Village Farms International Reports Third Quarter 2021 Financial Results: Adjusted EBITDA Up 49% Year-Over-Year /Another Record Quarter for Pure Sunfarms' Sales and Adjusted EBITDA
Village Farms International (NASDAQ: VFF) reported a consolidated EPS of $0.01 and Adjusted EBITDA of $6.8 million for Q3 2021, driven by its Canadian cannabis operation, Pure Sunfarms, which achieved record net sales of $27.4 million—a 53% year-over-year increase. The recent acquisition of Balanced Health Botanicals contributed to $31.2 million in total cannabis sales, making up 43% of Village Farms' total sales. The company's produce segment also reported positive Adjusted EBITDA despite price fluctuations in tomatoes. The report highlights Pure Sunfarms' robust growth and ongoing international expansion efforts.
- Q3 2021 Adjusted EBITDA of $6.8 million, up 49% from Q3 2020.
- Pure Sunfarms achieved record net sales of $27.4 million, a 53% year-over-year increase.
- Acquisition of Balanced Health Botanicals contributed $3.8 million in sales.
- 13% sequential growth in Adjusted EBITDA for Pure Sunfarms to C$10.9 million, marking the 12th consecutive quarter of positive Adjusted EBITDA.
- Overall net loss of $11.2 million for nine months ended September 30, 2021, a 343% decline from $4.6 million profit in the previous year.
- Produce segment sales slightly down by 1% due to tomato pricing pressures.
- Consolidated EPS of
$0.01 per share and Consolidated Adjusted EBITDA of$6.8 Million , Driven by 12th Consecutive Quarter of Pure Sunfarms' Positive Adjusted EBITDA - Pure Sunfarms Remains Top-Selling Dried Flower Brand in Ontario, Alberta and British Columbia
- Completed the Acquisition of Balanced Health Botanicals: Combined North American Cannabis Operations Comprised
43% of Total Village Farms Sales - Village Farms Fresh Produce Delivered Positive Adjusted EBITDA
VANCOUVER, BC, Nov. 9, 2021 /PRNewswire/ - Village Farms International, Inc. ("Village Farms" or the "Company") (NASDAQ: VFF) (TSX: VFF) today announced its financial results for the third quarter ended September 30, 2021. All figures are in U.S. dollars unless otherwise indicated. For Consolidated Results see below.
Management Commentary
"Our strong third quarter results were driven by another record performance from our Canadian cannabis business, Pure Sunfarms, as well as a partial quarter's contribution from the acquisition of Balanced Health Botanicals, and improved results in our Village Farms Fresh Produce business," said Michael DeGiglio, CEO, Village Farms. "Pure Sunfarms achieved record net sales and adjusted EBITDA since launching its retail branded products two years ago, with a healthy
"We are proud to have achieved what we have to date organically, and look forward to continuing to build on our leading market share performance in the expanding Canadian market, while additionally pursuing international sales. To address anticipated demand, we began planting out in half of our second 1.1 million square foot production facility (Delta 2) in September. Internationally, Pure Sunfarms completed its first export shipment and saw the completion of the EU-GMP certification inspection, a critical step towards EU-GMP certification and future sales into the European medical market. Upon receipt, we plan to aggressively pursue exports to EU-GMP jurisdictions, including Israel, with the same "Everyday Premium" strategy that has been so successful in Canada."
"With the acquisition of
"Village Farms Fresh Produce business saw improved financial results during the third quarter as tomato pricing recovered due to more stable retail demand amidst industry supply constraints. We continue to manage this business with a focus on profitability and enhancing our market share and product offerings to our retail customers, as we are increasingly encouraged about the future prospects for the Controlled Environment Agriculture produce industry and our opportunities in it."
