Village Farms International, Inc. (“Village Farms” or the
“Company”) (NASDAQ: VFF) today reported its financial results for
the first quarter ended March 31, 2024. All figures are in U.S.
dollars unless otherwise indicated.
Management Commentary
“The first quarter was an especially strong
start to 2024. Canadian Cannabis retail branded sales grew 28%
year-over-year, all organically, as we led the top five LPs in
market share growth, further narrowing the gap to number one, and
achieving a new record in April. Our success in quality, innovation
and brand building, together with the support of our provincial
boards and retail partners, are driving these results as we delight
our consumers,” said Michael DeGiglio, President and Chief
Executive Officer, Village Farms International. “In addition, our
Fresh Produce business was profitable on a solid year-over-year
increase in sales, with an improved adjusted EBITDA margin.”
“Total Canadian Cannabis sales delivered a new
record, up 49% year-over-year to C$50.5 million, with another
quarter of profitability and free cash flow. In our non-branded
channel, we continued to be opportunistic around improved supply
conditions and pricing, further reducing our non-brand-spec
inventory and supporting cash flow.”
“In our International Cannabis business, we are
on target to start production in our first facility in the
Netherlands this year as the only North American company with a
license participating in the first major legal recreational
cannabis market in Europe. Our Canadian export business, currently
shipping to four countries, is on track to deliver solid
year-over-year growth this year.”
“We are excited about the acceleration of the
global cannabis conversation and momentum in legalization. With our
experience in Canada as a profitable, market share leader, there is
no one better positioned than Village Farms to leverage its
cannabis expertise for new market opportunities around the world,
including in the U.S.”
“As we expand our cannabis business, we have a
solid foundation for long-term success in our Fresh Produce
business. This year, we expect to begin to benefit from our recent
investments in the latest cultivation technologies, including
artificial intelligence, as we continue to deliver on the
expectations of customers and consumers.”
1. Based on estimated retail sales from HiFyre, other third
parties and provincial boards.
FIRST Quarter Financial
Highlights(All comparable periods are for the
first quarter of 2023 unless otherwise stated)
Consolidated
- Consolidated sales increased 21%
year-over-year to $78.1 million from $64.7 million;
- Consolidated net loss improved to
($2.9 million), or ($0.03) per share from ($6.6 million), or
($0.06) per share;
- Consolidated adjusted EBITDA (a
non-GAAP measure) improved to $3.6 million from $0.5 million;
and,
- Consolidated cash used improved to
$3.6 million from cash used of $10.1 million (excluding net equity
financing proceeds) with break-even cash from operations compared
with cash used in operations of $3.7 million.
Canadian Cannabis (Pure Sunfarms and Rose
LifeScience)
- Net sales increased 49% to $37.4
million (C$50.5 million) from $25.1 million (C$34.0 million);
- Retail branded sales increased 28%,
international (export) sales decreased 13%, non-branded (wholesale)
sales increased 181%;
- Gross margin was 25% compared with
34%; (in Canadian dollars). This quarter’s gross margin was reduced
by sales of non-brand-spec inventory in the non-branded
channel:
- Net income increased to $0.8
million (C$1.1 million) from net loss of ($0.1 million) (C$0.1
million); and,
- Adjusted EBITDA increased to $4.1
million (C$5.5 million) from $3.9 million (C$5.3 million).
U.S. Cannabis (Balanced Health Botanicals)
- Net sales were $4.5 million
compared with $5.0 million;
- Gross margin was 59% compared with
65%;
- Net loss was ($0.7 million)
compared with a net loss of ($0.4 million); and,
- Adjusted EBITDA was ($0.6 million)
compared with ($0.2 million).
Village Farms Fresh (Produce)
- Sales increased 4% to $36.1 million
from $34.6 million;
- Net income improved to $0.1 million
from a net loss of ($2.6 million); and,
- Adjusted EBITDA improved to $2.0
million from negative ($1.0 million).
Strategic Growth and Operational
Highlights
Canadian Cannabis
- Is the fastest growing producer among the top five LPs in
Canada1, expanding its number two market share position nationally
to a new record in April, gaining share for nine consecutive
months2;
- Moved into the number two national market share position in the
pre-roll category and expanded its number one national market share
position in dried flower, achieving a record 18% share in
April2;
- Regained the top market share position in Ontario (Canada’s
largest provincial market) for the first time since 20222;
- Achieved record market share in Alberta3;
- Launched Hi-Def Pre-Rolls, a first-of-its-kind pre-roll,
featuring pure ground flower optimized for high potency, with THC
content between 36-44%, with no concentrates, infusions or
kief. Initial demand is exceeding expectations;
and,
- Expanded share of the milled category with the Super Toast
brand in Ontario every month since its August 2023 launch, reaching
the number two position with more than 20% share1.
1. For the first quarter of 2024. Based on estimated retail
sales from HiFyre, other third parties and provincial boards.2.
