Planet 13 Announces Q2 2021 Financial Results

  • Q2 2021 Revenue of $32.8 million, up 205% compared to Q2, 2020
  • Q2 2021 Adjusted EBITDA[1] of $7.2 million

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

LAS VEGAS, NV / ACCESSWIRE / August 26, 2021 / Planet 13 Holdings Inc. (CSE:PLTH) (OTCQB:PLNHF) ("Planet 13" or the "Company"), a leading vertically-integrated cannabis company, today announced its financial results for the three-month and six-month period ended June 30, 2021. Planet 13's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").

"Q2 was a strong quarter for Planet 13. With tourism back, the Superstore's in-store experience is once again proving that it is on the list of must visit destinations for any trip to Vegas. Every week thousands of people share their experience at the store with their friends on social media and the compounding impact of that organic marketing is obvious as even after being open for three years we are seeing strong growth and increasing share of the Nevada market every month," said Larry Scheffler, Co-CEO of Planet 13. "Along with our dispensary operations, our product brands are continuing to gain traction. According to Headset data, HaHa was the number two edibles and number three beverage brand in the state and TRENDI was the number three concentrate and number six vape brand."

"Along with stellar performance from our Nevada operations, 2021 has been about securing our next growth opportunities. I'm proud to say we opened our Orange County location on time and on budget. We are now focused on growing consumer awareness that will ultimately drive the sales we know are possible from that location," commented Bob Groesbeck, Co-CEO of Planet 13. "Subsequent to the quarter, we also won a dispensary license for the Chicago area giving us a clear path for our next SuperStore. Supported by a robust M&A pipeline and over $130 million in cash, Planet 13's future is bright."

Financial Highlights - Q2 - 2021

Operating Results

All comparisons below are to the quarter ended June 30, 2020, unless otherwise noted

  • Revenues were $32.8 million as compared to $10.8 million, an increase of 205.2%
  • Gross profit before biological adjustments was $18.7 million or 56.9% as compared to $4.7 million or 43.8%
  • Operating expenses, excluding non-cash compensation expense and depreciation and amortization, was $12.5 million as compared to $5.8 million, an increase of 114.8%
  • Net loss before taxes of $0.9 million as compared to a net loss of $3.3 million
  • Net loss of $4.4 million as compared to a net loss of $4.0 million
  • Adjusted EBITDA of $7.2 million as compared to Adjusted EBITDA loss of $0.6 million

Balance Sheet

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

  • Cash of $136.3 million as compared to $79.0 million
  • Total assets of $226.2 million as compared to $150.0 million
  • Total liabilities of $37.6 million as compared to $29.3 million

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, 2021 (the "MD&A").

  • On May 10, 2021 Planet 13 announced the conversion of all Class A restricted shares to common shares.
  • On June 2, 2021, Nevada announced the passage of Bill 341 allowing cannabis consumption lounges.
  • On June 22, 2021, Planet 13 announced adding Select and STIIIZY store-in-stores at the Orange County SupterStore.
  • On July 1, 2021, Planet 13 opened the Orange County SuperStore.
  • On July 7, 2021, Planet 13 announced Moxie as the third store-in-store in Orange County SuperStore.
  • On July 14, 2021, Planet 13 announced the results of its AGM.
  • On August 5, 2021, Planet 13 announced that its 49% owned subsidiary Planet 13 Illinois won a Chicago dispensary license.

Results of Operations (Summary)

The following tables set forth consolidated statements of financial information for the three-and six-month periods ending June 30, 2021, and June 30, 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 June 30, 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[2]

  NV Cannabis Ops  Consolidated  Consolidated    
  Three Months  Three Months  Three Months    
  Ended  Ended  Ended  Percentage 
  Jun-30-2021  Jun-30-2021  Jun-30-2020  Change 
EBITDA            
Profit (loss) before taxes  6,041,470   (851,413)  (3,286,823)  74.1%
Add back:                
Biological asset adjustments  372,392   372,392   (44,356)  939.6%
Non-cash share based payments  -   5,393,748   626,017   761.6%
Depreciation and amortization  1,096,897   1,096,897   1,040,065   5.5%
Depreciation included in COGS  634,740   634,740   406,322   56.2%
ROU Interest included in COGS  374,476   374,476   113,152   230.9%
Interest and non-operating expense (income)  212,495   212,495   568,154   (62.6%)
                 
