Village Farms International Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
VFF$2.88+3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000950170-24-093297
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000950170-24-122773
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 233 previous paragraphs and 239 current paragraphs.
109 unchanged; 92 reworded; 35 added; 29 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Was the fastest growing producer year-over year by market share;
Current report
Continued to hold the number two producer position in Canada;
Current report
Achieved the number one market share in Quebec; maintained the number one market share in Ontario;
Current report
Launched Neon Lambo cultivar to strong reception in Q4 2024; new category launches planned through the remainder of Q4 2024 and Q1 2025; and,
Current report
Currently hold the #1 and #3 cultivars in the German market through a supply agreement 2;
Current report
Saw year-over-year increases in international medicinal sales to each of Australia, Germany and the United Kingdom for Q3 and year-to-date 2024 (reported within Canadian Cannabis).
Current report
2.Based on estimates from Flowzz.
Current report
The Company was one of 25 participants, and the only operator, selected to participate in the Drug Enforcement Administration’s (DEA) upcoming Administrative Law Judge (ALJ) hearing regarding the proposed rescheduling of marijuana in the United States from a Schedule I to a Schedule III drug under the Controlled Substances Act, which is currently expected to take place sometime in January or February 2025;
Current report
Leli Holland
Current report
Acquired the remaining equity ownership interest in Leli, which holds one of 10 licenses to participate in the Dutch recreational cannabis program, to increase our ownership of Leli to 100 percent from 85 percent;
Current report
Completed construction of the Company’s first indoor cultivation facility in the town of Drachten, Netherlands. The Drachten facility has five flower rooms and additional space for drying, manufacturing, and packaging of finished goods for distribution to approximately 80 Dutch coffeeshops in participating jurisdictions; and
Current report
The Company began cultivating in October 2024 and continues to expect its first sales to begin during the first quarter of 2025.
Current report
During the third quarter of 2024, Village Farms Clean Energy produced net income of $0.3 million through royalty payments received from its clean energy partner.
Current report
Following the conclusion of an evaluation managed by the Audit Committee of the Board of Directors (the “Board”) of the Company, the Board approved the appointment of KPMG LLP as the Company’s independent registered public accounting firm effective August 8, 2024; and
Current report
Received notification from Nasdaq that the Company is not in compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market (Nasdaq Listing Rule 5550(a)(2)) (the "Minimum Bid Requirement”) as the bid price for the Company closed below US$1.00 from September 6, 2024 to October 17, 2024 (the “Notification”). The Notification has no immediate effect on the listing of the Common Shares on the Nasdaq Capital Market. Under Nasdaq Listing Rule 5810(c)(3)(A), the Company has until April 16, 2025 (a period of 180 calendar days from the date of Notification) to regain compliance with the Minimum Bid Requirement.
Current report
Sales for the three months ended September 30, 2024 were $83,368 compared with $69,510 for the three months ended September 30, 2023. The increase of $13,858, or 20%, was primarily due to an increase in Canadian Cannabis sales of $7,653 and an increase in VF Fresh sales of $7,058, partially offset by a decrease in U.S. Cannabis sales of $1,045. For additional information, refer to "Segmented Results of Operations" below.
Current report
Cost of sales for the three months ended September 30, 2024 was ($67,660) compared with ($54,889) for the three months ended September 30, 2023. The increase of $12,771, or 23%, was primarily due to an increase in Canadian Cannabis cost of sales of $7,998 and VF Fresh cost of sales of $5,069, partially offset by a decrease in U.S. Cannabis cost of sales of $360. For additional information, refer to "Segmented Results of Operations" below.
Current report
Interest income for the three months ended September 30, 2024 was $229 compared with $262 for the three months ended September 30, 2023.
Current report
Other Income (loss)
Current report
Other income (loss) for the three months ended September 30, 2024 was $379 compared with ($19) for the three months ended September 30, 2023. The increase was primarily attributable to a favorable fee adjustment for VFCE in the three months ended September 30, 2024.
Current report
Loss before taxes for the three months ended September 30, 2024 was ($656) compared with ($2,917) for the three months ended September 30, 2023. The decrease of $2,261 was primarily due to the improved gross margins in VF Fresh and Canadian Cannabis and a gain on foreign currency for the three months ended September 30, 2024 compared to a loss for the three months ended September 30, 2023, partially offset by higher selling, general, and administrative expenses.
Current report
Net loss attributable to Village Farms International, Inc. shareholders for the three months ended September 30, 2024 was ($820) compared with ($1,299) for the three months ended September 30, 2023. The decrease of $479 was primarily due to the improved gross margins in VF Fresh and Canadian Cannabis and a gain on foreign currency for the three months ended September 30,
Current report
2024 compared to a loss for the three months ended September 30, 2023, partially offset by higher selling, general, and administrative expenses.
Current report
Adjusted EBITDA for the three months ended September 30, 2024 was $5,302 compared with $3,248 for the three months ended September 30, 2023. The improvement was mainly driven by stronger performance from VF Fresh. For additional information, refer to the reconciliation of Adjusted EBITDA to net (loss) income in “Non-GAAP Measures—Reconciliation of Net Loss to Adjusted EBITDA”.
