Village Farms International, Inc. (“Village Farms” or the
“Company”) (NASDAQ: VFF) today announced its financial results for
the second quarter ended June 30, 2023. All figures are in U.S.
dollars unless otherwise indicated.
Management Commentary
“The second quarter saw the continuation of
strong growth in Retail Branded sales in our Canadian Cannabis
business, steady performance in our U.S. Cannabis business, and
marked improvement in our Fresh Produce business, all of which
contributed to significantly improved financial results on both a
year-over-year and sequential basis,” said Michael DeGiglio, Chief
Executive Officer, Village Farms.
“Our Canadian Cannabis business delivered 24%
year-over-year growth in Canadian dollar Retail Branded sales – all
of which was generated organically – once again significantly
outpacing expansion of the overall market. We maintained our
top-three market share position nationally for the second quarter
of 2023. Importantly, the business delivered these strong
competitive results while generating positive net income and its
19th consecutive quarter of positive adjusted EBITDA, which was up
97% in Canadian dollars year-over-year.”
Mr. DeGiglio continued, “The continuing standout
performance of our Canadian Cannabis business is the result of a
deliberate strategy and execution to win in Canada’s challenging
market environment. In the last year-and-a-half we have launched
seven new brands – the latest, Super Toast, last month – and more
than 300 new SKUs. At the same time, we are realizing continuous
production efficiencies to support future growth in Canada and
internationally. Market share growth and leadership in Canada
require continuous, consumer-focused innovation, and with the
rock-solid foundation we have built, our undivided attention is on
leveraging our leading position in dried flower and top brands to
deliver new strains, products and formats that meet the evolving
preferences of the cannabis market. Finally, we are using our
extensive experience in Canada to aggressively pursue international
opportunities, via both export and in-country operations,
delivering more than a 200% year-over-year growth in Canadian
dollar sales to international markets during the second
quarter.”
“In our U.S. Cannabis business, the success of
our innovative new products and prudent cost management have
stabilized this business. Sales for the second quarter increased
sequentially, while each of net income, adjusted EBITDA and cash
flow were all positive. There is no company better positioned to
benefit from favourable changes in CBD regulation than Balanced
Health Botanicals (“BHB”) in what we continue to believe will be a
high-growth, multi-billion-dollar market. Recent positive
regulatory discussions are encouraging based on BHB’s competitive
advantages: a stable, profitable business with a leading online
presence, DSHEA compliance, internalized manufacturing
capabilities, multiple published studies and a track record of
safety.”
“Our Cannabis business performance this year is
strong evidence of why we continue to believe, as we have since day
one, that Village Farms can be the leader for the long-term in the
global cannabis industry.”
Mr. DeGiglio added, “In our Fresh Produce
business, we continue to benefit from the actions we have taken
under our multi-part plan to return this business to profitability
as the macro-environment also improves. The result was another
quarter of substantial improvement in financial performance,
highlighted by an $11.6 million increase in adjusted EBITDA to
positive $1.3 million, which contributed to a $16.8 million
improvement and positive adjusted EBITDA for the year to date.
Looking ahead, we are strengthening our operations with investments
in infrastructure and AI technology, while innovating with new
higher margin varieties that have been well received by retailers
and consumers alike. With our strong results thus far in 2023, we
continue to track toward our goal of achieving positive adjusted
EBITDA for the full year.”
1. Based on estimated retail sales from HiFyre, other third
parties and provincial boards.
Second Quarter Financial
Highlights(All comparable periods are for the
second quarter of 2022 unless otherwise stated)
Consolidated
- Consolidated sales decreased (7%) year-over-year to $77.2
million from $82.9 million;
- Operating loss before tax improved to ($42 thousand) compared
with an operating loss before tax of ($43.8 million);
- Consolidated net loss improved to ($1.4 million), or ($0.01)
per share, compared with ($36.6 million), or ($0.41) per share;
and,
- Consolidated adjusted EBITDA (a non-GAAP measure) improved to
$4.5 million from negative ($10.3 million).
Canadian Cannabis (Pure Sunfarms and Rose
LifeScience)
- Net sales decreased (6%) to $28.1
million (C$37.7 million) from $29.8 million (C$38.0 million) (a
decrease of (1%) in Canadian dollars);
- Retail branded sales increased 24%
(in Canadian dollars);
- International (export) sales
increased 217% (in Canadian dollars);
- Gross margin was 38%;
- Net income was $1.2 million (C$1.7
million) compared with net income of $1.8 million (C$2.3 million);
and,
- Adjusted EBITDA increased 78% to
$4.8 million (C$6.7 million) from $2.7 million (C$3.4 million) (an
increase of 97% on a constant currency basis).
U.S. Cannabis (Balanced Health Botanicals)
- Net sales were $5.3 million, with
gross margin of 67%, net income of $0.2 million and adjusted EBITDA
of $0.4 million.
Village Farms Fresh (Produce)
- Sales decreased (7%) to $43.8
million from $47.2 million;
- Net loss improved significantly to
($0.7 million) from ($9.4 million); and,
- Adjusted EBITDA improved
significantly to $1.3 million from negative ($10.3 million).
Strategic Growth and Operational
Highlights
Canadian Cannabis
- Maintained top-three producer
market share ranking nationally for the second quarter of
20231;
- Became the number one producer for
Quebec by market share for the second quarter of 20231;
- Was the number two ranked cannabis
producer in the dried flower category nationally (held number one
position prior to acquisition of market share by a
competitor);
- Had the number one dried flower
brands in the core and premium price categories (Pure Sunfarms and
Soar, respectively) and the fastest growing dried flower brand in
the value category (The Original Fraser Valley Weed Co.) in
Canada’s largest provincial market, Ontario; and,
- Subsequent to quarter end, further
expanded its brand portfolio with the addition of Super Toast, a
brand focused on convenience and ready-to-go products.
1. Based on estimated retail sales from HiFyre, other third
parties and provincial boards.
