Village Farms(US:VFF)2025-11-10 12:02Market Position and Sales Performance - The company maintains a top five overall market share position in Canada and the number two position in dried flower, despite planned reductions in sales of lower-margin SKUs[113]. - International export sales increased 758% year-over-year, driven by continued strength of demand in Germany and steady performance across other international markets[120]. - The company believes it remains the largest exporter of medical cannabis to Europe, gaining market share sequentially in Germany in each of the past four quarters[120]. - Sales for the three months ended September 30, 2025 were $66,741, an increase of $11,803 or 21% compared to $54,938 for the same period in 2024, driven by growth in Canadian Cannabis sales and first-year sales from Leli[127]. - For the nine months ended September 30, 2025, total sales reached $166.32 million, compared to $150.52 million for the same period in 2024, representing an increase of 10.5%[156]. Financial Performance - The company significantly surpassed the high end of its targeted gross margin range of 30-40%, marking the third consecutive quarter meeting or exceeding the target range, contributing to record quarterly and YTD adjusted EBITDA performance[113]. - Gross profit for the three months ended September 30, 2025 was $31,938, an increase of $18,301 or 134% compared to $13,637 for the same period in 2024, primarily due to increased gross profit in Canadian Cannabis[129]. - Adjusted EBITDA for the three months ended September 30, 2025 was $20,288, an increase of $14,986 or 283% compared to $5,302 for the same period in 2024, driven by higher margins in Canadian Cannabis[138]. - Net income attributable to Village Farms International, Inc. shareholders for the three months ended September 30, 2025 was $10,217, compared to a net loss of $820 for the same period in 2024, reflecting improved gross margin[137]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $33,629, reflecting an increase of $28,295 or 530% from $5,334 in the same period of 2024, primarily due to higher margins in Canadian Cannabis[152]. Cost Management - Cost of sales for the nine months ended September 30, 2025 was $97,860, a decrease of $14,171 or 13% compared to $112,031 for the same period in 2024, primarily due to a decrease in Canadian Cannabis cost of sales[140]. - Selling, general and administrative expenses for the nine months ended September 30, 2025 were $45,629, representing 27% of sales, compared to $45,871 or 30% of sales for the same period in 2024[142]. - The cost of sales for the three months ended September 30, 2025, was $34,803, compared to $41,301 for the same period in 2024, reflecting a decrease of approximately 16%[153]. Investments and Acquisitions - The company completed its acquisition of the remaining 15% equity ownership interest in Leli Holland, with sales commencing in February 2025[100]. - The Phase II facility in Groningen is expected to quintuple total annualized production capacity to approximately 10,000 kilograms when operational in Q1 2026[120]. - The company has begun expansion of cultivation capacity in its Delta 2 greenhouse, expected to yield an incremental 40 metric tons of annualized cannabis production, expanding capacity by approximately 33%[120]. Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash as of September 30, 2025 were $87,561 million, compared to $24,631 million at December 31, 2024[222]. - For the nine months ended September 30, 2025, cash provided by operating activities was $46,710, a significant increase from $2,803 in 2024, primarily due to improvements in Canadian Cannabis gross margins[237]. - The net cash increase for the period was $64,827 in 2025, compared to a decrease of ($6,403) in 2024[236]. Impairments and Losses - Goodwill and intangible asset impairments for the nine months ended September 30, 2025 were $0, compared to $11,939 for the same period in 2024, indicating improved financial performance in the U.S. Cannabis reporting unit[148]. - The company reported a goodwill impairment of $11,939 million in 2024, which was not present in 2025, indicating improved financial performance[253]. - The loss from discontinued operations, net of tax, for the nine months ended September 30, 2025, was $(8,970), compared to $(4,756) for the same period in 2024, showing an increase in losses[150]. Operational Highlights - The company has introduced several new packaging innovations in the Canadian market, including a one-way aroma valve and windowed packaging for flower products[113]. - The company has a pending application for a Texas medicinal marijuana license, with new license awards expected on December 1, 2025[117]. - The company has authorized a US$10 million share repurchase for up to 5,687,000 common shares, representing five percent of the company's issued and outstanding common shares[120]. Segment Performance - Canadian Cannabis net sales for the three months ended September 30, 2025, were $46,583, a 28% increase from $36,463 in 2024[163]. - U.S. Cannabis net sales for the three months ended September 30, 2025, were $3,337, a 15% decrease from $3,943 in 2024[180]. - The Netherlands Cannabis segment commenced sales in Q1 2025, with net sales of $3,587 for the three months ended September 30, 2025[193].