Current report
Sales for the nine months ended September 30, 2024 were $253,627 compared with $211,378 for the nine months ended September 30, 2023. The increase of $42,249, or 20%, was primarily due to an increase in Canadian Cannabis sales of $32,667 and an increase in VF Fresh sales of $11,758, partially offset by a decrease in U.S. Cannabis sales of $2,489. For additional information, refer to "Segmented Results of Operations" below.
Current report
Cost of sales for the nine months ended September 30, 2024 were ($213,158) compared with ($172,958) for the nine months ended September 30, 2023. The increase of $40,200, or 23%, was primarily attributable to an increase in Canadian Cannabis cost of sales of $31,969 due to higher volume, and an increase in VF Fresh cost of sales of $8,477. For additional information, refer to "Segmented Results of Operations" below.
Current report
Selling, general and administrative expenses for the nine months ended September 30, 2024 increased $2,613, or 5%, to ($52,593) (21% of sales), compared with ($49,980) (24% of sales), for the nine months ended September 30, 2023. The increase was primarily attributable to an increase in Canadian Cannabis of $2,163 and VF Fresh of $1,160, partially offset by a decrease in U.S. Cannabis of $1,040. For additional information, refer to "Segmented Results of Operations" below.
Current report
Interest income for the nine months ended September 30, 2024 was $757 compared with $741 for the nine months ended September 30, 2023.
Current report
U.S. Cannabis cost of sales for the three months ended September 30, 2024 was ($1,443) compared with ($1,803) for the three months ended September 30, 2023. The decrease of $360, or 20%, was primarily due to lower sales.
Current report
U.S. Cannabis net loss for the three months ended September 30, 2024 was ($192) compared with net income of $79 for the three months ended September 30, 2023. The decrease of $271 was primarily due to the lower sales.
Current report
Net Loss
Current report
Net Income (Loss)
Current report
VF Fresh net income for the three months ended September 30, 2024 was $376 compared with a net loss of ($951) for the three months ended September 30, 2023. The increase of $1,327 was primarily due to higher volume at a stronger gross margin for the three months ended September 30, 2024.
Current report
Gross Profit (Loss)/Margin
Removed paragraphs (29)
Previous report
Further expanded its number two national market share position 1, further narrowing the gap to the number one position and achieving our highest national market share position to date;
Previous report
Was the only LP among the top five to expand its national market share position sequentially 1;
Previous report
Continued to achieve steady market share gains in British Columbia (moving up two positions to be tied for the number two position) and Alberta (moving up four positions to the number four position) in the last year 1;
Previous report
Village Farms' SKUs held the number one position in the flower category during both the first and second quarters of 20242;
Previous report
Launched Hi-Def Pre-Rolls, a first-of-its-kind pre-roll, featuring pure ground flower optimized for high potency, with THC content between 36-44%, with no concentrates, infusions or kief.
Previous report
International Cannabis
Previous report
Continued the build-out of the Company’s first indoor cannabis production facility in Drachten, The Netherlands for the Dutch recreational cannabis program, with production on track to begin in the fourth quarter of 2024. The Dutch Program recently completed its start-up phase and expanded the number of municipalities in which regulated cannabis can be sold in “coffee shops” from two to ten.
Previous report
Completed internalization of gummy production, which will support consistency of supply and gross profit;
Previous report
Balanced Health’s CBDistillery reported study results demonstrating its shhh+ Distilled THC + CBN Deep Sleep Gummies help users to achieve better-quality rest, fall back to sleep during the night and wake up feeling refreshed; and,
Previous report
Entered into a strategic agreement to expand third-party supply;
Previous report
Amended and extended the credit agreement for the Company’s C$10 million revolving line of credit with a Canadian chartered bank. Amendments include the expansion of the Company’s borrowing options to provide additional financial flexibility and the maturity date was extended from May 24, 2024 to May 24, 2027; and,
Previous report
Increased ownership of Rose by 10% to hold an 80% interest, with the purchase being immediately accretive to adjusted EBITDA and net income;
Previous report
Appointed finance and operations veteran, Carolyn Hauger, to the Board of Directors;
Previous report
Sales for the three months ended June 30, 2024 were $92,182 compared with $77,212 for the three months ended June 30, 2023. The increase of $14,970, or 19%, was primarily due to an increase in Canadian Cannabis sales of $12,680 and an increase in VF Fresh sales of $3,173, partially offset by a decrease in U.S. Cannabis sales of $1,004. For additional information, refer to "Segmented Results of Operations" below.
Previous report
Cost of sales for the three months ended June 30, 2024 was ($82,934) compared with ($65,713) for the three months ended June 30, 2023. The increase of $17,221, or 26%, was primarily due to an increase in Canadian Cannabis of $12,691 and VF Fresh cost of sales of $4,576, partially offset by a decrease in U.S. Cannabis cost of sales of $75. For additional information, refer to "Segmented Results of Operations" below.
Previous report
Interest income for the three months ended June 30, 2024 was $322 compared with $283 for the three months ended June 30, 2023.
Previous report
Loss before taxes for the three months ended June 30, 2024 was ($23,298) compared with ($42) for the three months ended June 30, 2023. The change of ($23,256) was primarily due to the impairment of goodwill and intangible assets within the U.S. Cannabis segment during the three months ended June 30, 2024 of ($11,939) (see "Critical Accounting Estimates and Judgments" below), lower gross margins in VF Fresh and U.S. Cannabis, and higher selling, general, and administrative expenses. The three months ended June 30, 2023 also included the ToBRFV Legal Settlement, which was recorded in prior-year periods.