Based on estimated retail sales from HiFyre, other third parties
and provincial boards.3. For the first quarter of 2024. Calculated
from sales information provided by Alberta Gaming, Liquor and
Cannabis (AGLC).
International Cannabis
- In January 2024, the Company started the build-out of its first
indoor cannabis production facility in Drachten, The Netherlands,
targeting start of production for the fourth quarter of 2024.
- Germany passed legislation partially legalizing cannabis for
personal use beginning April 1, 2024. The new legislation will
provide patients with greater access to high quality, legal
products, which will be beneficial to further growth of the German
medicinal cannabis market. Village Farms holds EU GMP certification
from the District Government of Dusseldorf in 2022 and began
shipping its best-selling Canadian strains to Germany in the second
quarter of 2023.
U.S. Cannabis
- Balanced Health’s CBDistillery reported study results
demonstrating its shhh+ Distilled THC + CBN Deep Sleep
Gummies help users to achieve better-quality rest, fall back
to sleep during the night and wake up feeling refreshed;
- Completion of internalization of gummy production on track for
the second quarter of 2024, which will support consistency of
supply and gross profit;
- William (Bill) Stoufer was appointed President of Balanced
Health. Mr. Stoufer joined BHB as Chief Operating Officer in 2019
and played a key role in establishing strong business processes
with a focus on customer excellence, which contributed positive
adjusted EBITDA and cash flow to Village Farms since acquisition;
and,
- The Company’s application for a Texas medicinal marijuana
license remains pending review by the Department of Public
Services. If awarded, the Company plans to work with its listing
authority to structure an acceptable ownership
structure.
VF Fresh (Produce)
- Production of tomatoes started in half of the Delta 2 facility;
and,
- The Company has an ongoing sale process for its Monahans
(Permian Basin, Texas) greenhouse facility. It is also evaluating
other uses for the site and facility, some of which are outside its
historical produce business.
Village Farms Clean Energy
- In April 2024, the
Delta, British Columbia Renewable Natural Gas Project began
operations, which immediately began contributing incremental
profitability to the Company.
Corporate
- The Company ranked as one of the fastest growing companies in
the Americas by The Financial Times and Statista for the second
consecutive year. The Company ranked first among cannabis
companies, 10th among agriculture, forestry and fishing
companies, 32nd among Canadian companies and
355th overall, improving its overall ranking by 72 positions
from last year.
- The Company expanded its executive team with the following
internal appointments to newly created roles, reflecting the
Company’s proven business model and significant growth potential:
- Chief Operating Officer – Ann Gillin Lefever;
- President, Global Medical Cannabis – Paul Furfaro; and,
- General Counsel, Global Cannabis – John Harloe, J.D.,
Ph.D.
1. Based on estimated retail sales from HiFyre, other third
parties and provincial boards.
Canadian Cannabis Performance
Summary
(millions except %
metrics) |
Three Months Ended March 31, |
|
|
|
2024 |
2023 |
|
|
|
CAD $ |
|
USD $ |
|
CAD $ |
|
USD $ |
|
Change of C $ |
Total Net Sales |
$50.5 |
|
$37.4 |
|
$34.0 |
|
$25.1 |
|
49% |
Total Cost of Sales |
$37.7 |
|
$27.9 |
|
$22.5 |
|
$16.7 |
|
68% |
Gross Profit |
$12.8 |
|
$9.5 |
|
$11.5 |
|
$8.4 |
|
11% |
Gross Margin |
25% |
|
25% |
|
34% |
|
34% |
|
-25% |
SG&A |
$10.4 |
|
$7.7 |
|
$9.3 |
|
$6.8 |
|
12% |
Net income (loss) |
$1.1 |
|
$0.8 |
|
($0.1) |
|
($0.1) |
|
-1200% |
Adjusted EBITDA (1) |
$5.5 |
|
$4.1 |
|
$5.3 |
|
$3.9 |
|
4% |
Adjusted EBITDA Margin
(1) |
11% |
|
11% |
|
16% |
|
16% |
|
-30% |
Free Cash Flow |
$6.3 |
|
$4.6 |
|
$5.3 |
|
$1.3 |
|
20% |
1 Adjusted EBITDA is not a recognized earnings
measure and does not have a standard meaning prescribed in by
GAAP.
Canadian Cannabis’ Percent of Sales by
Channel
(millions except %
metrics) |
Three Months Ended March 31, |
|
|
|
2024 |
2023 |
|
|
|
CAD $ |
|
USD $ |
|
CAD $ |
|
USD $ |
|
Change of C $ |
Retail Branded Sales |
$59.7 |
|
$44.2 |
|
$46.7 |
|
$34.5 |
|
28% |
International Sales |
$2.0 |
|
$1.5 |
|
$2.3 |
|
$1.7 |
|
-13% |
Non-Branded Sales |
$8.7 |
|
$6.5 |
|
$3.1 |
|
$2.3 |
|
181% |
Other |
$0.6 |
|
$0.4 |
|
$0.5 |
|
$0.4 |
|
20% |
Less: Excise Taxes |
($20.5) |
|
($15.2) |
|
($18.6) |
|
($13.8) |
|
10% |
Net Sales |
$50.5 |
|
$37.4 |
|
$34.0 |
|
$25.1 |
|
49% |
|
Presentation of Financial Results
The Company’s financial statements for the three
months ended March 31, 2024, as well as the comparative periods for
2023, have been prepared and presented under United States
Generally Accepted Accounting Principals (“GAAP”).
