In my eyes ...
Village is a smaller company which has COST a UNDER CONTROL ... Their market share has INCREASED ... Their cost of growing and sales is MUCH BETTER then Canopy's ... They got a jump on sales in Germany with licensees in place with agreements with German Gov't
Village been flying under the radar and Canopy thespend happy over burden by debt and isn't as close to profit gets recognized about Germany ???
Think market got it allllllllllllll wrong about just which company deserved praise and which should of been awarded the share bounce ...
Canopy does not fit the category what sooooooooooo ever !!!
Village Farms International Reports Q4 and 2023 Financials: Record Consolidated Sales for Q4
2024-03-13 07:00 ET - News Release
Fourth Quarter Highlights
- Canadian Cannabis Delivers 14% Year-Over-Year Sales Increase, Positive Adjusted EBITDA and Cash Flow
- Canadian Cannabis Reclaims #2 National Market Share Position1
- U.S. Cannabis Delivers Positive Adjusted EBITDA and Cash Flow
- Fresh Produce Delivers Significant Year-over-Year Improvement, With Positive Adjusted EBITDA for the Year
Annual Highlights
- Consolidated Net Loss Per Share Narrows to ($0.29), Adjusted EBITDA Improves Significantly to $7.6 Million; Cash Flow from Operations Improves Significantly to $5.3 Million
- Canadian Cannabis Delivers 20-Fold Increase in Net Income and 10-Fold Increase in Adjusted EBITDA
- All Core Businesses Generate Positive Adjusted EBITDA
VANCOUVER, British Columbia, March 13, 2024 (GLOBE NEWSWIRE) -- 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, 2023. All figures are in U.S. dollars unless otherwise indicated.
Management Commentary
“Our Canadian Cannabis business remains the undisputed leader in that market, with record sales and another quarter of positive adjusted EBITDA and cash flow in the fourth quarter,” said Michael DeGiglio, President and Chief Executive Officer. “We reclaimed the number two national market share rank across all categories and are steadily closing the gap on the top position. Record retail branded sales were complemented by another especially strong quarter for non-branded wholesale sales. In our non-branded wholesale channel, we took advantage of improved supply conditions and pricing created by the shift of many of our peers to asset light models, significantly reducing our non-brand-spec inventory. While these close out sales are temporarily affecting gross margin and adjusted EBITDA, they are generating additional cash flow, and will support more efficient, higher cash conversion inventory turnover this year and beyond.”
“We are encouraged by early signs of a more favorable operating environment for our Canadian Cannabis segment. Reduction in biomass oversupply, recent stabilization of retail pricing, more aggressive actions to address ballooning delinquent excise duties, and recommendations to change the excise duty to 10% of sales will benefit the industry’s profit potential, and especially our business as a profitable leader. Village Farms paid C$78 million in excise duties in 2023 on sales of C$232 million – an effective rate of nearly 34%.”
“On the international front, earlier this year we started the build out of our first production facility in the Netherlands, where we are proud to be the only North American participant in the first legal recreational cannabis market in a major European country. Production is targeted to begin later this year. We expanded our export program for the European medical market to the United Kingdom, with additional markets expected to be added this year. Notably, recent positive progress around German medical use regulation provides us with additional opportunity going forward as the market grows.”
“In our U.S. Cannabis business, we generated positive adjusted EBITDA and positive cash flow.”
“Within our Fresh Produce business, we achieved our goal of positive adjusted EBITDA for the year, with another quarter of significant year-over-year improvement. Our produce business is stable, and we are working toward sustainable profitability and cash flow. We are executing on our plan with respect to customer profitability, continuous cost improvement and operational efficiency. Our Fresh Produce expertise and a portion of our Texas-based assets remain a transformational opportunity to replicate our success in Canada in the next iteration of US high-THC cannabis regulation.”
“The fourth quarter closed a year in which each of our core businesses delivered positive adjusted EBITDA. Our strong momentum through the back half of 2023 has accelerated in 2024, marking a great start to a year that we believe will see new levels of performance across our businesses.”
Fourth Quarter 2023 Financial Highlights
(All comparable periods are for the fourth quarter of 2022 unless otherwise stated)
Consolidated
- Consolidated sales increased 7% year-over-year to $74.2 million from $69.5 million;
- Consolidated net loss improved to ($22.5 million), or ($0.20) per share, compared with ($49.3 million), or ($0.54) per share;
- Consolidated adjusted EBITDA (a non-GAAP measure) improved to ($0.7 million) from ($11.8 million); and,
- Consolidated cash used was $5.2 million compared with $1.5 million.
