false000158454900-000000000015845492023-11-082023-11-08

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 08, 2023

 

 

VILLAGE FARMS INTERNATIONAL, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Ontario

001-38783

Not applicable

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

4700-80th Street

British Columbia Canada

 

Delta, British Columbia, Canada

 

V4K 3N3

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (604) 940-6012

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common Shares, without par value

 

VFF

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


Item 2.02 Results of Operations and Financial Condition.

On November 8, 2023, Village Farms International, Inc. (the “Company” or “Village Farms”) issued a press release announcing its financial results for the third quarter ended September 30, 2023. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

 

The information contained in this Current Report on Form 8-K under Item 2.02, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information contained in this Current Report on Form 8-K under Item 2.02, including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

 

Exhibit

Number

Description

99.1

Press Release dated November 8, 2023.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

Village Farms International, Inc.

 

 

 

 

Date:

November 8, 2023

By:

/s/ Stephen C. Ruffini

 

 

 

Stephen C. Ruffini
Executive Vice President and Chief Financial Officer

 


Exhibit 99.1

img264507375_0.jpg 

 

 

FOR IMMEDIATE RELEASE

 

Village Farms International Reports Strong Third Quarter Results, Highlighted by Positive Cash Generation from Each Operating Segment

 

Consolidated Net Loss Narrowed to ($0.01) Per Share with Positive Consolidated Adjusted EBITDA
Generated Positive Consolidated Cash Flow of $8.8 Million, with Positive Contributions from Each Operating Segment
Canadian Cannabis Delivered Positive Net Income and Adjusted EBITDA and Returned to the Number Two Market Share Position Nationally in October1
US Cannabis Delivered Positive Net Income, Adjusted EBITDA
Fresh Produce Delivered Another Quarter of Significant Year-over-Year Improvement, Including Positive Adjusted EBITDA

 

Vancouver, BC, November 8, 2023 – Village Farms International, Inc. (“Village Farms” or the “Company”) (NASDAQ: VFF) today announced its financial results for the third quarter ended September 30, 2023. All figures are in U.S. dollars unless otherwise indicated.

Management Commentary

“We delivered continued strong improvement in our financial results in the third quarter, building on the first half of the year,” said Michael DeGiglio, President and Chief Executive Officer, Village Farms. “Solid, profitable performance from each of our Canadian and U.S. Cannabis businesses, together with another quarter of significant year-over-year improvement in our Fresh Produce operations, is proving out our strategic decision to build upon our unmatched expertise in controlled environmental agriculture to deliver positive cash flow and profitability as we pursue growth in each of our businesses. The combined performances of our businesses in the third quarter were reflected in positive consolidated adjusted EBITDA, as well as consolidated cash generation, with positive contributions from each of our operating segments.”

“Our leadership in the Canadian Cannabis industry is undisputed as we delivered another quarter of positive cash flow and adjusted EBITDA, while continuing to rank among the largest Licensed Producers nationally1,” continued Mr. DeGiglio. “Notably, year-to-date Canadian dollar adjusted EBITDA has increased 37%, driven by our focus on operational excellence. Our competitive advantage in cultivation is enabling innovative investment in other critical functions, such as commercialization, to generate sustainable, profitable market share expansion. We are seeing encouraging results as we evolve and improve “newness” at the shelf and continuously focus on quality, which is resonating with consumers and resulted in a return to the number two market share position nationally in October1from number four in July1.”


“Our stabilized U.S. Cannabis business generated positive net income, adjusted EBITDA and cash flow,” added Mr. DeGiglio. “Building on the strength of our product launches in the Synergy+ line of products, we recently launched a new visual brand for CBDistillery, including a revamped web site, focused on the wellness attributes of our products.”

“Our Fresh Produce business is progressing towards our goal of a return to profitability. We delivered another quarter of positive adjusted EBITDA and a $22.5 million year-over-year improvement year-to-date to positive $1.1 million. We also generated positive cash flow and remain firmly on track toward our goal of achieving positive adjusted EBITDA for this year. With the continued progress we have made in managing the Brown Rugose virus, including the implementation of virus-tolerant, and, increasingly, virus resistant strains, as well as investments in new technology, the Fresh Produce business is positioned for continued improvement next year.”

1. Based on estimated retail sales from HiFyre, other third parties and provincial boards.

 

Third Quarter Financial Highlights

(All comparable periods are for the third quarter of 2022 unless otherwise stated)

Consolidated

Consolidated sales decreased (2%) year-over-year to $69.5 million from $71.1 million;
Operating loss before tax and loss from equity method investments improved to ($2.9 million) from an operating loss before tax of ($12.3 million);
Consolidated net loss improved to ($1.3 million), or ($0.01) per share, compared with ($8.7 million), or ($0.10) per share;
Consolidated adjusted EBITDA (a non-GAAP measure)1 improved to $3.2 million from negative ($2.2 million); and,
Consolidated cash flow improved to $8.8 million compared with cash used of ($9.8 million).

