– Second Quarter Marks Fourth Consecutive
Quarter of Sequential Growth in Retail Branded Sales at 22% and
11th Consecutive Quarter of Positive EBITDA for Pure
Sunfarms –
-- Pure Sunfarms Becomes Top-Selling
Licensed Producer of Dried Flower in Ontario, Remains Top-Selling Dried Flower
Brand in Ontario and is
Top-Selling Dried Flower Brand in Alberta and British
Columbia –
VANCOUVER, BC, Aug. 9, 2021 /CNW/ - Village Farms International,
Inc. ("Village Farms" or the "Company") (NASDAQ: VFF) (TSX: VFF)
today announced its financial results for the second quarter ended
June 30, 2021. All figures are
in U.S. dollars unless otherwise indicated. For Consolidated
Results see below.
Management Commentary
"We are so proud to report another record quarter for Pure
Sunfarms' retail branded sales, which grew 22% sequentially – the
fourth consecutive quarter of 20%-plus growth – which contributed
to total net sales growth of 38% sequentially, once again outpacing
the broader retail cannabis market as we continue to gain national
market share," said Michael
DeGiglio, CEO, Village Farms. "Importantly, we are
also reporting a 192% sequential increase in adjusted EBITDA for
Pure Sunfarms this quarter to C$9.1
million, a record since our Retail Branded Sales launch, and
further evidence of the importance of our large-scale, low-cost
cultivation capabilities combined with an exceptional management
team and the right brand and product strategy."
"Pure Sunfarms remains well positioned to be the long-term
market leader in the Canadian cannabis market as many industry
participants continue to shift their strategies or combine
businesses in an attempt to compete successfully. Our continued
market share, leadership and growth, including our first ever
quarter as the top-selling* Licensed Producer in Ontario, gives us even more confidence that we
will achieve our stated goal of 20% market share in dried flower in
Canada."
"The continued strong momentum in Retail Branded Sales further
underscores the value of our initial focus on the dried flower
category. The dried flower market, including pre-rolled products,
still comprises more than 70%* of total retail sales, with second
quarter dollar-value growth five-times that of the three largest
2.0 categories. With expected continued sales momentum going
forward, and in view of potential growth opportunities, we have
expanded our capacity by 50% and plan to begin cultivation in the
completed half of Delta 2, our second, and now fully licensed, 1.1
million square-foot greenhouse facility next month. We
continue to look forward to adding the second half of Delta 2 to
our capacity next year, and have an additional 2.4 million square
feet of production area on the same site at our Delta 1 facility
that can be rapidly converted to cannabis production as the
Canadian legal cannabis market continues to grow."
"In the United States, we are
encouraged by the federal cannabis bill recently brought forward by
Senate leadership and view it as an integral step in the process of
regulatory change that would allow Village Farms to participate in
the high-THC cannabis market in the U.S. We have identified
multiple potential pathways to participate in the U.S. high-THC
cannabis market and continue to refine multiple strategies that
will enable us to move swiftly and aggressively to leverage our
tremendous cannabis success in Canada for the largest cannabis market in the
world, including strategies that could see us enter the U.S. market
in advance of converting our Texas
operations. We are optimistic that we will continue to see
substantive progress in the months to come and are planning
accordingly. With the benefit of having now operated our
Canadian cannabis business for several years, we expect our
Texas greenhouse operations can
represent at least a $1 billion sales
opportunity in cannabis to Village Farms."
"Finally, we expect our Produce business to normalize toward the
end of this year with indications that prices are trending back
to historical levels, as production volumes have improved
throughout 2021. Our Texas produce greenhouse operations,
with a replacement value in excess of $300
million, and located in one of the best growing environments
for cannabis in the continental United
States, represent one of our potential pathways to
participate in the U.S. high-THC cannabis market. We continue to
operate and manage these facilities for this optionality."
Pure Sunfarms' Second Quarter and Other Recent
Highlights
(Dollar Amounts are Before Village Farms'
Proportionate Share)
- Achieved 135% year-over-growth and 22% sequential growth in
Retail Branded Sales, marking the fourth consecutive quarter of
sequential growth in Retail Branded Sales;
- Achieved 70% year-over-year growth and 38% sequential growth in
total net sales;
- Achieved 40% gross margin as the Delta 3 greenhouse facility
operated at full capacity during the quarter;
- Achieved 192% sequential growth and 264% year-over-year growth
in Adjusted EBITDA to C$9.1 million
(US$7.4 million), a record since the
launch of its retail branded products in late 2019 and the 11th
consecutive quarter of positive Adjusted EBITDA;
- Was the top-selling brand* of dried flower products with the
Ontario Cannabis Store ("OCS") (by kilograms sold and dollars sold)
for the quarter ended June 30, 2021
and remained the top-selling brand of dried flower products with
the OCS (by kilograms sold and dollars sold) for the 21-month
period since its retail branded sales launch in October 2019;
- Was the top-selling Licensed Producer** of dried flower
products with the OCS (by kilograms sold and dollars sold) for the
quarter ended June 30, 2021;
- Was the top-selling brand of dried flower products*** in
Alberta for the quarter ended
June 30, 2021 and monthly since
October 2020 (by dollars sold);
- Was the top selling brand of dried flower products*** in
British Columbia for the quarter
ended June 30, 2021 and monthly since
October 2020 (by dollars sold);
and,
- Received from Health Canada an amendment to the cultivation
license for its second greenhouse facility, the 1.1 million square
foot Delta 2 facility, (adjacent to the Delta 3 facility),
permitting Pure Sunfarms to begin cultivating cannabis in the
currently completed half of the Delta 2 facility, which it expects
to do in September, with harvests expected to begin in November of
this year.
*Based on OCS market
data for the quarter ended June 30, 2021.
|
**Market share
performance and data cited has been calculated by Pure Sunfarms
from sales information provided by OCS as of June 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 June 30,
2021.
|
Pure Sunfarms' Financial Summary for the Three and Six Months
Ended June 30, 2021 and June 30, 2020 (Before Village Farms'
Proportionate Share)
(millions except %
metrics)
|
Three Months Ended
June 30,
|
|
|
2021
|
2020
|
Change of
C$
|
|
C$
|
US$
|
C$
|
US$
|
|
Total Gross
Sales
|
$41.7
|
$34.0
|
$19.3
|
$14.1
|
+116%
|
Total Net
Sales
|
$30.4
|
$24.7
|
$12.9
|
$9.4
|
+136%
|
Gross Margin
4
|
40%
|
40%
|
33%
|
33%
|
+22%
|
SG&A
|
$5.4
|
$4.3
|
$2.5
|
$1.9
|
-109%
|
Share-based
compensation
|
$0.2
|
$0.2
|
$0.0
|
$0.0
|
N/A
|
Net (loss)
income
|
$4.0
|
$3.2
|
$1.0
|
$0.8
|
+270%
|
Adjusted EBITDA
5
|
$9.1
|
$7.4
|
$2.5
|
$1.8
|
+264%
|
Adjusted EBITDA
Margin 5
|
30%
|
30%
|
19%
|
19%
|
+58%
|
|
|
|
|
|
|
(millions except %
metrics)
|
Six Months Ended
June 30,
|
|
|
2021
|
2020
|
Change of
C$
|
|
C$
|
US$
|
C$
|
US$
|
|
Total Gross
Sales
|
$72.5
|
$58.3
|
$40.8
|
$29.8
|
+77%
|
Total Net
Sales
|
$52.5
|
$42.2
|
$30.9
|
$22.5
|
+70%
|
Gross Margin
4
|
36%
|
36%
|
44%
|
44%
|
-18%
|
SG&A
|
$10.4
|
$8.3
|
$5.8
|
$4.3
|
-78%
|
Share-based
compensation
|
$1.6
|
$1.3
|
$0.0
|
$0.0
|
N/A
|
Net (loss) income
3
|
$0.4
|
$0.4
|
$9.6
|
$7.0
|
-96%
|
Adjusted EBITDA
5
|
$12.2
|
$9.9
|
$9.2
|
$6.7
|
+33%
|
Adjusted EBITDA
Margin 5
|
23%
|
23%
|
30%
|
30%
|
-23%
|
3.
|
Net income includes
C$6,044 (US$4,348) of debt forgiveness income as an outcome of the
"Settlement Agreement" in March 2020 between Pure Sunfarms, Emerald
Health Therapeutics and the Company.
|
4.
|
Gross margin for the
three months and six months ended June 30, 2021 excludes the C$145
(US$133) and C$3,824 (US$3,058), respectively, inventory adjustment
charge from the revaluation of inventory to fair value at the
acquisition date of November 2, 2020.
