Village Farms International Inc (VFF) 2023 Q3 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to Village Farms International's third-quarter 2023 financial results conference call. This morning, Village Farms issued a news release reporting its financial results for the third quarter ended September 30, 2023. That news release, along with the company's financial statements, are available on the company's website at villagefarms.com under the Investors heading.

早安，女士們，先生們。歡迎參加 Village Farms International 2023 年第三季財務業績電話會議。今天上午，Village Farms 發布了一份新聞稿，報告了截至2023 年9 月30 日的第三季度財務業績。新聞稿以及該公司的財務報表可在該公司網站Villagefarms.com 的“投資者”標題下方查看。

Please note that today's call is being broadcast live over the Internet and will be archived for replay both by telephone and via the Internet beginning approximately one hour following completion of the call. Details of how to access the replays are available in today's news release.

請注意，今天的電話會議正在透過網路進行現場直播，並將被存檔，以便在電話會議結束後大約一小時內透過電話和網路重播。有關如何存取重播的詳細信息，請參閱今天的新聞稿。

Before we begin, let me remind you that forward-looking statements may be made today during or after the formal part of this conference call. Certain material assumptions were applied in providing these statements, many of which are beyond our control. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in forward-looking statements.

在我們開始之前，讓我提醒您，今天可能會在本次電話會議的正式部分期間或之後發表前瞻性聲明。在提供這些陳述時應用了某些重大假設，其中許多假設超出了我們的控制範圍。這些陳述受到許多風險和不確定性的影響，可能導致實際結果與前瞻性陳述中明示或暗示的結果有重大差異。

A summary of these underlying assumptions, risks and uncertainties is contained in the company's various security filings with the SEC and Canadian regulators, including its Form 10-K MD&A for the year ended December 31, 2022 and 10-Q for the quarter ended September 30, 2023, which will be available on EDGAR and SEDAR plus. These forward-looking statements are made as of today's date and except as required by applicable securities law. We undertake no obligation to publicly update or revise any such statements.

這些基本假設、風險和不確定性的摘要包含在該公司向SEC 和加拿大監管機構提交的各種證券文件中，包括截至2022 年12 月31 日的年度10-K MD&A 表格和截至9 月30 日的季度的10-Q ，2023 年，將在 EDGAR 和 SEDAR plus 上提供。這些前瞻性陳述是截至今日作出的，除非適用的證券法要求。我們不承擔公開更新或修改任何此類聲明的義務。

I would now like to turn the call over to Michael DeGiglio, Chief Executive Officer of Village Farms International. Please go ahead, banks, lose.

我現在想將電話轉給 Village Farms International 執行長 Michael DeGiglio。請繼續吧，銀行，輸了。

Thanks Lis. Good morning and thank you for joining us for today's call. With me are Steve Ruffini, our Chief Financial Officer; and Ann Lefever, Vice President of Corporate Affairs; and Patti Smith, Vice President Corporate Controller.

謝謝莉斯。早安，感謝您參加我們今天的電話會議。和我在一起的還有我們的財務長 Steve Ruffini； Ann Lefever，公司事務副總裁；和派蒂史密斯（Patti Smith），公司財務副總裁。

As per our usual format, Steve and I will review the operating highlights and financial results for the quarter and then open the call up for questions.

按照我們通常的格式，史蒂夫和我將回顧本季度的營運亮點和財務業績，然後開始提問。

So turning to the third quarter, I am pleased with the contributions from each of our businesses, particularly the across-the-board execution on improved profitability and cash flow which is a true test of a sustainable business model.

因此，談到第三季度，我對我們每個業務的貢獻感到滿意，特別是在提高獲利能力和現金流方面的全面執行，這是對永續商業模式的真正考驗。

We generated positive cash flow in each of our operating segments. That's bottom-line cash flow, not just from operations, not adjusted pure cash flow. Each of our Canadian and US cannabis businesses also delivered positive adjusted EBITDA and net income. And our fresh produce operation saw another quarter of significant year-over-year improvement.

我們的每個營運部門都產生了正現金流。這是底線現金流，不僅僅是來自營運的現金流，也不是調整後的純現金流。我們的加拿大和美國大麻業務也實現了正調整 EBITDA 和淨利潤。我們的生鮮農產品業務又一個季度實現了同比顯著改善。

Also with positive adjusted EBITDA. I'm also pleased with trends at the retail shelf, which are two tests of whether everything we do resonates with the consumer.

調整後的 EBITDA 也為正值。我也對零售貨架上的趨勢感到滿意，這是對我們所做的一切是否能引起消費者共鳴的兩項測試。

I am proud to report that for the month of October, we regained the number two share nationally in Canadian cannabis, recovering from the number four share at the beginning of the quarter and more on this in a moment. The consolidated results were a further narrowing of a net loss to just $0.01 per share, another quarter of positive adjusted EBITDA and positive cash generation on a consolidated basis.

我很自豪地向大家報告，在 10 月份，我們在加拿大大麻市場中重新獲得了全國第二大的份額，從本季度初第四大的份額恢復過來，稍後將詳細介紹這一點。合併結果顯示，淨虧損進一步收窄至每股 0.01 美元，調整後的 EBITDA 又實現了一個季度的正值，合併後的現金產生量也為正值。

These results are not possible without the business acumen, commitment and contributions from each of our team members and I am grateful every day for the Village Farms team. Team's determination and I'm confident in our continued execution. Starting with our Canadian cannabis business, we are proving out what we believe is the most sustainable profitable model in the Canadian industry.

如果沒有我們每個團隊成員的商業頭腦、承諾和貢獻，這些成果是不可能實現的，我每天都對鄉村農場團隊表示感謝。團隊的決心，我對我們的持續執行充滿信心。從我們的加拿大大麻業務開始，我們正在證明我們認為是加拿大產業中最永續的獲利模式。

There are a number of highlights for Q3. The first is another quarter of positive adjusted EBITDA and cash flow generation. These are the direct result of our unrelenting focus on operational efficiencies. This in turn enables us to fund organic reinvestment in both the Canadian market and international markets as they become accessible. The Village Farms, organic reinvestment is critical. Simply put, we strive to build competitive modes in the capabilities which will drive future growth.

第三季有很多亮點。第一個季度是調整後的 EBITDA 和現金流產生的另一個季度。這些都是我們不懈地關注營運效率的直接結果。這反過來又使我們能夠在加拿大市場和國際市場變得可進入時為它們的有機再投資提供資金。對於鄉村農場來說，有機再投資至關重要。簡而言之，我們致力於打造驅動未來成長的能力競爭模式。

These pillars include cultivation and production, commercialization, branding and innovation, all with the consumer in mind. This quarter, our reinvestment wins include the launches of new brands and products as well as the continuous quality improvement, which are contributing to our top market share rankings and more importantly profitability. It also includes the development of our international business, both export and in-country, which are the base -- which are based on our profitable Canadian business model.

這些支柱包括種植和生產、商業化、品牌和創新，所有這些都以消費者為中心。本季度，我們的再投資勝利包括新品牌和產品的推出以及持續的品質改進，這有助於我們保持最高的市場份額排名，更重要的是提高盈利能力。它還包括我們國際業務的發展，包括出口和國內業務，這是基礎——基於我們盈利的加拿大商業模式。

Second highlight for the quarter is that our strengthened focus on newness is showing up where it matters profitable market share gains. As a reminder, we don't chase unprofitable market share. And sometimes that means foregoing top line growth for profitability and cash flow. The increased pace of newness that I discussed on our last call continued in Q3 with a number of noteworthy launches.