Previous report
Net loss attributable to Village Farms International, Inc. shareholders for the three months ended June 30, 2024 was ($23,549) compared with ($1,380) for the three months ended June 30, 2023. The change of ($22,169) was primarily due to the impairment of U.S. Cannabis goodwill and intangible assets incurred during the three months ended June 30, 2024 of ($11,939), a lower operating margin, and higher selling, general, and administrative expenses. The change as compared to the three months ended June 30, 2023 also reflected the ToBRFV Legal Settlement in prior-year periods.
Previous report
Adjusted EBITDA for the three months ended June 30, 2024 was ($3,559) compared with $4,475 for the three months ended June 30, 2023. The change was primarily due to the inclusion of the ToBRFV Legal Settlement at VF Fresh of $5,584 for the three months ended June 30, 2023, lower gross margins, and higher non-share-based compensation selling, general, and administrative costs. For additional information, refer to the reconciliation of Adjusted EBITDA to net (loss) income in “Non-GAAP Measures—Reconciliation of Net Loss to Adjusted EBITDA”.
Previous report
Sales for the six months ended June 30, 2024 were $170,259 compared with $141,868 for the six months ended June 30, 2023. The increase of $28,391, or 20%, was primarily due to an increase in Canadian Cannabis sales of $25,014 and an increase in VF Fresh sales of $4,700, partially offset by a decrease in U.S. Cannabis sales of $1,444. For additional information, refer to "Segmented Results of Operations" below.
Previous report
Cost of sales for the six months ended June 30, 2024 were ($145,498) compared with ($118,069) for the six months ended June 30, 2023. The increase of $27,429, or 23%, was primarily attributable to an increase in Canadian Cannabis cost of sales of $23,971 on higher volume, and VF Fresh cost of sales of $3,408. For additional information, refer to "Segmented Results of Operations" below.
Previous report
Selling, general and administrative expenses for the six months ended June 30, 2024 increased $1,895, or 6%, to ($36,053) (21% of sales), compared with ($34,158) (24% of sales), for the six months ended June 30, 2023. The increase was primarily attributable to an increase in Canadian Cannabis of $1,778 and VF Fresh of $536, partially offset by a decrease in U.S. Cannabis of $637. For additional information, refer to "Segmented Results of Operations" below.
Previous report
Interest income for the six months ended June 30, 2024 was $528 compared with $479 for the six months ended June 30, 2023.
Previous report
Other Income
Previous report
Other income for the six months ended June 30, 2024 was $149 compared with $5,632 for the six months ended June 30, 2023. The decrease in other income was primarily due to the ToBRFV Legal Settlement that was recorded in the six months ended June 30, 2023 within VF Fresh.
Previous report
U.S. Cannabis net loss for the three months ended June 30, 2024 was ($12,270) compared with net income of $172 for the three months ended June 30, 2023. The change was primarily due to the goodwill and intangible asset impairment charge taken in the three months ended June 30, 2024 of ($11,939). For more information, see "Critical Accounting Estimates and Judgments" below.
Previous report
Gross Loss/Margin
Previous report
VF Fresh net loss for the three months ended June 30, 2024 was ($8,300) compared with a net loss of ($698) for the three months ended June 30, 2023. The change was primarily due to a weaker gross margin for the three months ended June 30, 2024 and the inclusion of the ToBRFV Legal Settlement of $5,584 for the three months ended June 30, 2023.
Previous report
Gross Loss/Margin
Reworded paragraphs (92)
Previous wording
Village Farms International, Inc. (“VFF”, together with its subsidiaries, the “Company”, “Village Farms”, “we” “us” or “our”) is a corporation existing under the Business Corporations Act (Ontario). The Company’s principal operating subsidiaries are Village Farms Canada LP ("VFCLP"), Village Farms LP ("VFLP"), Pure Sunfarms Corp. (“Pure Sunfarms” or "PSF"), Balanced Health Botanicals, LLC (“Balanced Health”), Rose LifeScience Inc. ("Rose LifeScience” or “Rose”), and VF Clean Energy, Inc. (“VFCE”).
Current wording
Village Farms International, Inc. (“VFF”, together with its subsidiaries, the “Company”, “Village Farms”, “we” “us” or “our”) is a corporation existing under the Business Corporations Act (Ontario). The Company’s principal operating subsidiaries are Village Farms Canada Limited Partnership ("VFCLP"), Village Farms L.P. ("VFLP"), Pure Sunfarms Corp. (“Pure Sunfarms” or "PSF"), Balanced Health Botanicals, LLC (“Balanced Health”), Rose LifeScience Inc. ("Rose LifeScience” or “Rose”), VF Clean Energy, Inc. (“VFCE”), and Leli Holland B. V. ("Leli" or "Leli Holland").
Previous wording
In Canada, we converted two produce facilities to grow cannabis for the Canadian legal adult use (recreational) market. Our focus for our Canadian Cannabis segment is to produce high quality cannabis, leveraging our low-cost production to provide preferred products at an attractive price that address the preferred consumer segments in the market. This market positioning, combined with our cultivation expertise, has enabled us to evolve into the second best-selling producer nationally and one of the few Canadian LPs with consistently strong operating results.