|
5.
|
Adjusted EBITDA is
not a recognized earnings measure and does not have a standard
meaning prescribed in by GAAP. See "Non-GAAP Measures"
below.
|
Pure Sunfarms' Percent of Sales by Product Group
|
Three months ended
June 30,
|
Six months ended
June 30,
|
Channel
|
2021
|
2020
|
2021
|
2020
|
Retail,
Flower
|
66%
|
69%
|
68%
|
57%
|
Retail, Oil & 2.0
Product
|
8%
|
0%
|
10%
|
0%
|
Wholesale, Flower and
Trim
|
26%
|
31%
|
22%
|
43%
|
Village Farms' Second Quarter and Other Recent
Highlights
- Produce sales decreased (4%) with higher production volumes
offset by lower pricing as the tomato industry experienced one of
the lowest pricing environments for tomatoes-on-the-vine and
beefsteak varieties in the past ten years versus strong pricing due
to elevated demand amidst pandemic-related restrictions in the
second quarter of 2020. There are indications that pricing is
moving back to historical levels, however, year-over-year
comparisons remain challenging;
- Produce Adjusted EBITDA was a loss of ($3.9) million, which excludes a $1.4 million incremental electricity expense in
Texas due to temporarily elevated
pricing for a five-day period in February (more than 100- times
higher than the prices observed in early 2021 and historical
February pricing), the result of power supply constraints resulting
from the unprecedented winter storm; and,
- Implemented a normal course issuer bid ("NCIB") under which the
Company may purchase up to 4,062,309 of its common shares
(representing approximately 5% of issued and outstanding) beginning
May 26, 2021 and terminating
May 25, 2022. As of June 30, 2021, the Company had purchased 428,097
Common Shares with an average price of $9.2972 per Common Share and a gross value of
$3,980. As of the date of this
filing, the Company had purchased 536,052 Common Shares with an
average price of $9.3272 per Common
Share and a gross value of $5,000.
The Company's financial statements for the three and six months
ended June 30, 2021, as well as the
comparative periods for 2020, have been prepared and presented in
conformity with accounting principles generally accepted in
the United States of America
("GAAP"). On June 30, 2021, Village
Farms owned 100% of Pure Sunfarms Corp. ("Pure Sunfarms"), after
the acquisition was completed on November
2, 2020. Accordingly, for the three and six months
ended June 30, 2021, Pure Sunfarms'
financial results are consolidated with Village Farms'
results. For the three and six months ended June 30, 2020, Pure Sunfarms is accounted for on
a proportionate basis within "Equity Earnings from Unconsolidated
Entities".
Village Farms' Consolidated Financial Summary for the Three
and Six Months Ended June 30, 2021
and June 30, 2020 and Corporate
Highlights
($US millions except
per share metric)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
Sales1
|
$70.4
|
$47.6
|
+48%
|
$122.8
|
$79.7
|
+54%
|
Produce
|
$45.5
|
$47.4
|
-4%
|
$80.4
|
$79.4
|
+1%
|
Cannabis
|
$24.8
|
$0.0
|
N/A
|
$42.2
|
$0.0
|
N/A
|
VFCE
|
$0.1
|
$0.2
|
-37%
|
$0.2
|
$0.3
|
-46%
|
Net (Loss)
Income1
|
($4.5)
|
($0.1)
|
-370%
|
($11.9)
|
$4.1
|
-392%
|
(Loss) Income Per
Share1
|
($0.06)
|
($0.01)
|
-400%
|
($0.15)
|
$0.07
|
-314%
|
Adjusted EBITDA1
2
|
$1.6
|
$2.3
|
-32%
|
$2.0
|
$3.4
|
-42%
|
Produce
|
($3.9)
|
$3.0
|
-243%
|
($4.5)
|
$2.6
|
-274%
|
Cannabis
|
$7.4
|
$1.0
|
+585%
|
$9.9
|
$3.8
|
+157%
|
VFCE
|
($0.1)
|
($0.1)
|
-27%
|
($0.1)
|
($0.1)
|
-3%
|
Corporate
3
|
($1.8)
|
($1.6)
|
-13%
|
($3.3)
|
($2.9)
|
-16%
|
1.
|
Sales, Net Income,
Income (Loss) per share and Adjusted EBITDA includes results from
Pure Sunfarms pursuant to the Company's statutory reporting
requirements.
|
2.
|
Adjusted EBITDA is
not a recognized earnings measure and does not have a standard
meaning prescribed by GAAP. See "Non-GAAP Measures"
below.
|
3.
|
Corporate Adjusted
EBITDA includes Corporate and Hemp Adjusted EBITDA. See
"Reconciliation of Consolidated Net Income to Adjusted EBITDA"
below.
|
Our 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
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2021
6
|
|
|
2020
6
|
|
|
2021
6
|
|
|
2020
6
|
|
Sales
|
|
$
|
70,374
|
|
|
$
|
47,573
|
|
|
$
|
122,770
|
|
|
$
|
79,685
|
|
Cost of
sales
|
|
|
(65,109)
|
|
|
|
(44,044)
|
|
|
|
(115,198)
|
|
|
|
(75,391)
|
|
Gross
margin
|
|
|
5,265
|
|
|
|
3,529
|
|
|
|
7,572
|
|
|
|
4,294
|
|
Selling, general and
administrative expenses
|
|
|
(9,025)
|
|
|
|
(3,813)
|
|
|
|
(17,117)
|
|
|
|
(7,734)
|
|
Share-based
compensation
|
|
|
(1,887)
|
|
|
|
(328)
|
|
|
|
(3,885)
|
|
|
|
(857)
|
|
Interest
expense
|
|
|
(598)
|
|
|
|
(437)
|
|
|
|
(1,339)
|
|
|
|
(974)
|
|
Interest
income
|
|
|
46
|
|
|
|
93
|
|
|
|
49
|
|
|
|
476
|
|
Foreign exchange gain
(loss)
|
|
|
193
|
|
|
|
530
|
|
|
|
(311)
|
|
|
|
(396)
|
|
Gain on settlement
agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,681
|
|
Other (expense)
income
|
|
|
(166)
|
|
|
|
26
|
|
|
|
(235)
|
|
|
|
65
|
|
Loss on disposal of
assets
|
|
|
(40)
|
|
|
|
—
|
|
|
|
(40)
|
|
|
|
(6)
|
|
Recovery of
(provision for) income taxes
|
|
|
1,781
|
|
|
|
(69)
|
|
|
|
3,620
|
|
|
|
943
|
|
(Loss) income from
consolidated entities after income taxes
|
|
|
(4,431)
|
|
|
|
(469)
|
|
|
|
(11,686)
|
|
|
|
492
|
|
Equity (losses)
earnings of unconsolidated entities
|
|
|
(86)
|
|
|
|
350
|
|
|
|
(213)
|
|
|
|
3,579
|
|
Net (loss)
income
|
|
$
|
(4,517)
|
|
|
$
|
(119)
|
|
|
$
|
(11,899)
|
|
|
$
|
4,071
|
|
Adjusted EBITDA
7
|
|
$
|
1,547
|
|
|
$
|
2,268
|
|
|
$
|
1,951
|
|
|
$
|
3,364
|
|
(Loss) earnings per
share - basic
|
|
$
|
(0.06)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.15)
|
|
|
$
|
0.07
|
|
(Loss) earnings per
share - diluted
|
|
$
|
(0.06)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.15)
|
|
|
$
|
0.07
|
|
Net (loss)
income
|
|
$
|
(4,517)
|
|
|
$
|
(119)
|
|
|
$
|
(11,899)
|
|
|
$
|
4,071
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
2,366
|
|
|
|
55
|
|
|
|
4,077
|
|
|
|
(72)
|
|
Comprehensive (loss)
income
|
|
$
|
(2,151)
|
|
|
$
|
(64)
|
|
|
$
|
(7,822)
|
|
|
$
|
3,999
|
|
|
|
6.
|
For the three and six
months ended June 30, 2021, Pure Sunfarms is fully consolidated in
the financial results of the Company. For the three and six months
ended June 30, 2020, Village Farms share of Pure Sunfarms earnings
are reflected in equity (losses) earnings of unconsolidated
entities.
|
7.
|
Adjusted EBITDA is
not a recognized earnings measure and does not have a standard
meaning prescribed in by GAAP. Therefore, Adjusted EBITDA may not
be comparable to similar measures presented by other issuers. See
"Non-GAAP Measures" for a definition and reconciliation of Adjusted
EBITDA to net income (loss), 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 65%
interest in VFH.
|
Discussion of Financial Results
A discussion of our consolidated results for the three and six
months ended June 30, 2021 and 2020
is included below. The consolidated results include all three of
our operating segments, which include produce, cannabis and clean
energy, along with all public company expenses. The remaining 41.3%
interest in Pure Sunfarms was acquired by Village Farms on
November 2, 2020; for the three and
six months ended June 30, 2021, the
operating results of Pure Sunfarms are consolidated in our
Consolidated Statements of Income (Loss), and for the three and six
months ended June 30, 2020, Pure
Sunfarms' results are included in equity earnings from
unconsolidated entities in our Consolidated Statements of Income
(Loss).
