Planet 13 Announces Q3 2018 Earnings
  • Planet 13 Superstore opened on November 1st 2018. Already servicing an average of 1,300 customers a day, well on the way to meeting run-rate estimates
  • Highly rated1 Medizin dispensary generated $4.9 million in revenue in Q3 2018 and $12.9 million in the first nine-months; monthly revenue is growing at a 6.0% compound rate2
  • Adjusted EBITDA of $275,568 in Q3 2018 and $1.5 million in the first nine-months
  • 437 online deliveries in October 2018; monthly online revenue growing at a compound rate of 8.3%2 sequentially

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

LAS VEGAS, NV, Nov. 12, 2018 /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 and nine-month periods ended September 30, 2018. Planet 13's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").

"We opened Phase 1 of the 40,000 square foot Planet 13 Superstore on November 1st, and over the first ten days are already well on our way to meeting our expectations for run-rate daily traffic and average ticket on minimal marketing," said Larry Scheffler, Co-CEO of Planet 13. "Our thesis that a unique entertainment destination, proximity to the Las Vegas Strip, and a wide selection of Nevada's best products would drive strong tourist traffic and spending has proven to be correct. We believe that we are just at the beginning of the growth curve at the Superstore and expect to continue to ramp both traffic and average ticket as we execute on our marketing program in the coming weeks. MJBizCon is this week, and our management team is ready to showcase the Superstore for the thousands of cannabis connoisseurs and investors who are in town."    

Bob Groesbeck, Co-CEO of Planet 13 added, "In Q3, our Medizin dispensary posted another quarter of sequential revenue growth with a solid gain in average daily traffic. We temporarily closed the Medizin location on October 29th to transfer its licenses to the Superstore. We have a very loyal base of customers at this location and are well-positioned to receive an additional license for Medizin that would enable us to reopen this highly rated1 dispensary and quickly regain this revenue and EBITDA. It is an exciting time to be a Planet 13 shareholder, with several catalysts set to hit before the end of 2018, including additional growth from the Superstore; December's licensing results; and clarity regarding onsite consumption lounges. The Superstore is open and already generating substantial revenue, which will enable us to rapidly execute on these opportunities and enter Phase two of our Superstore expansion plan in the next year."

Financial Highlights – Q3 – 2018

Operating Results

All comparisons below are to the quarter ended September 30, 2017, unless otherwise noted

  • Revenues were $4.9 million as compared to $3.0 million, an increase of 63%
  • Gross margin was $2.7 million as compared $1.5 million, an increase of 78%
  • Operating expenses, excluding non-cash compensation expense, were $2.3 million as compared to $0.9 million, an increase of 143%
  • Net loss of $0.7 million as compared to a net loss of $0.2 million
  • Adjusted EBITDA of $275,568 as compared to Adjusted EBITDA loss of $1.4 million

Balance Sheet

All comparisons below are to December 31, 2017, unless otherwise noted

  • Cash and cash equivalents of $8.6 million as compared to $0.5 million
  • Total assets of $26.9 million as compared to $8.6 million, an increase of 214%
  • Total liabilities of $4.9 million as compared to $11.0 million, a decrease of 56%

Q3 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 Six Months Ended September 30, 2018 (the "MD&A").  

  • On September 17, 2018, Planet 13 began trading on the OTCQB under the ticker symbol PLNHF
  • On October 29, 2018, the Company's medical and recreational cannabis license was transferred from the Medizin location to the Superstore location.
  • On November 1, 2018, the Planet 13 Superstore opened.
  • On November 8, 2018, Planet 13 announced a $25 million bought deal public offering

Results of Operations (Summary)

The following tables set forth consolidated statements of financial information for the three and nine-month periods ending September 30, 2018 and September 30, 2017. 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 September 30, 2018 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.
















Three Months

Ended

Sep-30-2018


Three Months

Ended

Sep-30-2017


Percentage

Change


Nine Months

Ended

Sep-30-2018


Nine Months

Ended

Sep-30-2017


Percentage

Change

Revenue













Revenues, net of discounts


4,914,466


3,025,047


62.5%


12,941,145


5,621,262


130.2%

Cost of Goods Sold


(2,545,481)


(3,683,879)


(30.9%)


(6,502,025)


(2,422,716)


168.4%

Gross Profit, Before Biological Asset Adjustment


2,368,985


(658,832)


(459.6%)


6,439,120


3,198,546


101.3%

Realized fair value amounts included in COGS


(1,494,310)


(1,231,098)


21.4%


(4,752,463)


(3,942,347)


20.5%

Unrealized fair value gain on growth of biological assets


1,796,195


3,388,649


(47.0%)