EBITDA  8,732,470   7,233,335   (577,469)  1352.6%
Margin  26.6%  22.0%  (5.4%)    

[2] Adjusted EBITDA is a non-GAAP financial measure

Expressed in USD$ Three Months  Three Months    
  Ended  Ended  Percentage 
  Jun-30-2021  Jun-30-2020  Change 
Revenue         
Revenues, net of discounts  32,843,588   10,760,996   205.2%
Cost of Goods Sold  (14,149,025)  (6,051,963)  133.8%
Gross Profit, Before Biological Asset Adjustment  18,694,563   4,709,033   297.0%
Gross Profit Margin %  56.9%  43.8%    
Realized fair value amounts included in COGS  47,052   (327,997)  (114.3%)
Unrealized fair value gain on growth of biological assets  (419,444)  372,353   (212.6%)
Gross profit  18,322,171   4,753,389   285.5%
Gross Profit Margin %  55.8%  44.2%    
             
Expenses            
General and Administrative  10,927,038   5,559,623   96.5%
Sales and Marketing  1,543,406   246,353   526.5%
Depreciation and Amortization  1,096,897   1,040,065   5.5%
Share based payments  5,393,748   626,017   761.6%
Total Expenses  18,961,089   7,472,058   153.8%
             
Income (Loss) From Operations  (638,918)  (2,718,669)  (76.5%)
             
Other (Income) Expense:            
Interest Expense, net  481,578   572,265   (15.8%)
Realized Foreign Exchange gain (loss)  (145,556)  -  na 
Other expense (income)  (123,527)  (4,111)  2904.8%
Total Other (Income) Expense  212,495   568,154   (62.6%)
             
Income (loss) for the period before tax  (851,413)  (3,286,823)  (74.1%)
Provision for income tax (current and deferred)  3,567,432   701,272   408.7%
Income (Loss) for the period  (4,418,845)  (3,988,095)  10.8%
             
Other Comprehensive Income (Loss)            
Items that may be reclassified subsequently to profit/loss            
Foreign exchange translation adjustment  970,356   (83,699)    
Net Comprehensive Income (Loss) for the period  (3,448,489)  (4,071,794)    
Income (Loss) per share for the period            
Basic and fully diluted income (loss) per share $(0.02) $(0.03)    
             
Weighted Average Number of Shares Outstanding            
Basic  196,292,786   143,947,783     

Outstanding Shares

As of August 26, 2021, the Company had 196,463,520 common shares outstanding. There were 169,167 options issued and outstanding of which 169,167 have fully vested. There were 8,875,651 warrants outstanding and 4,943,789 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, August 26, 2021 at 5:00 p.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 26, 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: 42398
Listen to webcast: https://bit.ly/3yyUidB

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. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is calculated as net earnings before finance costs (net of finance income), income tax expense, share-based compensation, one-time costs 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

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 and dispensary operations in Orange County. 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, securing our next growth opportunities, growing consumer awareness of our Orange County location, ultimately driving the sales we know are possible from that location, the dispensary license for the Chicago area giving us a clear path for our next SuperStore, a robust M&A pipeline and Planet 13's future being bright.

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
June 30,
2021
  As at
December 31,
2020
 
Assets      
Current Assets      
Cash $136,286,828  $79,000,850 
HST receivable  231,264   103,445 
Inventories (Note 5)  12,131,141   7,334,717 
Biological assets (Note 6)  1,190,850   640,995 
Prepaid expenses and other current assets (Note 10)  6,285,345   2,637,547 
Total Current Assets  156,125,428   89,717,554 
         
Property and equipment (Note 7)  41,525,657   32,073,925 
Licenses (Note 8)  7,007,362   7,007,362 
Right of use assets (Note 9)  20,504,567   20,149,721 
Long-term deposits and other assets  1,066,819   1,054,443 
   70,104,405   60,285,451 
Total Assets $226,229,833  $150,003,005 
         
Liabilities        
Current Liabilities        
Accounts payable $6,096,681  $1,683,833 
Accrued expenses  7,024,381   2,844,714 
Income taxes payable  -   1,220,652 
Notes payable - current portion (Note 11)  884,000   884,000 
Long -term lease liabilities current portion (Note 12)  54,542   - 
Total Current Liabilities  14,059,604   6,633,199 
         
