- Village Farms' Canadian Cannabis Business Becomes #3
Producer in Canada Across All
Product Categories for Third Quarter and #1 in
October1
- Canadian Cannabis Retail Branded Sales
Increased 46% Year-Over-Year and 26%
Sequentially
- Quebec Business, Rose LifeScience, Becomes #2 LP in
Quebec in
October2
- Canadian Cannabis Launches Soar, Its Third Major New
Brand This Year
- Completion of Continuance into the Province of Ontario
VANCOUVER, BC, Nov. 9, 2022
/PRNewswire/ - Village Farms International, Inc. ("Village
Farms" or the "Company") (NASDAQ: VFF) (TSX: VFF) today announced
its financial results for the third quarter ended
September 30, 2022. All figures are in U.S. dollars
unless otherwise indicated.
Management Commentary
"The strong performance in our Canadian Cannabis business in the
third quarter reflects the successful execution of our growth
strategy and investments as we achieved another sales record,
outstanding growth in retail sales, and our 16th consecutive
quarter of positive adjusted EBITDA," said Michael DeGiglio, Chief Executive Officer,
Village Farms. "Our growth in retail branded sales continues
to be driven by multiple factors. Pure Sunfarms, which remains the
best-selling dried flower-brand nationwide, grew market share with
consumer-preferred innovations. We launched the first SKUs in our
new brand targeting the value segment of the market, The Original
Fraser Valley Weed Co., which has already contributed to expanding
our number one dried flower market share positions in BC and
Alberta. In Quebec, Rose LifeScience became the number two
selling licensed producer in October, less than one year after our
majority acquisition, as it launched new products across its
brands, including the highly successful Promenade brand in
collaboration with Pure Sunfarms. All of this contributed to
Village Farms becoming the number one selling cannabis company in
Canada across all product
categories in October."
"As our spending on major brand launches subsides and with
completion of our investment in 100% hang-dry product, we remain
focused on prudent cost management to further enhance profitability
over the near- and long-terms and invest in future growth. We
continue to refine our operating model to further expand our
leading market share and profitability status. We expect to
contribute to industry growth through consumer-led innovation like
our new Soar brand being unveiled this week."
"In our U.S. Cannabis business, Balanced Health Botanicals
continues to perform well despite the challenging consumer
environment. We remain focused on cultivating our customer
base and managing our costs as we pursue new sales opportunities
and introduce new products such as the recently launched second
product in the Synergy+ line, Deep Sleep Synergy+."
"Internationally, we continue to steadily move forward on
multiple opportunities in select additional markets. Sales to
Australia have accelerated through
this year spurred by market growth and consumer brand affinity,
with third quarter sales more than tripling from the first quarter
of this year. We continue to progress towards
commencing shipments to Israel and Germany. And in the Netherlands, where we hold just one
of ten cultivation licenses granted under the Closed
Cannabis Supply Chain Experiment in that country, we are advancing
our plan to directly participate in what is expected to be the
first major European market to permit large-scale cannabis
cultivation and distribution for recreational purposes."
"Our Fresh Produce business continues to be impacted by a number
of significant pressures including input cost inflation, adequate
supply of product, which has challenged our ability to pass on
higher costs to customers, and the ongoing challenges of the Brown
Rugose tomato virus that is impacting growers globally. We are
encouraged by the progress of the operational review we initiated
late summer of this year with the goal of optimizing the
profitability of this business. We believe strongly in the
potential of these operations, especially for their optionality and
considerably greater value as part of our cannabis strategy in a
national or Texas state legal
cannabis market in which we can participate."
1. Based on estimated
retail sales from HiFyre and Weed Crawler, as of October 31,
2022.
|
2. Based on estimated
retail sales from Weed Crawler, as of October 31, 2022.
|
THIRD QUARTER 2022 FINANCIAL HIGHLIGHTS
(All
comparable periods are for the third quarter
of 2021)
Consolidated
- Consolidated sales were $71.1
million, a decrease of (2)% from $72.4 million; on a constant currency basis,
consolidated sales were essentially unchanged from the previous
year;
- Consolidated net loss was ($8.7
million), or ($0.10) per share
compared with net income of $0.8
million), or $0.01 per share;
and,
- Consolidated adjusted EBITDA was negative ($2.2 million) compared with positive adjusted
EBITDA of $6.9 million.
Cannabis Segment
- Total Cannabis segment net sales increased 14% year-over-year
to $35.5 million, representing 50% of
total Village Farms sales; and
- Total Cannabis segment adjusted EBITDA was $5.4 million compared with $9.4 million.
Canadian Cannabis (Pure Sunfarms and Rose
LifeScience)
- Canadian Cannabis net sales increased 15% to a record
$30.4 million (C$38.0 million), with a gross margin of 32%
(within the Company's stated target range) and adjusted EBITDA of
$5.4 million (C$6.7 million); and,
- Canadian Cannabis retail branded sales increased 46%
year-over-year and 26% sequentially.
U.S. Cannabis (Balanced Health Botanicals and VF
Hemp)
- U.S. Cannabis net sales were $5.1
million, with a gross margin of 69% and adjusted EBITDA of
nil compared with net sales of $3.9
million, with a gross margin of 68% and adjusted EBITDA of
$0.7 million. (Comparative results
for the third quarter of 2021 include the contribution of Balance
Health for the period August 16 through
September 30 following the acquisition of Balanced Health
Botanicals by Village Farms.)
Village Farms Fresh (Produce)
- Sales were $35.5 million compared
with $41.0, primarily due to lower
volumes (including a lower percentage of higher priced specialty
tomatoes), and adjusted EBITDA was negative ($4.9 million) compared with $1.3 million.
STRATEGIC GROWTH AND OPERATIONAL HIGHLIGHTS
Canadian Cannabis
- Total Canadian Cannabis market share grew steadily throughout
the quarter and continued in October, marking four straight months
of expansion, with Village Farms becoming the third best-selling
cannabis producer in Canada across
all product categories for the third quarter and was the
top-selling cannabis producer in Canada across all product categories in
October1;
- Pure Sunfarms maintained its number one brand position for
dried flower in Canada and
continued to expand its market share in key provinces like
Ontario, Alberta and British
Columbia;
- Rose LifeScience expanded market share of its brands in
Quebec becoming the number two
licensed producer in Quebec in
October[2], driven by the Promenade, Pure Laine Cannabis and
Tam Tams brands;
- The roll-out of our second BC-grown brand, The Original Fraser
Valley Weed Co., focused on the value segment of the market,
contributed to market share expansion in BC and Alberta, and was recently launched in
Ontario;
- The Pure Sunfarms brand expanded into the provinces and
territories of Yukon, Northwest
Territories, New Brunswick, Newfoundland and
Labrador while Rose LifeScience launched select brands in the
provinces and territories of Yukon, Northwest
Territories and New
Brunswick; and,
- Pure Sunfarms placed number 17 of 430 companies, and was ranked
the fastest growing cannabis company, by The Globe and Mail Report
on Business' 2022 ranking of Canada's Top Growing Companies.
U.S. Cannabis
- Balanced Health Botanicals launched the second product in its
Synergy+ line. Deep Sleep Synergy+ is positioned to help customers
fall asleep, and stay asleep, using plant-based ingredients to
promote a refreshing slumber.
International Cannabis
- Sales to Australia during the
third quarter more than tripled from the first quarter of 2022 by
both volume and dollars.
3. Based on estimated
retail sales from HiFyre and Weed Crawler, as of October 31,
2022.
|
4. Based on estimated
retail sales from Weed Crawler, as of October 31, 2022.
|
CANADIAN CANNABIS FINANCIAL PERFORMANCE SUMMARY
(millions except %
metrics)
|
Three Months Ended
September 30,
|
|
|
2022
|
2021
|
Change of
C$
|
|
C$
|
US$
|
C$
|
US$
|
|
Total Gross
Sales
|
$59.6
|
$45.5
|
$45.6
|
$36.2
|
+31 %
|
Total Net
Sales
|
$39.8
|
$30.4
|
$34.5
|
$27.4
|
+15 %
|
Total Cost of Sales
1
|
$26.8
|
$20.5
|
$19.5
|
$15.5
|
-38 %
|
Gross Margin
1
|
$12.9
|
$9.9
|
$15.0
|
$11.9
|
-14 %
|
Gross Margin %
1
|
32 %
|
33 %
|
44 %
|
44 %
|
-25 %
|
SG&A
|
$10.1
|
$7.6
|
$6.7
|
$5.3
|
-51 %
|
Share-based
compensation
|
$0.4
|
$0.3
|
$0.2
|
$0.2
|
-74 %
|
Net
income
|
$0.2
|
$0.2
|
$6.7
|
$5.7
|
-97 %
|
Adjusted EBITDA
2
|
$6.7
|
$5.4
|
$11.1
|
$8.8
|
-40 %
|
Adjusted EBITDA Margin
2
|
17 %
|
18 %
|
32 %
|
32 %
|
-47 %
|
(millions except %
metrics)
|
Nine Months Ended
September 30,
|
|
|
2022
|
2021
|
Change of
C$
|
|
C$
|
US$
|
C$
|
US$
|
|
Total Gross
Sales
|
$154.1
|
$119.7
|
$118.1
|
$94.5
|
+30 %
|
Total Net
Sales
|
$105.4
|
$82.0
|
$87.0
|
$69.6
|
+21 %
|
Total Cost of Sales
1
|
$70.5
|
$54.9
|
$53.3
|
$42.6
|
-32 %
|
Gross Margin
1
|
$34.8
|
$27.1
|
$33.7
|
$27.0
|
+4 %
|
Gross Margin %
1
|
33 %
|
33 %
|
39 %
|
39 %
|
-14 %
|
SG&A
|
$29.8
|
$22.9
|
$17.1
|
$13.7
|
-74 %
|
Share-based
compensation
|
$1.2
|
$0.9
|
$1.9
|
$1.5
|
+34 %
|
Net income
|
$4.3
|
$3.0
|
$7.1
|
$6.1
|
-46 %
|
Adjusted EBITDA
2
|
$13.1
|
$10.6
|
$23.7
|
$19.0
|
-45 %
|
Adjusted EBITDA Margin
2
|
12 %
|
13 %
|
27 %
|
27 %
|
-55 %
|
1.
|
Total cost of sales and
gross margin for the three months ended September 30, 2022 excludes
the C$362 (US$279) investment adjustment charge and for the nine
months ended September 30, 2022 excludes the C$4,477 (US$3,536)
positive inventory adjustment and for the three and nine months
ended September 30, 2021 excludes the (C$1,534) (US$1,217) and
C$2,291 (US$1,841), respectively, inventory adjustment charge from
the revaluation of inventory to fair value at the acquisition date
of November 2, 2020. Total cost of sales and gross margin for the
three and nine months ended September 30, 2022 excludes the
US$1,404 catch-up of intangible amortization resulting from the
September 30, 2022 finalization of Rose purchase price
accounting.
|
2.
|
Adjusted EBITDA is a
non-GAAP measure, is not a recognized earnings measure and does not
have a standard meaning prescribed in by GAAP. For a reconciliation
of Adjusted EBITDA to net income, see "Reconciliation of Net Income
to Adjusted EBITDA" below.
|
Canadian Cannabis' Percent of Sales by Product
Group1
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
Channel
|
2022
|
2021
|
2022
|
2021
|
Retail,
Flower
|
81 %
|
59 %
|
72 %
|
64 %
|
Retail,
Derivatives
|
4 %
|
7 %
|
5 %
|
9 %
|
Wholesale, Flower and
Trim
|
15 %
|
34 %
|
23 %
|
27 %
|
1.
