Village Farms International, Inc. (NASDAQ: VFF) announced its financial results for the three months and year ended December 31, 2020. Sales increased 43% to $47.4 million for the quarter versus last year’s $33.1 million for the same time period. The net income rose 197% from ($7.2) million to $7.0 million in the quarter. Village Farms delivered earnings per share were $0.12, which beat expectations by ten cents. Investors though seemed unimpressed and the stock was sold off by over 9% in early trading to lately trade at $15.82.
For the full year, sales grew 18% to $170.1 million over 2019’s sales of $144.6 million. Net income rose 404% to $11.6 million in 2020 versus 2019’s net income of $2.3 million. The earnings per share for the year were $0.20. The company noted that “on December 31, 2020, Village Farms owned 100% of Pure Sunfarms Corp., as the full acquisition of the remaining interest in Pure Sunfarms occurred November 2, 2020. Accordingly, for the 60-day period from November 2 to December 31, 2020, Pure Sunfarms’ financial results are consolidated with Village Farms results for both the fourth quarter and year ended December 31, 2020.”
“The fourth quarter was a solid finish to a year of significant achievement for Village Farms and our wholly-owned Canadian cannabis subsidiary, Pure Sunfarms, which saw great success as it transitioned its focus to retail branded sales from nearly all sales in 2019 being non-branded, mainly to other producers,” said Michael DeGiglio, CEO, Village Farms. “Following a 40% sequential increase from the second to the third quarter of 2020, Pure Sunfarms sales of branded retail products to provincial distributors increased another 28% sequentially from the third to the fourth quarter, as our branded dried flower products continued to be the top seller with the Ontario Cannabis Store, and our first Cannabis 2.0 products were well received by consumers. This contributed to our ninth consecutive quarter of profitability, even as we invested during the quarter to support our future growth.”
“Finally, alongside the momentum at Pure Sunfarms, our produce business had a strong 2020, driven by higher pricing amidst elevated demand across our national and regional grocer and “big box” customers for much of the year. Our significant progress over the last two years in transitioning capacity designated for cannabis to growing partners enabled us to take full advantage of these market dynamics, coupled with year on year improvements at our Texas green house facilities, drove a $16.5 million year over-year improvement in Adjusted EBITDA to support our longer-term growth opportunities in cannabis.”
In January Village Farms entered into definitive agreements with certain institutional investors for the purchase and sale of an aggregate of 10,887,097 common shares in a registered direct offering, for expected gross proceeds of approximately $135 million (approximately CAD$171 million ). The company sold the shares at $12.40 (approximately CAD$15.70 ).