Market Overview

Planet 13 Announces Record Revenue and Adjusted EBITDA for Q2 2018: Revenue +203% vs. Q2 2017 and +23% from Q1 2018; Adjusted EBITDA +521.3% and +81.7%

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Planet 13 Announces Record Revenue and Adjusted EBITDA for Q2 2018: Revenue +203% vs. Q2 2017 and +23% from Q1 2018; Adjusted EBITDA +521.3% and +81.7%

Canada NewsWire

  • Highly rated1 Medizin dispensary generated $4.4 million in revenue in Q2 2018 and $8.0 million YTD; monthly revenue is growing at a 7.8% compound rate2
  • Adjusted EBITDA of $789,909 in Q2 2018 and $1.2 million YTD;
  • Planet 13 Superstore (the "Superstore") – 40,000 square foot cannabis entertainment complex – set to open November 1st 2018. All required licensing in place and construction ahead of schedule
  • 413 online deliveries in July 2018; monthly online revenue growing at a compound rate of 13.5%2 sequentially

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

LAS VEGAS, Aug. 29, 2018 /CNW/ - Planet 13 Holdings Inc. (CSE:PLTH) ("Planet 13" or the "Company"), a leading vertically-integrated Nevada cannabis company, today announced record financial results for the three and six-month periods ended June 30, 2018. Planet 13's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").

"With two months until the Grand Opening of Phase 1 of the 40,000 square foot Planet 13 Superstore, our team is ahead of schedule," said Bob Groesbeck, Co-CEO of Planet 13. "Construction is progressing rapidly, and we are in the market every day buying product from the top cultivators and brands in Nevada, with the expectation that we will be fully stocked by October 1st. Q2 2018 was the eighth consecutive quarter of revenue growth from our Medizin location. Given sustained growth in customer traffic, a team that has consistently made Medizin one of the top-rated dispensaries in Las Vegas1, and the building excitement about a world class cannabis and entertainment destination opening adjacent to the Las Vegas Strip, we are confident that we will hit our financial targets quickly and drive strong returns for shareholders."    

Larry Scheffler, Co-CEO of Planet 13 added, "We are well capitalized to execute our business plans and given the performance we are seeing in the market, anticipate rapid revenue and cash flow growth from the Superstore location when it opens.  Based on our discussions with regulators, we estimate 1.1 million square feet of cultivation capacity coming onstream over the next 12 to 18 months in a market that was fully supplied by 250,000 square feet in 2017. This anticipated oversupply will further bolster margins at the Superstore and has enabled our team to both invest now to prepare for the anticipated approval of a lounge concept on-site early next year and to evaluate accretive retail opportunities in other tier-one U.S. destinations. We have locked-down the closest possible location to the Las Vegas Strip, just steps from some of the most valuable entertainment properties in the world, with significant expansion opportunities on-site. We expect the Superstore to rapidly become a global destination for cannabis aficionados and to drive the brand awareness and loyalty required to enable a rapid and profitable expansion across the U.S."

Financial Highlights – Q2 – 2018

Operating Results

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

  • Revenues were $4.4 million as compared to $1.5 million, an increase of 203%
  • Gross margin was $2.4 million as compared $1.4 million, an increase of 69%
  • Operating expenses were $1.9 million as compared to $622,152, an increase of 201%
  • Net loss of $3.4 million as compared to a net income of $22,209
  • Adjusted EBITDA of $798,909 as compared to $128,584

Balance Sheet

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

  • Cash and cash equivalents of $17.1 million as compared to $0.5 million, an increase of 3,686%
  • Total assets of $26.9 million as compared to $8.6 million, an increase of 214%
  • Total liabilities of $6.0 million as compared to $11.0 million, a decrease of 46%

Q2 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 June 30, 2018 (the "MD&A").  

  • On May 23, 2018, the Company completed its funding round for combined gross proceeds of approximately $20,205,000.
  • On June 21, 2018, the Company's common shares commenced trading on the Canadian Securities Exchange.

Results of Operations (Summary)

The following tables set forth consolidated statements of financial information for the three and six-month periods ending June 30, 2018 and June 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 June 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 


Three  Months 




Six Months


Six Months




Ended


Ended


Percentage


Ended


Ended


Percentage


Jun-30-2018


Jun-30-2017


Change


Jun-30-2018


Jun-30-2017


Change

Revenue












Revenues, net of discounts

4,426,197


1,461,782


202.8%


8,026,679


2,596,215


209.2%

Gain on Biological Asset Transformation

1,058,531


774,970


36.6%


3,189,227


2,375,657


34.2%

Cost of Goods Sold

(3,105,592)


(830,114)


274.1%


(7,214,697)


(1,450,086)


397.5%

Gross Profit

2,379,136


1,406,638


69.1%


4,001,209


3,521,786


13.6%













Expenses












General and Administrative

1,644,556


589,735


178.9%


2,755,501


1,021,788


169.7%

Sales and Marketing

229,363


32,417


607.5%


334,909


45,808


631.1%

Depreciation and Amortization

29,077


28,804


0.9%


61,440


57,239


7.3%

Non-cash Compensation Expense

1,596,134


-


n/a


1,596,134


-


n/a

Total Expenses

3,499,130


650,956


437.5%


4,747,983


1,124,835


322.1%













Income (Loss) From Operations 

(1,119,994)


755,682


(248.2%)


(746,774)


2,396,951


(131.2%)













Other (Income) Expense:












Interest Expense, net

121,405


255,218


(52.4%)


239,857


488,337


(50.9%)

Foreign exchange (gain) loss

266,521


-


n/a


266,521


-


n/a

RTO acquisition costs

532,367


-


n/a


532,367


-


n/a

(Gain) loss on conversion of debt

848,925


-


n/a


848,925


-


n/a

Total Other (Income) Expense

1,769,218


255,218


593.2%


1,887,669


488,337


286.6%













Net loss for the period before tax

(2,889,212)


500,464


(677.3%)


(2,634,443)


1,908,614


(238.0%)

Provision for tax - current

514,093


478,255


7.5%


854,728


1,197,406


(28.6%)

Net Income (Loss) for the period

(3,403,305)


22,209


(15424.0%)


(3,489,171)


711,208


(590.6%)

























Loss per share for the period












Basic and fully diluted loss per share

($0.04)


na




($0.04)


na















Weighted Average Number of Shares Outstanding

83,819,620


 nil 




79,434,174


 nil 
















 

Adjusted EBITDA














Three  Months 


Three  Months 




Six Months


Six Months




Ended


Ended


Percentage


Ended


Ended


Percentage


Jun-30-2018


Jun-30-2017


Change


Jun-30-2018


Jun-30-2017


Change

EBITDA












Net profit (loss) before taxes

(2,889,212)


500,464


(677.3%)


(2,634,443)


1,908,614


(238.0%)

Add back:













Net change in Bio Asset valuation

164,358


(774,970)


na


68,926


(2,375,657)


na


Non-cash Compensation Expense

1,596,134


-


na


1,596,134


-


na


Depreciation and amortization

29,077


28,804


0.9%


61,440


57,239


7.3%


Depreciation included in COGS

129,334


119,068


8.6%


258,787


236,651


9.4%


Other (Income) Expense - one time RTO related costs

1,769,218


255,218


593.2%


1,887,669


488,337


286.6%













EBITDA

798,909


128,584


521.3%


1,238,512


315,184


292.9%


 

Summary of Quarterly Results


Three months ended

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

4,426,197

3,600,482

3,382,717

3,025,048

1,461,779

1,134,434

840,009

499,860

Net income (loss) 

(3,403,305)

(85,868)

340,621

280,348

11,087

189,485

(660,597)

(424,386)










Comprehensive Net Income (loss)

(3,403,305)

(85,868)

340,621

280,348

11,087

189,485

(660,597)

(424,386)










Net Income (loss) per share

(0.04)

(0.00)

 n/a 

 n/a 

 n/a 

 n/a 

 n/a 

 n/a 

Total assets

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

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)

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



Six Months

Six Months


Three Months

Three Months


Three Months

Three Months



Ended

Ended


Ended

Ended


Ended

Ended



30/Jun/18

30/Jun/17

% Change

30/Jun/18

30/Jun/17

% Change

31/Mar/18

31/Mar/18

% Change











Average Daily Traffic

638

198

222.6%

693

226

206.0%

581

168

245.3%











Average spend per customer

$69.95

$72.97

(4.1%)

$70.22

$70.96

(1.0%)

$69.61

$75.74

(8.1%)


 

Outstanding Shares

As at the date of this report, the Company had 62,008,400 common shares and 55,232,940 class A convertible, restricted voting shares issued and outstanding for a total of 117,241,340 shares outstanding.  There were 820,000 options issued and outstanding of which 258,750 have fully vested.  There were 17,214,795 warrants outstanding and 5,638,358 RSU's outstanding of which 1,879,453 RSUs had fully vested as at June 30, 2018 and at the date of this report.

Conference Call

Planet 13 will host a conference call on Wednesday, August 29, 2018 at 8:00 a.m. ET 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: August 29, 2018 | Time: 8:00am 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: 689023
Listen to webcast: https://bit.ly/2n9BSgc

For more information, please visit https://www.planet13holdings.com/ and follow on Instagram planet13dispensary, 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 July 31, 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.

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 potential local, regional and national expansion plans, including the completion of the construction of the Company's Superstore within the projected timeline or at all, estimated foot traffic at the Company's proposed retail locations, anticipated revenue and cash flow growth from the Superstore, anticipated approval of the Company's on-site lounge concept at the Superstore, and the ability to enter into third party supply agreements for cannabis and cannabis related products on terms favorable to the Company or at all.

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 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 Listing Statement dated May 24, 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


As at



30-Jun-18


December 31,



2018


2017

Assets





Current Assets





Cash and cash equivalents 


17,109,458


451,869

HST receivable


55,080


-

Inventory (Note 7)


1,183,893


966,622

Biological assets (Note 8)


2,637,409


2,706,335

Prepaid expenses


733,401


92,129

Total Current Assets


21,719,240


4,216,955






Property and equipment (Note 9)


5,223,546


4,341,915



5,223,546


4,341,915

Total Assets


26,942,786


8,558,870






Liabilities





Current Liabilities





Accounts payable and accrued liabilities


827,255


678,319

Accrued expenses


1,501,228


1,055,829

Income taxes payable


2,140,064


1,270,862

Notes payable - current portion (Note 10)


14,320


14,182

Total Current Liabilities


4,482,867


3,019,192






Notes payable - long-term portion (Note 10)


921,031


925,890

Notes payable - related party (Note 10)


-


6,526,732

Deferred tax liability


553,856


568,330



1,474,887


8,020,952

Total Liabilities


5,957,754


11,040,144






Shareholders' Equity





Share capital (Note 12)


21,111,565


-

Restricted share units (Note 12)


1,446,512


-

Warrants (Note 12)


4,247,779


-

Contributed surplus (Note 12)


149,622


-

Deficit


(5,970,445)


(2,481,274)

Total Shareholders' Equity


20,985,032


(2,481,274)

Total Liabilities and Shareholders' Equity


26,942,786


8,558,870

 

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



Three months


Three months


Six months


Six months



Ended


Ended


Ended


Ended



June 30,


June 30,


June 30,


June 30,



2018


2017


2018


2017

Revenue









Revenues, net of discounts


4,426,197


1,461,782


8,026,679


2,596,215

Gain on Biological Asset Transformation


1,058,531


774,970


3,189,227


2,375,657

Cost of Goods Sold


(3,105,592)


(830,114)


(7,214,697)


(1,450,086)

Gross Profit


2,379,136


1,406,638


4,001,209


3,521,786










Expenses









General and Administrative (Note 11)


1,644,556


589,735


2,755,501


1,021,788

Sales and Marketing


229,363


32,417


334,909


45,808

Depreciation and Amortization


29,077


28,804


61,440


57,239

Non-cash Compensation Expense


1,596,134


-


1,596,134


-

Total Expenses


3,499,130


650,956


4,747,983


1,124,835










Income (Loss) From Operations 


(1,119,994)


755,682


(746,774)


2,396,951










Other (Income) Expense:









Interest Expense, net


121,405


255,218


239,857


488,337

Foreign exchange (gain) loss


266,521


-


266,521


-

RTO acquisition costs


532,367


-


532,367


-

(Gain) loss on conversion of debt (Note 10)


848,925


-


848,925


-

Total Other (Income) Expense


1,769,218


255,218


1,887,669


488,337










Net loss for the period before tax


(2,889,212)


500,464


(2,634,443)


1,908,614

Provision for tax - current (Note 15)


514,093


478,255


854,728


1,197,406

Net Income (Loss) for the period


(3,403,305)


22,209


(3,489,171)


711,208



















Loss per share for the period









Basic and fully diluted loss per share


($0.04)


na


($0.04)


na










Weighted Average Number of Shares Outstanding


83,819,620


 nil 


79,434,174


 nil 

 

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS



Six months


Six months



Ended


Ended



June 30,


June 30,



2018


2017

Operating activities





Net loss for the period


(3,489,171)


711,208

Add (deduct) non-cash items:






Non–cash compensation expense


1,596,134


-


Depreciation and amortization


320,227


293,890


Unrealized foreign exchange (gain) loss


138,075


-


Loss on conversion of debt


848,925




Non-cash interest expense


217,048


231,210



(368,763)


1,236,308

Net change in non-cash working capital





Sales tax recoverable


47,060


-

Inventory


(217,271)


(460,644)

Biological assets


68,926


(2,375,657)

Prepaid expenses


(641,272)


-

Income tax payable


869,202


389,683

Net change in deferred tax liabilities


(14,474)


977,587

Accounts payable and accrued liabilities


561,182


174,328

Cash flow provided by (used in) operating activities


304,590


(58,395)






Investing activities





Purchase of property, plant and equipment


(1,201,858)


(69,613)

Cash flow used in investing activities


(1,201,858)


(69,613)






Financing activities





Issuance of common shares and warrants


19,508,446


-

Share and warrant issuance costs


(1,783,390)


-

Issuance of long-term debt


-


-

Principal repayment on equipment finance lease


(2,721)


(6,922)

Repayment of long-term debt 


-


-

Cash flow provided by (used in) financing activities


17,722,335


(6,922)






Effect of foreign exchange on cash


(202,155)


-






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


16,622,911


(134,930)

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


17,109,458


(114,062)






 

SOURCE Planet 13 Holdings Inc.

View original content: http://www.newswire.ca/en/releases/archive/August2018/29/c7866.html

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