Current wording
In Canada, we converted two produce facilities to grow cannabis for the Canadian legal adult use (recreational) market. Our focus for our Canadian Cannabis segment is to produce high quality cannabis, leveraging our low-cost production to provide preferred products at an attractive price that address the preferred consumer segments in the market. This market positioning, combined with our cultivation expertise, has enabled us to evolve into the second best-selling producer nationally and one of the few Canadian licensed producers with consistently strong operating results.
Previous wording
Additionally, through organic growth, exports and/or acquisitions, we have a strategy to participate in other international markets where cannabis attains legal status. In September 2021, our Canadian Cannabis business began exporting cannabis products to Australia for that country’s medical market. In March 2022, our Canadian Cannabis business received European Union Good Manufacturing Practice (“EU GMP”) certification for Pure Sunfarms’ 1.1 million square foot Delta 3 cannabis facility located in Delta, British Columbia (“B.C.”) which permits Pure Sunfarms to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification. In late 2022, Pure Sunfarms commenced exports to Israel and in 2023, Pure Sunfarms began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries. As a result of the typically higher margins in international medical markets, we expect international expansion to enhance our profitability while expanding our brand and experience into emerging legal cannabis markets. Through our 85% ownership of Leli Holland, we hold one of ten licenses to cultivate cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program, with production targeted to start in the fourth quarter of 2024.
Current wording
Additionally, through organic growth, exports and/or acquisitions, we have a strategy to participate in other international markets where cannabis attains legal status. In September 2021, our Canadian Cannabis business began exporting cannabis products to Australia for that country’s medical market. In March 2022, our Canadian Cannabis business received European Union Good Manufacturing Practice (“EU GMP”) certification for Pure Sunfarms’ 1.1 million square foot Delta 3 cannabis facility located in Delta, British Columbia (“B.C.”) which permits Pure Sunfarms to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification. In late 2022, Pure Sunfarms commenced exports to Israel and in 2023, Pure Sunfarms began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries. As a result of the typically higher margins in international medical markets, we expect international expansion to enhance our profitability while expanding our brand and experience into emerging legal cannabis markets. Through our ownership of Leli Holland, we hold one of ten licenses to cultivate cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program, with cultivation beginning in October of 2024.
Previous wording
Our Canadian Cannabis segment is comprised of Pure Sunfarms and an 80% ownership in Rose LifeScience.
Current wording
Our Canadian Cannabis segment is composed of Pure Sunfarms and an 80% ownership in Rose LifeScience.
Previous wording
Pure Sunfarms is one of the single largest cannabis cultivation and processing operations in the world, one of the lowest-cost greenhouse producers and has developed four of the best-selling flower brands in Canada. Pure Sunfarms leverages our 30 years of experience as a vertically integrated greenhouse grower to grow, produce and sell cannabis products throughout Canada and for export to markets where permissible by law.
Current wording
Village Farms Canadian Cannabis has one of the single largest cannabis cultivation and processing operations in the world, one of the lowest-cost greenhouse producers and has maintains three of the best-selling flower brands in Canada. Pure Sunfarms leverages our 30 years of experience as a vertically integrated greenhouse grower to grow, produce and sell cannabis products throughout Canada and for export to markets where permissible by law.
Previous wording
Rose is the second best-selling licensed producer of cannabis in the Province of Quebec, as well as a prominent cannabis products commercialization expert in Quebec, acting as the exclusive, direct-to-retail sales, marketing and distribution entity for some of the best-known brands in Canada, as well as Quebec-based micro and craft growers.
Current wording
Rose is a top two licensed producer of cannabis in the Province of Quebec, as well as a prominent cannabis products commercialization expert in Quebec, acting as the exclusive, direct-to-retail sales, marketing and distribution entity for some of the best-known brands in Canada, as well as Quebec-based micro and craft growers.
Previous wording
Our U.S. Cannabis segment is comprised of Balanced Health.
Current wording
Our U.S. Cannabis segment is composed of Balanced Health.
Previous wording
Our Produce segment is comprised of VF Fresh, which currently consists of Village Farms LP and Village Farms Canada LP.
Current wording
Our Produce segment is composed of VF Fresh, which currently consists of VFLP and VFCLP.
Previous wording
Our Energy segment is comprised of VF Clean Energy Inc.
Current wording
Our Energy segment is composed of VF Clean Energy Inc.
Previous wording
Expanded its number two national market share position in the pre-roll category 1;
Current wording
Continued to hold the number two national market share position in the pre-roll category 1;
Previous wording
The Supertoast brand was the third fastest growing brand nationally for the first half of 2024 with 20% market share in the milled category nationally 2, despite being sold in only four provinces;
Current wording
Super Toast remained the third fastest growing brand nationally in Q3 2024;
Previous wording
1.For the second quarter of 2024. Based on estimated retail sales from HiFyre, other third parties and provincial boards.
Current wording
1.For the third quarter of 2024. Based on estimated retail sales from HiFyre, other third parties and provincial boards.
Previous wording
The proliferation of unregulated hemp-derived products in the U.S. market, continues to challenge market share for the CBD industry and is causing certain states to impose significant restrictions on intoxicating hemp derived products;
Current wording
The proliferation of unregulated hemp-derived products in the U.S. market, continues to challenge market share for the CBD industry and is causing certain states to impose significant restrictions on intoxicating hemp derived products; and
Previous wording
In April 2024, the Delta, British Columbia Renewable Natural Gas Project began operations, which immediately began contributing incremental profit to the Company.