Canadian Cannabis (Pure Sunfarms and Rose LifeScience)
- Net sales increased 15% to $32.0 million (C$43.6 million) from $27.9 million (C$38.2 million) (an increase of 14% in Canadian dollars);
- Retail branded sales increased 5%, international (export) sales decreased (66%) and non-branded (wholesale) sales increased 339%;
- Gross margin was 23% compared with 1%. Gross margin for the fourth quarter of 2023 was reduced by sales of non-brand-spec inventory in the non-branded channel as strong demand drove improved supply dynamics;
- Net loss improved to ($1.0 million) (C$1.3 million) from net loss of ($2.8 million) (C$3.8 million); and,
- Adjusted EBITDA was $1.5 million (C$2.1 million) compared with ($6.4 million) (C$8.7 million).
U.S. Cannabis (Balanced Health Botanicals)
- Net sales were $5.1 million compared with $5.3 million;
- Gross margin was 66% compared 67%;
- Net loss improved to ($13.7 million) from a net loss of ($20.9 million), with net losses for the fourth quarters of 2023 and 2022 being impacted by the write down of intangible assets of ($14.0 million) and ($13.5 million), respectively; and,
- Adjusted EBITDA increased to $0.4 million from $0.3 million.
Village Farms Fresh (Produce)
- Sales were $37.1 million compared with $36.2 million;
- Net loss improved significantly to ($4.0 million) from ($20.7 million); and,
- Adjusted EBITDA improved to ($0.6 million) from negative ($3.0 million), with adjusted EBITDA for the fourth quarter of 2023 impacted by a later than expected seasonal increase in pricing,
Strategic Growth and Operational Highlights
Canadian Cannabis
- Reclaimed the number two market share position across all product categories for the fourth quarter of 20231;
- Rose LifeScience maintained the number two market share position in Quebec, expanding its share in each successive quarter of the year1;
- In the non-branded channel, took advantage of improved supply conditions and pricing created by shift of many producers to asset light models by significantly reducing non-brand-spec inventory, generating additional cash flow and supporting more efficient, higher cash conversion inventory turnover going forward;
- Pure Sunfarms brand launched a new high-THC 1g vape offering, featuring formulations to maximize flavour, potency and consumer experience;
- The Canadian Cannabis business’ premium Soar brand launched its first 1g Infused Blunts, which feature fresh, hang dried cannabis flower infused with a premium oil for consumers looking for an elevated cannabis experience; and,
- Village Farms was named the Best Canadian Cannabis Company at the Benzinga Cannabis Awards for the second consecutive year.
International Cannabis
- The Company continues to leverage its high-quality Canadian Cannabis products and portfolio for the international export market, with a primary focus on Europe and Australia. Nine of the Company’s best-selling strains in Canada are now being sold across four international medical markets. The Company has a strategy in place to accelerate international export sales in current markets, while expecting to launch products in additional European markets this year.
- Subsequent to quarter end, the Canadian Cannabis business commenced exports to the United Kingdom, launching some of Village Farms’ most popular strains under the Pure Sunfarms, with strains under The Original Fraser Valley Weed Co. (“Fraser Valley”) to come; and,
- Subsequent to quarter end, the Company commenced the build-out of its first indoor cannabis production facility in Drachten, Netherlands. Through its majority-owned (85%) subsidiary, Leli Holland, Village Farms holds one of 10 licenses permitting it to legally produce and distribute recreational cannabis in the Netherlands under the Dutch Cannabis Supply Chain Experiment. Production is targeted to start during the fourth quarter of 2024 with initial sales in early 2025.
U.S. Cannabis
- Launched a new visual brand for CBDistillery, including a revamped web site, focused on the wellness attributes of its products;
- Continued to advance the internalization of gummy production, ensuring consistency of supply while supporting higher gross margins;
- Ended the year with its highest ever highest product rating;
- Expanded the proportion of subscription-based sales to 69% in 2023 from 56% in 2022; and,
- John Harloe, J.D., Ph.D., General Counsel at BHB, was appointed to the governing board of Colorado’s Institute of Cannabis Research (ICR).
VF Fresh (Produce)
- Commenced the re-purposing of half of the Delta 2 facility back to producing tomatoes for the 2024 calendar year, with the additional production expected to contribute incremental cash flow and profitability to this division;
- Capital expenditure investments in infrastructure and technology made in the fourth quarter of 2023 are contributing to improved operating efficiencies in 2024; and,
- The Company has an ongoing sale process for its Monahans (Permian Basin, Texas) greenhouse facility. It is also evaluating other uses for the site and facility, some of which are outside its historical produce business.
Village Farms Clean Energy
- The Delta, British Columbia Renewable Natural Gas (RNG) Project is in the process of being operationalized. When operational, the Delta RNG Project is expected to immediately contribute incremental cash flow and profitability.
Other
- Village Farms’ President and Chief Executive Officer, Michael DeGiglio, was named a 2023 Notable Leader in Cannabis by Green Market Report, an aggregator of financial news and analytics for the cannabis industry.