RESULTS OF OPERATIONS (In thousands of U.S.
dollars, except per share amounts, and unless otherwise noted)
Consolidated Financial Performance
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
Sales |
|
$ |
78,077 |
|
|
$ |
64,656 |
|
Cost of sales |
|
|
(62,564 |
) |
|
|
(52,356 |
) |
Gross margin |
|
|
15,513 |
|
|
|
12,300 |
|
Selling, general and
administrative expenses |
|
|
(16,387 |
) |
|
|
(17,405 |
) |
Interest expense |
|
|
(917 |
) |
|
|
(1,133 |
) |
Interest income |
|
|
206 |
|
|
|
196 |
|
Foreign exchange loss |
|
|
(878 |
) |
|
|
(69 |
) |
Other income (expense),
net |
|
|
104 |
|
|
|
30 |
|
Loss before taxes and loss
from equity method investments |
|
|
(2,359 |
) |
|
|
(6,081 |
) |
Provision for income
taxes |
|
|
(320 |
) |
|
|
(634 |
) |
Loss including non-controlling
interests and before equity losses |
|
|
(2,679 |
) |
|
|
(6,715 |
) |
Less: net (income) loss
attributable to non-controlling interests, net of tax |
|
|
(173 |
) |
|
|
79 |
|
Net loss attributable to
Village Farms International Inc. |
|
$ |
(2,852 |
) |
|
$ |
(6,636 |
) |
Adjusted EBITDA (1) |
|
$ |
3,591 |
|
|
$ |
519 |
|
Basic loss per share |
|
$ |
(0.03 |
) |
|
$ |
(0.06 |
) |
Diluted loss per share |
|
$ |
(0.03 |
) |
|
$ |
(0.06 |
) |
1 Adjusted EBITDA is a not recognized earnings measure and does
not have a standardized meaning prescribed by GAAP. Therefore,
Adjusted EBITDA may not be comparable to similar measures presented
by other issuers. Management believes that Adjusted EBITDA is a
useful supplemental measure in evaluating the performance of the
Company because it excludes non-recurring and other items that do
not reflect our business performance. Adjusted EBITDA includes the
Company’s 70% interest in Rose LifeScience and 85% interest
Leli.
We caution that our results of operations for
the three months ended March 31, 2024, and 2023 may not be
indicative of our future performance.
SEGMENTED RESULTS OF OPERATIONS(In thousands of
U.S. dollars, except per share amounts, and unless otherwise
noted)
|
For The Three Months Ended March 31,
2024 |
|
|
VF Fresh(Produce) |
|
|
CannabisCanada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
Sales |
$ |
36,094 |
|
|
$ |
37,446 |
|
|
$ |
4,537 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
78,077 |
|
Cost of sales |
|
(32,784 |
) |
|
|
(27,938 |
) |
|
|
(1,842 |
) |
|
|
— |
|
|
|
— |
|
|
|
(62,564 |
) |
Selling, general and
administrative expenses |
|
(2,693 |
) |
|
|
(7,704 |
) |
|
|
(3,406 |
) |
|
|
(20 |
) |
|
|
(2,564 |
) |
|
|
(16,387 |
) |
Other (expense) income,
net |
|
(503 |
) |
|
|
(401 |
) |
|
|
— |
|
|
|
— |
|
|
|
(581 |
) |
|
|
(1,485 |
) |
Operating income (loss) |
|
114 |
|
|
|
1,403 |
|
|
|
(711 |
) |
|
|
(20 |
) |
|
|
(3,145 |
) |
|
|
(2,359 |
) |
(Provision for) recovery of
income taxes |
|
— |
|
|
|
(329 |
) |
|
|
— |
|
|
|
— |
|
|
|
9 |
|
|
|
(320 |
) |
Income (loss) from
consolidated entities |
|
114 |
|
|
|
1,074 |
|
|
|
(711 |
) |
|
|
(20 |
) |
|
|
(3,136 |
) |
|
|
(2,679 |
) |
Less: net (income) loss
attributable to non-controlling interests, net of tax |
|
— |
|
|
|
(227 |
) |
|
|
— |
|
|
|
— |
|
|
|
54 |
|
|
|
(173 |
) |
Net income (loss) |
$ |
114 |
|
|
$ |
847 |
|
|
$ |
(711 |
) |
|
$ |
(20 |
) |
|
$ |
(3,082 |
) |
|
$ |
(2,852 |
) |
Adjusted EBITDA (1) |
$ |
2,028 |
|
|
$ |
4,073 |
|
|
$ |
(615 |
) |
|
$ |
(20 |
) |
|
$ |
(1,875 |
) |
|
$ |
3,591 |
|
Basic income (loss) per
share |
$ |
0.00 |
|
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
Diluted income (loss) per
share |
$ |
0.00 |
|
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
|
For The Three Months Ended March 31,
2023 |
|
|
VF Fresh(Produce) |
|
|
CannabisCanada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
Sales |
$ |
34,567 |
|
|
$ |
25,112 |
|
|
$ |
4,977 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
64,656 |
|
Cost of sales |
|
(33,952 |
) |
|
|
(16,658 |
) |
|
|
(1,739 |
) |
|
|
(7 |
) |
|
|
— |
|
|
|