Canadian Cannabis (Pure Sunfarms) Third Quarter and Other Recent Highlights
(Dollar Amounts are Before Village Farms' Proportionate Share in the year ago period)
- Achieved record revenue, gross margin and adjusted EBITDA since the launch of its retail branded products in late 2019:
53% year-over-year growth and13% sequential growth in total net sales to C$34.5 million (US$27.4 million );44% gross margin, above the Company's stated target range of 30 to40% ;93% year-over-year and20% sequential growth in Adjusted EBITDA to C$10.9 million (US$8.6 million ), the 12th consecutive quarter of positive Adjusted EBITDA;- Maintained the leading market share positions in key markets:
- Remained the top-selling brand* of dried flower products:
- In Ontario (by kilograms sold and dollars sold) for the third quarter 2021 and for the period since Retail Branded sales launch in October 2019;
- In Alberta** for the third quarter 2021 and monthly since October 2020 (by dollars sold);
- In British Columbia** for the third quarter 2021 and monthly since October 2020 (by dollars sold);
- Remained the top-selling Licensed Producer*** of dried flower products in Ontario (by kilograms sold and dollars sold) for the quarter ended September 30, 2021;
- Launched 31 new SKUs across four product categories;
- Completed its first export shipment of cannabis, supplying a variety of high-quality, high-THC dried flower products to Village Farms' minority interest investee, Australia-based Altum International Pty Ltd. for the Australian medicinal cannabis market;
- Commenced cannabis cultivation in the completed half of its second 1.1 million square foot greenhouse facility, Delta 2; and,
- The certifying body of European Union Good Manufacturing Practices (EU-GMP), EUDRA, completed inspection of the Delta 3 facility.
* | Based on OCS market data for the quarter ended September 30, 2021. |
** | Market share performance data cited has been calculated by Pure Sunfarms from sales information provided by Buddi retail store data from over 300 retailers across Alberta and British Columbia as of September 30, 2021. |
*** | Market share performance and data cited has been calculated by Pure Sunfarms from sales information provided by OCS as of September 30, 2021. |
Canadian Cannabis (Pure Sunfarms) Financial Summary for the Three and Nine Months Ended September 30, 2021 and September 30, 2020 (Before Village Farms' Proportionate Share)
(millions except % metrics) | Three Months Ended September 30, | ||||
2021 | 2020 | Change of C$ | |||
C$ | US$ | C$ | US$ | ||
Total Gross Sales | + | ||||
Total Net Sales | + | ||||
Gross Margin 1 | + | ||||
SG&A | - | ||||
Share-based compensation | N/A | ||||
Net income | + | ||||
Adjusted EBITDA 3 | + | ||||
Adjusted EBITDA Margin 3 | + | ||||
(millions except % metrics) | Nine Months Ended September 30, | ||||
2021 | 2020 | Change of C$ | |||
C$ | US$ | C$ | US$ | ||
Total Gross Sales | + | ||||
Total Net Sales | + | ||||
Gross Margin 1 | - | ||||
SG&A | - | ||||
Share-based compensation | N/A | ||||
Net (loss) income 2 | - | ||||
Adjusted EBITDA 3 | + | ||||
Adjusted EBITDA Margin 3 | - | ||||
1. | Gross margin for the three months ended September 30, 2021 excludes the (C |
2. | Net income includes C |
3. | Adjusted EBITDA is not a recognized earnings measure and does not have a standard meaning prescribed in by GAAP. See "Non-GAAP Measures" below. |
Canadian Cannabis (Pure Sunfarms) Sales Composition by Product Group
Three months ended | Nine months ended | |||
Channel | 2021 | 2020 | 2021 | 2020 |
Retail, Flower | ||||
Retail, Oil & 2.0 Product | ||||
Wholesale, Flower and Trim | ||||
Village Farms' Third Quarter and Other Recent Highlights
- Total cannabis sales (Pure Sunfarms and Balanced Health Botanicals combined) were
$31.2 million , which included Pure Sunfarms sales of$27.4 million and Balanced Health sales of$3.8 million ; - Total Canada and U.S. cannabis adjusted EBITDA (Pure Sunfarms and Balanced Health Botanicals combined) was
$9.3 million , which included Pure Sunfarms Adjusted EBITDA of$8.6 million and Balanced Health Adjusted EBITDA of$0.7 million ; - Improved financial results from Village Farms Fresh Produce, with positive Adjusted EBITDA of
$1.4 million as pricing trended upward toward historical levels following one of the lowest pricing environments for tomatoes-on-the-vine and beefsteak varieties in the past ten years during the first half of 2021; - Acquired
100% interest of profitable Colorado-based CBD-platform Balanced Health Botanicals, which owns and operates one of the leading brands in the U.S. CBD market, providing immediate entry into that market in a consumer products category adjacent to the high-THC cannabis market, as well as the broader consumer packaged goods (CPG) wellness arena; - Balanced Health Botanicals expanded its product portfolio with the launch of its innovative Synergy Collection, developed to enhance the multitude of benefits offered by the hemp plant and other ingredients beyond CBD alone;
- Entered into an option agreement whereby the Company has the right to acquire an
80% ownership interest in Netherlands-based Leli Holland B.V., one of ten applicants selected by lottery to receive a license (subject to customary government approval) to legally cultivate and distribute cannabis to retailers under the Dutch government's Experiment to Investigate Closed Cannabis Supply Chains; and, - Unveiled new corporate branding embodies the Company's evolution over the last four years to a vertically integrated plant-based consumer products company, targeting high-growth, large-market opportunities in North America and around the world, including cannabinoids, related wellness products and fresh produce.