本季的第二個亮點是，我們對新穎性的加強關注體現在對獲利市場佔有率成長至關重要的領域。提醒一下，我們不會追逐無利可圖的市佔率。有時，這意味著為了獲利能力和現金流而放棄營收成長。我在上次電話會議中討論的創新步伐的加快在第三季度繼續進行，推出了許多值得注意的產品。

These included a new super brand, super cells targeted as a consumer preference for convenience and added strains for all three of our flower brands. We also saw the continued success of our store-brand, which quickly became a top three premium dry flower brand nationally after its launch 1 year ago. During Q3, one of Soar's exclusive cultivars, pineapple God, was one of the best-selling premium dried flower products nationally.

其中包括一個新的超級品牌、針對消費者對便利性的偏好的超級細胞，以及為我們所有三個花卉品牌添加的菌株。我們也看到了我們的商店品牌的持續成功，推出一年後迅速成為全國前三名的優質乾燥花品牌。第三季度，索亞獨家品種之一鳳梨神成為全國最暢銷的優質乾燥花產品之一。

Also on the product side, our launch of Fraser Valley strawberry amnesia, which was the largest in BC history and launches the number one SKU in Ontario. These are just a few examples of the new strains we add on an ongoing basis as part of our innovation calendar.

同樣在產品方面，我們推出了 Fraser Valley 草莓失憶症，這是 BC 省歷史上最大的一次，並在安大略省推出了排名第一的 SKU。這些只是我們在創新日曆中不斷添加的新菌株的幾個例子。

Recently, we also expanded our category offerings, including an entirely new vape offering with our first shipments rapidly selling out and our first infused blunts under the Sore brand, which also sold them.

最近，我們也擴大了我們的產品類別，包括我們的第一批出貨迅速售罄的全新電子煙產品，以及 Sore 品牌的第一批輸液鈍器，該品牌也出售了它們。

In Quebec as many of you know, there are just two product calls a year with launches time during Q2 and Q4. So working with our existing portfolios in between these protocols is as important as new launches themselves to ensure sustainable growth. Our success in doing so as evidenced by our continued expansion in market share in Q3 from the existing portfolio and then decided to see the results from the Q4 product launches, which are currently underway

眾所周知，在魁北克省，每年只有兩場產品發表會，發佈時間分別在第二季和第四季。因此，在這些協議之間使用我們現有的投資組合與新產品本身的推出一樣重要，以確保可持續成長。我們在這方面的成功體現在我們在第三季度從現有產品組合中持續擴大市場份額，然後決定查看目前正在進行的第四季度產品發布的結果

Importantly, in addition to cash flow generation, our efforts are proving out on the retail shelf. Year to date, we are the number three ranked licensed producer nationally. And as I noted at the onset, we reclaimed the number two spot in October. As we were the second top selling produce of dried flower nationally for the third quarter, sitting only behind a competitor who attained the top spot by purchasing market share via acquisitions.

重要的是，除了產生現金流之外，我們的努力也在零售貨架上得到了證明。今年迄今為止，我們是全國排名第三的許可生產商。正如我一開始就指出的那樣，我們在 10 月重新奪回了第二名的位置。由於我們第三季是全國第二大最暢銷的乾花產品，僅落後於透過收購獲得市場份額而獲得第一名的競爭對手。

I've challenged the team to retake the top spot in flower again through organic efforts. To their credit the latest data shows that we are now neck and neck with our competitor for that number one position. And I will note here that as of the end of the third, at the end of October, we had achieved five consecutive months of expansion in our share of the dried flower market nationally.

我向團隊發起挑戰，希望透過有機的努力再次奪回花藝榜首的位置。值得讚揚的是，最新數據顯示，我們現在與競爭對手並駕齊驅，爭奪第一名的位置。這裡我要指出的是，截至第三月底，也就是10月底，我們在全國乾燥花市場的市佔率已連續五個月擴大。

What's especially noteworthy here is the increasing breadth of contribution to our market share by brand by product and by geography. With respect to geography, I want to recognize the contribution of gross life science. Rose holds the number two market share position in Quebec, and it's the fastest growing producer in the province.

這裡特別值得注意的是，以品牌、產品和地理位置對我們市場佔有率的貢獻不斷擴大。就地理學而言，我想承認對整體生命科學的貢獻。玫瑰在魁北克省佔據第二大市場份額，並且是該省成長最快的生產商。

Rose has been one of the most, if not the most successful acquisitions in Canada, largely due to our relentless strategic focus on driving shareholder value and a strong partnership between the pure Sunfarms and Rose teams.

Rose 是加拿大最成功的收購之一（即使不是最成功的收購），這主要歸功於我們對推動股東價值的不懈戰略重點以及純粹的 Sunfarms 和 Rose 團隊之間的牢固合作夥伴關係。

During the third quarter, we also highlight the increase in bulk non-branded sales, reflecting a purpose driven decision to return to this channel as supply dynamics improve the profitability of these sales.

在第三季度，我們也強調了批量非品牌銷售的成長，反映出隨著供應動態提高了這些銷售的獲利能力，我們決定重返該管道。

We achieved this alongside our return to the number two ranking nationally and branded sales proving out the benefit of our leadership in cultivation, commercialization and innovation for multiple growth opportunities.

我們實現了這一目標，同時重返全國第二名，品牌銷售額證明了我們在培育、商業化和創新方面的領先地位，帶來了多種成長機會。

International sales contributed less in Q3 than it did in the first two quarters of the year. A variance, which reflects the start-up nature of the industry in our business. Year-to-date. International sales are up more than 2.5-fold from last year. And I admit it's a small base, but it does underscore the growth potential and long-term trend we expect from these markets, which I'll remind you typically have higher margins than the Canadian market.

第三季的國際銷售貢獻低於今年前兩季。差異，反映了我們業務中該行業的初創性質。今年迄今為止。國際銷售額比去年增長超過 2.5 倍。我承認這是一個很小的基數，但它確實強調了我們對這些市場的預期成長潛力和長期趨勢，我要提醒您的是，這些市場的利潤率通常高於加拿大市場。

As we add customers in new geographies. We expect growth in this business to be steadier and more predictable. Speaking, of which the Netherlands government recently issued a favorable final update to the rollout of its legal recreational cannabis program. This has provided clarity for our plans for [Wailea] which is just one of 10 licenses that allow participation in the program. We are moving forward and excited about the opportunity what now looks to be a fully integrated supply model.

隨著我們在新地區增加客戶。我們預計該業務的成長將更加穩定且更可預測。說到這裡，荷蘭政府最近發布了對其合法娛樂大麻計劃推出的有利的最終更新。這為我們的 [Wailea] 計劃提供了明確性，這只是允許參與該計劃的 10 個許可證之一。我們正在向前邁進，並對現在看起來完全整合的供應模式的機會感到興奮。

Turning now to US cannabis, balanced health botanicals demonstrated another quarter of stabilized performance, once again, generating positive net income, adjusted EBITDA and positive cash flow. Last month, we launched a new visual brand for CBD distillery, including a revamped website focus on wellness and attributes of its products.

