In Canada, the Company's wholly-owned Canadian subsidiary, Pure Sunfarms, is one of the single largest cannabis operations in the world, the lowest-cost greenhouse producer and one of Canada's best-selling brands. The Company also owns 80% of Québec-based, Rose LifeScience, a leading third-party cannabis products commercialization expert in the Province of Québec. – Former consumer goods distribution, food, and retail service industry executive will help guide the Company's global expansion initiatives – VA ...

Village Farms International (NASDAQ: VFF ) reported its Q4-2024 financial results last Thursday. The company reported increasing revenues and an adjusted EBITDA of $7 million. International cannabis sales are driving growth. The company's stock price is down 10.6% since I covered itWelcome to the home of The Cannabis Report: a monthly report on the cannabis industry. I am an analyst and consultant in the cannabis industry. I have contributed to High Times Magazine. I currently have a book out, Cannabis in t ...

Financial Data and Key Metrics Changes - Total fourth quarter revenues reached $83 million, an increase of 11% year-over-year, while full year revenues increased by 18% to $336 million [8] - Net loss improved to $8.6 million or $0.08 per share from $22.5 million last year, with the current loss including a $10.5 million write-down [30] - Consolidated adjusted EBITDA was negative $3.5 million, but would have been $7 million excluding the inventory write-down, marking the best results in four years [30][35] Business Line Data and Key Metrics Changes - Canadian cannabis net sales grew by 10% year-over-year, driven by non-branded and international sales, with international medicinal exports up 127% year-over-year [34] - Fresh produce sales increased by 17% year-over-year to $43.3 million, with adjusted EBITDA positive at $4.1 million compared to negative $600,000 last year [32][33] - U.S. cannabis business saw a sequential revenue increase of 17% to $4.6 million, with a gross margin of 70% and adjusted EBITDA returning to positive territory at $300,000 [37] Market Data and Key Metrics Changes - The Canadian cannabis market remains competitive, with the company holding the 3 market share position overall and being the second fastest growing licensed producer organically during 2024 [12] - International cannabis sales for the year increased to CAD 8.4 million, with strong growth momentum continuing into 2025 [18] - The New Zealand medical cannabis market is forecasted to grow at a compounded annual growth rate of 58% over the next five years [17] Company Strategy and Development Direction - The company is prioritizing profitable sales growth over low-margin volume in Canada, focusing on maintaining a leadership position before expanding into other markets [10] - Plans to move extraction and vape manufacturing in-house are underway, aiming to capture profitable market share with new product offerings [14] - The company is optimistic about the Dutch market, having completed its first harvest and commenced sales, with plans for a Phase 2 cultivation facility to quadruple production capabilities [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and ability to execute on growth opportunities, despite the inventory impairment in Q4 [15][23] - The company is well-positioned to deliver a successful year of profitable growth in 2025 and beyond, with a focus on international expansion [43] - Management acknowledged the challenges posed by potential tariffs but remains confident in their ability to adapt and manage costs effectively [25][27] Other Important Information - The company paid nearly CAD 100 million in excise taxes in 2024, which is more than double their SG&A expenses, highlighting the significant impact of these taxes on profitability [36] - The company ended Q4 with cash of $24.6 million and a working capital of $53.8 million, maintaining a comfortable net debt level of $15.9 million [40][41] Q&A Session Summary Question: Impact of inventory impairment on revenue - Management clarified that the impairment did not impact revenue as the decision was made to not sell suboptimal products [49][51] Question: Future market share and product allocation - Management indicated that while Canada remains a foundation, they are focusing on high-quality products and will meet domestic demand while also addressing international opportunities [58] Question: Status of licensed producers in the Netherlands - Management confirmed that only seven out of ten licensed producers are operational, with a firm deadline for coffee shops to buy exclusively from licensed producers by April 7 [64][66] Question: Growth expectations for international sales - Management expects to triple international medicinal export sales in 2025, with a focus on existing medical markets, separate from the recreational market in the Netherlands [75] Question: Risk of oversupply in the Canadian market - Management does not foresee a return to oversupply levels seen in previous years, citing limited biomass in the marketplace and steady demand for high-quality products [78][80]

