Planet 13 Announces First Quarter 2019 Financial Results

Planet-13 - puff puff post
  • Q1 Revenue of $13.8 million with the SuperStore now generating over $5 million per month in revenue.
  • SuperStore accounted for ~8.2% of all cannabis dispensary revenue for Nevada in January and February.
  • Q1 EBITDA of $1.3 million and Cash Flow from Operating Activities of $2.6 million.
  • Well capitalized with $20 million to complete all growth initiatives.

All figures are reported in United States dollars ($) unless otherwise indicated

LAS VEGAS, May 30, 2019 /CNW/ – Planet 13 Holdings Inc. (CSE: PLTH) (OTCQB: PLNHF) (“Planet 13” or the “Company“), a leading vertically-integrated Nevada cannabis company, today announced financial results for the three-month period ended March 31, 2019. Planet 13’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).

Cannabis Entertainment Complex (the “SuperStore”) monthly performance since opening November 1st, 2018.

30-Nov-18 31-Dec-18 31-Jan-19 28-Feb-19 31-Mar-19 30-Apr-19
Revenue $ 3364891 $ 3438723 $ 4075052 $ 4304122 $ 5456889 $ 5276095
MoM Growth 2.20% 18.50% 5.60% 26.80% -3.30%
Total Tickets 42,157 44,296 48,119 48,052 61,602 58,869
# of Days 30 31 31 28 31 30
Average Customers/Day 1,405 1,429 1,552 1,716 1,987 1,962
Avg Ticket $ 79.82 $ 77.63 $ 84.69 $ 89.57 $ 88.58 $ 89.62
Total Visitors 55,433 68,422 70,133 67,900 98,659 96,659
Avg Visitors/Day 1,848 2,207 2,262 2,425 3,183 3,222
Visitor Conversion Rate 76% 65% 69% 71% 62% 61%

Larry Scheffler, Co-CEO of Planet 13 commented, “The SuperStore is now drawing over 3,000 visitors per day and generating over $5 million a month in revenue. For the first two months of 2019, the SuperStore accounted for ~8.2% of all cannabis dispensary sales in Nevada.1 We fully expect to generate additional growth at the SuperStore as we continue to execute awareness initiatives and complete Phase II of our expansion plan, which is designed to generate strong traffic and incremental, high-margin revenue. Other companies are starting to recognize the value of being in our store. In Q1 we made a focused effort to start leveraging the Planet 13 Las Vegas SuperStore’s unique sales platform, highlighted by our exclusive launch of the Tyson Ranch brand. In our view, the SuperStore will rapidly become the only place to launch a national brand synonymous with the entertainment and excitement that Las Vegas is known for. With roughly 70% of the customers coming through the SuperStore each month originating from out of state, we expect the value of the platform to increase as it becomes a proven launchpad for national brands and by building awareness of our brands across the U.S. in advance of out-of-state expansion.”

Bob Groesbeck, Co-CEO added, “We expect our new production facility to be completed in Q3, which will enable us to expand sales of our current in-house brands – Medizin, TRENDI, and Leaf & Vine – and add more valuable brands to the portfolio. Our goal over time is to maintain a broad selection of third-party brands in the SuperStore, while incrementally growing the percentage of sales generated from wholly owned brands, to drive continual improvements in margin. With the launch of our fourth wholly-owned brand, Planet M, we are also actively exploring opportunities to take these highly successful brands into other dispensaries in Nevada as well as across the U.S. on a wholesale basis, as part of our long-term objective to be a premium retailer and cannabis brands company not only in Nevada, but in other key cannabis markets nationally.”

Financial Highlights – Q1 – 2019

Operating Results

All comparisons below are to the quarter ended March 31, 2018, unless otherwise noted

  • Revenues were $13.8 million as compared to $3.6 million, an increase of 286%
  • Gross profit before biological adjustments was $7.4 million or 53.8% as compared $1.6 million or 45.7%, an increase of 354%
  • Operating expenses, excluding non-cash compensation expense, were $5.9 million as compared to $1.2 million, an increase of 388%
  • Net loss of $1.2 million as compared to a net profit of $12,741
  • Adjusted EBITDA of $1.3 million as compared to Adjusted EBITDA of $667,563

Balance Sheet

All comparisons below are to December 31, 2018, unless otherwise noted

  • Cash and cash equivalents of $20.2 million as compared to $19.4 million
  • Total assets of $55.5 million as compared to $44.9 million, an increase of 24%
  • Total liabilities of $17.7 million as compared to $7.0 million, an increase of 151%

https://tax.nv.gov/Publications/Marijuana_Statistics_and_Reports/

Q1 Highlights and Recent Developments

For a more comprehensive overview of these highlights and recent developments, please refer to Planet 13’s Management’s Discussion and Analysis of the Financial Condition and Results of Operations for the Three and Twelve Months Ended March 31, 2019 (the “MD&A“).