現在轉向美國大麻，平衡健康植物藥在另一個季度表現穩定，再次產生正的淨利潤、調整後的 EBITDA 和正的現金流。上個月，我們為 CBD 釀酒廠推出了一個新的視覺品牌，包括改版後的網站，重點是其產品的健康和​​屬性。

Even in the challenging US market for CBD, we are focused on and we are achieving profitability and cash flow generation with our continued belief in the potential of this business in a favorable regulatory environment.

即使在充滿挑戰的美國 CBD 市場，我們仍專注於並正在實現盈利和現金流生成，我們始終相信該業務在有利的監管環境中的潛力。

Now moving on to fresh produce our Q3 performance took an another step forward our goal and achieving sustainable long-term profitability. We are effectively managing the higher cost environment, which we now operate. And we continue to make strong, steady progress in managing the brand with ghost arrived virus. This is not only through enhanced operating procedures across all operations, but also the implementation of virus tolerant and increasingly virus resistant strains and minimizing the potential for human impact.

現在轉向生鮮農產品，我們第三季的業績又向我們的目標邁出了一步，實現了可持續的長期獲利能力。我們正在有效地管理我們現在營運的較高成本環境。我們在應對幽靈病毒的品牌管理方面繼續取得強勁、穩定的進展。這不僅是透過加強所有操作的操作程序，而且還透過實施耐病毒和日益抗病毒的菌株，並最大限度地減少對人類影響的可能性。

We are also benefiting from higher pricing. As a result, fresh products delivered positive adjusted EBITDA, adding to our positive total for 2023. So far, that's a $5 million improvement over Q3 last year and brings the improvement for the year to date to more than $22 million. This is the great start to a new chapter for fresh produce.

我們也受益於更高的定價。因此，新鮮產品帶來了正的調整後 EBITDA，增加了我們 2023 年的正總額。到目前為止，這比去年第三季增加了 500 萬美元，今年迄今的改善額超過 2,200 萬美元。這是新鮮農產品新篇章的良好開端。

Our next goals refresh on sustainable profitability and ultimately cash flow generation, and I am confident we can get there.

我們的下一個目標是可持續獲利能力和最終現金流生成，我相信我們能夠實現這一目標。

I will now turn the call over to Steve for a more detailed review of the financials. Steve?

我現在將把電話轉給史蒂夫，讓他對財務狀況進行更詳細的審查。史蒂夫？

Thanks, Mich. As Mich noted, another quarter of solid performances from each of our businesses. Consolidated net cost for the quarter narrowed to $1.3 million or 0.01 per share. Our earnings per share from a net loss of $8.7 million or 0.1 per share for the same period last year. Notably each quarter this year has posted a sequential improvement over the prior. Consolidated sales for Q3 were $69.5 million compared with $71.1 million.

謝謝，米奇。正如米奇所指出的，我們每項業務又一個季度表現強勁。本季合併淨成本收窄至 130 萬美元，即每股 0.01 美元。我們的每股盈餘來自淨虧損 870 萬美元，去年同期每股淨虧損 0.1 美元。值得注意的是，今年每季都比前一季有所改善。第三季的綜合銷售額為 6,950 萬美元，去年同期為 7,110 萬美元。

The 2 % percentage decrease was largely the result of slightly lower Canada sales compared to the same period last year, as well as a small negative impact on FX due to a stronger US dollar in Q3 2023 versus Q3 2022 as the USD is our reporting currency.

下降2% 的百分比主要是由於加拿大銷售額與去年同期相比略有下降，以及由於美元是我們的報告貨幣，2023 年第三季相對於2022 年第三季美元走強，對外匯造成了小幅負面影響。

We delivered another quarter of positive consolidated adjusted EBITDA in Q3 at $3.2 million up $5.4 million improvement from the negative $2.2 million in Q3 last year. The improvement was driven mainly by fresh produce but also higher EBITDA from our US cannabis business as well as lower corporate costs.

第三季度，我們又實現了一個季度的正合併調整後 EBITDA，達到 320 萬美元，比去年第三季的負 220 萬美元增加了 540 萬美元。這項改善主要得益於新鮮農產品，但也得益於我們美國大麻業務的 EBITDA 增加以及企業成本降低。

I'll now turn to our Canadian cannabis results. As usual, I will discuss these in Canadian dollars to assist in year-over-year comparisons absent the impact of exchange rate fluctuations.

我現在談談我們的加拿大大麻結果。像往常一樣，我將以加元討論這些內容，以幫助在不受匯率波動影響的情況下進行同比比較。

As Mike noted, our Canadian cannabis operations delivered another quarter of positive EBITDA as well as positive cash flow and positive earnings. Total Canadian cannabis sales were $38.7 million compared with $39.8 million for Q3 last year. Breaking down into its component parts, retail branded sales, which comprise about 80% of total Canadian cannabis sales for Q3 were $31 million, down slightly from $32.8 million in Q3 2022. International exports from Canada were down slightly to $900,000 compared to $1.1 million in Q3 last year. Export sales for the year to date were up 162% compared to the same period last year.

正如麥克指出的那樣，我們的加拿大大麻業務又實現了一個季度的正 EBITDA 以及正現金流和正收益。加拿大大麻銷售額為 3,870 萬加元，而去年第三季為 3,980 萬加元。按其組成部分，零售品牌銷售額約佔第三季加拿大大麻總銷售額的80%，銷售額為3,100 萬美元，略低於2022 年第三季的3,280 萬美元。加拿大的國際出口額略降至90 萬美元，而2022 年第三季為110 萬美元。去年第三季。今年迄今的出口銷售額比去年同期成長了162%。

I mentioned -- as I mentioned last quarter, we are seeing an increase in inquiries and sales for non-branded or wholesale product due to what we believe is less availability on consistent, high-quality biomass as many producers have been moving through asset-light models or have sold through inventories to generate cash. That translated into higher non-branded sales for Q3 of $6 million, which was up from both $4.9 million in Q3 last year and $3.9 million for Q2 of this year. Pricing this channel has improved. While demand is up, we continue to be very selective around our non-branded sales.

我提到過，正如我上個季度提到的，我們看到非品牌或批發產品的詢問和銷售有所增加，因為我們認為，隨著許多生產商一直在通過資產轉移，一致的高質量生物質的可用性較少。輕型模型或透過庫存出售以產生現金。這意味著第三季非品牌銷售額增加至 600 萬美元，高於去年第三季的 490 萬美元和今年第二季的 390 萬美元。該通路的定價有所改善。雖然需求上升，但我們仍然對非品牌銷售非常挑剔。

Gross margin for Canadian cannabis for Q3 were 35% compared with last year's 32%. Last year's gross margin figure of 32% excludes the impact on our reported Q3 2020 margin of 27% due to the impact of acquisition accounting and inventory adjustments in our Q3 2022 results.

第三季加拿大大麻的毛利率為 35%，去年為 32%。去年 32% 的毛利率數據不包括由於 2022 年第三季業績中收購會計和庫存調整的影響而對我們報告的 2020 年第三季利潤率 27% 的影響。

Year-on-year increase was primarily due to a continuing lower bulk cost per gram as well as a slight favorable exchange rate fluctuations. As we have stated since our entry into the cannabis space, we will continue to improve our operational efficiencies as we learn, innovate and broaden our cannabis experience expertise.