Excludes Rose LifeScience commission-based revenue.
|
PRESENTATION OF FINANCIAL RESULTS
The Company's financial statements for the three and nine months
ended September 30, 2022, as well as
the comparative periods for 2021, have been prepared and presented
under United States Generally Accepted Accounting Principles
("GAAP"). Village Farms acquired 100% of Balanced Health Botanicals
on August 16, 2021 and their
operating results are consolidated in our Consolidated Statements
of Income (Loss) for the three and nine months ended September 30, 2022 as well as for August 16, 2021 through September 30, 2021 for the three and nine months
ended September 30, 2021. The Company
acquired 70% of Rose LifeScience on November
15, 2021 and their results are presented in the operations
of our consolidated wholly-owned subsidiaries and the minority
interest is presented in Net Income (Loss) Attributable to
Non-controlling Interests, Net of Tax for the three and nine months
ended September 30, 2022.
RESULTS OF OPERATIONS
(In thousands of U.S.
dollars, except per share amounts, and unless otherwise
noted)
Consolidated Financial Performance
|
|
Three Months
Ended
September 30,
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
2022
(1)
|
|
|
2021
(1)
|
|
|
2022
(1)
|
|
|
2021
(1)
|
|
Sales
|
|
$
|
71,056
|
|
|
$
|
72,442
|
|
|
$
|
224,115
|
|
|
$
|
195,212
|
|
Cost of
sales
|
|
|
(62,682)
|
|
|
|
(54,693)
|
|
|
|
(199,514)
|
|
|
|
(169,891)
|
|
Gross margin
|
|
|
8,374
|
|
|
|
17,749
|
|
|
|
24,601
|
|
|
|
25,321
|
|
Selling, general and
administrative expenses
|
|
|
(16,868)
|
|
|
|
(13,132)
|
|
|
|
(51,241)
|
|
|
|
(30,249)
|
|
Share-based
compensation
|
|
|
(926)
|
|
|
|
(1,820)
|
|
|
|
(3,004)
|
|
|
|
(5,705)
|
|
Interest
expense
|
|
|
(982)
|
|
|
|
(620)
|
|
|
|
(2,330)
|
|
|
|
(1,959)
|
|
Interest
income
|
|
|
60
|
|
|
|
50
|
|
|
|
129
|
|
|
|
99
|
|
Foreign exchange
loss
|
|
|
(1,963)
|
|
|
|
(324)
|
|
|
|
(2,171)
|
|
|
|
(635)
|
|
Other expense,
net
|
|
|
(17)
|
|
|
|
(119)
|
|
|
|
(14)
|
|
|
|
(354)
|
|
Impairments
(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
(29,799)
|
|
|
|
—
|
|
Write-off of joint
venture loan
|
|
|
—
|
|
|
|
—
|
|
|
|
(592)
|
|
|
|
—
|
|
Gain (loss) on disposal
of assets
|
|
|
7
|
|
|
|
—
|
|
|
|
7
|
|
|
|
(40)
|
|
Recovery of (provision
for) income taxes
|
|
|
3,183
|
|
|
|
(1,077)
|
|
|
|
14,563
|
|
|
|
2,543
|
|
(Loss) income from
consolidated entities
|
|
|
(9,132)
|
|
|
|
707
|
|
|
|
(49,851)
|
|
|
|
(10,979)
|
|
Less: net loss
attributable to non-controlling interests, net of tax
|
|
|
387
|
|
|
|
—
|
|
|
|
701
|
|
|
|
—
|
|
Income (loss) from
equity method investments
|
|
|
—
|
|
|
|
38
|
|
|
|
(2,667)
|
|
|
|
(175)
|
|
Net (loss) income
attributable to Village Farms International Inc.
|
|
$
|
(8,745)
|
|
|
$
|
745
|
|
|
$
|
(51,817)
|
|
|
$
|
(11,154)
|
|
Adjusted EBITDA
(3)
|
|
$
|
(2,233)
|
|
|
$
|
6,933
|
|
|
$
|
(18,358)
|
|
|
$
|
9,183
|
|
Basic (loss) income per
share
|
|
$
|
(0.10)
|
|
|
$
|
0.01
|
|
|
$
|
(0.59)
|
|
|
$
|
(0.14)
|
|
Diluted (loss) income
per share
|
|
$
|
(0.10)
|
|
|
$
|
0.01
|
|
|
$
|
(0.59)
|
|
|
$
|
(0.14)
|
|
|
|
1.
|
For the three and nine
months ended September 30, 2022, Balanced Health's financial
results are fully consolidated in the financial results of the
Company and Village Farms' share of Rose LifeScience's financial
results are fully consolidated in the financial results of the
Company with the minority non-controlling interest presented in net
loss attributable to non-controlling interests, net of tax. For the
three and nine months ended September 30, 2021, Balanced Health's
post-acquisition financial results for August 16, 2021 through
September 30, 2021 are fully consolidated in the financial results
of the Company.
|
2.
|
Consists of impairments
to goodwill of ($25,169) and intangible assets of ($4,630) that
were triggered by inflationary effects on consumer spending,
decreases in market capitalization of CBD companies and the
continued federal regulation lack of clarity with respect to CBD.