  • Between February 28 and March 11, 2019, the Company started construction on Phase II of the Superstore consisting of a restaurant, a consumer facing production facility, a CBD store and an event center.
  • On March 14, 2019, Planet 13 teamed-up with boxing legend Mike Tyson to launch Tyson Ranch exclusively at Planet 13 SuperStore.
  • On April 3, 2019, Planet 13 launched Leaf & Vine, a line of high CBD:THC vapes and concentrates.
  • On May 24, 2019, Planet 13 announced upgrading to the OTCQX Best Market.
  • On May 29, 2019, Planet 13 announced national launch of Planet M CBD Brand.

Results of Operations (Summary)

The following tables set forth consolidated statements of financial information for the three-month period ending March 31, 2019 and March 31, 2018. For further information regarding the Company’s financial results for these periods, please refer to the Company’s interim financial statements for the period ended March 31, 2019 together with the MD&A, available on Planet 13’s issuer profile on SEDAR at www.sedar.com and the Company’s website https://www.planet13holdings.com.

Expressed in USD$ Three Months Three Months Three Months
Ended Ended Percentage Ended Percentage
Mar-31-2019 Mar-31-2018 Change Dec-31-2018 Change
Revenue
Revenues, net of discounts 13,836,063 3,587,542 285.70% 8,279,698 67.10%
Cost of Goods Sold -6,393,446 -1,948,174 228.20% -4,110,064 55.60%
Gross Profit, Before Biological Asset Adjustment 7,442,617 1,639,368 354.00% 4,169,634 78.50%
Gross Profit Margin % 53.80% 45.70% 50.40%
Realized fair value amounts included in COGS -346,062 -587,834 -41.10% -675,419 -48.80%
Unrealized fair value gain on growth of biological assets 358,771 656,208 -45.30% 750,879 -52.20%
Gross profit 7,455,327 1,707,742 336.60% 4,245,094 75.60%
Gross Profit Margin % 53.90% 47.60% 51.30%
Expenses
General and Administrative 4,540,220 1,110,973 308.70% 4,788,076 -5.20%
Sales and Marketing 1,402,129 105,546 1228.50% 1,151,010 21.80%
Depreciation and Amortization 597,089 32,363 1745.00% 332,925 79.30%
Share based payments 572,352 na 367,497 55.70%
Total Expenses 7,111,790 1,248,882 469.50% 6,639,508 7.10%
Income (Loss) From Operations 343,537 458,860 -25.10% -2,394,414 -114.30%
Other (Income) Expense:
Interest Expense, net 215,699 118,452 82.10% 5,674 3701.50%
Realized Foreign Exchange gain (loss) 2,725 na 330 725.80%
Other income -17,163 -12,968 na -80,285 -78.60%
Loss on settlement of accounts payable na 96,341 na
Total Other (Income) Expense 201,261 105,484 90.80% 22,060 812.30%
Income (loss) for the period before tax 142,276 353,376 -59.70% -2,416,474 -105.90%
Provision for tax – current 1,565,619 340,635 359.60% 889,066 76.10%
Income (Loss) for the period -1,423,343 12,741 -11271.00% -3,305,540 -56.90%
Other Comprehensive (loss)
Items that may be reclassified subsequently to profit/loss
Foreign exchange translation adjustment 273,205 -666,970
Net Comprehensive Income (Loss) for the period -1,150,138 12,741 -3,972,510
Loss per share for the period
Basic and fully diluted loss per share ($0.01) $0.00 ($0.03)
Weighted Average Number of Shares Outstanding
Basic and fully diluted 129,467,108 75,000,000 128,166,081

 

Adjusted EBITDA

Three Months Three Months Three Months
Ended Ended Percentage Ended Percentage
Mar-31-2019 Mar-31-2018 Change Dec-31-2018 Change
EBITDA
Profit (loss) before taxes 142,276 353,376 -59.70% -2,416,474 -105.90%
Add back:
Net change in Inventory Bio Asset valuation 38,623 353,843 -89.10% -75,459 -151.20%
Net change in fair value inventory adjustments -72,643 -306,782 -76.30% na
Non-cash share based payments 572,352 na 367,497 55.70%
Depreciation and amortization 597,089 32,363 1745.00% 332,925 79.30%
Depreciation included in COGS -157,297 129,279 -221.70% -163,872 -4.00%
Interest and non-operating expense (income) 201,261 105,484 90.80% 22,060 812.30%
EBITDA 1,321,661 667,563 98.00% -1,933,323 -168.40%
Margin 9.60% 18.60%

 

