Village Farms International Announces Full Year and Fourth Quarter 2009
Results

    
    TRADING SYMBOL: The Toronto Stock Exchange:
                    Village Farms International, Inc. - VFF
    

VANCOUVER, March 10 /CNW/ - Village Farms International, Inc. (the "Company") (TSX: VFF) announced today results for the year ended and quarter ended December 31, 2009.

Full Year 2009 Operating Results Summary

    
    -   Revenues of US$130.5 million versus 2008 revenues of
        US$133.1 million;

    -   Earnings per share of US$0.17 per share versus US$0.12 per share in
        2008;

    -   Net income after tax of US$6.7 million versus US$4.5 million in 2008;

    -   EBITDA of US$9.1 million versus US$21.2 million in 2008;

    -   On December 31, 2009, the Company completed the conversion from an
        income trust structure to a corporation.
    

Michael DeGiglio, Chief Executive Officer of the Company, stated, "While the recession year of 2009 proved to be a challenging year for pricing, we saw improved pricing over 2008 levels throughout the fourth quarter of 2009. We have also experienced a return to normal first quarter pricing through the first two months of 2010, which is well above 2009 pricing and we believe that the market challenge of decreased consumer consumption of fresh produce is behind us. While the poor weather in Florida has helped tomato pricing, we predominately sell to retailers who prefer hydroponic produce. As such, we believe the primary driver of improved pricing is increased consumption rather than poor weather conditions for field growers."

DeGiglio added, "We expect the 2010 financial performance to be stronger than 2009 as a result of improved production from our Texas facilities during the first quarter of 2010 and better overall pricing for most of our products. Additionally, we are experiencing increased interest in our new greenhouse technology (GATES) and are working towards announcing some new business developments in this growth area later in 2010."

    
    Operational Summary for the Year:
    (in thousands of US dollars)
    

Revenue

Revenue for the year ended December 31, 2009, decreased $2,575, or 1.9%, to $130,524 from $133,099 for the year ended December 31, 2008. The decrease in revenue is primarily due to lower pricing throughout most of 2009 versus 2008. The comparable period pricing for the Company's tomato products was 7.5% lower in 2009 versus 2008.

Gross Profit

Gross profit for the year ended December 31, 2009, decreased $11,995, or 45%, to $14,765 from $26,760 for the year ended December 31, 2008. The decrease in gross profit is directly due to lower pricing and higher volume of supply partner produce, which generates a lower margin than Company-grown produce. Cost of goods for the Company's own facility production was 2% lower than the Company's 2008 production cost of goods, mostly due to lower transportation costs.

Selling, General and Administrative

Selling, general and administrative expenses for the year ended December 31, 2009, decreased $2,241, or 15.6% to $12,093 from $14,334 for the year ended December 31, 2008. The decrease is primarily due to lower personnel and share-based compensation costs, partially offset by costs of our conversion from an income trust during 2009.

Interest, Net

Net Interest expense, for the year ended December 31, 2009, decreased $458 to $3,159 from $3,617 for the year ended December 31, 2008. The decrease is due to the continued reduction in debt levels throughout 2009.

Other Income (Costs)

Other income for the year ended December 31, 2009, increased $2,751 to $876 from other costs of ($1,875) for the year ended December 31, 2008. The increase was due to a gain on derivatives of $709 in 2009 versus a loss on derivatives of ($2,801) in 2008 plus lower 2009 amortization of intangible assets of $1,070 due to the expiry of certain energy contracts in the fourth quarter of 2008, which were offset by insurance settlement gain income in 2009 of $2,189.

Net Income

Net income for the year ended December 31, 2009, increased $2,128 to $6,669 from net income of $4,541 for the year ended December 31, 2008. Our increased net income was solely due to the recognition of a Canadian tax asset that previously could not be realized under our prior Canadian income trust structure. In 2009, we recognized a net tax recovery of $6,280 versus an income tax expense of ($2,393) for the full year ended 2008. Our net income before taxes decreased by ($6,545) in 2009 to $389 from $6,934 in 2008 primarily due to lower pricing in 2009 versus 2008.

