- Consolidated Revenue Increased 18% Year-Over-Year to
$82.9 Million
- Canadian Cannabis Business Net Sales Increased 20%
Year-Over-Year and 37% Sequentially to Quarterly New
Record
- Pure Sunfarms Remains Best-Selling Dried Flower Brand in
Canada*
- Rose LifeScience Became the Number Three Licensed Producer
in Quebec**
VANCOUVER, BC, Aug. 9, 2022
/CNW/ - Village Farms International, Inc. ("Village Farms" or
the "Company") (NASDAQ: VFF) (TSX: VFF) today announced its
financial results for the second quarter ended June 30, 2022. All figures are in U.S.
dollars unless otherwise indicated.
Management Commentary
"The continued successful execution of our differentiated
Canadian Cannabis strategy drove strong year-over-year and
sequential sales growth, achieving a new record high for the second
quarter, as well as our 15th consecutive quarter of positive EBITDA
for that business," said Michael
DeGiglio, Chief Executive Officer, Village Farms. "Our Pure
Sunfarms brand maintained its number one market share position in
dried flower in Canada*, while
Rose LifeScience became a top-three licensed producer in
Quebec, with an 8.5% market
share**, in part driven by its Promenade brand in collaboration
with Pure Sunfarms. Importantly, our planned investments in our
commercial capabilities, including sales support and marketing,
strain development and other innovation, new brands and
geographical expansion over the past 18 months to drive both near-
and long-term growth are beginning to yield their intended results.
We are also seeing the benefits of the evolution of our strategy
for non-branded, with larger, more regular sales to a smaller
number of repeat customers, which has been complemented by steady
growth in exports, having recently completed our sixth shipment to
Australia."
"We continue to expect the second half of 2022 to trend
favourably for our Canadian Cannabis business, as we launch new
SKUs, including new strains, across our brands into a market that
continues to exhibit robust growth. In addition, the roll out of
the Original Fraser Valley Weed Co. brand will enable us to address
a considerable portion of the Canadian market that we previously
did not. We also expect to increasingly benefit from integrating
Pure Sunfarms and Rose to realize the significant synergistic
opportunities that can take Village Farms' Canadian Cannabis
business to the next level."
"In our U.S. Cannabis business, Balanced Health Botanicals and
CBDistillery® brand continues to perform well amidst a broader
U.S. cannabinoid market that continues to be challenged by lack of
regulatory clarity, resulting in confusion at the consumer level.
Balanced Health is an integral part of our long-term US Cannabis
strategy, as a well-established, profitable business, with top
brand awareness, and an established e-commerce platform and retail
channels that provides another potential pathway to participate in
the high-THC cannabis market in the U.S. when we are able."
"Internationally, we continue to progress steadily on multiple
new opportunities in selected target markets. Having received EU
GMP certification, our Canadian Cannabis operations are finalizing
details with partners with shipments expected to commence in the
coming months. Separately today, we announced our ownership of 85%
of Leli Holland, which has been was
awarded the tenth and final cultivation license granted under the
Closed Cannabis Supply Chain Experiment in the Netherlands.
As a result, we will directly participate in what will be the first
major European market to permit large-scale cannabis cultivation
and distribution for recreational purposes, while strongly
positioning our Company for success in other European markets as
they legalize."
"In our Village Farms Fresh produce business, as anticipated we
continued to be challenged by cost inflation across our operations,
with significant year-over-year increases in most categories,
including fertilizer and other inputs, packaging, freight and labor
costs, which has been exacerbated by the continued impact of the
Brown Rugose virus that has impacted the global tomato industry. To
date, we have not been able to pass these cost increases on to
customers due to the continued oversupply in each of the tomato,
cucumber and pepper markets. With the goal of optimizing
profitability for Village Farms Fresh, we have initiated an
intensive operational review of our operations. 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."
Second Quarter 2022 Financial
Highlights
(All comparable periods are for Second Quarter 2021)
Consolidated
- Consolidated sales increased 18% year-over-year to $82.9 million from $70.4
million;
- Consolidated net loss was ($36.6
million), or ($0.41) per
share, which included $29.8 million
of impairments to Balanced Health Botanicals' goodwill and
intangible assets, compared with ($4.5
million), or ($0.06) per
share; and,
- Consolidated adjusted EBITDA was negative ($10.3 million) compared with positive adjusted
EBITDA of $1.5 million.
Cannabis
- Total Cannabis segment net sales increased 44% year-over-year
to $35.6 million, representing 43% of
total Village Farms sales; and
- Total Cannabis segment adjusted EBITDA was $2.1 million, compared with $7.3 million.
Canadian Cannabis (Pure Sunfarms and Rose LifeScience)
Financial Summary for the Three and Six Months Ended June 30, 2022 and June 30,
2021
- Canadian Cannabis net sales increased 25% year-over-year to a
record $29.8 million (C$38.0 million), with a gross margin of 33%
(within the Company's stated target range) and adjusted EBITDA of
$2.7 million (C$3.3 million).
Canadian Cannabis Performance
Summary
(millions except %
metrics)
|
Three Months Ended
June 30,
|
|
|
2022
|
2021
|
Change of
C$
|
|
C$
|
US$
|
C$
|
US$
|
|
Total Gross
Sales
|
$53.8
|
$42.1
|
$41.7
|
$34.0
|
+29 %
|
Total Net
Sales
|
$38.0
|
$29.8
|
$30.4
|
$24.7
|
+25 %
|
Total Cost of Sales
1
|
$25.6
|
$20.1
|
$18.2
|
$14.8
|
+41 %
|
Gross Margin
1
|
$12.4
|
$9.7
|
$12.2
|
$9.9
|
+2 %
|
Gross Margin %
1
|
33 %
|
33 %
|
40 %
|
40 %
|
-19 %
|
SG&A
|
$10.9
|
$8.4
|
$5.4
|
$4.4
|
-103 %
|
Share-based
compensation
|
$0.3
|
$0.2
|
$0.2
|
$0.2
|
-45 %
|
Net income
|
$2.5
|
$1.8
|
$4.0
|
$3.2
|
-36 %
|
Adjusted EBITDA
2
|
$3.3
|
$2.7
|
$9.1
|
$7.4
|
-63 %
|
Adjusted EBITDA Margin
2
|
9 %
|
9 %
|
30 %
|
30 %
|
-70 %
|
(millions except %
metrics)
|
Six Months Ended
June 30,
|
|
|
2022
|
2021
|
Change of
C$
|
|
C$
|
US$
|
C$
|
US$
|
|
Total Gross
Sales
|
$94.5
|
$74.2
|
$72.5
|
$58.3
|
+30 %
|
Total Net
Sales
|
$65.6
|
$51.6
|
$52.5
|
$42.2
|
+25 %
|
Total Cost of Sales
1
|
$43.7
|
$34.4
|
$33.8
|
$27.1
|
+29 %
|
Gross Margin
1
|
$21.9
|
$17.2
|
$18.7
|
$15.1
|
+17 %
|
Gross Margin %
1
|
33 %
|
33 %
|
36 %
|
36 %
|
-7 %
|
SG&A
|
$19.7
|
$15.3
|
$10.4
|
$8.3
|
-89 %
|
Share-based
compensation
|
$0.8
|
$0.6
|
$1.6
|
$1.3
|
+51 %
|
Net income
|
$4.1
|
$2.8
|
$0.4
|
$0.4
|
+935 %
|
Adjusted EBITDA
2
|
$6.0
|
$4.8
|
$12.2
|
$9.9
|
-49 %
|
Adjusted EBITDA Margin
2
|
9 %
|
9 %
|
23 %
|
23 %
|
-59 %
|
1.
|
Total cost of sales and
gross margin for the three and six months ended June 30, 2022
excludes the C$2,245 (US$1,766) and C$4,839 (US$3,815),
respectively, positive inventory adjustment and for the three and
six months ended June 30, 2021 excludes the C$145 (US$133) and
C$3,824 (US$3,058), respectively, inventory adjustment charge from
the revaluation of inventory to fair value at the acquisition date
of November 2, 2020.
|
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. See "Non-GAAP
Measures" below.
|
Canadian Cannabis' Percent of
Sales by Product Group1
|
Three months
ended June
30,
|
Six months
ended June
30,
|
Channel
|
2022
|
2021
|
2022
|
2021
|
Retail,
Flower
|
67 %
|
65 %
|
67 %
|
68 %
|
Retail,
Derivatives
|
4 %
|
8 %
|
6 %
|
10 %
|
Wholesale, Flower and
Trim
|
29 %
|
27 %
|
27 %
|
22 %
|
1.
|
Excludes Rose
LifeScience commission-based revenue.
|
U.S. Cannabis (Balanced Health Botanicals and VF
Hemp)
- U.S. Cannabis net sales were $5.8
million, with a gross margin of 66% and adjusted EBITDA of
negative ($0.6 million). There are no
year-over-year comparisons because Balanced Health Botanicals was
acquired by Village Farms during the third quarter of 2021
(August 16, 2021).
Village Farms Fresh (Produce)
- Sales increased 4% to $47.2
million and adjusted EBITDA was negative ($10.3 million), compared with ($4.0 million), with the magnitude of the adjusted
EBITDA loss being due primarily to the impact of inflation on
costs.
Strategic Growth and Operational
Highlights
Canadian Cannabis
- Pure Sunfarms' maintained its number one brand position for
dried flower in Canada and was the
number five licensed producer in Canada (by dollar sales), and remained the
top-selling brand of dried flower products in key markets of
Ontario, Alberta and British
Columbia, while continuing to lead publicly traded Canadian
cannabis companies in profitability.
- Launched Pure Sunfarms branded products in Yukon, Northwest
Territories, New Brunswick
and Newfoundland and Labrador, extending Pure Sunfarms' brand reach
to ten provinces and territories representing 98 per cent of total
legal cannabis sales in Canada.
- At the end of the second quarter, Pure Sunfarms began shipping
products under its second brand, the Original Fraser Valley Weed
Co. ("Fraser Valley"), which quickly sold out in its initial
provincial market, British
Columbia. Fraser Valley
products appeal to the value segment of the market, targeting the
frequent, price-conscious consumer with dependable and potent bulk
flower.
- Rose expanded market share of its brands in Quebec to 8.5%, becoming the third
best-selling licensed producer in that province**, supported by its
strong portfolio, in particular the Promenade brand.
- Canadian Cannabis launched a total of 23 new SKUs (14 by Pure
Sunfarms and nine by Rose LifeScience).
- Pure Sunfarms and NOYA Cannabis Inc. launched Cookies sun-grown
flower in Ontario during the
quarter (with Pure Sunfarms being the licensed producer of
record).
*
|
For the quarter ended
June 30, 2022. Based on HiFyre data
|
**
|
For the quarter ended
June 30, 2022. Based on internal calculations, supported by
StatsCan data.
|
U.S. Cannabis
Balanced Health successfully launched the first product in the
new Synergy+ line. UNWIND Synergy+ is positioned to help customers
unwind after work or a long day.
- John Harloe J.D. PhD, General
Counsel for Balanced Health, was chosen by the Colorado Department
of Public Health and Environment for the SB 22-205 task force.
Colorado Governor, Jared Polis, has directed the task force to
study intoxicating hemp products, make legislative and rule
recommendations and analyze the effectiveness of each
recommendation.
- Subsequent to June 30, 2022,
Balanced Health announced the results of a study that reported
participants showed a significant reduction of mild or temporary
anxiety when they began using CBDistillery Daytime Synergy CBG +
CBD tincture.
International Cannabis
- Subsequent to the quarter-end, Leli
Holland B.V. ("Leli Holland") was awarded the tenth and
final cultivation license granted under the Dutch Closed Supply
Chain Experiment program. Subsequently, Village Farms exercised its
previously announced option, acquiring 85% of Leli Holland, enabling it to directly
participate as a cultivator and distributor in the Netherlands, the first major European
country to permit large scale recreational cultivation.
- Pure Sunfarms completed its sixth shipment to Australia as the Australian medical cannabis
market continues to experience steady growth.
- Pure Sunfarms is completing regulatory processes and other
preparations to enable it to begin exporting EU-GMP certified dried
flower to additional international medicinal markets, with an
initial focus on Israel and
Germany, in the coming
months.
Village Farms Fresh (Produce)
- Initiated an intensive operational review of the Fresh Produce
business with the goal of optimizing profitability of the
business.
Corporate
- Village Farms was named to Corporate Knights' Inaugural
Future 50: The Fastest Growing Sustainable Companies in
Canada. Village Farms was
selected from a pool of 6,115 companies (1,100 public and 4,015
private) as one of 25 publicly traded companies with the highest
year-over-year percentage increase in "clean revenue".
Presentation of Financial
Results
The Company's financial statements for the three and six months
ended June 30, 2022, as well as the
comparative periods for 2021, have been prepared and presented
under United States Generally Accepted Accounting Principals
("GAAP"). Balanced Health was acquired on August 16, 2021 and their results are presented
in the operations of our consolidated wholly-owned subsidiaries for
the three and six months ended June 30,
2022. 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 six months ended June 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
June30,
|
|
|
Six Months Ended
June30,
|
|
|
|
2022
(1)
|
|
|
2021
|
|
|
2022
(1)
|
|
|
2021
|
|
Sales
|
|
$
|
82,903
|
|
|
$
|
70,374
|
|
|
$
|
153,059
|
|
|
$
|
122,770
|
|
Cost of
sales
|
|
|
(76,580)
|
|
|
|
(65,109)
|
|
|
|
(136,832)
|
|
|
|
(115,198)
|
|
Gross margin
|
|
|
6,323
|
|
|
|
5,265
|
|
|
|
16,227
|
|
|
|
7,572
|
|
Selling, general and
administrative expenses
|
|
|
(17,402)
|
|
|
|
(9,025)
|
|
|
|
(34,373)
|
|
|
|
(17,117)
|
|
Share-based
compensation
|
|
|
(1,114)
|
|
|
|
(1,887)
|
|
|
|
(2,078)
|
|
|
|
(3,885)
|
|
Interest
expense
|
|
|
(665)
|
|
|
|
(598)
|
|
|
|
(1,348)
|
|
|
|
(1,339)
|
|
Interest
income
|
|
|
—
|
|
|
|
46
|
|
|
|
110
|
|
|
|
49
|
|
Foreign exchange (loss)
gain
|
|
|
(527)
|
|
|
|
193
|
|
|
|
(208)
|
|
|
|
(311)
|
|
Other expense,
net
|
|
|
(30)
|
|
|
|
(166)
|
|
|
|
(38)
|
|
|
|
(235)
|
|
Impairments
(2)
|
|
|
(29,799)
|
|
|
|
—
|
|
|
|
(29,799)
|
|
|
|
—
|
|
Write-off of joint
venture loan
|
|
|
(592)
|
|
|
|
—
|
|
|
|
(592)
|
|
|
|
—
|
|
Loss on disposal of
assets
|
|
|
—
|
|
|
|
(40)
|
|
|
|
—
|
|
|
|
(40)
|
|
Recovery of income
taxes
|
|
|
9,714
|
|
|
|
1,781
|
|
|
|
11,380
|
|
|
|
3,620
|
|
Loss from consolidated
entities
|
|
|
(34,092)
|
|
|
|
(4,431)
|
|
|
|
(40,719)
|
|
|
|
(11,686)
|
|
Less: net loss
attributable to non-controlling interests, net
of tax
|
|
|
152
|
|
|
|
—
|
|
|
|
314
|
|
|
|
—
|
|
Loss from equity method
investments
|
|
|
(2,615)
|
|
|
|
(86)
|
|
|
|
(2,667)
|
|
|
|
(213)
|
|
Net loss attributable
to Village Farms International Inc
|
|
$
|
(36,555)
|
|
|
$
|
(4,517)
|
|
|
$
|
(43,072)
|
|
|
$
|
(11,899)
|
|
Adjusted EBITDA
(3)
|
|
$
|
(10,308)
|
|
|
$
|
1,547
|
|
|
$
|
(16,419)
|
|
|
$
|
1,951
|
|
Basic loss per
share
|
|
$
|
(0.41)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.49)
|
|
|
$
|
(0.15)
|
|
Diluted loss per
share
|
|
$
|
(0.41)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.49)
|
|
|
$
|
(0.15)
|
|
1.
|
For the three and six
months ended June 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.
|
2.
|
Consists of impairments
to goodwill of ($25,159) 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 six
months ended June 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 June 30, 2022
|
|
|
VF
Fresh (Produce)
|
|
|
Cannabis
Canada(1)
|
|
|
Cannabis
U.S.(1)
|
|
|
Clean Energy
|
|
|
Corporate
|
|
|
Total
|
|
Sales
|
$
|
47,176
|
|
|
$
|
29,793
|
|
|
$
|
5,793
|
|
|
$
|
141
|
|
|
$
|
—
|
|
|
$
|
82,903
|
|
Cost of
sales
|
|
(56,143)
|
|
|
|
(18,285)
|
|
|
|
(1,956)
|
|
|
|
(196)
|
|
|
|
—
|
|
|
|
(76,580)
|
|
Selling, general and
administrative
expenses
|
|
(2,808)
|
|
|
|
(8,397)
|
|
|
|
(4,262)
|
|
|
|
(7)
|
|
|
|
(1,928)
|
|
|
|
(17,402)
|
|
Share-based
compensation
|
|
—
|
|
|
|
(219)
|
|
|
|
(107)
|
|
|
|
—
|
|
|
|
(788)
|
|
|
|
(1,114)
|
|
Other expense,
net
|
|
(402)
|
|
|
|
(231)
|
|
|
|
(12)
|
|
|
|
—
|
|
|
|
(577)
|
|
|
|
(1,222)
|
|
Write-off of joint
venture loan
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(592)
|
|
|
|
(592)
|
|
Impairments
(2)
|
|
—
|
|
|
|
—
|
|
|
|
(29,799)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(29,799)
|
|
Recovery of (provision
for) income taxes
|
|
2,827
|
|
|
|
(991)
|
|
|
|
7,025
|
|
|
|
—
|
|
|
|
853
|
|
|
|
9,714
|
|
(Loss) income from
consolidated entities
|
|
(9,350)
|
|
|
|
1,670
|
|
|
|
(23,318)
|
|
|
|
(62)
|
|
|
|
(3,032)
|
|
|
|
(34,092)
|
|
Less: net loss
attributable to non-
controlling interests, net of tax
|
|
—
|
|
|
|
152
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
152
|
|
Loss from equity method
investments
|
|
—
|
|
|
|
—
|
|
|
|
(2,615)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,615)
|
|
Net (loss)
income
|
|
(9,350)
|
|
|
|
1,822
|
|
|
|
(25,933)
|
|
|
|
(62)
|
|
|
|
(3,032)
|
|
|
|
(36,555)
|
|
Adjusted EBITDA
(3)
|
$
|
(10,282)
|
|
|
$
|
2,743
|
|
|
$
|
(633)
|
|
|
$
|
(63)
|
|
|
$
|
(2,073)
|
|
|
$
|
(10,308)
|
|
Basic (loss) income per
share
|
$
|
(0.11)
|
|
|
$
|
0.02
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.41)
|
|
Diluted (loss) income
per share
|
$
|
(0.11)
|
|
|
$
|
0.02
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.41)
|
|
|
For the Three Months
Ended June 30, 2021
|
|
|
VF
Fresh
(Produce)
|
|
|
Cannabis
Canada(1)
|
|
|
Cannabis
U.S.(1)
|
|
|
Clean
Energy
|
|
|
Corporate
|
|
|
Total
|
|
Sales
|
$
|
45,539
|
|
|
$
|
24,761
|
|
|
$
|
—
|
|
|
$
|
74
|
|
|
$
|
—
|
|
|
$
|
70,374
|
|
Cost of
sales
|
|
(49,353)
|
|
|
|
(14,941)
|
|
|
|
—
|
|
|
|
(815)
|
|
|
|
—
|
|
|
|
(65,109)
|
|
Selling, general and
administrative
expenses
|
|
(2,946)
|
|
|
|
(4,370)
|
|
|
|
—
|
|
|
|
(52)
|
|
|
|
(1,657)
|
|
|
|
(9,025)
|
|
Share-based
compensation
|
|
—
|
|
|
|
(191)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,696)
|
|
|
|
(1,887)
|
|
Other (expense) income,
net
|
|
(133)
|
|
|
|
(764)
|
|
|
|
—
|
|
|
|
(8)
|
|
|
|
340
|
|
|
|
(565)
|
|
Recovery of (provision
for) income taxes
|
|
2,233
|
|
|
|
(1,274)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
822
|
|
|
|
1,781
|
|
(Loss) income from
consolidated entities
|
|
(4,660)
|
|
|
|
3,221
|
|
|
|
—
|
|
|
|
(801)
|
|
|
|
(2,191)
|
|
|
|
(4,431)
|
|
Less: net (income) loss
attributable to
non-controlling interests, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Loss from equity method
investments
|
|
—
|
|
|
|
—
|
|
|
|
(86)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(86)
|
|
Net (loss)
income
|
|
(4,660)
|
|
|
|
3,221
|
|
|
|
(86)
|
|
|
|
(801)
|
|
|
|
(2,191)
|
|
|
|
(4,517)
|
|
Adjusted EBITDA
(3)
|
|
(3,980)
|
|
|
|
7,369
|
|
|
|
(48)
|
|
|
|
(135)
|
|
|
|
(1,659)
|
|
|
$
|
1,547
|
|
Basic (loss) income per
share
|
$
|
(0.06)
|
|
|
$
|
0.04
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.06)
|
|
Diluted (loss) income
per share
|
$
|
(0.06)
|
|
|
$
|
0.04
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.06)
|
|
|
For the Six Months
Ended June 30, 2022
|
|
|
VF
Fresh
(Produce)
|
|
|
Cannabis
Canada(1)
|
|
|
Cannabis
U.S.(1)
|
|
|
Clean
Energy
|
|
|
Corporate
|
|
|
Total
|
|
Sales
|
$
|
88,525
|
|
|
$
|
51,562
|
|
|
$
|
12,836
|
|
|
$
|
136
|
|
|
$
|
—
|
|
|
$
|
153,059
|
|
Cost of
sales
|
|
(101,782)
|
|
|
|
(30,544)
|
|
|
|
(4,287)
|
|
|
|
(219)
|
|
|
|
—
|
|
|
|
(136,832)
|
|
Selling, general and
administrative
expenses
|
|
(5,948)
|
|
|
|
(15,330)
|
|
|
|
(8,558)
|
|
|
|
(39)
|
|
|
|
(4,498)
|
|
|
|
(34,373)
|
|
Share-based
compensation
|
|
—
|
|
|
|
(586)
|
|
|
|
(202)
|
|
|
|
—
|
|
|
|
(1,290)
|
|
|
|
(2,078)
|
|
Other expense,
net
|
|
(432)
|
|
|
|
(977)
|
|
|
|
(12)
|
|
|
|
(6)
|
|
|
|
(57)
|
|
|
|
(1,484)
|
|
Write-off of joint
venture loan
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(592)
|
|
|
|
(592)
|
|
Impairments
(2)
|
|
—
|
|
|
|
—
|
|
|
|
(29,799)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(29,799)
|
|
Recovery of (provision
for) income taxes
|
|
4,542
|
|
|
|
(1,630)
|
|
|
|
7,025
|
|
|
|
—
|
|
|
|
1,443
|
|
|
|
11,380
|
|
(Loss) income from
consolidated entities
|
|
(15,095)
|
|
|
|
2,495
|
|
|
|
(22,997)
|
|
|
|
(128)
|
|
|
|
(4,994)
|
|
|
|
(40,719)
|
|
Less: net loss
attributable to non
-controlling interests, net of tax
|
|
—
|
|
|
|
314
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
314
|
|
Loss from equity method
investments
|
|
—
|
|
|
|
—
|
|
|
|
(2,667)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,667)
|
|
Net (loss)
income
|
|
(15,095)
|
|
|
|
2,809
|
|
|
|
(25,664)
|
|
|
|
(128)
|
|
|
|
(4,994)
|
|
|
|
(43,072)
|
|
Adjusted EBITDA
(3)
|
$
|
(16,483)
|
|
|
$
|
4,847
|
|
|
$
|
(53)
|
|
|
$
|
(122)
|
|
|
$
|
(4,608)
|
|
|
$
|
(16,419)
|
|
Basic (loss) income per
share
|
$
|
(0.17)
|
|
|
$
|
0.03
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.49)
|
|
Diluted (loss) income
per share
|
$
|
(0.17)
|
|
|
$
|
0.03
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.49)
|
|
|
For the Six Months
Ended June 30, 2021
|
|
|
VF
Fresh
(Produce)
|
|
|
Cannabis
Canada(1)
|
|
|
Cannabis
U.S.(1)
|
|
|
Clean
Energy
|
|
|
Corporate
|
|
|
Total
|
|
Sales
|
$
|
80,406
|
|
|
$
|
42,221
|
|
|
$
|
—
|
|
|
$
|
143
|
|
|
$
|
—
|
|
|
$
|
122,770
|
|
Cost of
sales
|
|
(83,503)
|
|
|
|
(30,189)
|
|
|
|
—
|
|
|
|
(1,506)
|
|
|
|
—
|
|
|
|
(115,198)
|
|
Selling, general and
administrative
expenses
|
|
(5,497)
|
|
|
|
(8,336)
|
|
|
|
—
|
|
|
|
(84)
|
|
|
|
(3,200)
|
|
|
|
(17,117)
|
|
Share-based
compensation
|
|
—
|
|
|
|
(1,285)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,600)
|
|
|
|
(3,885)
|
|
Other expense,
net
|
|
(389)
|
|
|
|
(1,394)
|
|
|
|
—
|
|
|
|
(20)
|
|
|
|
(73)
|
|
|
|
(1,876)
|
|
Recovery of (provision
for) income taxes
|
|
2,738
|
|
|
|
(630)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,512
|
|
|
|
3,620
|
|
(Loss) income from
consolidated entities
|
|
(6,245)
|
|
|
|
387
|
|
|
|
—
|
|
|
|
(1,467)
|
|
|
|
(4,361)
|
|
|
|
(11,686)
|
|
Less: net (income) loss
attributable to non-
controlling interests, net of tax
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Loss from equity method
investments
|
|
—
|
|
|
|
—
|
|
|
|
(213)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(213)
|
|
Net (loss)
income
|
|
(6,245)
|
|
|
|
387
|
|
|
|
(213)
|
|
|
|
(1,467)
|
|
|
|
(4,361)
|
|
|
|
(11,899)
|
|
Adjusted EBITDA
(3)
|
|
(4,472)
|
|
|
|
9,903
|
|
|
|
(127)
|
|
|
|
(151)
|
|
|
|
(3,202)
|
|
|
$
|
1,951
|
|
Basic (loss) income per
share
|
$
|
(0.08)
|
|
|
$
|
0.01
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.15)
|
|
Diluted (loss) income
per share
|
$
|
(0.08)
|
|
|
$
|
0.01
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.15)
|
|
1.