4,985,422


5,764,306


(13.5%)

Gross profit


2,670,870


1,498,719


78.2%


6,672,079


5,020,505


32.9%














Expenses













General and Administrative


2,039,797


862,396


136.5%


4,795,299


1,884,184


154.5%

Sales and Marketing


216,922


64,717


235.2%


551,831


110,525


399.3%

Depreciation and Amortization


5,751


8,416


(31.7%)


67,191


65,655


2.3%

Non-cash Compensation Expense


637,602


-


na


2,233,736


-


na

Total Expenses


2,900,072


935,529


210.0%


7,648,057


2,060,364


271.2%














Income (Loss) From Operations 


(229,202)


563,190


(140.7%)


(975,978)


2,960,141


(133.0%)














Other (Income) Expense:













Interest Expense, net


(3,671)


233,119


(101.6%)


236,186


721,456


(67.3%)

Realized Foreign Exchange (gain) loss


52,976


-


na


42,255


-


na

RTO acquisition costs


-


-


na


532,367


-


na

Loss on conversion of debt


-


-


na


848,925


-


na

Total Other (Income) Expense


49,305


233,119


(78.8%)


1,659,733


721,456


130.1%














Net income (loss) for the period before tax


(278,507)


330,071


(184.4%)


(2,635,711)


2,238,685


(217.7%)

Provision for tax - current


546,409


515,703


6.0%


1,401,137


1,713,109


(18.2%)

Net Income (Loss) for the period


(824,916)


(185,632)


344.4%


(4,036,848)


525,576


(868.1%)














Other Comprehensive income (loss)













     Foreign exchage translation adjustment


141,291


-


na


(135,951)


-


na

Net Comprehensive Income  (Loss) for the period


(683,625)


(185,632)


344.4%


(4,172,799)


525,576


(868.1%)

Loss per share for the period













Basic and fully diluted loss per share


($0.01)


na


na


($0.04)


na


na














Weighted Average Number of Shares Outstanding













Basic and fully diluted


117,349,580


 nil 




92,211,527


 nil 
















 

Adjusted EBITDA
















Three Months 
Ended

Sep-30-2018


Three  Months 

Ended

Sep-30-2017


Percentage

Change


Nine Months

Ended

Sep-30-2018


Nine Months

Ended

Sep-30-2017


Percentage

Change

EBITDA













Net profit (loss) before taxes


(278,507)


330,071


(184.4%)


(2,635,711)


2,238,685


(217.7%)

Add back:













Net change in Bio Asset valuation


(301,885)


(2,157,551)


na


(232,959)


(1,821,959)


na

Non-cash Compensation Expense


637,602


-


na


2,233,736


-


na

Depreciation and amortization


5,751


8,416


(31.7%)


67,191


65,655


2.3%

Depreciation included in COGS


163,302


153,226


6.6%


422,089


389,877


8.3%

Other (Income) Expense - one time RTO related costs


49,305


233,119


(78.8%)


1,659,733


721,456


130.1%














EBITDA


275,568


(1,432,719)


(119.2%)


1,514,079


1,593,714


(5.0%)














 

Summary of Quarterly Results











Three months ended

Sep-30-2018

Jun-30-2018

Mar-31-2018

Dec-31-2017

Sep-30-2017

Jun-30-2017

Mar-31-2017

Dec-31-2016

Sep-30-2016

US$










Total revenue

4,914,466

4,426,197

3,600,482

3,382,717

3,025,048

1,461,782

1,134,434

840,009

499,860

Net income (loss) 

(824,916)

(3,126,064)

(85,868)

295,965

(185,632)

22,209

688,999

(660,597)

(424,386)

Comprehensive Net Income (loss)

(683,625)

(3,403,306)

(85,868)

295,965

(185,632)

22,209

688,999

(660,597)

(424,386)

Net Income (loss) per share

(0.01)

(0.04)

(0.00)

 n/a 

 n/a 

 n/a 

 n/a 

 n/a 

 n/a 

Total assets

26,854,931

26,942,786

9,081,603

8,558,870

7,546,186

7,463,866

6,836,301

5,062,394

5,177,915

Total liabilities

4,857,506

5,957,754

8,314,441

11,040,144

11,680,362

11,760,007

10,986,251

8,365,209

8,538,183

Working capital (deficiency)

11,757,401

17,236,373

1,344,989

1,197,763

2,178,498

2,218,708

1,670,162

(536,659)

254,038

Dividends declared

-

-

-

-

-

-

-

-

-











 

Daily Traffic and Average Customer Spend


















Nine Months

Ended

30-Sep-18

Nine Months

Ended

30-Sep-17

 