1. Based on estimated retail sales from HiFyre, other third parties and provincial boards.
Change to Adjusted EBITDA Calculation
Based on feedback and guidance from the U.S. Securities and Exchange Commission, Village Farms has changed its method for calculating adjusted EBITDA such that it no longer excludes inventory write-downs from adjusted EBITDA. Previously reported adjusted EBITDA figures for the fourth quarter and full year 2022 have been adjusted to reflect this change. Specifically, for the fourth quarter and year ended December 31, 2022, the Company previously included adjustments of $11.0 million from loss on inventory write-downs in the Canadian Cannabis business. There were no inventory write-downs in the any of the Company’s businesses in the fourth quarter or the full year 2023.
Canadian Cannabis Performance Summary
| (millions except % metrics) | Three Months Ended December 31, | | | | |
| | 2023 | | | 2022 | | | | | |
| | CAD $ | | | USD $ | | | CAD $ | | | USD $ | | | Change of C $ | |
| Total Net Sales | $ | 43.6 | | | | $ | 32.0 | | | | $ | 38.2 | | | | $ | 27.9 | | | | 14% | |
| Total Cost of Sales | $ | 33.7 | | | | $ | 25.2 | | | | $ | 37.8 | | | | $ | 27.8 | | | | -11% | |
| Gross Margin | $ | 9.9 | | | | $ | 6.8 | | | | $ | 0.2 | | | | $ | 0.1 | | | | 4850% | |
| Gross Margin % | 23 | % | | | 21 | % | | | 1 | % | | | 1 | % | | | 4237% | |
| SG&A | $ | 10.2 | | | | $ | 7.0 | | | | $ | 10.5 | | | | $ | 7.8 | | | | -3% | |
| Net income (loss) | $ | (1.3 | ) | | | $ | (1.0 | ) | | | $ | (3.8 | ) | | | $ | (2.8 | ) | | | N/A% | |
| Adjusted EBITDA (1) | $ | 2.1 | | | | $ | 1.5 | | | | $ | (8.7 | ) | | | $ | (6.4 | ) | | | N/A% | |
| Adjusted EBITDA Margin (1) | 5 | % | | | 5 | % | | | -23 | % | | | -23 | % | | | N/A% | |
| Cash Flow | $ | 0.4 | | | | $ | 0.6 | | | | $ | (1.8 | ) | | | $ | (1.2 | ) | | | -122% | |
| (millions except % metrics) | Year Ended December 31, | | | | |
| | 2023 | | | 2022 | | | | | |
| | CAD $ | | | USD $ | | | CAD $ | | | USD $ | | | Change of C $ | |
| Total Net Sales | $ | 154.0 | | | | $ | 114.0 | | | | $ | 143.5 | | | | $ | 109.9 | | | | 7% | |
| Total Cost of Sales | $ | 104.8 | | | | $ | 78.1 | | | | $ | 104.7 | | | | $ | 80.5 | | | | 0% | |
| Gross Margin | $ | 49.2 | | | | $ | 35.9 | | | | $ | 38.3 | | | | $ | 29.4 | | | | 28% | |
| Gross Margin % | 32 | % | | | 31 | % | | | 27 | % | | | 27 | % | | | 20% | |
| SG&A | $ | 40.2 | | | | $ | 29.3 | | | | $ | 41.1 | | | | $ | 31.6 | | | | -2% | |
| Net income (loss) | $ | 4.0 | | | | $ | 2.9 | | | | $ | 0.2 | | | | $ | 0.1 | | | | 1900% | |
| Adjusted EBITDA (1) | $ | 20.0 | | | | $ | 14.8 | | | | $ | 2.1 | | | | $ | 2.0 | | | | 852% | |
| Adjusted EBITDA Margin (1) | 13 | % | | | 13 | % | | | 1 | % | | | 1 | % | | | 787% | |
| Cash Flow | $ | | 7.3 | | | | $ | 5.6 | | | | $ | (2.5 | ) | | | $ | | (2.4 | ) | | | -392% | | |
1 Adjusted EBITDA is not a recognized earnings measure and does not have a standard meaning prescribed in 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.