|
For the three and six
months ended June 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.
|
2.
|
Consists of impairments
to goodwill of ($25,159) 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
six months ended June 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
June30,
|
|
|
Six Months Ended
June30,
|
|
(in thousands of
U.S. dollars)
|
|
2022
(1)
|
|
|
2021
(1)
|
|
|
2022
(1)
|
|
|
2021
(1)
|
|
Net loss
|
|
$
|
(36,555)
|
|
|
$
|
(4,517)
|
|
|
$
|
(43,072)
|
|
|
$
|
(11,899)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
2,768
|
|
|
|
3,898
|
|
|
|
5,470
|
|
|
|
7,310
|
|
Foreign currency
exchange loss (gain)
|
|
|
570
|
|
|
|
(269)
|
|
|
|
251
|
|
|
|
235
|
|
Interest expense,
net
|
|
|
705
|
|
|
|
552
|
|
|
|
1,278
|
|
|
|
1,290
|
|
Recovery of income
taxes
|
|
|
(9,713)
|
|
|
|
(1,781)
|
|
|
|
(11,379)
|
|
|
|
(3,620)
|
|
Share-based
compensation
|
|
|
1,114
|
|
|
|
1,887
|
|
|
|
2,078
|
|
|
|
3,885
|
|
Interest expense for
VFH
|
|
|
26
|
|
|
|
13
|
|
|
|
39
|
|
|
|
27
|
|
Amortization for
JVs
|
|
|
130
|
|
|
|
30
|
|
|
|
224
|
|
|
|
64
|
|
Deferred financing
fees
|
|
|
61
|
|
|
|
166
|
|
|
|
127
|
|
|
|
166
|
|
Impairments
(2)
|
|
|
29,799
|
|
|
|
—
|
|
|
|
29,799
|
|
|
|
—
|
|
JV loan
write-off
|
|
|
592
|
|
|
|
—
|
|
|
|
592
|
|
|
|
—
|
|
Share of loss on JV
inventory impairment
|
|
|
2,284
|
|
|
|
—
|
|
|
|
2,284
|
|
|
|
—
|
|
Incremental utility
costs due to storm
|
|
|
—
|
|
|
|
1,400
|
|
|
|
—
|
|
|
|
1,400
|
|
Foreign currency
exchange (gain) loss for JVs
|
|
|
(28)
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
Purchase price
adjustment (3)
|
|
|
(2,059)
|
|
|
|
133
|
|
|
|
(4,109)
|
|
|
|
3,058
|
|
Amortization of
deferred charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gain on disposal of
assets
|
|
|
(2)
|
|
|
|
35
|
|
|
|
(2)
|
|
|
|
35
|
|
Adjusted EBITDA
(4)
|
|
$
|
(10,308)
|
|
|
$
|
1,547
|
|
|
$
|
(16,419)
|
|
|
$
|
1,951
|
|
Adjusted EBITDA for JVs
(5)
|
|
$
|
(302)
|
|
|
$
|
(48)
|
|
|
$
|
(327)
|
|
|
$
|
(127)
|
|
Adjusted EBITDA
excluding JVs
|
|
$
|
(10,006)
|
|
|
$
|
1,595
|
|
|
$
|
(16,092)
|
|
|
$
|
2,078
|
|
1.
|
For the three and six
months ended June 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.
|
2.
|
Consists of impairments
to goodwill of ($25,159) 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.
|
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 six
months ended June 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 six months ended June 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.
Response to the Ongoing
Coronavirus Pandemic
In March 2020, the World Health
Organization declared the outbreak of the COVID-19 virus a global
pandemic. This outbreak continues to cause major disruptions to
businesses and markets worldwide as the virus continues to spread.
Several countries as well as certain states and cities within
the United States and Canada have enacted temporary closures of
businesses, issued quarantine or shelter-in-place orders and taken
other restrictive measures. In response to the COVID-19 pandemic,
the Company implemented safety protocols and procedures to protect
its employees, its subcontractors, and its customers. These
protocols take into consideration guidance from state and local
government agencies as well as the Centers for Disease Control and
Prevention and other public health authorities.
