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Village Farms International reports significantly improved second quarter
August 9, 2023 By Grow Opportunity Staff
(Globe Newswire) Vancouver — Village Farms International, Inc. today announced its financial results for the second quarter ended June 30, 2023. All figures are in U.S. dollars unless otherwise indicated.
Second Quarter Financial Highlights
(All comparable periods are for the second quarter of 2022 unless otherwise stated)
Consolidated
- Consolidated sales decreased (7%) year-over-year to $77.2 million from $82.9 million;
- Operating loss before tax improved to ($42 thousand) compared with an operating loss before tax of ($43.8 million);
- Consolidated net loss improved to ($1.4 million), or ($0.01) per share, compared with ($36.6 million), or ($0.41) per share; and,
- Consolidated adjusted EBITDA (a non-GAAP measure) improved to $4.5 million from negative ($10.3 million).
Canadian Cannabis (Pure Sunfarms and Rose LifeScience)
- Net sales decreased (6%) to $28.1 million (C$37.7 million) from $29.8 million (C$38.0 million) (a decrease of (1%) in Canadian dollars);
- Retail branded sales increased 24% (in Canadian dollars);
- International (export) sales increased 217% (in Canadian dollars);
- Gross margin was 38%;
- Net income was $1.2 million (C$1.7 million) compared with net income of $1.8 million (C$2.3 million); and,
- Adjusted EBITDA increased 78% to $4.8 million (C$6.7 million) from $2.7 million (C$3.4 million) (an increase of 97% on a constant currency basis).
U.S. Cannabis (Balanced Health Botanicals)
- Net sales were $5.3 million, with gross margin of 67%, net income of $0.2 million and adjusted EBITDA of $0.4 million.
Village Farms Fresh (Produce)
- Sales decreased (7%) to $43.8 million from $47.2 million;
- Net loss improved significantly to ($0.7 million) from ($9.4 million); and,
- Adjusted EBITDA improved significantly to $1.3 million from negative ($10.3 million).
Strategic Growth and Operational Highlights
Canadian Cannabis
- Maintained top-three producer market share ranking nationally for the second quarter of 20231;
- Became the number one producer for Quebec by market share for the second quarter of 20231;
- Was the number two ranked cannabis producer in the dried flower category nationally (held number one position prior to acquisition of market share by a competitor);
- Had the number one dried flower brands in the core and premium price categories (Pure Sunfarms and Soar, respectively) and the fastest growing dried flower brand in the value category (The Original Fraser Valley Weed Co.) in Canada’s largest provincial market, Ontario; and,
- Subsequent to quarter end, further expanded its brand portfolio with the addition of Super Toast, a brand focused on convenience and ready-to-go products.
1. Based on estimated retail sales from HiFyre, other third parties and provincial boards.
Canadian Cannabis Performance Summary
| (millions except % metrics) | Three Months Ended June 30, |
|||||||||
| 2023 |
2022 |
Change of C$ | ||||||||
| C$ | US$ | C$ | US$ | |||||||
| Total Gross Sales | $56.5 | $42.1 | $52.3 | $41.0 | +8 | % | ||||
| Total Net Sales | $37.7 | $28.1 | $38.0 | $29.8 | -1 | % | ||||
| Total Cost of Sales | $23.3 | $17.3 | $23.3 | $18.3 | 0 | % | ||||
| Gross Margin | $14.4 | $10.8 | $14.7 | $11.5 | -2 | % | ||||
| Gross Margin % | 38% | 38% | 39% | 39% | +36 | % | ||||
| SG&A1 | $10.5 | $7.8 | $10.9 | $8.6 | -4 | % | ||||
| Net income | $1.7 | $1.2 | $2.3 | $1.8 | -26 | % | ||||
| Adjusted EBITDA 2 | $6.7 | $4.8 | $3.4 | $2.7 | +97 | % | ||||
| Adjusted EBITDA Margin 2 | 18% | 18% | 9% | 9% | +100 | % | ||||
| (millions except % metrics) | Six Months Ended June 30, |
|||||||||
| 2023 |
2022 |
Change of C$ | ||||||||
| C$ | US$ | C$ | US$ | |||||||
| Total Gross Sales | $109.3 | $80.9 | $91.2 | $71.7 | +20 | % | ||||
| Total Net Sales | $71.7 | $53.2 | $65.6 | $51.6 | +9 | % | ||||
| Total Cost of Sales | $45.8 | $34.0 | $38.9 | $30.5 | +18 | % | ||||
| Gross Margin | $25.9 | $19.2 | $26.7 | $21.1 | -3 | % | ||||
| Gross Margin % | 36% | 36% | 41% | 41% | -12 | |||||
| SG&A1 | $19.8 | $14.7 | $20.5 | $15.9 | -3 | % | ||||
| Net income | $1.5 | $1.1 | $4.1 | $2.8 | -63 | % | ||||
| Adjusted EBITDA 2 | $12.3 | $8.7 | $6.0 | $4.8 | +105 | % | ||||
| Adjusted EBITDA Margin 2 | 17% | 17% | 9% | 9% | +89 | % | ||||
1 SG&A for the three and six months ended June 30, 2023 includes share-based compensation of C$375 (US$291) and C$850 (US$663), respectively, compared with C$338 (US$219) and C$804 (US$586), respectively, for the three and six months ended June 30, 2022.
2 Adjusted EBITDA is not a recognized earnings measure and does not have a standard meaning prescribed in by GAAP.
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