Canadian Cannabis Performance
Summary
|
(millions except % metrics) |
Three Months Ended June 30, |
|
|
|
|
2023 |
|
2022 |
|
Change of C$ |
|
|
|
C$ |
|
US$ |
|
C$ |
|
US$ |
|
|
|
|
Total Gross Sales |
$56.5 |
|
$42.1 |
|
$52.3 |
|
$41.0 |
|
+8 |
% |
|
Total Net Sales |
$37.7 |
|
$28.1 |
|
$38.0 |
|
$29.8 |
|
-1 |
% |
|
Total Cost of Sales |
$23.3 |
|
$17.3 |
|
$23.3 |
|
$18.3 |
|
0 |
% |
|
Gross Margin |
$14.4 |
|
$10.8 |
|
$14.7 |
|
$11.5 |
|
-2 |
% |
|
Gross Margin % |
38% |
|
38% |
|
39% |
|
39% |
|
+36 |
% |
|
SG&A1 |
$10.5 |
|
$7.8 |
|
$10.9 |
|
$8.6 |
|
-4 |
% |
|
Net income |
$1.7 |
|
$1.2 |
|
$2.3 |
|
$1.8 |
|
-26 |
% |
|
Adjusted EBITDA 2 |
$6.7 |
|
$4.8 |
|
$3.4 |
|
$2.7 |
|
+97 |
% |
|
Adjusted EBITDA Margin 2 |
18% |
|
18% |
|
9% |
|
9% |
|
+100 |
% |
|
(millions except % metrics) |
Six Months Ended June 30, |
|
|
|
|
2023 |
|
2022 |
|
Change of C$ |
|
|
|
C$ |
|
US$ |
|
C$ |
|
US$ |
|
|
|
|
Total Gross Sales |
$109.3 |
|
$80.9 |
|
$91.2 |
|
$71.7 |
|
+20 |
% |
|
Total Net Sales |
$71.7 |
|
$53.2 |
|
$65.6 |
|
$51.6 |
|
+9 |
% |
|
Total Cost of Sales |
$45.8 |
|
$34.0 |
|
$38.9 |
|
$30.5 |
|
+18 |
% |
|
Gross Margin |
$25.9 |
|
$19.2 |
|
$26.7 |
|
$21.1 |
|
-3 |
% |
|
Gross Margin % |
36% |
|
36% |
|
41% |
|
41% |
|
-12 |
|
|
SG&A1 |
$19.8 |
|
$14.7 |
|
$20.5 |
|
$15.9 |
|
-3 |
% |
|
Net income |
$1.5 |
|
$1.1 |
|
$4.1 |
|
$2.8 |
|
-63 |
% |
|
Adjusted EBITDA 2 |
$12.3 |
|
$8.7 |
|
$6.0 |
|
$4.8 |
|
+105 |
% |
|
Adjusted EBITDA Margin 2 |
17% |
|
17% |
|
9% |
|
9% |
|
+89 |
% |
1 SG&A for the three and six months ended
June 30, 2023 includes share-based compensation of C$375 (US$291)
and C$850 (US$663), respectively, compared with C$338 (US$219) and
C$804 (US$586), respectively, for the three and six months ended
June 30, 2022.2 Adjusted EBITDA is not a recognized earnings
measure and does not have a standard meaning prescribed in by
GAAP.
Canadian Cannabis’ Percent of Sales by
Channel
|
(millions except % metrics) |
Three Months Ended June 30, |
|
|
|
|
2023 |
|
2022 |
|
Change of C$ |
|
|
|
C$ |
|
US$ |
|
C$ |
|
US$ |
|
|
|
|
Retail Branded Sales |
$49.9 |
|
$37.2 |
|
$40.3 |
|
$31.6 |
|
+24 |
% |
|
International Sales |
$1.9 |
|
$1.4 |
|
$0.6 |
|
$0.5 |
|
+217 |
% |
|
Non-Branded Sales |
$3.9 |
|
$2.9 |
|
$10.3 |
|
$8.1 |
|
-62 |
% |
|
Other |
$0.8 |
|
$0.6 |
|
$1.1 |
|
$0.8 |
|
+27 |
% |
|
Less: Excise Taxes |
$(18.8 |
) |
$(14.0 |
) |
$(14.3 |
) |
$(11.2 |
) |
+31 |
% |
|
Net Sales |
$37.7 |
|
$28.1 |
|
$38.0 |
|
$29.8 |
|
-1 |
% |
|
(millions except % metrics) |
Six Months Ended June 30, |
|
|
|
|
2023 |
|
2022 |
|
Change of C$ |
|
|
|
C$ |
|
US$ |
|
C$ |
|
US$ |
|
|
|
|
Retail Branded Sales |
$96.6 |
|
$71.7 |
|
$71.8 |
|
$56.4 |
|
+35 |
% |
|
International Sales |
$4.1 |
|
$3.1 |
|
$0.8 |
|
$0.6 |
|
+413 |
% |
|
Non-Branded Sales |
$7.1 |
|
$5.2 |
|
$16.6 |
|
$13.1 |
|
-57 |
% |
|
Other |
$1.3 |
|
$0.9 |
|
$2.0 |
|
$1.6 |
|
-35 |
% |
|
Less: Excise Taxes |
$(37.4) |
|
$(27.7) |
|
$(25.6) |
|
$(20.1) |
|
+46 |
% |
|
Net Sales |
$71.7 |
|
$53.2 |
|
$65.6 |
|
$51.5 |
|
+9 |
% |
Presentation of Financial Results
The Company’s financial statements for the three
and six months ended June 30, 2023, as well as the comparative
periods for 2022, have been prepared and presented under United
States Generally Accepted Accounting Principals (“GAAP”).
RESULTS OF OPERATIONS (In thousands of U.S.