年比成長主要是由於每克散裝成本持續下降以及匯率略有有利波動。正如我們自進入大麻領域以來所聲明的那樣，我們將在學習、創新和擴大我們的大麻經驗專業知識的同時，繼續提高我們的營運效率。

Selling and general administrative expenses for Canadian cannabis for Q3 were $10.2 million, down from $10.5 million, both in Q3 last year and Q2 this year. As percent of sales. SG&A for Q3 was unchanged at 26%. Canadian cannabis adjusted EBITDA was $6.2 million compared with $6.7 million for Q3 last year as well as Q2 of this year.

第三季加拿大大麻的銷售和一般管理費用為 1,020 萬加元，低於去年第三季和今年第二季的 1,050 萬加元。作為銷售額的百分比。第三季的 SG&A 維持在 26% 不變。加拿大大麻調整後 EBITDA 為 620 萬美元，而去年第三季和今年第二季為 670 萬美元。

As already noted, adjusted EBITDA for the year to date is up 37% for a 400 basis point expansion in the EBITDA margin to 16%. Canadian cannabis net income was $3.8 million, up significantly from net income of $200,000 for Q3 last year more than double the $1.7 million for Q2 of this year.

如前所述，今年迄今調整後的 EBITDA 成長了 37%，EBITDA 利潤率擴大了 400 個基點，達到 16%。加拿大大麻淨利潤為 380 萬加元，較去年第三季的 20 萬加元大幅成長，是今年第二季 170 萬加元的兩倍多。

Cash generation after all cash capital expenditures and debt service payments was also positive at $5.1 million up meaningfully from $1.3 million last year. As Mike noted at the onset, we have stabilized our US cannabis business as reflected in the financial results, US cannabis sales, which were generated entirely by balanced health.

扣除所有現金資本支出和償債費用後，現金產生量也達到 510 萬美元，較去年的 130 萬美元大幅增加。正如麥克一開始指出的那樣，我們已經穩定了我們的美國大麻業務，這反映在財務業績、美國大麻銷售上，這完全是由平衡的健康狀況產生的。

Botanicals were $5 million, down slightly from $5.1 million for Q3 last year. US cannabis gross margin was 64% compared with 69% Q3 last year, primarily due to the ongoing transition of our customers from tinctures gummies, partly due to the success of our synergy pipeline. Adjusted EBITDA for US cannabis was positive $200,000, a slight improvement over what was essentially breakeven performance in Q3 last year.

植物藥銷售額為 500 萬美元，略低於去年第三季的 510 萬美元。美國大麻毛利率為 64%，而去年第三季為 69%，這主要是由於我們的客戶不斷從酊劑軟糖轉型，部分原因是我們協同管道的成功。美國大麻的調整後 EBITDA 為正 20 萬美元，比去年第三季基本實現損益平衡的業績略有改善。

Finally, US-Canada generated net income of $79,000 as well as positive cash flow in the quarter.

最後，美加公司在本季創造了 79,000 美元的淨利潤以及正現金流。

Turning now to fresh produce, we delivered a positive EBITDA quarter, which I had not projected when asked during our Q2 earnings call in August. This is a result of improved pricing in the later half of our third quarter and better volumes from our third party supply partners as we slowly but surely regain our volume after losing two key third party suppliers to end of calendar year 2022.

現在轉向新鮮農產品，我們實現了正的 EBITDA 季度業績，這是我在 8 月第二季財報電話會議上被問到時沒有預料到的。這是由於我們第三季後半段定價的改善以及第三方供應合作夥伴銷售的增加，因為我們在 2022 年底失去了兩家主要第三方供應商後，緩慢但肯定地恢復了銷售量。

Total sales were up slightly year-over-year to $35.7 million with a strong increase in sales from our own greenhouses being substantially offset by a decrease in supply partner revenues versus last year. Sales from our own production increased 28%, which was driven by a 26% increase in the average selling price and an 8% increase in pounds produced.

總銷售額較去年同期略有成長，達到 3,570 萬美元，我們自己的溫室銷售額的強勁成長被供應合作夥伴收入較去年的下降所抵消。我們自己生產的銷售額成長了 28%，這是由於平均售價上漲 26% 和產量增加 8%。

While there's a lot of good operational news in our third quarter report I do want to note that our [VF] fresh gross margin was positive $1.5 million for us, three of $4.2 gross margin versus reporting gross margin losses in this business line every quarter since Q4 2021, when we reported a positive gross margin on gross margin percentage of 6.8%.

雖然我們的第三季報告中有很多營運方面的好消息，但我確實想指出，我們的[VF] 新毛利率為150 萬美元，與此以來每季報告該業務線毛利率為4.2美元的毛利率中的三分之二相比， 2021 年第四季度，我們報告毛利率為正，毛利率百分比為 6.8%。

Fresh Produce delivered another quarter of positive adjusted EBITDA nearly $800,000. As $5.7 million improvement over Q3 last year, which brings the year-to-date improvement to $22.5 million. As Q4 is typically a seasonally stronger quarter for fresh, we expect to achieve positive gross margin and EBITDA in Q4. I will note, however, that we are still dealing with some inflationary pressures on some input costs, which are challenging to pass on to our big box retail customers.

Fresh Produce 又一個季度實現正調整 EBITDA 近 80 萬美元。與去年第三季相比增加了 570 萬美元，今年迄今的增加額達到 2,250 萬美元。由於第四季度通常是新鮮食品季節性強勁的季度，我們預計第四季度將實現正毛利率和 EBITDA。然而，我要指出的是，我們仍在應對某些投入成本的通膨壓力，這些成本很難轉嫁給我們的大型零售客戶。

Q3 net loss for fresh produce also improved significantly to a loss of $950,000 from a loss of $4.6 million for the same quarter last year. I am pleased to report that reported positive cash flow from fresh produce which benefited from the receipt of a vendor settlement in Q3 that we reported in our earnings in Q2.

第三季生鮮農產品淨虧損也顯著改善，從去年同期的虧損 460 萬美元增至虧損 95 萬美元。我很高興地報告說，新鮮農產品帶來了正現金流，這得益於我們在第二季的收益中報告的第三季收到的供應商和解協議。

As we look ahead to next year, we have made the strategic decision deploy half of our Delta 2 facility not currently being used to grow cannabis to grow tomatoes at least for the 2024 calendar year. Health Canada now permits other crops to be grown in licensed facilities, which was not allowed since the inception of the cannabis regulations.

展望明年，我們已做出戰略決策，至少在 2024 年將目前未用於種植大麻的 Delta 2 設施的一半部署到種植西紅柿。加拿大衛生部現在允許在獲得許可的設施中種植其他作物，而自大麻法規出台以來，這是不允許的。

This pivot is due to a number of factors. One, the change in the regulations to the continuing improvements in our cannabis yields, hence, one of the key reasons for our cost of sales decreasing and three, historically, our tomato operations and Delta 2 were profitable. The additional production is expected to contribute incremental cash flow and profitability to our VF Fresh division.