1 For a reconciliation of Adjusted EBITDA to net (loss) income, see “Presentation of Financial Results—Reconciliation of Net Income to Adjusted EBITDA” below.

Canadian Cannabis (Pure Sunfarms and Rose LifeScience)

Net sales decreased (5%) to $28.8 million (C$38.7 million) from $30.4 million (C$39.8 million) (a decrease of (3%) in Canadian dollars);
Retail branded sales decreased (3%) (in Canadian dollars);
International (export) sales decreased (15%) (in Canadian dollars);
Gross margin was 35% compared with 27%; (in Canadian dollars);
Net income increased to $2.9 million (C$3.8 million) from net income of $0.2 million (C$0.2 million);
Adjusted EBITDA was $4.6 million (C$6.2 million) compared with $5.4 million (C$6.7 million); and,
Cash flow improved to $3.8 million (C$5.1 million) compared with $0.4 million (C$1.3 million).

U.S. Cannabis (Balanced Health Botanicals)


Net sales were $5.0 million compared with $5.1 million;
Gross margin was 64% compared with 69%;
Net income improved to $79,000 from a net loss of ($0.3 million);
Adjusted EBITDA increased to $0.2 million from $10,000; and,
Cash flow was $0.4 million compared with $0.1 million.

Village Farms Fresh (Produce)

Sales were $35.7million compared with $35.5 million;
Net loss improved significantly to ($1.0 million) from ($4.6 million);
Adjusted EBITDA improved significantly to $0.8million from negative ($4.9 million); and,
Cash flow improved to $4.6 million compared with cash used of ($10.7 million).

Strategic Growth and Operational Highlights

Canadian Cannabis

Maintained market share leadership, with recently launched brands and geographies increasingly contributing:
o
A top-three Licensed Producer nationally for 2023 year to date1, returning to the number two position in October1 and, in Quebec, the number two Licensed Producer and fastest growing Licensed Producer for the third quarter of 20231, with market share expanding from the second quarter of 20231;
o
A top-two ranked Licensed Producer in the dried flower category nationally in the third quarter of 2023 (held number one position prior to acquisition of market share by a competitor) 1;
o
Pure Sunfarms was the top-selling brand of dried flower in the core price category nationally for the year to date1;
o
The Original Fraser Valley Weed Co. was the fastest growing dried flower brand in the value category in Canada’s largest provincial market, Ontario, for the third quarter of 20231;
o
Shortly after its launch, the Soar brand rapidly became a top three premium dried flower cannabis brand in Canada1. Much of the brand's success to date can be credited to Pineapple God, one of Soar’s exclusive cultivars. In the third quarter of 2023, this cultivar was one of the best-selling premium dried flower products, nationally;
Launched new form factors to address the evolving preferences of Canadian consumers, including:
o
The Super Toast brand, which is a line of ready to smoke products intended for consumers who are looking for easy ways to select and experience fresh and potent cannabis; and,

o
An entirely new product line, the High THC, 1g Vape offering, featuring new hardware and formulations to maximize flavour, potency and consumer experience. The new 1g cartridges are optimized to deliver flavour and balanced vaporization, allowing consumers to enjoy their vape from start to finish; and,
In September, Village Farms was named the Best Canadian Cannabis Company for the second consecutive year at the 2023 Benzinga Cannabis Awards.

 

1. Based on estimated retail sales from HiFyre, other third parties and provincial boards.

 

U.S. Cannabis

Balanced Health Botanical’s CBDistillery recently unveiled a new visual brand featuring the same great ingredients and benefits. Products can now be found in five different categories, each with their own wellness benefit; and,
The Company filed an application for a Texas Medicinal license in late April 2023. The Company is hopeful that its application will be awarded the highest or one of the highest marks, putting it in a good position, should the State of Texas award additional medicinal cannabis licenses. If awarded, the Company plans to work with its listing authority to structure an acceptable ownership structure.

VF Fresh (Produce)

 

A regulatory change, improvements in the Company’s cannabis yields and the Company’s focus on supply-demand dynamics in all businesses support the decision to dedicate the unused half of the Delta 2 facility to produce for the 2024 calendar year. The Company expects this to contribute incremental cash flow and profitability to its VF Fresh business.