Current wording
In April 2024, the Delta, British Columbia Renewable Natural Gas Project began operations, which immediately began contributing incremental profit to the Company; and
Previous wording
Our consolidated results of operations (prior to net income) for the three and six months ended June 30, 2024 and 2023 presented below reflect the operations of our consolidated wholly-owned subsidiaries, our 70% ownership in Rose LifeScience through March 31, 2024, our 80% ownership in Rose LifeScience beginning on April 1, 2024, and our 85% ownership in Leli.
Current wording
Our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 presented below reflect the operations of our consolidated wholly-owned subsidiaries, our 70% ownership in Rose LifeScience through March 31, 2024, our 80% ownership in Rose LifeScience beginning on April 1, 2024, our 85% ownership in Leli through September 22, 2024, and our 100% ownership in Leli beginning on September 23, 2024.
Previous wording
Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. Adjusted EBITDA includes the Company’s 70% interest in Rose LifeScience through March 31, 2024, 80% interest in Rose LifeScience beginning on April 1, 2024 and 85% interest in Leli.
Current wording
Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. Adjusted EBITDA includes the Company’s 70% interest in Rose LifeScience through March 31, 2024, 80% interest in Rose LifeScience beginning on April 1, 2024, 85% interest in Leli through September 22, 2024, and our 100% interest in Leli beginning on September 23, 2024.
Previous wording
We caution that our results of operations for the three and six months ended June 30, 2024 and 2023 may not be indicative of our future performance.
Current wording
We caution that our results of operations for the three and nine months ended September 30, 2024 and 2023 may not be indicative of our future performance.
Previous wording
A discussion of our consolidated results for the three and six months ended June 30, 2024 and 2023 is included below. The consolidated results include all four of our operating segments: Produce, Canadian Cannabis, U. S. Cannabis, and Energy, along with public company expenses. For a discussion of our segmented results, please see “Segmented Results of Operations” below.
Current wording
A discussion of our consolidated results for the three and nine months ended September 30, 2024 and 2023 is included below. The consolidated results include all four of our operating segments: Produce, Canadian Cannabis, U. S. Cannabis, and Energy, along with public company expenses. For a discussion of our segmented results, please see “Segmented Results of Operations” below.
Previous wording
Gross profit for the three months ended June 30, 2024 was $9,248 compared with $11,499 for the three months ended June 30, 2023. The decrease of $2,251, or 20%, was primarily due to a decrease in gross profit at VF Fresh of $1,403 and U.S. Cannabis of $929. For additional information, refer to "Segmented Results of Operations" below.
Current wording
Gross profit for the three months ended September 30, 2024 was $15,708 compared with $14,621 for the three months ended September 30, 2023. The increase of $1,087, or 7%, was primarily due to an increase in gross profit at VF Fresh of $1,989, partially offset by a decrease in gross profit at Canadian Cannabis of $345 and U.S. Cannabis of $685. For additional information, refer to "Segmented Results of Operations" below.
Previous wording
Selling, general and administrative expenses for the three months ended June 30, 2024 were ($19,666) (21% of sales) compared with ($16,753) (22% of sales) for the three months ended June 30, 2023. The increase of $2,913, or 17%, was primarily due to an increase in share-based compensation of $1,540 and operating expenses for Canadian Cannabis of $922 and VF Fresh of $759, partially offset by a decrease in U.S. Cannabis operating expenses of $426. For additional information, refer to "Segmented Results of Operations" below.
Current wording
Selling, general and administrative expenses for the three months ended September 30, 2024 were ($16,540) (20% of sales) compared with ($15,822) (23% of sales) for the three months ended September 30, 2023. The increase of $718, or 5%, was primarily due to an increase in operating expenses for Canadian Cannabis of $385 and VF Fresh of $624 , partially offset by a decrease in U.S. Cannabis operating expenses of $403. For additional information, refer to "Segmented Results of Operations" below.
Previous wording
Interest expense for the three months ended June 30, 2024 was ($905) compared with ($1,411) for the three months ended June 30, 2023. The decrease of $506, or 36%, was due to a decrease in the average outstanding debt balance under our credit facilities.
Current wording
Interest expense for the three months ended September 30, 2024 was ($784) compared with ($988) for the three months ended September 30, 2023. The decrease of $204, or 21%, was due to a decrease in the average outstanding debt balance under our credit facilities.
Previous wording
Gross profit for the six months ended June 30, 2024 was $24,761, compared with $23,799 for the six months ended June 30, 2023. The increase of $962, or 4%, was primarily attributable to an increase in gross profit at VF Fresh of $1,292 and Canadian Cannabis of $1,043, partially offset by a decrease in gross profit at U.S. Cannabis of $1,472. For additional information, refer to "Segmented Results of Operations" below.
Current wording
Gross profit for the nine months ended September 30, 2024 was $40,469, compared with $38,420 for the nine months ended September 30, 2023. The increase of $2,049, or 5%, was primarily attributable to an increase in gross profit at VF Fresh of $3,281 and Canadian Cannabis of $698, partially offset by a decrease in gross profit at U.S. Cannabis of $2,157. For additional information, refer to "Segmented Results of Operations" below.
Previous wording
Interest expense for the six months ended June 30, 2024 was ($1,822) compared with ($2,544) for the six months ended June 30, 2023. The decrease of $722, or 28%, was due to a decrease in the average outstanding debt balance under our credit facilities.
