Village Farms International, Inc. (“Village Farms” or the
“Company”) (NASDAQ: VFF) today announced its financial results for
the fourth quarter and year ended December 31, 2022. All figures
are in U.S. dollars unless otherwise indicated.
Management Commentary
“The fourth quarter of 2022 once again
demonstrated the momentum in our Canadian Cannabis business as
investments in new brands and product innovations contributed to
25% year-over-year growth in retail branded sales and our 17th
consecutive quarter of positive adjusted EBITDA,” said Michael
DeGiglio, Chief Executive Officer, Village Farms. “We achieved a
major milestone in 2022: Our Canadian Cannabis business became the
number two top-selling cannabis company nationally1, growing market
share sequentially every quarter during 2022. We have maintained
this number two position in the first two months of 2023 despite
distressed sales of biomass and ongoing promotional activity in
certain parts of the Canadian market. Our strong brand recognition,
innovation, and low-cost, consistent cultivation are a powerful
combination in a market which is expected to grow steadily over the
next three to five years.”
“During 2023, we expect strong commercial
execution, continuous innovation and sales to export markets will
deliver another year of market-leading results in our Canadian
Cannabis business. At the same time, we are focused on continued
gains in production efficiencies and expense improvements.”
“In our U.S. Cannabis business, Balanced Health
Botanicals continues to perform well in a challenging consumer
market for CBD, based on its leading CBDistillery® brand and
innovative product introductions, including the strong performance
of its hemp-derived THC Synergy+ line of products. This, combined
with prudent cost management, drove positive EBITDA for our U.S.
Cannabis business for the fourth quarter.”
“In our Fresh Produce business, we again reduced
the adjusted EBITDA loss during the fourth quarter, driven by
improvements in our Texas operations. The Fresh Produce business
remains strategic for Village Farms and our customers, and it must
return to profitability. Following a comprehensive review of our
operations, we have initiated a multi-part plan, including
technology and operational enhancements, as well as the decision to
divest our Permian Basin facility, which we view as non-strategic
for our long-term optimized Fresh strategy or a longer-term
Texas-based and national legal cannabis market. We are confident
these initiatives, in aggregate, combined with an improving macro
environment compared with that of 2022, will contribute to
substantially improved financial performance from Fresh Produce in
2023.”
1. Based on estimated retail sales from HiFyre, other third
parties and provincial boards.
Fourth Quarter 2022 Financial
Highlights(All comparable periods are for the
fourth quarter of 2021 unless otherwise stated)
Consolidated
- Consolidated sales were $69.5
million, a decrease of ($3.3 million), or (5%), from $72.8 million,
with the stronger U.S. dollar compared to the Canadian dollar
decreasing reported U.S. sales for our Canadian Cannabis operations
by ($2.4 million). On a constant currency basis, consolidated sales
decreased by (1%);
- Consolidated net loss was ($49.3
million), or ($0.54) per share, compared with net income of $2.1
million, or $0.03 per share;
- Consolidated net loss included an
impairment of $13.5 million related to the acquisition of Balanced
Health Botanicals, a write down in the Canadian Cannabis business
of $11.0 million (C$15.0 million) of lower potency flower inventory
that was more than 12 months old, with the write down partially
attributable to lower pricing in the non-branded market, and
provision for income taxes of $30.4 million;
- Consolidated adjusted EBITDA was
negative ($0.8 million) compared with positive adjusted EBITDA of
$4.8 million; and,
- Completed a registered direct
offering with certain institutional investors for the purchase and
sale of an aggregate of 18,350,000 common shares at US$1.35 per
share, together with accompanying warrants to purchase up to
18,350,000 common shares (exercise price of US$1.65 per share) for
gross proceeds from the sale of the common shares of approximately
US$25 million and potential proceeds from the exercise of all
warrants of approximately US$30 million, with the net proceeds
intended to be used for general working capital purposes.
Cannabis Segment
- Total Cannabis segment net sales
decreased (2.0%) year-over-year to $33.2 million, representing
47.9% of total Village Farms sales; and,
- Total Cannabis segment adjusted
EBITDA was $5.0 million compared with $6.2 million.
Canadian Cannabis (Pure Sunfarms and Rose LifeScience)
- Canadian Cannabis net sales
increased 13.1% to a $27.9 million (C$38.2 million) on a constant
currency basis;
- Canadian Cannabis retail branded
sales increased 25% year-over-year (fourth quarter), and 25% for
the full 2022 year;
- Canadian Cannabis wholesale sales
decreased (35%) due to continued significant erosion in market
pricing as distressed producers liquidate inventories;
- Canadian Cannabis cost of sales
included an inventory write down of $11.0 million (C$15.0 million)
of lower potency flower that was more than 12 months old, with the
write down partially attributable to lower pricing in the
non-branded market. Excluding the write down, gross margin for
Canadian Cannabis was 40%, consistent with its stated target range
of 30% to 40%; and
- Canadian Cannabis adjusted EBITDA
was $4.7 million (C$6.3 million);
U.S. Cannabis (Balanced Health Botanicals and VF Hemp)
- U.S. Cannabis net sales were $5.3
million, with a gross margin of 67.2% and adjusted EBITDA of $0.3
million compared with net sales of $7.5 million, with a gross
margin of 70.1% and adjusted EBITDA of $1.8 million.
Village Farms Fresh
(Produce)
- Sales were $36.2 million compared
with $38.4, primarily due to a smaller growing area in Texas in
fourth quarter of 2022, lower production from our Canadian tomato
greenhouse due to the Brown Rugose virus in the fourth quarter of
2022 and lower third-party supplier volume in the fourth quarter of
2022 due to loss of some contracts in late 2022 that have been
replaced in 2023 with new growers.
- Adjusted EBITDA was negative ($3.0
million) compared with positive $1.2 million. Adjusted EBITDA for
the fourth quarter was a sequential improvement over negative ($4.9
million) reported for the third quarter of 2022. Adjusted EBITDA
for the second half of 2022 improved to negative ($7.9) from
negative ($15.1 million) for the first half of 2022.
Strategic Growth and Operational
Highlights
Canadian Cannabis
- Became the number two ranked cannabis producer in Canada by
market share for the fourth quarter, maintaining the number two
position during the first two months of 2023, and was the
top-selling cannabis producer in Canada across all product
categories in October 20223;
- Continued to expand its number one market share position in the
dried flower category in Canada;
- Rose LifeScience expanded its number two market share position
in Quebec1, which it achieved within the first year of acquisition
by Village Farms, maintaining the number two position during the
first two months of 20233;
- Continued the roll out of a second BC-grown brand, The Original
Fraser Valley Weed Co., focused on the value segment of the market,
with introductions of additional SKUs in British Columbia and
Alberta, as well as launch in Ontario, all of which contributed to
national market share growth;
- Launched Soar, a cannabis brand complementary to its existing
brands, designed to deliver an elevated cannabis experience with
limited quantity batches of exotic and unique genetics that are
hand-harvested, hang-dried, and hand-detailed; and,
- Rose Lifescience established partnerships with three regional
micro-producers, Cannabitibi, Teca Canna and Le Malin Vert,
expanding the number of micro-producers under the brand of the
cannabis collective DLYS to 11.
U.S. Cannabis
- Continued to have success with its Synergy+ line of
hemp-derived, THC products with strong sequential quarterly growth
in sales since launch.
International Cannabis
- Commenced shipping cannabis products (produced by Pure
Sunfarms) to Israel for that country’s medical market under an
exclusive three-year supply agreement with Israel-based Dr.
Samuelov Importing and Marketing Ltd., doing business as Better
Pharma; and,
- Sales to Australia for the fourth quarter increased more than
ten-fold from the first quarter of 2022.
1. Based on estimated retail sales from HiFyre, other third
parties and provincial boards.
Canadian Cannabis Financial Performance
Summary
|
(millions except % metrics) |
Three Months Ended December 31, |
|
|
|
|
2022 |
|
|
2021 |
|
Change of C$ |
|
|
C$ |
US$ |
C$ |
US$ |
|
|
Total Gross Sales |
$ |
59.9 |
|
$ |
44.1 |
|
$ |
46.3 |
|
$ |
36.7 |
|
+29 |
% |
|
Total Net Sales |
$ |
38.2 |
|
$ |
27.9 |
|
$ |
33.8 |
|
$ |
26.8 |
|
+12 |
% |
|
Total Cost of Sales 1 |
$ |
37.8 |
|
$ |
27.8 |
|
$ |
19.6 |
|
$ |
14.5 |
|
-92 |
% |
|
Cost of Sales Excluding Inventory Write Down |
$ |
22.8 |
|
$ |
16.8 |
|
$ |
19.6 |
|
$ |
14.5 |
|
-16 |
% |
|
Gross Margin 1 |
$ |
0.2 |
|
$ |
0.1 |
|
$ |
14.2 |
|
$ |
11.3 |
|
-99 |
% |
|
Gross Margin % 1 |
|
1 |
% |
|
1 |
% |
|
42 |
% |
|
42 |
% |
-98 |
% |
|
Gross Margin Excluding Inventory Write Down |
$ |
15.1 |
|
$ |
11.1 |
|
N/A |
N/A |
N/A |
|
Gross Margin % Excluding Inventory Write Down |
|
40 |
% |
|
40 |
% |
N/A |
N/A |
N/A |
|
SG&A |
$ |
10.0 |
|
$ |
7.3 |
|
$ |
9.2 |
|
$ |
7.2 |
|
-9 |
% |
|
Share-based compensation |
$ |
0.5 |
|
$ |
0.5 |
|
$ |
1.6 |
|
$ |
1.2 |
|
+69 |
% |
|
Net income |
($ |
3.8 |
) |
($ |
2.8 |
) |
$ |
4.4 |
|
$ |
3.5 |
|
-86 |
% |
|
Adjusted EBITDA 2 |
$ |
6.3 |
|
$ |
4.7 |
|
$ |
6.1 |
|
$ |
4.9 |
|
+3 |
% |
|
Adjusted EBITDA Margin 2 |
|
17 |
% |
|
17 |
% |
|
18 |
% |
|
18 |
% |
-11 |
% |
|
(millions except % metrics) |
Year Ended December 31, |
|
|
|
|
2022 |
|
|
2021 |
|
Change of C$ |
|
|
C$ |
US$ |
C$ |
US$ |
|
|
Total Gross Sales |
$ |
214.0 |
|
$ |
170.7 |
|
$ |
164.4 |
|
$ |
131.2 |
|
+30 |
% |
|
Total Net Sales |
$ |
143.5 |
|
$ |
109.9 |
|
$ |
120.8 |
|
$ |
96.4 |
|
+19 |
% |
|
Total Cost of Sales 1 |
$ |
104.7 |
|
$ |
80.5 |
|
$ |
72.5 |
|
$ |
57.8 |
|
-44 |
% |
|
Cost of Sales Excluding Inventory Write Down |
$ |
89.7 |
|
$ |
69.5 |
|
$ |
72.5 |
|
$ |
57.8 |
|
-24 |
% |
|
Gross Margin 1 |
$ |
38.3 |
|
$ |
29.4 |
|
$ |
48.3 |
|
$ |
38.6 |
|
-21 |
% |
|
Gross Margin % 1 |
|
27 |
% |
|
27 |
% |
|
40 |
% |
|
40 |
% |
-33 |
% |
|
Gross Margin Excluding Inventory Write Down |
$ |
53.3 |
|
$ |
40.4 |
|
N/A |
N/A |
N/A |
|
Gross Margin % Excluding Inventory Write Down |
|
37 |
% |
|
37 |
% |
N/A |
N/A |
N/A |
|
SG&A |
$ |
39.4 |
|
$ |
30.2 |
|
$ |
26.3 |
|
$ |
20.9 |
|
-50 |
% |
|
Share-based compensation |
$ |
1.7 |
|
$ |
1.4 |
|
$ |
3.5 |
|
$ |
2.7 |
|
+51 |
% |
|
Net income |
$ |
0.2 |
|
$ |
0.1 |
|
$ |
11.5 |
|
$ |
9.2 |
|
-98 |
% |
|
Adjusted EBITDA 2 |
$ |
17.1 |
|
$ |
13.1 |
|
$ |
29.3 |
|
$ |
23.4 |
|
-42 |
% |
|
Adjusted EBITDA Margin 2 |
|
12 |
% |
|
12 |
% |
|
24 |
% |
|
24 |
% |
-50 |
% |
1. Total cost of
sales and gross margin for the three months and twelve months ended
December 31, 2022 include a one-time inventory write down of
C$15,000 (US$11,038). Total cost of sales and gross margin for the
year ended December 31, 2022 excludes a US$1,404 catch-up of
intangible amortization resulting from the finalization of Rose
purchase price accounting in the third quarter of 2022. The year
ended December 31, 2021, cost of sales excludes the C$2,291
(US$1,841) 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. For a reconciliation of Adjusted EBITDA to net income, see
“Reconciliation of Net Income to Adjusted EBITDA” below.