dollars, except per share amounts, and unless otherwise noted)
Consolidated Financial Performance
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Sales |
$ |
77,212 |
|
|
$ |
82,903 |
|
|
$ |
141,868 |
|
|
$ |
153,059 |
|
| Cost of sales |
|
(65,713 |
) |
|
|
(76,580 |
) |
|
|
(118,069 |
) |
|
|
(136,832 |
) |
| Gross margin |
|
11,499 |
|
|
|
6,323 |
|
|
|
23,799 |
|
|
|
16,227 |
|
| Selling, general and
administrative expenses |
|
(16,753 |
) |
|
|
(18,516 |
) |
|
|
(34,158 |
) |
|
|
(36,451 |
) |
| Interest expense |
|
(1,411 |
) |
|
|
(665 |
) |
|
|
(2,544 |
) |
|
|
(1,348 |
) |
| Interest income |
|
283 |
|
|
|
— |
|
|
|
479 |
|
|
|
110 |
|
| Foreign exchange gain
(loss) |
|
738 |
|
|
|
(527 |
) |
|
|
669 |
|
|
|
(208 |
) |
| Other income (expense),
net |
|
5,602 |
|
|
|
(30 |
) |
|
|
5,632 |
|
|
|
(38 |
) |
| Write-off of joint venture
loan |
|
— |
|
|
|
(592 |
) |
|
|
— |
|
|
|
(592 |
) |
| Impairments |
|
— |
|
|
|
(29,799 |
) |
|
|
— |
|
|
|
(29,799 |
) |
| Loss before taxes and loss
from equity method investments |
|
(42 |
) |
|
|
(43,806 |
) |
|
|
(6,123 |
) |
|
|
(52,099 |
) |
| (Provision for) recovery of
income taxes |
|
(1,299 |
) |
|
|
9,714 |
|
|
|
(1,933 |
) |
|
|
11,380 |
|
| Loss including non-controlling
interests and before equity losses |
|
(1,341 |
) |
|
|
(34,092 |
) |
|
|
(8,056 |
) |
|
|
(40,719 |
) |
| Less: net loss attributable to
non-controlling interests, net of tax |
|
(39 |
) |
|
|
152 |
|
|
|
40 |
|
|
|
314 |
|
| Loss from equity method
investments |
|
— |
|
|
|
(2,615 |
) |
|
|
— |
|
|
|
(2,667 |
) |
| Net loss attributable to
Village Farms International Inc. |
$ |
(1,380 |
) |
|
$ |
(36,555 |
) |
|
$ |
(8,016 |
) |
|
$ |
(43,072 |
) |
| Adjusted EBITDA (1) |
$ |
4,475 |
|
|
$ |
(10,308 |
) |
|
$ |
4,994 |
|
|
$ |
(16,419 |
) |
| Basic loss per share |
$ |
(0.01 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.49 |
) |
| Diluted loss per share |
$ |
(0.01 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.49 |
) |
1 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.
We caution that our results of operations for
the three and six months ended June 30, 2023 and 2022 may not be
indicative of our future performance, particularly in light of
global inflation and lingering supply-chain shortages due to the
Ukrainian conflict.
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, 2023 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
43,846 |
|
|
$ |
28,065 |
|
|
$ |
5,301 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
77,212 |
|
| Cost of sales |
|
(46,607 |
) |
|
|
(17,349 |
) |
|
|
(1,743 |
) |
|
|
(14 |
) |
|
|
— |
|
|
|
(65,713 |
) |
| Selling, general and
administrative expenses |
|
(2,854 |
) |
|
|
(7,827 |
) |
|
|
(3,386 |
) |
|
|
(1 |
) |
|
|
(2,685 |
) |
|
|
(16,753 |
) |
| Other income (expense),
net |
|
5,135 |
|
|
|
(806 |
) |
|
|
— |
|
|
|
(19 |
) |
|
|
902 |
|
|
|
5,212 |
|
| Operating (loss) income |
|
(480 |
) |
|
|
2,083 |
|
|
|
172 |
|
|
|
(34 |
) |
|
|
(1,783 |
) |
|
|
(42 |
) |
| Provision for income
taxes |
|
(218 |
) |
|
|
(818 |
) |
|
|
— |
|
|
|
— |
|
|
|
(263 |
) |
|
|
(1,299 |
) |
| (Loss) income from
consolidated entities |
|
(698 |
) |
|
|
1,265 |
|
|
|
172 |
|
|
|
(34 |
) |
|
|
(2,046 |
) |
|
|
(1,341 |
) |
| Less: net (income) loss
attributable to non-controlling interests, net of tax |
|
— |
|
|
|
(91 |
) |
|
|
— |
|
|
|
— |
|
|
|
52 |
|
|
|
(39 |
) |
| Net (loss) income |
$ |
(698 |
) |
|
$ |
1,174 |
|
|
$ |
172 |
|
|
$ |
(34 |
) |
|
$ |
(1,994 |
) |
|
$ |
(1,380 |
) |
| Adjusted EBITDA (1) |
$ |
1,330 |
|
|
$ |
4,778 |
|
|
$ |
354 |
|
|
$ |
(35 |
) |
|
$ |
(1,952 |
) |
|
$ |
4,475 |
|
| (Loss) income per share |
$ |
(0.01 |
) |
|
$ |
0.01 |
|
|
$ |
0.00 |
|
|
$ |
(0.00 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
| Diluted (loss) income per
share |
$ |
(0.01 |
) |
|
$ |
0.01 |
|
|
$ |
0.00 |
|
|
$ |
(0.00 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
|
For The Three Months Ended June 30, 2022 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
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 |
) |
|
|
(8,616 |
) |
|
|
(4,369 |
) |
|
|
(7 |
) |
|
|
(2,716 |
) |
|
|
(18,516 |
) |
| Other expense, net |
|
(402 |
) |
|
|
(231 |
) |
|
|
(12 |
) |
|
|
— |
|
|
|
(577 |
) |
|
|
(1,222 |
) |
| Write-off of joint venture
loan |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(592 |
) |
|
|
(592 |
) |
| Impairments |
|
— |
|
|
|
— |
|
|
|
(29,799 |
) |
|
|
— |
|
|
|
— |
|
|
|
(29,799 |
) |
| Operating (loss) income |
|
(12,177 |
) |
|
|
2,661 |
|
|
|
(30,343 |
) |
|
|
(62 |
) |
|
|
(3,885 |
) |
|
|
(43,806 |
) |
| 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 |
|
— |
|
|
|
— |
|
|
|
(331 |
) |
|
|
— |
|
|
|
(2,284 |
) |
|
|
(2,615 |
) |
| Net (loss) income |
$ |
(9,350 |
) |
|
$ |
1,822 |
|
|
$ |
(23,649 |
) |
|
$ |
(62 |
) |
|
$ |
(5,316 |
) |
|
$ |
(36,555 |
) |
| Adjusted EBITDA (1) |
$ |
(10,282 |
) |
|
$ |
2,743 |
|
|
$ |
(633 |
) |
|
$ |
(63 |
) |
|
$ |
(2,073 |
) |
|
$ |
(10,308 |
) |
| (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 Six Months Ended June 30, 2023 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Sales |
