Great. Thanks, Rik. To summarize, we are pleased with the continued strong demand for our products and our ability to generate record revenue in the second quarter of 2013, with positive momentum across our key product categories. Going forward, our management team will continue to focus on the growth of our core natural and organic foods businesses. For our non-core holdings, we remain committed to reviewing all options to maximize shareholder value and in doing so, create additional capital that can be reinvested in our global foods platform. We believe the outlook remains strong for our core business and we are optimistic about our ability to capitalize on future growth opportunities. We will continue to execute on our plan to expand our capabilities to meet the demands of this growing market, which is being driven by a wide range of factors from health concerns through the desire for sustainable food alternatives. In closing, our long-term confidence comes from primarily from 2 areas: One, we are well positioned in the growing healthy food space; and secondly, our team is extremely focused on managing the controllable aspects of our business, as we make the necessary enhancements to progress further on the execution of our core strategies. As part of this process, we are currently realigning our food operations to reflect our strategies, simplify our operations, better serve our value-added customers and maximize our growth potential. We expect that this will be completed by the end of the year and will result in 3 food-based operating segments: One, being Sourcing and Supply; two, being Value-Added Ingredients; and three, being Consumer Packaged Products. And so we at SunOpta feel strongly that our business is well positioned with the right products and people at the right time for future growth in the natural and organic foods industry and are optimistic that 2013 will be another excellent year. Thank you for joining us on the call today. And with that, we'd now like to open the call up for questions. Operator?

[Operator Instructions] Our first question comes from the line of Peter Prattas with Cantor Fitzgerald.

Perhaps I'm a bit early, but given the success of your expansion initiatives, like your pouch facilities, have you started to consider where you might keep expanding in 2014?

Absolutely. I mean, we're in the middle of our budgeting processes right now, and I think it's fair to say that we will continue to have capital expenditures in both of our aseptic and pouch businesses in 2014 as well. We now have 4 lines on the East Coast in the Allentown facility. That facility has room for more. And obviously, we're also considering what we can -- how can we expand on the West Coast.

Sure. But just given the strength of your cash flow and your balance sheet and the success you're having, is there room to be even more aggressive with your organic growth plans, particularly in the absence of any acquisitions? And do you think that there is sufficient demand from your customer base for that?

Yes. We believe we do. I mean, I think, it is -- we have an aggressive growth plan for -- especially for Consumer Products, as well as our Ingredients platform going forward in 2014. And as I mentioned already in my remarks, we're now expanding in new categories in aseptic where traditionally, we've been very focused on the nondairy segment. We're now going into dairy, were going into nutritional, those are huge categories and we're just dipping our toes in it. I see a lot of potential there. The same is true for pouch. We have done a lot in the baby food categories. And now, there as well, we're working with some large nutritional companies launching new products that you should hopefully see on supermarket shelves by the end of this year.

Our next question comes from the line of Christine Healy with Scotiabank.

I wanted to, I guess, ask a couple of questions on the Consumer Product segment. Because I think this is the big surprise for the quarter. Just the margins, close to 4%, only of the 2 pouch lines running. Can you talk about what you expect for margins after lines 3 and 4 are up, so I guess second half of this year and in the next year? I know in your last call, you said lines 1 and 2 will lead to a breakeven and 3 and 4 should get you to 5%. So how has -- this view changed?

Yes. I think we were positively surprised by the fact that the Allentown facility was able to run, albeit very small, but still a small operating profit on the basis of running just a few lines. So of course, with not having to add a lot of staff, lines 3 and 4 should significantly add to that one. And as I mentioned in my remarks already, Consumer Products as a whole is now well north of 10% growth margins and that, I see continue growing as we are able to attract more value-added businesses to all of our facilities really.

Okay. And then, I know it wasn't just the pouches that led to that strong margin. You mentioned that the beverages and the frozen did quite well too. Is it sustainable on those sides, or is there anything unusual, I guess, that happened this quarter that led to higher margins in those other areas?

I think in our traditional beverage business, which is really lemonades and waters, we were aided in the second quarter by fairly heavy retail promotion programs, so there's a bit of seasonality in that. I think on the frozen business, we have done a lot of upgrades in our facility over there that have now come to a close. We have our SQF 2 accreditation, so we should be able to start bidding for other businesses. And we see positive things going there for at least the remainder of this year.

Okay. And then I guess, last quarter's call, Rik, I think you mentioned that you had locked in about 50% of the volume for lines 3 and 4. So line 3 was essentially full and you just needed to fill 4. Can you give us an update there? And how soon could we see a decision on 5 and 6?