% Change


Three Months

Ended

30-Sep-18

Three Months

Ended

30-Sep-17

 

% Change


Three Months

Ended

30-Jun-18

Three Months

Ended

30-Jun-17

 

% Change


Three Months

Ended

31-Mar-18

Three Months

Ended

31-Mar-17

 

% Change

















Average Daily Traffic

682

281

142.7%


776

447

73.6%


693

226

206.6%


581

168

245.8%

















Average spend per customer

$69.33

$73.29

(5.4%)


$68.69

$73.56

(6.6%)


$70.22

$70.96

(1.0%)


$69.61

$75.74

(8.1%)

















 

Outstanding Shares

As at the date of this report, the Company had 64,245,460 common shares and 55,232,940 class A convertible, restricted voting shares issued and outstanding for a total of 119,478,400 shares outstanding.  There were 845,000 options issued and outstanding of which 267,083 have fully vested.  There were 14,977,735 warrants outstanding and 5,663,358 RSU's outstanding of which 1,887,786 RSUs had fully vested as at September 30, 2018 and at the date of this report.

Conference Call

Planet 13 will host a conference call on Monday, November 12, 2018 at 8:00 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: November 12, 2018 | Time: 8:00 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: 918394
Listen to webcast: https://bit.ly/2zydvyE

For more information, please visit https://www.planet13holdings.com/ and follow on Facebook Planet 13 Las Vegas and Twitter @Planet13lv.

(1)

Based on customer feedback scores of 4.7-4.9 on a 5-pt scale from Leafly, Weedmaps, and Google

(2)

Monthly growth rates are sequential compound annual growth rates from January 1, 2018 to September 30, 2018

 

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 on the OTCQB 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 including the opening of Phase II of the Superstore, including the anticipated approval of the Company's on-site lounge concept at the Superstore, the expected number of daily visitors to the Superstore, future licenses expected to be granted by the State of Nevada, estimated foot traffic at the Company's retail locations, and the anticipated revenue and cash flow growth from the Superstore.

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; changes in project development and construction time frames, risk related the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, steel, power, labour and other consumables contributing to higher costs associated with the completion of future phases of the Company's Superstore; fluctuations in securities markets; expectations regarding the size of the legal Nevada and U.S. cannabis markets 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.

Future-orientated financial information and financial outlook information (collectively, "FOFI") contained in this news release, as such terms are defined by applicable securities laws, is provided for the purpose of providing information about management's current expectations and plans relating to the future. FOFI contained in this news release was made as of the date of this news release and was provided for the purpose of disclosing material undisclosed information pertaining to the Company. The Company disclaims any intention or obligations to update or revise any FOFI contained in this news release unless required by applicable law. Readers are cautioned that reliance on such information may not be appropriate for other purposes.

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 October 18, 2018 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 INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION











As at

September 30,

2018



As at

December 31,

2017




Unaudited



Audited

Assets







Current Assets







Cash 


$

8,566,712


$

451,869

HST receivable



72,831



-

Inventories (Note 7)



2,222,385



966,622

Biological assets (Note 8)



2,939,294



2,706,335

Prepaid expenses and other current assets



1,279,025



92,129

Total Current Assets



15,080,247



4,216,955








Property and equipment (Note 9)



11,233,859



4,341,915

Long-term deposits and other assets



540,825



-




11,774,684



4,341,915

Total Assets


$

26,854,931


$

8,558,870








Liabilities







Current Liabilities







Accounts payable


$

1,060,013


$

678,319

Accrued expenses



896,229



1,055,829

Income taxes payable



1,352,215



1,270,862

Notes payable - current portion (Note 10)



14,389



14,182

Total Current Liabilities



3,322,846



3,019,192








Notes payable - long-term portion (Note 10)



917,408



925,890

Notes payable - related party (Note 10)



-



6,526,732

Deferred tax liability



617,252



568,330




1,534,660



8,020,952

Total Liabilities



4,857,506



11,040,144








Shareholders' Equity







Share capital (Note 12)



22,698,011



-

Restricted share units (Note 12)



1,991,741



-

Warrants (Note 12)



3,719,751



-

Option reserve (Note 12)



241,995



-

Accumulated other comprehensive income (loss)



(135,951)



-

Deficit



(6,518,122)



(2,481,274)

Total Shareholders' Equity



21,997,425



(2,481,274)

Total Liabilities and Shareholders' Equity


$

26,854,931


$

8,558,870

 

