VANCOUVER, Aug. 12, 2019 /CNW/ - Village Farms
International, Inc. ("Village Farms" or the "Company") (TSX: VFF)
(NASDAQ: VFF) today announced its financial results for the second
quarter and six-month period ended June
30, 2019. All figures are in U.S. dollars unless
otherwise indicated.
Village Farms' Financial and Corporate Highlights for the
Second Quarter Ended June 30,
2019
(All comparable figures are for the second
quarter ended June 30, 2018)
- Net income before tax improved to positive US$9.9 million and included the contribution of
positive net income from Pure Sunfarms Corp. ("Pure Sunfarms") of
US$14.0 million (CAD$18.6 million) (Village Farms' share based on
its 50% ownership). This compares with a net loss of (US$2.3 million);
- Produce sales were US$41.3
million compared with US$42.0
million;
- Earnings per share improved to US$0.20 from a loss per share of (US$0.05);
- EBITDA improved to US$4.6
million, including the contribution from Pure Sunfarms of
US$9.4 million (CAD$12.6 million) (Village Farms' 50% share).
This compares with an EBITDA loss of (US$1.3
million); and
- Completed a bought deal offering of 1,000,000 common shares at
a price of CAD$20.00 per share for
aggregate gross proceeds to the Company of CAD$20,000,000.
Second Quarter Financial Results for Village Farms' Canadian
Cannabis Joint Venture, Pure Sunfarms
- Sales (before Village Farms' 50% share), which consisted
entirely of dried cannabis sold primarily to other licensed
producers, increased 125% sequentially to CAD$32.4 million (US$24.2
million);
- Cost of goods sold ("all in cost") per gram was CAD$0.65 (US$0.49)
per gram;
- Gross margin was 84%;
- Net income (before Village Farms' 50% share) increased 226%
sequentially to CAD$37.2 million
(US$27.9 million), marking Pure
Sunfarms' third consecutive quarter of profitability; and,
- EBITDA (before Village Farms' 50% share) increased 194%
sequentially to CAD$25.2 million
(US$18.9 million), resulting in an
EBITDA margin of 78%.
Recent Highlights for Village Farms' Canadian
Cannabis Joint Venture, Pure Sunfarms
- Achieved full run-rate production of 75,000 kilograms of dried
cannabis annually at its 1.1 million square foot Delta 3 greenhouse in Delta, B.C., the first and only single site
cannabis operation in the world to exceed 1 million square
feet;
- Received a Standard Processing License from Health Canada for
its 1.1 million square foot Delta
3 greenhouse facility which permits Pure Sunfarms to extract and
process cannabis at the Delta 3
facility and which will enable the development and manufacture of
products derived from the cannabis plant, including cannabis oil,
as well as concentrates and edibles, as regulations permit;
- Met all Health Canada criteria regarding the amendment to its
license that will permit it to sell dried cannabis products
directly to provincial/territorial and private retailers in
Canada and, in anticipation of
receipt of the amendment, continues to prepare for sales and
distribution to the Ontario Cannabis Store, with which it has a
supply agreement in place, as well as to other provinces, with
which it is in discussions for potential supply agreements;
- Commenced conversion of its second 1.1 million square foot
greenhouse operation, Delta 2, for
cannabis production, which is expected to double Pure Sunfarms'
annual output at full production to over 150,000 kilograms
(expected by the fourth quarter of 2020);
- Continued to advance towards completion of the 65,000 square
foot state-of-the-art processing center in the Delta 3 facility. The processing center, which
will include on-site extraction capabilities and is designed for
full GMP compliance and certification, and remains on schedule to
be completed by the end of 2019 and operational as soon as possible
thereafter subject to Health Canada licensing;
- Recently Emerald Health Therapeutics ("Emerald") has been
electing not to fully exercise its right under the Supply Agreement
to purchase 40% of Pure Sunfarms' cannabis production. Pure
Sunfarms has sold, and continues to sell, all portions of the
production that Emerald did not purchase to other licensed
producers in the spot market, where it has been realizing pricing
in excess of the predetermined selling price to Emerald under this
Supply Agreement.
Recent Highlights for Village Farms' U.S. Hemp/CBD
Program
- Commenced conversion of half of its 1.3 million square foot,
ultra-high-tech Permian Basin greenhouse for cultivation of
high-CBD hemp and CBD extraction, which will include the
implementation of leading-edge technologies that will support
Village Farms' leadership position in large-scale precision
agriculture. In June 2019, the state
of Texas legalized the cultivation
of hemp and the processing of hemp and hemp-derived products,
including cannabidiol (CBD). The Texas hemp legislation will require licenses
for both the cultivation and processing of hemp and Village Farms
plans to apply for the requisite licenses as soon as it is
permitted to do so;
- The Company's joint venture for hemp production and processing
in the Eastern U.S., Village Fields Hemp USA, LLC ("VFH"), has planted out
approximately 600 acres in Virginia, North
Carolina and South Carolina
and expects to begin harvesting in August of this year, with
initial sales of hemp biomass to commence in the fourth quarter of
2019. VFH is now well advanced in planning and engineering work to
establish its centralized extraction operations in the southeastern
U.S., which is expected to be operational in the first quarter of
2020; and,
- Expanded U.S. outdoor hemp cultivation and CBD extraction
program to Colorado through a new
joint venture, Arkansas Valley Green and Gold Hemp, LLC ("AVGGH")
for the outdoor cultivation of high-cannabidiol (CBD) hemp and CBD
extraction. AVGGH has planted 120 acres of Hemp and expects to
begin harvesting in October
2019.
"Pure Sunfarms' second quarter financial results firmly rank it
among the largest, most efficient and most profitable licensed
cannabis producers in Canada, and
clearly demonstrates that we have built a best in class cannabis
operation setting a new bar for industry performance," said
Michael DeGiglio, Chief Executive
Officer, Village Farms. "Moreover, Pure Sunfarms' ability to
achieve this level of operational and financial performance in just
24 months from our initial announcement to enter the cannabis
industry is clear validation of our unique conversion
strategy. It also underscores the considerable advantage of
combining existing, state-of-the-art greenhouse operations with 20
years of site-specific experience, and an exceptional management
team, supported by Village Farms' decades-long track record in
large-scale, low-cost, precision agriculture."
"These results are even more impressive given that Pure
Sunfarms' first 1.1 million square foot greenhouse, Delta 3, was not yet at full production during
the second quarter and sales were almost entirely to other licensed
producers at pricing below what Pure Sunfarms expects to realize
when selling directly to provincial/territorial and other
retailers. We expect Pure Sunfarms to deliver consistent
quarter-on-quarter growth throughout this year and next, driven by
Delta 3 now operating at full
production, the anticipated start of sales directly to the Ontario
Cannabis Store and other provincial/territorial and private
retailers, expansion of product sales into pre-rolls and oils and
other derivative products, and the doubling of capacity to 150,000
kilograms annually with its second 1.1 million square foot
facility, Delta 2, expected to
begin operations mid-2020 and achieve full production later that
year."
"The success of Pure Sunfarms to date – both operationally and
financially – provides us with tremendous confidence as Pure
Sunfarms proceeds with the conversion of Delta 2, which will benefit from the same
strategy of transferring Village Farms' experienced growers,
operational team and skilled crop workers that have been so
integral to the success of Delta
3. And we continue to be optimistic about the potential for
Pure Sunfarms to further expand production to as much as 330,000
kilograms or more through the addition of the 2.6 million square
foot Delta 1 facility, further
supporting low-cost production."
"The second quarter also saw Village Farms take major steps in
our aggressive pursuit of the significant hemp and CBD opportunity
in the United States as we
continue to pivot towards these new outsized growth opportunities
and transform the earnings potential of our Company. We
established our second joint venture for outdoor hemp cultivation
and CBD-extraction, adding Colorado to our production in three eastern
states. And we began conversion and enhancement of half of
our 1.3 million square foot, ultra-high-tech Permian Basin
greenhouse for hemp cultivation and on-site CBD extraction.
We remain firmly on track to begin sales of hemp biomass this year,
transitioning to sales of CBD crude oil early in 2020, and then
commence CBD product manufacturing. We are very active with
research and development initiatives, including genetics and
developing our downstream strategy to establish Village Farms as a
leading, vertically integrated, hemp-derived CBD company and
capture value throughout the supply chain."
Summary Statutory Results
(in thousands of U.S.
Dollars unless otherwise indicated)
|
For the three
months
ended June 30,
|
|
For the six
months
ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Produce
sales
|
$41,329
|
|
$42,039
|
|
$73,219
|
|
$71,529
|
Cost of
sales
|
(44,263)
|
|
(41,150)
|
|
(75,845)
|
|
(67,053)
|
Selling, general and
administrative expenses
|
(3,918)
|
|
(3,688)
|
|
(7,944)
|
|
(7,045)
|
Stock compensation
expense
|
(912)
|
|
(138)
|
|
(2,321)
|
|
(256)
|
Change in biological
asset (2)
|
630
|
|
856
|
|
530
|
|
197
|
Loss from
operations
|
(7,134)
|
|
(2,081)
|
|
(12,361)
|
|
(2,628)
|
Interest expense,
net
|
(503)
|
|
(691)
|
|
(1,110)
|
|
(1,289)
|
Foreign exchange gain
(loss)
|
243
|
|
(21)
|
|
521
|
|
(14)
|
Other income,
net
|
282
|
|
26
|
|
150
|
|
44
|
Share of income
(loss) from joint ventures
|
13,841
|
|
(104)
|
|
18,110
|
|
(341)
|
Gain on disposal of
assets
|
-
|
|
-
|
|
13,566
|
|
-
|
(Provision for)
recovery of income taxes
|
3,160
|
|
589
|
|
(1,340)
|
|
802
|
Net income
(loss)
|
9,889
|
|
(2,282)
|
|
17,536
|
|
(3,426)
|
Consolidated EBITDA
(3)
|
4,593
|
|
(1,316)
|
|
5,873
|
|
496
|
Earnings (loss) per
share – basic
|
$0.20
|
|
($0.05)
|
|
$0.36
|
|
($0.08)
|
Earnings (loss) per
share – diluted
|
$0.20
|
|
($0.05)
|
|
$0.35
|
|
($0.08)
|
Summary Results Including Joint Ventures, on a Proportionate
Basis
The following results reflect the Company's proportionate share
of the Pure Sunfarms joint venture operations, as this is the basis
on which management bases its operating decisions and
performance. For a reconciliation to the results in
accordance with International Financial Reporting Standards
("IFRS") refer to the "Reconciliation of IFRS to Proportionate
Results" as presented below and in Management's Discussion &
Analysis ("MD&A").
(in thousands of U.S. Dollars unless otherwise
indicated)
|
For the three
months ended
June 30,
|
|
For the six months
ended
June 30,
|
|
20191
|
|
20183
|
|
20191
|
|
20183
|
Consolidated
sales
|
$53,451
|
|
$42,039
|
|
$90,742
|
|
$71,529
|
Cost of
sales
|
(46,241)
|
|
(41,150)
|
|
(79,732)
|
|
(67,053)
|
Selling, general and
administrative expenses
|
(4,930)
|
|
(3,963)
|
|
(9,485)
|
|
(7,547)
|
Change in biological
asset (1)
|
7,978
|
|
960
|
|
10,929
|
|
358
|
Gain on disposal of
assets
|
-
|
|
-
|
|
13,566
|
|
-
|
Net income
(loss)
|
9,889
|
|
(2,282)
|
|
17,536
|
|
(3,426)
|
EBITDA(3)
|
$4,593
|
|
($1,316)
|
|
$5,873
|
|
496
|
Earning (loss) per
share – basic
|
$0.20
|
|
($0.05)
|
|
$0.36
|
|
($0.08)
|
Earning (loss) per
share – diluted
|
$0.20
|
|
($0.05)
|
|
$0.35
|
|
($0.08)
|
Notes:
|
|
(1)
|
Biological asset
consists of the Company's produce on the vines and Pure Sunfarms'
crop at the period end. Details of the changes are described
in note 5 of the Company's interim condensed consolidated financial
statements for the six months ended June 30, 2019.
|
|
|
(2)
|
EBITDA is not a
recognized earnings measure and does not have a standardized
meaning prescribed by IFRS. Therefore, EBITDA may not be
comparable to similar measures presented by other issuers.
See "Non-IFRS Measures". Management believes that EBITDA is a
useful supplemental measure in evaluating the performance of the
Company. Consolidated EBITDA includes the Company's 50% interest in
Pure Sunfarms, 65% interest in VFH and 60% (effective 63.25% with
VFH interest) interest in AVGGH.
|
|
|
(3)
|
The consolidated
financial results above reflect the proportionate share of the
Company's share of revenues and expenses from its joint venture
operations, as this is the basis which management bases its
operating decisions and performance evaluation. IFRS does not
allow for the inclusion of the joint venture on a proportionate
basis. These results include additional non-IFRS measures
such as EBITDA.
|
|
|
|
The results are not
generally accepted measures of financial performance under
IFRS. The Company's method of calculating these financial
performance measures may differ from other companies and
accordingly, they may not be comparable to measures used by other
companies. Refer to the MD&A for a reconciliation of
these non-IFRS measures and proportionate results.
|
Financial Highlights
(All amounts in U.S. Dollars
unless otherwise indicated.)
Cannabis
For the three months ended June 30,
2019, there were no comparable results for the three months
ended June 30, 2018 as no production
existed.
The Company's 50% share of sales of Pure Sunfarms for the three
months ended June 30, 2019 was
$12,122. Total Pure Sunfarms
sales consisted of close to 8,000 kilograms sold at an average
selling price of over $3 per gram
(CAD$4 per gram) during the three
months ended June 30, 2019.
The Company's 50% share of cost of sales of Pure Sunfarms for
the three months ended June 30, 2019
was $1,978. The cost per gram
for the three months was about half of that from the three months
ended March 31, 2019, the decrease is
due to higher production and a reduction of seasonal cost (i.e.,
electricity) resulting in a cost per gram of approximately
$0.49 per gram (CAD $0.65).
The Company's 50% share of selling, general and administrative
expenses of Pure Sunfarms for the three months ended
June 30, 2019 was $893.
The Company's 50% share of net income for the three months ended
June 30, 2019 was $13,962 compered to a loss of ($237) for the three months ended June 30, 2018.
The Company's 50% share of EDITDA for the three months ended
June 30, 2019 was $9,447 compared to ($275) for the three months ended June 30, 2018.
For the six ended months ended June
30, 2019, there were no comparable results for the six
months ended June 30, 2018 as no
production existed.
The Company's 50% share of sales of Pure Sunfarms for the six
months ended June 30, 2019 was
$17,523. Total Pure Sunfarms
sales consisted of close to 11,600 kilograms of flower and trim
during the six months ended June 30,
2019, at an average sales price of approximately
$3 per gram (CAD $4 per gram).
The Company's 50% share of cost of sales of Pure Sunfarms for
the six months ended June 30, 2019
was $3,887 (based on total grams sold
of close to 11,600 kilograms), or approximately $0.67 per gram (CAD$0.82 per gram).
The Company's 50% share of selling, general and administrative
expenses of Pure Sunfarms for the six months ended
June 30, 2019 was $1,393 and primarily consisted of personnel
costs.
Income from operations for the Company's 50% share of Pure
Sunfarms was $22,509 for the six
months ended June 30, 2019.
This income was generated by continuing strong wholesale pricing
and six-month cost of sales of cost of $0.62 (or CAD$0.82)
per gram sold.