Yes. I think, well, as I've just mentioned, lines 5 and 6, as well as West Coast is going to be -- it's going to basically be part of our budgeting process. So we'll hopefully be able to update you on that more on -- in the November timeframe. And when you talk about the capacity being full, of course, we wouldn't be talking about lines 5 and 6 already now in concept and in November, hopefully, in much more detail if we wouldn't be feeling that capacity. So we're very confident that, that capacity will be filled.

Okay. And just a last question for you guys. I know the U.S. farmers have a really good crop in their fields right now, that should benefit your processing margins in Q4 and onwards. But can you talk about the impact of the grain prices falling? How is your inventory carry, particularly on corn? And do you expect you could see some lower pricing on your Consumer Products next year? Or is it really just the raw green sales that will get impacted?

Christine, we're turn that over to John Ruelle, whose kind of the in-house agronomist.

You had quite a few questions in there, but we did experience some impact, as Rik mentioned, on our input sales as the late wet spring did cause some acres to not get planted. So we've really turned our sourcing group on and are expanding our sourcing to different geographies, both North America and around the world. So specifically to -- by commodity, I think corn and soybeans for sure, we're very confident that we're going to be able to fill supply gaps. Across all commodities, current contracts, we are confident that we will cover. I think the last one you mentioned was corn. What specifically question -- was your question there?

Yes. I know, sorry. Just -- as the corn price really coming off, I'm just wondering like your inventory carry before the new crop comes in, could there be an impact on, I guess, inventory charges?

Yes. And I think what you're seeing now on the board is indeed corn going lower. But don't forget, that I think across the U.S.A., it was a very late planting season that we referred to in our last quarterly call. So even though prices are going a lot lower right now, it remains to be seen whether or not we get an early frost or not, that could still damage the yields. So I wouldn't -- if I would be a betting man, I wouldn't be betting yet at this moment.

What I think to that end as well there -- we're in specialty crops. So the -- what the Chicago Board of Trade may be doing is not necessarily a direct correlation to our specialty crops. So I think as far as a crop year to crop year issue, we did have some issues last year when we converted from old crop to new crop with having to cover new crop sales with -- or I'm sorry, old crop sales with new crop pricing. We're pretty balanced in that regard heading into the fall.

Our next question comes from the line of Scott Van Winkle with Canaccord Genuity.

Going into this year, I figured we'd get into the middle of this year and that Grains & Food Group would be down year-over-year as you lost the kind of basic input sales. How have you -- can you give me thoughts on kind of how you've overcome last year's scenario going into this year?

Well, I'll offer a couple of comments and then Rik will jump in. But I think it goes to a couple of things. One is the capabilities of our global supply chain. As John just mentioned, to fill supply gaps and -- so we've done a nice job there. Second, a lot of growth has come from the value-added side, which -- since we add more value and carries a higher value-added sale value. So those are the 2 keys that I would suggest -- Rik, do you have further...

Well, the only thing I would say is that -- and I -- again, I think I referred to this in our last quarter. If you look at organic feed, that is a significant portion of the raw grains that we sell. The prices are a lot higher than they are at this year, the volume is about the same and we're able to carry the same kind of percentage margin. And I think that is really kind of a driver on both the revenue, as well as on the margin side.

Should we think about that as a kind of a natural hedge?

In which way, Scott? I'm not sure I get you.

Well, I'm thinking, does the feed kind of offset -- do they run in different directions, where one side of the business may be a little short, while one is strong? Is there a correlation, a negative correlation between the 2? Or it's just the way it -- one is so strong this year it's offsetting the other.

The real strength in feed just comes from the demand for natural and organic poultry and meats and that sort of thing. John, I don't think there's really a hedge against each other accounting wise [ph].

No. No, I think the real driver for the feed business is the demand for all the products, feeding cattle for beef and poultry and eggs, all those animals that are being fed to produce the products down the organic chain. It's really what drives demand for that side.

And as I've mentioned last time, what is good to see is that -- a couple of years back, I guess, when the price for organic feed went up, all of a sudden, demand came down. This time, demand is strong. I never saw so because we have programs in place with retailers where we supply their suppliers of poultry, eggs, et cetera. So that's leading to more stability, I guess, on our volume side.

Perfect. And then on the Ingredients segment, any changes in the customer roster there? Any opportunities, new moves happening?

Yes. I think we're making very good gains on the fruit side with the dairy, Greek yogurt specifically, and pancake segment is continuing to grow. I think on the fiber side, we have seen weakness in some of our really big customers on the cereal side, on the bread side, of course. House's going out of business hasn't helped either and -- but at least, we're now making it up with new business that we're landing with other accounts and with other products.