$ |
78,413 |
|
|
$ |
53,177 |
|
|
$ |
10,278 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
141,868 |
|
| Cost of sales |
|
(80,559 |
) |
|
|
(34,007 |
) |
|
|
(3,482 |
) |
|
|
(21 |
) |
|
|
— |
|
|
|
(118,069 |
) |
| Selling, general and
administrative expenses |
|
(5,770 |
) |
|
|
(14,675 |
) |
|
|
(7,003 |
) |
|
|
(30 |
) |
|
|
(6,680 |
) |
|
|
(34,158 |
) |
| Other income (expense),
net |
|
4,591 |
|
|
|
(1,410 |
) |
|
|
3 |
|
|
|
(19 |
) |
|
|
1,071 |
|
|
|
4,236 |
|
| Operating (loss) income |
|
(3,325 |
) |
|
|
3,085 |
|
|
|
(204 |
) |
|
|
(70 |
) |
|
|
(5,609 |
) |
|
|
(6,123 |
) |
| Recovery of (provision for)
income taxes |
|
8 |
|
|
|
(1,956 |
) |
|
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
(1,933 |
) |
| (Loss) income from
consolidated entities |
|
(3,317 |
) |
|
|
1,129 |
|
|
|
(204 |
) |
|
|
(70 |
) |
|
|
(5,594 |
) |
|
|
(8,056 |
) |
| Less: net loss (income)
attributable to non-controlling interests, net of tax |
|
— |
|
|
|
(60 |
) |
|
|
— |
|
|
|
— |
|
|
|
100 |
|
|
|
40 |
|
| Net (loss) income |
$ |
(3,317 |
) |
|
$ |
1,069 |
|
|
$ |
(204 |
) |
|
$ |
(70 |
) |
|
$ |
(5,494 |
) |
|
$ |
(8,016 |
) |
| Adjusted EBITDA (1) |
$ |
335 |
|
|
$ |
8,688 |
|
|
$ |
203 |
|
|
$ |
(71 |
) |
|
$ |
(4,161 |
) |
|
$ |
4,994 |
|
| (Loss) income per share |
$ |
(0.03 |
) |
|
$ |
0.01 |
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.08 |
) |
| Diluted (loss) income per
share |
$ |
(0.03 |
) |
|
$ |
0.01 |
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.08 |
) |
|
|
For The Six Months Ended June 30, 2022 |
|
|
|
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
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 |
) |
|
|
(15,916 |
) |
|
|
(8,760 |
) |
|
|
(39 |
) |
|
|
(5,788 |
) |
|
|
(36,451 |
) |
| Other (expense) income,
net |
|
(432 |
) |
|
|
(977 |
) |
|
|
(12 |
) |
|
|
(6 |
) |
|
|
(57 |
) |
|
|
(1,484 |
) |
| Write-off of joint venture
loan |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(592 |
) |
|
|
(592 |
) |
| Impairments |
|
— |
|
|
|
— |
|
|
|
(29,799 |
) |
|
|
— |
|
|
|
— |
|
|
|
(29,799 |
) |
| Operating (loss) income |
|
(19,637 |
) |
|
|
4,125 |
|
|
|
(30,022 |
) |
|
|
(128 |
) |
|
|
(6,437 |
) |
|
|
(52,099 |
) |
| 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 |
|
— |
|
|
|
— |
|
|
|
(383 |
) |
|
|
— |
|
|
|
(2,284 |
) |
|
|
(2,667 |
) |
| Net (loss) income |
$ |
(15,095 |
) |
|
$ |
2,809 |
|
|
$ |
(23,380 |
) |
|
$ |
(128 |
) |
|
$ |
(7,278 |
) |
|
$ |
(43,072 |
) |
| Adjusted EBITDA (1) |
$ |
(16,483 |
) |
|
$ |
4,847 |
|
|
$ |
(53 |
) |
|
$ |
(122 |
) |
|
$ |
(4,608 |
) |
|
$ |
(16,419 |
) |
| (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 |
) |
1 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.
A detailed discussion of our consolidated and
segment results can be found in the 10Q MD&A on the Village
Farms website under Financial Reports
(https://villagefarms.com/financial-reports/) within the Investors
section.
Reconciliation of Net Income to Adjusted
EBITDA
The following tables reflects a reconciliation
of net income to Adjusted EBITDA, as presented by the Company:
| |
For The Three Months Ended June 30, 2023 |
|
| (in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Net (loss) income |
$ |
(698 |
) |
|
$ |
1,174 |
|
|
$ |
172 |
|
|
$ |
(34 |
) |
|
$ |
(1,994 |
) |
|
$ |
(1,380 |
) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
1,302 |
|
|
|
1,494 |
|
|
|
87 |
|
|
|
— |
|
|
|
63 |
|
|
|
2,946 |
|
|
Foreign currency exchange gain |
|
(80 |
) |
|
|
(22 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(663 |
) |
|
|
(766 |
) |
|
Interest expense, net |
|
588 |
|
|
|
728 |
|
|
|
— |
|
|
|
— |
|
|
|
(237 |
) |
|
|
1,079 |
|
|
Provision for income taxes |
|
218 |
|
|
|
818 |
|
|
|
— |
|
|
|
— |
|
|
|
263 |
|
|
|
1,299 |
|
|
Share-based compensation |
|
— |
|
|
|
119 |
|
|
|
95 |
|
|
|
— |
|
|
|
385 |
|
|
|
599 |
|
|
Interest expense for JV's |
|
— |
|
|
|
34 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
|
Amortization for JVs |
|
— |
|
|
|
367 |
|
|
|
— |
|
|
|
— |
|
|
|
231 |
|
|
|
598 |
|
|
Foreign currency exchange loss for JVs |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Share-based compensation for JV's |
|
— |
|
|
|
40 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
40 |
|
|
Other expenses for JV's |
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9 |
) |
|
Deferred financing fees |
|
— |
|
|
|
34 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
|
Other expense, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Adjusted EBITDA (2) |
$ |
1,330 |
|
|
$ |
4,778 |
|
|
$ |
354 |
|
|
$ |
(35 |
) |
|
$ |
(1,952 |
) |
|
$ |
4,475 |
|
| |
For The Six Months Ended June 30, 2023 |
|
| (in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Net (loss) income |
$ |
(3,317 |
) |
|
$ |
1,069 |
|
|
$ |
(204 |
) |
|
$ |
(70 |
) |
|
$ |
(5,494 |
) |
|
$ |
(8,016 |
) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
2,556 |
|
|
|
3,284 |
|
|
|
226 |
|
|
|
— |
|
|
|
124 |
|
|
|
6,190 |
|
|
Foreign currency exchange (gain) loss |
|