Under "Cannabis 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 six months ended June 30,
2020 but were consolidated in our results for the three and
six months ended June 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 ($133) charge to cost of sales in the second
quarter of 2021 and a ($2,925) charge
to cost of sales in the first quarter of 2021 from the revaluation
of its inventory to fair value. This is a non-cash accounting
charge to cost of sales and should be adjusted for when analyzing
the actual operational results of Pure Sunfarms.
Consolidated Results
Three Months Ended June 30,
2021 Compared to Three Months Ended June 30, 2020
Sales
Sales for the three months ended June 30,
2021 were $70,374 as compared
to $47,573 for the three months ended
June 30, 2020. The increase in sales
was primarily due to the inclusion of Pure Sunfarms' Q2 2021
revenues of $24,761 and an increase
in produce supply partner sales of $1,867, partially offset by a decrease in our own
produce sales of ($3,676) and VFCE
power sales of ($151). The produce
supply partner sales increase was due to higher volumes of pounds
sold of tomatoes, peppers, cucumbers and mini-cucumbers. The
decrease in our own produce sales was due to a (42%) decrease in
the average selling price of tomatoes in the three months ended
June 30, 2021 versus June 30, 2020, partially offset by a 33% increase
in our own production volume. The price decrease is the result of a
market supply overage caused by lower retailer demand along with an
increase in Canadian and U.S. tomato production. The tomato produce
industry experienced one of the lowest pricing environments for
tomatoes-on-the-vine and beefsteak varieties in the past ten years
through late Q2 2021 with signs of pricing moving back into
historical ranges towards the end of Q2 2021.
Cost of Sales
Cost of sales for the three months ended June 30, 2021 were $65,109 as compared to $44,044 for the three months ended June 30, 2020. The increase in cost of sales was
primarily due to the addition of Pure Sunfarms' Q2 2021 cost of
sales of $14,941, an increase in our
produce costs of $4,286, higher
produce supply partner costs of $1,319 and an increase in clean energy costs of
$519. The Q2 2021 cost of sales for
Pure Sunfarms includes a $133 charge
from the revaluation of its inventory to fair value at acquisition
date and our produce costs include the $1,400 incremental utility charges associated
with the Texas freeze of
February 2021 that was settled and
paid in Q2 2021. The increase in our own production costs was
driven by the increase in volume as the Texas facilities improved production cost per
pound in Q2 2021 through better utilization of our labor,
transportation and handling cost, primarily due to greenhouse
management efficiency efforts. The increase in produce supply
partner cost of sales was driven by higher volumes of pounds sold
and the increase in clean energy costs were driven by higher
depreciation charges as the depreciable life of VFCE assets have
been accelerated due to the upcoming transition of operations to
the Delta RNG Project expected to become operational in the fall of
2022.
Gross Margin
Gross margin for the three months ended June 30, 2021 increased $1,736 to $5,265,
or a 7% gross margin, in comparison to $3,529, or a 7% gross margin, for the three
months ended June 30, 2020. Excluding
the $133 charge from the revaluation
of Pure Sunfarms' inventory to fair value at acquisition date and
$1,400 from the incremental
Texas freeze utility expenses,
gross margin for the three months ended June
30, 2021 increased $3,269 to
$6,798, or a 10% gross margin. The
positive variance between periods is primarily attributable to Pure
Sunfarms' Q2 2021 gross margin of $9,820 and higher produce supply partner gross
margin of $548, partially offset by
lower gross margin from our produce operations of ($7,962) and clean energy of ($670).
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three
months ended June 30, 2021 increased
$5,212 to $9,025 compared to $3,813 for the three months ended June 30, 2020. The increase was primarily due to
the inclusion of Pure Sunfarms' expenses of $4,370, higher produce related legal fees and an
increase in corporate expenses, primarily related to public company
costs such as investor relations, legal and regulatory fees and
incremental costs of U.S. reporting compliance.
Share-Based Compensation
Share-based compensation expenses for the three months ended
June 30, 2021 were $1,887 as compared to $328 for the three months ended June 30, 2020. The increase in share-based
compensation was primarily due to the vesting of performance shares
earned by key corporate and operations employees in Q2 2021 as
compared to Q2 2020 and the cost of stock options for Pure
Sunfarms' management of $191 in Q2
2021 versus nil in Q2 2020.
Equity (Losses) Earnings from Unconsolidated
Entities
Our share of losses from our joint ventures for the three months
ended June 30, 2021 was ($86) compared to earnings of $350 for the three months ended June 30, 2020. The Q2 2021 equity loss includes
only our proportionate share of the losses of VFH compared to Q2
2020 which includes our proportionate share of the earnings of Pure
Sunfarms and VFH. Our share of income from Pure Sunfarms was
presented in equity earnings from unconsolidated entities for the
three months ended June 30, 2020.
Village Farms began fully consolidating operating results of Pure
Sunfarms on November 2, 2020 and its
results are presented in the Company's consolidated operating
results for the three months ended June 30,
2021. For information regarding the results of operations
from our joint ventures, see "Reconciliation of U.S. GAAP Results
to Proportionate Results" below.
Net
Loss
Net loss for the three months ended June
30, 2021 was ($4,517) as
compared to ($119) for the three
months ended June 30, 2020. The
increase in net loss was primarily due to a lower gross margin from
our produce operations and higher corporate share-based
compensation, partially offset by an improved operating profit for
Pure Sunfarms in the three months ended June
30, 2021 as compared to June 30,
2020.
Adjusted EBITDA
Adjusted EBITDA for the three months ended June 30, 2021 was $1,547 compared to $2,268 for the three months ended June 30, 2020. The decrease in adjusted EBITDA
was primarily due to lower operating results of the produce
business, partially offset by the improvement in operating profit
for Pure Sunfarms. See the reconciliation of Adjusted EBITDA to net
income in "Non-GAAP Measures—Reconciliation of Net Earnings to
Adjusted EBITDA".
Six Months Ended June 30, 2021
Compared to Six Months Ended June 30,
2020
Sales
Sales for the six months ended June 30,
2021 were $122,770 as compared
to $79,685 for the six months ended
June 30, 2020. The increase in sales
was primarily due to the inclusion of Pure Sunfarms' 2021 revenues
of $42,221 and an increase in produce
supply partner sales of $6,005,
partially offset by a decrease in our own produce sales of
($4,909) and VFCE power sales of
($232). The produce supply partner
sales increase was due to higher volumes of pounds sold of
tomatoes, peppers, cucumbers and mini-cucumbers, partially offset
by lower price per pound for tomatoes and peppers. The decrease in
our own produce sales was due to a (30%) decrease in the average
selling price of tomatoes in the six months ended June 30, 2021 versus June
30, 2020, partially offset by a 23% increase in our own
production volume despite the ongoing virus pressure, primarily
from the tomato brown rugose fruit virus, at all of the
Texas facilities. The commodity
price decrease is the result of a market supply overage caused by
an increase in Canadian winter production and a change in retailer
buying habits to more specialty tomatoes. The tomato produce
industry experienced one of the lowest pricing environments for
tomatoes-on-the-vine and beefsteak varieties in the past ten years
through late Q2 2021 with signs of pricing moving back into
historical ranges towards the end of Q2 2021.
Cost of Sales
Cost of sales for the six months ended June 30, 2021 were $115,198 as compared to $75,391 for the six months ended June 30, 2020. The increase in cost of sales was
primarily due to the addition of Pure Sunfarms' 2021 cost of sales
of $30,189, higher produce supply
partner costs of $4,600, an increase
in our produce costs of $4,143 and
higher clean energy costs of $875.
