Village Farms International Inc (VFF) 2025 Q1 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to Village Farm International's first quarter 2025 financial results conference call.

女士們、先生們，早安。歡迎參加 Village Farm International 2025 年第一季財務業績電話會議。

Yesterday, Village Farms issued a news release reporting its financial results for the first quarter ended March 31, 2025. That news release, along with the company's financial statements are available on the company's website at villagefarms.com under the Investors heading.

昨天，Village Farms 發布了一份新聞稿，報告了截至 2025 年 3 月 31 日的第一季財務表現。新聞稿以及本公司的財務報表可在本公司網站 villagefarms.com 的「投資者」標題下查閱。

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 1 hour following the completion of this call. Details of how to access the replays are available in today's news release.

請注意，今天的電話會議將透過網路進行現場直播，並將在電話會議結束後約 1 小時開始透過電話和網路進行存檔重播。有關如何觀看重播的詳細資訊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.

在我們開始之前，請允許我提醒您，今天在本次電話會議的正式部分期間或之後可能會做出前瞻性陳述。在提供這些聲明時我們應用了某些重要假設，其中許多是我們無法控制的。

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.

這些聲明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聲明中表達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 securities filings with the SEC and Canadian regulations, including its Form 10-K and MD&A for the year ended December 31, 2024, and the 10-Q for the quarter ended March 31, 2025, which will be available on EDGAR and SEDAR+.

這些基本假設、風險和不確定性的摘要包含在公司向美國證券交易委員會和加拿大監管機構提交的各種證券文件中，包括截至 2024 年 12 月 31 日的年度 10-K 表和 MD&A 表以及截至 2025 年 3 月 31 日的季度 10-Q 表，這些文件將在 EDGAR 和 SEDAR+ ED/ SEDAR+ 上提供。

These forward-looking statements are made as of today's date, except for as required by applicable securities law. We undertake no obligation to publicly update or revise any such statements.

這些前瞻性陳述均截至今日作出，除非適用證券法另有規定。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, Mr. DeGiglio.

現在我想把電話轉給 Village Farms International 執行長 Michael DeGiglio。請繼續，德吉利奧先生。

Thank you, Jonathan, and good morning, and thank you for joining us today. With me today are Steve Ruffini, our Chief Financial Officer; Ann Gillin Lefever, our Chief Operating Officer; Patti Smith, our Corporate Controller; and Sam Gibbons, our Senior Vice President of Corporate Affairs.

謝謝你，喬納森，早安，謝謝你今天加入我們。今天與我一起出席的有我們的財務長史蒂夫·魯菲尼 (Steve Ruffini)、我們的首席營運官安·吉林·勒菲弗 (Ann Gillin Lefever)、我們的公司財務總監帕蒂·史密斯 (Patti Smith) 和我們的公司事務高級副總裁薩姆·吉本斯 (Sam Gibbons)。

Before we get into the details of our Q1 results, I'd like to spend a few minutes discussing our announcement yesterday that we have signed a definitive agreement to execute a transformative transaction for our company.

在我們討論第一季業績的細節之前，我想花幾分鐘時間討論我們昨天宣布的消息，即我們已簽署最終協議，為我們的公司執行一項變革性交易。

Under that agreement, we will privatize the majority of our Fresh Produce division into a new joint venture backed by private investment firms, including Sweat Equities to be called Vanguard Foods LP. We will retain a 37.9% ownership interest in Vanguard and receive $40 million in cash proceeds.

根據該協議，我們將把新鮮農產品部門的大部分業務私有化，成立一家由私人投資公司（包括 Sweat Equities）支持的新合資企業，名為 Vanguard Foods LP。我們將保留 Vanguard 37.9% 的所有權，並獲得 4,000 萬美元的現金收益。

We believe this transaction will unlock tremendous long-term value for both our cannabis and produce businesses and allow each of them to flourish independently. This transaction will drastically improve the upside potential for our 36-year legacy in the produce business as a private company with committed experienced industry partners who have created significant value for their shareholders in the past.

我們相信，這筆交易將為我們的大麻和生產業務釋放巨大的長期價值，並使它們各自獨立繁榮。作為一家私人公司，我們擁有經驗豐富的行業合作夥伴，這些合作夥伴過去曾為股東創造過巨大的價值，此次交易將大大提高我們在農產品業務領域 36 年來的上升潛力。

We are extremely excited about this joint venture and to partner with Charlie Sweat from Sweat Equities to transform the trajectory of our produce business and create a premier branded CPG foods company supporting healthy lifestyles and sustainable farming practices.

我們對這次合資企業感到非常興奮，並與 Sweat Equities 的 Charlie Sweat 合作，改變我們農產品業務的發展軌跡，創建一家支持健康生活方式和永續農業實踐的頂級品牌 CPG 食品公司。

For those of you who are less familiar with the produce industry, Charlie Sweat completely revolutionized the organic salad category during his tenure at Earthbound Farms, an organic produce company that he grew from $10 million to over $540 million in revenues during his 15-year tenure before selling the business for $600 million.

對於那些不太熟悉農產品行業的人來說，查理·斯威特 (Charlie Sweat) 在任職期間徹底改變了有機沙拉類別，這是一家有機農產品公司，在他任職的 15 年間，其收入從 1000 萬美元增長到 5.4 億美元以上，之後以 6 億美元的價格出售了該公司。

Charlie knows our industry inside and out. And together, we see tremendous potential to build a new private produce company that provide a wider array of products for our customers and compete effectively with our largest competitors in the marketplace.

查理對我們的產業瞭如指掌。我們共同看到了建立一家新的私人農產品公司的巨大潛力，該公司將為我們的客戶提供更廣泛的產品，並與市場上最大的競爭對手進行有效競爭。

Vanguard is a holding company and will become part of the new parent of our Fresh division. Fresh division will serve as the cornerstone of Vanguard's commercial operations and growth strategy, and Vanguard will be backstopped by additional capital support from our private equity partners to execute a roll-up strategy of our leading product brands and assets in North America.

Vanguard 是一家控股公司，將成為我們 Fresh 部門新母公司的一部分。新部門將成為先鋒集團商業營運和成長策略的基石，先鋒集團將獲得私募股權合作夥伴的額外資本支持，以實施在北美領先產品品牌和資產的整合策略。

Under the terms of the agreement, we will contribute our Texas-based 40-acre Marfa 2 and our 40-acre Fort Davis facility, all of our fresh produce-related intellectual property, except for the Village Farms name and transfer all of our produce distribution facilities, employees and operational control of these facilities to Vanguard.

根據協議條款，我們將捐出位於德州的 40 英畝 Marfa 2 和 40 英畝 Fort Davis 工廠，以及 Village Farms 名稱以外的所有新鮮農產品相關智慧財產權，並將所有農產品分銷設施、員工和這些設施的營運控制權轉讓給 Vanguard。

I will represent Village Farms interest on Vanguard's board and initially serve as interim CEO. Village Farms, CFO, Steve Ruffini, will also be appointed to Vanguard's Board. We will retain full ownership of all our Canadian greenhouse assets in Delta, British Columbia as well as our Marfa 1 and Permian Basin Monahans facility for future cannabis market optionality.

我將代表 Village Farms 在 Vanguard 董事會的利益，並最初擔任臨時執行長。Village Farms 財務長 Steve Ruffini 也將被任命為先鋒董事會成員。我們將保留位於不列顛哥倫比亞省三角洲的所有加拿大溫室資產以及馬爾法 1 號和二疊紀盆地莫納漢斯設施的全部所有權，以供未來大麻市場選擇。

These assets represent an incremental near 5 million square feet of expansion potential for cannabis, providing a clear runway to expand cannabis cultivation by more than 220% compared to our operational capacity today through our own greenhouse assets.

這些資產代表大麻種植面積增加近 500 萬平方英尺，為我們透過自己的溫室資產將大麻種植面積擴大 220% 以上提供了清晰的途徑。

In addition to drastically improving the long-term upside potential of our produce business, this split of produce and cannabis business acknowledges the strength of our cannabis business as one of the largest and most respected scaled cultivators and markers of cannabis on the planet. This success grew from the lessons learned and expertise shared from our 36 years in controlled environmental agriculture, which we carefully apply to the launch of the cannabis business some eight years ago now.

除了大幅提高我們農產品業務的長期上行潛力之外，農產品和大麻業務的分離還確認了我們大麻業務的實力，即作為全球最大、最受尊敬的大麻種植和標記商之一。這項成功源自於我們在受控環境農業領域 36 年的經驗教訓和專業知識，我們在八年前將這些經驗教訓和專業知識謹慎地應用於大麻業務的啟動。

Now is the time to focus on executing our global cannabis growth strategy and invest our improved cash flow to continue supporting this growth while ensuring that we maintain substantial future expansion potential as markets continue opening up to cannabis.

現在是時候專注於執行我們的全球大麻成長策略並投資我們改善的現金流以繼續支持這一成長，同時確保隨著市場繼續向大麻開放，我們保持巨大的未來擴張潛力。

By privatizing 1/3 of our greenhouse assets and operations, we've generated $40 million in cash, created a greater upside potential for our ownership interest in the produce industry with committed private equity partners, significantly improved the forward visibility into our financial performance and transformed our company into one of the most attractive platforms for revenue growth and margin expansion across the global cannabis industry.

透過將我們的 1/3 溫室資產和業務私有化，我們獲得了 4000 萬美元的現金，與忠誠的私募股權合作夥伴一起為我們在農產品行業的所有權權益創造了更大的上行潛力，顯著提高了我們財務業績的前瞻性，並將我們的公司轉變為全球大麻行業最具吸引力的收入增長和利潤擴張平台之一。

For comparative purposes, our market cap was less than $80 million as of the market close yesterday. We expect this transaction to close during the second quarter, at which time we plan to provide the investment community with additional details surrounding our pro forma financial performance and outlook.

為了進行比較，截至昨天收盤，我們的市值不到 8,000 萬美元。我們預計此交易將在第二季完成，屆時我們計劃向投資界提供有關我們的預測財務表現和前景的更多詳細資訊。

Now let's move to a summary of our Q1 performance, which reflects an excellent start in 2025 of our pro forma operations. Canadian cannabis had one of the strongest quarters over the last three years as we continue to successfully execute on strategy to leverage our experience and leadership in Canada into other international markets as we remain focused on profitability.

現在讓我們來總結一下我們第一季的業績，這反映了我們 2025 年預計營運的良好開端。加拿大大麻市場在過去三年中表現最為強勁，我們繼續成功執行策略，將我們在加拿大的經驗和領導地位運用到其他國際市場，同時繼續專注於獲利能力。

Importantly, our focus on prioritizing more profitable sales over competing for low-margin business to drive volume is reflected meaningful in our results. Higher-margin medical export sales from Canada for Q1 grew 285% year-over-year as the business continues to gain momentum. We continue to benefit from the addition of our fifth market, New Zealand as well as continued growth in existing markets in Germany, the UK and Australia, placing us firmly on track to achieve our stated goal of at least tripling our medical export sales this year.

重要的是，我們專注於優先考慮更有利可圖的銷售，而不是競爭低利潤的業務來推動銷量，這在我們的業績中得到了有意義的體現。隨著業務持續成長，加拿大第一季高利潤醫療產品出口銷售額年增 285%。我們繼續受益於第五個市場紐西蘭的加入以及德國、英國和澳洲等現有市場的持續成長，使我們堅定地朝著實現今年醫療出口銷售額至少成長兩倍的既定目標邁進。

Lower retail branded sales in Q1 were expected and also reflect our focus on improving profitability, specifically our conscious decision to move away from lower tier categories that don't align with the quality of our flower and longer-term global strategic objectives. We also continue to be optimistic about our wholesale channel in Canada, again, with a focus on profitability. While sales have been relatively steady for the last four quarters, gross margin on those sales for Q1 was up dramatically compared to Q1 of last year.