(27 |
) |
|
|
(35 |
) |
|
|
19 |
|
|
|
(1 |
) |
|
|
(689 |
) |
|
|
(733 |
) |
|
Interest expense, net |
|
1,131 |
|
|
|
1,289 |
|
|
|
(24 |
) |
|
|
— |
|
|
|
(380 |
) |
|
|
2,016 |
|
|
(Recovery of) provision for income taxes |
|
(8 |
) |
|
|
1,956 |
|
|
|
— |
|
|
|
— |
|
|
|
(15 |
) |
|
|
1,933 |
|
|
Share-based compensation |
|
— |
|
|
|
263 |
|
|
|
185 |
|
|
|
— |
|
|
|
1,834 |
|
|
|
2,282 |
|
|
Interest expense for JV's |
|
— |
|
|
|
34 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
|
Amortization for JVs |
|
— |
|
|
|
699 |
|
|
|
— |
|
|
|
— |
|
|
|
459 |
|
|
|
1,158 |
|
|
Foreign currency exchange loss for JVs |
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
Share-based compensation for JV's |
|
— |
|
|
|
74 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
74 |
|
|
Other expense for JV's |
|
— |
|
|
|
(15 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(15 |
) |
|
Deferred financing fees |
|
— |
|
|
|
68 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
68 |
|
|
Other expense, net |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
| Adjusted EBITDA (2) |
$ |
335 |
|
|
$ |
8,688 |
|
|
$ |
203 |
|
|
$ |
(71 |
) |
|
$ |
(4,161 |
) |
|
$ |
4,994 |
|
| |
For The Three Months Ended June 30, 2022 |
|
| (in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Net (loss) income |
$ |
(9,350 |
) |
|
$ |
1,822 |
|
|
$ |
(23,649 |
) |
|
$ |
(62 |
) |
|
$ |
(5,316 |
) |
|
$ |
(36,555 |
) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
1,242 |
|
|
|
1,385 |
|
|
|
141 |
|
|
|
— |
|
|
|
— |
|
|
|
2,768 |
|
|
Foreign currency exchange loss |
|
236 |
|
|
|
28 |
|
|
|
14 |
|
|
|
— |
|
|
|
292 |
|
|
|
570 |
|
|
Interest expense, net |
|
428 |
|
|
|
195 |
|
|
|
— |
|
|
|
— |
|
|
|
82 |
|
|
|
705 |
|
|
(Recovery of) provision for income taxes |
|
(2,827 |
) |
|
|
991 |
|
|
|
(7,025 |
) |
|
|
— |
|
|
|
(853 |
) |
|
|
(9,714 |
) |
|
Share-based compensation |
|
— |
|
|
|
219 |
|
|
|
107 |
|
|
|
— |
|
|
|
788 |
|
|
|
1,114 |
|
|
Interest expense for JV's |
|
— |
|
|
|
— |
|
|
|
26 |
|
|
|
— |
|
|
|
— |
|
|
|
26 |
|
|
Amortization for JVs |
|
— |
|
|
|
130 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
130 |
|
|
Foreign currency exchange gain for JVs |
|
— |
|
|
|
(28 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(28 |
) |
|
Deferred financing fees |
|
— |
|
|
|
61 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
61 |
|
|
Impairments |
|
— |
|
|
|
— |
|
|
|
29,799 |
|
|
|
— |
|
|
|
— |
|
|
|
29,799 |
|
|
'JV exit-related costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,876 |
|
|
|
2,876 |
|
|
Gain on disposal of assets |
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
Purchase price adjustment (1) |
|
— |
|
|
|
(2,059 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,059 |
) |
|
Other expense, net |
|
(9 |
) |
|
|
(1 |
) |
|
|
(46 |
) |
|
|
(1 |
) |
|
|
58 |
|
|
|
1 |
|
| Adjusted EBITDA (2) |
$ |
(10,282 |
) |
|
$ |
2,743 |
|
|
$ |
(633 |
) |
|
$ |
(63 |
) |
|
$ |
(2,073 |
) |
|
$ |
(10,308 |
) |
| |
For The Six Months Ended June 30, 2022 |
|
| (in thousands of U.S.
dollars) |
VF Fresh(Produce) |
|
|
Cannabis Canada |
|
|
Cannabis U.S. |
|
|
CleanEnergy |
|
|
Corporate |
|
|
Total |
|
|
Net (loss) income |
$ |
(15,095 |
) |
|
$ |
2,809 |
|
|
$ |
(23,380 |
) |
|
$ |
(128 |
) |
|
$ |
(7,278 |
) |
|
$ |
(43,072 |
) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
2,501 |
|
|
|
2,687 |
|
|
|
282 |
|
|
|
— |
|
|
|
— |
|
|
|
5,470 |
|
|
Foreign currency exchange loss (gain) |
|
236 |
|
|
|
117 |
|
|
|
14 |
|
|
|
2 |
|
|
|
(118 |
) |
|
|
251 |
|
|
Interest expense, net |
|
428 |
|
|
|
776 |
|
|
|
— |
|
|
|
4 |
|
|
|
70 |
|
|
|
1,278 |
|
|
(Recovery of) provision for income taxes |
|
(4,542 |
) |
|
|
1,630 |
|
|
|
(7,025 |
) |
|
|
— |
|
|
|
(1,443 |
) |
|
|
(11,380 |
) |
|
Share-based compensation |
|
— |
|
|
|
586 |
|
|
|
202 |
|
|
|
— |
|
|
|
1,290 |
|
|
|
2,078 |
|
|
Interest expense for JV's |
|
— |
|
|
|
— |
|
|
|
39 |
|
|
|
— |
|
|
|
— |
|
|
|
39 |
|
|
Amortization for JVs |
|
— |
|
|
|
224 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
224 |
|
|
Foreign currency exchange loss for JVs |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Deferred financing fees |
|
— |
|
|
|
127 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
127 |
|
|
Impairment |
|
— |
|
|
|
— |
|
|
|
29,799 |
|
|
|
— |
|
|
|
— |
|
|
|
29,799 |
|
|
JV exit-related costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,876 |
|
|
|
2,876 |
|
|
Gain on disposal of assets |
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
Purchase price adjustment (1) |
|
— |
|
|
|
(4,109 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,109 |
) |
|
Other expense, net |
|
(9 |
) |
|
|
(1 |
) |
|
|
16 |
|
|
— |
|
|
|
(5 |
) |
|
|
1 |
|
| Adjusted EBITDA (2) |
$ |
(16,483 |
) |
|
$ |
4,847 |
|
|
$ |
(53 |
) |
|
$ |
(122 |
) |
|
$ |
(4,608 |
) |
|
$ |
(16,419 |
) |
1 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, Pure Sunfarms' intangible
amortization and Rose intangible amortization resulting from the
September 30, 2022 finalization of the Rose purchase price
accounting.