Canadian Cannabis’ Percent of Sales by
Product Group1
|
|
Three months ended December
31, |
Year ended December 31, |
|
Channel |
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
Retail, Flower |
83 |
% |
64 |
% |
73 |
% |
64 |
% |
|
Retail, Derivatives |
3 |
% |
11 |
% |
4 |
% |
10 |
% |
|
Wholesale, Flower and Trim |
14 |
% |
25 |
% |
23 |
% |
26 |
% |
- Excludes Rose LifeScience
commission-based revenue.
PRESENTATION OF FINANCIAL RESULTS
The Company’s financial statements for the three and 12 months
ended December 31, 2022, as well as the comparative periods for
2021, have been prepared and presented under United States
Generally Accepted Accounting Principles (“GAAP”). Village Farms
acquired 100% of Balanced Health Botanicals on August 16, 2021 and
their operating results are consolidated in our Consolidated
Statements of Income (Loss) for the three and 12 months ended
December 31, 2022 as well as for August 16, 2021 through December
31, 2021 for the 12 months ended December 31, 2021. The Company
acquired 70% of Rose LifeScience on November 15, 2021 and their
results are presented in the operations of our consolidated
wholly-owned subsidiaries and the minority interest is presented in
Net Income (Loss) Attributable to Non-controlling Interests, Net of
Tax for the three and 12 months ended December 31, 2022.
RESULTS OF OPERATIONS (In thousands of U.S.
dollars, except per share amounts, and unless otherwise noted)
Consolidated Financial Performance
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
|
2022 (1) |
|
|
2021 (1) |
|
|
2022 (1) |
|
|
2021 (1) |
|
|
Sales |
|
$ |
69,457 |
|
|
$ |
72,380 |
|
|
$ |
293,572 |
|
|
$ |
268,020 |
|
| Cost of sales |
|
|
(66,561 |
) |
|
|
(52,664 |
) |
|
|
(266,075 |
) |
|
|
(222,841 |
) |
| Gross margin |
|
|
2,896 |
|
|
|
19,716 |
|
|
|
27,497 |
|
|
|
45,179 |
|
| Selling, general and
administrative expenses |
|
|
(17,037 |
) |
|
|
(16,208 |
) |
|
|
(68,278 |
) |
|
|
(46,384 |
) |
| Share-based compensation |
|
|
(983 |
) |
|
|
(1,828 |
) |
|
|
(3,987 |
) |
|
|
(7,533 |
) |
| Interest expense |
|
|
(914 |
) |
|
|
(923 |
) |
|
|
(3,244 |
) |
|
|
(2,835 |
) |
| Interest income |
|
|
78 |
|
|
|
27 |
|
|
|
207 |
|
|
|
126 |
|
| Foreign exchange loss |
|
|
(84 |
) |
|
|
159 |
|
|
|
(2,255 |
) |
|
|
(476 |
) |
| Other expense, net |
|
|
(109 |
) |
|
|
(26 |
) |
|
|
(115 |
) |
|
|
(420 |
) |
| Impairments (2) |
|
|
(13,500 |
) |
|
|
— |
|
|
|
(43,299 |
) |
|
|
— |
|
| Write-off of joint venture
loan |
|
|
— |
|
|
|
— |
|
|
|
(592 |
) |
|
|
— |
|
| (Provision for) recovery of
income taxes |
|
|
(19,244 |
) |
|
|
983 |
|
|
|
(4,681 |
) |
|
|
3,526 |
|
| (Loss) income from consolidated
entities |
|
|
(48,897 |
) |
|
|
1,900 |
|
|
|
(98,747 |
) |
|
|
(8,817 |
) |
| Less: net loss attributable to
non-controlling interests, net of tax |
|
|
(432 |
) |
|
|
— |
|
|
|
269 |
|
|
|
46 |
|
| Income (loss) from equity method
investments |
|
|
— |
|
|
|
175 |
|
|
|
(2,668 |
) |
|
|
(308 |
) |
| Net (loss) income attributable to
Village Farms International Inc. |
|
$ |
(49,329 |
) |
|
$ |
2,075 |
|
|
$ |
(101,146 |
) |
|
$ |
(9,079 |
) |
| Adjusted EBITDA (3) |
|
$ |
(758 |
) |
|
$ |
4,829 |
|
|
$ |
(21,311 |
) |
|
$ |
14,012 |
|
| Basic (loss) income per
share |
|
$ |
(0.54 |
) |
|
$ |
0.03 |
|
|
$ |
(1.13 |
) |
|
$ |
(0.11 |
) |
| Diluted (loss) income per
share |
|
$ |
(0.54 |
) |
|
$ |
0.03 |
|
|
$ |
(1.13 |
) |
|
$ |
(0.11 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- For the three and twelve months
ended December 31, 2022 and for the period August 16, 2021 through
December 31, 2021, Balanced Health is fully consolidated in the
financial results of the Company. For the three and twelve months
ended December 31, 2022 and for the period November 15, 2021 to
December 31, 2021, Rose LifeScience 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.
- Consists of impairments to goodwill
of ($43,299) 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 2, Item 8 Note 11 “Goodwill and Intangible
Assets” for additional details.
- 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 since acquisition and 65% interest in
VFH.