The 2021 cost of sales for Pure Sunfarms includes a $3,108 charge from the revaluation of its
inventory to fair value at acquisition date and our produce costs
include incremental utility charges of $1,400 associated with the Texas freeze of February 2021. The increase in our own production
costs was driven by the 23% increase in production volume in the
first six months of 2021 versus the first six months of 2020. The
increase in produce supply partner cost of sales was driven by
higher volumes of pounds sold and the increase in clean energy
costs were driven by higher depreciation charges as the depreciable
life of VFCE assets have been accelerated due to the upcoming
transition of operations to the Delta RNG Project expected to
become operational in the fall of 2022.
Gross Margin
Gross margin for the six months ended June 30, 2021 increased $3,278 to $7,572,
or a 6% gross margin, in comparison to $4,294, or a 5% gross margin, for the six months
ended June 30, 2020. Excluding the
$3,108 charge from the revaluation of
Pure Sunfarms' inventory to fair value at acquisition date and
$1,400 from the incremental
Texas freeze utility expenses,
gross margin for the six months ended June
30, 2021 increased $7,786 to
$12,080, or a 10% gross margin. The
positive variance between periods is primarily attributable to Pure
Sunfarms' 2021 gross margin of $12,032 and higher produce supply partner gross
margin of $1,405, partially offset by
lower gross margin from our produce operations of ($9,052) and clean energy of ($1,107).
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the six months
ended June 30, 2021 increased
$9,383 to $17,117 compared to $7,734 for the six months ended June 30, 2020. The increase was primarily due to
the inclusion of Pure Sunfarms' expenses of $8,336, higher produce related legal fees and an
increase in corporate expenses, primarily related to public company
costs such as investor relations, legal and regulatory fees,
listing fees for the Toronto Stock Exchange ("TSX"), the
January 2021 equity raise and
incremental costs of U.S. reporting compliance.
Share-Based Compensation
Share-based compensation expenses for the six months ended
June 30, 2021 were $3,885 as compared to $857 for the six months ended June 30, 2020. The increase in share-based
compensation was primarily due to the vesting of performance share
grants and stock options for Pure Sunfarms' management of
$1,285 in 2021 versus nil in 2020 as
well as the vesting of performance shares earned by corporate and
operations employees in 2021 as compared to 2020.
Gain on Settlement Agreement
On March 2, 2020, pursuant to the
settlement agreement between the Company, Pure Sunfarms and Emerald
("Settlement Agreement"), Emerald transferred to the Company 2.5%
of additional equity in Pure Sunfarms. The Company determined the
fair value of the equity received from Emerald to be $4,681 (C$6,500).
The Company recorded this amount as a gain on non-monetary exchange
on the Consolidated Statement of Income (Loss) and Comprehensive
Income (Loss) for the six months ended June
30, 2020.
Equity (Losses) Earnings from Unconsolidated
Entities
Our share of losses from our joint ventures for the six months
ended June 30, 2021 was ($213) compared to earnings of $3,579 for the six months ended June 30, 2020. The 2021 equity loss includes only
our proportionate share of the losses of VFH compared to 2020 which
includes Pure Sunfarms and VFH. Our share of income from Pure
Sunfarms was presented in equity earnings from unconsolidated
entities for the six months ended June 30,
2020. Village Farms began fully consolidating operating
results of Pure Sunfarms on November 2,
2020 and its results are presented in the Company's
consolidated operating results for the six months ended
June 30, 2021. For information
regarding the results of operations from our joint ventures, see
"Reconciliation of U.S. GAAP Results to Proportionate Results"
below.
Net (Loss) Income
Net loss for the six months ended June
30, 2021 was ($11,899) as
compared to net income of $4,071 for
the six months ended June 30, 2020.
The decrease in net income in the six months ended June 30, 2021 as compared to June 30, 2020 was primarily due to lower
operating profit of the produce operations, higher corporate
expenses and accelerating the depreciable life of the clean energy
assets due to the upcoming transition of operations to the Delta
RNG Project expected to become operational in the fall of 2022.
Adjusted EBITDA
Adjusted EBITDA for the six months ended June 30, 2021 was $1,951 compared to $3,364 for the six months ended June 30, 2020. The decrease in adjusted EBITDA
was primarily due to lower operating results from our produce
business, partially offset by the improvement in operating profit
for Pure Sunfarms. See the reconciliation of Adjusted EBITDA to net
income in "Non-GAAP Measures—Reconciliation of Net Earnings to
Adjusted EBITDA".
Foreign Currency Translation Adjustment
The foreign currency translation adjustment for the six months
ended June 30, 2021 was $4,077 compared to ($72) for the six months ended June 30, 2020. Village Farms' functional currency
is the U.S. dollar while Pure Sunfarms' functional currency is the
Canadian dollar. The 2021 currency translation adjustment is due to
the Canadian dollar strengthening versus the U.S. dollar during the
first six months of 2021, as Pure Sunfarms has more Canadian dollar
assets than Canadian dollar liabilities on its balance sheet,
resulting in a gain on its functional currency when converted on
its balance sheet to U.S. dollars.
Cannabis Segment Results – Pure Sunfarms (in C$)
Pure Sunfarms' comparative analysis are based on the
consolidated results of Pure Sunfarms for the three and six months
ended June 30, 2021 and June 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 Pure Sunfarms'
proportionate results for the three and six months ended
June 30, 2021 and June 30, 2020.
Three Months Ended June 30,
2021 Compared to Three Months Ended March 31, 2021
Sales
Pure Sunfarms' net sales for the three months ended June 30, 2021 were C$30,418 as compared to C$22,092 for the three months ended March 31, 2021. The sequential net sales increase
was comprised of a 22% increase in branded sales and a 121%
increase in non-branded sales. For the three months ended
June 30, 2021, 66% of revenue was
generated from branded flower and pre-rolls and 8% of revenue from
branded oils, edibles and vapes ("Cannabis Derivate Products") as
compared to 71% of revenue from branded flower and pre-rolls and
13% of revenue from Cannabis Derivative Products for the three
months ended March 31, 2021. For the
three months ended June 30, 2021,
non-branded sales represented 26% of revenues compared to 16% for
the three months ended March 31,
2021. The increase in branded sales between sequential
periods was largely attributable to increased production of
high-potency flower and trim released in the three months ended
June 30, 2021. Additionally,
many provinces began their COVID-19 re-opening plans as COVID-19
pressures began subsiding and capacity restrictions decreased,
particularly in Ontario, which
helped spur demand in the latter half of Q2 2021. Similarly, the
increase in non-branded sales was largely attributable to the
availability of high-potency flower and trim to meet demand from
other licensed producers ("LPs") in the wholesale market.
Cost of Sales
Pure Sunfarms' cost of sales for the three months ended
June 30, 2021 was C$18,328 as compared to C$19,279 for the three months ended March 31, 2021. As a result of the Pure Sunfarms
Acquisition, Pure Sunfarms recognized an increase in the fair value
of its inventory on the acquisition date, resulting in a
(C$145) charge to cost of sales in
the second quarter of 2021 and a (C$3,679) charge to cost of sales in the first
quarter of 2021 from the revaluation of its inventory to fair
value. This is a non-cash accounting charge to cost of sales and
should be adjusted for when analyzing the actual operational
results of Pure Sunfarms. The decrease in cost of sales between the
periods was driven by the lower charge from the revaluation of
inventory to fair value at acquisition date. In addition, cost of
sales as a percentage of revenue decreased to 60% from 71% for the
sequential quarter as our cost or production decreased due to
increased yields in cultivation.
Gross Margin
Gross margin for the three months ended June 30, 2021 increased C$9,277 to C$12,090, or a 40% gross margin, in comparison to
C$2,813, or a 13% gross margin, for
the three months ended March 31,
2021. Excluding the purchase price inventory adjustment of
C$145, gross margin for the three
months ended June 30, 2021 increased
C$5,743 to C$12,235, or a 40% gross margin, in comparison to
C$6,492, or a 29% gross margin,
excluding the purchase price inventory adjustment of C$3,679 for the three months ended March 31, 2021. The increase in gross margin
between sequential periods was attributable to an increase in
branded flower sales at higher margins, an increased demand for
high-quality, high-potency flower at higher margins for non-branded
revenue and lower cost of sales as a percentage of net sales.
Selling, General and Administrative Expenses
Pure Sunfarms' selling, general and administrative expenses for
the three months ended June 30, 2021
were C$5,368, or 18% of sales
compared to C$5,024, or 23% of sales
for the three months ended March 31,
2021. The decrease in selling, general and administrative
expenses as a percentage of sales for the three months ended
June 30, 2021 in comparison to the
three months ended March 31, 2021 was
due to general cost containment efforts initiated by management and
a higher percentage increase in sales.