這種轉向是由多種因素造成的。第一，法規的變化導致我們的大麻產量持續提高，因此，這是我們銷售成本下降的關鍵原因之一；第三，從歷史上看，我們的番茄業務和 Delta 2 都是盈利的。額外的產量預計將為我們的 VF Fresh 部門帶來更多的現金流和獲利能力。

This change will have no impact on our ability to meet expected cannabis demand. And is in fact a great opportunity for us to utilize what has been an idle area in our greenhouses to generate profitable revenues in this swing space. Now that regulations allow us to grow cannabis with other crops within a licensed facility.

這項改變不會影響我們滿足預期大麻需求的能力。事實上，這對我們來說是一個很好的機會，可以利用溫室中的閒置區域，在這個週轉空間中創造可獲利的收入。現在，法規允許我們在獲得許可的設施內將大麻與其他作物一起種植。

Turning now to cash and the balance sheet, cash at the end of third quarter increased to $40.5 million up from $31.7 million at the end of Q2 of this year, while our working capital at the end of the third quarter's group was relatively unchanged compared to Q2 at $84.3 million in working capital. Which are significant improvements from $21.7 million in cash and $60.8 million in working capital to end of last year. Total debt end of Q3 was $53 million, down slightly from $55 million at the end of Q2. Our quarterly principal debt service payments are close to $1.5 million per quarter.

現在轉向現金和資產負債表，第三季末的現金從今年第二季末的 3,170 萬美元增加到 4,050 萬美元，而我們第三季末的營運資本與去年同期相比相對沒有變動。第二季度營運資金為8,430 萬美元。與去年底相比，現金為 2,170 萬美元，營運資金為 6,080 萬美元，這是顯著的進步。第三季末的債務總額為 5,300 萬美元，略低於第二季末的 5,500 萬美元。我們的季度本金償付額接近每季 150 萬美元。

And now I'll turn the call back to Mike.

現在我將把電話轉回給麥克。

Thanks, Steve. For 30 plus years, we have built Village Farms with a deep and vibrant respect for cultivation as the core from which to build our business, some refer to us as farmers more recently, we were described as low cost or value grows where no clue how to build brands. This quarter and in fact, 2023 year to date challenges this simplistic viewpoint, it shows how deep our deep experience and resulting competitive advantage in cultivation is enabling deep funding leadership roles in critical areas that separate the best consumer goods companies from everyone else.

謝謝，史蒂夫。 30多年來，我們建立了鄉村農場，以對種植的深刻而充滿活力的尊重為核心，以此為基礎建立我們的業務，最近有人將我們稱為農民，我們被描述為低成本或價值增長，但不知道如何打造品牌。本季度乃至2023 年迄今為止，我們對這一簡單化的觀點提出了挑戰，它表明我們在培育方面的深厚經驗和由此產生的競爭優勢如何在關鍵領域發揮深入的融資領導作用，從而使最好的消費品公司與其他公司區分開來。

Getting cultivation right as we are proving out is providing us with bandwidth to innovate and other critical functions, which are now driving sustainable, profitable market share and cash flow. Importantly, these are the same pillars of success that we that will be the foundation as we look to expand our Canadian model as new cannabis markets open around the world.

正如我們所證明的那樣，正確的種植為我們提供了創新和其他關鍵功能的頻寬，這些功能現在正在推動可持續、可獲利的市場份額和現金流。重要的是，這些與我們的成功支柱相同，隨著世界各地新的大麻市場的開放，我們希望擴大我們的加拿大模式。

It's a continuing growth opportunity. We farmers are very excited about. So operator, I'll turn it over to you for call for any questions at this point. Thank you.

這是一個持續成長的機會。我們農民都很興奮。接線員，我會將其轉交給您，如有任何問題，請致電。謝謝。

(Operator Instructions)

（操作員說明）

Aaron Grey, Alliance Global Partners.

亞倫·格雷，聯盟全球合作夥伴。

Hi, good morning and congrats on the quarter here. Michael, want to kind of jump off where you left off in terms of kind of proving out that [CPG] capability and going on beyond just kind of own the products that you had mentioned.

你好，早安，恭喜這個季度。邁克爾，想從你上次停下的地方開始，證明 [CPG] 能力，並超越僅僅擁有你提到的產品。

So if you can speak to how you're viewing brand architecture today, particularly with the launch of value brand feature value, which we understand was necessary to compete with some of the pricing pressure means from a third party. It does imply some of the mix shift from Pure Sunfarms to Frasier. So just wanted some color in terms of how are you seeing the premium mainstream value mix evolving within the category, and that's well within your own portfolio as we continue to see the industry evolve here. Thanks.

因此，如果您能談談您如何看待當今的品牌架構，特別是隨著價值品牌特徵價值的推出，我們認為這是與第三方的一些定價壓力手段競爭所必需的。它確實意味著一些混合從 Pure Sunfarms 轉向 Frasier。因此，我只是想了解您如何看待該類別內優質主流價值組合的發展，這完全在您自己的投資組合中，因為我們將繼續看到該行業在這裡發展。謝謝。

Yes, it is somewhat it is testing. I mean, we really focus our consumer insights before we launch our brands. So clearly with Fraser Valley that was a segment, especially on the West Coast with now resonates on the East Coast or at least in Ontario, where we had sort of the number one launch there with Fraser Valley.

是的，它在某種程度上正在測試。我的意思是，在推出我們的品牌之前，我們確實專注於消費者洞察。很明顯，弗雷澤河谷是一個細分市場，尤其是在西海岸，現在在東海岸或至少在安大略省產生了共鳴，我們在那裡與弗雷澤河谷進行了排名第一的發射。

And then the quality of Fraser Valley is just exceptional. So that the quality and the pricing resonated well and has become a strong player for us. But equally, we launched, Soar a year ago, which is in that premium category and we never expected the premium care category to be more than 5% or 10% with the current economic situation, but it's doing very well. And then third, you know that's put some pressure on our Pure Sunfarms brand. But I think, you know, it's an evident flow and the economy has a lot to do with it.

弗雷澤河谷的品​​質也非常出色。因此品質和價格產生了良好的共鳴，並成為我們的強大參與者。但同樣，我們一年前推出了 Soar，它屬於高端類別，在當前的經濟形勢下，我們從未預計高端護理類別會超過 5% 或 10%，但它做得非常好。第三，你知道這給我們的 Pure Sunfarms 品牌帶來了一些壓力。但我認為，你知道，這是一種明顯的流動，經濟與之有很大關係。

So we continue to innovate. The other side of it is really newness within those brands. And keep in mind that Rose LifeScience has a number of brands that are resonating very well, not just in Quebec, but in other provinces going forward. And now we continue to drive newness innovation.

所以我們不斷創新。另一方面是這些品牌的新鮮感。請記住，Rose LifeScience 擁有許多能夠引起良好共鳴的品牌，不僅在魁北克省，而且在未來的其他省份也是如此。現在我們持續推動新穎的創新。

We need to know where we're going to be in 2025 right now with our launches and it takes a lot of energy, a lot of effort, a lot of time and money you have to continue to trial. And we're actually working on some very unique things, which we'll probably talk about next quarter going forward. But I hope that gives you some color.

我們需要知道 2025 年我們的發布將達到什麼水平，這需要大量的精力、大量的努力、大量的時間和金錢，你必須繼續嘗試。我們實際上正在研究一些非常獨特的事情，我們可能會在下個季度討論這些事情。但我希望這能給你一些色彩。

No it does. That's very helpful. And then same question for me on non-branded sales, we saw a nice uptick sequentially. So was that driven more by a one-off sale? Is our new line of business you expect to generate from the on a reoccurring basis, you kind of alluded to that in prepared remarks.