Current wording
Interest expense for the nine months ended September 30, 2024 was ($2,606) compared with ($3,532) for the nine months ended September 30, 2023. The decrease of $926, or 26%, was due to a decrease in the average outstanding debt balance under our credit facilities.
Previous wording
Other income for the three months ended June 30, 2024 was $45 compared with $5,602 for the three months ended June 30, 2023. The decrease was primarily attributable to a favorable legal settlement at VF Fresh of $5,584 in the three months ended June 30, 2023 relating to the partial recovery of operational losses from the Tomato Brown Rugose Fruit Virus ("ToBRFV") infestation (the "ToBRFV Legal Settlement"), which was recorded only in prior-year periods.
Current wording
Other income for the nine months ended September 30, 2024 was $528 compared with $5,613 for the nine months ended September 30, 2023. The decrease in other income was primarily due to the partial recovery of operational losses from the Tomato Brown Rugose Fruit Virus infestation (the "ToBRFV Legal Settlement") of $5,584 that was recorded in the nine months ended September 30, 2023 within VF Fresh.
Previous wording
Loss before taxes for six months ended June 30, 2024 was ($25,657) compared with ($6,123) for the six months ended June 30, 2023. The change of ($19,534), or (319%), was primarily due to an impairment of goodwill and intangible assets of ($11,939) in the U.S. Cannabis segment during the six months ended June 30, 2024, lower gross margin in VF Fresh and U. S. Cannabis, and higher selling, general, and administrative expenses. The six months ended June 30, 2023 also included the ToBRFV Legal Settlement, which was not present in current-year periods.
Current wording
Loss before taxes for nine months ended September 30, 2024 was ($26,313) compared with ($9,040) for the nine months ended September 30, 2023. The increase of ($17,273), or (191%), was primarily due to an impairment of goodwill and intangible assets of ($11,939) in the U.S. Cannabis segment during the nine months ended September 30, 2024 and higher selling, general, and administrative expenses. The nine months ended September 30, 2023 also included the ToBRFV Legal Settlement of $5,584.
Previous wording
Net loss attributable to Village Farms International, Inc. shareholders for the six months ended June 30, 2024 was ($26,401) as compared with ($8,016) for the six months ended June 30, 2023, a change of ($18,385), or (229%), primarily due to an impairment of goodwill and intangible assets of ($11,939) in the U.S. Cannabis segment during the six months ended June 30, 2024, lower operating margin in VF Fresh and U.S. Cannabis, and higher selling, general, and administrative expenses. The six months ended June 30, 2023 also included the ToBRFV Legal Settlement of $5,584 for VF Fresh that was not present in current-year periods.
Current wording
Net loss attributable to Village Farms International, Inc. shareholders for the nine months ended September 30, 2024 was ($27,221) as compared with ($9,315) for the nine months ended September 30, 2023, an increase of ($17,906), or (192%), primarily due to an impairment of goodwill and intangible assets of ($11,939) in the U.S. Cannabis segment during the nine months ended September 30, 2024 and higher selling, general, and administrative expenses. The nine months ended September 30, 2023 also included the ToBRFV Legal Settlement of $5,584 for VF Fresh.
Previous wording
Adjusted EBITDA for the six months ended June 30, 2024 was $32 compared with $4,994 for the six months ended June 30, 2023. The change was mainly driven by the inclusion of the ToBRFV Legal Settlement of $5,584 at VF Fresh during the six months ended June 30, 2023, lower gross margins and higher non-share-based compensation selling, general, and administrative costs for the six months ended June 30, 2024. For additional information, refer to the reconciliation of Adjusted EBITDA to net (loss) income in “Non-GAAP Measures—Reconciliation of Net Loss to Adjusted EBITDA”.
Current wording
Adjusted EBITDA for the nine months ended September 30, 2024 was $5,334 compared with $8,243 for the nine months ended September 30, 2023. The year over year decrease of $2,909 was mainly driven by the inclusion of the ToBRFV Legal Settlement of $5,584 at VF Fresh during the nine months ended September 30, 2023 and higher selling, general, and administrative costs for the nine months ended September 30, 2024. For additional information, refer to the reconciliation of Adjusted EBITDA to net (loss) income in “Non-GAAP Measures—Reconciliation of Net Loss to Adjusted EBITDA”.
Previous wording
Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. Adjusted EBITDA includes the Company’s 70% interest in Rose LifeScience through March 31, 2024, 80% interest in Rose LifeScience beginning on April 1, 2024 and 85% interest in Leli.
Current wording
Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. Adjusted EBITDA includes the Company’s 70% interest in Rose LifeScience through March 31, 2024, 80% interest in Rose LifeScience beginning on April 1, 2024, 85% interest in Leli through September 22, 2024, and our 100% interest in Leli beginning on September 23, 2024.
Previous wording
The Canadian Cannabis segment consists of Pure Sunfarms and Rose LifeScience. The comparative analysis for Canadian Cannabis is based on the consolidated results of Pure Sunfarms and our interest in Rose LifeScience for the three and six months ended June 30, 2024 and 2023. Beginning on April 1, 2024, our interest in Rose LifeScience increased from 70% to 80%, which is reflected in the results presented below.