Share-Based Compensation
Share-based compensation expenses for the three months ended
June 30, 2021 were C$234 as compared to C$1,392 for the three months ended March 31, 2021. The decrease in share-based
compensation is largely due to performance shares granted to Pure
Sunfarms' management that vested in the first quarter of 2021.
Net Income (Loss)
Pure Sunfarms' net income for the three months ended
June 30, 2021 was C$3,988 as compared to a net loss of (C$3,592) for the three months ended March 31, 2021. The higher net income between
periods was primarily driven by a higher gross margin due to
increased sales volume while decreasing cost of sales and selling,
general and administrative expenses as a percentage of revenue.
Adjusted EBITDA
Adjusted EBITDA for the three months ended June 30, 2021 and March
31, 2021 was C$9,125 and
C$3,125, respectively, representing
an increase of 191%. The increase in Adjusted EBITDA was driven by
higher net sales, gross margin and operating profit in the three
months ended June 30, 2021 as
compared to the three months ended March 31,
2021.
Three Months Ended June 30,
2021 Compared to Three Months Ended June 30, 2020
Sales
Pure Sunfarms' net sales for the three months ended June 30, 2021 were C$30,418 as compared to C$12,902 for the three months ended June 30, 2020. The net sales increase was
comprised of a 154% increase in branded sales and a 96% increase in
non-branded sales. For the three months ended June 30, 2021, 66% of revenue was generated from
branded flower and pre-rolls and 8% of revenue from Cannabis
Derivate Products as compared to 69% of revenue from branded flower
and pre-rolls and no sales from Cannabis Derivate Products as Pure
Sunfarms launched these products in Q3 2020. The sales increase was
due to the impact of store openings throughout Canada combined with favorable brand
performance and market share in addition to the launch of Cannabis
Derivate Products. Non-branded sales also benefited from
store openings and the growth of the Cannabis Derivate Products
which in turn increased demand for cannabis biomass sold to other
LPs. For the three months ended June
30, 2021, non-branded sales represented 26% of revenues
compared to 31% for the three months ended June 30, 2020.
Cost of Sales
Pure Sunfarms' cost of sales for the three months ended
June 30, 2021 was C$18,328 as compared to C$8,594 for the three months ended June 30, 2020. The Q2 2021 cost of sales for Pure
Sunfarms includes a C$145 charge from
the revaluation of its inventory to fair value at acquisition date.
The increase in cost of sales between periods was driven by an
increase in net sales, including a higher volume of branded sales
which require incremental costs for manufacturing, packaging and
distribution. However, cost of sales as a percentage of revenue
decreased from 67% to 60% due to increased production efficiencies
in 2021.
Gross Margin
Gross margin for the three months ended June 30, 2021 increased C$7,782 to C$12,090, or a 40% gross margin, in comparison to
C$4,308, or a 33% gross margin, for
the three months ended June 30, 2020.
The Q2 2021 gross margin for Pure Sunfarms includes a C$145 charge from the revaluation of its
inventory to fair value at acquisition date. The increase in gross
margin between periods was primarily due to the higher volume of
branded flower and pre-roll sales in 2021.
Selling, General and Administrative Expenses
Pure Sunfarms' selling, general and administrative expenses for
the three months ended June 30, 2021
were C$5,368 compared to C$2,574 for the three months ended June 30, 2020. The increase in selling, general
and administrative expenses for the three months ended June 30, 2021 in comparison to the three months
ended June 30, 2020 was primarily due
to additional headcount to support the growth of Pure Sunfarms.
Share-Based Compensation
Share-based compensation expenses for the three months ended
June 30, 2021 were C$234 as compared to nil for the three months
ended June 30, 2020. The increase in
share-based compensation is due to the cost of stock options for
Pure Sunfarms' management.
Net Income
Pure Sunfarms' net income for the three months ended
June 30, 2021 was C$3,988 as compared to C$1,079 for the three months ended June 30, 2020. The higher net income between
periods was driven by higher net sales which includes Cannabis
Derivative Products sales and lower selling, general and
administrative costs as a percentage of net revenue.
Adjusted EBITDA
Adjusted EBITDA for the three months ended June 30, 2021 and June 30,
2020 was C$9,125 and
C$2,509, respectively, representing
an increase of 264%. The increase in Adjusted EBITDA was driven by
higher net sales, gross margin and lower selling, general and
administrative costs as a percentage of net sales.
Six Months Ended June 30, 2021
Compared to Six Months Ended June 30,
2020
Sales
Pure Sunfarms' net sales for the six months ended June 30, 2021 were C$52,510 as compared to C$30,906 for the six months ended June 30, 2020. Branded sales for the six months
ended June 30, 2021 and 2020, were
C$41,045 and C$17,479, respectively, an increase of
C$23,566, or 135% between periods.
Non-branded revenue for the six months ended June 30, 2021 and 2020 was C$11,465 and C$13,427, respectively, a decrease of
(C$1,962), or (15%). For the six
months ended June 30, 2021, 68% of
revenue was generated from branded flower and pre-rolls and 10% of
revenue was generated from Cannabis Derivate Products as compared
to 57% of revenue from branded flower and pre-rolls and no revenue
from Cannabis Derivative Products for the six months ended
June 30, 2020. The increase in
branded sales was largely attributable to increased production of
high-potency flower, trim and Cannabis Derivate Products relative
to the prior period. Additionally, many provinces began their
re-opening plans as COVID-19 pressures subsided and capacity
restrictions decreased, particularly in Ontario, which helped spur demand in the
latter half of Q2 2021. For the six months ended June 30, 2021, non-branded sales represented 22%
of revenues compared to 43% for the six months ended June 30, 2020. The decrease in non-branded sales
was largely due to opportunistic and material non-monetary
transactions that occurred in 2020 with extraction licensed
producers in which Pure Sunfarms sold extraction grade dried flower
and trim and purchased various forms of distillate from the same
counterparties.
Cost of Sales
Pure Sunfarms' cost of sales for the six months ended
June 30, 2021 was C$37,607 as compared to C$17,201 for the six months ended June 30, 2020. The 2021 cost of sales for Pure
Sunfarms includes a C$3,824 charge
from the revaluation of inventory to fair value at acquisition
date. The increase in cost of sales between periods was driven by
an increase in net sales, including the higher volume of branded
sales which require incremental costs for manufacturing, packaging
and distribution.
Gross Margin
Gross margin for the six months ended June 30, 2021 increased C$1,198 to C$14,903, or a 28% gross margin, in comparison to
C$13,705, or a 44% gross margin, for
the six months ended June 30, 2020.
Excluding the purchase price inventory adjustment of C$3,824, gross margin for the six months ended
June 30, 2021 increased C$5,022 to C$18,727, or a 36% gross margin. The increase in
gross margin was driven by the increase in branded sales. However,
branded sales have a higher cost associated with packaging and
distribution which led to a decrease in gross margin as a
percentage of revenue between the periods. In addition, Pure
Sunfarms entered into certain co-manufacturing agreements to assist
in the production of Cannabis Derivative Products which have a
lower margin relative to in-house production.
Selling, General and Administrative Expenses
Pure Sunfarms' selling, general and administrative expenses for
the six months ended June 30, 2021
were C$10,392 compared to
C$5,829 for the six months ended
June 30, 2020. The increase in
selling, general and administrative expenses for the six months
ended June 30, 2021 in comparison to
the six months ended June 30, 2020
was primarily due to additional headcount to support the growth of
Pure Sunfarms. Selling, general and administrative expenses
remained approximately 20% of net sales as revenues increased 70%
between the six months ended June 30,
2021 and June 30, 2020,
respectively.
Share-Based Compensation
Share-based compensation expenses for the six months ended
June 30, 2021 were C$1,626 as compared to nil for the six months
ended June 30, 2020. The increase in
share-based compensation is due to the vesting of performance share
grants and cost of stock options for Pure Sunfarms' management.
Gain on Settlement of Net Liabilities
Pure Sunfarms recognized income of C$6,044 in the first quarter of 2020 as an
outcome of the March 2, 2020
Settlement Agreement between Pure Sunfarms, Emerald and the
Company. This gain is Pure Sunfarms' forgiveness of the shareholder
loan and accrued interest owed by Emerald offset by the
extinguishment of the supply agreement and any amounts receivable
thereunder, which included a C$8,100
receivable from Emerald for sales made in 2019.