(52,356 |
) |
Selling, general and
administrative expenses |
|
(2,916 |
) |
|
|
(6,848 |
) |
|
|
(3,617 |
) |
|
|
(29 |
) |
|
|
(3,995 |
) |
|
|
(17,405 |
) |
Other (expense) income,
net |
|
(544 |
) |
|
|
(604 |
) |
|
|
3 |
|
|
|
— |
|
|
|
169 |
|
|
|
(976 |
) |
Operating (loss) income |
|
(2,845 |
) |
|
|
1,002 |
|
|
|
(376 |
) |
|
|
(36 |
) |
|
|
(3,826 |
) |
|
|
(6,081 |
) |
Recovery of (provision for)
income taxes |
|
226 |
|
|
|
(1,138 |
) |
|
|
— |
|
|
|
— |
|
|
|
278 |
|
|
|
(634 |
) |
Loss from consolidated
entities |
|
(2,619 |
) |
|
|
(136 |
) |
|
|
(376 |
) |
|
|
(36 |
) |
|
|
(3,548 |
) |
|
|
(6,715 |
) |
Less: net loss attributable to
non-controlling interests, net of tax |
|
— |
|
|
|
31 |
|
|
|
— |
|
|
|
— |
|
|
|
48 |
|
|
|
79 |
|
Net loss |
$ |
(2,619 |
) |
|
$ |
(105 |
) |
|
$ |
(376 |
) |
|
$ |
(36 |
) |
|
$ |
(3,500 |
) |
|
$ |
(6,636 |
) |
Adjusted EBITDA (1) |
$ |
(995 |
) |
|
$ |
3,910 |
|
|
$ |
(151 |
) |
|
$ |
(36 |
) |
|
$ |
(2,209 |
) |
|
$ |
519 |
|
Basic loss per share |
$ |
(0.03 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.06 |
) |
Diluted loss per share |
$ |
(0.03 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.06 |
) |
1 Adjusted EBITDA is not a recognized earnings measure and does
not have a standardized meaning prescribed by GAAP. Therefore,
Adjusted EBITDA may not be comparable to similar measures presented
by other issuers. Management believes that Adjusted EBITDA is a
useful supplemental measure in evaluating the performance of the
Company because it excludes non-recurring and other items that do
not reflect our business performance. Adjusted EBITDA includes the
Company’s 70% interest in Rose LifeScience and 85% interest
Leli.
A detailed discussion of our consolidated and
segment results can be found in the 10Q MD&A on the Village
Farms website under Financial Reports
(https://villagefarms.com/financial-reports/) within the Investors
section.
Reconciliation of Net Income to Adjusted
EBITDA
The following tables reflects a reconciliation
of net income to Adjusted EBITDA, as presented by the Company:
|
For The Three Months Ended March 31,
2024 |
|
(in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
Net income (loss) |
$ |
114 |
|
|
$ |
847 |
|
|
$ |
(711 |
) |
|
$ |
(20 |
) |
|
$ |
(3,082 |
) |
|
$ |
(2,852 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
1,334 |
|
|
|
2,271 |
|
|
|
54 |
|
|
|
— |
|
|
|
60 |
|
|
|
3,719 |
|
Foreign currency exchange gain |
|
9 |
|
|
|
27 |
|
|
|
— |
|
|
|
— |
|
|
|
735 |
|
|
|
771 |
|
Interest expense (income), net |
|
571 |
|
|
|
306 |
|
|
|
— |
|
|
|
— |
|
|
|
(154 |
) |
|
|
723 |
|
Provision for (recovery of) income taxes |
|
— |
|
|
|
329 |
|
|
|
— |
|
|
|
— |
|
|
|
(9 |
) |
|
|
320 |
|
Provision for income taxes attributable to non-controlling
interest |
|
— |
|
|
|
(99 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(99 |
) |
Share-based compensation |
|
— |
|
|
|
22 |
|
|
|
42 |
|
|
|
— |
|
|
|
308 |
|
|
|
372 |
|
Interest expense for JV's |
|
— |
|
|
|
(8 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8 |
) |
Amortization for JVs |
|
— |
|
|
|
367 |
|
|
|
— |
|
|
|
— |
|
|
|
267 |
|
|
|
634 |
|
Foreign currency exchange loss for JVs |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
Share-based compensation for JV's |
|
— |
|
|
|
23 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
23 |
|
Other expenses for JV's |
|
— |
|
|
|
(25 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25 |
) |
Deferred financing fees |
|
— |
|
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
Adjusted EBITDA (1) |
$ |
2,028 |
|
|
$ |
4,073 |
|
|
$ |
(615 |
) |
|
$ |
(20 |
) |
|
$ |
(1,875 |
) |
|
$ |
3,591 |
|
|
For The Three Months Ended March 31,
2023 |
|
(in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
Net loss |
$ |
(2,619 |
) |
|
$ |
(105 |
) |
|
$ |
(376 |
) |
|
$ |
(36 |
) |
|
$ |
(3,500 |
) |
|
$ |
(6,636 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