預計第一季品牌零售銷售額將有所下降，這也反映了我們對提高盈利能力的關注，特別是我們有意識地決定放棄與我們的花卉品質和長期全球戰略目標不符的低端類別。我們也持續對加拿大的批發管道持樂觀態度，同樣關注獲利能力。雖然過去四個季度的銷售額相對穩定，但第一季的銷售毛利率與去年第一季相比大幅上升。

As we discussed on last quarter's call, we felt we were entering 2025 with a very healthy inventory position, which would enable our teams to focus on quality and profitability, and we are seeing the impact meaningfully in Q1 results and we expect this trend to continue.

正如我們在上個季度的電話會議上所討論的那樣，我們認為我們將以非常健康的庫存狀況進入 2025 年，這將使我們的團隊能夠專注於品質和盈利能力，並且我們在第一季度的業績中看到了顯著的影響，我們預計這種趨勢將繼續下去。

All of this contributed to the expansion of our gross margin for Canadian cannabis from 25% in Q1 of last year to 36%, in line with our targeted range of 30% to 40% gross margin. And given the more favorable margin profile of our international medical sales, we anticipate that we'll be able to sustain this range for the foreseeable future. These favorable impacts drove strong increases in adjusted EBITDA and net income of 75% and 291%, respectively, CAD9.6 million and CAD4.3 million with another quarter of positive cash flow from operations.

所有這些都促使我們加拿大大麻的毛利率從去年第一季的 25% 擴大到 36%，與我們 30% 至 40% 的目標毛利率範圍一致。鑑於我們的國際醫療銷售利潤率更為有利，我們預計在可預見的未來我們將能夠維持這一範圍。這些有利影響推動調整後的 EBITDA 和淨收入分別強勁增長 75% 和 291%，達到 960 萬加元和 430 萬加元，並且又一個季度的經營現金流為正。

Q1 also marked the first quarter revenue contribution from our Leli Holland subsidiary in the Netherlands, which you will now see broken out as a separate segment in our reporting financials. Sales of nearly $0.5 million reflected approximately one month of revenue. Importantly, pricing, which is very attractive relative to Canada, continues to be in line with our expectations. Adjusted EBITDA was essentially breakeven with just one month of revenue.

第一季也是我們位於荷蘭的 Leli Holland 子公司首次貢獻季度收入，您現在將在我們的財務報告中看到它作為一個單獨的部分分拆出來。近 50 萬美元的銷售額大約相當於一個月的收入。重要的是，相對於加拿大而言，定價非常有吸引力，並且繼續符合我們的預期。調整後的 EBITDA 僅靠一個月的收入就基本達到收支平衡。

We are now well underway on construction of Phase 2 of our Netherlands operation, a brand-new state-of-the-art indoor facility in a town of Groningen. This facility, which we expect will be completed in Q1 of next year will quadruple our annual production capacity. Given the more favorable margin profile of our Netherlands recreational sales, the completion of our Phase 2 facility is expected to enable us to drive a strong year of profitable growth in 2026.

目前，我們正在順利進行荷蘭業務的第二階段建設，這是位於格羅寧根鎮的全新最先進的室內設施。我們預計工廠將於明年第一季竣工，將使我們的年生產能力提高四倍。鑑於我們荷蘭休閒銷售的利潤率更為有利，我們第二期設施的完工預計將使我們能夠在 2026 年實現強勁的獲利成長。

In summary, we feel very good about our start to the fiscal year of 2025. We are seeing our prioritization of more profitable sales reflected in our financial results across our cannabis business with continued momentum in international export sales in Leli Holland.

總而言之，我們對 2025 財年的開局感到非常滿意。我們看到，我們對更有利可圖的銷售的優先考慮反映在我們大麻業務的財務業績中，而 Leli Holland 的國際出口銷售繼續保持強勁勢頭。

Our joint venture for Fresh Produce will afford us greater focus and resources to execute our global cannabis strategy and enable us to generate stronger cash flows to continue to fuel that growth, all while retaining a meaningful ownership position in what we believe is a very attractive opportunity to realize significant long-term value with the support of outstanding private equity partners.

我們的 Fresh Produce 合資企業將使我們更加專注和擁有資源來執行我們的全球大麻策略，並使我們能夠產生更強勁的現金流以繼續推動這一增長，同時保留有意義的所有權地位，我們認為這是一個非常有吸引力的機會，在優秀私募股權合作夥伴的支持下實現重大的長期價值。

So this concludes my prepared remarks, and I'll now turn the call over to Steve to review the financials before I make some last closing comments. Steve?

我的準備好的演講到此結束，現在我將把電話交給史蒂夫來審查財務狀況，然後再做最後的總結發言。史蒂夫？

Thanks, Mike. I'll start with a review of our consolidated results. We appreciate the substantive nature of the Vanguard transaction will have on our financial results. And after closing, we will provide pro forma results for the full year 2024 and the first quarter of 2025.

謝謝，麥克。我將首先回顧我們的綜合業績。我們認識到先鋒交易的實質將對我們的財務表現產生影響。交易結束後，我們將提供 2024 年全年和 2025 年第一季的預測業績。

As our Canadian produce assets do not generate much operational activity due to seasonality in Q1, while not official, one could eliminate the VF fresh column in our reported segmented results and ascertain the substantive nature improvement in our reported results. Consolidated revenues USD 77 million were roughly in line with our prior year first quarter revenues of $78 million.

由於我們的加拿大農產品資產在第一季度由於季節性原因沒有產生太多的運營活動，雖然不是官方的，但人們可以消除我們報告的分段結果中的 VF fresh 列，並確定我們報告結果中的實質性改進。合併收入 7,700 萬美元與去年同期第一季 7,800 萬美元的收入大致持平。

The slight decrease of 1% is due to lower Canadian cannabis revenues, which were negatively impacted by a stronger US dollar in Q1 2025 versus Q1 2024. Our net loss of $6.7 million or $0.06 per share was lower than our prior year first quarter loss of $2.9 million or $0.03 per share solely due to our weaker year-on-year performance in VF fresh.

1% 的小幅下降是由於加拿大大麻收入下降，而 2025 年第一季與 2024 年第一季相比，美元走強對其產生了負面影響。我們的淨虧損為 670 萬美元或每股 0.06 美元，低於去年同期第一季的 290 萬美元或每股 0.03 美元的虧損，這完全是由於 VF fresh 的同比表現較弱。

Our VF fresh and consolidated results were negatively impacted by a $4.3 million incremental noncash accounting cards to our VF fresh cost of sales due to the impact of desk storms that occurred at our Texas facilities in March and April. Our actual cultivation costs were in line with our budget and prior year expenditures.

