SunOpta (STKL), a maker of plant and fruit based food and drinks, did not pay the U.S. duties it owed on fruit snacks made in Canada between 2022-24.

The underpayment, including interest, has now been accrued at $7.4 million and SunOpta says it voluntarily reported the matter to the U.S. Customs and Border Protection (CBP), however:

“As the matter is subject to review by CBP, it is possible that the actual amount of duties and interest owed may differ from the amount presently accrued by the Company, and CBP may assess additional fines, penalties or enact other measures.”

The company revised three years of financial statements in its latest annual report, which revealed SunOpta had:

—Overstated revenue $3.5 million, or 0.56% in 2023
—Overstated operating income $3.2 million, or 65.4% in 2023
—Overstated operating income $1.5 million, or 9.7% in 2022

SunOpta also overstated sales in two of the first three quarters in 2024.

The misstatements inflated SunOpta’s Adjusted EBITDA, a key metric on which executive bonuses are based.

SunOpta did not say whether it would claw back executive bonuses paid due to erroneous financial accounting.

With an Enterprise Value (EV) of approximately $1.1 billion, SunOpta is priced as if it will grow annual sales to more than $5.9 billion, up from an estimated $790.6 million in 2025. To justify its current share price of $5.88 our Reverse DCF— which quantifies investor expectations embedded in the current share price— indicates SunOpta must:

—Grow sales 27.5% annually between 2027-2034, significantly faster than the company’s estimated 2025 and 2026 sales growth of 9.2% and 8.2%, respectively, and the three-year average of 13.5%
—Immediately increase NOPAT margin to 7.7%, significantly higher than our 2024 estimate of 1.71% and our 3-year average estimate of 0.7%
—Increase Invested Capital (IC) Turns to 1.5 from our 3-year average estimate of 0.87

Notably, the current share price also implies SunOpta increases Return on Invested Capital (ROIC) to 11.5% from our 3-year average estimate of 0.64%: