Planet 13 Announces Q1 2021 Financial Results

  • Q1 2021 Revenue of $23.8 million
  • Planet 13 accounted for 8.6% of all Nevada cannabis dispensary revenue in Q1
  • Q1 2021 EBITDA of $5.2 million

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

LAS VEGAS, NV / ACCESSWIRE / May 27, 2021 / Planet 13 Holdings Inc. (CSE:PLTH)(OTCQB:PLNHF) (“Planet 13” or the “Company“), a leading vertically-integrated Nevada cannabis company, today announced its financial results for the three-month period ended March 31, 2021. Planet 13’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).

“After a slower January and February, due to COVID-19 related restrictions in place in Nevada, we had an absolutely outstanding March, April, and now May. It is clear that Vegas is back, and with hotels and casinos across the strip reporting being fully booked for the foreseeable future we think it’s just getting started,” said Larry Scheffler, Co-CEO of Planet 13. “After a year of fighting against the largest possible macro storm, it feels great to have the wind at our backs and to see all the improvements we put in place start to pay off.”

“Tourism is back, and the SuperStore is performing well. The Medizin store is proving that our blend of entertainment, customer service, and product selection work in smaller footprint retail stores. Our wholesale is growing at a solid pace. Across our Nevada operations, we are experiencing a successful return to growth,” commented Bob Groesbeck, Co-CEO of Planet 13. “In California, we are on track and on budget for our Orange County SuperStore – P13 OC. We’ve taken everything we’ve learned running the Las Vegas SuperStore and put it into this Store. We are set to open in July, and we look forward to bringing the Planet 13 experience to California and introducing it to millions of first time visitors.”

Financial Highlights – Q1 – 2021

Operating Results

All comparisons below are to the quarter ended March 31, 2020, unless otherwise noted

  • Revenues were $23.8 million as compared to $16.8 million, an increase of 41.8%
  • Gross profit before biological adjustments was $12.8 million or 53.8% as compared to $9.0 million or 53.9%
  • Operating expenses, excluding non-cash compensation expense and depreciation and amortization, was $8.4 million as compared to $7.0 million, an increase of 21.0%
  • Net income before taxes of $3.0 million as compared to a net income of $0.3 million
  • Net income of $0.4 million as compared to a net loss of $1.4 million
  • Adjusted EBITDA of $5.2 million as compared to Adjusted EBITDA of $2.4 million

Balance Sheet

All comparisons below are to December 31, 2020, unless otherwise noted

  • Cash of $141.1 million as compared to $79.0 million
  • Total assets of $218.4 million as compared to $150.0 million
  • Total liabilities of $35.0 million as compared to $29.3 million

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 Months Ended March 31, 2021 (the “MD&A“).

  • On February 2, 2021, Planet 13 announced closing of CDN$69 million bought deal, upsized from CDN$50 million.
  • On February 3, 2021, Planet 13 announced the start of construction on the Orange County SuperStore.
  • On March 15, 2021 Planet 13 announced a partnership with Curaleaf Select to open shop-in-shop.
  • On April 19, 2021 Planet 13 announced the grant of restricted stock units.
  • On April 22, 2021 Planet 13 announced record sales on “420.”
  • On May 10, 2021 Planet 13 announced the conversion of all Class A restricted shares to common shares.

Results of Operations (Summary)

The following tables set forth consolidated statements of financial information for the three-month periods ending March 31, 2021 and March 31, 2020. For further information regarding the Company’s financial results for these periods, please refer to the Company’s annual financial statements for the period ended March 31, 2021 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  Consolidated  Consolidated 
 
 Three Months  Three Months  Three Months 
 
 Ended  Ended  Ended 
 
 Mar-31-2021  Mar-31-2021  Mar-31-2020 
EBITDA
         
Profit (loss) before taxes
  4,356,088   3,047,835   304,497 
Add back:
            
Biological asset adjustments
  (366,746)  (366,746)  (234,419)
Non-cash share based payments
     203,973   810,823 
Depreciation and amortization
  1,083,122   1,083,122   987,008 
Depreciation included in COGS
  517,177   517,177   157,026 
ROU Interest included in COGS
  325,718   325,718   35,524 
Interest and non-operating expense (income)
  407,966   407,966   329,291 
 
            
EBITDA
  6,323,325   5,219,045   2,389,750 
Margin
  26.6%  21.9%  14.2%

 

Expressed in USD$
 Three Months  Three Months    
 
 Ended  Ended  Percentage 
 
 Mar-31-2021  Mar-31-2020  Change 
Revenue
         
Revenues, net of discounts
  23,816,208   16,793,002   41.8%
Cost of Goods Sold
  (11,006,530)  (7,746,922)  42.1%
Gross Profit, Before Biological Asset Adjustment
  12,809,678   9,046,080   41.6%
Gross Profit Margin %
  53.8%  53.9%    
Realized fair value amounts included in COGS
  (288,476)  (193,196)  49.3%
Unrealized fair value gain on growth of biological assets
  655,222   427,615   53.2%
Gross profit
  13,176,424   9,280,499   42.0%
Gross Profit Margin %
  55.3%  55.3%    
 
            
Expenses
            
General and Administrative
  7,773,579   5,522,514   40.8%
Sales and Marketing
  659,949   1,446,608   (54.4%)
Depreciation and Amortization
  1,083,122   987,008   9.7%
Share based payments
  203,973   810,823   (74.8%)
Total Expenses
  9,720,623   8,766,953   10.9%
 
            
Income (Loss) From Operations
  3,455,801   513,546   572.9%
 
            
Other (Income) Expense:
            
Interest Expense, net
  470,863   281,005   67.6%
Realized Foreign Exchange gain (loss)
       na 
Other expense (income)
  (62,897)  (71,956)  (12.6%)
Total Other (Income) Expense
  407,966   209,049   95.2%
 
            
Income (loss) for the period before tax
  3,047,835   304,497   900.9%
Provision for income tax (current and deferred)
  2,605,072   1,713,559   52.0%
Income (Loss) for the period
  442,763   (1,409,062)   (131.4%)
 
            
Other Comprehensive Income (Loss)
            
Items that may be reclassified subsequently to profit/loss
            
Foreign exchange translation adjustment
  829,635   31,069     
Net Comprehensive Income (Loss) for the period
  1,272,398   (1,377,993)     
Income (Loss) per share for the period
            
Basic and fully diluted income (loss) per share
 $0.00  $(0.01)     
 
            
Weighted Average Number of Shares Outstanding
            
Basic
  190,777,592   138,915,955     
Diluted
  193,050,462   138,915,955     

Outstanding Shares

As of May 26, 2021, the Company had 196,386,104 common shares outstanding. There were 184,168 options issued and outstanding of which 176,669 have fully vested. There were 8,877,751 warrants outstanding and 4,994,567 RSU’s outstanding of which nil RSUs had fully vested as at the date of this MD&A.

Conference Call

Planet 13 will host a conference call on Thursday, May 27, 2021 at 5:00 p.m. ET to discuss its first 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 27, 2021 | Time: 5:00 p.m. EST

Participant Dial-in: Toll Free 877-407-8035 or International 201-689-8035

Replay Dial-in: Toll Free 877-481-4010 or International 919-882-2331

(Available for 2 weeks)

Reference Number: 41412

Listen to webcast: https://bit.ly/3or4jFC

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.

For further inquiries, please contact:

LodeRock Advisors Inc., Planet 13 Investor Relations
mark.kuindersma@loderockadvisors.com
(416) 519-2156 ext. 2230

Bob Groesbeck and Larry Scheffler
Co-Chief Executive Officers
ir@planet13lasvegas.com

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, Planet 13’s first California location and the timeline for opening of the Santa Ana dispensary.

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; risks associated with COVID-19 and other infectious diseases presenting as major health issues; fluctuations in general macroeconomic conditions; fluctuations in securities markets; expectations regarding the size of the Nevada and California 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 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 licensed subsidiary entities in states that have legalized marijuana operations, 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, including COVID-19, are contained under the heading “Risk Factors” and elsewhere in the Company’s annual information form dated April 5, 2021 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, 
 
 2021  2020 
Assets
      
Current Assets
      
Cash
 $141,126,157  $79,000,850 
HST receivable
  132,636   103,445 
Inventories (Note 5)
  9,099,432   7,334,717 
Biological assets (Note 6)
  920,975   640,995 
Prepaid expenses and other current assets (Note 10)
  5,057,135   2,637,547 
Total Current Assets
  156,336,335   89,717,554 
 
        
Property and equipment (Note 7)
  34,149,653   32,073,925 
Licenses (Note 8)
  7,007,362   7,007,362 
Right of use assets (Note 9)
  19,894,552   20,149,721 
Long-term deposits and other assets
  1,054,443   1,054,443 
 
  62,106,010   60,285,451 
Total Assets
 $218,442,345  $150,003,005 
 
        
Liabilities
        
Current Liabilities
        
Accounts payable
 $3,293,068  $1,683,833 
Accrued expenses
  4,273,664   2,844,714 
Income taxes payable
  3,716,909   1,220,652 
Notes payable – current portion (Note 11)
  884,000   884,000 
Total Current Liabilities
  12,167,641   6,633,199 
 
        
Long -term lease liabilities (Note 12)
  22,404,495   22,326,077 
Other long-term liabilities
  28,000   28,000 
Deferred tax liability
  422,237   313,422 
 
  22,854,732   22,667,499 
Total Liabilities
  35,022,373   29,300,698 
 
        
Shareholders’ Equity
        
Share capital (Note 13)
  196,957,891   139,177,034 
Restricted share units (Note 13)
  1,714,792   3,262,351 
Warrants (Note 13)
  12,255,137   6,972,053 
Option reserve (Note 13)
  204,966   276,081 
Accumulated other comprehensive loss
  350,513   (479,122)
Deficit
  (28,063,327)  (28,506,090)
Total Shareholders’ Equity
  183,419,972   120,702,307 
Total Liabilities and Shareholders’ Equity
 $218,442,345  $150,003,005 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
C
OMPREHENSIVE INCOME (LOSS)

Expressed in United States Dollars
 Three months  Three months 
 
 Ended  Ended 
 
 March 31,  March 31, 
 
 2021  2020 
Revenue
      
Revenues, net of discounts
 $23,816,208  $16,793,002 
Cost of Goods Sold
  (11,006,530)  (7,746,922)
Gross Profit before fair value asset adjustment
  12,809,678   9,046,080 
Realized fair value amounts included in inventory sold
  (288,476)  (193,196)
Unrealized fair value gain on growth of biological assets
  655,222   427,615 
Gross Profit
  13,176,424   9,280,499 
 
        
Expenses
        
General and Administrative (Note 12 and Note 14)
  7,773,579   5,522,514 
Sales and Marketing
  659,949   1,446,608 
Depreciation and Amortization (Note 7 & 9)
  1,083,122   987,008 
Share-Based Compensation Expense (Note 13 and Note 17)
  203,973   810,823 
Total Expenses
  9,720,623   8,766,953 
 
        
Other Expense:
        
Interest expense, net
  470,863   281,005 
Other income
  (62,897)  (71,956)
Total Other Expense
  407,966   209,049 
 
        
Income before income taxes
  3,047,835   304,497 
Provision for tax – current
  2,496,257   1,853,382 
Provision for tax – deferred
  108,815   (139,823)
Income (loss) for the period
 $442,763  $(1,409,062) 
 
        
Other Comprehensive Income
        
 
        
Foreign exchange translation gain
  829,635   31,069 
Net Comprehensive Income (Loss) for the period
 $1,272,398  $(1,377,993) 
 
        
Net income (loss) per share for the period
        
Basic and diluted income (loss) per share (Note 16)
 $0.00  $(0.01) 
 
        
Weighted Average Number of Common Shares Outstanding
        
Basic
  190,777,592   138,915,955 
Diluted
  193,050,462   138,915,955 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Expressed in United States Dollars
 Three Months  Three Months 
 
 Ended  Ended 
 
 March 31,  March 31, 
 
 2021  2020 
Operating activities
      
Net income (loss) for the period
 $442,763  $(1,409,062)
Add (deduct) non-cash items:
        
Share based payments (Note 13 and 17)
  203,973   810,823 
Depreciation and amortization (Note 7 and 9)
  1,651,389   1,400,265 
Deferred tax liability
  108,815   (171,041)
Other assets
     (1,317,580)
Non-cash accretion of lease liabilities (Note 12)
  367,337    
Non-cash interest expense on ROU Liabilities (Note 12)
  470,863   400,836 
 
        
Net change in non-cash working capital
        
HST receivable
  (30,505)  (8,112)
Inventories (Note 5)
  (1,764,715)  (1,151,096)
Biological assets (Note 6)
  (279,980)  (125,294)
Prepaid expenses and other assets (Note 10)
  (2,421,189)  788,819 
Accounts payable
  1,609,684   1,206,528 
Accrued expenses
  1,428,951   133,728 
Income tax payable
  2,496,257   1,884,600 
Cash flow provided by operating activities
  4,283,643   2,443,414 
 
        
Investing activities
        
Purchase of property and equipment (Note 7)
  (3,471,948)  (2,086,591)
Cash flow used in investing activities
  (3,471,948)   (2,086,591) 
 
        
Financing activities
        
Issuance of shares on warrant and option exercises (Note 13)
  10,884,762   1,064,521 
Issuance of shares and warrants on financings (Note 13)
  50,356,532    
Payment on lease liabilities (Note 12)
  (759,782)  (329,245)
Cash flow provided by financing activities
  60,481,512   735,276 
 
        
Net increase in cash
  61,293,207   1,092,099 
Cash at beginning of the year
  79,000,850   12,814,712 
Effect of foreign exchange on cash
  832,100   31,069 
Cash at end of the period
 $141,126,157  $13,937,880 

1 Market share data is based on January and February results https://tax.nv.gov/uploadedFiles/taxnvgov/Content/TaxLibrary/NV-Marijuana-Revenue-FY21(4).pdf

SOURCE: Planet 13 Holdings