Canadian Cannabis’ Percent of Sales by Channel
| (millions except % metrics) | Three Months Ended December 31, | | | |
| | 2023 | | 2022 | | | |
| | CAD $ | | | USD $ | | | CAD $ | | | USD $ | | | Change of C $ | |
| Retail Branded Sales | $ | 56.1 | | | $ | 41.2 | | | $ | 53.5 | | | $ | 39.3 | | | 5% | |
| International Sales | $ | 1.1 | | | $ | 0.8 | | | $ | 3.2 | | | $ | 2.3 | | | -66% | |
| Non-Branded Sales | $ | 7.9 | | | $ | 5.7 | | | $ | 1.8 | | | $ | 1.3 | | | 339% | |
| Other | $ | 0.7 | | | $ | 0.6 | | | $ | 0.5 | | | $ | 0.3 | | | 40% | |
| Less: Excise Taxes | $ | (22.2 | ) | | $ | (16.3 | ) | | $ | (20.8 | ) | | $ | (15.3 | ) | | 7% | |
| Net Sales | $ | 43.6 | | | $ | 32.0 | | | $ | 38.2 | | | $ | 27.9 | | | 14% | |
| | | | | | | | | | | | | | | | | | |
| (millions except % metrics) | Year Ended December 31, | | | |
| | 2023 | | 2022 | | | |
| | CAD $ | | | USD $ | | | CAD $ | | | USD $ | | | Change of C $ | |
| Retail Branded Sales | $ | 202.4 | | | $ | 149.9 | | | $ | 177.2 | | | $ | 135.6 | | | 14% | |
| International Sales | $ | 6.2 | | | $ | 4.6 | | | $ | 5.2 | | | $ | 3.9 | | | 19% | |
| Non-Branded Sales | $ | 21.0 | | | $ | 15.5 | | | $ | 23.3 | | | $ | 17.9 | | | -10% | |
| Other | $ | 2.7 | | | $ | 2.0 | | | $ | 3.4 | | | $ | 2.6 | | | -21% | |
| Less: Excise Taxes | $ | (78.3 | ) | | $ | (58.0 | ) | | $ | (65.6 | ) | | $ | (50.1 | ) | | 19% | |
| Net Sales | $ | 154.0 | | | $ | 114.0 | | | $ | 143.5 | | | $ | 109.9 | | | 7% | |
| | | | | | | | | | | | | | | | | | | |
Presentation of Financial Results
The Company’s financial statements for the three and twelve months ended December 31, 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
December 31, | | | Year Ended December 31, | |
| | | 2023 | | | | 2022 | | | 2023 | | | 2022 | |
| Sales | | $ | 74,225 | | | | $ | 69,457 | | | $ | 285,603 | | | $ | 293,572 | |
| Cost of sales | | | (63,219 | ) | | | | (66,561 | ) | | | (236,177 | ) | | | (266,075 | ) |
| Gross margin | | | 11,006 | | | | | 2,896 | | | | 49,426 | | | | 27,497 | |
| Selling, general and administrative expenses | | | (15,521 | ) | | | | (18,020 | ) | | | (65,501 | ) | | | (72,265 | ) |
| Interest expense | | | (977 | ) | | | | (914 | ) | | | (4,509 | ) | | | (3,244 | ) |
| Interest income | | | 277 | | | | | 78 | | | | 1,018 | | | | 207 | |
| Foreign exchange gain (loss) | | | 904 | | | | | (84 | ) | | | 602 | | | | (2,255 | ) |
| Other income (expense), net | | | 3 | | | | | (109 | ) | | | 5,616 | | | | (115 | ) |
| Write-off of joint venture loan | | | — | | | | | — | | | | — | | | | (592 | ) |
| Impairments | | | (14,020 | ) | | | | (13,500 | ) | | | (14,020 | ) | | | (43,299 | ) |
| Loss before taxes and loss from equity method investments | | | (18,328 | ) | | | | (29,653 | ) | | | (27,368 | ) | | | (94,066 | ) |
| Provision for income taxes | | | (4,182 | ) | | | | (19,244 | ) | | | (4,451 | ) | | | (4,681 | ) |
| Loss including non-controlling interest and before equity losses | | | (22,510 | ) | | | | (48,897 | ) | | | (31,819 | ) | | | (98,747 | ) |
| Less: net loss (income) attributable to non-controlling interests, net of tax | | | 27 | | | | | (432 | ) | | | 21 | | | | 269 | |
| Loss from equity method investments | | | — | | | | | — | | | | — | | | | (2,668 | ) |
| Net loss attributable to Village Farms International, Inc. shareholders | | $ | (22,483 | ) | | | $ | (49,329 | ) | | $ | (31,798 | ) | | $ | (101,146 | ) |
| Adjusted EBITDA (1) | | $ | (658 | ) | | | $ | (11,796 | ) | | $ | 7,585 | | | $ | (34,633 | ) |
| Basic loss per share | | $ | (0.20 | ) | | | $ | (0.54 | ) | | $ | (0.29 | ) | | $ | (1.13 | ) |
| Diluted loss per share | | $ | (0.20 | ) | | | $ | (0.54 | ) | | $ | (0.29 | ) | | $ | (1.13 | ) |
| | | | | | | | | | | | | | | | | | |
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 and 85% interest in Leli.
We caution that our results of operations for the three and twelve months ended December 31, 2023, and 2022 may not be indicative of our future performance, particularly in light of global inflation and lingering supply-chain shortages due to world conflicts.