Company Performance - Village Farms reported a quarterly loss of $0.08 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.02, marking an earnings surprise of -300% [1] - The company posted revenues of $82.55 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 1.07%, and showing an increase from $74.23 million year-over-year [2] - Over the last four quarters, Village Farms has surpassed consensus revenue estimates four times, but has only exceeded EPS estimates once [2] Stock Movement and Outlook - Village Farms shares have declined approximately 10.6% since the beginning of the year, compared to a decline of -4.8% for the S&P 500 [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates indicating breakeven on $79.29 million in revenues for the upcoming quarter and $0.01 on $353.24 million in revenues for the current fiscal year [4][7] Industry Context - The Consumer Products - Staples industry, to which Village Farms belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Village Farms' stock performance [5]

Company Performance - Village Farms International, Inc. remains a top three cannabis producer in Canada and was the second fastest growing producer organically year-over-year[393]. - Sales for the year ended December 31, 2024 increased by $50,578, or approximately 18%, to $336,181 compared to $285,603 for 2023[400]. - Sales for VF Fresh reached $169,183, while Cannabis Canada and U.S. Cannabis generated $148,856 and $17,390 respectively, totaling $336,181 for the year ended December 31, 2024[429]. - Canadian cannabis net sales for the year ended December 31, 2024 increased by $34,826, or 31%, to $148,856 from $114,030 in 2023[432]. - U.S. Cannabis net sales for the year ended December 31, 2024, decreased by 14% to $17,390 from $20,330 in 2023, attributed to new restrictions on CBD sales[457]. - Produce sales for the year ended December 31, 2024, increased by 12% to $169,184 compared to $151,243 in 2023, driven by a 13% increase in pounds sold[471]. Financial Results - The net loss for the year ended December 31, 2024 was $3,181, compared to net income of $2,936 in 2023, primarily due to an inventory write-down of $10,436 (C$15,000)[443]. - Adjusted EBITDA for 2024 decreased by $5,797 to $1,788 from $7,585 in 2023[413]. - The net loss attributable to Village Farms International, Inc. shareholders for 2024 was $35,850, an increase of $1,052, or 3%, compared to $34,798 in 2023[412]. - Loss before taxes and loss from equity method investments for 2024 was $37,305, an increase of $9,937, or 36%, compared to $27,368 in 2023[409]. - Adjusted EBITDA for the year ended December 31, 2024 was $7,282, a decrease of $7,482, or 51%, compared to $14,764 in 2023, largely due to the inventory impairment charge[445]. Cost and Expenses - Cost of sales for 2024 increased by $52,604, or 22%, to $288,781 from $236,177 in 2023[401]. - Selling, general and administrative expenses for 2024 increased by $5,547 to $71,048, or 21% of sales, from $65,501, or 23% of sales, in 2023[403]. - Gross margin for 2024 decreased by $2,026, or 4%, to $47,400 from $49,426 in 2023[402]. - The company incurred excise tax of $71,953 (C$98,442) for the year ended December 31, 2024, an increase of $13,938 (C$20,127), or 24%, compared to $58,015 (C$78,315) in 2023[433]. Impairments and Write-downs - Goodwill and intangible asset impairments for 2024 were $11,939 compared to $14,020 in 2023[408]. - Inventory write-downs for the year ended December 31, 2024, were $11,038 due to older manufactured products requiring higher rework costs than their resale value[537]. - The company reported impairments of $10,039,000 for goodwill and $1,900,000 for intangible assets in 2024, compared to $11,300,000 and $2,720,000 respectively in 2023[514]. Market and Operational Challenges - The company continues to face challenges from unregulated hemp-derived products in the U.S. market, which may impact market share for the CBD industry[393]. - The company is exploring options to sell its Produce assets and has an ongoing sale process for its Monahans greenhouse facility[393]. - The company has material long-term debt and lines of credit that may be affected by rising interest rates, impacting the cost of capital[506]. Strategic Initiatives - The acquisition of Leli Holland was completed in Q4 2024, making it a wholly owned subsidiary, with sales expected to commence in February 2025[386]. - The company plans to continue focusing on market expansion and new product development to drive future growth[429]. - The company plans to consolidate its financial results with a 100% interest in Leli beginning on September 23, 2024[514]. Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2024 were $24,631, down from $35,291 as of December 31, 2023[485]. - Operating activities generated cash flow of $10,348 for the year ended December 31, 2024, compared to $5,315 for the year ended December 31, 2023[502]. - Cash flows used in investing activities for 2024 were $10,241 million, up from $6,231 million in 2023 and down from $20,889 million in 2022, primarily due to $6,061 million in capital expenditures for Leli and $4,022 million for cannabis operations[503].