The Company's financial statements for the three and nine months ended September 30, 2021, as well as the comparative periods for 2020, have been prepared and presented in conformity with accounting principles generally accepted in the United States of America ("GAAP"). On September 30, 2021, Village Farms owned
Village Farms' Consolidated Financial Summary for the Three and Nine Months Ended September 30, 2021 and September 30, 2020 and Corporate Highlights
($US millions except per share | Three Months Ended September 30, | Nine Months Ended September 30, | ||||
2021 | 2020 | Change | 2021 | 2020 | Change | |
Sales1 | + | + | ||||
Produce | - | - | ||||
Cannabis2 | N/A | N/A | ||||
VFCE | - | - | ||||
Net Income (Loss)1 | + | ( | - | |||
Income (Loss) Per | ( | - | ||||
Adjusted EBITDA1, 3 | + | |||||
Produce | - | ( | - | |||
Cannabis2 | + | + | ||||
VFCE | ( | ( | - | ( | ( | - |
Corporate | ( | ( | - | ( | ( | - |
1. | Sales, Net Income, Income (Loss) per share and Adjusted EBITDA includes results from Pure Sunfarms and Balanced Health pursuant to the Company's statutory reporting requirements. |
2. | Cannabis includes the results of Cannabis – U.S and Cannabis – Canada. |
3. | Adjusted EBITDA is not a recognized earnings measure and does not have a standard meaning prescribed by GAAP. See "Non-GAAP Measures" below. |
Response to the Ongoing Coronavirus Pandemic
In March 2020, the World Health Organization declared the outbreak of the COVID-19 virus a global pandemic. This outbreak continues to cause major disruptions to businesses and markets worldwide as the virus continues to spread. A number of countries as well as certain states and cities within the United States and Canada have enacted temporary closures of businesses, issued quarantine or shelter-in-place orders, and taken other restrictive measures in response to COVID-19. To date, all of our operations are operating normally and abiding by applicable restrictions, however, the extent to which COVID-19 and the related global economic crisis affect our business, results of operations and financial condition, will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and any recovery period, future actions taken by governmental authorities, central banks and other third parties (including new financial regulation and other regulatory reform) in response to the pandemic, and the effects on our produce, clients, vendors and employees. We continue to service our customers amid uncertainty and disruption linked to COVID-19 and we are actively managing our business to respond to the impact.
Summary Statutory Results
(in thousands of U.S. Dollars unless otherwise indicated)
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 1 | 2020 1 | 2021 1 | 2020 1 | |||||||||||||
Sales | $ | 72,442 | $ | 43,037 | $ | 195,212 | $ | 122,722 | ||||||||
Cost of sales | (54,693) | (37,418) | (169,891) | (112,809) | ||||||||||||
Gross margin | 17,749 | 5,619 | 25,321 | 9,913 | ||||||||||||
Selling, general and administrative expenses | (13,132) | (4,942) | (30,249) | (12,676) | ||||||||||||
Share-based compensation | (1,820) | (472) | (5,705) | (1,329) | ||||||||||||
Interest expense | (620) | (299) | (1,959) | (1,273) | ||||||||||||
Interest income | 50 | 101 | 99 | 577 | ||||||||||||
Foreign exchange loss | (324) | (484) | (635) | (880) | ||||||||||||
Gain on settlement agreement | — | — | — | 4,681 | ||||||||||||
Other (expense) income | (119) | 27 | (354) | 92 | ||||||||||||
Loss on disposal of assets | — | — | (40) | (6) | ||||||||||||
(Provision for) recovery of income taxes | (1,077) | (336) | 2,543 | 607 | ||||||||||||
Income (loss) from consolidated entities after income | 707 | (786) | (10,979) | (294) | ||||||||||||
Equity earnings (losses) of unconsolidated entities | 38 | 1,306 | (175) | 4,885 | ||||||||||||
Net income (loss) | $ | 745 | $ | 520 | $ | (11,154) | $ | 4,591 | ||||||||
Adjusted EBITDA 2 | $ | 6,785 | $ | 4,556 | $ | 8,736 | $ | 7,921 | ||||||||
Earnings (loss) per share – basic | $ | 0.01 | $ | 0.01 | $ | (0.14) | $ | 0.08 | ||||||||
Earnings (loss) per share – basic | $ | 0.01 | $ | 0.01 | $ | (0.14) | $ | 0.08 | ||||||||
Net income (loss) | $ | 745 | $ | 520 | $ | (11,154) | $ | 4,591 | ||||||||
Other comprehensive (loss) income: | ||||||||||||||||
Foreign currency translation adjustment | (3,912) | 31 | 165 | (41) | ||||||||||||
Comprehensive (loss) income | $ | (3,167) | $ | 551 | $ | (10,989) | $ | 4,550 | ||||||||
1. | For the three and nine months ended September 30, 2021, Pure Sunfarms is fully consolidated in the financial results of the Company. For the three and nine months ended September 30, 2020, Village Farms' proportionate share of Pure Sunfarms earnings are reflected in equity (losses) earnings of unconsolidated entities. For the three and nine months ended September 30, 2021, Balanced Health's financial results of August 16, 2021 to September 30, 2021 are fully consolidated in the financial results of the Company. |
