Village Farms Earnings + Call Notes

Canadian standout with a global reach.

Village Farms Earnings

$83.4M Revs; est. $80.9M
$5.3M AEBITDA; est. $2.4M
$15.7M GP; est. $14.3M
($0.7M) OI; est. ($2.4M)
18.9% GM; est. 17.7%
($0.8M) NI; est. ($3.5M)
($0.01) EPS; est. ($0.02)

Total Sales Grew 20% Year-over-Year: 29% Canadian Cannabis Net Sales Growth; 20% Fresh Produce Sales Growth; 111% International Medicinal Cannabis Sales Growth

Canadian Cannabis Remained #2 by Market Share and was Fastest Growing LP over Last Year; 22% Year-over-Year Retail Branded Sales Growth

Commenced Cultivation in Netherlands; Company’s First International AU Market

Canadian Cannabis Delivered Positive AEBITDA, Operating Cash Flow and Net Income

Fresh Produce Delivered Positive Adjusted EBITDA and Net Income

“Strong performance in our Fresh Produce business, continued growth in Canadian Cannabis and a doubling of International Medicinal Cannabis Sales drove 20% year-over-year growth in consolidated sales, with both positive Adjusted EBITDA and cash flow from operations during the third quarter.

“Our Canadian Cannabis business continues to deliver strong growth with leading market share as we realized revenue growth in all sales channels and positive EBITDA and operating cash flow. We were once again the fastest growing producer in Canada over the last year in terms of market share and, for the first time ever, were number one in Quebec, making us the top producer in Canada’s two most populus provinces. Out-of-stocks in some cultivars after a strong first half impacted sales growth in the quarter, and non-brand-spec sales that converted inventory to cash impacted gross margin. Gross margin, excluding non-brand-spec sales returned to our target range of 30 to 40%.”

“We are also increasingly benefitting from our international cannabis focus. Exports from Canada increased 111% from the third quarter last year, with continued increases in sales to our German, Australian, and UK partners. Our EU-GMP certification was also recently renewed, and we are optimistic heading into next year about our opportunities to expand our international business with additional markets and customer wins. In the Netherlands, we received final approval to commence cultivation, are in production now, and remain on target to begin sales to participating jurisdictions in the first quarter of 2025.”

“Fresh Produce delivered positive adjusted EBITDA on solid sales growth, demonstrating our expected recovery from the softer pricing we experienced during the second quarter. We are continuing to drive this business toward sustained profitability as we benefit from ongoing yield and cost improvement initiatives.”

“As we close out fiscal year 2024, we are focused on driving more profitable sales in Canadian Canna, prioritizing profitable growth as we manage inventory levels with evolving supply dynamics and increasing international demand. We are looking forward to more exciting catalysts for our business in fiscal year 2025, with continued international expansion and contributions from sales in the Netherlands. We believe our Netherlands business has the potential to become a strong contributor of profitability and cash flow generation, driven by more favorable pricing and taxes in the Dutch market compared to Canada.” ” Michael DeGiglio, President and CEO

Call Notes