Our next question comes from the line of Tim Tiberio with Miller Tabak. Tim J. Tiberio - Miller Tabak + Co., LLC, Research Division: My question, I guess, is more around the future business that your contracting in the aseptic beverage and the pouch business. You've obviously made very good progress on the operational side. You're filling in these production lines. But as we look forward and you're judging these new contracts, are you still happy with the margins that you're winning on this new business versus the initial business that you were ramping? Is that still kind of getting you to the operating margins that you've been talking about on the Consumer Products side?

Yes. I think there's a couple of things there. First of all, we are going into some new categories. And if you think about nutritional categories having a lot higher retail shelf price, that also leads to a higher margin there already. And I think it's also, in a way, diversifying into adjacent categories and potentially, diversifying also our customer base, which we're actively working on both of those. I'm a firm believer that even though aseptic traditionally, and including this year, is one of our strongest performing businesses that we own, there's a heck of a lot of potential for more there. Tim J. Tiberio - Miller Tabak + Co., LLC, Research Division: Okay. I guess if I can put it in another way, it's great that you're ramping these lines very quickly, but it doesn't sound like you're feeling the pressure that you have to give up margin just to get this new business in the door.

I think that's a valid statement.

Our next question comes from the line of Brian Freckmann with LS Capital.

You guys talk about -- well, on the call, it seems like you guys sort of used the word Consumer Products, and then I would say throw in aseptic in that and sort of stripping that out of Grains & Foods. I'm glad to hear that you guys are going to change the way you're going to report from, I guess, it's Sourcing, Value-Added and Consumer Products, is that -- Packaging, is that correct?

That's right.

Is aseptic going to end up in Consumer Packaging?

Yes, exactly. What we're doing, Brian, is we're realigning internally. And as we've built this business over time -- we've had a number of operating segments as we've built the company. And the real meat of our company is we do sourcing and supply, we do Value-Added Ingredients and we do Consumer Packaged Products. And what we've been doing internally is realigning how we manage each of those categories from the raw materials right through to the consumer and our go-to market. And so as part of that realignment, our Consumer Products Group will manage all of our basket of consumer products that we take to the market.

Including aseptic.

Including aseptic. So the same people that are working on pouches and beverages, et cetera, will also work with our customers on aseptic beverages. And so it makes our key account planning much more streamlined, it makes our billing processes with the customers much more streamlined, it makes our ability to service the customers better. So we've been involved in doing that. And as part of that, we have an obligation and then, it's what we've wanted to do. And the nice by-product of that is that, that will streamline our reporting. So rather than seeing our aseptic beverage business, which has traditionally been in our Grains & Foods segment, you'll see it now as part of the Consumer Packaged Products.

As well as grain snacks.

As well as grains snacks. All of the roasted soy and sunflower, and corn, et cetera, which is in the Grains & Foods business today, you'll now see that in the Consumer Products business. And so we're simplifying -- as we indicated in our comments, we're simplifying our structure to get to our customers better, to better align with our strategy, and the wonderful by-product of that is that it will simplify our reporting in our segment reporting for all of our -- for all of the shareholders and users of our financial statements. So our target is to be completed with our internal realignment by the end of this year. It's a -- not a massive undertaking, but it's a large undertaking across the organizations, and we've been working on it hard all this year. And what we expect that will happen is that for Q4, we'll report in the new segments and provide a bridge to the old segments.

So guys will do that, but -- it's great to hear. So one more quarter of the old and then fourth quarter, we're going to get the new reporting?

Yes. That -- the only thing that could stop that is if somehow we're not finished with our internal realignment, but our goals -- and right now, we're on target to do that. So that would be the -- that's the plan.

And I just wanted to make it absolutely clear that when I talk about Consumer Products growing 9% and having a 350 basis point expansion on the operating, that actually excludes aseptic. I'm not tossing aseptic in there at the moment.

Yes, I was going to make a big reach here and sort of say, if you put your kind of hat on and said -- you're throwing in aseptic into that and just a casual guess, I promise I won't hold you to it, but what -- if you added aseptic to your consumer business or you sort of thought about the consumer business as it will be versus sort of what it is now, what is the growth rate -- what has been the growth rate at least maybe in this last quarter? And maybe what do the margins look like right now?

I would say that if our aseptic business is, well, just about double the size of our Consumer Products, and the margins there would make Consumer Products look even more attractive than we already have in our own internal forecast for the future.

Well, guys, I mean, obviously, I think there's a lot of you on this call who are very excited about that business in the future there. So as soon as you can get those out, I think that would be great to see.

[Operator Instructions] Our next question comes from the line of Ron Reuven with Reuven Capital Investments.