1,254 |
|
|
|
1,790 |
|
|
|
139 |
|
|
|
— |
|
|
|
61 |
|
|
|
3,244 |
|
Foreign currency exchange loss (gain) |
|
53 |
|
|
|
(13 |
) |
|
|
19 |
|
|
|
— |
|
|
|
(26 |
) |
|
|
33 |
|
Interest expense (income), net |
|
543 |
|
|
|
561 |
|
|
|
(24 |
) |
|
|
— |
|
|
|
(143 |
) |
|
|
937 |
|
(Recovery of) provision for income taxes |
|
(226 |
) |
|
|
1,138 |
|
|
|
— |
|
|
|
— |
|
|
|
(278 |
) |
|
|
634 |
|
Share-based compensation |
|
— |
|
|
|
144 |
|
|
|
90 |
|
|
|
— |
|
|
|
1,449 |
|
|
|
1,683 |
|
Amortization for JVs |
|
— |
|
|
|
332 |
|
|
|
— |
|
|
|
— |
|
|
|
228 |
|
|
|
560 |
|
Foreign currency exchange loss for JVs |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Share-based compensation for JV's |
|
— |
|
|
|
34 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
Other expense, net for JV's |
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
Deferred financing fees |
|
— |
|
|
|
34 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
Other expense, net |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Adjusted EBITDA (1) |
$ |
(995 |
) |
|
$ |
3,910 |
|
|
$ |
(151 |
) |
|
$ |
(36 |
) |
|
$ |
(2,209 |
) |
|
$ |
519 |
|
1 Adjusted EBITDA is not a recognized earnings measure and does
not have a standardized meaning prescribed by GAAP. Therefore,
Adjusted EBITDA may not be comparable to similar measures presented
by other issuers. Management believes that Adjusted EBITDA is a
useful supplemental measure in evaluating the performance of the
Company because it excludes non-recuring and other items that do
not reflect our business performance. Adjusted EBITDA includes the
Company’s 70% interest in Rose LifeScience since acquisition and
85% interest in Leli since acquisition.
This press release is intended to be read in
conjunction with the Company’s Consolidated Financial Statements
("Financial Statements”) and Management’s Discussion & Analysis
("MD&A”) for the three months ended March 31, 2024 in the
Company Form 10-Q, which will be filed on (www.sec.gov/edgar.shtml)
and SEDAR (www.sedar.com) and will be available at
www.villagefarms.com.
Conference Call
Village Farms’ management team will host a
conference call to discuss its first quarter financial results
today, Wednesday, May 8, 2024, at 8:30 a.m. ET. Participants can
access the conference call by telephone at (800) 715-9871 or (646)
307-1963, or via the Internet at
https://edge.media-server.com/mmc/p/jeaqt3fm/ (conference ID
7790112).
The live question and answer session will be
limited to analysts; however, others are invited to submit
questions ahead of the conference call via email at
investorrelations@villagefarms.com. Management will address
questions received via email during the question and answer session
as time permits.
Conference Call Archive Access Information
For those unable to participate in the conference call at the
scheduled time, it will be archived for replay beginning
approximately one hour following completion of the call on Village
Farms’ web site at
http://villagefarms.com/investor-relations/investor-calls.
About Village Farms
International
Village Farms leverages decades of experience as
a large-scale, Controlled Environment Agriculture-based, vertically
integrated supplier for high-value, high-growth plant-based
Consumer Packaged Goods opportunities, with a strong foundation as
a leading fresh produce supplier to grocery and large-format
retailers throughout the US and Canada, and new high-growth
opportunities in the cannabis and CBD categories in North America,
the Netherlands and selected markets internationally.
In Canada, the Company's wholly-owned Canadian
subsidiary, Pure Sunfarms, is one of the single largest cannabis
operations in the world, the lowest-cost greenhouse producer and
one of Canada’s best-selling brands. The Company also owns 70% of
Québec-based, Rose LifeScience, a leading third-party cannabis
products commercialization expert in the Province of Québec.