由於 3 月和 4 月發生在我們德克薩斯州工廠的颱風的影響，我們的 VF 新鮮和合併業績受到 430 萬美元增量非現金會計卡的負面影響，這些增量非現金會計卡計入我們的 VF 新鮮銷售成本。我們的實際種植成本與我們的預算和前幾年的支出一致。

As a reminder, our tomato crops are annual crops, and we harvest them once a year. In our Texas greenhouse that crop season runs from September to June, as we produce and sell tomatoes, we charge the estimated full crop cost against the sale of crops from each facility.

提醒一下，我們的番茄作物是一年生作物，每年收穫一次。在我們位於德克薩斯州的溫室中，作物季節從九月持續到六月，當我們生產和銷售西紅柿時，我們會從每個設施的作物銷售額中扣除估計的全部作物成本。

The collective damage of these dust storms puts tremendous stress in our plants, and we lost a good portion of our expected full crop yield, which requires us to take an incremental charge to our cost of sales to catch up our full crop costs through March 31 based on our latest crop forecast.

這些沙塵暴造成的集體破壞給我們的植物帶來了巨大的壓力，我們損失了很大一部分預期的作物產量，這要求我們根據最新的作物預測，在 3 月 31 日之前對銷售成本進行增量收費，以彌補作物的全部成本。

The dust storms were a first for Village Farms and had a significant impact at our Fort Davis facility, resulting in a 31% increase in our cost per pound from just that one facility. This obviously was a disappointing -- had a disappointing impact on our quarter performance. Consolidated EBITDA was essentially flat at $81,000 compared to $3.6 million in Q1 of last year. The decrease in our adjusted EBITDA was driven entirely by our fresh produce segment.

沙塵暴對 Village Farms 來說是第一次發生，並對我們位於戴維斯堡的工廠產生了重大影響，導致僅在該工廠每磅成本就增加了 31%。這顯然令人失望——對我們的季度業績產生了令人失望的影響。合併 EBITDA 基本持平於 81,000 美元，而去年第一季為 360 萬美元。我們調整後的 EBITDA 的下降完全是由新鮮農產品部門造成的。

Turning now to our cannabis businesses. I will start with Canadian cannabis, which I will discuss at Canadian dollars. I will add here that the change in the exchange rate compared to Q1 of last year did have an impact on reported results, which are reported in US dollars.

現在來談談我們的大麻生意。我將從加拿大大麻開始，並以加元來討論。我在這裡要補充一點，與去年第一季相比，匯率的變化確實對以美元報告的結果產生了影響。

Net sales were $50 million, which was roughly in line with Q1 last year, driven mainly by the strong growth in international sales. We benefited from the continued momentum in our international medicinal export sales, particularly in German -- in the German market as we expanded our customer base as that market continues to grow as well as adding new markets like New Zealand, resulting in the 285% increase in exports in Q1 last year -- from last year.

淨銷售額為 5,000 萬美元，與去年第一季大致持平，主要得益於國際銷售額的強勁成長。我們受惠於國際藥品出口銷售的持續成長勢頭，尤其是在德國市場——隨著德國市場的持續成長，我們的客戶群也不斷擴大，同時我們也增加了紐西蘭等新市場，導致去年第一季的出口額比去年增長了 285%。

In fact, our international first quarter sales of $7.7 million were nearly as much as our entire 2024 international sales of $8.4 million. Non-branded sales were up 3% year-over-year to $9 million as we continue to be opportunistic where possible to align to supply with demand, notably, as Mike mentioned, at much higher margins.

事實上，我們第一季的國際銷售額為 770 萬美元，幾乎相當於我們 2024 年全年的國際銷售額 840 萬美元。非品牌銷售額年增 3%，達到 900 萬美元，因為我們盡可能地抓住機會，使供應與需求保持一致，特別是如 Mike 提到的那樣，利潤率要高得多。

As a reminder that up until this quarter, for most of the past two years, we have been selling off lower-margin SKUs and non-spec inventory and unfavorable margins to convert inventory to cash. Consistent with our focus on profitable growth, retail branded sales were 22% lower than Q1 last year at $32.7 million, with the decrease reflecting a shift away from value offerings, i.e., lower margin value brands with a stricter focus on higher-margin branded sales as well as the international medicinal market.

提醒一下，截至本季度，在過去兩年的大部分時間裡，我們一直在出售利潤率較低的 SKU 和非規格庫存以及不利的利潤率，以將庫存轉換為現金。與我們對獲利成長的關註一致，零售品牌銷售額比去年第一季下降了 22%，為 3,270 萬美元，這一下降反映了價值產品的轉變，即利潤率較低的價值品牌，更加嚴格地關注利潤率較高的品牌銷售以及國際醫藥市場。

Canadian cannabis gross margin was 36% up from 25% in Q1 last year, well within our target range of 30% to 40% and demonstrating the positive results of our expanded medicinal export sales as well as a focus on higher margin -- the higher-margin business in Canada as well as continued progress in realizing production efficiencies.

加拿大大麻毛利率從去年第一季的 25% 上升至 36%，遠高於我們 30% 至 40% 的目標範圍，這反映了我們擴大醫藥出口銷售的積極成果，也體現了我們對更高利潤率的關注——加拿大利潤率更高的業務以及在實現生產效率方面的持續進步。

SG&A expense as a percentage of sales for Q1 was 25% compared to 21% in Q1 last year. The increase being primarily key account spends, which, while it is an SG&A cost is tied to branded sales. Q1 adjusted EBITDA for Canadian cannabis was $9.6 million or as a percentage of net sales over 19% up a very healthy 75% from Q1 of last year due mainly to improved margins.