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. See "Non-GAAP Measures" for a definition and reconciliation of Adjusted EBITDA to net (loss) income, the nearest comparable measurement under GAAP. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company. Adjusted EBITDA includes the Company's majority non-controlling interest in Pure Sunfarms (through November 1, 2020), and |
Discussion of Financial Results
A discussion of our consolidated results for the three and nine months ended September 30, 2021 and 2020 is included below. The consolidated results include public company expenses and all four of our operating segments: Produce, Cannabis-Canada, Cannabis-U.S. and clean energy. The remaining
Under "Cannabis-–Canada Segment Results", we also present a discussion of the operating results of Pure Sunfarms, before any allocation to Village Farms, which were not consolidated in our financial results for the three and nine months ended September 30, 2020 but were consolidated in our results for the three and nine months ended September 30, 2021. As a result of the Pure Sunfarms Acquisition, Pure Sunfarms recognized an increase in the fair value of its inventory on-hand on the acquisition date, resulting in a
Under "Cannabis Segment Results – U.S.", we present a discussion of the operating results of Balanced Health for the period of August 16, 2021 to September 30, 2021, which were consolidated in the Company's financial results for the three and nine months ended September 30, 2021.
CONSOLIDATED RESULTS
Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020
Sales
Sales for the three months ended September 30, 2021 were
Cost of Sales
Cost of sales for the three months ended September 30, 2021 were
Gross Margin
Gross margin for the three months ended September 30, 2021 increased
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended September 30, 2021 increased
Share-Based Compensation
Share-based compensation expenses for the three months ended September 30, 2021 were
Equity Earnings from Unconsolidated Entities
Our share of earnings from our joint ventures for the three months ended September 30, 2021 was
Net Income
Net income for the three months ended September 30, 2021 was
Adjusted EBITDA
Adjusted EBITDA for the three months ended September 30, 2021 was
CANNABIS SEGMENT RESULTS - CANADA
The Canadian cannabis segment currently consists of Pure Sunfarms. Pure Sunfarms' comparative analysis are based on the consolidated results of Pure Sunfarms for the three and nine months ended September 30, 2021 and September 30, 2020, not accounting for the percentage owned by Village Farms. See "Reconciliation of U.S. GAAP Results to Proportionate Results" for a presentation of the cannabis segment's proportionate results for the three and nine months ended September 30, 2021 and September 30, 2020.
Three Months Ended September 30, 2021 Compared to Three Months Ended June 30, 2021
Sales
Canadian cannabis net sales for the three months ended September 30, 2021 were
Cost of Sales
Canadian cannabis cost of sales for the three months ended September 30, 2021 was
Gross Margin
Gross margin for the three months ended September 30, 2021 increased
Selling, General and Administrative Expenses
Canadian cannabis selling, general and administrative expenses for the three months ended September 30, 2021 were
Share-Based Compensation
Share-based compensation expenses for the three months ended September 30, 2021 were
Net Income
Canadian cannabis net income for the three months ended September 30, 2021 was
Adjusted EBITDA
Adjusted EBITDA for the three months ended September 30, 2021 and June 30, 2021 was
Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020
Sales
Canadian cannabis net sales for the three months ended September 30, 2021 were
Cost of Sales
Canadian cannabis cost of sales for the three months ended September 30, 2021 was
Gross Margin
Gross margin for the three months ended September 30, 2021 increased
Selling, General and Administrative Expenses
Canadian cannabis selling, general and administrative expenses for the three months ended September 30, 2021 were
Share-Based Compensation
Share-based compensation expenses for the three months ended September 30, 2021 were
Net Income
Canadian cannabis net income for the three months ended September 30, 2021 was
Adjusted EBITDA
Adjusted EBITDA for the three months ended September 30, 2021 and September 30, 2020 was
CANNABIS SEGMENT RESULTS – UNITED STATES
The U.S. cannabis segment currently consists of Balanced Health. For the three and nine months ended September 30, 2021, U.S. cannabis financial results are based on the consolidated results of Balanced Health from the closing date of the acquisition of August 16, 2021, as the results of Balanced Health from August 16, 2021 through September 30, 2021 are consolidated in the Company's results.