Current wording
The Canadian Cannabis segment consists of Pure Sunfarms and Rose LifeScience. The comparative analysis for Canadian Cannabis is based on the consolidated results of Pure Sunfarms and our interest in Rose LifeScience for the three and nine months ended September 30, 2024 and 2023. Beginning on April 1, 2024, our interest in Rose LifeScience increased from 70% to 80%, which is reflected in the results presented below.
Previous wording
Canadian Cannabis net sales for the three months ended June 30, 2024 were $40,745 compared with $28,065 for the three months ended June 30, 2023. The increase of $12,680, or 45%, was due primarily to a 32% increase in net branded sales and a 182% increase in non-branded sales. The increase in net branded sales was due to market share gain across the flower, pre-roll and milled categories, driven by high quality cultivation and new product launches. The increase in non-branded sales resulted from improved supply conditions and pricing created by the shift of many producers to asset light models, including sales of non-brand-spec inventory. International sales increased by 9% primarily due to higher sales to Germany and UK, partially offset by lower sales to Australia.
Current wording
Canadian Cannabis net sales for the three months ended September 30, 2024 were $36,463 compared with $28,810 for the three months ended September 30, 2023. The increase of $7,653, or 27%, was due primarily to a 18% increase in net branded sales and a 66% increase in non-branded sales. The increase in net branded sales was due to market share gain across the flower, pre-roll and milled categories, driven by successful new product launches, the expansion of a rapidly growing brand, and rising demand for value-based product offerings. The increase in non-branded sales resulted from improved industry supply dynamics and pricing supported by a shift of many producers toward asset-light models and sales of non-brand-spec inventory. International sales increased by 94% primarily due to higher sales to Germany, the United Kingdom, and Australia.
Previous wording
The Canadian Cannabis business continues to pay a burdensome excise duty (also known as excise tax) on its branded sales (sales to provincial distributors). For the three months ended June 30, 2024, the Company incurred excise duties of $19,815 (C$27,114), or 39% of gross branded sales, compared with $13,966 (C$18,760), or 38% of gross branded sales, for the three months ended June 30, 2023. The increase of $5,849 (C$8,354), or 42%, was due to an increase in kilograms sold in the branded channel. The Canadian excise duty is our single largest cost of participating in the branded adult-use market in Canada.
Current wording
(C$24,109), or 39% of gross branded sales, compared with $14,396 (C$19,314), or 38% of gross branded sales, for the three months ended September 30, 2023. The increase of $3,278 (C$4,795), or 23%, was due to an increase in kilograms sold in the branded channel. The Canadian excise duty is our single largest cost of participating in the branded adult-use market in Canada.
Previous wording
For the three months ended June 30, 2024, 75% of net sales were generated from branded flower, pre-rolls and cannabis derivative products compared with 83% for the three months ended June 30, 2023. Non-branded, international, and other sales accounted for 25% of Canadian Cannabis net sales for the three months ended June 30, 2024, as compared with 17% for the three months ended June 30, 2023.
Current wording
For the three months ended September 30, 2024, 75% of net sales were generated from branded flower, pre-rolls and cannabis derivative products compared with 80% for the three months ended September 30, 2023. Non-branded, international, and other sales accounted for 25% of Canadian Cannabis net sales for the three months ended September 30, 2024, as compared with 20% for the three months ended September 30, 2023.
Previous wording
Canadian Cannabis cost of sales for the three months ended June 30, 2024 was ($30,040) compared with ($17,349) for the three months ended June 30, 2023. The increase of $12,691, or 73%, was primarily due to an increase in volume (kilograms) packaged and sold of branded products, as well as an increase in non-branded kilograms sold.
Current wording
Canadian Cannabis cost of sales for the three months ended September 30, 2024 was ($26,864) compared with ($18,866) for the three months ended September 30, 2023. The increase of $7,998, or 42%, was primarily due to an increase in volume (kilograms) packaged and sold of branded products, as well as an increase in non-branded kilograms sold.
Previous wording
Canadian Cannabis gross profit for the three months ended June 30, 2024 was $10,705 compared with $10,716 for the three months ended June 30, 2023. Canadian Cannabis gross margin for the three months ended June 30, 2024 was 26% compared with 38% for the three months ended June 30, 2023. The decrease in gross margin percentage was due to a significant volume of sales of non-brand-spec inventory within the non-branded sales channel, as well as higher sales of value brands within the branded sales channel.
Current wording
Canadian Cannabis gross profit for the three months ended September 30, 2024 was $9,599 compared with $9,944 for the three months ended September 30, 2023. Canadian Cannabis gross margin for the three months ended September 30, 2024 was 26% compared with 35% for the three months ended September 30, 2023. The decrease in gross margin percentage was due to an unfavorable mix, with higher sales volume of non-brand-spec inventory within the non-branded sales channel, as well as higher sales of value brands within the branded sales channel.
Previous wording
Canadian Cannabis selling, general and administrative expenses for the three months ended June 30, 2024 were ($8,749), or 21%, of sales compared with ($7,827), or 28%, of sales for the three months ended June 30, 2023. The increase of $922 was primarily due to higher commercial and marketing expenses.
Current wording
Canadian Cannabis selling, general and administrative expenses for the three months ended September 30, 2024 were ($7,983), or 22%, of sales compared with ($7,598), or 26%, of sales for the three months ended September 30, 2023. The increase of $385 was primarily due to higher commercial and marketing expenses.