SEGMENTED RESULTS OF OPERATIONS
(In thousands of U.S. dollars, except per share
amounts, and unless otherwise noted)
|
|
For the Three Months Ended December 31, 2022 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada (1) |
|
|
Cannabis U.S. (1) |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
36,200 |
|
|
$ |
27,926 |
|
|
$ |
5,331 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
69,457 |
|
| Cost of sales |
|
(37,021 |
) |
|
|
(27,755 |
) |
|
|
(1,744 |
) |
|
|
(41 |
) |
|
|
— |
|
|
|
(66,561 |
) |
| Selling, general and
administrative expenses |
|
(3,279 |
) |
|
|
(7,331 |
) |
|
|
(3,787 |
) |
|
|
(5 |
) |
|
|
(2,635 |
) |
|
|
(17,037 |
) |
| Share-based compensation |
|
— |
|
|
|
(476 |
) |
|
|
(38 |
) |
|
|
— |
|
|
|
(469 |
) |
|
|
(983 |
) |
| Other (expense) income, net |
|
(411 |
) |
|
|
(533 |
) |
|
|
(94 |
) |
|
|
(37 |
) |
|
|
46 |
|
|
|
(1,029 |
) |
| Impairments |
|
— |
|
|
|
— |
|
|
|
(13,500 |
) |
|
|
— |
|
|
|
— |
|
|
|
(13,500 |
) |
| Recovery of (provision for)
income taxes |
|
(16,236 |
) |
|
|
5,759 |
|
|
|
(7,025 |
) |
|
|
— |
|
|
|
(1,742 |
) |
|
|
(19,244 |
) |
| Loss from consolidated
entities |
|
(20,747 |
) |
|
|
(2,410 |
) |
|
|
(20,857 |
) |
|
|
(83 |
) |
|
|
(4,800 |
) |
|
|
(48,897 |
) |
| Less: net loss attributable to
non-controlling interests, net of tax |
|
— |
|
|
|
(432 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(432 |
) |
| Net (loss) income |
|
(20,747 |
) |
|
|
(2,842 |
) |
|
|
(20,857 |
) |
|
|
(83 |
) |
|
|
(4,800 |
) |
|
|
(49,329 |
) |
| Adjusted EBITDA (3) |
$ |
(3,007 |
) |
|
$ |
4,722 |
|
|
$ |
266 |
|
|
$ |
(83 |
) |
|
$ |
(2,656 |
) |
|
$ |
(758 |
) |
| Basic (loss) income per
share |
$ |
(0.22 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.54 |
) |
| Diluted (loss) income per
share |
$ |
(0.22 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.54 |
) |
|
|
For the Three Months Ended December 31, 2021 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada (1) |
|
|
Cannabis U.S. (1) |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
38,438 |
|
|
$ |
26,382 |
|
|
$ |
7,517 |
|
|
$ |
43 |
|
|
$ |
— |
|
|
$ |
72,380 |
|
| Cost of sales |
|
(35,819 |
) |
|
|
(14,455 |
) |
|
|
(2,217 |
) |
|
|
(173 |
) |
|
|
— |
|
|
|
(52,664 |
) |
| Selling, general and
administrative expenses |
|
(3,244 |
) |
|
|
(7,131 |
) |
|
|
(3,761 |
) |
|
|
(45 |
) |
|
|
(2,027 |
) |
|
|
(16,208 |
) |
| Share-based compensation |
|
— |
|
|
|
(1,267 |
) |
|
|
(95 |
) |
|
|
— |
|
|
|
(466 |
) |
|
|
(1,828 |
) |
| Other income (expense), net |
|
419 |
|
|
|
(1,400 |
) |
|
|
148 |
|
|
|
(7 |
) |
|
|
77 |
|
|
|
(763 |
) |
| (Provision for) recovery of
income taxes |
|
(597 |
) |
|
|
966 |
|
|
|
— |
|
|
|
— |
|
|
|
614 |
|
|
|
983 |
|
| (Loss) income from consolidated
entities |
|
(803 |
) |
|
|
3,095 |
|
|
|
1,592 |
|
|
|
(182 |
) |
|
|
(1,802 |
) |
|
|
1,900 |
|
| Income from equity method
investments |
|
— |
|
|
|
— |
|
|
|
175 |
|
|
|
— |
|
|
|
— |
|
|
|
175 |
|
| Net (loss) income |
|
(803 |
) |
|
|
3,095 |
|
|
|
1,767 |
|
|
|
(182 |
) |
|
|
(1,802 |
) |
|
|
2,075 |
|
| Adjusted EBITDA (3) |
$ |
1,179 |
|
|
$ |
4,438 |
|
|
$ |
1,832 |
|
|
$ |
(74 |
) |
|
$ |
(2,546 |
) |
|
$ |
4,829 |
|
| Basic (loss) income per
share |
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
0.02 |
|
|
$ |
0.00 |
|
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
| Diluted (loss) income per
share |
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
0.02 |
|
|
$ |
0.00 |
|
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
|
For the Year Ended December 31, 2022 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada (1) |
|
|
Cannabis U.S. (1) |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
160,252 |
|
|
$ |
109,882 |
|
|
$ |
23,302 |
|
|
$ |
136 |
|
|
$ |
— |
|
|
$ |
293,572 |
|
| Cost of sales |
|
(177,634 |
) |
|
|
(80,494 |
) |
|
|
(7,643 |
) |
|
|
(304 |
) |
|
|
— |
|
|
|
(266,075 |
) |
| Selling, general and
administrative expenses |
|
(12,004 |
) |
|
|
(30,235 |
) |
|
|
(16,000 |
) |
|
|
(58 |
) |
|
|
(9,981 |
) |
|
|
(68,278 |
) |
| Share-based compensation |
|
— |
|
|
|
(1,373 |
) |
|
|
(305 |
) |
|
|
— |
|
|
|
(2,309 |
) |
|
|
(3,987 |
) |
| Other expense, net |
|
(1,187 |
) |
|
|
(2,023 |
) |
|
|
(247 |
) |
|
|
(43 |
) |
|
|
(1,907 |
) |
|
|
(5,407 |
) |
| Write-off of joint venture
loan |
|
— |
|
|
|
— |
|
|
|
(592 |
) |
|
|
— |
|
|
|
— |
|
|
|
(592 |
) |
| Impairments (2) |
|
— |
|
|
|
— |
|
|
|
(43,299 |
) |
|
|
— |
|
|
|
— |
|
|
|
(43,299 |
) |
| (Provision for) recovery of
income taxes |
|
(9,914 |
) |
|
|
4,091 |
|
|
|
— |
|
|
|
— |
|
|
|
1,142 |
|
|
|
(4,681 |
) |
| (Loss) income from consolidated
entities |
|
(40,487 |
) |
|
|
(152 |
) |
|
|
(44,784 |
) |
|
|
(269 |
) |
|
|
(13,055 |
) |
|
|
(98,747 |
) |
| Less: net loss attributable to
non-controlling interests, net of tax |
|
— |
|
|
|
269 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
269 |
|
| Loss from equity method
investments |
|
— |
|
|
|
— |
|
|
|
(2,668 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,668 |
) |
| Net (loss) income |
|
(40,487 |
) |
|
|
117 |
|
|
|
(47,452 |
) |
|
|
(269 |
) |
|
|
(13,055 |
) |
|
|
(101,146 |
) |
| Adjusted EBITDA (3) |
$ |
(24,369 |
) |
|
$ |
13,085 |
|
|
$ |
223 |
|
|
$ |
(263 |
) |
|
$ |
(9,987 |
