Village Farms International, Inc. (“Village Farms” or the
“Company”) (NASDAQ: VFF) today reported its financial results for
the third quarter ended September 30, 2024. All figures are in U.S.
dollars unless otherwise indicated.
Management Commentary
“Strong performance in our Fresh Produce
business, continued growth in Canadian Cannabis and a doubling of
International Medicinal Cannabis Sales drove 20% year-over-year
growth in consolidated sales, with both positive Adjusted EBITDA
and cash flow from operations during the third quarter,” said
Michael DeGiglio, President and Chief Executive Officer, Village
Farms International.
“Our Canadian Cannabis business continues to
deliver strong growth with leading market share as we realized
revenue growth in all sales channels and positive EBITDA and
operating cash flow. We were once again the fastest growing
producer in Canada over the last year in terms of market share and,
for the first time ever, were number one in Quebec, making us the
top producer in Canada’s two most populus provinces. Out-of-stocks
in some cultivars after a strong first half impacted sales growth
in the quarter, and non-brand-spec sales that converted inventory
to cash impacted gross margin. Gross margin, excluding
non-brand-spec sales returned to our target range of 30 to
40%.”
“We are also increasingly benefitting from our
international cannabis focus. Exports from Canada increased 111%
from the third quarter last year, with continued increases in sales
to our German, Australian, and UK partners. Our EU-GMP
certification was also recently renewed, and we are optimistic
heading into next year about our opportunities to expand our
international business with additional markets and customer wins.
In the Netherlands, we received final approval to commence
cultivation, are in production now, and remain on target to begin
sales to participating jurisdictions in the first quarter of
2025.”
“Fresh Produce delivered positive adjusted
EBITDA on solid sales growth, demonstrating our expected recovery
from the softer pricing we experienced during the second quarter.
We are continuing to drive this business toward sustained
profitability as we benefit from ongoing yield and cost improvement
initiatives.”
“As we close out fiscal year 2024, we are
focused on driving more profitable sales in Canadian Cannabis,
prioritizing profitable growth as we manage inventory levels with
evolving supply dynamics and increasing international demand. We
are looking forward to more exciting catalysts for our business in
fiscal year 2025, with continued international expansion and
contributions from sales in the Netherlands. We believe our
Netherlands business has the potential to become a strong
contributor of profitability and cash flow generation, driven by
more favorable pricing and taxes in the Dutch market compared to
Canada.”
Third Quarter Financial
Highlights(All comparable periods are for the
third quarter of 2023 unless otherwise stated)
Consolidated
- Consolidated sales increased 20% to
$83.4 million from $69.5 million;
- Consolidated net loss was ($0.8
million), or ($0.01) per share, compared with ($1.3 million), or
($0.01) per share;
- Consolidated adjusted EBITDA (a
non-GAAP measure) increased 63% to $5.3 million from $3.2 million;
and,
- Consolidated cash flow from
operations was $4.3 million compared with $12.1 million.
Canadian Cannabis
- Net sales increased 27% to $36.5
million (C$49.8 million) from $28.8 million (C$38.7 million);
- Retail branded sales increased 22%,
international medicinal sales increased 111%, non-branded
(wholesale) sales increased 68% (in Canadian dollars);
- Gross margin was 26% compared with
35%; (in Canadian dollars). This quarter’s gross margin was reduced
by sales of non-branded spec inventory in the non-branded channel.
Excluding the non-branded spec inventory sales, gross margin was
31% (in Canadian dollars);
- Net income was $1.2 million (C$1.6
million) compared with $2.9 million (C$3.8 million);
- Adjusted EBITDA was $4.8 million
(C$6.5 million) compared with $4.6 million (C$6.2 million);
and,
- Cash flow from operations was $4.5
million (C$6.1 million) compared with $4.8 million (C$6.8
million).
U.S. Cannabis (Balanced Health Botanicals)
- Net sales were $3.9 million
compared with $5.0 million;
- Gross margin was 63% compared with
64%;
- Net loss was ($0.2 million)
compared with net income of $0.1 million;
- Adjusted EBITDA was ($0.2 million)
compared with $0.2 million.
Village Farms Fresh (Produce)
- Sales increased 20% to $42.8
million from $35.7 million;
- Net income was $0.4 million
compared with a net loss of ($1.0 million); and,
- Adjusted EBITDA
was $2.3 million compared with $0.8 million.
Strategic Growth and Operational
Highlights
Canadian Cannabis
- Was the fastest growing producer year-over year by market
share1;
- Further expanded its number one national market share position
in dried flower1;
- Continued to hold the number two producer position in
Canada1;
- Continued to hold the number two national market share position
in the pre-roll category1;
- Achieved the number one market share in Quebec2; maintained the
number one market share in Ontario1;
- Super Toast remained the third fastest growing brand nationally
in Q3 20241; and,
- Launched Neon Lambo cultivar to
strong reception in Q4 2024; new category launches planned through
the remainder of Q4 2024 and Q1 2025.
1. For the third 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.
International Cannabis
- Saw year-over-year increases in
international medicinal sales to each of Australia, Germany and the
United Kingdom for Q3 and year-to-date 2024 (reported within
Canadian Cannabis)
- Currently hold the #1 and #3
cultivars in the German market through a supply agreement1
- Acquired the remaining equity
ownership interest in Leli Holland, which holds one of 10 licenses
to participate in the Netherlands recreational cannabis program, to
increase its ownership to 100 percent from 85 percent.
- Completed build out of the
Company’s first indoor cultivation facility in Drachten,
Netherlands. The Drachten facility has five flower rooms and
additional space for drying, manufacturing, and packaging of
finished goods.
- Began cultivating in the Drachten
facility October 2024. The Company continues to expect sales to
participating jurisdictions to begin during the first quarter of
2025.
1. Based on estimates from Flowzz.
U.S. Cannabis
- The Company was one
of 25 participants, and the only operator, selected to participate
in the Drug Enforcement Administration’s (DEA) upcoming
Administrative Law Judge (ALJ) hearing regarding the proposed
rescheduling of marijuana in the United States from a Schedule I to
a Schedule III drug under the Controlled Substances Act, which is
currently expected to take place sometime in January or February
2025.