不，確實如此。這非常有幫助。然後對我來說，關於非品牌銷售的同樣的問題，我們看到了連續的良好上升。那麼，這更多是由一次性銷售推動的嗎？您在準備好的發言中提到過，您希望我們的新業務線能夠持續產生嗎？

So just fair to say some of the increase in mix and then also on the other part on gross margin, some of the pressure we saw in that sequentially was that driven by some of the non-operated mix. So just how we think about that sales going forward in terms of new generating business on a reoccurring basis? And then how any type of gross margin impact we have there? Thank you.

因此，公平地說，混合的一些增長，以及毛利率的另一部分的增長，我們依次看到的一些壓力是由一些非經營組合驅動的。那麼，我們如何看待不斷發生的新發電業務的銷售情況呢？那我們在那裡對毛利率有何影響？謝謝。

So actually, the gross margin, we're very satisfied with the gross margin on our B2B business, extremely satisfied. We made a strategic decision at the beginning of this year just sort of opened up. We wanted to prove internally to the company as well as to our consumers and distributors in the provinces that we can be a very strong branded company.

所以實際上，毛利率，我們對 B2B 業務的毛利率非常滿意，非常滿意。我們在今年年初做出了一個戰略決策，有點開放。我們想向公司內部以及各省的消費者和經銷商證明我們可以成為一家非常強大的品牌公司。

And I think we proved that as we continue to prove it out so that there was a big focus on just being very myopic on the branding side. However, we are focused on cash flow generation, those with the marching orders early on and strategically, we decided let's open up our B&B business.

我認為我們已經證明了這一點，因為我們繼續證明這一點，因此人們非常關注品牌方面的短視。然而，我們專注於現金流的產生，那些早期就收到訂單的人，從策略上來說，我們決定開放我們的民宿業務。

We have capacity. The margins are good. That's not the reason we see margin change. And then, you know, we were watching the dynamics in the industry, there was a lot of flower available and slowly that seem to be driving up a number of companies change their model to a light asset model. And if we can drive greater profitability, greater revenue, greater sales, we're going to take that business on. And of course, for international in a way that speed to be as well. So these just parallels that very nicely, and we're going to continue moving forward, our B2B.

我們有能力。利潤率很好。這並不是我們看到利潤率變化的原因。然後，你知道，我們正在觀察行業的動態，有很多可用的鮮花，並且慢慢地似乎正在推動許多公司將其模式轉變為輕資產模式。如果我們能夠提高獲利能力、收入和銷售額，我們就會繼續開展這項業務。當然，對於國際化來說，速度也是如此。所以這些非常相似，我們將繼續前進，我們的 B2B。

Great. Thanks for the color. I'll join back in the queue.

偉大的。謝謝你的顏色。我會重新加入隊列。

Eric Des Lauriers, Craig Hallum.

艾瑞克·德斯·勞里埃、克雷格·哈勒姆。

Great. Thanks for taking my questions and congratulations on the strong results here. And so I was hoping you could drill in a bit more into some of the changes in produce this quarter. So obviously, you know some moving parts here. One of the profitability drivers here is the increase in volumes. It sounds like.

偉大的。感謝您提出我的問題，並祝賀我們取得的優異成績。因此，我希望您能更深入地了解本季農產品的一些變化。顯然，您知道這裡的一些活動部件。這裡的獲利驅動因素之一是銷售量的增加。這聽起來像。

I'm wondering if you could also just help us understand or perhaps just kind of drill in a bit more deeply into some of the operational improvements that you've made. I know recently you've kind of spoken about AI. investments for produce.

我想知道您是否也可以幫助我們理解或只是更深入地研究您所做的一些營運改進。我知道你最近談到了人工智慧。農產品投資。

If you can kind of just give us an update overall on the operational improvements that you have made in that in that segment and sort of how to think about perhaps the difference in operating expenses versus cost of goods sold kind of going forward, where should we look to see some of that improvement going forward? Thanks.

如果您可以向我們提供有關您在該細分市場中所做的運營改進的總體最新信息，以及如何考慮未來運營費用與銷售商品成本之間的差異，我們應該在哪里希望看到未來的一些改進？謝謝。

Well, I think if know, look, last year was the worst year we had in produce in 33 years. So it was a very difficult year, but it was really driven by a number of factors, it was a perfect storm of inflationary pressures that really started post COVID that were astronomical.

好吧，我想如果知道的話，看看，去年是我們 33 年來農產品產量最差的一年。所以，這是非常困難的一年，但它確實是由許多因素驅動的，這是一場完美的通膨壓力風暴，在新冠疫情之後真正開始，其規模是天文數字。

When you look at diesel, fuel shipping thousand plus trucks a year. That's in our cost of sales. It was crazy, everything went ballistic. Fertilizer costs were up 65%, 70%, corrugated cost for all the patent maturities across the board and labor skyrocketed across the board. Even based on our foreign worker program, the Department of Labor continues to drive costs up 7% a year.

看看柴油，每年運輸數千輛卡車。這是我們的銷售成本。太瘋狂了，一切都變得瘋狂起來。化肥成本上漲了65%、70%，所有專利到期的瓦楞成本全面上漲，勞動力全面飆升。即使根據我們的外籍工人計劃，勞工部仍繼續使成本每年上漲 7%。

So all that was happening while we were battling the virus. And we are always in agriculture dealing with items out of our control viruses bacterias instead so on. But this was sort of one of the worst we've ever seen. Thank God we're seeing we're putting in every day more and more towns, more varieties that are tolerant, which means they may get the virus but they can tolerate it. And that's very important.

所以這一切都是在我們與病毒作鬥爭時發生的。在農業領域，我們總是處理不受我們控制的病毒、細菌等問題。但這是我們見過的最糟糕的情況之一。感謝上帝，我們看到我們每天都在越來越多的城鎮、越來越多的耐受品種中投入使用，這意味著他們可能會感染病毒，但他們可以耐受。這非常重要。

And we are now starting to starting to see the first of totally resistant variety. So it's taken a long time, even once the resistance gene was ready to be spliced into the new varieties. It still takes 11 turns of growing a [parent to parent at the parent] until it's finally in there. So we had to be patient about it.

現在我們開始看到第一個完全抗性的品種。因此，即使抗性基因已經準備好被拼接到新品種中，也需要很長時間。仍然需要 11 個回合才能從[父級到父級]成長到最終到達那裡。所以我們必須對此保持耐心。

So that's probably the biggest impact simultaneously we talked about putting AI systems that work and current as like a very strong copilot with our growers that are monitoring thousands of data points every second of the day, every day of the year.

因此，這可能是最大的影響，同時我們談到讓人工智慧系統發揮作用，就像我們的種植者的一個非常強大的副駕駛一樣，一年中的每一天每秒監控數千個數據點。

That is a big help we've also invested this year alone close to $4 million in new technology to drive our labor costs down as we speak right now of most of that equipment is being installed, which will have a benefit going forward in 20204.