As of August 9, 2022, all of the
Company's operations are operating normally, however, the extent to
which COVID-19 and the related global economic crisis affect the
Company's business, results of operations and financial condition,
will depend on future developments that are highly uncertain and
cannot be predicted, including the scope and duration of the
pandemic and any recovery period, future actions taken by
governmental authorities, central banks and other third parties
(including new financial regulation and other regulatory reform) in
response to the pandemic, and the effects on our produce, clients,
vendors and employees. Village Farms continues to service its
customers amid uncertainty and disruption linked to COVID-19 and is
actively managing its business to respond to the impact.
Conference Call
Village Farms' management team will host a conference call
today, Tuesday, August 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 784970 followed by the pound (#) key. The telephone replay
will be available until Tuesday, August 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
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 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 law. 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 (including internationally as a result of
our acquisition of Leli Holland),
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 industry or the cannabis
industry 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",
"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, including that of Rose
LifeScience Inc. ("Rose"), Balanced Health Botanicals, LLC
("Balanced Health"), Pure Sunfarms, Inc.("Pure Sunfarms") and our
operations of growing hemp in the United
States; the legal status of Pure Sunfarms, Rose and Balanced
Health cannabis business; risks relating to the integration of
Balanced Health and Rose into our cannabis business; risks related
to international expansion through our investment in Leli Holland; 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 licenses (e.g., Pure Sunfarms ability to obtain
licenses for its Delta 2 greenhouse facility as well as additional
licenses under the Canadian act respecting cannabis to amend to the
Controlled Drugs and Substances Act, the Criminal Code and other
Acts, S.C. 2018, c. 16 (Canada)
for its Delta 3 greenhouse facility), and changes in our regulatory
requirements; risks relating to conversion of our greenhouses to
cannabis production for Pure Sunfarms; 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; 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;
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 and developing 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, 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 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
26,189
|
|
$
53,417
|
Restricted
cash
|
|
6,810
|
|
5,250
|
Trade
receivables
|
|
37,119
|
|
34,360
|
Inventories
|
|
76,588
|
|
68,677
|
Other
receivables
|
|
506
|
|
616
|
Income tax
receivable
|
|
1,831
|
|
2,430
|
Prepaid expenses and
deposits
|
|
9,966
|
|
10,209
|
Total current
assets
|
|
159,009
|
|
174,959
|
Non-current
assets
|
|
|
|
|
Property, plant and
equipment
|
|
218,004
|
|
215,704
|
Investment in in
minority interests
|
|
2,109
|
|
2,109
|
Note receivable - joint
venture
|
|
-
|
|
3,256
|
Goodwill
|
|
92,643
|
|
117,533
|
Intangibles
|
|
20,956
|
|
26,394
|
Deferred tax
asset
|
|
28,710
|
|
16,766
|
Right-of-use
assets
|
|
7,224
|
|
7,609
|
Other assets
|
|
5,637
|
|
2,581
|
Total assets
|
|
$
534,292
|
|
$
566,911
|
LIABILITIES
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Line of
credit
|
|
$
6,892
|
|
$
7,760
|
Trade
payables
|
|
26,634
|
|
22,597
|
Current maturities of
long-term debt
|
|
10,063
|
|
11,416
|
Accrued sales
taxes
|
|
13,876
|
|
3,899
|
Accrued loyalty
program
|
|
1,828
|
|
2,098
|
Accrued
liabilities
|
|
17,561
|
|
14,168
|
Lease liabilities -
current
|
|
1,437
|
|
962
|
Income tax
payable
|
|
985
|
|
-
|
Other current
liabilities
|
|
1,576
|
|
1,413
|
Total current
liabilities
|
|
80,852
|
|
64,313
|
Non-current
liabilities
|
|
|
|
|
Long-term
debt
|
|
47,621
|
|
50,419
|
Deferred tax
liability
|
|
17,193
|
|
18,657
|
Lease liabilities -
non-current
|
|
6,383
|
|
6,711
|
Other
liabilities
|
|
1,652
|
|
1,973
|
Total
liabilities
|
|
153,701
|
|
142,073
|
Commitments and
contingencies
|
|
|
|
|
MEZZANINE
EQUITY
|
|
|
|
|
Redeemable
non-controlling interests
|
|
16,119
|
|
16,433
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Common stock
|
|
365,737
|
|
365,561
|
Additional paid in
capital
|
|
11,463
|
|
9,369
|
Accumulated other
comprehensive loss
|
|
3,565
|
|
6,696
|
Retained
earnings
|
|
(16,293)
|
|
26,779
|
Total shareholders'
equity
|
|
364,472
|
|
408,405
|
Total liabilities and
shareholders' equity
|
|
$
534,292
|
|
$
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 June
30,
|
|
Six Months Ended June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
82,903
|
|
$
70,374
|
|
$ 153,059
|
|
$ 122,770
|
Cost of
sales
|
|
-76,580
|
|
-65,109
|
|
-136,832
|
|
-115,198
|
Gross margin
|
|
6,323
|
|
5,265
|
|
16,227
|
|
7,572
|
Selling, general and
administrative expenses
|
|
(17,402)
|
|
(9,025)
|
|
(34,373)
|
|
(17,117)
|
Share-based
compensation
|
|
(1,114)
|
|
(1,887)
|
|
(2,078)
|
|
(3,885)
|
Interest
expense
|
|
(665)
|
|
(598)
|
|
(1,348)
|
|
(1,339)
|
Interest
income
|
|
-
|
|
46
|
|
110
|
|
49
|
Foreign exchange (loss)
gain
|
|
(527)
|
|
193
|
|
(208)
|
|
(311)
|
Other (expense),
net
|
|
(30)
|
|
(166)
|
|
(38)
|
|
(235)
|
Write-off of joint
venture loan
|
|
(592)
|
|
-
|
|
(592)
|
|
-
|
Impairments
|
|
(29,799)
|
|
-
|
|
(29,799)
|
|
-
|
Loss on disposal of
assets
|
|
-
|
|
(40)
|
|
-
|
|
(40)
|
Loss before taxes and
loss from equity method investments
|
|
(43,806)
|
|
(6,212)
|
|
(52,099)
|
|
(15,306)
|
Recovery of income
taxes
|
|
9,714
|
|
1,781
|
|
11,380
|
|
3,620
|
Loss from equity method
investments
|
|
(2,615)
|
|
(86)
|
|
(2,667)
|
|
(213)
|
Loss including
non-conrolling interests
|
|
(36,707)
|
|
(4,517)
|
|
(43,386)
|
|
(11,899)
|
Less: net loss
attribuable to non-controlling interests, net of tax
|
|
152
|
|
|
|
314
|
|
-
|
Net loss attributable
to Village Farms International Inc.
