Le Lézard
Classified in: Business
Subjects: ERN, MAT

Planet 13 Announces Third Quarter 2019 Financial Results


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

LAS VEGAS, Nov. 25, 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 September 30, 2019. Planet 13's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").

Cannabis Entertainment Complex (the "SuperStore") monthly performance for first 12 months of operations.









30-Nov-18

31-Dec-18

31-Jan-19

28-Feb-19

31-Mar-19

30-Apr-19

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%








State of Nevada Sales

$    52,538,426

$    51,839,503

$

52,749,856

$

49,479,204

$

59,748,815

$

54,674,578

% of State's Sales

6.4%

6.6%

7.7%

8.7%

9.1%

9.6%
















31-May-19

30-Jun-19

31-Jul-19

31-Aug-19

30-Sep-19

31-Oct-19

Total Tickets

64,930

60,323

60,044

62,833

59,091

59,605

# of Days

31

30

31

31

30

31

Average Customers/Day

2,095

2,011

1,937

2,027

1,970

1,923

Avg Ticket

$

90.63

$

88.87

$

90.41

$

90.25

$

94.73

$

94.48

Total Visitors

108,174

102,145

110,813

115,246

101,228

102,304

Avg Visitors/Day

3,489

3,405

3,575

3,718

3,374

3,300

Visitor Conversion Rate

60%

59%

54%

55%

58%

58%








State of Nevada Sales

$

62,019,961

$

57,948,330

$

59,933,851

$

62,303,103

 Data not released yet 

% of State's Sales

9.5%

9.3%

9.1%

9.1%



________________

1

Includes data for July and August. Nevada sales for September are unavailable.

 

Larry Scheffler, Co-CEO of Planet 13 commented, "The SuperStore celebrated its one-year anniversary at the start of this month and 12 months on, even with this location generating $59.5 million in revenue2 and accounting for 9% of the State's cannabis sales3, we are just at the beginning of the growth potential for this site and for Planet 13. With Phase II and wholesale operations just getting underway, we expect to continue generating profitable growth as we expand the sales of our well-regarded in-house, in-store produced brands both on-site and in 3rd party dispensaries state-wide commencing in the New Year."

Bob Groesbeck, Co-CEO added, "In Q3, the highly profitable four-wall economics at the SuperStore drove our third consecutive quarter of positive EBITDA and positive operating cash flow. In addition to having recently opened Phase II in Las Vegas, we have been moving forward with our license acquisition in Santa Ana. Backed by a tier-one location close to tourist traffic and Planet 13's world-class customer service, this location is poised to continue to build Planet 13's reputation for creating world-class cannabis entertainment destinations while generating additional value for shareholders."

Financial Highlights ? Q3 ? 2019

Operating Results

All comparisons below are to the quarter ended September 30, 2018, unless otherwise noted

Balance Sheet

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

_________________________

2

$59.5 million revenue generated from November 1, 2018 to October 31, 2019

3

https://tax.nv.gov/uploadedFiles/taxnvgov/Content/TaxLibrary/NV-Marijuana-Revenue-FY20%20(003)(1).pdf from January 1, 2019 to August 31, 2019.  Nevada sales for September are unavailable.

 

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 Nine Months Ended September 30, 2019 (the "MD&A").  

Results of Operations (Summary)

The following tables set forth consolidated statements of financial information for the three-month and nine-month period ending September 30, 2019 and September 30, 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 September 30, 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.