Net Income
Pure Sunfarms' net income for the six months ended June 30, 2021 was C$396 as compared to net income of C$9,632 for the six months ended June 30, 2020. The decrease in net income was
largely attributable to the one-time gain on settlement of net
liabilities of C$6,044 in 2020 as
well as the lower operating profit for the six months ended
June 30, 2021.
Adjusted EBITDA
Adjusted EBITDA for the six months ended June 30, 2021 and June 30,
2020 was C$12,250 and
C$9,235, respectively. Adjusted
EBITDA increased 33% between periods primarily due to higher gross
margin for the period ended June 30,
2021 as compared to June 30,
2020.
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
June 30,
|
|
|
Six Months Ended
June 30,
|
|
(in thousands of
U.S. dollars)
|
|
2021
8
|
|
|
2020
8
|
|
|
2021
8
|
|
|
2020
8
|
|
Net (loss)
income
|
|
$
|
(4,517)
|
|
|
$
|
(119)
|
|
|
$
|
(11,899)
|
|
|
$
|
4,071
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
3,898
|
|
|
|
1,491
|
|
|
|
7,310
|
|
|
|
3,021
|
|
Foreign currency
exchange loss
|
|
|
(269)
|
|
|
|
(530)
|
|
|
|
235
|
|
|
|
396
|
|
Interest expense,
net
|
|
|
552
|
|
|
|
344
|
|
|
|
1,290
|
|
|
|
498
|
|
Recovery of income
taxes
|
|
|
(1,781)
|
|
|
|
69
|
|
|
|
(3,620)
|
|
|
|
(943)
|
|
Share-based
compensation
|
|
|
1,887
|
|
|
|
328
|
|
|
|
3,885
|
|
|
|
857
|
|
Interest expense for
JVs
|
|
|
13
|
|
|
|
103
|
|
|
|
27
|
|
|
|
396
|
|
Amortization for
JVs
|
|
|
30
|
|
|
|
377
|
|
|
|
64
|
|
|
|
678
|
|
Foreign currency
exchange loss for JVs
|
|
|
—
|
|
|
|
(17)
|
|
|
|
—
|
|
|
|
85
|
|
Provision for income
taxes for JVs
|
|
|
—
|
|
|
|
222
|
|
|
|
—
|
|
|
|
1,491
|
|
Deferred financing
fees
|
|
|
166
|
|
|
|
—
|
|
|
|
166
|
|
|
|
—
|
|
Incremental utility
costs due to storm
|
|
|
1,400
|
|
|
|
—
|
|
|
|
1,400
|
|
|
|
—
|
|
Purchase price
adjustment 9
|
|
|
133
|
|
|
|
—
|
|
|
|
3,058
|
|
|
|
—
|
|
Gain on settlement
agreement 10
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,681)
|
|
Gain on settlement of
net liabilities from JV
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,496)
|
|
Gain on disposal of
assets
|
|
|
35
|
|
|
|
—
|
|
|
|
35
|
|
|
|
(9)
|
|
Adjusted EBITDA
11
|
|
$
|
1,547
|
|
|
$
|
2,268
|
|
|
$
|
1,951
|
|
|
$
|
3,364
|
|
Adjusted EBITDA for
JVs (See table below)
|
|
$
|
(48)
|
|
|
$
|
1,034
|
|
|
$
|
(127)
|
|
|
$
|
3,717
|
|
Adjusted EBITDA
excluding JVs
|
|
$
|
1,595
|
|
|
$
|
1,234
|
|
|
$
|
2,078
|
|
|
$
|
(353)
|
|
8.
|
For the three and six
months ended June 30, 2021, Pure Sunfarms is fully consolidated in
the financial results of the Company. For the three and six months
ended June 30, 2020, our share of Pure Sunfarms earnings is
reflected in equity earnings from unconsolidated
entities.
|
9.
|
The purchase price
adjustment primarily reflects the non-cash accounting charge to
cost of sales resulting from the revaluation of Pure Sunfarms'
inventory to fair value at the acquisition date.
|
10.
|
See "Results of
Operations – Consolidated Results – Gain on Settlement Agreement"
above.
|
11.
|
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 65% interest in
VFH.
|
Breakout of JV
Adjusted EBITDA
|
|
Three Months
Ended
June 30,
|
|
|
Six Months
Ended
June 30,
|
|
(in thousands of
U.S. dollars)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Pure Sunfarms
Adjusted EBITDA
|
|
$
|
—
|
|
|
$
|
1,076
|
|
|
$
|
—
|
|
|
$
|
3,854
|
|
VFH Adjusted
EBITDA
|
|
|
(48)
|
|
|
|
(42)
|
|
|
|
(127)
|
|
|
|
(137)
|
|
Total JV Adjusted
EBITDA
|
|
$
|
(48)
|
|
|
$
|
1,034
|
|
|
$
|
(127)
|
|
|
$
|
3,717
|
|
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
Pure Sunfarms ("Cannabis") and VFH ("Hemp") operations). The
tables reflect the full statements of income for Pure Sunfarms and
VFH multiplied by the ownership percentage of the Company (versus
presenting the results of these joint ventures in Equity Earnings
from Unconsolidated Entities):
|
For the Three
months ended June 30, 2021
|
|
|
|
|
Produce
|
|
Clean
Energy
|
|
Corporate
|
|
|
Cannabis12
|
|
|
Hemp
12
|
|
|
Total
|
|
Sales
|
$
|
45,539
|
|
$
|
74
|
|
$
|
—
|
|
|
|
24,761
|
|
|
$
|
—
|
|
|
$
|
70,374
|
|
Cost of
sales
|
|
(49,321)
|
|
|
(847)
|
|
—
|
|
|
|
(14,941)
|
|
|
|
(42)
|
|
|
|
(65,151)
|
|
Selling, general and
administrative expenses
|
|
(2,946)
|
|
|
(52)
|
|
(1,657)
|
|
|
|
(4,370)
|
|
|
|
(36)
|
|
|
|
(9,061)
|
|
Share-based
compensation
|
|
—
|
|
|
—
|
|
(1,696)
|
|
|
|
(191)
|
|
|
|
—
|
|
|
|
(1,887)
|
|
Loss on disposal of
assets
|
|
—
|
|
|
—
|
|
—
|
|
|
|
(40)
|
|
|
|
—
|
|
|
|
(40)
|
|
Other (expense)
income, net
|
|
—
|
|
|
(10)
|
|
209
|
|
|
|
(724)
|
|
|
|
(8)
|
|
|
|
(533)
|
|
Recovery of
(provision for) income taxes
|
$
|
2,710
|
|
$
|
—
|
|
345
|
|
|
|
(1,274)
|
|
|
|
—
|
|
|
|
1,781
|
|
Net (loss)
income
|
$
|
(4,018)
|
|
$
|
(835)
|
$
|
(2,800)
|
|
|
$
|
3,222
|
|
|
$
|
(86)
|
|
|
|
(4,517)
|
|
Adjusted EBITDA
13
|
$
|
(3,981)
|
|
$
|
(135)
|
$
|
(1,658)
|
|
|
$
|
7,369
|
|
|
$
|
(48)
|
|
|
$
|
1,547
|
|
(Loss) earnings per
share - basic
|
$
|
(0.05)
|
|
$
|
(0.01)
|
$
|
(0.04)
|
|
|
$
|
0.04
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.06)
|
|
(Loss) earnings per
share - diluted
|
$
|
(0.05)
|
|
$
|
(0.01)
|
$
|
(0.04)
|
|
|
$
|
0.04
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
months ended June 30, 2020
|
|
|
Produce
|
|
Clean
Energy
|
|
Corporate
|
|
|
Cannabis12
|
|
|
Hemp
12
|
|
|
Total
|
|
Sales
|
$
|
47,455
|
|
$
|
118
|
|
$
|
—
|
|
|
$
|
5,509
|
|
|
$
|
—
|
|
|
$
|
53,082
|
|
Cost of
sales
|
|
(43,716)
|
|
|
(328)
|
|
—
|
|
|
|
(3,678)
|
|
|
|
—
|
|
|
|
(47,722)
|
|
Selling, general and
administrative expenses
|
|
(2,319)
|
|
|
(65)
|
|
(1,429)
|
|
|
|
(1,086)
|
|
|
|
(170)
|
|
|
|
(5,069)
|
|
Share-based
compensation
|
|
|
|
|
|
|
(328)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(328)
|
|
Other (expense)
income, net
|
|
|
|
|
(12)
|
|
224
|
|
|
|
(60)
|
|
|
|
57
|
|
|
|
209
|
|
Recovery of
(provision for) income taxes
|
$
|
220
|
|
$
|
—
|
|
(289)
|
|
|
|
(222)
|
|
|
|
—
|
|
|
|
(291)
|
|
Net income
(loss)
|
$
|
1,640
|
|
$
|
(287)
|
$
|
(1,822)
|
|
|