Previous wording
Canadian Cannabis net income for the three months ended June 30, 2024 was $1,384 compared with net income of $1,174 for the three months ended June 30, 2023. The improvement in net income was primarily due to a decrease in the tax provision expense of $559, partially offset by an increase in selling, general and administrative expenses.
Current wording
Canadian Cannabis net income for the three months ended September 30, 2024 was $1,168 compared with net income of $2,863 for the three months ended September 30, 2023. The decrease in net income was primarily due to an increase in the tax provision expense of $1,342 and an increase in selling, general and administrative expenses.
Previous wording
Adjusted EBITDA for Canadian Cannabis for the three months ended June 30, 2024 was $4,818 compared with $4,778 for the three months ended June 30, 2023. For additional information, refer to the reconciliation of Adjusted EBITDA to net (loss) income in “Non-GAAP Measures—Reconciliation of Net Loss to Adjusted EBITDA”.
Current wording
Adjusted EBITDA for Canadian Cannabis for the three months ended September 30, 2024 was $4,752 compared with $4,585 for the three months ended September 30, 2023. For additional information, refer to the reconciliation of Adjusted EBITDA to net (loss) income in “Non-GAAP Measures—Reconciliation of Net Loss to Adjusted EBITDA”.
Previous wording
Canadian Cannabis net sales for the six months ended June 30, 2024 were $78,191 compared with $53,177 for the six months ended June 30, 2023. The increase of $25,014, or 47%, was due primarily to a 36% increase in net branded sales and a 181% increase in non-branded sales. The increase in net branded sales was due to market share gain across the flower, pre-roll and milled categories, driven by high quality cultivation and new product launches. The increase in non-branded sales resulted from improved supply conditions and pricing created by the shift of many producers to asset light models and sales of non-brand-spec inventory.
Current wording
Canadian Cannabis net sales for the nine months ended September 30, 2024 were $114,654 compared with $81,987 for the nine months ended September 30, 2023. The increase of $32,667, or 40%, was due primarily to a 30% increase in net branded sales and a 128% increase in non-branded sales. The increase in net branded sales was due to market share gain across the flower, pre-roll and milled categories, driven by high quality cultivation and new product launches. The increase in non-branded sales resulted from improved industry supply conditions and pricing supported by a shift of many producers toward asset light models and sales of non-brand-spec inventory.
Previous wording
The Canadian Cannabis business continues to pay a burdensome excise duty (also known as excise tax) on its branded sales (sales to provincial distributors). For the six months ended June 30, 2024, the Company incurred excise duties of $39,518 (C$53,679), or 40% of our gross branded sales, compared to $27,724 (C$37,361), or 39% of our gross branded sales for the six months ended June 30, 2023. The increase of $11,794 (C$16,318), or 43%, in excise duties was due to an increase in kilograms sold in the branded channel. The Canadian excise duty is our single largest cost of participating in the adult-use (branded) market in Canada.
Current wording
The Canadian Cannabis business continues to pay a burdensome excise duty on its branded sales (sales to provincial distributors). For the nine months ended September 30, 2024, the Company incurred excise duties of $57,193 (C$77,788), or 40% of our gross branded sales, compared to $41,724 (C$56,145), or 38% of our gross branded sales for the nine months ended September 30, 2023. The increase of $15,469 (C$21,643), or 37%, in excise duties was due to an increase in kilograms sold in the branded channel. The Canadian excise duty is our single largest cost of participating in the adult-use (branded) market in Canada.
Previous wording
For the six months ended June 30, 2024, 76% of net sales were generated from branded flower, pre-rolls and cannabis derivative products compared with 83% for the six months ended June 30, 2023. Non-branded, international, and other sales accounted for 24% of Canadian Cannabis net sales for the six months ended June 30, 2024, as compared with 17% for the six months ended June 30, 2023.
Current wording
For the nine months ended September 30, 2024, 76% of net sales were generated from branded flower, pre-rolls and cannabis derivative products compared with 82% for the nine months ended September 30, 2023. Non-branded, international, and other sales accounted for 24% of Canadian Cannabis net sales for the nine months ended September 30, 2024, as compared with 18% for the nine months ended September 30, 2023.
Showing the first 40 of 92 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The Canadian Cannabis business continues to pay a burdensome excise duty (also known as excise tax) on its branded sales (sales to provincial distributors). For the three months ended September 30, 2024, the Company incurred excise duties of $17,674
Current report — wording carried from elsewhere
Interest under the PSF Non-Revolving Facility is payable at the Canadian prime rate plus an applicable margin per annum, 8.45% as of September 30, 2024, payable quarterly. Amounts outstanding under the PSF Non-Revolving Facility mature on February 7, 2026.
Current report — wording carried from elsewhere
Management concluded that as of June 30, 2024, the fair value was lower than its carrying amount and as a result, an impairment charge to goodwill of $10,039 was recorded to the reporting unit.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Based on estimated retail sales from HiFyre, other third parties and provincial boards.
Previous report — wording carried elsewhere
U.S. Cannabis cost of sales for the three months ended June 30, 2024 was ($1,668) compared with ($1,743) for the three months ended June 30, 2023. The decrease of $75, or 4%, was primarily due to lower sales, partially offset by a shift in product mix as consumers moved to gummies and away from the higher margin tincture products.
Previous report — wording carried elsewhere
Management believes that Adjusted EBITDA - Constant Currency is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect the underlying business performance of the Company.