Sales Performance - Full year consolidated sales increased by 18% year-over-year to $336.2 million[5] - Fourth quarter consolidated sales rose by 11% year-over-year to $82.6 million[5] - Canadian Cannabis sales grew by 31% year-over-year, with retail branded sales increasing by 23%[5] - Retail branded sales for Q4 2024 reached CAD $55.8 million, a decrease of 1% compared to CAD $56.1 million in Q4 2023[19] - Non-branded sales increased by 20% to CAD $9.5 million in Q4 2024, up from CAD $7.9 million in Q4 2023[19] - International sales surged by 127% to CAD $2.5 million in Q4 2024, compared to CAD $1.1 million in Q4 2023[19] - Net sales for the year ended December 31, 2024, were CAD $204.0 million, a 32% increase from CAD $154.0 million in 2023[19] - Village Farms reported Q4 2024 sales of $82.554 million, an increase of 11.0% from $74.225 million in Q4 2023[48] Financial Performance - Full year cash flow from operations amounted to $10.3 million, reflecting a strong operational performance[5] - The company reported a net loss attributable to shareholders of CAD $8.629 million for Q4 2024, an improvement from a net loss of CAD $25.483 million in Q4 2023[21] - Adjusted EBITDA for the year ended December 31, 2024, was CAD $1.788 million, down from CAD $7.585 million in 2023[21] - The company experienced a gross margin of CAD $6.931 million in Q4 2024, down from CAD $11.006 million in Q4 2023[21] - The net loss for 2024 was $35.850 million, which is a decrease from a net loss of $34.798 million in 2023[24] - Adjusted EBITDA for 2024 was $1.788 million, a significant improvement from a negative $7.585 million in 2023[24] - Basic loss per share for 2024 was $0.32, compared to a loss of $0.33 per share in 2023[24] - The company reported an operating loss of $37.305 million for 2024, compared to a loss of $27.368 million in 2023[24] Cost and Expenses - Selling, general and administrative expenses increased to CAD $18.455 million in Q4 2024, compared to CAD $15.521 million in Q4 2023[21] - The cost of sales for 2024 was $288.781 million, compared to $236.177 million in 2023, indicating a 22% increase[24] - The company reported an increase in amortization and depreciation expenses to $18,838,000 for the year ended December 31, 2024, compared to $15,926,000 for the previous year[28] - Depreciation and amortization expenses increased to $18,838 million in 2024 from $15,926 million in 2023, reflecting an increase of 18.1%[50] Asset and Liability Management - Total current assets decreased to $116.019 million as of December 31, 2024, from $151.768 million a year earlier, a decline of 23.5%[46] - The company’s total assets decreased to $389.306 million as of December 31, 2024, down from $463.989 million in 2023, a reduction of 16.1%[46] - The company’s total liabilities decreased to $125.348 million as of December 31, 2024, from $148.048 million in 2023, a decrease of 15.3%[46] International Expansion - Fourth quarter international sales surged by 113% year-over-year, with expectations to triple international sales in 2025[5] - The company is expanding its international presence with additional export contracts to new countries and customers in the Asia-Pacific and European regions, targeting significant medium- and long-term potential in the cannabis market[36] Operational Efficiency - The company aims to optimize resources between its Pure Sunfarms and Rose subsidiaries to enhance operational efficiencies in 2025[6] - The company is expanding its production capacity in the Netherlands, with a Phase II facility expected to quintuple annual production capacity by Q4 2025[5] Market Position and Strategy - Village Farms' subsidiary, Pure Sunfarms, is recognized as one of the largest cannabis operations globally and a leading brand in Canada, highlighting its competitive position in the market[34] - The company is focusing on expanding its cannabis segment in both Canada and the U.S. markets[24] - The company plans to enter the US high-THC cannabis market leveraging its extensive greenhouse operations of over 5.5 million square feet in West Texas[37] Environmental Impact - Village Farms Clean Energy partnership is expected to reduce Vancouver's greenhouse gas emissions by 475,000 metric tons of CO2 annually[38]

Full Year 2024 and Recent Business Highlights Full Year Consolidated Sales Grew 18% Year-over-Year to $336.2 Million2024 Canadian Cannabis Sales Grew 31% Year-over-Year; Retail Branded Sales Grew 23% #1 Market Share in Dried Flower, #2 in Pre-Rolls, and #3 Market Share Overall in 2024Full Year Consolidated Cash Flow from Operations of $10.3 MillionQ4 Consolidated Sales Grew 11% Year-over-Year to $82.6 MillionQ4 International Sales Increased 113% Year-over-Year; Expect International Sales to Triple in 2025Q4 ...