這是一個很大的幫助，我們光是今年就投資了近 400 萬美元的新技術，以降低我們的勞動力成本，因為我們現在正在安裝大部分設備，這將在 20204 年帶來好處。

Our yields are starting to be up and that's so direct that's a directly affected by both the less impact from the virus as well as working with our AI system. That being said, to a big part of our profitabilities working with third-party growers and due to the virus, we lost two of them, one switched into berries and one went out of business.

我們的產量開始上升，這是非常直接的，直接受到病毒影響較小以及與我們的人工智慧系統合作的影響。話雖這麼說，由於我們與第三方種植者合作的大部分利潤，由於病毒的影響，我們失去了其中的兩個，一個轉為漿果，一個倒閉了。

So we're rebuilding that and we're very bullish. I was just in Mexico last week, I was there in June, we're building our relationships going forward. So I think it's all a cumulative. There's not just one thing that's going to drive it, and we'll continue to look at driving our gross margin.

所以我們正在重建它，我們非常樂觀。我上星期剛在墨西哥，六月在那裡，我們正在建立未來的關係。所以我認為這都是累積的。推動這一成長的因素不僅僅是一件事，我們將繼續考慮提高毛利率。

Higher pricing has been more solid. Finally, I think the industry had to realize is that cutting prices against your competition but trying to drive higher prices so the industry can survive and that seems to be resonating with a lot of our competitors.

更高的定價更加穩固。最後，我認為該行業必須認識到，針對競爭對手降低價格，但試圖提高價格，以便行業能夠生存，這似乎引起了我們許多競爭對手的共鳴。

So we're bullish. That being said, you know, it is a commodity and there is fluctuations quarter- to- quarter, but I think overall we're headed in a very strong direction with $22 million turnover in one years is it's not easy to do, especially in agriculture. So I hope that gives you the color you need, Eric.

所以我們看漲。話雖這麼說，你知道，它是一種商品，每個季度都會有波動，但我認為總體而言，我們正朝著一個非常強勁的方向前進，一年內營業額達到2200 萬美元，這並不容易做到，特別是在農業。所以我希望這能給你你需要的顏色，艾瑞克。

Yeah, those very helpful, and I'm glad to hear if I could just kind of double-click on that a bit more on. So obviously, granted that we are dealing with commodities here and no one's in charge of pricing. Do you feel that perhaps once this new technology is kind of fully layered in in 2024 that you sort of have what you need now to reach a sustainably profitable on produce business?

是的，這些非常有幫助，我很高興聽到我是否可以雙擊它。顯然，我們在這裡處理商品並且沒有人負責定價。您是否認為，也許一旦這項新技術在 2024 年完全投入使用，您現在就具備了在農產品業務上實現可持續盈利所需的條件？

Or are there other areas that you may look to kind of drive down costs on going forward before you're kind of you feel sort of comfortable that at least from what's in your control that you're kind of out of the woods here?

或者，在您感到舒適之前，您可能會尋求其他領域來降低前進的成本，至少從您的控制範圍來看，您已經擺脫了困境？

Yeah, the only thing the only uncertainty would be where inflation goes and even our interest rates on our loans have skyrocketed over the year. So it's not been one area that hasn't been have a negative effect.

是的，唯一不確定的是通貨膨脹的走向，甚至我們的貸款利率在這一年也飆升了。因此，這一領域並非沒有受到負面影響。

And I think as a for example, even though our interest rate that we pay on our produce business is not directly tied to operational efficiencies and excellence it does matter. So I think 2024 is really a very strong pivotal year for us to get to sustainable profitability going forward. I feel I feel pretty solid on that

我認為，舉例來說，儘管我們為農產品業務支付的利率與營運效率和卓越性並不直接相關，但它確實很重要。因此，我認為 2024 年對於我們實現永續獲利來說確實是非常重要的關鍵一年。我覺得我對此感覺很踏實

That's great. And just last question for me, just looking for an update on that potential sale of the greenhouse in Texas.

那太棒了。我的最後一個問題是，尋找德克薩斯州溫室潛在銷售的最新資訊。

I don't have anything to report we're working at it. We're not just sitting on our laurels, but I think with the economy the way it is some other things that have happened in the industry. We just have to be patient. But as you can see, we'd see reported where our cash position is and our working capital. So that will eventually go and it will be a nice day that we'll have to reinvest hopefully in 2024.

我沒有任何可報告的，我們正在努力。我們不僅滿足於現狀，而且我認為隨著經濟的發展，產業中也發生了一些其他事情。我們只需要耐心等待。但正如您所看到的，我們會看到報告我們的現金狀況和營運資金。所以這最終會過去，這將是美好的一天，我們希望在 2024 年進行再投資。

All right. Thanks for the color, and congrats again.

好的。謝謝你的顏色，再次恭喜。

Thanks.

謝謝。

Mike Regan, Excelsior Equities

麥克·雷根（Mike Regan），Excelsior 股票

Yes, hi. Thanks for taking the question and congrats on a really good quarter. In terms of -- we've seen a lot of the capacity start to some of your competitors trying to shut down capacity in Canada. And it's interesting that some of that swing capacity for cannabis will be applied as tomatoes now.

是的，嗨。感謝您提出問題，並祝賀您度過了一個非常好的季度。就我們而言，我們已經看到一些競爭對手開始啟動大量產能，試圖關閉加拿大的產能。有趣的是，大麻的一些搖擺能力現在將被用作西紅柿。

And I guess are you starting to see any impact on sort of the reduction in capacity that is allowing you to potentially actually add to that capacity? Or is it just more that you're getting so much improvements on your yields that you don't need you can reduce that, so swing capacity and has generated some cash out of it?

我想您是否開始看到容量減少所帶來的任何影響，從而使您有可能真正增加容量？或者只是因為你的產量得到瞭如此大的提高，你不需要你可以減少它，所以搖擺產能並從中產生了一些現金？

Yes, we're seeing we're finally seeing sometimes things never change. And then there's a domino effect. And maybe 2024 is that year of reckoning within excess capacity that we've seen for so many years in the Canadian marketplace.

是的，我們終於看到有時事情永遠不會改變。然後就會產生骨牌效應。也許 2024 年是我們多年來在加拿大市場看到的產能過剩的一年。

So we are seeing -- a while a lot of companies have publicly reported that they're either not going to participate in the Canadian cannabis retail market, maybe focus on overseas or other cannabis markets. Some have indicated that they will be a light asset model so on.

所以我們看到，一段時間以來，許多公司公開報告說，他們要么不會參與加拿大大麻零售市場，要么專注於海外或其他大麻市場。有的表示會是輕資產模式等等。

And that's fine. We have nothing good or bad to say, but there are a potential customer and we can work with them. So the mutual benefit because our driver is positive cash flow increased revenues, while we're looking at our own expansion and profitable market share we're going to do so.

那很好。我們沒有什麼好或壞可說，但有一個潛在的客戶，我們可以與他們合作。因此，互惠互利，因為我們的驅動力是正現金流增加收入，同時我們正在考慮自己的擴張和可獲利的市場份額，我們將這樣做。

So we are seeing some changes happening. I think what was out there for companies just trying to generate cash without being profitable. It's not very durable. So it's going to change. So we're definitely going to participate in that.