2 Adjusted EBITDA is not a recognized earnings
measure and does not have a standardized meaning prescribed by
GAAP. Therefore, Adjusted EBITDA presented for these segments may
not be comparable to similar measures presented for comparable
segments by other issuers. Management believes that Adjusted EBITDA
is a useful supplemental measure in evaluating the performance of
the Company’s segments because it excludes non-recurring and other
items that do not reflect the business performance of our segments.
Adjusted EBITDA for Canadian Cannabis includes the 70% interest in
Rose LifeScience since acquisition and Adjusted EBITDA for
“Corporate” and “Total” includes our 65% interest in VFH.
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 months ended June 30, 2023 in the
Company Form 10-Q, which will be filed on (www.sec.gov/edgar.shtml)
and SEDAR (www.sedar.com) and will be available at
www.villagefarms.com.
Conference Call
Village Farms’ management team will host a
conference call to discuss second quarter financial results today,
Wednesday August 9, 2023, at 8:30 a.m. ET.
Participants can access the conference call via a webcast at
Village Farms Second Quarter 2023 Conference Call Webcast or on the
Company website at Village Farms - Events. Participants wanting to
access the conference call by telephone must register in advance at
Village Farms Second Quarter 2023 Conference Call to receive
telephone dial-in information.
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 beginning approximately one hour following completion of the
call on Village Farms’ web site at
http://villagefarms.com/investor-relations/investor-calls.
About Village Farms International
Village Farms leverages decades of experience as
a large-scale, Controlled Environment Agriculture-based, vertically
integrated supplier for high-value, high-growth plant-based
Consumer Packaged Goods opportunities, with a strong foundation as
a leading fresh produce supplier to grocery and large-format
retailers throughout the US and Canada, and new high-growth
opportunities in the cannabis and CBD categories in North America
and selected markets internationally.
In Canada, the Company's wholly-owned Canadian
subsidiary, Pure Sunfarms, is one of the single largest cannabis
operations in the world, the lowest-cost greenhouse producer and
one of Canada’s best-selling brands. The Company also owns 70% of
Québec-based, Rose LifeScience, a leading third-party cannabis
products commercialization expert in the Province of Québec,
In the US, wholly-owned Balanced Health
Botanicals is one of the leading CBD brands and e-commerce
platforms in the country. Subject to compliance with all applicable
US federal and state laws and stock exchange rules, Village Farms
plans to enter the US high-THC cannabis market via multiple
strategies, leveraging one of the largest greenhouse operations in
the country (more than 5.5 million square feet in West Texas), as
well as the operational and product expertise gained through Pure
Sunfarms' cannabis success in Canada.
Internationally, Village Farms is targeting
selected, nascent, legal cannabis and CBD opportunities with
significant medium- and long-term potential, with an initial focus
on the Asia-Pacific region and Europe.
Cautionary Statement Regarding
Forward-Looking Information
As used in this Press Release, the terms
“Village Farms”, “Village Farms International”, the “Company”,
“we”, “us”, “our” and similar references refer to Village Farms
International, Inc. and our consolidated subsidiaries, and the term
“Common Shares” refers to our common shares, no par value. Our
financial information is presented in U.S. dollars and all
references in this Press Release to “$” means U.S. dollars and all
references to “C$” means Canadian dollars.
This Press Release contains forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995, Section 27A of the U.S.
Securities Act of 1933, as amended, (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and is subject to the safe harbor created by those
sections. This Press Release also contains "forward-looking
information" within the meaning of applicable Canadian securities
laws. We refer to such forward-looking statements and
forward-looking information collectively as "forward-looking
statements". Forward-looking statements may relate to the Company's
future outlook or financial position and anticipated events or
results and may include statements regarding the financial
position, business strategy, budgets, expansion plans, litigation,
projected production, projected costs, capital expenditures,
financial results, taxes, plans and objectives of or involving the
Company. Particularly, statements regarding future results,
performance, achievements, prospects or opportunities for the
Company, the greenhouse vegetable or produce industry and the
cannabis industry and market 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 on acceptable terms, including our
dependence upon credit facilities and dilutive transactions;
potential difficulties in achieving and/or maintaining
profitability; variability of product pricing; risks inherent in
the cannabis, hemp, CBD, cannabinoids, and agricultural businesses;
our market position and competitive position; our ability to
leverage current business relationships for future business
involving hemp and cannabinoids; the ability of Pure Sunfarms and
Rose to cultivate and distribute cannabis in Canada; existing and
new governmental regulations, including risks related to regulatory
compliance and regarding obtaining and maintaining licenses
required under the Cannabis Act (Canada), the Criminal Code and
other Acts, S.C. 2018, C. 16 (Canada) for its Canadian operational
facilities, and changes in our regulatory requirements; legal and
operational risks relating to expected conversion of our
greenhouses to cannabis production in Canada and in the United
States; risks related to rules and regulations at the U.S. Federal
(Food and Drug Administration and United States Department of
Agriculture), state and municipal levels with respect to produce
and hemp, cannabidiol-based products commercialization; retail
consolidation, technological advances and other forms of
competition; transportation disruptions; product liability and
other potential litigation; retention of key executives; labor
issues; uninsured and underinsured losses; vulnerability to rising
energy costs; inflationary effects on costs of cultivation and
transportation; recessionary effects on demand of our products;
environmental, health and safety risks, foreign exchange exposure,
risks associated with cross-border trade; difficulties in managing
our growth; restrictive covenants under our credit facilities;
natural catastrophes; rising interest rates; and tax risks.