Sales
U.S. cannabis net sales for the period of August 16, 2021 to September 30, 2021 were
Cost of Sales
U.S. cannabis cost of sales for the period of August 16, 2021 to September 30, 2021 were
Gross Margin
U.S. cannabis gross margin for the period of August 16, 2021 to September 30, 2021 was
Selling, General and Administrative Expenses
U.S. cannabis selling general and administrative expenses for the period of August 16, 2021 to September 30, 2021 was
Share-Based Compensation
U.S. cannabis share-based compensation for the period of August 16, 2021 to September 30, 2021 was
Net Income
U.S. cannabis net income for the period of August 16, 2021 to September 30, 2021 was
Adjusted EBITDA
U.S. cannabis adjusted EBITDA for the period of August 16, 2021 to September 30, 2021 was
Reconciliation of Consolidated Net Income to Adjusted EBITDA
The following table reflects a reconciliation of net income to Adjusted EBITDA, as presented by the Company:
Three Months Ended | Nine Months Ended | |||||||||||||||
(in thousands of U.S. dollars) | 2021 1 | 2020 1 | 2021 1 | 2020 1 | ||||||||||||
Net (loss) income | $ | 745 | $ | 520 | $ | (11,154) | $ | 4,591 | ||||||||
Add: | ||||||||||||||||
Amortization | 3,306 | 1,518 | 10,616 | 4,540 | ||||||||||||
Foreign currency exchange loss | 286 | 484 | 521 | 880 | ||||||||||||
Interest expense, net | 570 | 198 | 1,860 | 696 | ||||||||||||
Recovery of income taxes | 1,077 | 336 | (2,543) | (607) | ||||||||||||
Share-based compensation | 1,820 | 472 | 5,705 | 1,329 | ||||||||||||
Interest expense for JVs | 13 | 240 | 40 | 636 | ||||||||||||
Amortization for JVs | (64) | 598 | — | 1,276 | ||||||||||||
Foreign currency exchange loss for JVs | — | 33 | — | 118 | ||||||||||||
Provision for income taxes for JVs | — | 245 | — | 1,736 | ||||||||||||
Deferred financing fees | 68 | — | 234 | — | ||||||||||||
Incremental utility costs due to storm | — | — | 1,400 | — | ||||||||||||
Purchase price adjustment 2 | (1,217) | — | 1,841 | — | ||||||||||||
Other expense | 181 | — | 181 | — | ||||||||||||
Gain on settlement agreement 3 | — | — | — | (4,681) | ||||||||||||
Gain on settlement of net liabilities from JV | — | — | — | (2,496) | ||||||||||||
Gain on disposal of assets | — | (88) | 35 | (97) | ||||||||||||
Adjusted EBITDA 4 | $ | 6,785 | $ | 4,556 | $ | 8,736 | $ | 7,921 | ||||||||
Adjusted EBITDA for JVs (See table below) | $ | (13) | $ | 2,333 | $ | (140) | $ | 6,050 | ||||||||
Adjusted EBITDA excluding JVs | $ | 6,798 | $ | 2,223 | $ | 8,876 | $ | 1,871 | ||||||||
1. | For the three and nine months ended September 30, 2021, Pure Sunfarms is fully consolidated in the financial results of the Company. For the three and nine months ended September 30, 2020, our share of Pure Sunfarms' earnings is reflected in equity earnings of unconsolidated entities. For the three and nine months ended September 30, 2021, Balanced Health's financial results from August 16, 2021 to September 30, 2021 are fully consolidated in the financial results of the Company. |
2. | The purchase price adjustment primarily reflects the non-cash accounting charge/(positive impact) resulting from the revaluation of Pure Sunfarms' inventory to fair value at the acquisition date. |
3. | See "Results of Operations – Consolidated Results – Gain on Settlement Agreement" above. |
4. | Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company. Adjusted EBITDA includes the Company's majority non-controlling interest in Pure Sunfarms (through November 1, 2020), and |
Breakout of JV Adjusted | Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands of U.S. dollars) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Pure Sunfarms Adjusted | $ | — | $ | 2,511 | $ | — | $ | 6,365 | ||||||||