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, 2023 | | | | |
| | VF Fresh (Produce) | | | Cannabis Canada | | | Cannabis U.S. | | | Clean Energy | | | Corporate | | | Total | |
| Sales | $ | 37,118 | | | $ | 32,043 | | | $ | 5,064 | | | $ | — | | | $ | — | | | $ | 74,225 | |
| Cost of sales | | (36,285 | ) | | | (25,217 | ) | | | (1,717 | ) | | | — | | | | — | | | | (63,219 | ) |
| Selling, general and administrative expenses | | (2,789 | ) | | | (7,002 | ) | | | (3,020 | ) | | | (2 | ) | | | (2,708 | ) | | | (15,521 | ) |
| Other (expense) income, net | | (498 | ) | | | (298 | ) | | | (10 | ) | | | (56 | ) | | | 1,069 | | | | 207 | |
| Impairments | | — | | | | — | | | | (14,020 | ) | | | — | | | | — | | | | (14,020 | ) |
| Operating loss | | (2,454 | ) | | | (474 | ) | | | (13,703 | ) | | | (58 | ) | | | (1,639 | ) | | | (18,328 | ) |
| Recovery of (provision for) income taxes | | (1,513 | ) | | | (509 | ) | | | — | | | | — | | | | (2,160 | ) | | | (4,182 | ) |
| Loss from consolidated entities | | (3,967 | ) | | | (983 | ) | | | (13,703 | ) | | | (58 | ) | | | (3,799 | ) | | | (22,510 | ) |
| Less: net (income) loss attributable to non-controlling interests, net of tax | | — | | | | (13 | ) | | | — | | | | — | | | | 40 | | | | 27 | |
| Net loss | $ | (3,967 | ) | | $ | (996 | ) | | $ | (13,703 | ) | | $ | (58 | ) | | $ | (3,759 | ) | | $ | (22,483 | ) |
| Adjusted EBITDA (1) | $ | (604 | ) | | $ | 1,491 | | | $ | 437 | | | $ | (58 | ) | | $ | (1,924 | ) | | $ | (658 | ) |
| Basic loss per share | $ | (0.04 | ) | | $ | (0.01 | ) | | $ | (0.12 | ) | | $ | (0.00 | ) | | $ | (0.03 | ) | | $ | (0.20 | ) |
| Diluted loss per share | $ | (0.04 | ) | | $ | (0.01 | ) | | $ | (0.12 | ) | | $ | (0.00 | ) | | $ | (0.03 | ) | | $ | (0.20 | ) |
| | For the Three Months Ended December 31, 2022 | | | | |
| | VF Fresh (Produce) | | | Cannabis Canada | | | Cannabis U.S. | | | Clean Energy | | | 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 | ) | | | (7,807 | ) | | | (3,825 | ) | | | (5 | ) | | | (3,104 | ) | | | (18,020 | ) |
| Other (expense) income, net | | (411 | ) | | | (533 | ) | | | (94 | ) | | | (37 | ) | | | 46 | | | | (1,029 | ) |
| Impairments | | — | | | | — | | | | (13,500 | ) | | | — | | | | — | | | | (13,500 | ) |
| Operating loss | | (4,511 | ) | | | (8,169 | ) | | | (13,832 | ) | | | (83 | ) | | | (3,058 | ) | | | (29,653 | ) |
| (Provision for) recovery of 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 income attributable to non-controlling interests, net of tax | | — | | | | (432 | ) | | | — | | | | — | | | | — | | | | (432 | ) |
| Net loss | | (20,747 | ) | | | (2,842 | ) | | | (20,857 | ) | | | (83 | ) | | | (4,800 | ) | | | (49,329 | ) |
| Adjusted EBITDA (1) | $ | (3,007 | ) | | $ | (6,316 | ) | | $ | 266 | | | $ | (83 | ) | | $ | (2,656 | ) | | $ | (11,796 | ) |
| Basic loss per share | $ | (0.23 | ) | | $ | (0.03 | ) | | $ | (0.23 | ) | | $ | (0.00 | ) | | $ | (0.05 | ) | | $ | (0.54 | ) |
| Diluted loss per share | $ | (0.23 | ) | | $ | (0.03 | ) | | $ | (0.23 | ) | | $ | (0.00 | ) | | $ | (0.05 | ) | | $ | (0.54 | ) |
| | For the Year Ended December 31, 2023 | | | | |
| | VF Fresh (Produce) | | | Cannabis Canada | | | Cannabis U.S. | | | Clean Energy | | | Corporate | | | Total | |
| Sales | $ | 151,243 | | | $ | 114,030 | | | $ | 20,330 | | | $ | — | | | $ | — | | | $ | 285,603 | |
| Cost of sales | | (151,064 | ) | | | (78,090 | ) | | | (7,002 | ) | | | (21 | ) | | | — | | | | (236,177 | ) |
| Selling, general and administrative expenses | | (10,625 | ) | | | (29,275 | ) | | | (13,118 | ) | | | (32 | ) | | | (12,451 | ) | | | (65,501 | ) |
| Other income (expense), net | | 3,495 | | | | (2,136 | ) | | | (18 | ) | | | (133 | ) | | | 1,519 | | | | 2,727 | |