- The proliferation
of unregulated hemp-derived products in the U.S. market, continues
to challenge market share for the CBD industry and is causing
certain states to impose significant restrictions on intoxicating
hemp derived products; 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)
- Continued to
benefit from implementing new cultivation technologies, including
artificial intelligence, to drive further operational improvements;
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 net
income to the Company.
- During the third
quarter of 2024, Village Farms Clean Energy produced net income of
$0.3 million through royalty payments received from its clean
energy partner.
Canadian Cannabis Performance
Summary
| (millions except %
metrics) |
Three Months Ended September 30, |
|
|
| |
2024 |
2023 |
|
|
|
|
CAD $ |
|
USD $ |
|
CAD $ |
|
USD $ |
|
Change of C $ |
|
Total Net Sales |
$49.8 |
|
$36.5 |
|
$38.7 |
|
$28.8 |
|
29% |
| Total Cost of Sales |
$36.7 |
|
$26.9 |
|
$25.3 |
|
$18.9 |
|
45% |
| Gross Profit |
$13.1 |
|
$9.6 |
|
$13.4 |
|
$9.9 |
|
-2% |
| Gross Margin % |
26% |
|
26% |
|
35% |
|
35% |
|
-24% |
| SG&A |
$10.9 |
|
$8.0 |
|
$10.2 |
|
$7.6 |
|
7% |
| Net income |
$1.6 |
|
$1.2 |
|
$3.8 |
|
$2.9 |
|
-58% |
| Adjusted EBITDA (1) |
$6.5 |
|
$4.8 |
|
$6.2 |
|
$4.6 |
|
5% |
| Adjusted EBITDA Margin
(1) |
13% |
|
13% |
|
16% |
|
16% |
|
-19% |
| Cash flow from Operations |
$6.1 |
|
$4.5 |
|
$6.8 |
|
$4.8 |
|
-10% |
| (millions except %
metrics) |
Nine Months Ended September 30, |
|
|
| |
2024 |
2023 |
|
|
|
|
CAD $ |
|
USD $ |
|
CAD $ |
|
USD $ |
|
Change of C $ |
|
Total Net Sales |
$156.0 |
|
$114.7 |
|
$110.4 |
|
$82.0 |
|
41% |
| Total Cost of Sales |
$115.4 |
|
$84.8 |
|
$71.1 |
|
$52.9 |
|
62% |
| Gross Profit |
$40.6 |
|
$29.9 |
|
$39.2 |
|
$29.1 |
|
4% |
| Gross Margin % |
26% |
|
26% |
|
36% |
|
36% |
|
-27% |
| SG&A |
$33.3 |
|
$24.4 |
|
$30.0 |
|
$22.3 |
|
11% |
| Net income |
$4.6 |
|
$3.4 |
|
$5.3 |
|
$3.9 |
|
-13% |
| Adjusted EBITDA (1) |
$18.6 |
|
$13.6 |
|
$17.9 |
|
$13.3 |
|
4% |
| Adjusted EBITDA Margin
(1) |
12% |
|
12% |
|
16% |
|
16% |
|
-26% |
| Cash flow from Operations |
$19.4 |
|
$14.3 |
|
$16.7 |
|
$12.4 |
|
16% |
| |
1 Adjusted EBITDA is not a recognized earnings
measure and does not have a standard meaning prescribed by
GAAP.
Canadian Cannabis’ Composition of Sales
by Channel
| (millions except %
metrics) |
Three Months Ended September 30, |
|
|
| |
2024 |
2023 |
|
|
|
|
CAD $ |
|
USD $ |
|
CAD $ |
|
USD $ |
|
Change of C $ |
| Retail Branded Sales |
$61.3 |
|
$44.9 |
|
$50.3 |
|
$37.4 |
|
22% |
| Non-Branded Sales |
$10.1 |
|
$7.4 |
|
$6.0 |
|
$4.5 |
|
68% |
| International Sales |
$1.9 |
|
$1.4 |
|
$0.9 |
|
$0.7 |
|
111% |
| Other |
$0.6 |
|
$0.4 |
|
$0.8 |
|
$0.6 |
|
-25% |
| Less: Excise Taxes |
($24.1) |
|
($17.7) |
|
($19.3) |
|
($14.4) |
|
25% |
| Net Sales |
$49.8 |
|
$36.5 |
|
$38.7 |
|
$28.8 |
|
29% |
|
|
|
|
|
|
|
|
|
|
|
| (millions except %
metrics) |
Nine Months Ended September 30, |
|
|
| |
2024 |
2023 |
|
|
| |
CAD $ |
|
USD $ |
|
CAD $ |
|
USD $ |
|
Change of C $ |
| Retail Branded Sales |
$195.9 |
|
$144.0 |
|
$146.3 |
|
$108.7 |
|
34% |
| Non-Branded Sales |
$30.1 |
|
$22.1 |
|
$13.1 |
|
$9.7 |
|
130% |
| International Sales |
$6.0 |
|
$4.4 |
|
$5.1 |
|
$3.8 |
|
18% |
| Other |
$1.8 |
|
$1.3 |
|
$2.0 |
|
$1.5 |
|
-10% |
| Less: Excise Taxes |
($77.7) |
|
($57.1) |
|
($56.1) |
|
($41.7) |
|
39% |
| Net Sales |
$156.0 |
|
$114.7 |
|
$110.4 |
|
$82.0 |
|
41% |
| |
Presentation of Financial Results
The Company’s financial statements for the three
and nine months ended September 30, 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 September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Sales |
|
$ |
83,368 |
|
|
$ |
69,510 |
|
|
$ |
253,627 |
|
|
$ |
211,378 |
|
| Cost of sales |
|
|
(67,660 |
) |
|
|
(54,889 |
) |
|
|
(213,158 |
) |
|
|
(172,958 |
) |
| Gross profit |
|
|
15,708 |
|
|
|
14,621 |
|
|
|
40,469 |
|
|
|
38,420 |
|
| Selling, general and
administrative expenses |
|
|
(16,540 |
) |
|
|
(15,822 |
) |
|
|
(52,593 |
) |
|
|
(49,980 |
) |
| Interest expense |
|
|
(784 |
) |
|
|
(988 |
) |
|
|
(2,606 |
) |
|
|
(3,532 |
) |
| Interest income |
|
|
229 |
|
|
|
262 |
|
|
|
757 |
|
|
|
741 |
|
| Foreign exchange gain
(loss) |
|
|
352 |
|
|
|
(971 |
) |
|
|
(929 |
) |
|
|
(302 |
) |
| Other income (loss) |
|
|
379 |
|
|
|
(19 |