See Part 1, Item 1 Note 6 "Goodwill and Intangible Assets" for
additional details.
|
3.
|
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 65% interest in
VFH.
|
|
|
We caution that our results of operations for the three and nine
months ended September 30, 2022 and
2021 may not be indicative of our future performance, particularly
in light of the ongoing COVID-19 pandemic. We are currently unable
to assess the ultimate impact of the COVID-19 pandemic on our
business and our results of operations for future periods.
SEGMENTED RESULTS OF OPERATIONS
(In thousands of
U.S. dollars, except per share amounts, and unless otherwise
noted)
|
For the Three Months
Ended September 30, 2022
|
|
|
VF Fresh
(Produce)
|
|
|
Cannabis
Canada (1)
|
|
|
Cannabis
U.S. (1)
|
|
|
Clean
Energy
|
|
|
Corporate
|
|
|
Total
|
|
Sales
|
$
|
35,527
|
|
|
$
|
30,394
|
|
|
$
|
5,135
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71,056
|
|
Cost of
sales
|
|
(38,831)
|
|
|
|
(22,196)
|
|
|
|
(1,611)
|
|
|
|
(44)
|
|
|
|
—
|
|
|
|
(62,682)
|
|
Selling, general and
administrative expenses
|
|
(2,777)
|
|
|
|
(7,574)
|
|
|
|
(3,655)
|
|
|
|
(14)
|
|
|
|
(2,848)
|
|
|
|
(16,868)
|
|
Share-based
compensation
|
|
—
|
|
|
|
(311)
|
|
|
|
(65)
|
|
|
|
—
|
|
|
|
(550)
|
|
|
|
(926)
|
|
Other expense,
net
|
|
(344)
|
|
|
|
(513)
|
|
|
|
(142)
|
|
|
|
—
|
|
|
|
(1,896)
|
|
|
|
(2,895)
|
|
Recovery of (provision
for) income taxes
|
|
1,780
|
|
|
|
(38)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,441
|
|
|
|
3,183
|
|
Loss from consolidated
entities
|
|
(4,645)
|
|
|
|
(238)
|
|
|
|
(338)
|
|
|
|
(58)
|
|
|
|
(3,853)
|
|
|
|
(9,132)
|
|
Less: net loss
attributable to non-controlling interests, net of tax
|
|
—
|
|
|
|
387
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
387
|
|
Net (loss)
income
|
|
(4,645)
|
|
|
|
149
|
|
|
|
(338)
|
|
|
|
(58)
|
|
|
|
(3,853)
|
|
|
|
(8,745)
|
|
Adjusted EBITDA
(3)
|
$
|
(4,879)
|
|
|
$
|
5,417
|
|
|
$
|
10
|
|
|
$
|
(58)
|
|
|
$
|
(2,723)
|
|
|
$
|
(2,233)
|
|
Basic (loss) income per
share
|
$
|
(0.05)
|
|
|
$
|
0.00
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.10)
|
|
Diluted (loss) income
per share
|
$
|
(0.05)
|
|
|
$
|
0.00
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.10)
|
|
|
For the Three Months
Ended September 30, 2021
|
|
|
VF Fresh
(Produce)
|
|
|
Cannabis
Canada (1)
|
|
|
Cannabis
U.S. (1)
|
|
|
Clean
Energy
|
|
|
Corporate
|
|
|
Total
|
|
Sales
|
$
|
41,152
|
|
|
$
|
27,393
|
|
|
$
|
3,838
|
|
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
72,442
|
|
Cost of
sales
|
|
(39,099)
|
|
|
|
(14,244)
|
|
|
|
(1,231)
|
|
|
|
(119)
|
|
|
|
—
|
|
|
|
(54,693)
|
|
Selling, general and
administrative expenses
|
|
(2,239)
|
|
|
|
(5,324)
|
|
|
|
(2,063)
|
|
|
|
(59)
|
|
|
|
(3,447)
|
|
|
|
(13,132)
|
|
Share-based
compensation
|
|
—
|
|
|
|
(186)
|
|
|
|
(63)
|
|
|
|
—
|
|
|
|
(1,571)
|
|
|
|
(1,820)
|
|
Other income (expense),
net
|
|
(798)
|
|
|
|
112
|
|
|
|
(181)
|
|
|
|
(8)
|
|
|
|
(133)
|
|
|
|
(1,008)
|
|
Recovery of (provision
for) income taxes
|
|
(497)
|
|
|
|
(2,024)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,444
|
|
|
|
(1,077)
|
|
(Loss) income from
consolidated entities
|
|
(1,481)
|
|
|
|
5,727
|
|
|
|
300
|
|
|
|
(127)
|
|
|
|
(3,707)
|
|
|
|
712
|
|
Income from equity
method investments
|
|
—
|
|
|
|
—
|
|
|
|
33
|
|
|
|
—
|
|
|
|
—
|
|
|
|
33
|
|
Net (loss)
income
|
|
(1,481)
|
|
|
|
5,727
|
|
|
|
333
|
|
|
|
(127)
|
|
|
|
(3,707)
|
|
|
|
745
|
|
Adjusted EBITDA
(3)
|
|
1,334
|
|
|
|
8,775
|
|
|
|
659
|
|
|
|
(118)
|
|
|
|
(3,717)
|
|
|
$
|
6,933
|
|
Basic (loss) income per
share
|
$
|
(0.03)
|
|
|
$
|
0.07
|
|
|
$
|
0.00
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.03)
|
|
|
$
|
0.01
|
|
Diluted (loss) income
per share
|
$
|
(0.003)
|
|
|
$
|
0.07
|
|
|
$
|
0.00
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.03)
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended September 30, 2022
|
|
|
VF Fresh
(Produce)
|
|
|
Cannabis
Canada (1)
|
|
|
Cannabis
U.S. (1)
|
|
|
Clean
Energy
|
|
|
Corporate
|
|
|
Total
|
|
Sales
|
$
|
124,052
|
|
|
$
|
81,956
|
|
|
$
|
17,971
|
|
|
$
|
136
|
|
|
$
|
—
|
|
|
$
|
224,115
|
|
Cost of
sales
|
|
(140,613)
|
|
|
|
(52,739)
|
|
|
|
(5,899)
|
|
|
|
(263)
|
|
|
|
—
|
|
|
|
(199,514)
|