| Impairments | | — | | | | — | | | | (14,020 | ) | | | — | | | | — | | | | (14,020 | ) |
| Operating (loss) income | | (6,951 | ) | | | 4,529 | | | | (13,828 | ) | | | (186 | ) | | | (10,932 | ) | | | (27,368 | ) |
| Recovery of (provision for) income taxes | | (1,284 | ) | | | (1,431 | ) | | | — | | | | — | | | | (1,736 | ) | | | (4,451 | ) |
| (Loss) income from consolidated entities | | (8,235 | ) | | | 3,098 | | | | (13,828 | ) | | | (186 | ) | | | (12,668 | ) | | | (31,819 | ) |
| Less: net (income) loss attributable to non-controlling interests, net of tax | | — | | | | (162 | ) | | | — | | | | — | | | | 183 | | | | 21 | |
| Net (loss) income | $ | (8,235 | ) | | $ | 2,936 | | | $ | (13,828 | ) | | $ | (186 | ) | | $ | (12,485 | ) | | $ | (31,798 | ) |
| Adjusted EBITDA (1) | $ | 506 | | | $ | 14,764 | | | $ | 861 | | | $ | (186 | ) | | $ | (8,360 | ) | | $ | 7,585 | |
| Basic (loss) income per share | $ | (0.07 | ) | | $ | 0.03 | | | $ | (0.13 | ) | | $ | (0.00 | ) | | $ | (0.12 | ) | | $ | (0.29 | ) |
| Diluted (loss) income per share | $ | (0.07 | ) | | $ | 0.03 | | | $ | (0.13 | ) | | $ | (0.00 | ) | | $ | (0.12 | ) | | $ | (0.29 | ) |
| | For the Year Ended December 31, 2022 | | | | |
| | VF Fresh (Produce) | | | Cannabis Canada | | | Cannabis U.S. | | | Clean Energy | | | 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 | ) | | | (31,608 | ) | | | (16,305 | ) | | | (58 | ) | | | (12,290 | ) | | | (72,265 | ) |
| Other expense, net | | (1,187 | ) | | | (2,023 | ) | | | (247 | ) | | | (43 | ) | | | (1,907 | ) | | | (5,407 | ) |
| Write-off of joint venture loan | | — | | | | — | | | | — | | | | — | | | | (592 | ) | | | (592 | ) |
| Impairments | | — | | | | — | | | | (43,299 | ) | | | — | | | | — | | | | (43,299 | ) |
| Operating loss | | (30,573 | ) | | | (4,243 | ) | | | (44,192 | ) | | | (269 | ) | | | (14,789 | ) | | | (94,066 | ) |
| (Provision for) recovery of income taxes | | (9,914 | ) | | | 4,091 | | | | — | | | | — | | | | 1,142 | | | | (4,681 | ) |
| Loss from consolidated entities | | (40,487 | ) | | | (152 | ) | | | (44,192 | ) | | | (269 | ) | | | (13,647 | ) | | | (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 | | | $ | (44,192 | ) | | $ | (269 | ) | | $ | (16,315 | ) | | $ | (101,146 | ) |
| Adjusted EBITDA (1) | $ | (24,369 | ) | | $ | 2,047 | | | $ | 223 | | | $ | (263 | ) | | $ | (12,271 | ) | | $ | (34,633 | ) |
| 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 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
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 our Annual Report on Form 10-K for the twelve months ended December 31, 2023 (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 tables reflects a reconciliation of net income to Adjusted EBITDA, as presented by the Company:
| | For the Three Months Ended December 31, 2023 | |
| (in thousands of U.S. dollars) | VF Fresh
(Produce) | | | Cannabis Canada | | | Cannabis U.S. | | | Clean
Energy | | | Corporate | | | Total | |
| Net (loss) income | $ | (3,967 | ) | | $ | (996 | ) | | $ | (13,703 | ) | | $ | (58 | ) | | $ | (3,759 | ) | | $ | (22,483 | ) |
| Add: | | | | | | | | | | | | | | | | | |
| Amortization | | 1,297 | | | | 2,028 | | | | 56 | | | | — | | | | 63 | | | | 3,444 | |
| Foreign currency exchange (gain) loss | | (42 | ) | | | (66 | ) | | | — | | | | — | | | | (838 | ) | | | (946 | ) |
| Interest expense (income), net | | 595 | | | | 267 | | | | — | | | | — | | | | (233 | ) | | | 629 | |
| Provision for income taxes | | 1,513 | | | | 508 | | | | — | | | | — | | | | 2,161 | | | | 4,182 | |
| (Provision for) recovery of income taxes attributable to non-controlling interest | | — | | | | (104 | ) | | | — | | | | — | | | | 6 | | | | (98 | ) |
