VFF Earning Date, Transcript Summary & Report

Fourth Quarter Revenue Increase: Total fourth quarter revenues of $83 million increased 11% year-over-year.

Revenue Increase Overview: Full year revenues increased 18% year-over-year to $336 million.

Canadian Cannabis Sales Growth: Total net sales in Canadian cannabis for 2024 grew 31% with all growth generated organically.

Retail Sales Increase: Retail branded sales were up 23%.

Dried Flower Market Gains: Incremental share gains in Dried Flower for the past four months in Ontario.

Dried Flower Market Share Increase: National share of the Dried Flower categories gained 120 basis points since December.

Organic Growth Leadership: Second fastest growing LP organically during 2024 and held the #2 position in both Ontario and Quebec.

Market Share Expansion: Expanded #1 national market share position in Dried Flower and moved into #2 national share position in Pre-Roll category for 2024.

Vape Market Ranking Success: Super Toast all-in-one vapes quickly became the #6 ranked vape offerings nationally and #2 in Ontario.

Positive EBITDA Across Segments: Positive adjusted EBITDA in each of Canadian cannabis, US cannabis, and fresh produce businesses.

Gross Margin Target Range: Gross margin for Canadian cannabis would have moved back into 30% to 40% target range excluding inventory write-down.

Surge in Cannabis Exports: International cannabis exports to medical markets were up 113% year-over-year, driven by increased sales in Germany, Australia, and the UK.

International Market Expansion: Added fifth international medical market with shipments to New Zealand, forecasted to grow at 58% CAGR over the next five years.

Successful Harvest Completion: First harvest at Drachten facility in the Netherlands completed on schedule with positive feedback from coffee shops.

Production Capacity Expansion: Phase 2 cultivation facility in Groningen will quadruple annual production capabilities.

Fresh Produce Sales Surge: Fresh produce sales increased 17% year-over-year to $43.3 million, with positive adjusted EBITDA of $4.1 million.

Positive Cash Flow Growth: Total cash flow from operations for the full year was $10.5 million, reflecting third consecutive quarter of positive operating cash flow.

Earnings Miss Report: Village Farms International, Inc. misses on earnings expectations, reporting an EPS of $-0.07 against expectations of $-0.02.

Inventory Write-Down Impact: The company took a significant $10.5 million non-cash write-down of non-flower manufactured inventory, which negatively impacted their fourth quarter performance.

Profitability Concerns Despite Revenue Growth: Despite reporting an 11% increase in total fourth quarter revenues, the adjusted EBITDA was negative $3.5 million, indicating underlying profitability issues.

Cannabis Segment Financial Struggles: The Canadian cannabis segment reported an adjusted EBITDA of negative $9.1 million due to the inventory impairment, highlighting financial struggles in this area.

Excise Tax Burden: The company faced challenges with excise taxes, paying nearly $100 million in 2024, which is more than double their SG&A expenses, indicating a heavy financial burden.

Regulatory Challenges in Cannabis: The U.S. cannabis business continues to be impacted by regulatory headwinds, limiting sales growth despite a sequential increase in revenues.

Cash Flow Challenges: The timing of excise tax payments negatively affected cash flow from operations in the fourth quarter, reflecting operational inefficiencies.