VFH Adjusted EBITDA | (13) | (178) | (140) | (315) | ||||||||||||
Total JV Adjusted EBITDA | $ | (13) | $ | 2,333 | $ | (140) | $ | 6,050 | ||||||||
Reconciliation of Consolidated U.S. GAAP Results to Proportionate Results
The following tables are a reconciliation of the GAAP results to the proportionate results (which include our proportionate share of the joint venture operations, Pure Sunfarms and VFH ). Pure Sunfarms was a joint venture until the Company acquired
For the Three months ended September 30, 2021 | ||||||||||||||||||||||||
Produce | Cannabis1,2 | Clean | Corporate | Hemp1 | Total | |||||||||||||||||||
Sales | $ | 41,152 | $ | 31,231 | $ | 59 | $ | — | $ | 7 | $ | 72,449 | ||||||||||||
Cost of sales | (39,099) | (15,475) | (119) | — | 52 | (54,641) | ||||||||||||||||||
Selling, general and administrative | (2,239) | (7,387) | (59) | (3,447) | (8) | (13,140) | ||||||||||||||||||
Share-based compensation | — | (249) | — | (1,571) | — | (1,820) | ||||||||||||||||||
Loss on disposal of assets | — | — | — | — | — | — | ||||||||||||||||||
Other expense (expense), net | (798) | (69) | (8) | (133) | (18) | (1,026) | ||||||||||||||||||
Recovery of income taxes | (497) | (2,024) | — | 1,444 | — | (1,077) | ||||||||||||||||||
Net (loss) income | $ | (1,481) | $ | 6,027 | $ | (127) | $ | (3,707) | $ | 33 | 745 | |||||||||||||
Adjusted EBITDA 3 | $ | 1,334 | $ | 9,299 | $ | (118) | $ | (3,717) | $ | (13) | $ | 6,785 | ||||||||||||
(Loss) earnings per share – basic | $ | (0.03) | $ | 0.07 | $ | (0.00) | $ | (0.03) | $ | 0.00 | $ | 0.01 | ||||||||||||
(Loss) earnings per share – diluted | $ | (0.03) | $ | 0.07 | $ | (0.00) | $ | (0.03) | $ | 0.00 | $ | 0.01 | ||||||||||||
For the three months ended September 30, 2020 | ||||||||||||||||||||||||
Produce | Cannabis1,2 | Clean | Corporate | Hemp1 | Total | |||||||||||||||||||
Sales | $ | 42,933 | $ | 10,007 | $ | 104 | $ | — | $ | — | $ | 53,044 | ||||||||||||
Cost of sales | (37,106) | (6,547) | (312) | — | — | (43,965) | ||||||||||||||||||
Selling, general and administrative | (2,560) | (1,436) | (36) | (2,346) | (213) | (6,591) | ||||||||||||||||||
Share-based compensation | — | — | — | (472) | — | (472) | ||||||||||||||||||
Gain on disposal of assets | — | — | — | — | 89 | 89 | ||||||||||||||||||
Other (expense) income, net | (696) | (336) | (13) | 54 | (13) | (1,004) | ||||||||||||||||||
Recovery of (provision for) income | (2,340) | (245) | — | 2,004 | — | (581) | ||||||||||||||||||
Net income (loss) | $ | 231 | $ | 1,443 | $ | (257) | $ | (760) | $ | (137) | $ | 520 | ||||||||||||
Adjusted EBITDA 3 | $ | 4,653 | $ | 2,511 | $ | (85) | $ | (2,345) | $ | (178) | $ | 4,556 | ||||||||||||
Earnings (loss) per share - basic | $ | 0.00 | $ | 0.02 | $ | (0.00) | $ | (0.01) | $ | (0.00) | $ | 0.01 | ||||||||||||
Earnings (loss) per share - diluted | $ | 0.00 | $ | 0.02 | $ | (0.00) | $ | (0.01) | $ | (0.00) | $ | 0.01 | ||||||||||||
For the nine months ended September 30, 2021 | ||||||||||||||||||||||||
Produce | Cannabis1,2 | Clean | Corporate | Hemp1 | Total | |||||||||||||||||||
Sales | $ | 121,558 | $ | 73,452 | $ | 202 | $ | — | $ | 7 | $ | 195,219 | ||||||||||||
Cost of sales | (122,486) | (45,664) | (1,741) | — | (38) | (169,929) | ||||||||||||||||||
Selling, general and administrative | (7,736) | (15,723) | (143) | (6,647) | (109) | (30,358) | ||||||||||||||||||
Share-based compensation | — | (1,534) | — | (4,171) | — | (5,705) | ||||||||||||||||||
Loss on disposal of assets | — | (40) | — | — | 5 | (35) | ||||||||||||||||||