 

Canadian Cannabis Performance Summary

(millions except % metrics)

Three Months Ended September 30,

2023

2022

Change of C$

C$

US$

C$

US$

Total Net Sales

$38.7

$28.8

$39.8

$30.4

-3%

Total Cost of Sales

$25.3

$18.9

$29.0

$22.2

-13%

Gross Margin

$13.4

$9.9

$10.7

$8.2

+25%

Gross Margin %

35%

35%

27%

27%

+28%

SG&A1

$10.2

$7.6

$10.5

           $7.9

-3%

Net income

$3.8

$2.9

$0.2

$0.2

+1800%

Adjusted EBITDA 2

$6.2

$4.6

           $6.7

           $5.4

-7%

Adjusted EBITDA Margin 2

16%

16%

17%

18%

-5%

Cash Flow

$5.1

$3.8

$1.3

$0.4

292%

(millions except % metrics)

Nine Months Ended September 30,

2023

2022

Change of C$

C$

US$

C$

US$

Total Net Sales

$110.4

$82.0

$105.4

$82.0

+5%


Total Cost of Sales

$71.1

$52.9

$67.9

$52.7

+5%

Gross Margin

$39.2

$29.1

$37.5

$29.3

+5%

Gross Margin %

36%

36%

36%

36%

0%

SG&A1

$30.0

$22.3

          $31.0

$23.8

-3%

Net income

$5.3

$3.9

$4.3

$3.0

+23%

Adjusted EBITDA 2

$17.9

$13.3

          $13.1

          $10.6

+37%

Adjusted EBITDA Margin 2

16%

16%

12%

13%

+33%

Cash Flow

$16.0

$11.9

$10.4

$8.1

54%

(1)
SG&A for the three and nine months ended September 30, 2023 includes share-based compensation of C$290 (US$216) and C$790 (US$586), respectively, compared with C$409 (US$313) and C$1,212 (US$946), respectively, for the three and nine months ended September 30, 2022.
(2)
Adjusted EBITDA and Adjusted EBITDA margin are not a recognized earnings measure and does not have a standard meaning prescribed in by GAAP. Therefore, Adjusted EBITDA and Adjusted EBITDA Margin 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. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Net Sales.

 

Canadian Cannabis’ Percent of Sales by Channel

(millions except % metrics)

Three Months Ended September 30,

2023

2022

Change of C$

C$

US$

C$

US$

Retail Branded Sales

$50.3

$37.4

$51.9

$40.0

-3%

International Sales

$0.9

$0.7

$1.1

$0.9

-15%

Non-Branded Sales

$6.0

$4.5

$4.9

$3.6

+22%

Other

$0.8

$0.6

$1.0

$0.7

-16%

Less: Excise Taxes

$(19.3)

$(14.4)

$(19.2)

$(14.8)

+1%

Net Sales

$38.7

$28.8

$39.8

$30.4

-3%

(millions except % metrics)

Nine Months Ended September 30,

2023

2022

Change of C$

C$

US$

C$

US$

Retail Branded Sales

$146.3

$108.7

$123.7

$96.4

+18%

International Sales

$5.1

$3.8

$1.9

$1.5

+162%

Non-Branded Sales

$13.1

$9.7

$21.5

$16.7

-39%

Other

$2.0

$1.5

$3.0

$2.3

-32%

Less: Excise Taxes

$(56.1)

$(41.7)

$(44.8)

$(34.9)

+25%

Net Sales

$110.4

$82.0

$105.4

$82.0

+5%

 

Presentation of Financial Results

 

The Company’s financial statements for the three and nine months ended September 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 September 30,

Nine Months Ended September 30,

2023

2022

2023

2022

Sales

$

69,510

$

71,056

$

211,378

$

224,115

Cost of sales

(54,889

)

(62,682

)

(172,958

)

(199,514

)

Gross margin

14,621

8,374

38,420

24,601

Selling, general and administrative expenses

(15,822

)

(17,794

)

(49,980

)

(54,245

)

Interest expense

(988

)

(982

)

(3,532

)

(2,330

)

Interest income

262

60

741

129

Foreign exchange loss

(971

)

(1,963

)

(302

)

(2,171

)

Other (expense) income, net

(19

)

(10

)

5,613

(7

)

Write-off of joint venture loan

(592

)

Impairments

(29,799

)

Loss before taxes and loss from equity method investments

(2,917

)

(12,315

)

(9,040

)

(64,414

)

Recovery of (provision for) income taxes

1,664

3,183

(269

)

14,563

Loss including non-controlling interests and before equity losses

(1,253

)

(9,132

)

(9,309

)

(49,851

)

Less: net (income) loss attributable to non-controlling interests, net of tax

(46

)

387

(6

)

701

Loss from equity method investments

(2,667

)

Net loss attributable to Village Farms International Inc.