| Share-based compensation | | — | | | | (576 | ) | | | 54 | | | | — | | | | 447 | | | | (75 | ) |
| Interest expense for JV's | | — | | | | 50 | | | | — | | | | — | | | | — | | | | 50 | |
| Amortization for JVs | | — | | | | 340 | | | | — | | | | — | | | | 229 | | | | 569 | |
| Foreign currency exchange loss for JVs | | — | | | | 2 | | | | — | | | | — | | | | — | | | | 2 | |
| Share-based compensation for JV's | | — | | | | 38 | | | | — | | | | — | | | | — | | | | 38 | |
| Other expenses for JV's | | — | | | | (34 | ) | | | — | | | | — | | | | — | | | | (34 | ) |
| Deferred financing fees | | — | | | | 34 | | | | — | | | | — | | | | — | | | | 34 | |
| Impairments | | — | | | | — | | | | 14,020 | | | | — | | | | — | | | | 14,020 | |
| Other expense | | — | | | | — | | | | 10 | | | | — | | | | — | | | | 10 | |
| Adjusted EBITDA (2) | $ | (604 | ) | | $ | 1,491 | | | $ | 437 | | | $ | (58 | ) | | $ | (1,924 | ) | | $ | (658 | ) |
| | For the Three Months Ended December 31, 2022 | |
| (in thousands of U.S. dollars) | VF Fresh
(Produce) | | | Cannabis Canada | | | Cannabis U.S. | | | Clean
Energy | | | Corporate | | | Total | |
| Net (loss) income | $ | (20,747 | ) | | $ | (2,842 | ) | | $ | (20,857 | ) | | $ | (83 | ) | | $ | (4,800 | ) | | $ | (49,329 | ) |
| Add: | | | | | | | | | | | | | | | | | |
| Amortization | | 1,292 | | | | 992 | | | | 140 | | | | — | | | | — | | | | 2,424 | |
| Foreign currency exchange loss | | — | | | | 38 | | | | 26 | | | | — | | | | 22 | | | | 86 | |
| Interest expense (income), net | | 500 | | | | 402 | | | | — | | | | — | | | | (65 | ) | | | 837 | |
| Provision for (recovery of) income taxes | | 16,236 | | | | (5,759 | ) | | | 7,025 | | | | — | | | | 1,742 | | | | 19,244 | |
| (Provision for) recovery of income taxes attributable to non-controlling interest | | — | | | | 630 | | | | — | | | | — | | | | — | | | | 630 | |
| Share-based compensation | | — | | | | 362 | | | | 39 | | | | — | | | | 471 | | | | 872 | |
| Amortization for JVs | | — | | | | 241 | | | | — | | | | — | | | | — | | | | 241 | |
| Share-based compensation for JV's | | — | | | | 45 | | | | — | | | | — | | | | | — | | | | 45 | |
| Other expense for JV's | | — | | | | 45 | | | | — | | | | — | | | | | — | | | | 45 | |
| Deferred financing fees | | — | | | | 43 | | | | — | | | | — | | | | — | | | | 43 | |
| Impairments | | — | | | | — | | | | 13,500 | | | | — | | | | — | | | | 13,500 | |
| Other expense, net | | (288 | ) | | | 218 | | | | 393 | | | | — | | | | (26 | ) | | | 297 | |
| Purchase price adjustment (1) | | — | | | | (731 | ) | | | — | | | | — | | | | — | | | | (731 | ) |
| Adjusted EBITDA (2) | | (3,007 | ) | | | (6,316 | ) | | | 266 | | | | (83 | ) | | | (2,656 | ) | | | (11,796 | ) |
| | For the Year Ended December 31, 2023 | |
| (in thousands of U.S. dollars) | VF Fresh
(Produce) | | | Cannabis Canada | | | Cannabis U.S. | | | Clean
Energy | | | Corporate | | | Total | |
| Net (loss) income | $ | (8,235 | ) | | $ | 2,936 | | | $ | (13,828 | ) | | $ | (186 | ) | | $ | (12,485 | ) | | $ | (31,798 | ) |
| Add: | | | | | | | | | | | | | | | | | |
| Amortization | | 5,136 | | | | 7,106 | | | | 335 | | | | — | | | | 251 | | | | 12,828 | |
| Foreign currency exchange (gain) loss | | (2 | ) | | | (74 | ) | | | 19 | | | | — | | | | (693 | ) | | | (750 | ) |
| Interest expense (income), net | | 2,323 | | | | 1,882 | | | | (24 | ) | | | — | | | | (828 | ) | | | 3,353 | |
| Provision for income taxes | | 1,284 | | | | 1,430 | | | | — | | | | — | | | | 1,737 | | | | 4,451 | |
| (Provision for) recovery of income taxes attributable to non-controlling interest | | — | | | | (104 | ) | | | — | | | | — | | | | 6 | | | | (98 | ) |
| Share-based compensation | | — | | | | (152 | ) | | | 317 | | | | — | | | | 2,733 | | | | 2,898 | |