In the US, wholly-owned Balanced Health
Botanicals is one of the leading CBD brands and e-commerce
platforms in the country. Subject to compliance with all applicable
US federal and state laws and stock exchange rules, Village Farms
plans to enter the US high-THC cannabis market via multiple
strategies, leveraging one of the largest greenhouse operations in
the country (more than 5.5 million square feet in West Texas), as
well as the operational and product expertise gained through Pure
Sunfarms' cannabis success in Canada.
Internationally, Village Farms is targeting
selected, nascent, legal cannabis and CBD opportunities with
significant medium- and long-term potential, with an initial focus
on the Asia-Pacific region and Europe.
Cautionary Statement Regarding
Forward-Looking Information
As used in this Press Release, the terms
“Village Farms”, “Village Farms International”, the “Company”,
“we”, “us”, “our” and similar references refer to Village Farms
International, Inc. and our consolidated subsidiaries, and the term
“Common Shares” refers to our common shares, no par value. Our
financial information is presented in U.S. dollars and all
references in this Press Release to “$” means U.S. dollars and all
references to “C$” means Canadian dollars.
This Press Release contains forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995, Section 27A of the U.S.
Securities Act of 1933, as amended, (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and is subject to the safe harbor created by those
sections. This Press Release also contains "forward-looking
information" within the meaning of applicable Canadian securities
laws. We refer to such forward-looking statements and
forward-looking information collectively as "forward-looking
statements". Forward-looking statements may relate to the Company's
future outlook or financial position and anticipated events or
results and may include statements regarding the financial
position, business strategy, budgets, expansion plans, litigation,
projected production, projected costs, capital expenditures,
financial results, taxes, plans and objectives of or involving the
Company. Particularly, statements regarding future results,
performance, achievements, prospects or opportunities for the
Company, the greenhouse vegetable or produce industry or the
cannabis industry are forward-looking statements. In some cases,
forward-looking information can be identified by such terms as
"can", "outlook", "may", "might", "will", "could", "should",
"would", "occur", "expect", "plan", "anticipate", "believe",
"intend", "try", "estimate", "predict", "potential", "continue",
"likely", "schedule", "objectives", or the negative or grammatical
variation thereof or other similar expressions concerning matters
that are not historical facts. The forward-looking statements in
this Press Release are subject to risks that may include, but are
not limited to: our limited operating history in the cannabis and
cannabinoids industry, including that of Pure Sunfarms, Inc. (“Pure
Sunfarms”), Rose LifeScience Inc. (“Rose” or “Rose LifeScience”)
and Balanced Health Botanicals, LLC (“Balanced Health”); the legal
status of the cannabis business of Pure Sunfarms and Rose and the
hemp business of Balanced Health; risks relating to the integration
of Balanced Health and Rose into our consolidated business; risks
relating to obtaining additional financing, including our
dependence upon credit facilities; potential difficulties in
achieving and/or maintaining profitability; variability of product
pricing; risks inherent in the cannabis, hemp, CBD, cannabinoids,
and agricultural businesses; market position; ability to leverage
current business relationships for future business involving hemp
and cannabinoids; the ability of Pure Sunfarms and Rose to
cultivate and distribute cannabis in Canada; existing and new
governmental regulations, including risks related to regulatory
compliance and regarding obtaining and maintaining licenses; legal
and operational risks relating to expected conversion of our
greenhouses to cannabis production in Canada and in the United
States; risks related to rules and regulations at the US federal
(Food and Drug Administration and United States Department of
Agriculture), state and municipal rules and regulations with
respect to produce and hemp, cannabidiol-based products
commercialization; retail consolidation, technological advances and
other forms of competition; transportation disruptions; product
liability and other potential litigation; retention of key
executives; labor issues; uninsured and underinsured losses;
vulnerability to rising energy costs; inflationary effects on costs
of cultivation and transportation; recessionary effects on demand
of our products; environmental, health and safety risks, foreign
exchange exposure, risks associated with cross-border trade;
difficulties in managing our growth; restrictive covenants under
our credit facilities; natural catastrophes; the ongoing COVID-19
pandemic; and tax risks.
The Company has based these forward-looking
statements on factors and assumptions about future events and
financial trends that it believes may affect its financial
condition, results of operations, business strategy and financial
needs. Although the forward-looking statements contained in this
Press Release are based upon assumptions that management believes
are reasonable based on information currently available to
management, there can be no assurance that actual results will be
consistent with these forward-looking statements. Forward-looking
statements necessarily involve known and unknown risks and
uncertainties, many of which are beyond the Company's control,
which may cause the Company's or the industry's actual results,
performance, achievements, prospects and opportunities in future
periods to differ materially from those expressed or implied by
such forward-looking statements. These risks and uncertainties
include, among other things, the factors contained in the Company's
filings with securities regulators, including this Press
Release.