The Company's 50% share of net income for the six months ended
June 30, 2019 was $18,260 versus a loss of ($275) for the six months ended June 30, 2018.
The Company's 50% share of EBITDA for the six months ended
June 30, 2019 was $12,671 versus ($502) for the same period in
2018.
Produce
For the three months ended June 30,
2019 compared to the three months ended June 30, 2018.
Sales for the three months ended June 30,
2019 decreased by ($710), or
(2%), to $41,329 from $42,039 for the three months ended June 30, 2018. The decrease in sales for
the three months ended June 30, 2019
is primarily due to a decrease in the Company's production of (9%)
partially offset by an increase in supply partner revenue of
14%.
Cost of sales for the three months ended June 30, 2019 increased by ($3,113), or (8%), to $44,263 from $41,150 for the three months ended June 30, 2018; primarily due to an increase of
($1,447) in contract sales cost (due
to the increased volume) and an increase in cost per pound from the
Texas facilities. The
decrease in production caused an increase in cost per pound as a
majority of the production costs are fixed so as production
decreases cost per pound increases.
EBITDA for the three months ended June
30, 2019 decreased by ($3,690)
from the three months ended June 30,
2018, primarily as a result of a decrease in income from
operations, due to a decrease in sales and an increase in cost per
pound for product produced as the fixed costs were spread over less
pounds.
For the six months ended June 30,
2019 compared to the six months ended June 30, 2018.
Sales for the six months ended June 30,
2019 increased by $1,690, or
2%, to $73,219 from $71,529 for the six months ended June 30, 2018. The increase in sales for the six
months ended June 30, 2019 is
primarily due to an increase in supply partner revenue of 16%
partially offset by a decrease in the Company's production of
(12%).
Cost of sales for the six months ended June 30, 2019 increased by $8,792, or (13%), to $75,845 from $67,053 for the six months ended June 30, 2018; primarily due to an increase of
25% in contract sales cost and an increase in cost per pound from
the Texas facilities due to lower
production.
EBITDA for the six months ended June 30,
2019 decreased by ($7,650),
from the six months ended June 30,
2018, primarily as a result of a decrease in income from
operations, which resulted in decreased sales and an increase in
cost per pound for product produced as the fixed costs were spread
over less pounds.
Non-IFRS Measures
References in this MD&A to "EBITDA" are to earnings before
interest, taxes, depreciation, amortization, foreign currency
exchange gains and losses on translation of long-term debt,
unrealized gains on the changes in the value of derivative
instruments, unrealized change in biological asset, stock
compensation, and gains and losses on asset sales. EBITDA is
a cash flow measure that is not recognized under IFRS and does not
have a standardized meaning prescribed by IFRS. Therefore, EBITDA
may not be comparable to similar measures presented by other
issuers. Investors are cautioned that EBITDA should not be
construed as an alternative to net income or loss determined in
accordance with IFRS as an indicator of the Company's performance
or to cash flows from operating, investing and financing activities
as measures of liquidity and cash flows. Management believes that
EBITDA is an important measure in evaluating the historical
performance of the Company.