$
|
463
|
|
|
$
|
(113)
|
|
|
$
|
(119)
|
|
Adjusted EBITDA
13
|
$
|
2,783
|
|
$
|
(106)
|
$
|
(1,443)
|
|
|
$
|
1,076
|
|
|
$
|
(42)
|
|
|
$
|
2,268
|
|
Earnings (loss) per
share - basic
|
$
|
0.03
|
|
$
|
(0.01)
|
$
|
(0.03)
|
|
|
$
|
0.01
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
Earnings (loss) per
share - diluted
|
$
|
0.03
|
|
$
|
(0.01)
|
$
|
(0.03)
|
|
|
$
|
0.01
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six months
ended June 30, 2021
|
|
|
Produce
|
|
Clean
Energy
|
|
Corporate
|
|
|
Cannabis12
|
|
|
Hemp
12
|
|
|
Total
|
|
Sales
|
$
|
80,406
|
|
$
|
143
|
|
$
|
—
|
|
|
$
|
42,221
|
|
|
$
|
—
|
|
|
$
|
122,770
|
|
Cost of
sales
|
|
(83,387)
|
|
|
(1,622)
|
|
—
|
|
|
|
(30,189)
|
|
|
|
(90)
|
|
|
|
(115,288)
|
|
Selling, general and
administrative expenses
|
|
(5,497)
|
|
|
(84)
|
|
(3,200)
|
|
|
|
(8,336)
|
|
|
|
(101)
|
|
|
|
(17,218)
|
|
Share-based
compensation
|
|
—
|
|
|
—
|
|
(2,600)
|
|
|
|
(1,285)
|
|
|
|
—
|
|
|
|
(3,885)
|
|
Loss on disposal of
assets
|
|
—
|
|
|
—
|
|
—
|
|
|
|
(40)
|
|
|
|
—
|
|
|
|
(40)
|
|
Other expense,
net
|
|
—
|
|
|
(21)
|
|
(461)
|
|
|
|
(1,354)
|
|
|
|
(22)
|
|
|
|
(1,858)
|
|
Recovery of
(provision for) income taxes
|
$
|
3,372
|
|
$
|
—
|
|
878
|
|
|
|
(630)
|
|
|
|
—
|
|
|
|
3,620
|
|
Net (loss)
income
|
$
|
(5,106)
|
|
$
|
(1,584)
|
$
|
(5,383)
|
|
|
$
|
387
|
|
|
$
|
(213)
|
|
|
$
|
(11,899)
|
|
Adjusted EBITDA
13
|
$
|
(4,472)
|
|
$
|
(151)
|
$
|
(3,202)
|
|
|
$
|
9,903
|
|
|
$
|
(127)
|
|
|
$
|
1,951
|
|
(Loss) earnings per
share - basic
|
$
|
(0.06)
|
|
$
|
(0.02)
|
$
|
(0.07)
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
(0.15)
|
|
(Loss) earnings per
share - diluted
|
$
|
(0.06)
|
|
$
|
(0.02)
|
$
|
(0.07)
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
(0.15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six months
ended June 30, 2020
|
|
|
Produce
|
|
Clean
Energy
|
|
Corporate
|
|
|
Cannabis12
|
|
|
Hemp
12
|
|
|
Total
|
|
Sales
|
$
|
79,417
|
|
$
|
268
|
|
$
|
—
|
|
|
$
|
12,951
|
|
|
$
|
98
|
|
|
$
|
92,734
|
|
Cost of
sales
|
|
(74,644)
|
|
|
(747)
|
|
—
|
|
|
|
(7,235)
|
|
|
|
(120)
|
|
|
|
(82,746)
|
|
Selling, general and
administrative expenses
|
|
(4,854)
|
|
|
(110)
|
|
(2,770)
|
|
|
|
(2,434)
|
|
|
|
(287)
|
|
|
|
(10,455)
|
|
Share-based
compensation
|
|
—
|
|
|
—
|
|
(857)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(857)
|
|
Gain on settlement
agreement
|
|
—
|
|
|
—
|
|
4,681
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,681
|
|
Gain on settlement of
net liabilities
|
|
—
|
|
|
—
|
|
—
|
|
|
|
2,496
|
|
|
|
—
|
|
|
|
2,496
|
|
(Loss) gain on
disposal of assets
|
|
—
|
|
|
—
|
|
(6)
|
|
|
|
5
|
|
|
|
10
|
|
|
|
9
|
|
Other expense,
net
|
$
|
|
|
$
|
(31)
|
|
(798)
|
|
|
|
(298)
|
|
|
|
(116)
|
|
|
|
(1,243)
|
|
Recovery of
(provision for) income taxes
|
$
|
1,401
|
|
$
|
|
$
|
(458)
|
|
|
|
(1,491)
|
|
|
|
—
|
|
|
|
(548)
|
|
Net income
(loss)
|
$
|
1,320
|
|
$
|
(620)
|
$
|
(208)
|
|
|
$
|
3,994
|
|
|
$
|
(415)
|
|
|
$
|
4,071
|
|
Adjusted EBITDA
13
|
$
|
2,565
|
|
$
|
(146)
|
$
|
(2,772)
|
|
|
$
|
3,854
|
|
|
$
|
(137)
|
|
|
$
|
3,364
|
|
Earnings (loss) per
share - basic
|
$
|
0.02
|
|
$
|
(0.01)
|
$
|
0.00
|
|
|
$
|
0.07
|
|
|
$
|
(0.01)
|
|
|
$
|
0.07
|
|
Earnings (loss) per
share - diluted
|
$
|
0.02
|
|
$
|
(0.01)
|
$
|
0.00
|
|
|
$
|
0.07
|
|
|
$
|
(0.01)
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.
|
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.
|
13.
|
Adjusted EBITDA is
not a recognized earnings measure and does not have a standard
meaning prescribed in by GAAP. See "Non-GAAP Measures"
above.
|
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 six months ended June 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, Monday, August 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/3dGm67Z.
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 443555 followed by the pound key. The telephone replay
will be available until Monday, August 16,
2021 at midnight (ET). The conference call will also
be archived on Village Farms' website
at http://villagefarms.com/investor-relations/investor-calls.
About Village Farms International, Inc.
Village Farms is one of the largest and longest-operating
greenhouse growers in North America. The Company leverages
decades of experience in large-scale, low-cost intensive
agriculture as a vertically integrated produce supplier to pursue
high-value, high-growth plant-based Consumer Packaged Goods
opportunities in cannabis and CBD in North America and
select markets internationally.
The Company's wholly owned Canadian
subsidiary, British-Columbia-based Pure Sunfarms is currently
one of the single largest cannabis operations in the world, one of
the lowest-cost greenhouse producers and one of the best-selling
brands in Canada.
In the U.S., subject to compliance with all applicable U.S.
federal and state laws, Village Farms is pursuing a strategy to
become a leading developer and supplier of branded and
white-labeled CBD products targeting major retailers and consumer
packaged goods companies. Village Farms has one of the largest
greenhouse operations in the country and is strategically
positioned to utilize its agricultural experience and Pure
Sunfarms' operational and product expertise, to pursue potential
high-THC cannabis opportunities when legally permitted to do
so.
Internationally, Village Farms evaluates and targets select,
nascent, legal cannabis and CBD opportunities with significant
long-term potential, with an initial focus on
the Asia-Pacific region through its investment
in Australia-based Altum International.
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,
and changes in our regulatory requirements; risks relating to
conversion of our greenhouses to cannabis production for Pure
Sunfarms; 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 and its impact in the expected ability to
convert our Texas operations,
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 in managing
our growth; 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.