第一季銷售、一般及行政費用佔銷售額的百分比為 25%，去年第一季為 21%。成長主要來自大客戶支出，雖然這是銷售、一般及行政費用，但與品牌銷售掛鉤。加拿大大麻第一季調整後的 EBITDA 為 960 萬美元，佔淨銷售額的百分比超過 19%，比去年第一季成長了 75%，這主要歸因於利潤率的提高。

Finally, as we do each quarter, I will highlight that in Q1, we paid excise taxes on retail branded sales of $20 million, another direct cost of branded sales of nearly 40% of branded retail revenues and more than double our SG&A.

最後，正如我們每個季度所做的那樣，我要強調的是，在第一季度，我們為品牌零售支付了 2000 萬美元的消費稅，這是品牌銷售的另一項直接成本，佔品牌零售收入的近 40%，是我們的銷售、一般和行政費用的兩倍多。

With the recent Canadian election behind us, we renew our call in favor of excise tax reform to support the many benefits of a sustainable legal, domestic Canadian cannabis industry. This quarter also saw the initial contribution from our first international recreational cannabis sales through our Leli Holland operations in the Netherlands, which started partway through the quarter in late February.

隨著最近的加拿大大選結束，我們再次呼籲支持消費稅改革，以支持可持續的合法加拿大國內大麻產業的許多好處。本季也見證了我們透過位於荷蘭的 Leli Holland 業務首次進行國際休閒大麻銷售的初步貢獻，該銷售於 2 月底在本季中期開始。

Sales were $485,000 and adjusted EBITDA was $77,000, reflecting an adjusted EBITDA margin of 15.8%. Not many start-up operations have such nice margins, which is a testament to our ability to bring our cannabis knowledge and cultivation expertise into new markets.

銷售額為 485,000 美元，調整後 EBITDA 為 77,000 美元，調整後 EBITDA 利潤率為 15.8%。很少有新創公司能擁有如此好的利潤率，證明了我們有能力將大麻知識和種植專業知識帶入新市場。

Turning to our US cannabis business. Although Q1 sales of $3.9 million continued to trend lower due to continuing state level unregulated hemp products, which in some states has resulted in all intoxicating hemp-based products being banned. We continue to generate a healthy gross margin of 66% and return this segment back to positive adjusted EBITDA.

談談我們的美國大麻業務。儘管第一季的銷售額為 390 萬美元，但由於各州對大麻產品的監管持續不力，銷售額繼續呈下降趨勢，在某些州，所有令人陶醉的大麻產品都被禁止。我們繼續保持 66% 的健康毛利率，並使該部門的調整後 EBITDA 恢復為正值。

We believe we have stabilized this business segment even with the regulatory headwinds, and we're looking -- and we're working on a number of initiatives to reinvigorate sales on our responsible GMP-produced natural hemp products as we await improved regulations with some states now requiring GMP standards, which is a welcome regulatory change as one of the few hemp-based GMP producers.

我們相信，即使面臨監管阻力，我們也已經穩定了這一業務部門，並且我們正在尋求並正在採取多項舉措，以重振我們負責任的 GMP 生產的天然大麻產品的銷售，同時我們正在等待法規的改進，一些州現在要求 GMP 標準，作為少數基於大麻的 GMP 生產商之一，這是一個受歡迎的監管變化。

Finally, Village Farms Clean Energy generated $300,000 in net income from royalty payments we received from RNG partner, providing a healthy stream of incremental profits for the company. Turning to consolidated cash flows and the balance sheet.

最後，Village Farms Clean Energy 從我們從 RNG 合作夥伴收到的特許權使用費中獲得了 30 萬美元的淨收入，為公司帶來了健康的增量利潤流。轉向合併現金流量和資產負債表。

Total cash flow from operations was negative $6.4 million in the first quarter, partially due to the timing of government payments, which will normalize over the year. We ended Q1 with a cash of $15 million and working capital of $50 million. We remain comfortable with our net debt level of $19.3 million. When the Vanguard transaction closes, which will require us to at least pay off our operating produce line of $5 million, we will be in a net cash position.

第一季經營活動產生的現金流量總額為負 640 萬美元，部分原因是政府付款的時間安排，但年內付款時間安排將恢復正常。我們在第一季結束時擁有 1500 萬美元的現金和 5000 萬美元的營運資金。我們對 1,930 萬美元的淨債務水準感到滿意。當 Vanguard 交易結束時，我們將償還至少 500 萬美元的營運生產線，屆時我們將處於淨現金狀況。

Total term debt at the end of Q1 was $34 million. Subsequent to quarter end, we amended our loan with Farm Credit Canada to improve financial covenants. These changes reflect the considerable expansion and growth of our business since entering into the original agreement in 2013. The FCC loan matures on May 2027.

第一季末的定期債務總額為 3,400 萬美元。季度末之後，我們修改了與加拿大農業信貸公司的貸款，以改善財務契約。這些變化反映了我們自 2013 年簽訂原始協議以來業務的大幅擴張和成長。FCC貸款將於2027年5月到期。

We also refinanced our three Canadian cannabis term loans, consolidating them into a single facility with 2 of our existing lenders with a 50 basis point decrease in the interest rate, more attractive financial covenants and a new maturity date of February 2028.

我們還對三筆加拿大大麻定期貸款進行了再融資，將它們與現有的兩家貸款機構合併為一筆貸款，利率降低了 50 個基點，財務契約更具吸引力，新的到期日為 2028 年 2 月。

In closing, we feel very good about our financial position and performance of our cannabis businesses and believe the new ownership structure of our fresh produce business will allow us to realize more meaningful long-term value creation as we focus more of our human capital and financial resources on our cannabis businesses.

最後，我們對大麻業務的財務狀況和業績感到非常滿意，並相信隨著我們將更多的人力資本和財力資源集中在大麻業務上，新鮮農產品業務的新所有權結構將使我們能夠實現更有意義的長期價值創造。

I will now turn the call back to Mike. Mike?

我現在將電話轉回給麥克。麥克風？

Thanks, Steve. To reiterate, Vanguard's transaction monetizes 1/3 of our greenhouse assets positions our produce business to thrive as an independent private entity and maintains a significant expansion potential for us to continue building our leadership position and reputation in one of the largest and most respected scale cultivators and marketers of cannabis on the planet.