|
Selling, general and
administrative expenses
|
|
(8,725)
|
|
|
|
(22,904)
|
|
|
|
(12,213)
|
|
|
|
(53)
|
|
|
|
(7,346)
|
|
|
|
(51,241)
|
|
Share-based
compensation
|
|
—
|
|
|
|
(897)
|
|
|
|
(267)
|
|
|
|
—
|
|
|
|
(1,840)
|
|
|
|
(3,004)
|
|
Other expense,
net
|
|
(776)
|
|
|
|
(1,490)
|
|
|
|
(154)
|
|
|
|
(6)
|
|
|
|
(1,953)
|
|
|
|
(4,379)
|
|
Write-off of joint
venture loan
|
|
—
|
|
|
|
—
|
|
|
|
(592)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(592)
|
|
Impairments
(2)
|
|
—
|
|
|
|
—
|
|
|
|
(29,799)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(29,799)
|
|
Recovery of (provision
for) income taxes
|
|
6,322
|
|
|
|
(1,668)
|
|
|
|
7,025
|
|
|
|
—
|
|
|
|
2,884
|
|
|
|
14,563
|
|
(Loss) income from
consolidated entities
|
|
(19,740)
|
|
|
|
2,258
|
|
|
|
(23,928)
|
|
|
|
(186)
|
|
|
|
(8,255)
|
|
|
|
(49,851)
|
|
Less: net loss
attributable to non-controlling interests, net of tax
|
|
—
|
|
|
|
701
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
701
|
|
Loss from equity method
investments
|
|
—
|
|
|
|
—
|
|
|
|
(2,667)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,667)
|
|
Net (loss)
income
|
|
(19,740)
|
|
|
|
2,959
|
|
|
|
(26,595)
|
|
|
|
(186)
|
|
|
|
(8,255)
|
|
|
|
(51,817)
|
|
Adjusted EBITDA
(3)
|
$
|
(21,362)
|
|
|
$
|
10,558
|
|
|
$
|
(43)
|
|
|
$
|
(180)
|
|
|
$
|
(7,331)
|
|
|
$
|
(18,358)
|
|
Basic (loss) income per
share
|
$
|
(0.22)
|
|
|
$
|
0.03
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.59)
|
|
Diluted (loss) income
per share
|
$
|
(0.22)
|
|
|
$
|
0.03
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.59)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended September 30, 2021
|
|
|
VF Fresh
(Produce)
|
|
|
Cannabis
Canada (1)
|
|
|
Cannabis
U.S. (1)
|
|
|
Clean
Energy
|
|
|
Corporate
|
|
|
Total
|
|
Sales
|
$
|
121,558
|
|
|
$
|
69,614
|
|
|
$
|
3,838
|
|
|
$
|
202
|
|
|
$
|
—
|
|
|
$
|
195,212
|
|
Cost of
sales
|
|
(122,486)
|
|
|
|
(44,433)
|
|
|
|
(1,231)
|
|
|
|
(1,741)
|
|
|
|
—
|
|
|
|
(169,891)
|
|
Selling, general and
administrative expenses
|
|
(7,736)
|
|
|
|
(13,660)
|
|
|
|
(2,063)
|
|
|
|
(143)
|
|
|
|
(6,647)
|
|
|
|
(30,249)
|
|
Share-based
compensation
|
|
—
|
|
|
|
(1,471)
|
|
|
|
(63)
|
|
|
|
—
|
|
|
|
(4,171)
|
|
|
|
(5,705)
|
|
Other expense,
net
|
|
(798)
|
|
|
|
(1,282)
|
|
|
|
(181)
|
|
|
|
(29)
|
|
|
|
(599)
|
|
|
|
(2,889)
|
|
Recovery of (provision
for) income taxes
|
|
2,875
|
|
|
|
(2,654)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,322
|
|
|
|
2,543
|
|
(Loss) income from
consolidated entities
|
|
(6,587)
|
|
|
|
6,114
|
|
|
|
300
|
|
|
|
(1,711)
|
|
|
|
(9,095)
|
|
|
|
(10,979)
|
|
Less: net (income) loss
attributable to non-controlling interests, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Loss from equity method
investments
|
|
—
|
|
|
|
—
|
|
|
|
(175)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(175)
|
|
Net (loss)
income
|
|
(6,587)
|
|
|
|
6,114
|
|
|
|
125
|
|
|
|
(1,711)
|
|
|
|
(9,095)
|
|
|
|
(11,154)
|
|
Adjusted EBITDA
(3)
|
|
(3,138)
|
|
|
|
18,977
|
|
|
|
532
|
|
|
|
(269)
|
|
|
|
(6,919)
|
|
|
$
|
9,183
|
|
Basic (loss) income per
share
|
$
|
(0.08)
|
|
|
$
|
0.08
|
|
|
$
|
0.00
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.14)
|
|
Diluted (loss) income
per share
|
$
|
(0.08)
|
|
|
$
|
0.08
|
|
|
$
|
0.00
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
For the three and nine
months ended September 30, 2022, Balanced Health's financial
results are fully consolidated in the financial results of the
Company and Village Farms' share of Rose LifeScience's financial
results are fully consolidated in the financial results of the
Company with the minority non-controlling interest presented in net
loss attributable to non-controlling interests, net of tax. For the
three and nine months ended September 30, 2021, Balanced Health's
post-acquisition financial results for August 16, 2021 through
September 30, 2021 are fully consolidated in the financial results
of the Company.
|
2.
|
Consists of impairments
to goodwill of ($25,169) and intangible assets of ($4,630) that
were triggered by inflationary effects on consumer spending,
decreases in market capitalization of CBD companies and the
continued federal regulation lack of clarity with respect to CBD.