Reconciliation of Net Income to EBITDA
The following table reflects a reconciliation of net income to
EBITDA, as presented by the Company:
(in thousands of
U.S. dollars)
|
For the three
months
ended June 30,
|
|
For the six
months
ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
(loss)
|
$9,889
|
|
($2,282)
|
|
$17,536
|
|
($3,426)
|
Add:
|
|
|
|
|
|
|
|
Amortization
|
1,841
|
|
1,722
|
|
3,769
|
|
3,523
|
Foreign currency
exchange loss (gain)
|
(243)
|
|
21
|
|
(521)
|
|
14
|
Interest expense,
net
|
503
|
|
691
|
|
1,110
|
|
1,289
|
Income taxes
(recovery)
|
(3,160)
|
|
(589)
|
|
1,340
|
|
(802)
|
Stock based
compensation
|
912
|
|
138
|
|
2,321
|
|
256
|
Change in biological
asset
|
(630)
|
|
(856)
|
|
(530)
|
|
(197)
|
Change in biological
asset for JV's
|
(7,348)
|
|
(161)
|
|
(10,399)
|
|
(161)
|
Interest expense for
JV's
|
196
|
|
-
|
|
197
|
|
-
|
Amortization for
JV's
|
197
|
|
-
|
|
424
|
|
-
|
Foreign currency
exchange loss (gain) for JV's
|
12
|
|
-
|
|
(7)
|
|
-
|
Income taxes
(recovery) from JV's
|
2,424
|
|
|
|
4,199
|
|
-
|
Gain on disposal of
assets
|
-
|
|
-
|
|
(13,566)
|
|
-
|
EBITDA
|
$4,593
|
|
($1,316)
|
|
$5,873
|
|
$496
|
EBITDA for JV's
(See table below)
|
$9,324
|
|
($275)
|
|
$12,525
|
|
($502)
|
EBITDA excluding
JVs(produce)
|
($4,731)
|
|
($1,041)
|
|
($6,652)
|
|
$998
|
|
|
|
|
Breakout of JV's
EBITDA
(in thousands of
U.S. dollars)
|
For the three
months
ended June 30,
|
|
For the six
months
ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Pure Sunfarms
EBITDA
|
$9,447
|
|
($275)
|
|
$12,671
|
|
($502)
|
VFH EBITDA
|
(103)
|
|
-
|
|
(126)
|
|
-
|
AVGGH
EBITDA
|
(20)
|
|
-
|
|
(20)
|
|
-
|
Total JV's
EBITDA
|
$9,324
|
|
($275)
|
|
$12,525
|
|
($502)
|
|
|
|
|
|
|
|
|
Reconciliation of IFRS to Proportionate Results
The following tables are a reconciliation of the IFRS results to
the proportionate results (which include the Company's
proportionate share of the Pure Sunfarms operations):
|
For the three
months ended June 30, 2019
|
|
Produce
|
|
PSF(4)
|
|
Hemp(4)
|
|
Total
|
Sales
|
$41,329
|
|
$12,122
|
|
$-
|
|
$53,451
|
Cost of
sales
|
(44,263)
|
|
(1,978)
|
|
-
|
|
(46,241)
|
Selling, general and
administrative expenses
|
(3,918)
|
|
(893)
|
|
(119)
|
|
(4,930)
|
Stock compensation
expense
|
(912)
|
|
-
|
|
-
|
|
(912)
|
Change in biological
asset (5)
|
630
|
|
7,348
|
|
-
|
|
7,978
|
Other income
(expense) net
|
22
|
|
(157)
|
|
(51)
|
|
(186)
|
(Provision for)
recovery of income taxes
|
3,160
|
|
(2,480)
|
|
49
|
|
729
|
Net income
(loss)
|
(3,952)
|
|
13,962
|
|
(121)
|
|
9,889
|
EBITDA
(6)
|
(4,731)
|
|
9,447
|
|
(123)
|
|
4,593
|
Earnings (loss) per
share – basic
|
($0.08)
|
|
$0.28
|
|
($0.00)
|
|
$0.20
|
Earnings (loss) per
share – diluted
|
($0.08)
|
|
$0.28
|
|
($0.00)
|
|
$0.20
|
|
For the three
months ended June 30, 2018
|
|
Produce
|
|
PSF(4)
|
|
Hemp(4)