) |
|
|
528 |
|
|
|
5,613 |
|
| Goodwill and intangible asset
impairments (1) |
|
|
— |
|
|
|
— |
|
|
|
(11,939 |
) |
|
|
— |
|
| Loss before taxes |
|
|
(656 |
) |
|
|
(2,917 |
) |
|
|
(26,313 |
) |
|
|
(9,040 |
) |
| (Provision for) recovery of
income taxes |
|
|
(94 |
) |
|
|
1,664 |
|
|
|
(674 |
) |
|
|
(269 |
) |
| Loss including non-controlling
interests |
|
|
(750 |
) |
|
|
(1,253 |
) |
|
|
(26,987 |
) |
|
|
(9,309 |
) |
| Less: net income attributable
to non-controlling interests, net of tax |
|
|
(70 |
) |
|
|
(46 |
) |
|
|
(234 |
) |
|
|
(6 |
) |
| Net loss attributable to
Village Farms International Inc. shareholders |
|
$ |
(820 |
) |
|
$ |
(1,299 |
) |
|
$ |
(27,221 |
) |
|
$ |
(9,315 |
) |
| Adjusted EBITDA (2) |
|
$ |
5,302 |
|
|
$ |
3,248 |
|
|
$ |
5,334 |
|
|
$ |
8,243 |
|
| Basic loss per share |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.09 |
) |
| Diluted loss per share |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.09 |
) |
| |
(1) Reflects impairment to goodwill and intangibles of $11,939
in U.S. Cannabis that was based on recent historical performance,
near-term forecasts, and the state of the CBD industry in the
United States. See “Critical Accounting Estimates and Judgments”
below for more information.(2) 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 through March 31, 2024, 80% interest
in Rose LifeScience beginning on April 1, 2024, 85% interest in
Leli through September 22, 2024, and our 100% interest in Leli
beginning on September 23, 2024.
We caution that our results of operations for the three and nine
months ended September 30, 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 September 30,
2024 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
42,770 |
|
|
$ |
36,463 |
|
|
$ |
3,943 |
|
|
$ |
192 |
|
|
$ |
— |
|
|
$ |
83,368 |
|
| Cost of sales |
|
(39,289 |
) |
|
|
(26,864 |
) |
|
|
(1,443 |
) |
|
|
(64 |
) |
|
|
— |
|
|
|
(67,660 |
) |
| Selling, general and
administrative expenses |
|
(2,690 |
) |
|
|
(7,983 |
) |
|
|
(2,692 |
) |
|
|
(1 |
) |
|
|
(3,174 |
) |
|
|
(16,540 |
) |
| Other expense, net |
|
(388 |
) |
|
|
(16 |
) |
|
|
— |
|
|
|
170 |
|
|
|
410 |
|
|
|
176 |
|
| Operating income (loss) |
|
403 |
|
|
|
1,600 |
|
|
|
(192 |
) |
|
|
297 |
|
|
|
(2,764 |
) |
|
|
(656 |
) |
| (Provision for) recovery of
income taxes |
|
(27 |
) |
|
|
(308 |
) |
|
|
— |
|
|
|
— |
|
|
|
241 |
|
|
|
(94 |
) |
| Income (loss) from
consolidated entities |
|
376 |
|
|
|
1,292 |
|
|
|
(192 |
) |
|
|
297 |
|
|
|
(2,523 |
) |
|
|
(750 |
) |
| Less: net (income) loss
attributable to non-controlling interests, net of tax |
|
— |
|
|
|
(124 |
) |
|
|
— |
|
|
|
— |
|
|
|
54 |
|
|
|
(70 |
) |
| Net income (loss) |
$ |
376 |
|
|
$ |
1,168 |
|
|
$ |
(192 |
) |
|
$ |
297 |
|
|
$ |
(2,469 |
) |
|
$ |
(820 |
) |
| Adjusted EBITDA (2) |
$ |
2,331 |
|
|
$ |
4,752 |
|
|
$ |
(159 |
) |
|
$ |
313 |
|
|
$ |
(1,935 |
) |
|
$ |
5,302 |
|
| Basic income (loss) per
share |
$ |
0.00 |
|
|
$ |
0.01 |
|
|
$ |
(0.00 |
) |
|
$ |
0.00 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
| Diluted income (loss) per
share |
$ |
0.00 |
|
|
$ |
0.01 |
|
|
$ |
(0.00 |
) |
|
$ |
0.00 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
|
For The Three Months Ended September 30,
2023 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
35,712 |
|
|
$ |
28,810 |
|
|
$ |
4,988 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
69,510 |
|
| Cost of sales |
|
(34,220 |
) |
|
|
(18,866 |
) |
|
|
(1,803 |
) |
|
|
— |
|
|
|
— |
|
|
|
(54,889 |
) |
| Selling, general and
administrative expenses |
|
(2,066 |
) |
|
|
(7,598 |
) |
|
|
(3,095 |
) |
|
|
— |
|
|
|
(3,063 |
) |
|
|
(15,822 |
) |
| Other expense, net |
|
(598 |
) |
|
|
(428 |
) |
|
|
(11 |
) |
|
|
(58 |
) |
|
|
(621 |
) |
|
|
(1,716 |
) |
| Operating (loss) income |
|
(1,172 |
) |
|
|
1,918 |
|
|
|
79 |
|
|
|
(58 |
) |
|
|
(3,684 |
) |
|
|
(2,917 |
) |
| Recovery of income taxes |
|
221 |
|
|
|
1,034 |
|
|
|
— |
|
|
|
— |
|
|
|
409 |
|
|
|
1,664 |
|
| (Loss) income from
consolidated entities |
|
(951 |
) |
|
|
2,952 |
|
|
|
79 |
|
|
|
(58 |
) |
|
|
(3,275 |
) |
|
|
(1,253 |
) |
| Less: net (income) loss
attributable to non-controlling interests, net of tax |
|
— |
|
|
|
(89 |
) |
|
|
— |
|
|
|
— |
|
|
|
43 |
|
|
|
(46 |
) |
| Net (loss) income |
$ |
(951 |
) |
|
$ |
2,863 |
|
|
$ |
79 |
|
|
$ |
(58 |
) |
|
$ |
(3,232 |