EBITDA

EDITDA for the year ended December 31, 2009, decreased to $9,122 from $21,247 for the year ended December 31, 2008, primarily due to a lower gross profit as a result of lower product pricing and internal production issues during the first quarter of 2009.

Fourth Quarter 2009 Operating Results Summary:

    
    -   Revenues of US $33.6 million versus fourth quarter 2008 revenue of
        US$ 30.4 million;

    -   EBITDA of US$5.7 million versus US$6.1 million in the fourth quarter
        2008;

    -   Net income of US$9.2 million versus a net loss of US($1.1) million in
        the fourth quarter 2008.


    Operational Summary for the Quarter:
    (in thousands of US dollars)
    

Revenue

Revenue for the quarter ended December 31, 2009 increased $3,175, or 10.4%, to $33,597 from $30,422 for the quarter ended December 31, 2008. The increase in revenue is due to an increase in supply partner produce of $2,986 over the same period in 2008. Revenues from our own production were up $189 for the comparable period in 2008 due to higher pricing in 2009 versus 2008, offset by a decrease in production of 4% from 2008.

Gross Profit

Gross profit for the quarter ended December 31, 2009 increased $546, or 8%, to $7,406 from $6,860 for the quarter ended December 31, 2008. The increase in gross profit is directly due to higher volumes of third party produce and higher pricing. Cost of goods for the Company's production was 2% lower than the Company's 2008 production cost of goods.

Selling, General and Administrative

Selling, general and administrative expenses for the quarter ended December 31, 2009, decreased $145, or 3.9%, to $3,604 from $3,749 for the quarter ended December 31, 2008. The decrease is primarily due to lower personnel costs in the fourth quarter of 2009 as compared to the same period in 2008, which were offset by costs of our conversion from an income trust during the fourth quarter of 2009 of approximately $500.

Interest, Net

Net Interest expense, for the quarter ended December 31, 2009, decreased $105 to $740 from $845 for the quarter ended December 31, 2008. The decrease is due to the continued reduction in debt levels throughout 2009 and 2008.

Other Income (Costs)

Other income for the quarter ended December 31, 2009, increased $2,768 to $657 from other costs of ($2,109) for the quarter ended December 31, 2008. The increase was due to a gain on derivatives of $274 as compared to a loss on derivatives of ($3,228) for the fourth quarter of 2008, which was partially offset by realizing a smaller gain on sale of assets in 2009 of $65 versus other income of $1,428 mostly related to a vendor settlement in the fourth quarter of 2008.

Net Income

Net income for the quarter ended December 31, 2009, increased $10,269 to $9,179 from a net loss of ($1,090) for the quarter ended December 31, 2008. The increase was due to higher operating income of $691, higher other income of $2,767 and the recording of the Canadian tax asset in the fourth quarter due to the successful completion of our conversion from an income trust.

EBITDA

EDITDA for the quarter ended December 31, 2009 increased $746, or 15%, to $5,723 from an adjusted figure of $4,977 for the quarter ended December 31, 2008, as a result of higher product pricing and lower administrative costs. EBITDA for the fourth quarter ended December 31, 2008 was reported as $6,077, but included a one-time legal settlement of approximately $1,100, excluding this settlement from the fourth quarter 2008 results in an adjusted EBITDA of $4,977.

Non-GAAP Measures

EBITDA is not a recognized measure and does not have standardized meaning under Canadian generally accepted accounting principles. Accordingly, this measure may not be comparable to similar measures presented by other issuers. Please refer to the Company's Management's Discussion and Analysis for the year ended December 31, 2009, which will be available at www.sedar.com, for additional information concerning EBITDA and a reconciliation of EBITDA to net earnings and operating cash flows, for the periods presented.