Other expense, net | (798) | (1,423) | (29) | (599) | (40) | (2,889) | ||||||||||||||||||
Recovery of (provision for) income | 2,875 | (2,654) | — | 2,322 | — | 2,543 | ||||||||||||||||||
Net (loss) income | $ | (6,587) | $ | 6,414 | $ | (1,711) | $ | (9,095) | $ | (175) | $ | (11,154) | ||||||||||||
Adjusted EBITDA 3 | $ | (3,138) | $ | 19,202 | $ | (269) | $ | (6,919) | $ | (140) | $ | 8,736 | ||||||||||||
(Loss) income per share – basic | $ | (0.08) | $ | 0.08 | $ | (0.02) | $ | (0.12) | $ | (0.00) | $ | (0.14) | ||||||||||||
(Loss) income per share – diluted | $ | (0.08) | $ | 0.08 | $ | (0.02) | $ | (0.12) | $ | (0.00) | $ | (0.14) | ||||||||||||
For the nine months ended September 30, 2020 | ||||||||||||||||||||||||
Produce | Cannabis1,2 | Clean | Corporate | Hemp1 | Total | |||||||||||||||||||
Sales | $ | 122,356 | $ | 22,958 | $ | 366 | $ | — | $ | 98 | $ | 145,778 | ||||||||||||
Cost of sales | (111,750) | (13,782) | (1,059) | — | (120) | (126,711) | ||||||||||||||||||
Selling, general and administrative | (7,414) | (3,870) | (146) | (5,116) | (500) | (17,046) | ||||||||||||||||||
Share-based compensation | — | — | — | (1,329) | — | (1,329) | ||||||||||||||||||
Gain on settlement agreement | — | — | — | 4,681 | — | 4,681 | ||||||||||||||||||
Gain on settlement of net liabilities | — | 2,496 | — | — | — | 2,496 | ||||||||||||||||||
(Loss) gain on disposal of assets | — | 5 | — | (6) | 99 | 98 | ||||||||||||||||||
Other expense, net | (696) | (634) | (44) | (744) | (129) | (2,247) | ||||||||||||||||||
Recovery of (provision for) income | (939) | (1,736) | — | 1,546 | — | (1,129) | ||||||||||||||||||
Net income (loss) | $ | 1,557 | $ | 5,437 | $ | (883) | $ | (968) | $ | (552) | $ | 4,591 | ||||||||||||
Adjusted EBITDA 3 | $ | 7,219 | $ | 6,365 | $ | (231) | $ | (5,117) | $ | (315) | $ | 7,921 | ||||||||||||
Earnings (loss) per share – basic | $ | 0.02 | $ | 0.10 | $ | (0.01) | $ | (0.02) | $ | (0.01) | $ | 0.08 | ||||||||||||
Earnings (loss) per share – diluted | $ | 0.02 | $ | 0.10 | $ | (0.01) | $ | (0.02) | $ | (0.01) | $ | 0.08 | ||||||||||||
(1) | The adjusted consolidated financial results have been adjusted to include our share of sales and expenses from Pure Sunfarms and VFH on a proportionate accounting basis, on which management bases its operating decisions and performance evaluation. GAAP does not allow for the inclusion of the joint ventures on a proportionate basis. These results include additional non-GAAP measures such as Adjusted EBITDA. |
The adjusted results are not generally accepted measures of financial performance under GAAP. Our method of calculating these financial performance measures may differ from other companies and accordingly, they may not be comparable to measures used by other companies. | |
(2) | The Cannabis results include the financial results of both Cannabis – U.S. and Cannabis - Canada. |
(3) | Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company. Consolidated Adjusted EBITDA includes our majority non-controlling interest Pure Sunfarms (through November 1, 2020), and our |
This press release is intended to be read in conjunction with the Company's Consolidated Financial Statements ("Financial Statements") and Management's Discussion & Analysis ("MD&A") for the three and nine months ended September 30, 2021 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 today, Tuesday, November 9, 2021, at 8:30 a.m. ET to discuss its financial results. Participants can access the conference call by telephone by dialing (416) 764-8659 or (888) 664-6392, or via the Internet at: https://bit.ly/3b9dXql.