Adjusted EBITDA



NV Cannabis Ops








NV Cannabis Ops









Three Months 


Three  Months 


Three Months




Nine Months


Nine Months


Nine Months 





Ended


Ended


Ended


Percentage


Ended


Ended


Ended


Percentage



Sep-30-2019


Sep-30-2019


Sep-30-2018


Change


Sep-30-2019


Sep-30-2019


Sep-30-2018


Change

EBITDA

















Profit (loss) before taxes


2,886,238


251,123


(480,966)


(152.2%)


7,006,744


1,457,619


(6,217,528)


(123.4%)

Add back:

















Biological asset adjustments


52,291


52,291


46,587


12.2%


129,101


129,101


(84,824)


(252.2%)

   Non-cash share based payments


-


2,016,803


637,602


216.3%


-


3,128,417


2,233,736


40.1%

   Depreciation and amortization


680,056


680,056


5,752


11722.9%


1,945,186


1,945,186


67,191


2795.0%

   Depreciation included in COGS


157,030


157,030


141,205


11.2%


286,987


286,987


258,788


10.9%

   Interest and non-operating expense (income)


211,297


211,297


26,431


699.4%


625,674


625,674


5,023,326


(87.5%)


















EBITDA


3,986,912


3,368,600


376,611


794.5%


9,993,692


7,572,984


1,280,689


491.3%

 Margin


23.9%


20.2%


7.7%




21.2%


16.1%


9.9%



 














Expressed in USD$


Three  Months 


Three  Months 




Nine Months


Nine Months





Ended


Ended


Percentage


Ended


Ended


Percentage



Sep-30-2019


Sep-30-2018


Change


Sep-30-2019


Sep-30-2018


Change

Revenue













Revenues, net of discounts


16,696,932


4,891,591


241.3%


47,054,712


12,887,057


265.1%

Cost of Goods Sold


(6,820,706)


(2,290,666)


197.8%


(20,040,750)


(6,409,227)


212.7%

Gross Profit, Before Biological Asset Adjustment


9,876,226


2,600,925


279.7%


27,013,962


6,477,830


317.0%

Gross Profit Margin %


59.1%


53.2%




57.4%


50.3%



Realized fair value amounts included in COGS


(562,461)


546,511


(202.9%)


(805,604)


(1,934,550)


(58.4%)

Unrealized fair value gain on growth of biological assets


510,170


(593,098)


(186.0%)


676,503


2,019,374


(66.5%)

Gross profit


9,823,935


2,554,338


284.6%


26,884,861


6,562,654


309.7%

Gross Profit Margin %


58.8%


52.2%




57.1%


50.9%
















Expenses













General and Administrative


4,902,355


2,145,223


128.5%


14,918,783


4,900,724


204.4%

Sales and Marketing


1,762,301


220,296


700.0%


4,809,182


555,205


766.2%

Depreciation and Amortization


680,056


5,752


11722.9%


1,945,186


67,191


2795.0%

Share based payments


2,016,803


637,602


216.3%


3,128,417


2,233,736


40.1%

Total Expenses


9,361,515


3,008,873


211.1%


24,801,568


7,756,856


219.7%














Income (Loss) From Operations 


462,420


(454,535)


(201.7%)


2,083,293


(1,194,202)


(274.5%)














Other (Income) Expense:













Interest Expense, net


314,389


(3,671)


(8664.1%)


902,544


236,186


282.1%

Realized Foreign Exchange gain (loss)


(6,204)


52,976


(111.7%)


(1,141)


42,255


(102.7%)

RTO acquisition costs


-


-


na


-


4,702,604


na

Other income


(96,888)


(22,874)


323.6%


(275,729)


(54,059)


410.1%

Loss on settlement of accounts payable (Note 13(d))


-


-


na


-


96,340


na

Total Other Expense


211,297


26,431


699.4%


625,674


5,023,326


(87.5%)














Income (loss) for the period before tax


251,123


(480,966)


(152.2%)


1,457,619


(6,217,528)


(123.4%)

Provision for tax - current


1,973,475


546,409


261.2%


5,538,784


1,239,408


346.9%

(Loss) for the period


(1,722,352)


(1,027,375)


67.6%


(4,081,165)


(7,456,936)


(45.3%)














Other Comprehensive Income (Loss)













Items that may be reclassified subsequently to profit/loss 













     Foreign exchange translation adjustment


28,932


141,291




219,821


(135,951)



Net Comprehensive (Loss) for the period


(1,693,420)


(886,084)