) |
|
$ |
(21,311 |
) |
| Basic (loss) income per
share |
$ |
(0.45 |
) |
|
$ |
0.00 |
|
|
$ |
(0.52 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.16 |
) |
|
$ |
(1.13 |
) |
| Diluted (loss) income per
share |
$ |
(0.45 |
) |
|
$ |
0.00 |
|
|
$ |
(0.52 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.16 |
) |
|
$ |
(1.13 |
) |
|
|
For the Year Ended December 31, 2021 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada (1) |
|
|
Cannabis U.S. (1) |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
159,996 |
|
|
$ |
96,434 |
|
|
$ |
11,345 |
|
|
$ |
245 |
|
|
$ |
— |
|
|
$ |
268,020 |
|
| Cost of sales |
|
(158,305 |
) |
|
|
(59,224 |
) |
|
|
(3,398 |
) |
|
|
(1,914 |
) |
|
|
— |
|
|
|
(222,841 |
) |
| Selling, general and
administrative expenses |
|
(10,980 |
) |
|
|
(20,937 |
) |
|
|
(5,605 |
) |
|
|
(188 |
) |
|
|
(8,674 |
) |
|
|
(46,384 |
) |
| Share-based compensation |
|
— |
|
|
|
(2,738 |
) |
|
|
(158 |
) |
|
|
— |
|
|
|
(4,637 |
) |
|
|
(7,533 |
) |
| Other expense, net |
|
(379 |
) |
|
|
(2,946 |
) |
|
|
16 |
|
|
|
(36 |
) |
|
|
(522 |
) |
|
|
(3,867 |
) |
| Recovery of (provision for)
income taxes |
|
2,278 |
|
|
|
(1,688 |
) |
|
|
— |
|
|
|
— |
|
|
|
2,936 |
|
|
|
3,526 |
|
| Net (loss) income |
|
(7,390 |
) |
|
|
8,901 |
|
|
|
2,200 |
|
|
|
(1,893 |
) |
|
|
(10,897 |
) |
|
|
(9,079 |
) |
| Adjusted EBITDA (3) |
$ |
(1,959 |
) |
|
$ |
23,415 |
|
|
$ |
2,364 |
|
|
$ |
(343 |
) |
|
$ |
(9,465 |
) |
|
$ |
14,012 |
|
| Basic (loss) income per
share |
$ |
(0.09 |
) |
|
$ |
0.11 |
|
|
$ |
0.02 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.11 |
) |
| Diluted (loss) income per
share |
$ |
(0.09 |
) |
|
$ |
0.11 |
|
|
$ |
0.02 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.11 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- For the three and twelve months
ended December 31, 2022 and for the period August 16, 2021 through
December 31, 2021, Balanced Health is fully consolidated in the
financial results of the Company. For the three and twelve months
ended December 31, 2022 and for the period November 15, 2021 to
December 31, 2021, 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.
- Consists of
impairments to goodwill of ($43,299) 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 2, Item 8
Note 11 “Goodwill and Intangible Assets” for additional
details.
- 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 since acquisition and 65% interest in
VFH.
A detailed discussion of our consolidated and segment results
can be found in our Annual Report on Form 10-K for the 12 months
ended December 31, 2022 (the “Annual 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 Annual 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 December 31, |
Year Ended December 31, |
|
| (in thousands of
U.S. dollars) |
|
2022 (1) |
|
|
2021 (1) |
|
|
2022 (1) |
|
2021 (1) |
|
|
Net (loss) income |
|
$ |
(49,329 |
) |
|
$ |
2,075 |
|
|
$ |
(101,146 |
) |
|
$ |
(9,079 |
) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
|
2,424 |
|
|
|
2,388 |
|
|
|
10,260 |
|
|
|
13,004 |
|
|
Foreign currency exchange loss (gain) |
|
|
86 |
|
|
|
(192 |
) |
|
|
2,268 |
|
|
|
329 |
|
|
Interest expense, net |
|
|
837 |
|
|
|
849 |
|
|
|
3,038 |
|
|
|
2,709 |
|
|
Recovery of income taxes |
|
|
21,341 |
|
|
|
(983 |
) |
|
|
7,136 |
|
|
|
(3,526 |
) |
|
Share-based compensation |
|
|
872 |
|
|
|
1,828 |
|
|
|
3,808 |
|
|
|
7,533 |
|
|
Interest expense for JV’s |
|
|
— |
|
|
|
13 |
|
|
|
38 |
|
|
|
53 |
|
|
Amortization for JVs |
|
|
241 |
|
|
|
71 |
|
|
|
1,554 |
|
|
|
71 |
|
|
(Recovery of) provision for income taxes for JV’s |
|
|
(1,467 |
) |
|
|
— |
|
|
|
(1,718 |
) |
|
|
— |
|
|
Share-based compensation for JV’s |
|
|
45 |
|
|
|
— |
|
|
|
124 |
|
|
|
— |
|
|
Other expense (income), net |
|
|
45 |
|
|
|
— |
|
|
|
(25 |
) |
|
|
— |
|
|
Deferred financing fees |
|
|
43 |
|
|
|
66 |
|
|
|
214 |
|
|
|
300 |
|
|
Incremental utility costs due to storm |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,400 |
|
|
Impairments (2) |
|
|
13,500 |
|
|
|
— |
|
|
|
43,299 |
|
|
|
— |
|
|
Loss on inventory write-down |
|
|
11,038 |
|
|
|
— |
|
|
|
11,038 |
|
|
|
|
|
|
Purchase price adjustment (3) |
|
|
(731 |
) |
|
|
(861 |
) |
|
|
(4,268 |
) |
|
|
980 |
|
|
Loss (gain) on disposal of assets |
|
|
— |
|
|
|
219 |
|
|
|
(7 |
) |
|
|
254 |
|
|
Share of loss on JV inventory impairment |
|
|
— |
|
|
|
— |
|
|
|
2,284 |
|
|
|
|
|
|
Write-off of note receivable |
|
|
— |
|
|
|
— |
|
|
|
592 |
|
|
|
|
|
|
Other expense (income), net |
|
|
297 |
|
|
|
(197 |
) |
|
|
200 |
|
|
|
(16 |
) |
| Adjusted EBITDA
(4) |
|
$ |
(758 |
) |
|
$ |
5,276 |
|
|
$ |
(21,311 |
) |
|
$ |
14,012 |
|
| Adjusted EBITDA for
JVs |
|
$ |
— |
|
|
$ |
(120 |
) |
|
$ |
(327 |
) |
|
$ |
(260 |
) |
| Adjusted EBITDA
excluding JVs |
|
$ |
(758 |
) |
|
$ |
5,396 |
|
|
$ |
(20,984 |
) |
|
$ |
14,272 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- For the three and twelve months
ended December 31, 2022 and for the period August 16, 2021 through
December 31, 2021, Balanced Health is fully consolidated in the
financial results of the Company. For the three and twelve months
ended December 31, 2022 and for the period November 15, 2021 to
December 31, 2021, 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.