$

(1,299

)

$

(8,745

)

$

(9,315

)

$

(51,817

)

Adjusted EBITDA (1)

$

3,248

$

(2,233

)

$

8,243

$

(20,642

)

Basic loss per share

$

(0.01

)

$

(0.10

)

$

(0.09

)

$

(0.59

)

Diluted loss per share

$

(0.01

)

$

(0.10

)

$

(0.09

)

$

(0.59

)

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. For the nine months ended September 30, 2022, we previously included an adjustment for $2,284 of obsolete inventory associated with winding down of the Village Fields Hemp (“VFH”) joint venture (the “JV exit”) that is now being excluded in response to comments from and discussions with the Staff of the U.S. Securities and Exchange Commission.

We caution that our results of operations for the three and nine months ended September 30, 2023 and 2022 may not be indicative of our future performance, particularly in light of the ongoing global Tomato brown rugose fruit virus (ToBRFV), the potential impact of inflation and/or the potential impact of supply-chain shortages due to conflicts abroad.

 

SEGMENTED RESULTS OF OPERATIONS

(In thousands of U.S. dollars, except per share amounts, and unless otherwise noted)


For The Three Months Ended September 30, 2023

VF Fresh
(Produce)

Cannabis Canada

Cannabis U.S.

Clean
Energy

Corporate

Total

Sales

$

35,712

$

28,810

$

4,988

$

$

$

69,510

Cost of sales

(34,220

)

(18,866

)

(1,803

)

(54,889

)

Selling, general and administrative expenses

(2,066

)

(7,598

)

(3,095

)

(3,063

)

(15,822

)

Other expense, net

(598

)

(428

)

(11

)

(58

)

(621

)

(1,716

)

Operating (loss) income

(1,172

)

1,918

79

(58

)

(3,684

)

(2,917

)

Recovery of income taxes

221

1,034

409

1,664

(Loss) income from consolidated entities

(951

)

2,952

79

(58

)

(3,275

)

(1,253

)

Less: net (income) loss attributable to non-controlling interests, net of tax

(89

)

43

(46

)

Net (loss) income

$

(951

)

$

2,863

$

79

$

(58

)

$

(3,232

)

$

(1,299

)

Adjusted EBITDA (1)

$

774

$

4,585

$

221

$

(57

)

$

(2,275

)

$

3,248

Basic (loss) income per share

$

(0.01

)

$

0.03

$

0.00

$

(0.00

)

$

(0.03

)

$

(0.01

)

Diluted (loss) income per share

$

(0.01

)

$

0.03

$

0.00

$

(0.00

)

$

(0.03

)

$

(0.01

)

For The Three Months Ended September 30, 2022

VF Fresh
(Produce)

Cannabis Canada

Cannabis U.S.

Clean
Energy

Corporate

Total

Sales

$

35,527

$

30,394

$

5,135

$

$

$

71,056

Cost of sales

(38,830

)

(22,196

)

(1,612

)

(44

)

(62,682

)

Selling, general and administrative expenses

(2,777

)

(7,885

)

(3,720

)

(14

)

(3,398

)

(17,794

)

Other expense, net

(344

)

(513

)

(142

)

(1,896

)

(2,895

)

Operating loss

(6,424

)

(200

)

(339

)

(58

)

(5,294

)

(12,315

)

Recovery of (provision for) income taxes

1,780

(38

)

1,441

3,183

Loss from consolidated entities

(4,644

)

(238

)

(339

)

(58

)

(3,853

)

(9,132

)

Less: net loss attributable to non-controlling interests, net of tax

387

387

Net (loss) income

$

(4,644

)

$

149

$

(339

)

$

(58

)

$

(3,853

)

$

(8,745

)

Adjusted EBITDA (1)

$

(4,879

)

$

5,417

$

10

$

(58

)

$

(2,723

)

$

(2,233

)

Basic (loss) income per share

$

(0.05

)

$

0.00

$

(0.00

)

$

(0.00

)

$

(0.04

)

$

(0.10

)

Diluted (loss) income per share

$

(0.05

)

$

0.00

$

(0.00

)

$

(0.00

)

$

(0.04

)

$

(0.10

)

For The Nine Months Ended September 30, 2023

VF Fresh
(Produce)

Cannabis Canada

Cannabis U.S.