So I just wanted to know, as far as the business -- obviously, it stabilized dramatically and now it's back on a growth phase. Where do we stand in regards to starting to give projections for the next year as far as earnings and op margins?

Yes. As Rik said, we're going to do our budgeting and planning process for next year and we normally conclude that later -- late November type thing. So at that stage of the game, we'll have a better view on what next year looks like, but we're cautiously optimistic.

Okay. In regards to the longer-term goals of getting to 8% operating margins, 10% EBITDA margins, are we still on target? Is it something that...

Yes, no change to those targets. As we've stated, our targets are for 8% operating margins, 10% EBITDA margins and 15% return on net asset margins, and we want to exit 2015 on those rates so we can see the full benefit in 2016. All of the core strategies that we have are focused on that. Obviously, moving up the value-added chain and all of the investments and the bulk of our energy being associated on adding value clearly drives margin shift and -- sorry, mix shift and -- which drives margin shift. Rik talked about the fact that, as part of our realignment, we've brought in another senior operational resource to really work on the leverage side of this business, which is also critical to achieving those targets. And then continuing to grow our revenues. Our assumption is that our revenues can grow 10% a year at the same time. So you've got the contribution from new business that comes at a higher margin because you're utilizing the platform that you have in place. We've got higher value-added product mix, which is extremely important, and we saw some of the benefit of that starting to show through in the Consumer Products Group this year. And then lastly, leveraging the platform, which is doing more with less and streamlining costs wherever we can and we have resources in place to work on that. So all of those targets remain in place.

And in regards to the Mascoma write-down, I guess, as far as the -- I guess, it's being compared to your public companies that haven't done too well. I mean, do you see this as somewhat of a permanent loss? Or in essence, permanent valuation on it? Or I mean, do you see this -- is Mascoma still growing where you think that it's eventually going to turn around and the value of it will increase?

Well, a couple of things, Ron. When we did this transaction back in 2010, it was all noncash. And following the rules of reporting, we had to record a gain, which we normalized at the time. And our position at the time and our position today was that Mascoma will make a good company, doing good things and they're a real business and they're continuing to build the business. So we remain optimistic on the prospects for that business as much as we can know from being minority shareholders. Having said all of that, correct to your point, the markets for the public companies in the space are down significantly. And we felt, based on our evaluation, that it would be prudent at the time. As much as we're optimistic about the business, it would be prudent to take the external factors into account and then mirror that up with what we know about the business. So net-net, it was noncash. We normalized it [indiscernible] normalized it again [indiscernible] and we have that obligation.

Our next question comes from the line of Keith Howlett with Desjardins Capital Garden -- Market.

Pretty close. I was just wondering on this -- the product formulation and new product development. As you realign your segments, is there any change in how you're going to develop new products?

Yes. Well, I think it is -- as we're changing these segments, first of all, I think the most important change that will happen is that, as Steve alluded to already, I think it puts us especially with retailers, and that is a significant part of our business. Puts us in a better position to have account management with those people, because we will be able to sell a broader portfolio of our products over there. And if you think about the R&D side, the R&D side is, to some degree, already kind of linked across our company, if you like. But that will become only stronger as we go forward and making sure that our pipeline of R&D projects is aligned to what our customers really want. So I don't really see too many significant changes on the R&D side, as you get more on how we can serve our customers' better side.

I know some of the other companies may be larger in scale, like Maple Leaf centralized their development to try and put all the people together. Is that -- I know you've -- in the past, you've indicated that they all work together anyway, doesn't really need to be physically together. Is that still your view that it can be in different locations?

Well, we're having -- yes, we're having a debate on that as we speak, and we're looking even at, at least, bringing some of our people together. But it's always -- there's always a trade-off about -- if you can bring all your R&D people together and you can do great R&D, but you got to make sure they stay connected to the business as well, so -- and that's exactly the exercise we're going through right now. And we should have more clarity on that as we go into 2014.

Just as we look to the 2016 targets, what would the -- do you think, roughly speaking -- would be the gross margin rate that would accompany the 10% EBITDA margin?

That really depends a lot on the segment of where we do business in. And the highest being in our Consumer Products and the lower being in our Grains & Foods and in the mix of the business as that's here [ph] towards consumer products, that's how you're going to reach the 10% EBITDA.

I'm not showing any further questions at this time. I'd like to turn the call back over to Steve Bromley for closing remarks.

Well, thank you very much. I appreciate everyone, we appreciate everyone joining the call today, and look forward to speaking with you again in early November. So I hope everyone has an enjoyable rest of the summer and we look forward to seeing you soon. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.