(3,861,344)


(7,592,887)



(Loss) per share for the period













Basic and fully diluted loss per share


($0.01)


($0.01)




($0.03)


($0.08)
















Weighted Average Number of Shares Outstanding













Basic and fully diluted


135,503,007


117,349,580




133,098,596


92,274,805
















 

Outstanding Shares

As at the date of this report, the Company had 81,517,869 common shares and 55,232,940 class A convertible, restricted voting shares issued and outstanding for a total of 136,750,809 shares outstanding.  There were 753,508 options issued and outstanding of which 445,835 have fully vested.  There were 15,380,713 warrants outstanding and 4,382,409 RSU's outstanding of which nil RSUs had fully vested as at the date of this report.

Conference Call

Planet 13 will host a conference call on Tuesday, November 26, 2019 at 8:30 a.m. EST to discuss its third 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 26, 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: 906344
Listen to webcast: https://bit.ly/2KaRzjm 

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 and California 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 States of Nevada and California; 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 MM Development Company, Inc. ("MMDC") in Nevada. 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 (unaudited)


As at


As at



September, 30


December 31,



2019


2018

Assets





Current Assets





Cash 


$

18,103,113


$

19,364,086

HST receivable


24,358


101,831

Inventories (Note 5)


5,659,018


5,322,111

Biological assets (Note 6)


534,914


915,177

Prepaid expenses and other current assets (Note 9)


4,533,224


1,391,278

Total Current Assets


28,854,627


27,094,483






Property and equipment (Note 7)


27,936,239


17,256,484

Right of use assets (Note 8)


9,646,944


-

Long-term deposits and other assets 


679,339


594,339



38,262,522


17,850,823

Total Assets


$

67,117,149


$

44,945,306






Liabilities





Current Liabilities





Accounts payable


$

4,553,153


$

1,720,721

Accrued expenses


1,865,174


1,306,145

Income taxes payable


7,924,847


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


15,227,174


6,112,434






Long -term lease liabilities (Note 11)


10,452,523


29,768

Deferred rent (Note 12)


-


427,508

Other long-term liabilities


28,000


-

Deferred tax liability (Note 15)


271,902


470,856



10,752,425


928,132

Total Liabilities


25,979,599


7,040,566






Shareholders' Equity





Share capital (Note 13)


50,714,252


42,460,824

Restricted share units (Note 13)


2,470,871


2,800,335

Warrants (Note 13)


6,140,614


7,046,843

Option reserve (Note 13)


382,308


305,890

Accumulated other comprehensive income (loss)


(583,098)


(802,920)

Deficit


(17,987,397)


(13,906,232)

Total Shareholders' Equity


41,137,550


37,904,740

Total Liabilities and Shareholders' Equity


$

67,117,149


$

44,945,306

 

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










Expressed in United States Dollars (unaudited)


Three months


Three months


Nine months


Nine months



Ended


Ended


Ended


Ended



September 30,


September 30,


September 30,


September 30,



2019


2018


2019


2018

Revenue









Revenues, net of discounts


$

16,696,932


$

4,891,591


$

47,054,712


$

12,887,057

Cost of Goods Sold (Note 5)


(6,820,706)


(2,290,666)


(20,040,750)


(6,409,227)

Gross Profit before fair value asset adjustment


9,876,226


2,600,925


27,013,962


6,477,830

Realized fair value amounts included in inventory sold


(562,461)


546,511


(805,604)


(1,934,550)

Unrealized fair value gain on growth of biological assets


510,170


(593,098)


676,503


2,019,374

Gross Profit


9,823,935


2,554,338


26,884,861


6,562,654










Expenses









General and Administrative (Note 14)


4,902,355


2,145,223


14,918,783


4,900,724

Sales and Marketing


1,762,301


220,296


4,809,182


555,205

Depreciation and Amortization


680,056


5,752


1,945,186


67,191

Share-Based Compensation Expense


2,016,803


637,602


3,128,417


2,233,736

Total Expenses


9,361,515


3,008,873


24,801,568


7,756,856










Income (Loss) From Operations 


462,420


(454,535)


