VILLAGE FARMS INTERNATIONAL, INC. FORM 10-K (ANNUAL REPORT)

Press release · 1d ago
VILLAGE FARMS INTERNATIONAL, INC. FORM 10-K (ANNUAL REPORT)

VILLAGE FARMS INTERNATIONAL, INC. FORM 10-K (ANNUAL REPORT)

Village Farms International, Inc. filed its annual report for the fiscal year ended December 31, 2024. The company reported an aggregate market value of its voting stock and nonvoting common equity held by non-affiliates of $102,579,818 as of June 30, 2024. As of March 7, 2025, the company had 112,337,049 Common Shares outstanding. The report does not provide detailed financial information, but it does indicate that the company is a smaller reporting company and an emerging growth company, and that it has elected not to use the extended transition period for complying with new or revised financial accounting standards. The report also includes information about the company’s auditor, KPMG LLP, and notes that certain materials are incorporated by reference from the company’s definitive proxy statement for its 2025 Annual Meeting of Stockholders.

Overview of Village Farms International’s Financial Performance

Village Farms International, Inc. (VFF) is a corporation based in Ontario, Canada that operates in the produce, cannabis, and energy sectors. The company’s principal operating subsidiaries include Village Farms Canada Limited Partnership, Village Farms L.P., Pure Sunfarms Corp., Balanced Health Botanicals, LLC, Rose LifeScience Inc., VF Clean Energy, Inc., and Leli Holland B.V.

Revenue and Profit Trends

  • Sales increased 18% in 2024 to $336.2 million, driven by growth in the Canadian Cannabis and Produce segments.
  • Cost of sales increased 22% to $288.8 million, resulting in a 4% decrease in gross margin to $47.4 million.
  • The Canadian Cannabis segment saw a 31% increase in sales to $148.9 million, but a 15% decrease in gross margin to $30.7 million due to a $10.4 million non-cash inventory impairment.
  • The U.S. Cannabis segment experienced a 14% decrease in sales to $17.4 million and a 17% decrease in gross margin to $11.0 million.
  • The Produce segment had a 12% increase in sales to $169.2 million and a significant improvement in gross margin to $5.1 million.
  • The Energy segment contributed $0.8 million in sales and $0.8 million in operating income.
  • The Leli segment, acquired in Q4 2024, contributed no sales in 2024 as operations commenced in 2025.

Strengths and Weaknesses

Strengths:

  • Leading market position in Canadian cannabis with strong brand recognition
  • Diversified business model across produce, cannabis, and energy sectors
  • Expertise in greenhouse cultivation and operations
  • Expanding international medical cannabis exports

Weaknesses:

  • Ongoing challenges in the U.S. CBD market due to regulatory uncertainty and competition from unregulated products
  • Reliance on debt financing and exposure to rising interest rates
  • Impairment charges on goodwill and intangible assets in the cannabis segments
  • Compliance with complex and evolving cannabis regulations in multiple jurisdictions

Outlook

The company’s future performance will depend on several key factors:

  • Continued growth and profitability in the Canadian cannabis market through increased market share and international medical exports
  • Ability to navigate the evolving U.S. CBD regulatory landscape and regain market share
  • Successful integration and ramp-up of the newly acquired Leli operations in the Netherlands
  • Management of rising costs and interest rates through operational efficiencies and prudent capital allocation
  • Potential federal legalization of cannabis in the U.S. and FDA regulation of CBD products

Overall, Village Farms faces both opportunities and challenges as it navigates the complex and dynamic cannabis, produce, and energy markets. The company’s diversified business model and focus on low-cost, high-quality production provide a foundation for future growth, but it must also address ongoing regulatory and competitive pressures in key markets.