About Village Farms

Village Farms is one of the largest producers, marketers and distributors of premium-quality, greenhouse-grown tomatoes, bell peppers and cucumbers in North America. This premium product as well as premium product produced under exclusive arrangements with other greenhouse producers is grown in sophisticated, highly efficient and intensive agricultural greenhouse facilities located in British Columbia and Texas. Product is marketed and distributed under the Village Farms(R) brand primarily to retail grocers and dedicated fresh food distributors throughout the United States, Canada and Japan. Village Farms currently operates distribution centers located in key markets in the United States and Canada. Since its inception, Village Farms has been guided by sustainable agricultural principles which integrate three main goals; environmental health, economic profitability, and social & economic equality.

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 Company's current annual information form and management's discussion and analysis for the year ended December 31, 2009, which will be 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.

    
                      Village Farms International, Inc.
                    (formerly Village Farms Income Fund)

                         Consolidated Balance Sheets
                   (In thousands of United States dollars)

                                                    December 31, December 31,
                                                        2009         2008
                                                    ------------ ------------
                                                      (audited)    (audited)
    Assets

    Current assets:
      Cash and cash equivalents                          $2,611       $4,101
      Accounts receivable                                 9,594        9,357
      Other receivables                                     592          567
      Inventories                                        11,948       11,438
      Assets held for sale                                    -          344
      Prepaids and deposits                                 909          544
                                                    ------------ ------------
                                                         25,654       26,351

    Property, plant and equipment                        66,599       70,489
    Deferred tax assets                                   4,549            -
    Intangible assets                                     1,404        1,508
    Other assets                                            877          821
                                                    ------------ ------------
      Total assets                                      $99,083      $99,169
                                                    ------------ ------------
                                                    ------------ ------------
    Liabilities and shareholders' equity

    Current liabilities:
      Accounts payable and accrued liabilities           $9,564       $9,388
      Distributions payable                                   -          317
      Current maturities of long-term debt                3,260        3,227
      Current obligations under capital leases              283          227
                                                    ------------ ------------
        Total current liabilities                        13,107       13,159


      Long-term debt                                     51,472       54,732
      Derivatives                                         2,092        2,801
      Obligations under capital leases                      262          472
      Future income taxes                                 3,589        4,881
                                                    ------------ ------------
        Total liabilities                                70,522       76,045
                                                    ------------ ------------

    Shareholders' equity:

      Share capital                                      24,850            -
      Trust units                                             -       24,850
      Retained earnings                                   3,656       (1,781)
      Accumulated other comprehensive income                 55           55
                                                    ------------ ------------
        Total shareholders' equity                       28,561       23,124
                                                    ------------ ------------
        Total liabilities and shareholders' equity      $99,083      $99,169
                                                    ------------ ------------
                                                    ------------ ------------



                      Village Farms International, Inc.
                    (formerly Village Farms Income Fund)

                     Consolidated Statements of Earnings
                 For the Years Ended and Three Months Ended
       (In thousands of United States dollars, except for share/units
                   outstanding and per share/unit amounts)

                               Full Year Ended         Three Months Ended
                                 December 31,              December 31,
                              2009         2008         2009         2008
                          ------------ ------------ ------------ ------------
                            (audited)    (audited)   (unaudited)  (unaudited)

    Net sales                $130,524     $133,099      $33,597      $30,422
    Cost of sales             115,759      106,339       26,191       23,562
                          ------------ ------------ ------------ ------------
    Gross profit               14,765       26,760        7,406        6,860

    Selling, general and
     administrative expenses   12,093       14,334        3,604        3,749
                          ------------ ------------ ------------ ------------
    Operating Income            2,672       12,426        3,802        3,111

    Interest expense, net       3,159        3,617          740          845
    Foreign exchange loss
     (gain)                        62          388         (347)         183
    Amortization of
     intangible assets            103        1,173           25          126
    Loss on derivatives          (709)       2,801         (274)       3,228
    Other (income), net          (298)      (2,487)         (65)      (1,428)
    (Gain) on sale of asset       (34)           -            4            -
                          ------------ ------------ ------------ ------------
    Earnings before income
     taxes                        389        6,934        3,719          157

