Village Farms Earnings + Call Notes

Canadian standout focuses on global canna.

Village Farms Earnings

Village Farms International Announces Transformative Transaction to Privatize its Fresh Produce Business

$77M Revs; est. $77.8M
$81k AEBITDA; est. $3.6M
$11.3 M GP; est. $16.7M

Canadian Cannabis Delivers Strongest EBITDA Performance in 3 Years; Maintains Top 3 Market Share Nationally Despite Reduction in Lower-Margin Branded Sales

Canadian Cannabis Net Income and AEBITDA +258% and +64% YoY

International Medical Export Cannabis Sales Increased +285% YoY

Commenced Cannabis Sales in Netherlands, the Company’s First EU AU Market

Company to privatize certain assets of its Fresh Produce segment; enter supply agreements for retained assets –

Village Farms’ Fresh segment to become cornerstone of NewCo’s commercial operations and growth strategy

Village Farms to receive $40M in cash proceeds; 37.9% equity ownership in NewCo

VFF retains ownership of all Canadian cultivation assets; Marfa I and Monahans for future cannabis optionality

On the Quarter:

“Our Q1 results demonstrate success in our strategy to drive more profitable sales in Canadian Cannabis, with our strongest quarter of aEBITDA performance in three yrs and another quarter of healthy cash flow from operations.

Sales of higher margin medical exports from Canada grew 285% YoY, contributing to gross margin expansion in Canadian Cannabis to 36% and placing us firmly on track to meet our stated target of tripling international export sales in 2025.

We are maintaining a top market share position in Canada despite our reduction in lower-margin branded sales, and feel confident in our ability to drive operating leverage through the business as our international revenues continue to increase.

The first quarter also saw the initial contribution of our first European recreational cannabis sales through our Leli Holland subsidiary in the Netherlands, where sales began in late February. Our Phase I operations are now fully ramped, and we are feeling very confident about the quality of our products and position in this new marketplace.

We are continuing to introduce new products into the market and expect to complete our Phase II facility in Groningen in Q1 2026. The completion of our Phase II facility is expected to quintuple our annual production capacity, and w the more favorable margin profile of our Netherlands AU sales, we believe this will position us to drive a very strong year of profitable growth in 2026.” CEO Mike DeGiglio

On the Transaction:

“I am pleased to announce this transformative transaction for Village Farms, and very proud to work with Charlie Sweat and the team at Sweat Equities to drastically improve long-term upside potential for our produce business.

Charlie is a proven industry pioneer w an incredible track record building enterprises across the health and wellness food categories and creating value for shareholders.

We believe this transaction will unlock tremendous long-term value for both our businesses, and are excited to gain committed new capital partners in produce and to focus our resources toward advancing our leadership position in global cannabis.”

CEO Mike DeGiglio

Call Notes