The Company has based these forward-looking
statements on factors and assumptions about future events and
financial trends that it believes may affect its financial
condition, results of operations, business strategy and financial
needs. Although the forward-looking statements contained in this
Press Release are based upon assumptions that management believes
are reasonable based on information currently available to
management, there can be no assurance that actual results will be
consistent with these forward-looking statements. Forward-looking
statements necessarily involve known and unknown risks and
uncertainties, many of which are beyond the Company's control,
which may cause the Company's or the industry's actual results,
performance, achievements, prospects and opportunities in future
periods to differ materially from those expressed or implied by
such forward-looking statements. These risks and uncertainties
include, among other things, the factors contained in the Company's
filings with securities regulators, including this Press
Release.
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 RelationsLodeRock Advisors(416)
519-4196lawrence.chamberlain@loderockadvisors.com
Village Farms International,
Inc. Condensed Consolidated Statements of
Financial Position (In thousands of United States
dollars, except share data)
(Unaudited)
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
| ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
26,659 |
|
|
$ |
16,676 |
|
|
Restricted cash |
|
5,000 |
|
|
|
5,000 |
|
|
Trade receivables |
|
29,509 |
|
|
|
27,558 |
|
|
Inventories |
|
73,733 |
|
|
|
70,582 |
|
|
Other receivables |
|
10,504 |
|
|
|
309 |
|
|
Income tax receivable, net |
|
1,741 |
|
|
|
6,900 |
|
|
Prepaid expenses and deposits |
|
9,563 |
|
|
|
5,959 |
|
|
Total current assets |
|
156,709 |
|
|
|
132,984 |
|
|
Non-current assets |
|
|
|
|
|
|
Property, plant and equipment |
|
207,374 |
|
|
|
207,701 |
|
|
Investments |
|
2,109 |
|
|
|
2,109 |
|
|
Goodwill |
|
67,239 |
|
|
|
66,225 |
|
|
Intangibles |
|
36,532 |
|
|
|
37,157 |
|
|
Deferred tax asset |
|
4,201 |
|
|
|
4,201 |
|
|
Right-of-use assets |
|
12,962 |
|
|
|
9,132 |
|
|
Other assets |
|
1,976 |
|
|
|
5,776 |
|
|
Total assets |
$ |
489,102 |
|
|
$ |
465,285 |
|
|
LIABILITIES |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Line of credit |
$ |
4,000 |
|
|
$ |
7,529 |
|
|
Trade payables |
|
20,551 |
|
|
|
24,894 |
|
|
Current maturities of long-term debt |
|
9,373 |
|
|
|
9,646 |
|
|
Accrued sales taxes |
|
13,211 |
|
|
|
11,594 |
|
|
Accrued loyalty program |
|
1,821 |
|
|
|
2,060 |
|
|
Accrued liabilities |
|
19,384 |
|
|
|
13,064 |
|
|
Lease liabilities - current |
|
1,755 |
|
|
|
1,970 |
|
|
Other current liabilities |
|
1,680 |
|
|
|
1,458 |
|
|
Total current liabilities |
|
71,775 |
|
|
|
72,215 |
|
|
Non-current liabilities |
|
|
|
|
|
|
Long-term debt |
|
41,615 |
|
|
|
43,821 |
|
|
Deferred tax liability |
|
19,138 |
|
|
|
19,756 |
|
|
Lease liabilities - non-current |
|
11,816 |
|
|
|
7,785 |
|
|
Other liabilities |
|
1,927 |
|
|
|
1,714 |
|
|
Total liabilities |
|
146,271 |
|
|
|
145,291 |
|
|
Commitments and contingencies |
|
|
|
|
|
| MEZZANINE
EQUITY |
|
|
|
|
|
|
Redeemable non-controlling interest |
|
16,223 |
|
|
|
16,164 |
|
| SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
Common stock, no par value per share - unlimited shares authorized;
110,238,929 shares issued and outstanding at June 30,
2023 and 91,788,929 shares issued and outstanding at
December 31, 2022. |
|
386,719 |
|
|
|
372,429 |
|
|
Additional paid in capital |
|
24,888 |
|
|
|
13,372 |
|
|
Accumulated other comprehensive loss |
|
(3,284 |
) |
|
|
(8,371 |
) |
|
Retained earnings |
|
(82,383 |
) |
|
|
(74,367 |
) |
|
Total Village Farms International, Inc. shareholders’ equity |
|
325,940 |
|
|
|
303,063 |
|
|
Non-controlling interest |
|
668 |
|
|
|
767 |
|
|
Total shareholders’ equity |
|
326,608 |
|
|
|
303,830 |
|
|
Total liabilities, mezzanine equity and shareholders’ equity |
$ |
489,102 |
|
|
$ |
465,285 |
|
Village Farms International,
Inc. Condensed Consolidated Statements of
Operations 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, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Sales |
$ |
77,212 |
|
|
$ |
82,903 |
|
|
$ |
141,868 |
|
|
$ |
153,059 |
|
| Cost of sales |
|
(65,713 |
) |
|
|
(76,580 |
) |
|
|
(118,069 |
) |
|
|
(136,832 |
) |
| Gross margin |
|
11,499 |
|
|
|
6,323 |
|
|
|
23,799 |
|
|
|
16,227 |
|
| Selling, general and
administrative expenses |
|
(16,753 |
) |
|
|
(18,516 |
) |
|
|
(34,158 |
) |
|
|
(36,451 |
) |
| Interest expense |
|
(1,411 |
) |
|
|
(665 |
) |
|
|
(2,544 |
) |
|
|
(1,348 |
) |
| Interest income |
|
283 |
|
|
|
— |
|
|
|
479 |
|
|
|
110 |
|
| Foreign exchange gain
(loss) |
|
738 |
|
|
|
(527 |
) |
|
|
669 |
|
|
|
(208 |
) |
| Other income (expense) |
|
5,602 |
|
|
|
(30 |
) |
|
|
5,632 |
|
|
|
(38 |
) |
| Write-off of joint venture
loan |
|
— |
|
|
|
(592 |
) |
|
|
— |
|
|
|
(592 |