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

















Three months

Ended

September 30,

2018



Three months

Ended

September 30,

2017



Nine months

Ended

September 30,

2018



Nine months

Ended

September 30,

2017

Revenue













Revenues, net of discounts


$

4,914,466


$

3,025,047


$

12,941,145


$

5,621,262

Cost of Goods Sold



(2,545,481)



(3,683,879)



(6,502,025)



(2,422,716)

Gross Profit Before Biological Asset Adjustment



2,368,985



(658,832)



6,439,120



3,198,546

Realized fair value amounts included in COGS



(1,494,310)



(1,231,098)



(4,752,463)



(3,942,347)

Unrealized fair value gain on growth of biological assets



1,796,195



3,388,649



4,985,422



5,764,306

Gross profit



2,670,870



1,498,719



6,672,079



5,020,505














Expenses













General and Administrative (Note 11)



2,039,797



862,396



4,795,299



1,884,184

Sales and Marketing



216,922



64,717



551,831



110,525

Depreciation and Amortization



5,751



8,416



67,191



65,655

Non-cash Compensation Expense



637,602



-



2,233,736



-

Total Expenses



2,900,072



935,529



7,648,057



2,060,364














Income (Loss) From Operations 



(229,202)



563,190



(975,978)



2,960,141














Other (Income) Expense:













Interest (Income) Expense, net



(3,671)



233,119



236,186



721,456

Realized foreign exhchange (gain) loss



52,976



-



42,255



-

RTO acquisition costs



-



-



532,367



-

Loss on conversion of debt (Note 10)



-



-



848,925



-

Total Other (Income) Expense



49,305



233,119



1,659,733



721,456














Net Income (Loss) for the period before tax



(278,507)



330,071



(2,635,711)



2,238,685

Provision for tax - current (Note 16)



546,409



515,703



1,401,137



1,713,109

Net Income (Loss) for the period


$

(824,916)


$

(185,632)


$

(4,036,848)


$

525,576














Other Comprehensive Income (Loss)


























Foreign exchange translation adjustment



141,291



-



(135,951)



-

Net Comprehensive Income  (Loss) for the period


$

(683,625)


$

(185,632)


$

(4,172,799)


$

525,576














Loss per share for the period













Basic and fully diluted loss per share (Note 13)



($0.01)



na



($0.04)



na














Weighted Average Number of Common Shares Outstanding













Basic and Fully Diluted



117,349,580



 nil 



92,211,527



nil 














 

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS











Nine months

Ended

September 30,

2018



Nine months

Ended

September 30,

2017

Operating activities







Net loss for the period


$

(4,036,848)


$

525,576

Add (deduct) non-cash items:








Non–cash compensation expense



2,233,736



-


Depreciation and amortization



489,280



455,532


Loss on conversion of debt



848,925



-


Unrealized foreign exchange (gain) loss        



42,255



-


Non-cash interest expense



217,048



723,993








Net change in non-cash working capital







HST receivable



(72,831)



-

Inventories



(1,255,763)



(638,711)

Biological assets



(232,959)



(1,821,959)

Prepaid expenses



(1,186,896)



-

Other assets



(540,825)



-

Income tax payable



81,353



1,093,643

Net change in deferred tax liabilities



48,922



789,329

Accounts payable 



381,694



(378,979)

Accrued expenses



(159,600)



-

Cash flow provided by (used in) operating activities



(3,142,509)



748,424








Investing activities







Purchase of property, plant and equipment



(7,381,223)



(237,602)

Advance of secured promissory note receivable



(1,254,862)



-

Repayment of secured promissory note receivable



1,254,862



-

Cash flow used in investing activities



(7,381,223)



(237,602)








Financing activities







Issuance of common shares and warrants



19,508,445



-

Issuance of shares on warrant exercise



1,058,418



-

Share and warrant issuance costs



(1,741,806)



-

Issuance of long-term debt



-



-

Principal repayment on equipment finance lease



(8,275)



(10,408)

Repayment of long-term debt - related party



-



(180,000)

Cash flow provided by (used in) financing activities



18,816,782



(190,408)

Effect of foreign exchange on cash



(212,885)



-








Net increase (decrease) in cash and cash equivalents during the period



8,080,165



320,414

Cash and cash equivalents at beginning of period



451,869



20,868

Net cash acquired on the RTO acquisition



34,678



-

Cash and cash equivalents at end of period


$

8,566,712


$

341,282








 

SOURCE Planet 13 Holdings Inc.

For further information: Jonathan Ross, Lode Rock Advisors Inc., Planet 13 Investor Relations, jon.ross@loderockadvisors.com, 416-283-0178; Robert Groesbeck or Larry Scheffler, Co-Chief Executive Officers, ir@planet13lasvegas.com
:)