- Consists of
impairments to goodwill of ($43,299) 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 2, Item 8
Note 11 “Goodwill and Intangible Assets” for additional
details.
- The purchase price adjustment
primarily reflects the non-cash accounting charge resulting from
the revaluation of Pure Sunfarms’ inventory to fair value at the
acquisition date on November 2, 2020 and the catch-up of intangible
amortization resulting from the September 30, 2022 finalization of
the Rose purchase price accounting.
- 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.
Conference Call
Village Farms’ management team will have a
conference call to discuss its fourth quarter and year-end
financial results today, Thursday, March 9, 2023, at 8:30 a.m. ET.
Participants wanting to access the conference call by telephone
must register in advance at Village Farms Fourth Quarter 2022
Conference Call to receive the telephone dial-in
information. For those wanting to listen to the
webcast, please visit the Events and Presentations section of
Village Farms’ website here: Events - Village Farms International.
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.
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,
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, Israel and Europe.
Cautionary Statement Regarding
Forward-Looking Information
As used in this Press Release, the terms
“Village Farms”, “Village Farms International”, the “Company”,
“we”, “us”, “our” and similar references refer to Village Farms
International, Inc. and our consolidated subsidiaries, and the term
“Common Shares” refers to our common shares, no par value. Our
financial information is presented in U.S. dollars and all
references in this Press Release to “$” means U.S. dollars and all
references to “C$” means Canadian dollars.
This Press Release contains forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995, Section 27A of the U.S.
Securities Act of 1933, as amended, (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and is subject to the safe harbor created by those
sections. This Press Release also contains "forward-looking
information" within the meaning of applicable Canadian securities
laws. We refer to such forward-looking statements and
forward-looking information collectively as "forward-looking
statements". Forward-looking statements may relate to the Company's
future outlook or financial position and anticipated events or
results and may include statements regarding the financial
position, business strategy, budgets, expansion plans, litigation,
projected production, projected costs, capital expenditures,
financial results, taxes, plans and objectives of or involving the
Company. Particularly, statements regarding future results,
performance, achievements, prospects or opportunities for the
Company, the greenhouse vegetable or produce industry or the
cannabis industry are forward-looking statements. In some cases,
forward-looking information can be identified by such terms as
"can", "outlook", "may", "might", "will", "could", "should",
"would", "occur", "expect", "plan", "anticipate", "believe",
"intend", "try", "estimate", "predict", "potential", "continue",
"likely", "schedule", "objectives", or the negative or grammatical
variation thereof or other similar expressions concerning matters
that are not historical facts. The forward-looking statements in
this Press Release are subject to risks that may include, but are
not limited to: our limited operating history in the cannabis and
cannabinoids industry, including that of Pure Sunfarms, Inc. (“Pure
Sunfarms”), Rose LifeScience Inc. (“Rose” or “Rose LifeScience”)
and Balanced Health Botanicals, LLC (“Balanced Health”); the legal
status of the cannabis business of Pure Sunfarms and Rose and the
hemp business of Balanced Health; risks relating to the integration
of Balanced Health and Rose into our consolidated business; risks
relating to obtaining additional financing, including our
dependence upon credit facilities; potential difficulties in
achieving and/or maintaining profitability; variability of product
pricing; risks inherent in the cannabis, hemp, CBD, cannabinoids,
and agricultural businesses; market position; ability to leverage
current business relationships for future business involving hemp
and cannabinoids; the ability of Pure Sunfarms and Rose to
cultivate and distribute cannabis in Canada; existing and new
governmental regulations, including risks related to regulatory
compliance and regarding obtaining and maintaining licenses; legal
and operational risks relating to expected conversion of our
greenhouses to cannabis production in Canada and in the United
States; risks related to rules and regulations at the US federal
(Food and Drug Administration and United States Department of
Agriculture), state and municipal rules and regulations with
respect to produce and hemp, cannabidiol-based products
commercialization; retail consolidation, technological advances and
other forms of competition; transportation disruptions; product
liability and other potential litigation; retention of key
executives; labor issues; uninsured and underinsured losses;
vulnerability to rising energy costs; inflationary effects on costs
of cultivation and transportation; recessionary effects on demand
of our products; environmental, health and safety risks, foreign
exchange exposure, risks associated with cross-border trade;
difficulties in managing our growth; restrictive covenants under
our credit facilities; natural catastrophes; the ongoing COVID-19
pandemic; and tax risks.
The Company has based these forward-looking
statements on factors and assumptions about future events and
financial trends that it believes may affect its financial
condition, results of operations, business strategy and financial
needs. Although the forward-looking statements contained in this
Press Release are based upon assumptions that management believes
are reasonable based on information currently available to
management, there can be no assurance that actual results will be
consistent with these forward-looking statements. Forward-looking
statements necessarily involve known and unknown risks and
uncertainties, many of which are beyond the Company's control,
which may cause the Company's or the industry's actual results,
performance, achievements, prospects and opportunities in future
periods to differ materially from those expressed or implied by
such forward-looking statements. These risks and uncertainties
include, among other things, the factors contained in the Company's
filings with securities regulators, including this Press Release.
In particular, we caution you that our forward-looking statements
are subject to the ongoing and developing circumstances related to
the COVID-19 pandemic, which may have a material adverse effect on
our business, operations and future financial results.
When relying on forward-looking statements to
make decisions, the Company cautions readers not to place undue
reliance on these statements, as forward-looking statements involve
significant risks and uncertainties and should not be read as
guarantees of future results, performance, achievements, prospects
and opportunities. The forward-looking statements made in this
Press Release relate only to events or information as of the date
on which the statements are made in this Press Release. Except as
required by law, the Company undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, after the date on
which the statements are made or to reflect the occurrence of
unanticipated events.