) |
|
$ |
(1,299 |
) |
| Adjusted EBITDA (2) |
$ |
774 |
|
|
$ |
4,585 |
|
|
$ |
221 |
|
|
$ |
(57 |
) |
|
$ |
(2,275 |
) |
|
$ |
3,248 |
|
| Basic (loss) income per
share |
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
0.00 |
|
|
$ |
(0.00 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
| Diluted (loss) income per
share |
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
0.00 |
|
|
$ |
(0.00 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
|
For The Nine Months Ended September 30,
2024 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
125,883 |
|
|
$ |
114,654 |
|
|
$ |
12,777 |
|
|
$ |
313 |
|
|
$ |
— |
|
|
$ |
253,627 |
|
| Cost of sales |
|
(123,256 |
) |
|
|
(84,842 |
) |
|
|
(4,953 |
) |
|
|
(107 |
) |
|
|
— |
|
|
|
(213,158 |
) |
| Selling, general and
administrative expenses |
|
(8,996 |
) |
|
|
(24,436 |
) |
|
|
(9,058 |
) |
|
|
(38 |
) |
|
|
(10,065 |
) |
|
|
(52,593 |
) |
| Other expense (loss) |
|
(1,418 |
) |
|
|
(687 |
) |
|
|
— |
|
|
|
170 |
|
|
|
(315 |
) |
|
|
(2,250 |
) |
| Goodwill and intangible asset
impairments (1) |
|
— |
|
|
|
— |
|
|
|
(11,939 |
) |
|
|
— |
|
|
|
— |
|
|
|
(11,939 |
) |
| Operating (loss) income |
|
(7,787 |
) |
|
|
4,689 |
|
|
|
(13,173 |
) |
|
|
338 |
|
|
|
(10,380 |
) |
|
|
(26,313 |
) |
| (Provision for) recovery of
income taxes |
|
(23 |
) |
|
|
(896 |
) |
|
|
— |
|
|
|
— |
|
|
|
245 |
|
|
|
(674 |
) |
| (Loss) income from
consolidated entities |
|
(7,810 |
) |
|
|
3,793 |
|
|
|
(13,173 |
) |
|
|
338 |
|
|
|
(10,135 |
) |
|
|
(26,987 |
) |
| Less: net (income) loss
attributable to non-controlling interests, net of tax |
|
— |
|
|
|
(394 |
) |
|
|
— |
|
|
|
— |
|
|
|
160 |
|
|
|
(234 |
) |
| Net (loss) income |
$ |
(7,810 |
) |
|
$ |
3,399 |
|
|
$ |
(13,173 |
) |
|
$ |
338 |
|
|
$ |
(9,975 |
) |
|
$ |
(27,221 |
) |
| Adjusted EBITDA (2) |
$ |
(1,991 |
) |
|
$ |
13,643 |
|
|
$ |
(1,014 |
) |
|
$ |
354 |
|
|
$ |
(5,658 |
) |
|
$ |
5,334 |
|
| Basic (loss) income per
share |
$ |
(0.07 |
) |
|
$ |
0.03 |
|
|
$ |
(0.12 |
) |
|
$ |
0.00 |
|
|
$ |
(0.09 |
) |
|
$ |
(0.25 |
) |
| Diluted (loss) income per
share |
$ |
(0.07 |
) |
|
$ |
0.03 |
|
|
$ |
(0.12 |
) |
|
$ |
0.00 |
|
|
$ |
(0.09 |
) |
|
$ |
(0.25 |
) |
|
|
For The Nine Months Ended September 30,
2023 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
114,125 |
|
|
$ |
81,987 |
|
|
$ |
15,266 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
211,378 |
|
| Cost of sales |
|
(114,779 |
) |
|
|
(52,873 |
) |
|
|
(5,285 |
) |
|
|
(21 |
) |
|
|
— |
|
|
|
(172,958 |
) |
| Selling, general and
administrative expenses |
|
(7,836 |
) |
|
|
(22,273 |
) |
|
|
(10,098 |
) |
|
|
(30 |
) |
|
|
(9,743 |
) |
|
|
(49,980 |
) |
| Other income (expense)
net |
|
3,993 |
|
|
|
(1,838 |
) |
|
|
(8 |
) |
|
|
(77 |
) |
|
|
450 |
|
|
|
2,520 |
|
| Operating (loss) income |
|
(4,497 |
) |
|
|
5,003 |
|
|
|
(125 |
) |
|
|
(128 |
) |
|
|
(9,293 |
) |
|
|
(9,040 |
) |
| Recovery of (provision for)
income taxes |
|
229 |
|
|
|
(922 |
) |
|
|
— |
|
|
|
— |
|
|
|
424 |
|
|
|
(269 |
) |
| (Loss) income from
consolidated entities |
|
(4,268 |
) |
|
|
4,081 |
|
|
|
(125 |
) |
|
|
(128 |
) |
|
|
(8,869 |
) |
|
|
(9,309 |
) |
| Less: net (income) loss
attributable to non-controlling interests, net of tax |
|
— |
|
|
|
(149 |
) |
|
|
— |
|
|
|
— |
|
|
|
143 |
|
|
|
(6 |
) |
| Net (loss) income |
$ |
(4,268 |
) |
|
$ |
3,932 |
|
|
$ |
(125 |
) |
|
$ |
(128 |
) |
|
$ |
(8,726 |
) |
|
$ |
(9,315 |
) |
| Adjusted EBITDA (2) |
$ |
1,110 |
|
|
$ |
13,273 |
|
|
$ |
424 |
|
|
$ |
(128 |
) |
|
$ |
(6,436 |
) |
|
$ |
8,243 |
|
| Basic (loss) income per
share |
$ |
(0.04 |
) |
|
$ |
0.04 |
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.08 |
) |
| Diluted (loss) income per
share |
$ |
(0.04 |
) |
|
$ |
0.04 |
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.08 |
) |
| |
(1) Reflects impairment to goodwill and intangibles of $11,939
in U.S. Cannabis that was based on recent historical performance,
near-term forecasts, and the state of the CBD industry in the
United States. See “Critical Accounting Estimates and Judgments”
below for more information.(2) 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 through March 31, 2024, 80% interest
in Rose LifeScience beginning on April 1, 2024, 85% interest in
Leli through September 22, 2024, and our 100% interest in Leli
beginning on September 23, 2024.