When relying on forward-looking statements to
make decisions, the Company cautions readers not to place undue
reliance on these statements, as forward-looking statements involve
significant risks and uncertainties and should not be read as
guarantees of future results, performance, achievements, prospects
and opportunities. The forward-looking statements made in this
Press Release relate only to events or information as of the date
on which the statements are made in this Press Release. Except as
required by law, the Company undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, after the date on
which the statements are made or to reflect the occurrence of
unanticipated events.
Contact Information
Lawrence ChamberlainInvestor
RelationsLodeRock Advisors(416)
519-4196lawrence.chamberlain@loderockadvisors.com |
Village Farms International, Inc.
Consolidated Statements of Financial Position
(In thousands of United States dollars, except share
data) (Unaudited) |
|
|
|
March 31, 2024 |
|
December 31, 2023 |
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
26,685 |
|
|
$ |
30,291 |
|
Restricted cash |
|
|
5,000 |
|
|
|
5,000 |
|
Trade receivables |
|
|
38,826 |
|
|
|
30,561 |
|
Inventories |
|
|
74,029 |
|
|
|
78,472 |
|
Other receivables |
|
|
115 |
|
|
|
294 |
|
Prepaid expenses and deposits |
|
|
6,197 |
|
|
|
7,150 |
|
Total current assets |
|
|
150,852 |
|
|
|
151,768 |
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
|
|
201,020 |
|
|
|
205,613 |
|
Investments |
|
|
2,656 |
|
|
|
2,656 |
|
Goodwill |
|
|
54,942 |
|
|
|
55,918 |
|
Intangibles |
|
|
30,778 |
|
|
|
32,275 |
|
Deferred tax asset |
|
|
4,201 |
|
|
|
4,201 |
|
Right-of-use assets |
|
|
11,944 |
|
|
|
12,596 |
|
Other assets |
|
|
2,046 |
|
|
|
1,962 |
|
Total assets |
|
$ |
458,439 |
|
|
$ |
466,989 |
|
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Line of credit |
|
$ |
4,000 |
|
|
$ |
4,000 |
|
Trade payables |
|
|
19,935 |
|
|
|
21,753 |
|
Current maturities of long-term debt |
|
|
8,866 |
|
|
|
9,133 |
|
Accrued sales taxes |
|
|
21,331 |
|
|
|
15,941 |
|
Accrued loyalty program |
|
|
1,668 |
|
|
|
1,773 |
|
Accrued liabilities |
|
|
12,024 |
|
|
|
15,076 |
|
Lease liabilities - current |
|
|
2,243 |
|
|
|
2,112 |
|
Income tax payable |
|
|
47 |
|
|
|
28 |
|
Other current liabilities |
|
|
2,561 |
|
|
|
2,340 |
|
Total current liabilities |
|
|
72,675 |
|
|
|
72,156 |
|
Non-current liabilities |
|
|
|
|
Long-term debt |
|
|
37,217 |
|
|
|
38,925 |
|
Deferred tax liability |
|
|
23,553 |
|
|
|
23,730 |
|
Lease liabilities - non-current |
|
|
10,534 |
|
|
|
11,335 |
|
Other liabilities |
|
|
2,044 |
|
|
|
1,902 |
|
Total liabilities |
|
|
146,023 |
|
|
|
148,048 |
|
Commitments and contingencies |
|
|
|
|
MEZZANINE
EQUITY |
|
|
|
|
Redeemable non-controlling interest |
|
|
15,627 |
|
|
|
15,667 |
|
SHAREHOLDERS’
EQUITY |
|
|
|
|
Common stock, no par value per share - unlimited shares authorized;
110,248,929 shares issued and outstanding at March 31, 2024 and
December 31, 2023. |
|
|
386,719 |
|
|
|
386,719 |
|
Additional paid in capital |
|
|
26,016 |
|
|
|
25,611 |
|
Accumulated other comprehensive loss |
|
|
(7,503 |
) |
|
|
(3,540 |
) |
Retained earnings |
|
|
(109,017 |
) |
|
|
(106,165 |
) |
Total Village Farms International, Inc. shareholders’ equity |
|
|
296,215 |
|
|
|
302,625 |
|
Non-controlling interest |
|
|
574 |
|
|
|
649 |
|
Total shareholders’ equity |
|
|
296,789 |
|
|
|
303,274 |
|
Total liabilities, mezzanine equity and shareholders’ equity |
|
$ |
458,439 |
|
|
$ |
466,989 |
|
Village Farms International, Inc.