|
|
$
(36,555)
|
|
$
(4,517)
|
|
$
(43,072)
|
|
$
(11,899)
|
Basic loss per
share
|
|
$
(0.41)
|
|
$
(0.06)
|
|
$
(0.49)
|
|
$
(0.15)
|
Diluted loss per
share
|
|
$
(0.41)
|
|
$
(0.06)
|
|
$
(0.49)
|
|
$
(0.15)
|
Weighted average number
of common shares used in the computation of net loss per share (in
thousands):
|
|
|
|
|
|
|
|
|
Basic
|
|
88,567
|
|
81,071
|
|
88,472
|
|
78,560
|
Diluted
|
|
88,567
|
|
81,071
|
|
88,472
|
|
78,560
|
Net loss attributable
to Village Farms International Inc.
|
|
$
(36,555)
|
|
$
(4,517)
|
|
$
(43,072)
|
|
$
(11,899)
|
Other comprehensive
loss:
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
151
|
|
2,366
|
|
612
|
|
4,077
|
Comprehensive
loss
|
|
$
(36,404)
|
|
$
(2,151)
|
|
$
(42,460)
|
|
$
(7,822)
|
Village Farms
International, Inc.
|
Condensed
Consolidated Interim Statements of Cash Flows
|
(In thousands of
United States dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
Six Months Ended June
30,
|
|
|
2022
|
|
2021
|
Cash flows used in
operating activities:
|
|
|
|
|
Net loss
|
|
$
(43,072)
|
|
$
(11,899)
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
6,332
|
|
6,536
|
Amortization of
deferred charges
|
|
126
|
|
166
|
Share of loss from
joint ventures
|
|
2,667
|
|
213
|
Interest
expense
|
|
1,348
|
|
1,339
|
Interest
income
|
|
(110)
|
|
(49)
|
Interest paid on
long-term debt
|
|
(1,855)
|
|
(1,909)
|
Unrealized foreign
exchange loss
|
|
115
|
|
161
|
Impairments
|
|
29,799
|
|
-
|
Write-off of joint
venture loan
|
|
592
|
|
-
|
Loss on disposal of
assets
|
|
-
|
|
40
|
Non-cash lease
expense
|
|
29
|
|
(255)
|
Share-based
compensation
|
|
2,078
|
|
3,885
|
Deferred income
taxes
|
|
(16,134)
|
|
(3,199)
|
Changes in non-cash
working capital items
|
|
9,064
|
|
(10,239)
|
Net cash used in
operating activities
|
|
(9,021)
|
|
(15,210)
|
Cash flows used in
investing activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(10,232)
|
|
(11,355)
|
Advances to joint
ventures
|
|
-
|
|
(12)
|
Notes
receivable
|
|
(3,449)
|
|
(1,001)
|
Net cash used in
investing activities
|
|
(13,681)
|
|
(12,368)
|
Cash flows provided
by financing activities:
|
|
|
|
|
Proceeds from
borrowings
|
|
4,000
|
|
4,227
|
Repayments on
borrowings
|
|
(6,490)
|
|
(6,026)
|
Proceeds from issuance
of common stock and warrants
|
|
-
|
|
135,000
|
Issuance
costs
|
|
-
|
|
(7,511)
|
Proceeds from exercise
of stock options
|
|
192
|
|
186
|
Proceeds from exercise
of warrants
|
|
-
|
|
18,495
|
Share
re-purchases
|
|
-
|
|
(3,980)
|
Payments on capital
lease obligations
|
|
(612)
|
|
(310)
|
Payment of note payable
related to acquisition
|
|
-
|
|
(15,498)
|
Net cash (used in)
provided by financing activities
|
|
(2,910)
|
|
124,583
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(56)
|
|
502
|
Net (decrease)
increase in cash and cash equivalents
|
|
(25,668)
|
|
97,507
|
Cash and cash
equivalents, beginning of period
|
|
58,667
|
|
25,679
|
Cash and cash
equivalents, end of period
|
|
$
32,999
|
|
$
123,186
|
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SOURCE Village Farms International, Inc.