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 September 30,
2024 |
|
| (in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Net income (loss) |
$ |
376 |
|
|
$ |
1,168 |
|
|
$ |
(192 |
) |
|
$ |
297 |
|
|
$ |
(2,469 |
) |
|
$ |
(820 |
) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization |
|
1,348 |
|
|
|
2,734 |
|
|
|
50 |
|
|
|
— |
|
|
|
72 |
|
|
|
4,204 |
|
| Foreign currency exchange loss
(gain) |
|
20 |
|
|
|
(34 |
) |
|
|
— |
|
|
|
— |
|
|
|
(349 |
) |
|
|
(363 |
) |
| Interest expense, net |
|
560 |
|
|
|
149 |
|
|
|
— |
|
|
|
16 |
|
|
|
(63 |
) |
|
|
662 |
|
| Provision for (recovery of)
income taxes |
|
27 |
|
|
|
308 |
|
|
|
— |
|
|
|
— |
|
|
|
(241 |
) |
|
|
94 |
|
| Provision for income taxes
attributable to non-controlling interest |
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
| Share-based compensation |
|
— |
|
|
|
12 |
|
|
|
(17 |
) |
|
|
— |
|
|
|
863 |
|
|
|
858 |
|
| Interest expense for
NCI's |
|
— |
|
|
|
(85 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(85 |
) |
| Amortization for NCI’s |
|
— |
|
|
|
486 |
|
|
|
— |
|
|
|
— |
|
|
|
252 |
|
|
|
738 |
|
| Foreign currency exchange gain
for NCI’s |
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
| Share-based compensation for
NCI’s |
|
— |
|
|
|
16 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
16 |
|
| Adjusted EBITDA (2) |
$ |
2,331 |
|
|
$ |
4,752 |
|
|
$ |
(159 |
) |
|
$ |
313 |
|
|
$ |
(1,935 |
) |
|
$ |
5,302 |
|
| |
For The Nine Months Ended September 30,
2024 |
|
| (in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Net (loss) income |
$ |
(7,810 |
) |
|
$ |
3,399 |
|
|
$ |
(13,173 |
) |
|
$ |
338 |
|
|
$ |
(9,975 |
) |
|
$ |
(27,221 |
) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization |
|
4,029 |
|
|
|
7,550 |
|
|
|
154 |
|
|
|
— |
|
|
|
178 |
|
|
|
11,911 |
|
| Foreign currency exchange loss
(gain) |
|
58 |
|
|
|
(19 |
) |
|
|
— |
|
|
|
— |
|
|
|
715 |
|
|
|
754 |
|
| Interest expense, net |
|
1,709 |
|
|
|
671 |
|
|
|
— |
|
|
|
16 |
|
|
|
(400 |
) |
|
|
1,996 |
|
| Provision for (recovery of)
income taxes |
|
23 |
|
|
|
896 |
|
|
|
— |
|
|
|
— |
|
|
|
(245 |
) |
|
|
674 |
|
| Provision for income taxes
attributable to non-controlling interest |
|
— |
|
|
|
(156 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(156 |
) |
| Share-based compensation |
|
— |
|
|
|
52 |
|
|
|
66 |
|
|
|
— |
|
|
|
3,284 |
|
|
|
3,402 |
|
| Interest expense for
NCI’s |
|
— |
|
|
|
(116 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(116 |
) |
| Amortization for NCI’s |
|
— |
|
|
|
1,285 |
|
|
|
— |
|
|
|
— |
|
|
|
785 |
|
|
|
2,070 |
|
| Foreign currency exchange gain
for NCI’s |
|
— |
|
|
|
9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9 |
|
| Share-based compensation for
NCI’s |
|
— |
|
|
|
58 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
58 |
|
| Other expense, net for
NCI’s |
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
| Deferred financing fees |
|
— |
|
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
| Goodwill and intangible asset
impairments (1) |
|
— |
|
|
|
— |
|
|
|
11,939 |
|
|
|
— |
|
|
|
— |
|
|
|
11,939 |
|
| Adjusted EBITDA (2) |
$ |
(1,991 |
) |
|
$ |
13,643 |
|
|
$ |
(1,014 |
) |
|
$ |
354 |
|
|
$ |
(5,658 |
) |
|
$ |
5,334 |
|
| |
For The Three Months Ended September 30,
2023 |
|
| (in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Net (loss) income |
$ |
(951 |
) |
|
$ |
2,863 |
|
|
$ |
79 |
|
|
$ |
(58 |
) |
|
$ |
(3,232 |
) |
|
$ |
(1,299 |
) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization |
|
1,283 |
|
|
|
1,795 |
|
|
|
53 |
|
|
|
— |
|
|
|
64 |
|
|
|
3,195 |
|
| Foreign currency exchange
loss |
|
66 |
|
|
|
28 |
|
|
|
— |
|
|
|
1 |
|
|
|
834 |
|
|
|
929 |
|
| Interest expense (income),
net |
|
597 |
|
|
|
326 |
|
|
|
— |
|
|
|
— |
|
|
|
(215 |
) |
|
|
708 |
|
| Recovery of income taxes |
|
(221 |
) |
|
|
(1,034 |
) |
|
|
— |
|
|
|
— |
|
|
|
(409 |
) |
|
|
(1,664 |
) |
| Share-based compensation |
|
— |
|
|
|
160 |
|
|
|
78 |
|
|
|
— |
|
|
|
452 |
|
|
|
690 |
|
| Interest expense for
NCI’s |
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13 |
|
| Amortization for NCI’s |
|
— |
|
|
|
372 |
|
|
|
— |
|
|
|
— |
|
|
|
231 |
|
|
|
603 |
|
| Foreign currency exchange loss
for NCI’s |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
| Share-based compensation for
NCI’s |
|
— |
|
|
|
39 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39 |
|
| Other expenses for NCI’s |
|
— |
|
|
|
(14 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
| Deferred financing fees |
|
— |
|
|
|
34 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
| Other expenses |
|
— |
|
|
|
— |
|
|
|
11 |
|
