Village Farms International Announces Strong Q1 2024 Results Amidst Expanding Market Presence
Village Farms International, Inc. (NASDAQ: VFF), a leading producer and distributor of greenhouse-grown produce and cannabis products, has released its financial results for the first quarter of 2024. The report highlights significant growth in sales, improvements in net losses, and a robust expansion in both Canadian and international cannabis markets.
1. Consolidated Financial Highlights
For the three months ended March 31, 2024, Village Farms reported consolidated sales of $78.08 million, reflecting a 21% increase from $64.66 million in Q1 2023. This growth was driven primarily by the company’s success in the Canadian cannabis sector, which continues to thrive amid increasing market demand.
Key Financial Metrics:
- Sales: $78,077 (Q1 2024) vs. $64,656 (Q1 2023)
- Cost of Sales: $62,564 (Q1 2024) vs. $52,356 (Q1 2023)
- Gross Profit: $15,513 (Q1 2024) vs. $12,300 (Q1 2023)
- Net Loss Attributable to Shareholders: $2,852 (Q1 2024) vs. $6,636 (Q1 2023)
- Adjusted EBITDA: $3,591 (Q1 2024) vs. $519 (Q1 2023)
| May 2023 | May 2024 | |
|---|---|---|
Net Income | -101.2M | -28.01M |
Net Income to Non-controlling Interest | -186K | 231K |
Profit | -101.4M | -27.78M |
Net Income Continuing | -98.83M | -27.78M |
Income Tax Expense | 6.98M | 4.13M |
Pretax Income | -91.85M | -23.64M |
Non-operating Income | -6.12M | 6.72M |
Operating Income | -82.11M | -25.86M |
Revenue | 288.0M | 299.0M |
Costs and Expenses | 370.1M | 324.8M |
Cost of Revenue | 258.1M | 246.3M |
Operating Expenses | 112.0M | 78.50M |
Impairment Expense | 43.29M | 14.02M |
Selling, General & Administrative | 68.71M | 64.48M |
2. Segment Performance
Canadian Cannabis Segment
The Canadian cannabis segment demonstrated remarkable resilience and growth. Sales in this segment surged to $37.45 million, a staggering 49% increase from $25.11 million in the prior year. This growth is attributed to the company's strategic initiatives, which include launching innovative products such as Hi-Def Pre-Rolls and expanding its market share to a record 18% in dried flower.
- Gross Profit: $9,508 (Q1 2024) vs. $8,454 (Q1 2023)
- Adjusted EBITDA: $4,073 (Q1 2024) vs. $3,910 (Q1 2023)
U.S. Cannabis Segment
While the U.S. cannabis segment faced challenges, reporting a 9% decrease in sales to $4.54 million, the company is focused on enhancing product offerings and internal efficiencies. The adjusted EBITDA for this segment was a loss of $615, compared to a loss of $151 in the previous year.
Produce Segment (VF Fresh)
Sales in the produce segment showed modest growth, reaching $36.09 million, up 4% from $34.57 million in Q1 2023. The gross profit, however, saw a slight decline due to increased costs of sales.
- Gross Profit: $11,903 (Q1 2024) vs. $12,256 (Q1 2023)
- Adjusted EBITDA: $2,695 (Q1 2024) vs. $2,538 (Q1 2023)
| May 2023 | May 2024 | |
|---|---|---|
Total Assets | 475.9M | 458.4M |
Total Current Assets | 146.2M | 150.8M |
Cash and Equivalents | 29.88M | 26.68M |
Net Inventories | 75.03M | 74.02M |
Accounts Receivable | 26.79M | 38.82M |
Non-trade Receivables | 3.33M | 0 |
Restricted Cash and Investments | 5M | 5M |
Prepaid Expenses | 5.89M | 6.19M |
Other Current Assets | 265K | 115K |
Total Non-current Assets | 329.7M | 307.5M |
Intangible Assets | 103.0M | 85.72M |
Long-term Investments | 2.10M | 2.65M |
Non-current Deferred Tax Assets | 4.20M | 4.20M |
Net PP&E | 205.8M | 201.0M |
Lease Assets | 8.66M | 11.94M |
Other Non-current Assets | 5.83M | 2.04M |
Total Liabilities and Equity | 475.9M | 458.4M |
Temporary Equity and Redeemable Non-controlling Interest | 16.13M | 15.62M |
Total Liabilities | 136.6M | 146.0M |
Total Current Liabilities | 65.94M | 72.67M |
Accounts Payable and Accrued Liabilities | 32.85M | 32.00M |
Current Debt | 11.47M | 11.10M |
Other Current Liabilities | 21.61M | 29.56M |
Total Non-current Liabilities | 70.73M | 73.34M |
Long-term Debt | 42.52M | 37.21M |
Other Non-current Liabilities | 28.20M | 36.13M |
Total Equity and Non-controlling Interests | 323.1M | 296.7M |
Total Equity | 322.4M | 296.2M |
Non-controlling Interests | 718K | 574K |
3. Cash Flow and Liquidity Analysis
As of March 31, 2024, Village Farms reported cash, cash equivalents, and restricted cash totaling $31.69 million, with a working capital of $78.18 million. The company is confident that its current liquidity position will support its operational needs and planned capital expenditures for the next twelve months.
Cash Flow Highlights:
- Net Change in Cash: $(3.60) million (Q1 2024)
- Net Cash from Operating Activities: $(0.05) million (Q1 2024)
| May 2023 | May 2024 | |
|---|---|---|
Net Change in Cash | -6.54M | -3.19M |
Effect of Exchange Rate Changes | -1.47M | 834K |
Net Cash from Operating Activities | -13.92M | 8.93M |
Operating Profit | -101.2M | -28.01M |
Adjustment to Operating Profit | 87.34M | 36.94M |
Net Cash from Investing Activities | -13.27M | -7.03M |
Business & Interest in Affiliates | 5.87M | 0 |
Investments | -2.70M | -287K |
Productive Assets | 10.10M | 7.31M |
Net Cash from Financing Activities | 22.11M | -5.93M |
Debt | -8.01M | -5.93M |
Equity Issuance/Repurchase | 31.56M | 0 |
Other Financing Activities | -1.43M | 0 |
4. Strategic Developments
Village Farms is making significant strides in expanding its cannabis operations both nationally and internationally. In Canada, the company has regained its top market share position in Ontario, while also launching unique products that cater to evolving consumer preferences. The international effort includes the establishment of a new indoor cannabis production facility in the Netherlands, with production expected to begin in Q4 2024, capitalizing on the newly legalized German cannabis market.
5. Future Outlook
With a strong financial foundation and a commitment to innovation and sustainability, Village Farms is well-positioned for continued growth in 2024. The company’s strategic focus on expanding its cannabis market share and enhancing operational efficiencies across all segments promises to deliver substantial returns in the coming quarters.
As Village Farms continues to navigate the complexities of the cannabis and produce industries, stakeholders can anticipate further updates that reflect the company’s commitment to enhancing well-being for both people and the planet.
