Village Farms International, Inc.

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 30th, 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. 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. 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. 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 CDAR+. 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. I would now like to turn the call over to Michael DiGiglio, Chief Executive Officer of Village Farms International. Please go ahead.

Thanks, Liz. Good morning, and thank you for joining us for today's call.

With me are Steve Ruffini, our Chief Financial Officer. Anne Gillen Lefevre, Vice President of Corporate Affairs, and Patty Smith, Vice President, Corporate Controller. As per our usual format, Steve and I will review the operating highlights and financial results of the quarter and then open the call up for questions. 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. 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 U.S. cannabis businesses also delivered positive adjusted EBITDA net income. And our fresh produce operations saw another quarter of significant year-over-year improvement, also with positive adjusted EBITDA. I'm also pleased with trends at the retail shelf, which are a true test of whether everything we do resonates with the consumer. 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 one cent per share, another quarter of positive adjusted EBITDA, and positive cash generation on a consolidated basis. 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's determination, and I am 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. There are a number of highlights for Q3. The first is another quarter of positive adjusted EBITDA on cash flow generation. These are the direct result of our unrelentant 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. For Village Farms, organic reinvestment is critical. Simply put, we strive to build competitive moats in the capabilities which will drive future growth. 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 a 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 based on our profitable Canadian business model. The second highlight for the quarter is that our strength and 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 in our last call continued in Q3 with a number of noteworthy launches. These included a new super brand, Super Toast, 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 SOAR brand, which quickly became a top three premium dried flower brand nationally after its launch one year ago. During Q3, one of SOAR's exclusive cultivars, Pineapple God, was one of the best-selling premium dried flower products nationally. Also on the product side, our launch of Fraser Valley's Strawberry Amnesia, which was the largest in BC history, and launched as 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. 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 Soar brand, which also sold out. In Quebec, as many of you know, there are just two product calls a year with launches timed during Q2 and Q4. So working with our existing portfolios in between these product calls is as important as new launches themselves to ensure sustainable growth. Our success in doing so is evidenced by our continued expansion in market share in Q3 from the existing portfolio, and I'm excited to see the results from the Q4 product launches which are currently underway. 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 producer of dried flower nationally for the third quarter, sitting only behind a competitor who attained the top spot by purchasing market share via acquisitions. I've challenged the team to retake the top spot in flour, 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 at the end of October, we had achieved five consecutive months of expansion in our share of the dried flour market nationally. 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 Rose Life Science. Rose holds the number two market share position in Quebec, and it's the fastest growing producer in the province. 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 the strong partnership between the PureSun Farms and Rose teams. During the third quarter, we also highlighted 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. We achieved this alongside our return to the number two ranking nationally in branded sales, proving out the benefit of our leadership in cultivation, commercialization, and innovation for multiple growth opportunities. International sales contributed less to NQ3 than it did in the first two quarters of the year, a variance which reflects the startup nature of the industry and our business. Year to date, international sales are up more than two and a half 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 will remind you typically have higher margins than the Canadian market. As we add customers in new geographies, we expect growth in this business to be more steady and predictable. Speaking of which, the Netherlands government recently issued a favorable final update to the rollout of its legal recreational cannabis programs. This has provided clarity for our plans for Lely Holland, which is just one of 10 licenses that allow participation in the program. We are moving forward and excited about the opportunity of what now looks to be a fully integrated supply model. Turning now to U.S. 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 relaunched a new visual brand for CBD distillery, including a revamped website focused on wellness and attributes of its products. Even in the challenging U.S. market for CBD, we are focused on and we are achieving profitability and cash flow generation without continued belief in the potential of this business in a favorable regulatory environment. Now moving on to fresh products. produce, our Q3 performance took another step forward of our goal in 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 Brown-Brigosa rye 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 future impact. We are also benefiting from higher pricing. As a result, Fresh Produce 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 a great start to a new chapter for Fresh Produce Our next goal is to refresh our sustainable profitability and ultimately cash flow generation, and I am confident we can get there. I will now turn the call over to Steve for a more detailed review of the financials. Steve?