|
|
— |
|
|
|
— |
|
|
|
11 |
|
| Adjusted EBITDA (2) |
$ |
774 |
|
|
$ |
4,585 |
|
|
$ |
221 |
|
|
$ |
(57 |
) |
|
$ |
(2,275 |
) |
|
$ |
3,248 |
|
| |
For The Nine Months Ended September 30,
2023 |
|
| (in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Net (loss) income |
$ |
(4,268 |
) |
|
$ |
3,932 |
|
|
$ |
(125 |
) |
|
$ |
(128 |
) |
|
$ |
(8,726 |
) |
|
$ |
(9,315 |
) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization |
|
3,839 |
|
|
|
5,078 |
|
|
|
279 |
|
|
|
— |
|
|
|
188 |
|
|
|
9,384 |
|
| Foreign currency exchange loss
(gain) |
|
40 |
|
|
|
(8 |
) |
|
|
19 |
|
|
|
— |
|
|
|
145 |
|
|
|
196 |
|
| Interest expense, net |
|
1,728 |
|
|
|
1,615 |
|
|
|
(24 |
) |
|
|
— |
|
|
|
(595 |
) |
|
|
2,724 |
|
| (Recovery of) provision for
income taxes |
|
(229 |
) |
|
|
922 |
|
|
|
— |
|
|
|
— |
|
|
|
(424 |
) |
|
|
269 |
|
| Share-based compensation |
|
— |
|
|
|
424 |
|
|
|
263 |
|
|
|
— |
|
|
|
2,286 |
|
|
|
2,973 |
|
| Interest expense for
NCI’s |
|
— |
|
|
|
47 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
47 |
|
| Amortization for NCI’s |
|
— |
|
|
|
1,072 |
|
|
|
— |
|
|
|
— |
|
|
|
690 |
|
|
|
1,762 |
|
| Foreign currency exchange loss
for NCI’s |
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
| Share-based compensation for
NCI’s |
|
— |
|
|
|
113 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
113 |
|
| Other expenses for NCI’s |
|
— |
|
|
|
(29 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(29 |
) |
| Deferred financing fees |
|
— |
|
|
|
102 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
102 |
|
| Other expense, net |
|
— |
|
|
|
— |
|
|
|
12 |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
| Adjusted EBITDA (2) |
$ |
1,110 |
|
|
$ |
13,273 |
|
|
$ |
424 |
|
|
$ |
(128 |
) |
|
$ |
(6,436 |
) |
|
$ |
8,243 |
|
| |
(1) Reflects impairment to goodwill and intangibles of $11,939
in U.S. Cannabis that was based on recent historical performance,
near-term forecasts, and the state of the CBD industry in the
United States. See “Critical Accounting Estimates and Judgments”
below for more information.(2) Adjusted EBITDA is not a recognized
earnings measure and does not have a standardized meaning
prescribed by GAAP. Therefore, Adjusted EBITDA presented for these
segments 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 the underlying business performance of the Company.
This press release is intended to be read in
conjunction with the Company’s Consolidated Financial Statements
("Financial Statements”) and MD&A for the three and nine months
ended September 30, 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 third quarter financial results
today, Thursday, November 7, 2024, at 8:30 a.m. ET. Participants
can access the conference call via a webcast at Village Farms Third
Quarter 2024 Conference Call Webcast or on the company website at
Village Farms - Events. Participants wanting to access the
conference call by telephone must register in advance at Village
Farms Third Quarter 2024 Conference Call Registration to receive
telephone dial-in information.
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. The Company has a strong foundation as the
leading and longest-tenured leading fresh produce supplier to
grocery and large-format retailers throughout the US and Canada and
is capitalizing on 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 80% of
Québec-based, Rose LifeScience, a leading third-party cannabis
products commercialization expert in the Province of Québec.
Internationally, Village Farms is targeting
selected, nascent, legal cannabis and CBD opportunities with
significant medium- and long-term potential. The Company exports
medical cannabis from its EU GMP certified facility in Canada to a
growing list of international markets including Germany, the United
Kingdom, Israel, and Australia. The Company is expanding its
international presence with additional export contracts to new
countries and customers in the Asia-Pacific and European regions,
as well as select strategic investments in operating assets. In
Europe, wholly-owned Leli Holland has one of 10 licences to grow
and distribute recreational cannabis products.
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.
Village Farms Clean Energy (VFCE), through a
partnership with Atlanta-based Terreva Renewables, creates clean
energy from landfill gas at its Delta RNG facility. VFCE receives
royalties on all revenue generated. This partnership reduces
Vancouver’s greenhouse gas emissions by 475,000 metric tons of CO2
per year, equivalent to removing more than 100,000 vehicles off the
road or the energy use equivalent of powering 51,300 homes for one
year.