) |
| Impairments |
|
— |
|
|
|
(29,799 |
) |
|
|
— |
|
|
|
(29,799 |
) |
| Loss before taxes and loss
from equity method investments |
|
(42 |
) |
|
|
(43,806 |
) |
|
|
(6,123 |
) |
|
|
(52,099 |
) |
| (Provision for) recovery of
income taxes |
|
(1,299 |
) |
|
|
9,714 |
|
|
|
(1,933 |
) |
|
|
11,380 |
|
| Loss from equity method
investments |
|
— |
|
|
|
(2,615 |
) |
|
|
— |
|
|
|
(2,667 |
) |
| Loss including non-controlling
interests |
|
(1,341 |
) |
|
|
(36,707 |
) |
|
|
(8,056 |
) |
|
|
(43,386 |
) |
| Less: net (income) loss
attributable to non-controlling interests, net of tax |
|
(39 |
) |
|
|
152 |
|
|
|
40 |
|
|
|
314 |
|
| Net loss attributable to
Village Farms International, Inc. shareholders |
$ |
(1,380 |
) |
|
$ |
(36,555 |
) |
|
$ |
(8,016 |
) |
|
$ |
(43,072 |
) |
| Basic loss per share
attributable to Village Farms International, Inc. shareholders |
$ |
(0.01 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.49 |
) |
| Diluted loss per share
attributable to Village Farms International, Inc. shareholders |
$ |
(0.01 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.49 |
) |
| Weighted average number of
common shares used in the computation of net loss per
share (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
110,239 |
|
|
|
88,567 |
|
|
|
107,185 |
|
|
|
88,472 |
|
|
Diluted |
|
110,239 |
|
|
|
88,567 |
|
|
|
107,185 |
|
|
|
88,472 |
|
| Loss including non-controlling
interests |
$ |
(1,341 |
) |
|
$ |
(36,707 |
) |
|
$ |
(8,056 |
) |
|
$ |
(43,386 |
) |
| Other comprehensive income
(loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
4,225 |
|
|
|
151 |
|
|
|
5,087 |
|
|
|
612 |
|
| Comprehensive income (loss)
including non-controlling interests |
|
2,884 |
|
|
|
(36,556 |
) |
|
|
(2,969 |
) |
|
|
(42,774 |
) |
|
Comprehensive (income) loss attributable to non-controlling
interests |
|
(361 |
) |
|
|
268 |
|
|
|
(403 |
) |
|
|
430 |
|
| Comprehensive income (loss)
attributable to Village Farms International, Inc. shareholders |
$ |
2,523 |
|
|
$ |
(36,288 |
) |
|
$ |
(3,372 |
) |
|
$ |
(42,344 |
) |
Village Farms International,
Inc. Condensed Consolidated Statements of Cash
Flows (In thousands of United States
dollars) (Unaudited)
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
| Cash flows used in
operating activities: |
|
|
|
|
|
|
Net loss attributable to Village Farms International, Inc.
shareholders |
$ |
(8,016 |
) |
|
$ |
(43,072 |
) |
|
Adjustments to reconcile net loss net loss attributable to Village
Farms International, Inc. shareholders |
|
|
|
|
|
|
to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
7,729 |
|
|
|
6,332 |
|
|
Amortization of deferred charges |
|
68 |
|
|
|
126 |
|
|
Share of loss from joint ventures |
|
— |
|
|
|
2,667 |
|
|
Net loss attributable to non-controlling interest |
|
(40 |
) |
|
|
— |
|
|
Interest expense |
|
2,544 |
|
|
|
1,348 |
|
|
Interest income |
|
(479 |
) |
|
|
(110 |
) |
|
Interest paid on long-term debt |
|
(2,637 |
) |
|
|
(1,855 |
) |
|
Unrealized foreign exchange loss |
|
27 |
|
|
|
115 |
|
|
Impairments |
|
— |
|
|
|
29,799 |
|
|
Write-off of joint venture loan |
|
— |
|
|
|
592 |
|
|
Non-cash lease expense |
|
907 |
|
|
|
29 |
|
|
Share-based compensation |
|
2,388 |
|
|
|
2,078 |
|
|
Deferred income taxes |
|
(392 |
) |
|
|
(16,134 |
) |
|
Changes in non-cash working capital items |
|
(7,346 |
) |
|
|
9,064 |
|
|
Net cash used in operating activities |
|
(5,247 |
) |
|
|
(9,021 |
) |
| Cash flows used in
investing activities: |
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
(2,548 |
) |
|
|
(10,232 |
) |
|
Issuance of note receivable |
|
— |
|
|
|
(3,449 |
) |
|
Repayment of note receivable |
|
835 |
|
|
|
— |
|
|
Net cash used in investing activities |
|
(1,713 |
) |
|
|
(13,681 |
) |
| Cash flows provided by
(used in) financing activities: |
|
|
|
|
|
|
Proceeds from borrowings |
|
— |
|
|
|
4,000 |
|
|
Repayments on borrowings |
|
(6,406 |
) |
|
|
(6,490 |
) |
|
Proceeds from issuance of common stock and warrants |
|
24,772 |
|
|
|
— |
|
|
Issuance costs |
|
(1,437 |
) |
|
|
— |
|
|
Proceeds from exercise of stock options |
|
83 |
|
|
|
192 |
|
|
Payments on capital lease obligations |
|
— |
|
|
|
(612 |
) |
|
Net cash provided by (used in) financing activities |
|
17,012 |
|
|
|
(2,910 |
) |
| Effect of exchange rate
changes on cash and cash equivalents |
|
(69 |
) |
|
|
(56 |
) |
| Net increase
(decrease) in cash, cash equivalents and restricted
cash |
|
9,983 |
|
|
|
(25,668 |
) |
| Cash, cash equivalents
and restricted cash, beginning of period |
|
21,676 |
|
|
|
58,667 |
|
| Cash, cash equivalents
and restricted cash, end of period |
$ |
31,659 |
|
|
$ |
32,999 |
|
| Non-cash investing and
financing activities: |
|
|
|
|
|
| Operating lease
right-of-use assets |
$ |
4,808 |
|
|
$ |
— |
|
| Operating lease
liabilities |
$ |
4,808 |
|
|
$ |
— |
|
Village Farms (NASDAQ:VFF)
Historical Stock Chart
From Nov 2023 to Dec 2023
Village Farms (NASDAQ:VFF)
Historical Stock Chart
From Dec 2022 to Dec 2023
