Village Farms International, Inc. reported its financial results for the first quarter ended March 31, 2024. All figures are in U.S. dollars unless otherwise indicated.
“The first quarter was an especially strong start to 2024. Canadian Cannabis retail branded sales grew 28% year-over-year, all organically, as we led the top five LPs in market share growth, further narrowing the gap to number one, and achieving a new record in April. Our success in quality, innovation and brand building, together with the support of our provincial boards and retail partners, are driving these results as we delight our consumers,” said Michael DeGiglio, President and Chief Executive Officer, Village Farms International. “In addition, our Fresh Produce business was profitable on a solid year-over-year increase in sales, with an improved adjusted EBITDA margin.”
“Total Canadian Cannabis sales delivered a new record, up 49% year-over-year to C$50.5 million, with another quarter of profitability and free cash flow. In our non-branded channel, we continued to be opportunistic around improved supply conditions and pricing, further reducing our non-brand-spec inventory and supporting cash flow.”
“In our International Cannabis business, we are on target to start production in our first facility in the Netherlands this year as the only North American company with a license participating in the first major legal recreational cannabis market in Europe. Our Canadian export business, currently shipping to four countries, is on track to deliver solid year-over-year growth this year.”
“We are excited about the acceleration of the global cannabis conversation and momentum in legalization. With our experience in Canada as a profitable, market share leader, there is no one better positioned than Village Farms to leverage its cannabis expertise for new market opportunities around the world, including in the U.S.”
“As we expand our cannabis business, we have a solid foundation for long-term success in our Fresh Produce business. This year, we expect to begin to benefit from our recent investments in the latest cultivation technologies, including artificial intelligence, as we continue to deliver on the expectations of customers and consumers.”
1. Based on estimated retail sales from HiFyre, other third parties and provincial boards.
FIRST Quarter Financial Highlights
(All comparable periods are for the first quarter of 2023 unless otherwise stated)
Consolidated
- Consolidated sales increased 21% year-over-year to $78.1 million from $64.7 million;
- Consolidated net loss improved to ($2.9 million), or ($0.03) per share from ($6.6 million), or ($0.06) per share;
- Consolidated adjusted EBITDA (a non-GAAP measure) improved to $3.6 million from $0.5 million; and,
- Consolidated cash used improved to $3.6 million from cash used of $10.1 million (excluding net equity financing proceeds) with break-even cash from operations compared with cash used in operations of $3.7 million.
Canadian Cannabis (Pure Sunfarms and Rose LifeScience)
- Net sales increased 49% to $37.4 million (C$50.5 million) from $25.1 million (C$34.0 million);
- Retail branded sales increased 28%, international (export) sales decreased 13%, non-branded (wholesale) sales increased 181%;
- Gross margin was 25% compared with 34%; (in Canadian dollars). This quarter’s gross margin was reduced by sales of non-brand-spec inventory in the non-branded channel:
- Net income increased to $0.8 million (C$1.1 million) from net loss of ($0.1 million) (C$0.1 million); and,
- Adjusted EBITDA increased to $4.1 million (C$5.5 million) from $3.9 million (C$5.3 million).
Strategic Growth and Operational Highlights
Canadian Cannabis
- Is the fastest growing producer among the top five LPs in Canada1, expanding its number two market share position nationally to a new record in April, gaining share for nine consecutive months2;
- Moved into the number two national market share position in the pre-roll category and expanded its number one national market share position in dried flower, achieving a record 18% share in April2;
- Regained the top market share position in Ontario (Canada’s largest provincial market) for the first time since 20222;
- Achieved record market share in Alberta3;
- Launched Hi-Def Pre-Rolls, a first-of-its-kind pre-roll, featuring pure ground flower optimized for high potency, with THC content between 36-44%, with no concentrates, infusions or kief. Initial demand is exceeding expectations; and,
- Expanded share of the milled category with the Super Toast brand in Ontario every month since its August 2023 launch, reaching the number two position with more than 20% share1.
1. For the first quarter of 2024. Based on estimated retail sales from HiFyre, other third parties and provincial boards.
2. Based on estimated retail sales from HiFyre, other third parties and provincial boards.
3. For the first quarter of 2024. Calculated from sales information provided by Alberta Gaming, Liquor and Cannabis (AGLC).
About Village Farms International
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 70% of Québec-based, Rose LifeScience, a leading third-party cannabis products commercialization expert in the Province of Québec.