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, the cannabis
industry and market and our energy segment 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, Corp. (“Pure Sunfarms”), Rose
LifeScience Inc. (“Rose” or “Rose LifeScience”) and Balanced Health
Botanicals, LLC (“Balanced Health”); the limited operational
history of the Delta RNG Project in our energy segment; the legal
status of the cannabis business of Pure Sunfarms and Rose and the
hemp business of Balanced Health and uncertainty regarding the
legality and regulatory status of cannabis in the United States;
risks relating to the integration of Balanced Health and Rose into
our consolidated business; risks relating to obtaining additional
financing on acceptable terms, including our dependence upon credit
facilities and dilutive transactions; potential difficulties in
achieving and/or maintaining profitability; variability of product
pricing; risks inherent in the cannabis, hemp, CBD, cannabinoids,
and agricultural businesses; our market position and competitive
position; our 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 required under the Cannabis Act (Canada), the
Criminal Code and other Acts, S.C. 2018, C. 16 (Canada) for its
Canadian operational facilities, and changes in our regulatory
requirements; 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
U.S. Federal (Food and Drug Administration and United States
Department of Agriculture), state and municipal levels 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; elevated interest rates; 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 the Company’s most
recently filed Quarterly Report on Form 10-Q and the Company’s most
recently filed annual report on Form 10-K.
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
| Sam GibbonsSenior Vice President,
Corporate AffairsPhone: (407) 936-1190 ext. 328Email:
sgibbons@villagefarms.comLawrence ChamberlainLodeRock
AdvisorsPhone: (416) 519-4196Email:
lawrence.chamberlain@loderockadvisors.com |
| |
|
Village Farms International, Inc.
Consolidated Statements of Financial Position
(In thousands of United States dollars, except share
data) (Unaudited) |
|
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
| ASSETS |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
28,696 |
|
|
$ |
30,291 |
|
|
Restricted cash |
|
|
— |
|
|
|
5,000 |
|
|
Trade receivables |
|
|
33,185 |
|
|
|
30,561 |
|
|
Inventories |
|
|
60,022 |
|
|
|
78,472 |
|
|
Income tax receivable |
|
|
8 |
|
|
|
— |
|
|
Other receivables |
|
|
937 |
|
|
|
294 |
|
|
Prepaid expenses and deposits |
|
|
5,218 |
|
|
|
7,150 |
|
|
Total current assets |
|
|
128,066 |
|
|
|
151,768 |
|
|
Non-current assets |
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
200,271 |
|
|
|
205,613 |
|
|
Investments |
|
|
2,656 |
|
|
|
2,656 |
|
|
Goodwill |
|
|
44,996 |
|
|
|
55,918 |
|
|
Intangibles |
|
|
27,494 |
|
|
|
32,275 |
|
|
Deferred tax asset |
|
|
1,201 |
|
|
|
1,201 |
|
|
Right-of-use assets |
|
|
10,978 |
|
|
|
12,596 |
|
|
Other assets |
|
|
2,186 |
|
|
|
1,962 |
|
|
Total assets |
|
$ |
417,848 |
|
|
$ |
463,989 |
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Line of credit |
|
$ |
4,000 |
|
|
$ |
4,000 |
|
|
Trade payables |
|
|
18,428 |
|
|
|
21,753 |
|
|
Current maturities of long-term debt |
|
|
8,649 |
|
|
|
9,133 |
|
|
Accrued sales taxes |
|
|
13,334 |
|
|
|
15,941 |
|
|
Accrued loyalty program |
|
|
1,624 |
|
|
|
1,773 |
|
|
Accrued liabilities |
|
|
12,407 |
|
|
|
15,076 |
|
|
Lease liabilities - current |
|
|
2,489 |
|
|
|
2,112 |
|
|
Income tax payable |
|
|
— |
|
|
|
28 |
|
|
Other current liabilities |
|
|
1,694 |
|
|
|
2,340 |
|
|
Total current liabilities |
|
|
62,625 |
|
|
|
72,156 |
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Long-term debt |
|
|
34,604 |
|
|
|
38,925 |
|
|
Deferred tax liability |
|
|
23,954 |
|
|
|
23,730 |
|
|
Lease liabilities - non-current |
|
|
9,453 |
|
|
|
11,335 |
|
|
Other liabilities |
|
|
2,254 |
|
|
|
1,902 |
|
|
Total liabilities |
|
|
132,890 |
|
|
|
148,048 |
|
| MEZZANINE
EQUITY |
|
|
|
|
|
|
|
Redeemable non-controlling interest |
|
|
10,608 |
|
|
|
15,667 |
|
| SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
Common stock, no par value per share - unlimited shares authorized;
112,337,049 shares issued and outstanding at September 30, 2024 and
110,248,929 shares issued and outstanding at December 31,
2023. |
|
|
387,349 |
|
|
|
386,719 |
|
|
Additional paid in capital |
|
|
30,338 |
|
|
|
25,611 |
|
|
Accumulated other comprehensive loss |
|
|
(6,951 |
) |
|
|
(3,540 |
) |
|
Retained earnings |
|
|
(136,386 |
) |
|
|
(109,165 |
) |
|
Total Village Farms International, Inc. shareholders’ equity |
|
|
274,350 |
|
|
|
299,625 |
|
|
Non-controlling interest |
|
|
— |
|
|
|
649 |
|
|
Total shareholders’ equity |
|
|
274,350 |
|
|
|
300,274 |
|
|
Total liabilities, mezzanine equity and shareholders’ equity |
|
$ |
417,848 |
|
|
$ |
463,989 |
|
|
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 September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Sales |
