Village Farms Income Fund Announces Record Second Quarter Revenues and Net Income



    
    Village Farms Income Fund will host a conference call on Tuesday,
    August 19, 2008 at 8:30 a.m. Pacific Time (11:30 a.m. Eastern Time), to
    review the second quarter results. To participate in the conference call,
    please dial 416-644-3417 or toll free 800-732-0232. To ensure your
    participation, please call approximately five minutes prior to the
    scheduled start of the call.

    TRADING SYMBOL:   The Toronto Stock Exchange:
                      Village Farms Income Fund - VFF.UN

    VANCOUVER, Aug. 13 /CNW/ - Village Farms Income Fund (the "Fund") (TSX:
VFF.UN) announced its results for the second quarter ended June 30, 2008.

    (Note: amounts in U.S. dollars unless otherwise noted).

    Financial Highlights for the Three Months Ended June 30, 2008:

      -  Revenues increased 34%, to $44.1 million for the second quarter of
         2008, compared to $32.9 million in the second quarter of 2007;
      -  Net earnings increased $5.9 million to $4.0 million for the second
         quarter of 2008, from a loss of $1.9 million for the second quarter
         of 2007;
      -  EBITDA increased $4.2 million to $4.5 million, from $0.3 million in
         the prior year; and
      -  Working capital as of June 30, 2008 was $13.1 million.
    

    "We are proud to report strong financial results and a record second
quarter for both revenue and earnings in Village Farms' history. We delivered
this performance throughout all divisions of our Company," said Michael A.
DeGiglio, Chief Executive Officer. "Revenues grew nearly 34% quarter over
quarter."
    DeGiglio added, "We were able to accomplish this level of internal
improvement despite the softness in the U.S. economy and the sharp rise in
commodity prices, which is testament to the effectiveness of our bottom-up
operational strategies and the stability of the produce industry in general.
During the quarter we also saw greater demand for our greenhouse-grown produce
due to recent food safety concerns regarding certain domestic and imported
tomatoes."
    DeGiglio concluded, "We believe our strong brand and high-quality, safe
produce combined with our ability to market and distribute our fresh produce
on time and 365 days per year, gives us a unique ability to continue
delivering growth and value to our unitholders. Our revenue performance in the
quarter resulted in a more than $4 million increase in EBITDA, resulting in a
trailing twelve month EBITDA of $22.2 million."

    Operational Summary for the Second Quarter and Year to Date:

    Results of Operations for the Three Months Ended June 30, 2008 Compared
    to the Three Months Ended June 30, 2007

    Revenue

    Revenue for the three month period ended June 30, 2008 increased $11,170
or 34% to $44,053 from $32,883 for the three month period ended June 30, 2007.
The increase in revenue is primarily due to strong selling prices for tomatoes
due to favorable market conditions and improved customer mix, an increase in
Village Farms' production yields and an increase in revenues related to
product sold on behalf of our exclusive partners.

    Gross Profit

    Gross profit for the three month period ended June 30, 2008 increased
$4,026 or 281% to $5,461 from $1,435 for the three month period ended June 30,
2007, due to the reasons outlined above. Gross profit margins rose 8% to 12%
for the three months ended June 30, 2008 from 4% for the three months ended
June 30, 2007.

    Selling, General and Administrative Expenses

    Selling, general and administrative expenses for the three month period
ended June 30, 2008 increased $459 or 17% to $3,204 from $2,745 for the three
month period ended June 30, 2007. The increase is primarily due to increased
personnel costs which include additional personnel in the sales and marketing
areas.

    Interest, Net

    Interest, net for the three month period ended June 30, 2008 decreased
$627 or 41% to $918 from $1,545 for the three month period ended June 30,
2007. The decrease is due to lower debt balances and lower borrowing costs.

    Other Income

    Other income for the three month period ended June 30, 2008 increased
$647 to $883 from $236 for the three month period ended June 30, 2007. The
increase was primarily due to a gain realized on the sale of natural gas
resulting from excess gas inventory as a result of decreased gas usage from
improved energy management.

    Net Income

    Net income for the three month period ended June 30, 2008 increased
$5,946 to $4,062 from a loss of $1,884 for the three month period ended June
30, 2007. The increase was primarily due to an increase in gross profit,
decrease in interest expense and gains in other income and derivatives,
partially offset by increases in selling, general and administrative expenses
and income tax expense.

    EBITDA

    EDITDA for the three month period ended June 30, 2008 increased $4,180 to
$4,459 from $279 for the three month period ended June 30, 2007, primarily due
to an increases in gross profit and other income, partially offset by an
increase in selling, general and administrative expenses. See the EBITDA
calculation in "Reconciliation of Net Earnings to EBITDA" in the Fund's
Management's Discussion and Analysis for the three months ended June 30, 2008.

    Results of Operations for the Six Months Ended June 30, 2008 Compared to
    the Six Months Ended June 30, 2007

    Revenue

    Revenue for the six month period ended June 30, 2008 increased $15,248 or
27% to $72,571 from $57,323 for the six month period ended June 30, 2007. The
increase in revenue is primarily due to strong selling prices for tomatoes due
to favorable market conditions and improved customer mix, an increase in
Village Farms' production yields and an increase in revenues related to
product sold on behalf of our exclusive partners.

    Gross Profit

    Gross profit for the six month period ended June 30, 2008 increased
$8,241 or 92% to $17,177 from $8,936 for the six month period ended
June 30, 2007, due to the reasons outlined above. Gross profit margins rose 8%
to 24% for the six months ended June 30, 2008 from 16% for the six months
ended June 30, 2007.