Consolidated Statements of Operations and Comprehensive
Income (Loss)(In thousands of United States
dollars, except per share data)
(Unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Sales |
|
$ |
78,077 |
|
|
$ |
64,656 |
|
Cost of sales |
|
|
(62,564 |
) |
|
|
(52,356 |
) |
Gross profit |
|
|
15,513 |
|
|
|
12,300 |
|
Selling, general and
administrative expenses |
|
|
(16,387 |
) |
|
|
(17,405 |
) |
Interest expense |
|
|
(917 |
) |
|
|
(1,133 |
) |
Interest income |
|
|
206 |
|
|
|
196 |
|
Foreign exchange loss,
net |
|
|
(878 |
) |
|
|
(69 |
) |
Other income (expense) |
|
|
104 |
|
|
|
30 |
|
Loss before taxes |
|
|
(2,359 |
) |
|
|
(6,081 |
) |
Provision for income
taxes |
|
|
(320 |
) |
|
|
(634 |
) |
Loss including non-controlling
interests |
|
|
(2,679 |
) |
|
|
(6,715 |
) |
Less: net (income) loss
attributable to non-controlling interests, net of tax |
|
|
(173 |
) |
|
|
79 |
|
Net loss attributable to
Village Farms International, Inc. shareholders |
|
$ |
(2,852 |
) |
|
$ |
(6,636 |
) |
Basic loss per share
attributable to Village Farms International, Inc. shareholders |
|
$ |
(0.03 |
) |
|
$ |
(0.06 |
) |
Diluted loss per share
attributable to Village Farms International, Inc. shareholders |
|
$ |
(0.03 |
) |
|
$ |
(0.06 |
) |
Weighted average number of
common shares used in the computation of net loss per share (in
thousands): |
|
|
|
|
Basic |
|
|
110,249 |
|
|
|
104,097 |
|
Diluted |
|
|
110,249 |
|
|
|
104,097 |
|
Loss including non-controlling
interests |
|
$ |
(2,679 |
) |
|
$ |
(6,715 |
) |
Other comprehensive (loss)
income: |
|
|
|
|
Foreign currency translation adjustment |
|
|
(4,251 |
) |
|
|
862 |
|
Comprehensive loss including
non-controlling interests |
|
|
(6,930 |
) |
|
|
(5,853 |
) |
Comprehensive loss (income) attributable to non-controlling
interests |
|
|
115 |
|
|
|
(42 |
) |
Comprehensive loss
attributable to Village Farms International, Inc. shareholders |
|
$ |
(6,815 |
) |
|
$ |
(5,895 |
) |
Village Farms International, Inc.
Consolidated Statements of Cash Flows (In
thousands of United States dollars)
(Unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows provided by
(used in) operating activities: |
|
|
|
|
Net loss attributable to Village Farms International, Inc.
shareholders |
|
$ |
(2,852 |
) |
|
$ |
(6,636 |
) |
Adjustments to reconcile net loss attributable to Village Farms
International, Inc. shareholders to net cash provided by (used in)
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
4,558 |
|
|
|
3,986 |
|
Amortization of deferred charges |
|
|
10 |
|
|
|
34 |
|
Net loss attributable to non-controlling interest |
|
|
173 |
|
|
|
(79 |
) |
Interest expense |
|
|
917 |
|
|
|
1,133 |
|
Interest paid on long-term debt |
|
|
(1,062 |
) |
|
|
(1,511 |
) |
Unrealized foreign exchange loss |
|
|
130 |
|
|
|
(13 |
) |
Loss on disposal of assets |
|
|
— |
|
|
|
4 |
|
Non-cash lease expense |
|
|
631 |
|
|
|
(4 |
) |
Share-based compensation |
|
|
405 |
|
|
|
1,732 |
|
Deferred income taxes |
|
|
330 |
|
|
|
(734 |
) |
Changes in non-cash working capital items |
|
|
(3,290 |
) |
|
|
(1,580 |
) |
Net cash used in operating activities |
|
|
(50 |
) |
|
|
(3,668 |
) |
Cash flows used in
investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
|
(1,876 |
) |
|
|
(1,076 |
) |
Net cash used in investing activities |
|
|
(1,876 |
) |
|
|
(1,076 |
) |
Cash flows (used in)
provided by financing activities: |
|
|
|
|
Repayments on borrowings |
|
|
(1,442 |
) |
|
|
(4,788 |
) |
Proceeds from issuance of common stock and warrants |
|
|
— |
|
|
|
24,772 |
|
Issuance costs |
|
|
— |
|
|
|
(1,437 |
) |
Proceeds from exercise of stock options |
|
|
— |
|
|
|
83 |
|
Net cash (used in) provided by financing activities |
|
|
(1,442 |
) |
|
|
18,630 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(238 |
) |
|
|
(678 |
) |
Net (decrease)
increase in cash, cash equivalents and restricted
cash |
|
|
(3,606 |
) |
|
|
13,208 |
|
Cash, cash equivalents
and restricted cash, beginning of period |
|
|
35,291 |
|
|
|
21,676 |
|
Cash, cash equivalents
and restricted cash, end of period |
|
$ |
31,685 |
|
|
$ |
34,884 |
|
Village Farms (NASDAQ:VFF)
過去 株価チャート
から 5 2024 まで 6 2024
Village Farms (NASDAQ:VFF)
過去 株価チャート
から 6 2023 まで 6 2024