Clean
Energy

Corporate

Total

Sales

$

114,125

$

81,987

$

15,266

$

$

$

211,378

Cost of sales

(114,779

)

(52,873

)

(5,285

)

(21

)

(172,958

)

Selling, general and administrative expenses

(7,836

)

(22,273

)

(10,098

)

(30

)

(9,743

)

(49,980

)

Other income (expense), net

3,993

(1,838

)

(8

)

(77

)

450

2,520

Operating (loss) income

(4,497

)

5,003

(125

)

(128

)

(9,293

)

(9,040

)

Recovery of (provision for) income taxes

229

(922

)

424

(269

)

(Loss) income from consolidated entities

(4,268

)

4,081

(125

)

(128

)

(8,869

)

(9,309

)

Less: net (income) loss attributable to non-controlling interests, net of tax

(149

)

143

(6

)

Net (loss) income

$

(4,268

)

$

3,932

$

(125

)

$

(128

)

$

(8,726

)

$

(9,315

)

Adjusted EBITDA (1)

$

1,110

$

13,273

$

424

$

(128

)

$

(6,436

)

$

8,243

Basic (loss) income per share

$

(0.04

)

$

0.04

$

(0.00

)

$

(0.00

)

$

(0.08

)

$

(0.09

)

Diluted (loss) income per share

$

(0.04

)

$

0.04

$

(0.00

)

$

(0.00

)

$

(0.08

)

$

(0.09

)

 


For The Nine Months Ended September 30, 2022

VF Fresh
(Produce)

Cannabis Canada

Cannabis U.S.

Clean
Energy

Corporate(2)

Total

Sales

$

124,052

$

81,956

$

17,971

$

136

$

$

224,115

Cost of sales

(140,612

)

(52,740

)

(5,899

)

(263

)

(199,514

)

Selling, general and administrative expenses

(8,725

)

(23,801

)

(12,480

)

(53

)

(9,186

)

(54,245

)

Other expense, net

(776

)

(1,490

)

(154

)

(6

)

(1,953

)

(4,379

)

Write-off of joint venture loan

(592

)

(592

)

Impairments

(29,799

)

(29,799

)

Operating (loss) income

(26,061

)

3,925

(30,361

)

(186

)

(11,731

)

(64,414

)

Recovery of (provision for) income taxes

6,322

(1,668

)

7,025

2,884

14,563

(Loss) income from consolidated entities

(19,739

)

2,257

(23,336

)

(186

)

(8,847

)

(49,851

)

Less: net loss attributable to non-controlling interests, net of tax

701

701

Loss from equity method investments

(383

)

(2,284

)

(2,667

)

Net (loss) income

$

(19,739

)

$

2,958

$

(23,719

)

$

(186

)

$

(11,131

)

$

(51,817

)

Adjusted EBITDA (1)

$

(21,362

)

$

10,558

$

(43

)

$

(180

)

$

(9,615

)

$

(20,642

)

Basic (loss) income per share

$

(0.22

)

$

0.03

$

(0.26

)

$

(0.00

)

$

(0.14

)

$

(0.59

)

Diluted (loss) income per share

$

(0.22

)

$

0.03

$

(0.26

)

$

(0.00

)

$

(0.14

)

$

(0.59

)

(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.
(2)
For the nine months ended September 30, 2022, we previously included an adjustment for $2,284 of obsolete inventory associated with the JV exit that is now being excluded in response to comments from and discussions with the Staff of the U.S. Securities and Exchange Commission.

A detailed discussion of our consolidated and segment results can be found in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (the "Third Quarter 10-Q”), which will be filed on EDGAR at www.sec.gov, on SEDAR at www.sedarplus.com and can also 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 tables reflects a reconciliation of net income to Adjusted EBITDA, as presented by the Company:


For The Three Months Ended September 30, 2023

(in thousands of U.S. dollars)

VF Fresh
(Produce)

Cannabis Canada

Cannabis U.S.

Clean
Energy

Corporate

Total

Net (loss) income

$

(951

)

$

2,863

$

79

$

(58

)

$

(3,232

)

$

(1,299

)

Add:

Amortization

1,283

1,795

53

64

3,195

Foreign currency exchange gain

66

28

1

834

929

Interest expense (income), net

597

326

(215

)

708

Provision for income taxes

(221

)

(1,034

)

(409

)

(1,664

)

Share-based compensation

160

78

452

690

Interest expense for JV’s

13

13

Amortization for JVs

372

231

603

Foreign currency exchange loss for JVs

3

3

Share-based compensation for JV’s

39

39

Other expenses for JV’s

(14

)

(14

)

Deferred financing fees

34

34

Other expense

11

11

Adjusted EBITDA (4)

$

774

$

4,585