|
$ |
83,368 |
|
|
$ |
69,510 |
|
|
$ |
253,627 |
|
|
$ |
211,378 |
|
| Cost of sales |
|
|
(67,660 |
) |
|
|
(54,889 |
) |
|
|
(213,158 |
) |
|
|
(172,958 |
) |
| Gross profit |
|
|
15,708 |
|
|
|
14,621 |
|
|
|
40,469 |
|
|
|
38,420 |
|
| Selling, general and
administrative expenses |
|
|
(16,540 |
) |
|
|
(15,822 |
) |
|
|
(52,593 |
) |
|
|
(49,980 |
) |
| Interest expense |
|
|
(784 |
) |
|
|
(988 |
) |
|
|
(2,606 |
) |
|
|
(3,532 |
) |
| Interest income |
|
|
229 |
|
|
|
262 |
|
|
|
757 |
|
|
|
741 |
|
| Foreign exchange gain
(loss) |
|
|
352 |
|
|
|
(971 |
) |
|
|
(929 |
) |
|
|
(302 |
) |
| Other income (loss) |
|
|
379 |
|
|
|
(19 |
) |
|
|
528 |
|
|
|
5,613 |
|
| Goodwill and intangible asset
impairments |
|
|
— |
|
|
|
— |
|
|
|
(11,939 |
) |
|
|
— |
|
| Loss before taxes |
|
|
(656 |
) |
|
|
(2,917 |
) |
|
|
(26,313 |
) |
|
|
(9,040 |
) |
| (Provision for) recovery of
income taxes |
|
|
(94 |
) |
|
|
1,664 |
|
|
|
(674 |
) |
|
|
(269 |
) |
| Loss including non-controlling
interests |
|
|
(750 |
) |
|
|
(1,253 |
) |
|
|
(26,987 |
) |
|
|
(9,309 |
) |
| Less: net income attributable
to non-controlling interests, net of tax |
|
|
(70 |
) |
|
|
(46 |
) |
|
|
(234 |
) |
|
|
(6 |
) |
| Net loss attributable to
Village Farms International, Inc. shareholders |
|
$ |
(820 |
) |
|
$ |
(1,299 |
) |
|
$ |
(27,221 |
) |
|
$ |
(9,315 |
) |
| Basic loss per share
attributable to Village Farms International, Inc. shareholders |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.09 |
) |
| Diluted loss per share
attributable to Village Farms International, Inc. shareholders |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.09 |
) |
| Weighted average number of
common shares used in the computation of net loss per share (in
thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
111,917 |
|
|
|
110,239 |
|
|
|
111,045 |
|
|
|
108,214 |
|
|
Diluted |
|
|
111,917 |
|
|
|
110,239 |
|
|
|
111,045 |
|
|
|
108,214 |
|
| Loss including non-controlling
interests |
|
$ |
(750 |
) |
|
$ |
(1,253 |
) |
|
$ |
(26,987 |
) |
|
$ |
(9,309 |
) |
| Other comprehensive income
(loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
2,595 |
|
|
|
(5,986 |
) |
|
|
(3,655 |
) |
|
|
(899 |
) |
| Comprehensive gain (loss)
including non-controlling interests |
|
|
1,845 |
|
|
|
(7,239 |
) |
|
|
(30,642 |
) |
|
|
(10,208 |
) |
|
Comprehensive (income) loss attributable to non-controlling
interests |
|
|
(222 |
) |
|
|
353 |
|
|
|
10 |
|
|
|
(50 |
) |
| Comprehensive gain (loss)
attributable to Village Farms International, Inc. shareholders |
|
$ |
1,623 |
|
|
$ |
(6,886 |
) |
|
$ |
(30,632 |
) |
|
$ |
(10,258 |
) |
|
Village Farms International, Inc.
Consolidated Statements of Cash Flows (In
thousands of United States dollars)
(Unaudited) |
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
|
2024 |
|
|
2023 |
|
| Cash flows provided by
(used in) operating activities: |
|
|
|
|
|
|
|
Net loss attributable to Village Farms International, Inc.
shareholders |
|
$ |
(27,221 |
) |
|
$ |
(9,315 |
) |
|
Adjustments to reconcile net loss attributable to Village Farms
International, Inc. shareholders to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
14,507 |
|
|
|
11,726 |
|
|
Amortization of deferred charges |
|
|
10 |
|
|
|
102 |
|
|
Net income attributable to non-controlling interest |
|
|
234 |
|
|
|
6 |
|
|
Interest expense |
|
|
2,606 |
|
|
|
3,532 |
|
|
Interest paid on long-term debt |
|
|
(3,128 |
) |
|
|
(3,645 |
) |
|
Unrealized foreign exchange loss |
|
|
143 |
|
|
|
92 |
|
|
Goodwill and intangible asset impairments |
|
|
11,939 |
|
|
|
— |
|
|
Non-cash lease expense |
|
|
1,684 |
|
|
|
1,615 |
|
|
Share-based compensation |
|
|
3,476 |
|
|
|
3,135 |
|
|
Deferred income taxes |
|
|
384 |
|
|
|
1,748 |
|
|
Changes in non-cash working capital items |
|
|
5,302 |
|
|
|
(2,191 |
) |
|
Net cash provided by operating activities |
|
|
9,936 |
|
|
|
6,805 |
|
| Cash flows (used in)
provided by investing activities: |
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(8,147 |
) |
|
|
(4,358 |
) |
|
Purchases of intangibles |
|
|
(80 |
) |
|
|
— |
|
|
Repayment of note receivable |
|
|
— |
|
|
|
835 |
|
|
Net cash used in investing activities |
|
|
(8,227 |
) |
|
|
(3,523 |
) |
| Cash flows (used in)
provided by financing activities: |
|
|
|
|
|
|
|
Repayments on borrowings |
|
|
(4,301 |
) |
|
|
(7,858 |
) |
|
Purchase of Non-controlling interest |
|
|
(3,817 |
) |
|
|
— |
|
|
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 |
|
|
(8,118 |
) |
|
|
15,560 |
|
| Effect of exchange rate
changes on cash and cash equivalents |
|
|
(186 |
) |
|
|
(35 |
) |
| Net (decrease)
increase in cash, cash equivalents and restricted
cash |
|
|
(6,595 |
) |
|
|
18,807 |
|
| Cash, cash equivalents
and restricted cash, beginning of period |
|
|
35,291 |
|
|
|
21,676 |
|
| Cash, cash equivalents
and restricted cash, end of period |
|
$ |
28,696 |
|
|
$ |
40,483 |
|
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