    Selling, General and Administrative

    Selling, general and administrative expenses for the six month period
ended June 30, 2008 increased $923 or 17% to $6,406 from $5,483 for the six
month period ended June 30, 2007. The increase is primarily due to increased
personnel costs which include additional personnel in the sales and marketing
areas.

    Interest, Net

    Interest, net for the six month period ended June 30, 2008 decreased
$1,271 or 40% to $1,878 from $3,149 for the six month period ended June 30,
2007. The decrease is due to lower debt balances and lower borrowing costs.

    Other Income

    Other income for the six month period ended June 30, 2008 increased $591
to $1,057 from $466 for the six month period ended June 30, 2007. The increase
was primarily due to a gain realized on the sale of natural gas resulting from
excess gas inventory as a result of decreased gas usage from improved energy
management.

    Net Income

    Net income for the six month period ended June 30, 2008 increased $6,899
or 669% to $7,930 from $1,031 for the six month period ended June 30, 2007.
The increase was primarily due to an increase in gross profit, a decrease in
interest, net, offset by an increase in selling, general and administrative
expenses and the reduction of the gain on foreign exchange from the prior
year.

    EBITDA

    EDITDA for the six month period ended June 30, 2008 increased $7,945 or
121% to $14,493 from $6,548 for the six month period ended June 30, 2007,
primarily due to the increase in gross profit, partially offset by an increase
in selling, general and administrative expenses. See the EBITDA calculation in
"Reconciliation of Net Earnings to EBITDA" in the Fund's Management's
Discussion and Analysis for the six months ended June 30, 2008.

    Distributions to Unitholders

    The Fund's policy is to distribute annually to Unitholders available cash
provided by operations after cash required for capital expenditures, working
capital reserves, growth capital reserves and other reserves considered
advisable by the Trustees of the Fund. The policy allows the Fund to make
stable monthly distributions to its Unitholders based on the Fund's estimate
of distributable cash for the year. The Fund pays cash distributions on the
last business day of each month to Unitholders of record on the last business
day of the previous month.

    About Village Farms

    Village Farms is the largest producer, marketer and distributor of
premium-quality, greenhouse grown tomatoes, bell peppers and cucumbers in
North America. This premium product as well as product produced under
exclusive arrangements with other greenhouse producers is grown in
sophisticated, highly intensive agricultural greenhouse facilities located in
British Columbia, Texas and Pennsylvania and is marketed and distributed under
its Village Farms(R) brand name, primarily to retail supermarkets and
dedicated fresh food distribution companies. Village Farms markets and
distributes throughout the United States, Canada, Mexico and Japan, and
currently operates seven distribution centres located across the United States
and Canada. Since its inception, Village Farms has been guided by a
sustainable agriculture policy which integrates three main goals -
environmental health, economic profitability and social and economic equality.

    Restriction on Non-Resident Ownership

    The Declaration of Trust of the Fund contains provisions which prohibit
non-residents of Canada from owning more than 49.9% of the Units of the Fund
on a fully-diluted basis and give the Trustees of the Fund certain powers,
including the power to require non-residents to sell their Units if this
limitation is exceeded and the right to refuse to register transfers of units
to non-residents if such a situation is imminent. The Fund estimates that in
excess of 40% of its Units, on a fully-diluted basis, are held by
non-residents. Should non-residents acquire additional Units of the Fund, it
may be necessary for the Trustees to exercise their powers to require
non-resident Unitholders to sell their Units and/or to refuse Unit transfers
to non-residents. Accordingly, non-residents may determine that it is not
appropriate to acquire directly or indirectly Units of the Fund.

    Forward Looking Statements

    This press release contains certain "forward looking statements". These
statements relate to future events or future performance and reflect our
expectations regarding our growth, results of operations, performance,
business prospects, opportunities or industry performance and trends. These
forward looking statements reflect our current internal projections,
expectations or beliefs and are based on information currently available to
us. In some cases, forward looking statements can be identified by terminology
such as "may", "will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict" , "potential", "continue" or the negative of these terms
or other comparable terminology. A number of factors could cause actual events
or results to differ materially from the results discussed in the forward
looking statements. In evaluating these statements, you should specifically
consider various factors, including, but not limited to, such risks and
uncertainties as availability of resource, competitive pressures and changes
in market activity, risks associated with U.S. and international sales and
foreign exchange, regulatory requirements and all of the other "Risk Factors"
set out in the Fund's current annual information form and Management's
Discussion and Analysis for the fiscal year ended December 31, 2007, which are
available electronically at www.sedar.com. Actual results may differ
materially from any forward looking statement. Although we believe that the
forward looking statements contained in this press release are based upon
reasonable assumptions, you cannot be assured that actual results will be
consistent with these forward looking statements. These forward looking
statements are made as of the date of this press release, and other than as
specifically required by applicable law, we assume no obligation to update or
revise them to reflect new events or circumstances.

    Non-GAAP Measures

    EBITDA and distributable cash are not recognized measures and do not have
standardized meanings under the Canadian generally accepted accounting
principles. Accordingly, these measures may not be comparable to similar
measures presented by other issuers. Please refer to the Fund's Management's
Discussion and Analysis for the six months ended June 30, 2008, which is
available at www.sedar.com, for additional information concerning these
measures and a reconciliation of these measures to net earnings and operating
cash flows, respectively, for the periods presented.

    %SEDAR: 00020068E




For further information:

For further information: Kenneth S. Hollander, Executive Vice President
and Chief Financial Officer, Village Farms Canada Limited Partnership, (732)
676-3008

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VILLAGE FARMS INCOME FUND

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