Village Farms
International, Inc.
|
Condensed
Consolidated Interim Statements of Financial
Position
|
(In thousands of
United States dollars, except share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
114,029
|
|
$
21,640
|
Restricted
cash
|
|
9,157
|
|
4,039
|
Trade
receivables
|
|
41,303
|
|
23,222
|
Inventories
|
|
48,607
|
|
46,599
|
Other
receivables
|
|
756
|
|
145
|
Income tax
receivable
|
|
21
|
|
18
|
Prepaid expenses and
deposits
|
|
8,127
|
|
6,145
|
Total current
assets
|
|
222,000
|
|
101,808
|
Non-current
assets
|
|
|
|
|
Property, plant and
equipment
|
|
196,236
|
|
187,020
|
Investment in in
minority interests
|
|
2,227
|
|
1,226
|
Note receivable -
joint venture
|
|
3,344
|
|
3,545
|
Goodwill
|
|
24,698
|
|
24,027
|
Intangibles
|
|
17,311
|
|
17,311
|
Deferred tax
asset
|
|
15,869
|
|
13,312
|
Right-of-use
assets
|
|
3,267
|
|
3,832
|
Other
assets
|
|
2,432
|
|
1,950
|
Total
assets
|
|
$
487,384
|
|
$
354,031
|
LIABILITIES
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Line of
credit
|
|
$
-
|
|
$
2,000
|
Trade
payables
|
|
19,425
|
|
15,064
|
Current maturities of
long-term debt
|
|
10,889
|
|
10,166
|
Note
payable
|
|
-
|
|
15,314
|
Accrued
liabilities
|
|
28,818
|
|
22,438
|
Income tax
payable
|
|
1,760
|
|
4,523
|
Operating lease
liabilities - current
|
|
1,134
|
|
1,107
|
Finance lease
liabilities - current
|
|
15
|
|
27
|
Other current
liabilities
|
|
4,752
|
|
1,641
|
Total current
liabilities
|
|
66,793
|
|
72,280
|
Non-current
liabilities
|
|
|
|
|
Long-term
debt
|
|
54,583
|
|
53,913
|
Deferred tax
liability
|
|
18,292
|
|
18,059
|
Operating lease
liabilities - non-current
|
|
2,284
|
|
2,855
|
Finance lease
liabilities - non-current
|
|
1
|
|
8
|
Other
liabilities
|
|
1,895
|
|
1,633
|
Total
liabilities
|
|
143,848
|
|
148,748
|
Commitments and
contingencies
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Common
stock
|
|
302,497
|
|
145,668
|
Additional paid in
capital
|
|
6,748
|
|
17,502
|
Accumulated other
comprehensive income
|
|
10,332
|
|
6,255
|
Retained
earnings
|
|
23,959
|
|
35,858
|
Total shareholders'
equity
|
|
343,536
|
|
205,283
|
Total liabilities and
shareholders' equity
|
|
$
487,384
|
|
$
354,031
|
Village Farms
International, Inc.
|
Condensed
Consolidated Interim Statements of Income (Loss) and Comprehensive
Income (Loss)
|
(In thousands of
United States dollars, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended June
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
70,374
|
|
$
47,573
|
|
$
122,770
|
|
$
79,685
|
Cost of
sales
|
|
(65,109)
|
|
(44,044)
|
|
(115,198)
|
|
(75,391)
|
Gross
margin
|
|
5,265
|
|
3,529
|
|
7,572
|
|
4,294
|
Selling, general and
administrative expenses
|
|
(9,025)
|
|
(3,813)
|
|
(17,117)
|
|
(7,734)
|
Share-based
compensation
|
|
(1,887)
|
|
(328)
|
|
(3,885)
|
|
(857)
|
Interest
expense
|
|
(598)
|
|
(437)
|
|
(1,339)
|
|
(974)
|
Interest
income
|
|
46
|
|
93
|
|
49
|
|
476
|
Foreign exchange
loss
|
|
193
|
|
530
|
|
(311)
|
|
(396)
|
Gain on settlement
agreement
|
|
—
|
|
-
|
|
—
|
|
4,681
|
Other (expense)
income
|
|
(166)
|
|
26
|
|
(235)
|
|
65
|
Loss on disposal of
assets
|
|
(40)
|
|
—
|
|
(40)
|
|
(6)
|
Loss before taxes and
earnings of unconsolidated entities
|
|
(6,212)
|
|
(400)
|
|
(15,306)
|
|
(451)
|
Recovery of income
taxes
|
|
1,781
|
|
(69)
|
|
3,620
|
|
943
|
(Loss) income from
consolidated entities after income taxes
|
|
(4,431)
|
|
(469)
|
|
(11,686)
|
|
492
|
Equity (losses)
earnings from unconsolidated entities
|
|
(86)
|
|
350
|
|
(213)
|
|
3,579
|
Net (loss)
income
|
|
$
(4,517)
|
|
$
(119)
|
|
$
(11,899)
|
|
$
4,071
|
Basic (loss) income
per share
|
|
$
(0.06)
|
|
$
(0.00)
|
|
$
(0.15)
|
|
$
0.07
|
Diluted (loss) income
per share
|
|
$
(0.06)
|
|
$
(0.00)
|
|
$
(0.15)
|
|
$
0.07
|
Weighted average
number of common shares used in the computation of net (loss)
income per share (in thousands):
|
|
|
|
|
|
|
|
|
Basic
|
|
81,071
|
|
56,399
|
|
78,560
|
|
54,636
|
Diluted
|
|
81,071
|
|
56,399
|
|
78,560
|
|
55,756
|
Net (loss)
income
|
|
$
(4,517)
|
|
$
(119)
|
|
$
(11,899)
|
|
$
4,071
|
Other comprehensive
(loss) income:
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
2,366
|
|
55
|
|
4,077
|
|
(72)
|
Comprehensive (loss)
income
|
|
$
(2,151)
|
|
$
(64)
|
|
$
(7,822)
|
|
$
3,999
|
Village Farms
International, Inc.
|
Condensed
Consolidated Interim Statements of Cash Flows
|
(In thousands of
United States dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
Six Months Ended June
30,
|
|
|
2021
|
|
2020
|
Cash flows used in
operating activities:
|
|
|
|
|
Net (loss)
income
|
|
$
(11,899)
|
|
$
4,071
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
6,536
|
|
3,021
|
Amortization of
deferred charges
|
|
166
|
|
38
|
Share of (loss)
income from joint ventures
|
|
213
|
|
(3,579)
|
Interest
expense
|
|
1,339
|
|
974
|
Interest
income
|
|
(49)
|
|
(476)
|
Interest paid on
long-term debt
|
|
(1,909)
|
|
(1,018)
|
Unrealized foreign
exchange gain (loss)
|
|
161
|
|
-
|
Gain on settlement
agreement
|
|
-
|
|
(4,681)
|
Loss on disposal of
assets
|
|
(40)
|
|
6
|
Non-cash lease
expense
|
|
(254)
|
|
(627)
|
Interest paid on
finance lease
|
|
(1)
|
|
(2)
|
Share-based
compensation
|
|
3,885
|
|
857
|
Deferred income
taxes
|
|
(3,199)
|
|
(400)
|
Changes in non-cash
working capital items
|
|
(10,159)
|
|
3,961
|
Net cash used in
operating activities
|
|
(15,210)
|
|
2,145
|
Cash flows used in
investing activities:
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(11,355)
|
|
(452)
|
Advances to joint
ventures
|
|
(12)
|
|
(125)
|
Investment in joint
ventures
|
|
-
|
|
(11,713)
|
Investment in
minority interests
|
|
(1,001)
|
|
-
|
Net cash used in
investing activities
|
|
(12,368)
|
|
(12,290)
|
Cash flows
provided by financing activities:
|
|
|
|
|
Proceeds from
borrowings
|
|
4,227
|
|
3,000
|
Repayments on
borrowings
|
|
(6,026)
|
|
(2,652)
|
Proceeds from
issuance of common stock and warrants
|
|
135,000
|
|
7,957
|
Issuance
costs
|
|
(7,511)
|
|
(663)
|
Proceeds from
exercise of stock options
|
|
186
|
|
122
|
Proceeds from
exercise of warrants
|
|
18,495
|
|
-
|
Share
re-purchases
|
|
(3,980)
|
|
-
|
Payments on capital
lease obligations
|
|
(310)
|
|
(39)
|
Payment of note
payable related to acquisition
|
|
(15,498)
|
|
-
|
Net cash provided by
financing activities
|
|
124,583
|
|
7,725
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
502
|
|
(1)
|
Net increase in
cash and cash equivalents
|
|
97,507
|
|
(2,421)
|
Cash and cash
equivalents, beginning of period
|
|
25,679
|
|
11,989
|
Cash and cash
equivalents, end of period
|
|
$
123,186
|
|
$
9,568
|
View original
content:https://www.prnewswire.com/news-releases/village-farms-international-reports-second-quarter-2021-financial-results-pure-sunfarms-achieves-38-sequential-net-sales-growth-and-192-sequential-adjusted-ebitda-growth-to-c9-1-million-301350925.html
SOURCE Village Farms International, Inc.