2,083,293


(1,194,202)










Other Expense:









Interest expense, net


314,389


(3,671)


902,544


236,186

Realized foreign exchange (gain) loss


(6,204)


52,976


(1,141)


42,255

Other (income)


(96,888)


(22,874)


(275,729)


(54,059)

RTO listing expense (Note 3(g))


-


-


-


4,702,604

Loss on settlement of accounts payable (Note 13(d))


-


-


-


96,340

Total Other Expense


211,297


26,431


625,674


5,023,326










Income (Loss) before income taxes


251,123


(480,966)


1,457,619


(6,217,528)

Provision for tax - current (Note 15)


2,172,429


546,409


5,889,961


1,381,096

Provision for tax - deferred (Note 15)


(198,954)


-


(351,177)


(1,381,096)

Net (loss) for the period


$

(1,722,352)


$

(1,027,375)


$

(4,081,165)


$

(6,217,528)










Other Comprehensive Income (Loss)


















     Foreign exchange translation gain (loss)


28,932


141,291


219,821


(135,951)

Net Comprehensive  (Loss) for the Period


$

(1,693,420)


$

(886,084)


$

(3,861,344)


$

(6,353,479)










Loss per share for the period









Basic and diluted loss per share (Note 16)


($0.01)


($0.01)


($0.03)


($0.07)










Weighted Average Number of Common Shares Outstanding









Basic and Diluted (Note 16)


135,503,007


117,349,580


133,098,596


92,274,805










 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS






Expressed in United States Dollars (unaudited)


Nine Months


Nine Months



Ended


Ended



September 30,


September 30, 



2019


2018

Operating activities





Net (loss) for the period


$

(4,081,165)


$

(6,217,528)

Add (deduct) non-cash items:





Share based payments (Note 13)


3,128,417


2,233,736

Depreciation and amortization (Note 7,8)


2,417,847


489,280

Loss on settlement of accounts payable


-


96,340

Share base payment to Carpincho shareholders on RTO


-


3,910,559

Settlement of AP for RSUs


-


346,206

Deferred tax liability (Note 15)


(198,954)


(390,435)

Realized fair value amounts included in inventory sold


(759,856)


(1,157,898)

Unrealized fair value gain on growth of biological assets


-


-

Unrealized foreign exchange (gain) loss


-


-

Non-cash interest expense


-


217,049






Net change in non-cash working capital





HST receivable


77,473


(72,831)

Inventories (Note 5)


422,949


(518,556)

Biological assets (Note 6)


380,263


351,869

Prepaid expenses and other assets (Note 9)


(3,226,185)


(1,186,896)

Long term deposits and other assets


(85,000)


(540,825)

Accounts payable 


2,832,431


381,694

Accrued expenses


559,030


(159,600)

Income tax payable


5,737,738


197,252

Other liabilities


407,593


-

Cash flow provided by (used in) operating activities


7,612,581


(2,020,584)






Investing activities





Purchase of property, plant and equipment (Note 7)


(12,682,554)


(7,381,223)

Cash flow used in investing activities


(12,682,554)


(7,381,223)






Financing activities





Issuance of common shares and warrants (Note 13)


-


20,205,692

Issuance of shares on warrant and option exercises (Note 13)


3,965,736


1,058,418

Share and warrant issuance costs


-


(2,309,453)

Principal repayment on lease liabilities (Note 11)


(50,614)


(8,275)

Cash flow provided by (used in) financing activities


3,915,122


18,946,382






Net increase (decrease) in cash 


(1,154,851)


9,544,575

Cash  at beginning of the period


19,364,086


451,869

Net cash acquired on acquisition


-


34,678

Effect of foreign exchange on cash


(106,122)


(225,002)

Cash at end of the period


$

18,103,113


$

9,806,120








 

SOURCE Planet 13 Holdings Inc.


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