Summary of Quarterly Results 2018-2019

Three months ended Mar-31-2019 Dec-31-2018 Sep-30-2018 Jun-30-2018 Mar-31-2018
US$
Total revenue 13,836,063 8,279,698 4,896,191 4,403,324 3,587,542
Net income (loss) -1,423,343 -3,305,540 -824,916 -6,605,989 12,741
Comprehensive Net Income (loss) -1,150,138 -3,972,510 -683,625 -6,883,229 12,741
Net Income (loss) per share -0.01 -0.03 -0.01 -0.07 0
Total assets 55,510,677 44,945,306 26,854,931 26,942,786 9,081,603
Total liabilities 17,656,059 7,040,566 4,857,506 5,957,754 8,314,441
Working capital 19,539,822 20,982,049 11,757,401 17,236,373 1,344,989
Dividends declared

 

Summary of Quarterly Results 2017-2016

Three months ended Dec-31-2017 Sep-30-2017 Jun-30-2017 Mar-31-2017 Dec-31-2016 Sep-30-2016
US$
Total revenue 3,382,717 3,025,048 1,461,782 1,134,434 840,009 499,860
Net income (loss) 259,493 -185,632 22,209 -698,585 -660,597 -424,386
Comprehensive Net Income (loss) 259,493 -185,632 22,209 -698,585 -660,597 -424,386
Net Income (loss) per share  n/a  n/a  n/a  n/a  n/a  n/a
Total assets 7,657,047 7,546,186 7,463,866 6,836,301 5,062,394 5,177,915
Total liabilities 10,839,575 11,680,362 11,760,007 10,986,251 8,365,209 8,538,183
Working capital 1,197,763 2,178,498 2,218,708 1,670,162 -536,659 254,038
Dividends declared

 

Outstanding Shares

As at the date of this report, the Company had 79,086,246 common shares and 55,232,940 class A convertible, restricted voting shares issued and outstanding for a total of 134,319,186 shares outstanding.  There were 875,000 options issued and outstanding of which 354,883 have fully vested.  There were 18,086,742 warrants outstanding and 3,444,905 RSU’s outstanding of which nil RSUs had fully vested as at December 31, 2018 and at the date of this report.

Conference Call

Planet 13 will host a conference call on Friday, May 31, 2019 at 8:30 a.m. EST to discuss its second quarter financial results and provide investors with key business highlights.  The call will be chaired by Bob Groesbeck, Co-CEO, Larry Scheffler, Co-CEO, and Dennis Logan, CFO.

CONFERENCE CALL DETAILS

Date: May 31, 2019 | Time: 8:30 a.m. EST
Participant Dial-in: 416-764-8688 or 1-888-390-0546
Replay Dial-in: 416-764-8677 or 1-888-390-0541
(Available for 2 weeks)
Reference Number: 611654
Listen to webcast: https://bit.ly/2EmDEUh

Financial Measures

There are measures included in this news release that do not have a standardized meaning under generally accepted accounting principles (GAAP) and therefore may not be comparable to similarly titled measures and metrics presented by other publicly traded companies. The Company includes these measures because it believes certain investors use these measures and metrics as a means of assessing financial performance. EBITDA (earnings before interest, taxes, depreciation and amortization) is calculated as net earnings before finance costs (net of finance income), income tax expense, and depreciation and amortization of intangibles and is a non-GAAP financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.

About Planet 13
Planet 13 (www.planet13holdings.com) is a vertically integrated cannabis company based in Nevada, with award-winning cultivation, production and dispensary operations in Las Vegas – the entertainment capital of the world. Planet 13’s mission is to build a recognizable global brand known for world-class dispensary operations and a creator of innovative cannabis products. Planet 13’s shares trade on the Canadian Stock Exchange (CSE) under the symbol PLTH and OTCQX under the symbol PLNHF.

Cautionary Note Regarding Forward-Looking Information

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward looking statements relate to, among other things, future expansion plans.

These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: final regulatory and other approvals or consents; fluctuations in general macroeconomic conditions; fluctuations in securities markets; expectations regarding the size of the Nevada cannabis market and changing consumer habits; the ability of the Company to successfully achieve its business objectives; plans for expansion; political and social uncertainties; inability to obtain adequate insurance to cover risks and hazards; and the presence of laws and regulations that may impose restrictions on cultivation, production, distribution and sale of cannabis and cannabis related products in the State of Nevada; and employee relations. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. The Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational and medicinal cannabis marketplace in the United States through its subsidiary MMDC. Local state laws where MMDC operates permit such activities however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in the Company’s annual information form dated April 30, 2019 filed on its issuer profile on SEDAR at www.sedar.com.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

 