謝謝，史蒂夫。重申一下，Vanguard 的交易將我們三分之一的溫室資產貨幣化，使我們的農產品業務能夠作為獨立的私營實體蓬勃發展，並保持巨大的擴張潛力，使我們能夠繼續在全球最大、最受尊敬的大麻種植和營銷商之一中建立領導地位和聲譽。

Village Farms is all in the future of cannabis globally, and we're excited to write this next chapter. We have never had a clear path to drive stronger revenue growth, margin expansion and cash flow generation, which we believe will drive very strong returns to shareholders in the future.

Village Farms 著眼於全球大麻的未來，我們很高興能夠寫下一篇章。我們從未有過明確的途徑來推動更強勁的營收成長、利潤率擴大和現金流產生，我們相信這將在未來為股東帶來非常豐厚的回報。

Thank you, operator. We'll take questions now.

謝謝您，接線生。我們現在開始回答問題。

Frederico Gomes from ATB Capital Markets

來自 ATB 資本市場的 Frederico Gomes

Hi, good morning. Thanks for taking my question. Congratulations on the transaction and the results as well. I guess the first question, talking about balance sheet. As you mentioned, Steve, with the transaction here, you will be in a cash position, really strong balance sheet and really focused on your cannabis platform. So I'm curious about what are you thinking about capital allocation here in addition to the expansion that is already undergoing in the Netherlands? Thanks.

嗨，早安。感謝您回答我的問題。祝賀交易成功，也祝賀結果順利。我想第一個問題是關於資產負債表的。正如你所提到的，史蒂夫，透過這筆交易，你將擁有一個現金狀況、非常強勁的資產負債表，並且真正專注於你的大麻平台。所以我很好奇，除了荷蘭已經在進行的擴張之外，您對這裡的資本配置有什麼看法？謝謝。

Well, right now, we are very happy building our war chest, so to speak, continue to monitor the US market for optionality going forward. We think it's going to be exciting when and if that day occurs and hopefully, it will be in the next couple of years.

嗯，現在，我們很高興建立我們的資金儲備，可以這麼說，繼續監控美國市場未來的可選性。我們認為，如果那一天到來，那將是一件令人興奮的事情，希望它能在未來幾年內實現。

So that's the market we really want to eyeball and keep close to. So I think we're very happy with organic growth as opposed to nonorganic growth. Nonorganic growth is tough, bringing in companies that maybe not don't have tremendous value, accretive value for us. So I think we're going to see where we go, build our infrastructure for the rest of the year and wait and see what happens.

所以這是我們真正想要關注並密切關注的市場。因此我認為我們對有機成長而非非有機成長感到非常滿意。非有機成長很困難，引進一些可能對我們來說沒有巨大價值或增值價值的公司。所以我認為我們將看看我們會去哪裡，為今年剩餘時間建造我們的基礎設施，然後等著看會發生什麼。

I think we are -- we started this year sort of very balanced on our inventories levels. And in fact, we are short of capacity. So I think we'll look at further expansion that's on our radar screen of producing cannabis in Canada at our current facilities for 2026 and beyond, and we'll make that decision here probably in the next quarter.

我認為——今年我們的庫存水準非常平衡。而事實上，我們的產能不足。因此，我認為我們將進一步考慮在 2026 年及以後在我們現有的設施中在加拿大生產大麻的擴張計劃，我們可能會在下個季度做出這一決定。

And then we want to get Leli Phase 2 as they sit up and running. So I think we're in a good position in we'll just leave it at that, Fred.

然後，我們希望 Leli Phase 2 能夠順利啟動並運行。所以我認為我們處於一個很好的位置，我們就到此為止吧，弗雷德。

Great. Appreciate that color. Second question on your non-branded segment. You mentioned the financial year, you saw a good average selling price increase here in both flower and on bulk trim, pretty strong prices. Do you continue to see prices improving in Canada on the non-branded channel? Do you think that there's further upside here for wholesale?

偉大的。欣賞那種顏色。第二個問題關於您的非品牌部分。您提到了財政年度，您看到花卉和散裝裝飾的平均售價都有了不錯的上漲，價格相當強勁。您是否看到加拿大非品牌通路的價格持續上漲？您認為批發業務還有進一步上漲的空間嗎？

Hi, good morning, It's Ann. We are seeing continued improvement in pricing. Certainly, on a year-over-year basis, the curve can shorten a little bit in terms of month-to-month or prior period comparisons. But overall, year-over-year, B2B is strengthening. We do think that's a function of both a reduction in excess supply from some reduction of growing as well as the demand that we're seeing and others are seeing from international markets. So demand has tightened -- sorry, supply has tightened up, and that helps pricing.

嗨，早上好，我是安。我們看到價格持續改善。當然，與去年同期相比，與月度或前期相比，曲線可能會縮短一點。但整體而言，B2B 業務逐年增強。我們確實認為，這是由於產量下降導致供應過剩減少，以及我們和其他人從國際市場看到的需求增加。因此需求已經收緊——抱歉，供應已經收緊，這有助於定價。

Perfect. Thanks for that. I'll be back with you. Thanks.

完美的。謝謝。我會回來陪你。謝謝。

Doug Cooper from Beacon Securities Limited.

Beacon Securities Limited 的 Doug Cooper。

Hey, good morning guys, and Congratulations on the transaction. It looks fantastic. Just to be clear, what are you left with after the -- you moved some stuff into Vanguard? So you'd be left with D1 in Delta. I'm just talking on the produce side, right? And then a couple of assets in Texas?

嘿，大家早安，祝賀交易成功。看起來棒極了。只是想清楚一點，在你將一些東西轉移到 Vanguard 之後，你還剩下什麼？因此，您只能使用 Delta 中的 D1。我只是在談論產品方面，對嗎？那麼在德州還有一些資產嗎？

Yeah, D1 and Delta, which will continue to produce produce for the foreseeable future. As you know, D2 is half produce and half cannabis. I just mentioned that we're looking at that full conversion of D2, that decision will be made. And if that occurs, then really D1 will really be only -- our only cannabis producing facility. However, that being said, we continue to the asset of Marfa 1, which will be leased, triple net leased to Vanguard and continue to own our Monahans facility, which won't be producing produce anytime soon. So I hope that answers the question.