    Provision for income
     taxes                     (6,280)       2,393       (5,460)       1,247
                          ------------ ------------ ------------ ------------

    Net earnings (loss)         6,669        4,541        9,179       (1,090)
                          ------------ ------------ ------------ ------------

    Net income per
     Unit/share-basic           $0.17        $0.12        $0.24       ($0.03)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Weighted average number
     of units/shares
     outstanding-basic     38,707,345   36,368,633   38,707,345   36,368,633
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Net income per
     Unit/share-diluted         $0.17        $0.12        $0.24       ($0.03)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Weighted average number
     of units/shares
     outstanding-diluted   38,707,345   38,707,345   38,707,345   38,707,345
                          ------------ ------------ ------------ ------------



                      Village Farms International, Inc.
                    (formerly Village Farms Income Fund)

                    Consolidated Statements of Cash Flows
                 For the Years Ended and Three Months Ended
                   (In thousands of United States dollars)

                               Full Year Ended         Three Months Ended
                                 December 31,              December 31,
                              2009         2008         2009         2008
                          ------------ ------------ ------------ ------------
                            (audited)    (audited)   (unaudited)  (unaudited)

    Cash flows from
     operating activities:
      Net earnings (loss)      $6,669       $4,541       $9,179      ($1,090)
        Adjustments to
         reconcile net
         income to net cash
         provided by
         operating activities:
          Depreciation and
           amortization         5,770        6,456        1,437        1,426
          (Gain) loss on
           sale of property       (34)           -            7            -
          (Gain) loss on
           derivatives           (709)       2,801         (273)       3,228
          Foreign exchange
           loss                   79           35            2           35
          Share based
           compensation             -        1,050            -          237
          Future income taxes  (5,841)       2,153       (6,146)       1,989
          Changes in non-cash
           working capital       (734)         855       (1,356)      (1,901)
                          ------------ ------------ ------------ ------------
            Net cash provided
             by operating
             activities         5,200       17,891        2,850        3,924
                          ------------ ------------ ------------ ------------

    Cash flows from investing
     activities:
      Purchases of property,
       plant and equipment     (1,890)      (3,994)        (467)      (1,288)
      Proceeds from sale of
       property, plant and
       equipment                  266           50           44            -
                          ------------ ------------ ------------ ------------
            Net cash used in
             investing
             activities        (1,624)      (3,944)        (423)      (1,288)
                          ------------ ------------ ------------ ------------

    Cash flows from financing
     activities:
      Payments on operating
       line of credit               -       (3,313)      (1,691)           -
      Payments on long-term
       debt                    (3,227)      (3,152)        (806)        (794)
      Payments on obligations
       under capital leases      (154)        (427)         (57)        (166)
      Dividend payments to
       Unitholders and PPS
       holders                 (1,550)      (4,137)           -         (916)
      Other                       (56)        (402)          15          127
                          ------------ ------------ ------------ ------------
            Net cash used in
             financing
             activities        (4,987)     (11,431)      (2,539)      (1,749)
                          ------------ ------------ ------------ ------------

      Foreign exchange gain       (79)         (35)          (2)         (35)
                          ------------ ------------ ------------ ------------

    Net increase (decrease) in
     cash and cash equivalents (1,490)       2,481         (114)         852
    Cash and cash equivalents
     beginning of period        4,101        1,620        2,725        3,249
                          ------------ ------------ ------------ ------------
    Cash and cash
     equivalents end of
     period                    $2,611       $4,101       $2,611       $4,101
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    Supplemental cash flow
     information:
      Interest paid            $3,159       $3,937         $797         $887
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
      Income taxes paid          $100       $1,929          $76           $0
                          ------------ ------------ ------------ ------------
    

%SEDAR: 00020068E

SOURCE VILLAGE FARMS INCOME FUND

For further information: For further information: Stephen C. Ruffini, Senior Vice President and Chief Financial Officer, Village Farms International, Inc., (732) 676-3008

Organization Profile

VILLAGE FARMS INCOME FUND

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