Core Insights - Village Farms International, Inc. reported its financial results for Q4 and the full year 2024, highlighting a focus on profitable growth initiatives for 2025 [2][4][6]. Financial Performance - Full year consolidated sales increased by 18% year-over-year to $336.2 million, with Canadian Cannabis sales growing by 31% and retail branded sales up by 23% [6][18]. - Q4 consolidated sales rose by 11% year-over-year to $82.6 million, while international sales surged by 113% [6][18]. - The company faced a $10.5 million non-cash impairment charge in Q4 related to non-flower inventory, which affected Adjusted EBITDA, bringing it to a loss of $3.5 million [3][5][6]. Canadian Cannabis Segment - Canadian Cannabis gross margin for Q4 was reported at 33%, with an Adjusted EBITDA margin of 12% when excluding the impairment charge [4][7]. - The company maintained the 1 market share in dried flower and ranked 2 in pre-rolls for 2024 [6][8]. International Expansion - The company has expanded its international sales, now shipping to five markets including Germany, Australia, the UK, and recently New Zealand, with plans to triple international medicinal export sales in 2025 [4][13]. - International sales in Q4 2024 increased significantly, reflecting strong demand in key markets [6][13]. Operational Developments - Village Farms is optimizing resources between its Pure Sunfarms and Rose subsidiaries to enhance operational efficiencies [4][8]. - The company has commenced a Phase II expansion at its Leli Holland subsidiary in the Netherlands, expected to quintuple annual production capacity by Q4 2025 [4][6][13]. Future Outlook - The company expressed confidence in its ability to execute a profitable growth strategy in 2025, supported by a strong balance sheet and healthy inventory position [4][6].

Core Insights - ROSE LifeScience Inc. has launched new product extensions for its Pure Laine and Tam Tams brands, aiming to enhance the cannabis experience for Canadian consumers [1] Product Offerings - Pure Laine Originals has introduced two new products: Pure Laine Selects – Special Haze & Original Kush Slims, available in 10-packs, featuring iconic cannabis cultivars [2] - Tam Tams has launched two pre-rolls: Cherry Bloom & Tropical Milkshake, designed to evoke the essence of a Montreal summer, available in a 7x0.5g format [3] - The winter 2025 product line from ROSE is now available in select provinces across Canada [3] Company Overview - ROSE LifeScience is a significant player in the Québec cannabis market, focusing on responsible production, sale, and consumption of cannabis [4] - The company is majority-owned by Village Farms International, which has extensive experience in controlled environment agriculture and is a leading supplier of fresh produce [5] - Village Farms operates Pure Sunfarms, one of the largest cannabis operations globally, and holds an 80% stake in ROSE LifeScience [6] Market Position - Village Farms ranks as the 2 cannabis producer in Canada and is expanding into the U.S. high-THC cannabis market, leveraging its greenhouse operations [7] - The company is also targeting international cannabis and CBD opportunities, particularly in the Asia-Pacific region and Europe, holding a cannabis license in the Netherlands [8]

Company Overview - Village Farms International, Inc. has announced its first shipment of Pink Kush to New Zealand through its subsidiary Pure Sunfarms, marking a significant step in its international expansion strategy [2][4] - Pink Kush is recognized as the top-selling dried flower strain in Canada over the past four years, highlighting its popularity and market strength [2][3] Market Expansion - The New Zealand cannabis market is projected to grow at a compound annual growth rate (CAGR) of 58% by 2030, indicating substantial growth potential for medical cannabis products [3] - Medleaf Therapeutics, a New Zealand-based company, will distribute Pink Kush under its 'Bloom' brand, leveraging its established distribution network across clinics and healthcare practitioners [3][5] Strategic Partnerships - The partnership with Medleaf Therapeutics is aimed at enhancing Village Farms' presence in international medical markets, showcasing the company's commitment to expanding its global footprint [4] - Medleaf's focus on market-proven medical cannabis products aligns with Village Farms' strategy to export leading cannabis products to growing international markets [5] Operational Strength - Village Farms operates one of the largest cannabis operations globally through Pure Sunfarms, recognized for being a low-cost greenhouse producer and a best-selling brand in Canada [8] - The company is also involved in various international markets, exporting medical cannabis to countries such as Germany, the UK, Israel, and Australia, while targeting new opportunities in the Asia-Pacific and European regions [9] Future Outlook - Village Farms plans to enter the US high-THC cannabis market, utilizing its extensive greenhouse operations and the expertise gained from its Canadian cannabis success [10] - The company is focused on expanding its international presence with additional export contracts and strategic investments in operating assets [9]