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Expressed in United States Dollars As at As at
March 31, December 31,
2019 2018
Assets
Current Assets
Cash $ 20161253 $ 19364086
HST receivable 117,333 101,831
Inventories (Note 5) 5,198,723 5,322,111
Biological assets (Note 6) 876,554 915,177
Prepaid expenses and other current assets (Note 9) 1,782,527 1,391,278
Total Current Assets 28,136,390 27,094,483
Property and equipment (Note 7) 18,782,929 17,256,484
Right of use assets (Note 8) 7,952,019
Long-term deposits and other assets 639,339 594,339
27,374,287 17,850,823
Total Assets $ 55510677 $ 44945306
Liabilities
Current Liabilities
Accounts payable $ 2400103 $ 1720721
Accrued expenses 1,806,234 1,306,145
Income taxes payable 3,506,231 2,187,109
Notes payable – current portion (Note 10) 884,000 884,000
Current portion of lease liabilities (Note 11) 14,459
Total Current Liabilities 8,596,568 6,112,434
Long -term lease liabilities (Note 11) 8,342,138 29,768
Deferred rent (Note 12) 427,508
Deferred tax liability (Note 15) 717,353 470,856
9,059,491 928,132
Total Liabilities 17,656,059 7,040,566
Shareholders’ Equity
Share capital (Note 13) 44,774,892 42,460,824
Restricted share units (Note 13) 1,807,341 2,800,335
Warrants (Note 13) 6,747,387 7,046,843
Option reserve (Note 13) 384,289 305,890
Accumulated other comprehensive income (loss) -529,715 -802,920
Deficit -15,329,576 -13,906,232
Total Shareholders’ Equity 37,854,618 37,904,740
Total Liabilities and Shareholders’ Equity $ 55510677 $ 44945306

 

See accompanying notes
Nature of operations (Note 1)
Restatement (Note 3 (f))

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

As Restated
(Note 3 (f))
Expressed in United States Dollars Three months Three months
Ended Ended
March 31, March 31,
2019 2018
Revenue
Revenues, net of discounts $ 13836063 $ 3587542
Cost of Goods Sold (Note 6) -6,393,446 -1,948,174
Gross Profit before fair value asset adjustment 7,442,617 1,639,368
Realized fair value amounts included in inventory sold -346,062 -587,834
Unrealized fair value gain on growth of biological assets 358,771 656,208
Gross Profit 7,455,326 1,707,742
Expenses
General and Administrative (Note 14) 4,540,220 1,110,973
Sales and Marketing 1,402,129 105,546
Depreciation and Amortization 597,089 32,363
Share-Based Compensation Expense 572,352
Total Expenses 7,111,790 1,248,882
Income (Loss) From Operations 343,536 458,860
Other Expense:
Interest expense, net 215,699 118,452
Realized foreign exchange loss 2,725
Other (income) expense -17,163 -12,968
Total Other Expense 201,261 105,484
Income (Loss) before income taxes 142,275 353,376
Provision for tax – current (Note 15) 1,319,122 320,594
Provision for tax – deferred (Note 15) 246,497 20,041
Net Loss for the period $ -1423344 $ 12741
Other Comprehensive Loss
Foreign exchange translation loss 273,205
Net Comprehensive Loss for the period $ -1150139 $ 12741
Loss per share for the period
Basic and diluted loss per share (Note 16) ($0.01) $0.00
Weighted Average Number of Common Shares Outstanding
Basic and Diluted (Note 16) 129,467,108 75,000,000

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

As Restated
(Note 3 (f))
Expressed in United States Dollars (unaudited) Three Months Three Months
Ended Ended
March 31, March 31,
2019 2018
Operating activities
Net income (loss) for the period $ -1423344 $ 12741
Add (deduct) non-cash items:
Share based payments (Note 13) 572,352
Depreciation and amortization (Note 7,8) 754,384 161,815
Deferred tax liability (Note 15) 246,497 20,041
Realized fair value amounts included in inventory sold 346,062 587,834
Unrealized fair value gain on grwth of biological assets -358,771 -656,208
Non-cash interest expense 215,699 89,029
Net change in non-cash working capital
HST receivable -15,502
Inventories (Note 5) -222,674 -1,130,482
Biological assets (Note 6) 397,394 1,010,051
Prepaid expenses and other assets (Note 9) -391,249 -487,046
Long term deposits and other assets -45,000
Accounts payable 679,381 -163,151
Accrued expenses 500,090 332,911
Income tax payable 1,319,122 320,594
Cash flow provided by (used in) operating activities 2,574,441 98,129
Investing activities
Purchase of property, plant and equipment (Note 7) -2,202,345 -53,226
Cash flow used in investing activities -2,202,345 -53,226
Financing activities
Issuance of shares on warrant exercise (Note 13) 527,665
Payment on lease liabilities (Note 11) -375,799 -3,536
Cash flow provided by (used in) financing activities 151,866 -3,536
Net increase (decrease) in cash 523,962 41,367
Cash at beginning of the period 19,364,086 451,869
Effect of foreign exchange on cash 273,205
Cash at end of the period $ 20161253 $ 493236

 

SOURCE Planet 13 Holdings Inc.

 

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