Vancouver, B.C., May 10, 2010 – Village Farms International, Inc. (the “Company”) (TSX: VFF) announced today results for the quarter ended March 31, 2010.
First Quarter 2010 Operating Results Summary:
(Note amounts in U.S. dollars)
Revenues increased 45% to $31.1 million for the first quarter of 2010 compared to $21.4 million for the first quarter of 2009; Earnings per share of $0.11 for the first quarter of 2010 versus $0.02 for the first quarter of 2009; Net income increased to $4.2 million in the first quarter of 2010 versus $0.6 million in the first quarter of 2009; EBITDA increased by nearly 150% to $8.9 million in the first quarter of 2010 compared to $3.6 million in the first quarter of 2009.
Michael DeGiglio, Chief Executive Officer, stated “We are pleased to report the second straight quarter of rebounding results after sluggish quarters early last year. Solid performance in both production and pricing, across all of our product lines, combined with operating efficiencies led to one of our best quarters ever, even as we maintained our investments in R&D, new business development and marketing. Our first quarter results reflected more normalized pricing as opposed to the first quarter of 2009. We believe pricing across our product lines demonstrates that consumer consumption for fresh fruits and vegetables is returning to pre-recession levels coupled with our retail customers supporting the ongoing communication of the Company’s branded, industry leading, sustainable growing practices and culture.”
“While market demand was stagnate for most of 2009, the Company continued its commitment to R&D, through further technological advancement of its GATES growing systems and its focus on variety innovation and on water and energy sustainability. We continue to concentrate on expanding our retail customer base with some of the largest grocery retail organizations in North America, as well as our unparalleled quality and delivery services. Moving forward, we will focus on increasing our capacity through new greenhouse developments and by adding partner growers to increase our market share to position us for success in 2010 and beyond.”
“We expect continuing growth in consumer demand in 2010 as compared with 2009 levels and are working hard to sustain improved results and growth for the remainder of 2010 and beyond.”
“As we enter our third decade of service to the industry, our strong results are a function of Village Farms having the best talent and the highest quality of products and services. Our team continues to push our business strategy while maintaining our commitment to community, the environment and our customers. We are very proud of the entire Village Farms family”.
Operational Summary for the Quarter:
(in thousands of US dollars)
Revenue
Revenue for the quarter ended March 31, 2010, increased $9,659, or 45%, to $31,102 from $21,443 for the quarter ended March 31, 2009. The increase in revenue is due to a 36% increase in the average selling price of tomatoes, an increase of 24% in Village Farms grown product, as well as an increase in supply partner revenues of 8.4% over the same period in 2009.
Gross Profit
Gross profit for the quarter ended March 31, 2010, increased $5,365, or 110%, to $10,236 from $4,871 for the quarter ended March 31, 2009. The increase in gross profit is directly due to higher volumes of produce and higher pricing, as compared to 2009.
Selling, General and Administrative
Selling, general and administrative expenses for the quarter ended March 31, 2010, increased $7 to $2,978 from $2,971 for the quarter ended March 31, 2009. Essentially, our overhead costs are constant with our 2009 expenses, as they are not tied to production yield or revenues.
Interest, Net
Net Interest expense, for the quarter ended March 31, 2010, decreased $107 to $709 from $816 for the quarter ended March 31, 2009. The decrease is due to the continued reduction in debt levels throughout 2010 and 2009.
Other Income (Costs)
Other income (costs) for the quarter ended March 31, 2010, decreased $816 to costs of ($570) from other income of $246 for the quarter ended March 31, 2009. The decrease was due to a loss on derivatives of ($317), in 2010, versus income of $83 on derivatives for the first quarter of 2009. As well as a loss of ($329) on asset disposals in 2010, as compared to a $156 gain on the sales of assets during the first quarter of 2009. Neither the derivative loss or asset disposal loss in 2010 were cash losses.
Net Income
Net income for the quarter ended March 31, 2010, increased $3,559 to $4,199 from $640 for the quarter ended March 31, 2009. The increase was due to higher gross profits of $5,365 partially offset by other costs and a higher income tax provision due to higher operating income in 2010.
EBITDA
EBITDA for the quarter ended March 31, 2010, increased $5,282, or 148%, to $8,855 from an adjusted figure of $3,573 for the quarter ended March 31, 2009, as a result of higher product pricing and higher production in 2010 over 2009. The Company’s trailing twelve month EBITDA is $14,404, as of March 31, 2010.
Non-GAAP Measures
EBITDA is not a recognized measure and does not have standardized meaning under Canadian generally accepted accounting principles. Accordingly, this measure may not be comparable to similar measures presented by other issuers. Please refer to the Company’s Management's Discussion and Analysis for the quarter ended March 31, 2010, which is available at www.sedar.com, for additional information concerning EBITDA and a reconciliation of EBITDA to net earnings and operating cash flows, for the periods presented.
Source: Village Farms International Inc.