Contact Information
| Lawrence ChamberlainInvestor
Relations(416)
519-4196lawrence.chamberlain@loderockadvisors.com |
|
| |
|
|
|
|
|
| Village
Farms International, Inc. |
|
| Consolidated
Statements of Financial Position |
|
| (In
thousands of United States dollars) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
December 31, 2022 |
|
December 31, 2021 |
|
|
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
16,676 |
|
|
$ |
53,417 |
|
|
Restricted cash |
|
|
5,000 |
|
|
|
5,250 |
|
|
Trade receivables |
|
|
27,558 |
|
|
|
34,360 |
|
|
Inventories |
|
|
70,582 |
|
|
|
68,677 |
|
|
Other receivables |
|
|
309 |
|
|
|
616 |
|
|
Income tax receivable |
|
|
6,900 |
|
|
|
2,430 |
|
|
Prepaid expenses and deposits |
|
|
5,959 |
|
|
|
10,209 |
|
|
Total current assets |
|
|
132,984 |
|
|
|
174,959 |
|
|
Non-current assets |
|
|
|
|
|
|
Property, plant and equipment |
|
|
207,701 |
|
|
|
215,704 |
|
|
Investment in in minority interests |
|
|
2,109 |
|
|
|
2,109 |
|
|
Note receivable - joint venture |
|
|
- |
|
|
|
3,256 |
|
|
Goodwill |
|
|
66,225 |
|
|
|
117,533 |
|
|
Intangibles |
|
|
37,157 |
|
|
|
26,394 |
|
|
Deferred tax asset |
|
|
4,201 |
|
|
|
16,766 |
|
|
Right-of-use assets |
|
|
9,132 |
|
|
|
7,609 |
|
|
Other assets |
|
|
5,776 |
|
|
|
2,581 |
|
|
Total assets |
|
$ |
465,285 |
|
|
$ |
566,911 |
|
|
LIABILITIES |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Line of credit |
|
$ |
7,529 |
|
|
$ |
7,760 |
|
|
Trade payables |
|
|
24,894 |
|
|
|
22,597 |
|
|
Current maturities of long-term debt |
|
|
9,646 |
|
|
|
11,416 |
|
|
Accrued sales taxes |
|
|
11,594 |
|
|
|
3,899 |
|
|
Accrued loyalty program |
|
|
2,060 |
|
|
|
2,098 |
|
|
Accrued liabilities |
|
|
13,064 |
|
|
|
14,168 |
|
|
Lease liabilities - current |
|
|
1,970 |
|
|
|
962 |
|
|
Income tax payable |
|
|
- |
|
|
|
- |
|
|
Other current liabilities |
|
|
1,458 |
|
|
|
1,413 |
|
|
Total current liabilities |
|
|
72,215 |
|
|
|
64,313 |
|
|
Non-current liabilities |
|
|
|
|
|
|
Long-term debt |
|
|
43,821 |
|
|
|
50,419 |
|
|
Deferred tax liability |
|
|
19,756 |
|
|
|
18,657 |
|
|
Lease liabilities - non-current |
|
|
7,785 |
|
|
|
6,711 |
|
|
Other liabilities |
|
|
1,714 |
|
|
|
1,973 |
|
|
Total liabilities |
|
|
145,291 |
|
|
|
142,073 |
|
|
Commitments and
contingencies |
|
|
|
|
|
|
MEZZANINE EQUITY |
|
|
|
|
|
|
Redeemable non-controlling interests |
|
|
16,164 |
|
|
|
16,433 |
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Common stock |
|
|
372,429 |
|
|
|
365,561 |
|
|
Additional paid in capital |
|
|
13,372 |
|
|
|
9,369 |
|
|
Accumulated other comprehensive loss |
|
|
(8,371 |
) |
|
|
6,696 |
|
|
Retained earnings |
|
|
(74,367 |
) |
|
|
26,779 |
|
|
Total Village Farm International Inc. shareholders'
equity |
|
|
303,063 |
|
|
|
408,405 |
|
|
Non-controlling
interest |
|
|
767 |
|
|
|
- |
|
|
Total shareholders’ equity |
|
|
303,830 |
|
|
|
408,405 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
465,285 |
|
|
$ |
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 December 31, |
|
Twelve Months Ended December31, |
|
| |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
69,457 |
|
|
|
$ |
72,808 |
|
|
$ |
293,572 |
|
|
|
$ |
268,020 |
|
|
|
Cost of sales |
|
(66,561 |
) |
|
|
(52,950 |
) |
|
|
(266,075 |
) |
|
|
|
(222,841 |
) |
|
|
Gross margin |
|
2,896 |
|
|
|
19,858 |
|
|
|
27,497 |
|
|
|
45,179 |
|
|
| Selling,
general and administrative expenses |
|
|
(17,037 |
) |
|
|
(16,135 |
) |
|
|
(68,278 |
) |
|
|
(46,384 |
) |
|
| Share-based
compensation |
|
|
(983 |
) |
|
|
(1,828 |
) |
|
|
(3,987 |
) |
|
|
(7,533 |
) |
|
|
Interest expense |
|
(914 |
) |
|
|
(876 |
) |
|
|
(3,244 |
) |
|
|
(2,835 |
) |
|
|
Interest income |
|
78 |
|
|
|
27 |
|
|
|
207 |
|
|
|
126 |
|
|
| Foreign
exchange loss |
|
|
(84 |
) |
|
|
159 |
|
|
|
(2,255 |
) |
|
|
(476 |
) |
|
| Other
expense, net |
|
|
(109 |
) |
|
|
193 |
|
|
|
(707 |
) |
|
|
(1,012 |
) |
|
|
Impairments |
|
(13,500 |
) |
|
|
- |
|
|
|
(43,299 |
) |
|
|
- |
|
|
| Loss on
disposal of assets |
|
|
- |
|
|
|
(219 |
) |
|
|
- |
|
|
|
7 |
|
|
| (Loss)
income before taxes and loss from equity method investments |
|
|
(29,653 |
) |
|
|
1,179 |
|
|
|
(94,066 |
) |
|
|
(12,928 |
) |
|
| Recovery of
(provision for) income taxes |
|
|
(19,244 |
) |
|
|
983 |
|
|
|
(4,681 |
) |
|
|
3,526 |
|
|
| Income
(loss) from equity method investments |
|
|
- |
|
|
|
(133 |
) |
|
|
(2,668 |
) |
|
|
(308 |
) |
|
| (Loss)