See Part 1, Item 1 Note 6 "Goodwill and Intangible Assets" for
additional details.
|
3.
|
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 65% interest in
VFH.
|
A detailed discussion of our consolidated and segment results can
be found in our Quarterly Report on Form 10-Q for the three and
nine months ended September 30, 2022
(the "Quarterly Report"), which will be filed with the Securities
and Exchange Commission and will be available at www.sec.gov, and
will also be filed in Canada on
SEDAR (www.sedar.com). In addition, the Quarterly Report can
be found 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 table reflects a reconciliation of net income to
Adjusted EBITDA, as presented by the Company:
|
|
Three Months
Ended
September 30,
|
|
|
Nine Months
Ended
September 30,
|
|
(in thousands of
U.S. dollars)
|
|
2022
(1)
|
|
|
2021
(1)
|
|
|
2022
(1)
|
|
|
2021
(1)
|
|
Net (loss)
income
|
|
$
|
(8,745)
|
|
|
$
|
745
|
|
|
$
|
(51,817)
|
|
|
$
|
(11,154)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
3,007
|
|
|
|
3,306
|
|
|
|
8,479
|
|
|
|
10,616
|
|
Foreign currency
exchange loss (gain)
|
|
|
1,934
|
|
|
|
286
|
|
|
|
2,182
|
|
|
|
521
|
|
Interest expense,
net
|
|
|
922
|
|
|
|
570
|
|
|
|
2,201
|
|
|
|
1,860
|
|
Recovery of income
taxes
|
|
|
(3,183)
|
|
|
|
1,077
|
|
|
|
(14,563)
|
|
|
|
(2,543)
|
|
Share-based
compensation
|
|
|
926
|
|
|
|
1,820
|
|
|
|
3,004
|
|
|
|
5,705
|
|
Interest expense for
VFH
|
|
|
0
|
|
|
|
13
|
|
|
|
39
|
|
|
|
40
|
|
Amortization for
JVs
|
|
|
1,197
|
|
|
|
(64)
|
|
|
|
1,288
|
|
|
|
—
|
|
Deferred financing
fees
|
|
|
44
|
|
|
|
68
|
|
|
|
171
|
|
|
|
234
|
|
Other
expense
|
|
|
(14)
|
|
|
|
181
|
|
|
|
120
|
|
|
|
181
|
|
Impairments
(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
29,799
|
|
|
|
—
|
|
JV loan
write-off
|
|
|
—
|
|
|
|
—
|
|
|
|
592
|
|
|
|
—
|
|
Share of loss on JV
inventory impairment
|
|
|
—
|
|
|
|
—
|
|
|
|
2,284
|
|
|
|
—
|
|
Incremental utility
costs due to storm
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,400
|
|
Foreign currency
exchange (gain) loss for JVs
|
|
|
1
|
|
|
|
—
|
|
|
|
2
|
|
|
|
—
|
|
Purchase price
adjustment (3)
|
|
|
1,683
|
|
|
|
(1,217)
|
|
|
|
(2,132)
|
|
|
|
1,841
|
|
Gain on disposal of
assets
|
|
|
(5)
|
|
|
|
—
|
|
|
|
(7)
|
|
|
|
35
|
|
Adjusted EBITDA
(4)
|
|
$
|
(2,233)
|
|
|
$
|
6,785
|
|
|
$
|
(18,358)
|
|
|
$
|
8,736
|
|
Adjusted EBITDA for JVs
(5)
|
|
$
|
—
|
|
|
$
|
(13)
|
|
|
$
|
(327)
|
|
|
$
|
(140)
|
|
Adjusted EBITDA
excluding JVs
|
|
$
|
(2,233)
|
|
|
$
|
6,798
|
|
|
$
|
(18,031)
|
|
|
$
|
8,876
|
|
|
|
1.
|
For the three and nine
months ended September 30, 2022, Balanced Health's financial
results are fully consolidated in the financial results of the
Company and Village Farms' share of Rose LifeScience's financial
results are fully consolidated in the financial results of the
Company with the minority non-controlling interest presented in net
loss attributable to non-controlling interests, net of tax. For the
three and nine months ended September 30, 2021, Balanced Health's
post-acquisition financial results for August 16, 2021 through
September 30, 2021 are fully consolidated in the financial results
of the Company.
|
2.
|
Consists of impairments
to goodwill of ($25,169) and intangible assets of ($4,630) that
were triggered by inflationary effects on consumer spending,
decreases in market capitalization of CBD companies and the
continued federal regulation lack of clarity with respect to CBD.
See Part 1, Item 1 Note 6 "Goodwill and Intangible Assets" for
additional details.
|
3.
|
The purchase price
adjustment primarily reflects the non-cash accounting charge
resulting from the revaluation of Pure Sunfarms' inventory to fair
value at the acquisition date on November 2, 2020 and the catch-up
of intangible amortization resulting from the September 30, 2022
finalization of the Rose purchase price accounting.
|
4.
|
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 70% interest in
Rose LifeScience since acquisition and 65% interest in
VFH.
|
5.
|
The Adjusted EBITDA for
JVs consists of the VF Hemp Adjusted EBITDA for the three and nine
months ended September 30, 2022 and 2021.
|
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 and nine months ended September 30, 2022 in the Quarterly Report, which
will be filed on (www.sec.gov/edgar.shtml) and SEDAR
(www.sedar.com) and will be available at www.villagefarms.com.