所以我們看到一些改變正在發生。我認為對於那些只想賺取現金而不盈利的公司來說，存在什麼？它不是很耐用。所以它將會改變。所以我們肯定會參與其中。

Now keep in mind, we do have excess capacity because as Steve reported how yields have been increasing. We said that five years ago that, growing is a continuous improvement process. You get better at it, hopefully get better at it and you could drive, you can drive yields up, which drives your costs down. So we're in a good position. We have excess square footage we can put to use. We're very focused now.

現在請記住，我們確實有產能過剩，因為正如史蒂夫所報告的那樣，產量一直在增加。我們五年前就說過，成長是一個持續改進的過程。你在這方面做得更好，希望能做得更好，你可以推動，你可以提高產量，從而降低你的成本。所以我們處於有利的位置。我們有多餘的面積可以使用。我們現在非常專注。

Now that where we've reached sort of profitability and a market share position in Canada, now we're very serious about going international.

既然我們在加拿大已經實現了一定的獲利能力和市場份額，那麼現在我們非常認真地走向國際。

I think some companies may be when international before Canada was right. We had a different approach. Let's get Canada right and going and then go international. So we're really looking forward to increased penetration in the international markets in 2024, and we have the capacity to do so. So I think we could service our own needs.

我認為有些公司可能在加拿大之前就已經國際化了，這是正確的。我們有不同的方法。讓我們讓加拿大走上正軌，然後走向國際。因此，我們非常期待 2024 年提高國際市場的滲透率，而且我們有能力做到這一點。所以我認為我們可以滿足我們自己的需求。

We could be a B2B and we could definitely drive international capacity as well going into 2024 and 2025.

我們可以成為 B2B 企業，而且我們絕對可以在 2024 年和 2025 年提高國際產能。

And then as a quick follow-up, I'm wondering about how Ontario has changed the pricing structure for the licensed producers and the retailers there for the benefit of licensed producers and the retailers. And it's only it's still bit early, but is there any commentary on how you're seeing those pricing changes and volume changes and or any volume changes in Ontario at this point?

然後，作為快速跟進，我想知道安大略省如何為了許可生產商和零售商的利益而改變許可生產商和零售商的定價結構。只是現在還為時過早，但您對目前安大略省的這些價格變化和數量變化以及/或任何數量變化有何評論？

Mike, this is Steve. Thanks. Thanks for the question. Very good observation that as you point out. The -- I see the market markup changed at the end of September, so really no impact on Q3 at all on does We have great transparency with the pricing structure in Ontario and some of the other provinces to date. So it's been a whole month.

麥克，這是史蒂夫。謝謝。謝謝你的提問。正如你所指出的，這是非常好的觀察。我看到市場加價在 9 月底發生了變化，因此對第三季度實際上沒有任何影響。迄今為止，我們對安大略省和其他一些省份的定價結構具有很大的透明度。就這樣，整整一個月過去了。

We have benefited from the change. We have decided as a company to keep our pricing the same at retail. So we are effectively the way it works. We will realize 100% of the margin decrease by OCS. So we'll see a 3% to 5% increase in our margins in OCS on what other LPs are doing and not doing. We think most will follow will follow us, but which remains to be seen whether people will chase prices down or we've decided to keep the margin as to ourselves.

我們從這項變化中受益。作為一家公司，我們決定保持零售價格不變。所以我們實際上就是按照它的方式運作的。我們將透過OCS實現100%的利潤減少。因此，根據其他有限合夥人正在做和沒有做的事情，我們的 OCS 利潤將增加 3% 到 5%。我們認為大多數人都會跟隨我們，但人們是否會壓低價格，或者我們決定保留利潤，還有待觀察。

Great. Thanks a lot.

偉大的。多謝。

Thank you Mike

謝謝麥克

Eric Livshits, ATB Capital Markets.

Eric Livshits，ATB 資本市場。

Hi. So given the positive cash flow generation this quarter, I'm just wondering, do you see this as somewhat of a turning point in cash flow generation for the company? Or should we expect cash flows to kind of just be more bumpy in the quarters ahead. Thank you.

你好。因此，考慮到本季產生的正現金流，我只是想知道，您是否認為這在某種程度上是公司現金流產生的轉捩點？或者我們是否應該預期未來幾季的現金流會更加坎坷。謝謝。

Well, I think they may be somewhat lumpy in the quarters ahead. But on the positive side, that's our focus is positive cash generation. If the market share slipped, it's because we don't deem it profitable market share. I'm just not going to chase it. Those days are over and we could see what that's done to a number of companies just chasing unprofitable market share.

嗯，我認為他們在未來幾季可能會有些不穩定。但從正面的一面來看，我們的重點是正面的現金產生。如果市場佔有率下滑，那是因為我們不認為它是有利可圖的市場佔有率。我只是不會去追它。那些日子已經過去了，我們可以看到這對許多只是追逐無利可圖的市場份額的公司造成了什麼影響。

So with our very parochial focus on profitable market share, I think we're going to stay positive. We're driving our costs down. Now, it may not be steady every single quarter, but probably won't be. But I think overall on an annual basis, we can say we're going to be to the positive side.

因此，由於我們非常狹隘地關注可獲利的市場份額，我認為我們將保持積極的態度。我們正在降低成本。現在，它可能不會每個季度都保持穩定，但很可能不會。但我認為總體而言，每年我們可以說我們將走向積極的一面。

Great. Thank you so much.

偉大的。太感謝了。

I would now like to turn the call back to Ann for another question

我現在想把電話轉回安詢問另一個問題

Thanks Lis, before we conclude, we wanted to highlight a question that came in via e-mail related to the Canadian distribution model and the purchasing policies of large provincial buyers. It's is a great multipart question from a clearly engaged shareholder that we appreciated getting. The question boils down to is whether we and other LPs are missing out on sales due to ordering practices of the provincial buyers.

謝謝 Lis，在結束之前，我們想強調透過電子郵件提出的一個與加拿大分銷模式和大型省級買家的採購政策相關的問題。這是一位明確參與的股東提出的一個很好的多面向問題，我們對此表示感謝。問題歸根結底是我們和其他有限合夥人是否因省級買家的訂購行為而錯過了銷售機會。

Thanks Ann. And then the question to that, the short answer is no we have excellent relationships with all the provinces and territories we supply.

謝謝安。那麼問題來了，簡短的回答是否定的，我們與我們供貨的所有省份和地區都有良好的關係。

We know all boards are working hard to ensure market demand is met with their supply, and we're working closely with them to provide a much more accurate forecasting and trying to maximize product penetration to meet their demands. So I think it's a synergistic opportunity for us.

我們知道所有董事會都在努力確保供應滿足市場需求，我們正在與他們密切合作，提供更準確的預測，並努力最大限度地提高產品滲透率以滿足他們的需求。所以我認為這對我們來說是一個協同機會。

And, you know, we it's still a nascent industry. So we're not always getting it right, but we're working together and getting better together to the benefit of us. But ultimately, to the benefit of the consumer. So hope that suffices.

而且，你知道，我們這仍然是一個新興產業。因此，我們並不總是做得對，但我們正在共同努力，共同變得更好，從而造福我們。但最終還是為了消費者的利益。所以希望這就夠了。

So thank you, Lis, and thanks, everyone, for joining us today. We look forward to speaking with you on our next call going forward for year end and Q4. Thank you all.

謝謝你，莉斯，也謝謝大家今天加入我們。我們期待在年底和第四季的下一次電話會議上與您交談。謝謝你們。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。