income including non-controlling interests |
|
|
(48,897 |
) |
|
|
2,029 |
|
|
|
(101,415 |
) |
|
|
(9,710 |
) |
|
| Less: net
loss attributable to non-controlling interests, net of tax |
|
|
(432 |
) |
|
|
46 |
|
|
|
269 |
|
|
|
46 |
|
|
| Net (loss)
income attributable to Village Farms International Inc. |
|
$ |
(49,329 |
) |
|
$ |
2,075 |
|
|
$ |
(101,146 |
) |
|
$ |
(9,664 |
) |
|
| Basic (loss)
income per share |
|
$ |
(0.54 |
) |
|
|
$ |
0.03 |
|
|
$ |
(1.13 |
) |
|
|
$ |
(0.11 |
) |
|
| Diluted
(loss) income per share |
|
$ |
(0.54 |
) |
|
|
$ |
0.03 |
|
|
$ |
(1.13 |
) |
|
|
$ |
(0.11 |
) |
|
| Weighted
average number of common shares used in the computation of net loss
per share (in thousands): |
|
|
|
|
|
|
|
|
|
| Basic |
|
|
91,350 |
|
|
|
82,161 |
|
|
|
89,127 |
|
|
|
82,161 |
|
|
| Diluted |
|
|
91,350 |
|
|
|
82,161 |
|
|
|
89,127 |
|
|
|
82,161 |
|
|
| Net (loss)
income attributable to Village Farms International Inc. |
|
$ |
(49,329 |
) |
|
$ |
2,075 |
|
|
$ |
(101,146 |
) |
|
$ |
(9,664 |
) |
|
| Other
comprehensive loss: |
|
|
|
|
|
|
|
|
|
| Foreign
currency translation adjustment |
|
|
(260 |
) |
|
|
233 |
|
|
|
(15,460 |
) |
|
|
441 |
|
|
|
Comprehensive loss |
|
$ |
(49,589 |
) |
|
$ |
2,308 |
|
|
$ |
(116,606 |
) |
|
$ |
(9,223 |
) |
|
| |
|
|
|
|
|
|
|
|
|
| Village
Farms International, Inc. |
|
| Condensed
Consolidated Interim Statements of Cash Flows |
|
| (In
thousands of United States dollars) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, |
|
|
|
|
|
2022 |
|
|
|
2021 |
|
|
| Cash
flows used in operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(101,146 |
) |
|
$ |
(9,079 |
) |
|
|
Adjustments to reconcile net (loss) income to net cash used in
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
13,054 |
|
|
|
12,709 |
|
|
|
Amortization of deferred charges |
|
|
214 |
|
|
|
300 |
|
|
|
Share of loss from joint ventures |
|
|
2,668 |
|
|
|
308 |
|
|
|
Net loss attributable to non-controlling interest |
|
|
(269 |
) |
|
|
- |
|
|
|
Interest expense |
|
|
3,244 |
|
|
|
2,835 |
|
|
|
Interest income |
|
|
(207 |
) |
|
|
(126 |
) |
|
|
Interest paid on long-term debt |
|
|
(3,420 |
) |
|
|
(3,306 |
) |
|
|
Unrealized foreign exchange loss |
|
|
83 |
|
|
|
- |
|
|
|
Impairments |
|
|
54,337 |
|
|
|
- |
|
|
|
Write-off of joint venture loan |
|
|
592 |
|
|
|
- |
|
|
|
(Gain) loss on disposal of assets |
|
|
(7 |
) |
|
|
259 |
|
|
|
Non-cash lease expense |
|
|
(604 |
) |
|
|
(1,351 |
) |
|
|
Share-based compensation |
|
|
3,987 |
|
|
|
7,533 |
|
|
|
Deferred income taxes |
|
|
9,831 |
|
|
|
(2,866 |
) |
|
|
Changes in non-cash working capital items |
|
|
(2,246 |
) |
|
|
(46,783 |
) |
|
|
Net cash used in operating activities |
|
|
(19,889 |
) |
|
|
(39,567 |
) |
|
| Cash
flows used in investing activities: |
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(14,292 |
) |
|
|
(21,656 |
) |
|
|
Acquisitions, net |
|
|
(5,873 |
) |
|
|
(40,685 |
) |
|
|
Advances to joint ventures |
|
|
- |
|
|
|
(20 |
) |
|
|
Notes receivable |
|
|
(734 |
) |
|
|
(1,109 |
) |
|
|
Net cash used in investing activities |
|
|
(20,899 |
) |
|
|
(63,470 |
) |
|
| Cash
flows (used in) provided by financing activities: |
|
|
|
|
|
|
Proceeds from borrowings |
|
|
7,321 |
|
|
|
19,669 |
|
|
|
Repayments on borrowings |
|
|
(9,709 |
) |
|
|
(9,454 |
) |
|
|
Proceeds from issuance of common stock and warrants |
|
|
6,692 |
|
|
|
135,000 |
|
|
|
Issuance costs |
|
|
- |
|
|
|
(7,511 |
) |
|
|
Proceeds from exercise of stock options |
|
|
192 |
|
|
|
199 |
|
|
|
Proceeds from exercise of warrants |
|
|
- |
|
|
|
18,495 |
|
|
|
Share repurchases |
|
|
- |
|
|
|
(5,000 |
) |
|
|
Payments on capital lease obligations |
|
|
- |
|
|
|
(17 |
) |
|
|
Payment of note payable related to acquisition |
|
|
- |
|
|
|
(15,498 |
) |
|
|
Net cash (used in) provided by financing activities |
|
|
4,496 |
|
|
|
135,883 |
|
|
| Effect of
exchange rate changes on cash and cash equivalents |
|
|
(699 |
) |
|
|
142 |
|
|
| Net
(decrease) increase in cash and cash equivalents |
|
|
(36,991 |
) |
|
|
32,988 |
|
|
| Cash
and cash equivalents, beginning of period |
|
|
58,667 |
|
|
|
25,679 |
|
|
| Cash
and cash equivalents, end of period |
|
$ |
21,676 |
|
|
$ |
58,667 |
|
|
| |
|
|
|
|
|
Village Farms (NASDAQ:VFF)
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From May 2023 to Jun 2023
Village Farms (NASDAQ:VFF)
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From Jun 2022 to Jun 2023