| Interest expense for JV's | | — | | | | 97 | | | | — | | | | — | | | | — | | | | 97 | |
| Amortization for JV's | | — | | | | 1,412 | | | | — | | | | — | | | | 919 | | | | 2,331 | |
| Foreign currency exchange loss for JV's | | — | | | | 7 | | | | — | | | | — | | | | — | | | | 7 | |
| Share-based compensation for JV's | | — | | | | 151 | | | | — | | | | — | | | | — | | | | 151 | |
| Other expenses for JV's | | — | | | | (63 | ) | | | — | | | | — | | | | — | | | | (63 | ) |
| Deferred financing fees | | — | | | | 136 | | | | — | | | | — | | | | — | | | | 136 | |
| Impairments | | — | | | | — | | | | 14,020 | | | | — | | | | — | | | | 14,020 | |
| Other expense | | — | | | | — | | | | 22 | | | | — | | | | — | | | | 22 | |
| Adjusted EBITDA (2) | $ | 506 | | | $ | 14,764 | | | $ | 861 | | | $ | (186 | ) | | $ | (8,360 | ) | | $ | 7,585 | |
| | For the Year Ended December 31, 2022 | |
| (in thousands of U.S. dollars) | VF Fresh
(Produce) | | | Cannabis Canada | | | Cannabis U.S. | | | Clean
Energy | | | Corporate | | | Total | |
| Net (loss) income | $ | (40,487 | ) | | $ | 117 | | | $ | (44,192 | ) | | $ | (269 | ) | | $ | (16,315 | ) | | $ | (101,146 | ) |
| Add: | | | | | | | | | | | | | | | | | |
| Amortization | | 5,044 | | | | 4,652 | | | | 564 | | | | — | | | | — | | | | 10,260 | |
| Foreign currency exchange loss | | — | | | | 115 | | | | 47 | | | | 2 | | | | 2,104 | | | | 2,268 | |
| Interest expense (income), net | | 1,471 | | | | 1,758 | | | | — | | | | 4 | | | | (195 | ) | | | 3,038 | |
| Provision for (recovery of) income taxes | | 9,914 | | | | (4,091 | ) | | | — | | | | — | | | | (1,142 | ) | | | 4,681 | |
| (Provision for) recovery of income taxes attributable to non-controlling interest | | — | | | | 737 | | | | — | | | | — | | | | — | | | | 737 | |
| Share-based compensation | | — | | | | 1,194 | | | | 305 | | | | — | | | | 2,309 | | | | 3,808 | |
| Interest expense for JV's | | — | | | | — | | | | — | | | | — | | | | 38 | | | | 38 | |
| Amortization for JV's | | — | | | | 1,554 | | | | — | | | | — | | | | — | | | | 1,554 | |
| Foreign currency exchange loss for JV's | | — | | | | 1 | | | | — | | | | — | | | | — | | | | 1 | |
| Share-based compensation for JV's | | — | | | | 124 | | | | — | | | | — | | | | — | | | | 124 | |
| Other expense for JV's | | — | | | | (26 | ) | | | — | | | | — | | | | — | | | | (26 | ) |
| Deferred financing fees | | — | | | | 214 | | | | — | | | | — | | | | — | | | | 214 | |
| Impairments | | — | | | | — | | | | 43,299 | | | | — | | | | — | | | | 43,299 | |
| Gain on disposal of assets | | (7 | ) | | | — | | | | — | | | | — | | | | — | | | | (7 | ) |
| Other expense, net | | (304 | ) | | | (34 | ) | | | 200 | | | | — | | | | 338 | | | | 200 | |
| JV exit-related costs | | — | | | | — | | | | — | | | | — | | | | 592 | | | | 592 | |
| Purchase price adjustment (1) | | — | | | | (4,268 | ) | | | — | | | | — | | | | — | | | | (4,268 | ) |
| Adjusted EBITDA (2) | $ | (24,369 | ) | | $ | 2,047 | | | $ | 223 | | | $ | (263 | ) | | $ | (12,271 | ) | | $ | (34,633 | ) |
| Adjusted EBITDA for JV's | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | (327 | ) | | $ | (327 | ) |
| Adjusted EBITDA excluding JV's (6) | $ | (24,369 | ) | | $ | 2,047 | | | $ | 223 | | | $ | (263 | ) | | $ | (11,944 | ) | | $ | (34,306 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
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 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.
This press release is intended to be read in conjunction with the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2023 (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.
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