Completion of Continuance into the Province of Ontario
On November 9, 2022, the Company
completed its continuance (the "Continuance") from the Canada
Business Corporations Act into the Province of Ontario under the Business Corporations
Act (Ontario) (the "OBCA").
The Continuance was approved by the Company's shareholders at the
Company's annual and special meeting of shareholders held on
May 24, 2022. As a result of the
Continuance, the Company is now governed by the OBCA.
Conference Call
Village Farms' management team will host a conference call
today, Wednesday, November 9, 2022,
at 8:30 a.m. ET to discuss its financial results.
Participants can access the conference call by telephone by dialing
(416) 764-8659 or (888) 664-6392, or via the Internet
at: https://app.webinar.net/Q8rLNPLNepq. The live
question and answer session will be limited to analysts; however,
others are invited to submit their questions ahead of the
conference call via email
at investorrelations@villagefarms.com. Management will
address questions received via email as part of the conference call
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 both by telephone
and via the Internet beginning approximately one hour following
completion of the call. To access the archived conference call by
telephone, dial (416) 764-8677 or (888) 390-0541 and enter the
passcode 675731 followed by the pound (#) key. The telephone
replay will be available until Wednesday, November 16,
2022 at midnight (ET). The conference call will also be
available on Village Farms' web site
at http://villagefarms.com/investor-relations/investor-calls.
About Village Farms International, Inc.
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 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. In particular, we caution you that
our forward-looking statements are subject to the ongoing and
developing circumstances related to the COVID-19 pandemic, which
may have a material adverse effect on our business, operations and
future financial results.
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.
Village Farms
International, Inc.
|
Consolidated
Statements of Financial Position
|
(In thousands of
United States dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
18,165
|
|
$
53,417
|
Restricted
cash
|
|
5,000
|
|
5,250
|
Trade
receivables
|
|
32,905
|
|
34,360
|
Inventories
|
|
74,072
|
|
68,677
|
Other
receivables
|
|
517
|
|
616
|
Income tax
receivable
|
|
1,469
|
|
2,430
|
Prepaid expenses and
deposits
|
|
11,083
|
|
10,209
|
Total current
assets
|
|
143,211
|
|
174,959
|
Non-current
assets
|
|
|
|
|
Property, plant and
equipment
|
|
207,658
|
|
215,704
|
Investment in in
minority interests
|
|
2,109
|
|
2,109
|
Note receivable - joint
venture
|
|
-
|
|
3,256
|
Goodwill
|
|
79,443
|
|
117,533
|
Intangibles
|
|
36,402
|
|
26,394
|
Deferred tax
asset
|
|
30,238
|
|
16,766
|
Right-of-use
assets
|
|
9,587
|
|
7,609
|
Other assets
|
|
2,646
|
|
2,581
|
Total assets
|
|
$
511,294
|
|
$
566,911
|
LIABILITIES
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Line of
credit
|
|
$
7,650
|
|
$
7,760
|
Trade
payables
|
|
25,458
|
|
22,597
|
Current maturities of
long-term debt
|
|
9,449
|
|
11,416
|
Accrued sales
taxes
|
|
14,305
|
|
3,899
|
Accrued loyalty
program
|
|
1,923
|
|
2,098
|
Accrued
liabilities
|
|
14,860
|
|
14,168
|
Lease liabilities -
current
|
|
1,962
|
|
962
|
Income tax
payable
|
|
972
|
|
-
|
Other current
liabilities
|
|
2,214
|
|
1,413
|
Total current
liabilities
|
|
78,793
|
|
64,313
|
Non-current
liabilities
|
|
|
|
|
Long-term
debt
|
|
44,851
|
|
50,419
|
Deferred tax
liability
|
|
18,638
|
|
18,657
|
Lease liabilities -
non-current
|
|
8,216
|
|
6,711
|
Other
liabilities
|
|
1,600
|
|
1,973
|
Total
liabilities
|
|
152,098
|
|
142,073
|
Commitments and
contingencies
|
|
|
|
|
MEZZANINE
EQUITY
|
|
|
|
|
Redeemable
non-controlling interests
|
|
15,732
|
|
16,433
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Common stock
|
|
366,561
|
|
365,561
|
Additional paid in
capital
|
|
12,389
|
|
9,369
|
Accumulated other
comprehensive loss
|
|
(11,215)
|
|
6,696
|
Retained
earnings
|
|
(25,038)
|
|
26,779
|
Total Village
Farm International Inc. shareholders' equity
|
342,697
|
|
408,405
|
Non-controlling
interest
|
|
767
|
|
-
|
Total shareholders'
equity
|
|
343,464
|
|
408,405
|
Total liabilities and
shareholders' equity
|
|
$
511,294
|
|
$
566,911
|
Village Farms
International, Inc.