|
|
Total
|
Sales
|
$42,039
|
|
$-
|
|
$-
|
|
$42,039
|
Cost of
sales
|
(41,150)
|
|
-
|
|
-
|
|
(41,150)
|
Selling, general and
administrative expenses
|
(3,688)
|
|
(275)
|
|
-
|
|
(3,963)
|
Stock compensation
expense
|
(138)
|
|
-
|
|
-
|
|
(138)
|
Change in biological
asset (5)
|
856
|
|
104
|
|
-
|
|
960
|
Other income
(expense) net
|
(686)
|
|
-
|
|
-
|
|
(686)
|
Recovery of income
taxes
|
589
|
|
-
|
|
-
|
|
589
|
Net income
(loss)
|
(2,178)
|
|
(104)
|
|
-
|
|
(2,282)
|
EBITDA
(6)
|
(1,041)
|
|
(275)
|
|
-
|
|
(1,316)
|
Earnings (loss) per
share – basic
|
($0.05)
|
|
($0.00)
|
|
$-
|
|
($0.05)
|
Earnings (loss) per
share – diluted
|
($0.05)
|
|
($0.00)
|
|
$-
|
|
($0.05)
|
|
For the six months
ended June 30, 2019
|
|
Produce
|
|
PSF(4)
|
|
Hemp(4)
|
|
Total
|
Sales
|
$73,219
|
|
$17,523
|
|
$-
|
|
$90,742
|
Cost of
sales
|
(75,845)
|
|
(3,887)
|
|
-
|
|
(79,732)
|
Selling, general and
administrative expenses
|
(7,944)
|
|
(1,393)
|
|
(148)
|
|
(9,485)
|
Stock compensation
expense
|
(2,321)
|
|
-
|
|
-
|
|
(2,321)
|
Change in biological
asset (5)
|
530
|
|
10,399
|
|
-
|
|
10,929
|
Gain on disposal of
assets
|
13,566
|
|
-
|
|
-
|
|
13,566
|
Other income
(expense) net
|
(439)
|
|
(133)
|
|
(51)
|
|
(623)
|
(Provision for)
recovery of for income taxes
|
(1,340)
|
|
(4,249)
|
|
49
|
|
(5,540)
|
Net income
(loss)
|
(574)
|
|
18,260
|
|
(150)
|
|
17,536
|
EBITDA
(6)
|
(6,652)
|
|
12,671
|
|
(146)
|
|
5,873
|
Earnings (loss) per
share – basic
|
($0.01)
|
|
$0.37
|
|
$0.00
|
|
$0.36
|
Earnings (loss) per
share – diluted
|
($0.01)
|
|
$0.36
|
|
$0.00
|
|
$0.35
|
|
For the six months
ended June 30, 2018
|
|
Produce
|
|
PSF(4)
|
|
Hemp(4)
|
|
Total
|
Sales
|
$71,529
|
|
$-
|
|
$-
|
|
$71,529
|
Cost of
sales
|
(67,053)
|
|
-
|
|
-
|
|
(67,053)
|
Selling, general and
administrative expenses
|
(7,045)
|
|
(502)
|
|
-
|
|
(7,547)
|
Stock compensation
expense
|
(256)
|
|
|
|
|
|
(256)
|
Change in biological
asset (5)
|
197
|
|
161
|
|
-
|
|
358
|
(Gain) loss on sale
of assets
|
-
|
|
-
|
|
-
|
|
-
|
Other income
(expense) net
|
(1,259)
|
|
-
|
|
-
|
|
(1,259)
|
Recovery of income
taxes
|
802
|
|
-
|
|
-
|
|
802
|
Net income
(loss)
|
(3,085)
|
|
(341)
|
|
-
|
|
(3,426)
|
EBITDA
(6)
|
998
|
|
(502)
|
|
-
|
|
496
|
Earnings (loss) per
share – basic
|
($0.07)
|
|
($0.01)
|
|
$-
|
|
($0.08)
|
Earnings (loss) per
share – diluted
|
($0.07)
|
|
($0.01)
|
|
$-
|
|
($0.08)
|
|
|
Notes:
|
|
(4)
|
The adjusted
consolidated financial results have been adjusted to include the
Company's share of revenues and expenses from its Pure Sunfarms and
Hemp joint ventures on a proportionate accounting basis, on which
management bases its operating decisions and performance
evaluation. IFRS does not allow for the inclusion of the
Joint Venture on a proportionate basis. These results include
additional non-IFRS measures such as EBITDA.