是的，D1 和 Delta 在可預見的未來將繼續生產農產品。如您所知，D2 一半是農產品，一半是大麻。我剛才提到，我們正在考慮 D2 的全面轉換，將會做出決定。如果發生這種情況，那麼 D1 將真正成為我們唯一的大麻生產設施。然而，話雖如此，我們仍將繼續持有 Marfa 1 的資產，該資產將以三重淨租賃的方式租賃給 Vanguard，並繼續擁有我們的 Monahans 工廠，該工廠近期不會生產產品。我希望這能回答這個問題。

So yes. So the only produce that we'll see on the financial statements post the transaction with Vanguard will be coming out of Delta 1?

是的。那麼，我們在與 Vanguard 交易後的財務報表上看到的唯一產品將來自 Delta 1 嗎？

Correct.

正確的。

And is that -- Mike, is that profitable at that segment? Or the D1, is it profitable?

那麼——麥克，這個細分市場有獲利嗎？或 D1，它有利潤嗎？

Yes, it's always been profitable. It's our most profitable facility. Yes.

是的，它一直都是獲利的。這是我們最賺錢的設施。是的。

Okay. And so I know, Steve, you guys talked about pro forma, you released those in Q2 sometime. But ballpark figure, I've got Canadian cannabis, US cannabis and in the Netherlands. Just correct me if these numbers are right, USD39 million in revenue and $6.9 million of EBITDA in the quarter.

好的。所以我知道，史蒂夫，你們談到了形式發票，你們在第二季的某個時候發布了它們。但大致來說，我有加拿大大麻、美國大麻和荷蘭大麻。如果這些數字正確的話請糾正我，本季營收為 3,900 萬美元，EBITDA 為 690 萬美元。

Yes, that's correct.

是的，正確。

Okay. And then what -- and the actual that -- just those three groups, they're profitable on a net income basis, right?

好的。那麼 — — 實際情況是 — — 只有這三個團體在淨收入基礎上是盈利的，對嗎？

Yes. This quarter, they are. I mean, obviously, accounting charges can impact net income, but yes. I look at operating -- they're all positive operating income. Look at that one.

是的。本季，情況確實如此。我的意思是，顯然，會計費用會影響淨收入，但是的。我看一下營運狀況——它們都是正的營運收入。看看那個。

Okay. Okay. And then you'll be in a net cash position, as you talked about to the tune of about $15 million?

好的。好的。然後您的淨現金狀況就會像您所說的那樣達到約 1500 萬美元？

We'd be higher than that.

我們會比這更高。

I don't think we gave a number.

我認為我們沒有給出具體數字。

We didn't give a number, but higher than that number.

我們沒有給出一個數字，但比這個數字高。

Okay. Okay. And then what's the -- do you have the -- so you focus on the Canadian or the cannabis segment of operation to -- as per the question earlier, I guess, the focus in the Netherlands. Are you seeing any M&A opportunities in Canada, however, are you just going to focus on primarily the wholesale and then the international/Netherlands?

好的。好的。那麼，您有嗎？所以您專注於加拿大或大麻業務領域，根據先前的問題，我想專注於荷蘭。您是否看到加拿大有任何併購機會，但是，您是否只主要關注批發市場，然後是國際/荷蘭市場？

Yes, for the foreseeable future, that's what we're going to do, focus on our organic growth in Canada, continue our export, driving our export sales and focus on building out the Netherlands.

是的，在可預見的未來，我們將這樣做，專注於加拿大的有機成長，繼續我們的出口，推動我們的出口銷售，並專注於建立荷蘭。

Okay. And just my last one, Netherlands, the Canadians mine is Phase 1, what is the capacity or potential sales there? And then you talked about Phase 2, I think, was 4 times the capacity once it's up and running? Is that -- can you just sort of confirm it?

好的。最後一個問題，荷蘭，加拿大礦場是第一階段，那裡的產能或潛在銷售量是多少？然後您談到了第二階段，我認為，一旦啟動並運行，容量將是原來的 4 倍？是這樣的－您能確認一下嗎？

Yes. It's quadrupling our current footprint, almost 5 times actually.

是的。它使我們目前的足跡增加了四倍，實際上幾乎增加了五倍。

And what would be the footprint post in Phase 1 and what is it post Phase 2?

第一階段的足跡是什麼？第二階段之後的足跡又是什麼？

Post Phase 2, we'll be producing at around 10,000 to 12,000 kilos on an annualized basis and the current facility is 2,000.

第二階段後，我們每年的產量將達到 10,000 至 12,000 公斤左右，目前的產能為 2,000 公斤。

2,000. Can you talk about pricing in the Netherlands. How is it? Stable? Just talk a little bit about pricing.

2,000。能談談荷蘭的定價嗎？如何？穩定的？只談一點定價問題。

It's very stable, but we'd rather say it.

它非常穩定，但我們寧願這麼說。

It's in line with what we have expected and modeled. So, so far, team has done a great job of delivering against that expectation, producing great quality flower already.

這與我們的預期和模型一致。因此，到目前為止，團隊已經出色地完成了這項期望，並生產出了優質的花朵。

Okay. And in terms of copy houses who are on the program, are they all -- just maybe talk about the demand, the size of the market and how it's progressing with the coffee houses coming online?

好的。至於參與該計劃的複印店，他們是否都——只是談論需求、市場規模以及咖啡館上線後的進展？

Yeah, it's really good. So there's 590 coffee shops, about 80 are in Phase 1 legalization. And as of April 7, last month, it's mandated, they can only buy legal product. And of the 10 licenses that were issued, only seven are producing. So three aren't. So yes, there's a need for additional capacity for sure.

是的，非常好。因此，共有 590 家咖啡店，其中約 80 家處於第一階段合法化階段。自上個月 4 月 7 日起，法規規定，他們只能購買合法產品。在頒發的 10 個許可證中，只有 7 個可以投入生產。所以三個不是。所以是的，肯定需要額外的容量。

Okay.

好的。

Okay, excellent work like this.

好的，這樣的作品非常出色。

Thanks.

謝謝。

(Operator Instructions)

（操作員指示）

Pablo Zuanic from Zuanic & Associates.