|
Condensed
Consolidated Interim Statements of Income (Loss) and Comprehensive
Income (Loss)
|
(In thousands of
United States dollars, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
71,056
|
|
$
72,442
|
|
$
224,115
|
|
$
195,212
|
Cost of
sales
|
|
-62,682
|
|
-54,693
|
|
-199,514
|
|
-169,891
|
Gross margin
|
|
8,374
|
|
17,749
|
|
24,601
|
|
25,321
|
Selling, general and
administrative expenses
|
|
(16,868)
|
|
(13,132)
|
|
(51,241)
|
|
(30,249)
|
Share-based
compensation
|
|
(926)
|
|
(1,820)
|
|
(3,004)
|
|
(5,705)
|
Interest
expense
|
|
(982)
|
|
(620)
|
|
(2,330)
|
|
(1,959)
|
Interest
income
|
|
60
|
|
50
|
|
129
|
|
99
|
Foreign exchange
loss
|
|
(1,963)
|
|
(324)
|
|
(2,171)
|
|
(635)
|
Other expense,
net
|
|
(17)
|
|
(119)
|
|
(14)
|
|
(354)
|
Write-off of joint
venture loan
|
|
-
|
|
-
|
|
(592)
|
|
-
|
Impairments
|
|
-
|
|
-
|
|
(29,799)
|
|
-
|
Gain (loss) on disposal
of assets
|
|
7
|
|
-
|
|
7
|
|
(40)
|
(Loss) income before
taxes and loss from equity method investments
|
|
(12,315)
|
|
1,784
|
|
(64,414)
|
|
(13,522)
|
Recovery of (provision
for) income taxes
|
|
3,183
|
|
(1,077)
|
|
14,563
|
|
2,543
|
Income (loss) from
equity method investments
|
|
-
|
|
38
|
|
(2,667)
|
|
(175)
|
(Loss) income including
non-conrolling interests
|
|
(9,132)
|
|
745
|
|
(52,518)
|
|
(11,154)
|
Less: net loss
attribuable to non-controlling interests, net of tax
|
|
387
|
|
-
|
|
701
|
|
-
|
Net (loss) income
attributable to Village Farms International Inc.
|
|
$
(8,745)
|
|
$
745
|
|
$
(51,817)
|
|
$
(11,154)
|
Basic (loss) income per
share
|
|
$
(0.10)
|
|
$
0.01
|
|
$
(0.59)
|
|
$
(0.14)
|
Diluted (loss) income
per share
|
|
$
(0.10)
|
|
$
0.01
|
|
$
(0.59)
|
|
$
(0.14)
|
Weighted average number
of common shares used in the computation of net loss per share (in
thousands):
|
|
|
|
|
|
|
|
|
Basic
|
|
88,684
|
|
84,823
|
|
88,543
|
|
80,671
|
Diluted
|
|
88,684
|
|
86,910
|
|
88,543
|
|
80,671
|
Net (loss) income
attributable to Village Farms International Inc.
|
|
$
(8,745)
|
|
$
745
|
|
$
(51,817)
|
|
$
(11,154)
|
Other comprehensive
loss:
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
(14,780)
|
|
(3,869)
|
|
(17,911)
|
|
208
|
Comprehensive
loss
|
|
$
(23,525)
|
|
$
(3,124)
|
|
$
(69,728)
|
|
$
(10,946)
|
Village Farms
International, Inc.
|
Condensed
Consolidated Interim Statements of Cash Flows
|
(In thousands of
United States dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2022
|
|
2021
|
Cash flows used in
operating activities:
|
|
|
|
|
Net loss
|
|
$
(51,817)
|
|
$
(11,154)
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
11,061
|
|
9,364
|
Amortization of
deferred charges
|
|
171
|
|
234
|
Share of loss from
joint ventures
|
|
2,667
|
|
175
|
Net loss attributable
to non-controlling interest
|
|
(701)
|
|
-
|
Interest
expense
|
|
2,330
|
|
1,959
|
Interest
income
|
|
(129)
|
|
(99)
|
Interest paid on
long-term debt
|
|
(2,989)
|
|
(2,926)
|
Unrealized foreign
exchange loss
|
|
77
|
|
19
|
Impairments
|
|
29,799
|
|
-
|
Write-off of joint
venture loan
|
|
592
|
|
-
|
(Gain) loss on disposal
of assets
|
|
(7)
|
|
40
|
Non-cash lease
expense
|
|
775
|
|
(376)
|
Share-based
compensation
|
|
3,004
|
|
5,705
|
Deferred income
taxes
|
|
(19,670)
|
|
(3,196)
|
Changes in non-cash
working capital items
|
|
11,621
|
|
(20,851)
|
Net cash used in
operating activities
|
|
(13,216)
|
|
(21,106)
|
Cash flows used in
investing activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(12,869)
|
|
(15,131)
|
Acquisitions,
net
|
|
(4,693)
|
|
(25,944)
|
Advances to joint
ventures
|
|
-
|
|
(15)
|
Notes
receivable
|
|
(1,914)
|
|
(1,109)
|
Net cash used in
investing activities
|
|
(19,476)
|
|
(42,199)
|
Cash flows (used in)
provided by financing activities:
|
|
|
|
|
Proceeds from
borrowings
|
|
4,000
|
|
4,147
|
Repayments on
borrowings
|
|
(6,262)
|
|
(7,410)
|
Proceeds from issuance
of common stock and warrants
|
|
824
|
|
135,000
|
Issuance
costs
|
|
-
|
|
(7,511)
|
Proceeds from exercise
of stock options
|
|
192
|
|
199
|
Proceeds from exercise
of warrants
|
|
-
|
|
18,495
|
Share
repurchases
|
|
-
|
|
(5,000)
|
Payments on capital
lease obligations
|
|
(782)
|
|
(537)
|
Payment of note payable
related to acquisition
|
|
-
|
|
(15,498)
|
Net cash (used in)
provided by financing activities
|
|
(2,028)
|
|
121,885
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(782)
|
|
191
|
Net (decrease)
increase in cash and cash equivalents
|
|
(35,502)
|
|
58,771
|
Cash and cash
equivalents, beginning of period
|
|
58,667
|
|
25,679
|
Cash and cash
equivalents, end of period
|
|
$
23,165
|
|
$
84,450
|
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SOURCE Village Farms International, Inc.