For those unable to participate in the conference call at the scheduled time, it will be archived for replay both by telephone and via the Internet beginning approximately one hour following completion of the call. To access the archived conference call by telephone, dial (416) 764-8677 or (888) 390-0541 and enter the passcode 942299 followed by the pound key. The telephone replay will be available until Tuesday, November 16, 2021 at midnight (ET). The conference call will also be temporarily available on Village Farms' website at http://villagefarms.com/investor-relations/investor-calls.
About Village Farms International, Inc.
Village Farms leverages decades of experience as a large-scale, Controlled Environment Agriculture-based, vertically integrated supplier for high-value, high-growth plant-based Consumer Packaged Goods opportunities, with a strong foundation as a leading fresh produce supplier to grocery and large-format retailers throughout the US and Canada, and new high-growth opportunities in the cannabis and CBD categories in North America and selected markets internationally.
In Canada, the Company's wholly-owned Canadian subsidiary, Pure Sunfarms, is one of the single largest cannabis operations in the world, the lowest-cost greenhouse producer and one of Canada's best-selling brands.
In the US, wholly-owned Balanced Health Botanicals is one of the leading CBD brands and e-commerce platforms in the country. Subject to compliance with all applicable US federal and state laws and stock exchange rules, Village Farms plans to enter the US high-THC cannabis market via multiple strategies, leveraging one of the largest greenhouse operations in the country (more than 5.5 million square feet in West Texas), as well as the operational and product expertise gained through Pure Sunfarms' cannabis success in Canada.
Internationally, Village Farms is targeting selected, nascent, legal cannabis and CBD opportunities with significant medium- and long-term potential, with an initial focus on the Asia-Pacific region and Europe.
Cautionary Statement Regarding Forward-Looking Information
This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is subject to the safe harbor created by those sections. This press release also contains "forward-looking information" within the meaning of applicable Canadian securities law. We refer to such forward-looking statements and forward-looking information collectively as "forward-looking statements". Forward-looking statements may relate to the Company's future outlook or financial position and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, expansion plans, litigation, projected production, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the Company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the Company, the greenhouse vegetable industry or the cannabis industry are forward-looking statements. In some cases, forward-looking information can be identified by such terms as "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, including that of Pure Sunfarms and our start-up operations of growing hemp in the United States; the legal status of Pure Sunfarms' cannabis business; risks relating to obtaining additional financing, including our dependence upon credit facilities; potential difficulties in achieving and/or maintaining sales levels, growth, and profitability; variability of product pricing; risks inherent in the cannabis, hemp and agricultural businesses; the ability of Pure Sunfarms to cultivate and distribute cannabis in Canada; existing and new governmental regulations, including risks related to regulatory compliance and licenses under the Canadian act respecting cannabis to amend to the Controlled Drugs and Substances Act, the Criminal Code and other Acts, S.C. 2018, c. 16 (Canada) for its Delta greenhouse facilities, changes in our regulatory requirements; risks relating to conversion of our greenhouses to cannabis or hemp production in Canada and in the USA; risks related to rules and regulations at the U.S. federal (Food and Drug Administration and United States Department of Agriculture), state and municipal levels with respect to produce and hemp; retail consolidation, expected market size for our products, market share participation, risks regarding the legal status of cannabis and high-THC products in the USA, technological advances and other forms of competition; transportation disruptions; product liability and other potential litigation; retention of key executives; labor issues; uninsured and underinsured losses; vulnerability to rising energy costs; environmental, health and safety risks, foreign exchange exposure, risks associated with cross-border trade; difficulties and ability in managing our growth and our corporate and commercial international expansion; restrictive covenants under our credit facilities; natural catastrophes; the ongoing and developing COVID-19 pandemic; and tax risks.
The Company has based these forward-looking statements on factors and assumptions about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. Although the forward-looking statements contained in this press release are based upon assumptions that management believes are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the Company's control, that may cause the Company's or the industry's actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the factors contained in the Company's filings with securities regulators, including this press release. In particular, we caution you that our forward-looking statements are subject to the ongoing and developing circumstances related to the COVID-19 pandemic, which may have a material adverse effect on our business, operations and future financial results.
When relying on forward-looking statements to make decisions, the Company cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future results, performance, achievements, prospects and opportunities. The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
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