Zuanic & Associates 的 Pablo Zuanic。

Yes, good morning, everyone, and of course congratulations on the you spend. Can I just ask a couple of questions there. How did you determine the $40 million? I mean what valuation metric was used for that? And then bigger picture, why not spin everything, all the produce division? I realize that you want to give the Texas optionality, but maybe if you can discuss your thought process in terms of why these assets specifically and not the rest? Thank you.

是的，大家早安，當然也祝賀你們度過這段時光。我可以問幾個問題嗎？您是如何確定這 4000 萬美元的？我的意思是使用了什麼估值指標？那麼從更大的角度來看，為什麼不旋轉一切，所有的生產部門？我知道您想給予德州選擇權，但您是否可以討論您的思考過程，為什麼是這些資產而不是其他資產？謝謝。

Well, the transaction actually probably was at $80 million with $40 million in cash. That's what we're reporting for those assets. And I'm not going to get into the details. I could talk to you separately off-line about it. But in the end, the company did have a fairness opinion on it. So it was really structured as an $80 million deal, and I'll explain that to you separately with $40 million in cash, $40 million in equity of those assets.

嗯，實際上交易金額可能是 8000 萬美元，其中 4000 萬美元為現金。這就是我們對這些資產的報告。我不想談論細節。我可以離線與您單獨討論此事。但最終該公司確實對此給出了公平意見。因此，這筆交易實際上是一筆 8000 萬美元的交易，我將分別向您解釋，其中 4000 萬美元為現金，4000 萬美元為這些資產的股權。

And you have to understand, this was a very important structure for us because we wanted to maintain optionality for cannabis and more importantly, find the right operating partners to work with. Those 2 is what we were focused on for the last couple of years.

你必須明白，這對我們來說是一個非常重要的結構，因為我們希望保持大麻的選擇性，更重要的是，找到合適的營運夥伴。這兩個是我們過去幾年關注的重點。

And in the end, we're very pleased with how the structure is, again, giving us optionality, both in Canada and the US for the future of cannabis and having great partners that can continue to roll up the produce industry. And hopefully, that equity will be worth a great deal of shareholders in the future.

最後，我們對這種結構感到非常滿意，它再次為我們提供了在加拿大和美國大麻未來的選擇權，並擁有可以繼續推動大麻生產行業的優秀合作夥伴。希望這些股權將來能為股東帶來豐厚的價值。

No, of course. And then just to clarify, I know you said it's about 1/3 of the produce assets. But in terms of revenue, it's a little more than that, right? I think the press release says the Canadian revenue is $25 million, but the total is $169 million. So it's like 84% of revenue has being spun.

當然不是。然後澄清一下，我知道您說過這大約是生產資產的 1/3。但從收入來說，應該比這多一點吧？我認為新聞稿上說加拿大的收入是 2500 萬美元，但總額是 1.69 億美元。因此，84% 的收入都已經被轉移了。

Yes. All the revenue is going over to Vanguard with the exception of the revenue that's generated out of Delta 1. So Delta 1, we tied up exclusive marketing agreement with Vanguard just like we've -- part of our existing revenues prior to this deal comes from third-party partners in Mexico and Canada.

是的。除 Delta 1 產生的收入外，所有收入將轉給 Vanguard。因此，Delta 1，我們與 Vanguard 簽訂了獨家行銷協議，就像我們在這筆交易之前的部分現有收入來自墨西哥和加拿大的第三方合作夥伴一樣。

So we've entered into a marketing agreement. So we will book those revenues going to -- and Vanguard will be selling that to our retail customers to the retail customers based on a marketing agreement, and we'll book those revenues. But we are in a minority position.

因此我們簽訂了行銷協議。因此，我們將記錄這些收入——先鋒集團將根據行銷協議將這些收入出售給我們的零售客戶，我們將記錄這些收入。但我們處於少數地位。

Okay, thank you. And then just have two more quick questions. One in the case of Holland. Have the coffee shops in the pilot began to buy only exclusively from the licensed producers, or are they still being allowed to buy from the gray market because that that that that date keeps on moving, it seems right if you can clarify that and then maybe go on go on.

好的，謝謝。然後再問兩個簡單的問題。其中一個案例是荷蘭。試點中的咖啡店是否已經開始只從有執照的生產商那裡採購，或者他們是否仍然被允許從灰色市場採購，因為那個日期一直在變化，如果你能澄清這一點，然後繼續下去，這似乎是正確的。

Only from the legal market as of April. 27th.

僅限自 4 月 27 日起在合法市場上銷售。

Okay. And then the last one, Steve, in terms of -- when you talked about GMP in terms of hemp, you are manufacturing all the gummies in-house. Could you offer that? Could you often come manufacturing services to other companies out there? I know it's a very volatile industry. We don't know what's going to happen at the state level. But it seems that you have a unique opportunity there to use your capacity not to make just your own gummies, but also to co-manufacture for other people. Is there an opportunity?

好的。然後最後一個問題，史蒂夫，就——當你談到大麻的 GMP 時，你們是在內部生產所有的軟糖。你能提供這個嗎？您經常為其他公司提供製造服務嗎？我知道這是一個非常不穩定的行業。我們不知道州一級會發生什麼。但看起來你有一個獨特的機會，可以利用你的能力，不僅可以製作自己的軟糖，還可以為其他人共同製造。有機會嗎？

Yes, it's an opportunity when we've had discussions with others about that.

是的，當我們與其他人討論這個問題時，這是一個機會。

Thank you Great.

非常感謝。

John Chapman from Alliance Global Partners. (Operator Instructions)

來自 Alliance Global Partners 的 John Chapman。（操作員指示）

And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Mike for any further remarks.

今天節目的問答環節到此結束。我想將程序交還給麥克，以便他可以做出進一步的評論。

Thank you, Jonathan. I just want to once again thank everybody for attending today's call and look forward to reporting our second quarter in August. Thank you.

謝謝你，喬納森。我只想再次感謝大家參加今天的電話會議，並期待在八月報告我們的第二季業績。謝謝。

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

女士們、先生們，感謝各位參加今天的會議。該計劃確實就此結束。您現在可以斷開連線。再會。