|
|
|
|
The adjusted results
are not generally accepted measures of financial performance under
IFRS. The Company's method of calculating these financial
performance measures may differ from other companies and
accordingly, they may not be comparable to measures used by other
companies. Refer to the MD&A for a reconciliation of
these non-IFRS measures and adjusted results.
|
|
|
(5)
|
Biological asset
consists of the Company's produce on the vines and Pure Sunfarms'
crop at the period end. Details of the changes are described
in note 5 of the Company's interim condensed consolidated financial
statements for the six months ended June 30, 2019.
|
|
|
(6)
|
EBITDA is not a
recognized earnings measure and does not have a standardized
meaning prescribed by IFRS. Therefore, EBITDA may not be
comparable to similar measures presented by other issuers.
See "Non-IFRS Measures". Management believes that EBITDA is a
useful supplemental measure in evaluating the performance of the
Company. Consolidated EBITDA includes the Company's 50% interest
Pure Sunfarms, 65% interest in VFH and 60% (effective 63.25% with
VFH interest) interest in AVGGH.
|
Conference Call
Village Farms' management team will host a conference call
Tuesday, August 13, 2019 at
11:00 a.m. ET (8:00 a.m. PT) to discuss its second quarter 2019
financial results. Participants can access the conference
call by telephone by dialing (647) 427-7450 or (888) 231-8191, or
via the Internet at: https://bit.ly/334YIJG.
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) 849-0833 or (855) 859-2056 and enter the
passcode 1676417 followed by the pound key. The telephone replay
will be available until, August 20,
2019 at midnight (ET). The conference call will also
be archived on Village Farms' website
at http://villagefarms.com/investor-relations/investor-calls.
About Village Farms International, Inc.
Village Farms is one of the largest and longest-operating
vertically integrated greenhouse growers in North America and the only publicly traded
greenhouse produce company in Canada. Village Farms produces and distributes
fresh, premium-quality produce with consistency 365 days a year to
national grocers in the U.S. and Canada from more than nine million square feet
of Controlled Environment Agriculture (CEA) greenhouses in
British Columbia and Texas, as well as from its partner greenhouses
in British Columbia, Ontario and Mexico. The Company is now
leveraging its 30 years of experience as a vertically integrated
grower for the rapidly emerging global cannabis opportunity through
its 50% ownership of British
Columbia-based Pure Sunfarms Corp., one of the single
largest cannabis growing operations in the world. The Company
also intends to pursue opportunities to become a vertically
integrated leader in the U.S. hemp-derived CBD market, subject to
compliance with all applicable U.S. federal and state laws, Village
Farms has established two joint ventures, Village Fields Hemp
USA, LLC, and Arkansas Valley
Green and Gold Hemp LLC, for multi-state outdoor hemp cultivation
and CBD extraction and plans to pursue controlled environment hemp
production at its Texas greenhouse
operations, which total 5.7 million square feet of production area,
subject to legalization of hemp in Texas.
Cautionary Language
Certain statements contained in this press release constitute
forward-looking information within the meaning of applicable
securities laws ("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, 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, Pure Sunfarms, the greenhouse vegetable industry or
the cannabis and hemp industries are forward-looking statements. In
some cases, forward-looking information can be identified by such
terms as "outlook", "may", "might", "will", "could", "should",
"would", "occur", "expect", "plan", "anticipate", "believe",
"intend", "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.
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, that 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 U.S. and Canadian securities regulators, including as detailed
in the Company's annual information form and management's
discussion and analysis for the year-ended December 31, 2018.
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 only
relate 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.
View original
content:http://www.prnewswire.com/news-releases/village-farms-international-reports-strong-second-quarter-2019-results--canadian-cannabis-jv-more-than-doubles-sales-to-cad32-3-million-with-an-all-in-cost-of-production-of-cad0-65-per-gram-and-ebitda-margin-of-78-and-achieve-300900402.html
SOURCE Village Farms International, Inc.