Village Farms(US:VFF)2025-03-13 11:06Company 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].