Planet 13 Announces First Quarter 2019 Financial Results
  • 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

$

3,364,891

$

3,438,723

$

4,075,052

$

4,304,122

$

5,456,889


5,276,095

MoM Growth




2.2%


18.5%


5.6%


26.8%


-3.3%

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%

 

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


285.7%


8,279,698


67.1%

Cost of Goods Sold

(6,393,446)


(1,948,174)


228.2%


(4,110,064)


55.6%

Gross Profit, Before Biological Asset Adjustment

7,442,617


1,639,368


354.0%


4,169,634


78.5%

Gross Profit Margin %

53.8%


45.7%




50.4%



Realized fair value amounts included in COGS

(346,062)


(587,834)


(41.1%)


(675,419)


(48.8%)

Unrealized fair value gain on growth of biological assets

358,771


656,208


(45.3%)


750,879


(52.2%)

Gross profit

7,455,327


1,707,742


336.6%


4,245,094


75.6%

Gross Profit Margin %

53.9%


47.6%




51.3%













Expenses










General and Administrative

4,540,220


1,110,973


308.7%


4,788,076


(5.2%)

Sales and Marketing

1,402,129


105,546


1228.5%


1,151,010


21.8%

Depreciation and Amortization

597,089


32,363


1745.0%


332,925


79.3%

Share based payments

572,352


-


na


367,497


55.7%

Total Expenses

7,111,790


1,248,882


469.5%


6,639,508


7.1%











Income (Loss) From Operations 

343,537


458,860


(25.1%)


(2,394,414)


(114.3%)











Other (Income) Expense:










Interest Expense, net

215,699


118,452


82.1%


5,674


3701.5%

Realized Foreign Exchange gain (loss)

2,725


-


na


330


725.8%

Other income

(17,163)


(12,968)


na


(80,285)


(78.6%)

Loss on settlement of accounts payable

-


-


na


96,341


na

Total Other (Income) Expense

201,261


105,484


90.8%


22,060


812.3%











Income (loss) for the period before tax

142,276


353,376


(59.7%)


(2,416,474)


(105.9%)

Provision for tax - current

1,565,619


340,635


359.6%


889,066


76.1%

Income (Loss) for the period

(1,423,343)


12,741


(11271.0%)


(3,305,540)


(56.9%)











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


(59.7%)


(2,416,474)


(105.9%)

Add back:










Net change in Inventory Bio Asset valuation

38,623


353,843


(89.1%)


(75,459)


(151.2%)

Net change in fair value inventory adjustments

(72,643)


(306,782)


(76.3%)


-


na

Non-cash share based payments

572,352


-


na


367,497


55.7%

Depreciation and amortization

597,089


32,363


1745.0%


332,925


79.3%

Depreciation included in COGS

(157,297)


129,279


(221.7%)


(163,872)


(4.0%)

Interest and non-operating expense (income)

201,261


105,484


90.8%


22,060


812.3%











EBITDA

1,321,661


667,563


98.0%


(1,933,323)


(168.4%)

Margin

9.6%


18.6%







 

Summary of Quarterly Results

Three months ended

Mar-31-2019

Dec-31-2018

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

13,836,063

8,279,698

4,896,191

4,403,324

3,587,542

3,382,717

3,025,048

1,461,782

1,134,434

840,009

499,860

Net income (loss) 

(1,423,343)

(3,305,540)

(824,916)

(6,605,989)

12,741

259,493

(185,632)

22,209

(698,585)

(660,597)

(424,386)

Comprehensive Net Income (loss)

(1,150,138)

(3,972,510)

(683,625)

(6,883,229)

12,741

259,493

(185,632)

22,209

(698,585)

(660,597)

(424,386)

Net Income (loss) per share

(0.01)

(0.03)

(0.01)

(0.07)

0.00

 n/a 

 n/a 

 n/a 

 n/a 

 n/a 

 n/a 

Total assets

55,510,677

44,945,306

26,854,931

26,942,786

9,081,603

7,657,047

7,546,186

7,463,866

6,836,301

5,062,394

5,177,915

Total liabilities

17,656,059

7,040,566

4,857,506

5,957,754

8,314,441

10,839,575

11,680,362

11,760,007

10,986,251

8,365,209

8,538,183

Working capital

19,539,822

20,982,049

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

-

-

-

-

-

-

-

-

-

-

-













 

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 

$

20,161,253


$

19,364,086

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

$

55,510,677


$

44,945,306







Liabilities






Current Liabilities






Accounts payable

$

2,400,103


$

1,720,721

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

$

55,510,677


$

44,945,306







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

$

13,836,063


$

3,587,542

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

$

(1,423,344)


$

12,741







Other Comprehensive Loss












Foreign exchange translation loss


273,205



-

Net Comprehensive Loss for the period

$

(1,150,139)


$

12,741







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

$

(1,423,344)


$

12,741

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

$

20,161,253


$

493,236







 

SOURCE Planet 13 Holdings Inc.

For further information: LodeRock Advisors Inc., Planet 13 Investor Relations, mark.kuindersma@loderockadvisors.com, (416) 519-2156 ext. 2230; Robert Groesbeck or Larry Scheffler, Co-Chief Executive Officers, ir@planet13lasvegas.com
:)