Long -term lease liabilities net of current portion (Note 12)  23,226,086   22,326,077 
Other long-term liabilities  28,000   28,000 
Deferred tax liability  279,995   313,422 
   23,534,081   22,667,499 
Total Liabilities  37,593,685   29,300,698 
         
Shareholders' Equity        
Share capital (Note 13)  201,023,272   139,177,034 
Restricted share units (Note 13)  7,081,682   3,262,351 
Warrants (Note 13)  11,486,105   6,972,053 
Option reserve (Note 13)  206,392   276,081 
Accumulated other comprehensive loss  1,320,869   (479,122)
Deficit  (32,482,172)  (28,506,090)
Total Shareholders' Equity  188,636,148   120,702,307 
Total Liabilities and Shareholders' Equity $226,229,833  $150,003,005 

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

Expressed in United States Dollars Three months  Three months 
  Ended  Ended 
  June 30,  June 30, 
  2021  2020 
Revenue      
Revenues, net of discounts $32,843,588  $10,760,996 
Cost of Goods Sold  (14,149,025)  (6,051,963)
Gross Profit before fair value asset adjustment  18,694,563   4,709,033 
Realized fair value amounts included in inventory sold  47,052   (327,997)
Unrealized fair value gain on growth of biological assets  (419,444)  372,353 
Gross Profit  18,322,171   4,753,389 
         
Expenses        
General and Administrative (Note 14)  10,927,038   5,559,623 
Sales and Marketing  1,543,406   246,353 
Depreciation and Amortization (Note 7 & 9)  1,096,897   1,040,065 
Share-Based Compensation Expense (Note 13 and Note 17)  5,393,748   626,017 
Total Expenses  18,961,089   7,472,058 
         
Income From Operations  (638,918)  (2,718,669)
         
Other Expense:        
Interest expense, net  481,578   572,265 
Realized foreign exchange gain  (145,556)  - 
Other income  (123,527)  (4,111)
Total Other Expense  212,495   568,154 
         
Income before income taxes  (851,413)  (3,286,823)
Provision for tax - current  3,709,674   866,710 
Provision for tax - deferred  (142,242)  (165,438)
Income (loss) for the period $(4,418,845) $(3,988,095)
         
Other Comprehensive Income        
         
Foreign exchange translation gain  970,356   (83,699)
Net Comprehensive Income (Loss) for the period $(3,448,489) $(4,071,794)
         
Net income (loss) per share for the period        
Basic and diluted income (loss) per share (Note 16) $(0.02) $(0.03)
         
Weighted Average Number of Common Shares Outstanding        
Basic and diluted  196,292,786   143,947,783 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Expressed in United States Dollars Six Months  Six Months 
  Ended  Ended 
  June 30,  June 30, 
  2021  2020 
Operating activities      
Net loss for the period $(3,976,082) $(5,397,157)
Add (deduct) non-cash items:        
Share based payments (Note 13 and 17)  5,597,721   1,436,840 
Depreciation and amortization (Note 7 and 9)  3,331,902   2,846,655 
Deferred tax liability  (33,427)  (408,444)
Other assets  (12,376)  (494,717)
Non-cash accretion of lease liabilities (Note 12)  735,833   - 
Non-cash interest expense on ROU Liabilities (Note 12)  952,441   1,075,663 
         
Net change in non-cash working capital        
HST receivable  (131,315)  (93,648)
Inventories (Note 5)  (4,796,424)  (301,629)
Biological assets (Note 6)  (549,855)  (185,324)
Prepaid expenses and other assets (Note 10)  (3,736,947)  1,970,664 
Accounts payable  3,694,807   1,652,038 
Accrued expenses  4,179,668   300,756 
Income tax payable  (1,220,652)  2,823,275 
Cash flow provided by operating activities  4,035,294   5,224,972 

 
        
Investing activities        
Purchase of property and equipment (Note 7)  (11,486,978)  (2,352,575)
Purchase of licenses (Note 8)  -   (1,153,407)
Cash flow used in investing activities  (11,486,978)  (3,505,982)
         
Financing activities        
Issuance of shares on warrant and option exercises (Note 13)  14,155,679   9,195,063 
Issuance of shares and warrants on financings (Note 13)  50,356,532   - 
Payment on lease liabilities (Note 12)  (1,610,271)  (951,311)
Cash flow provided by financing activities  62,901,940   8,243,752 
         
Net increase in cash  55,450,256   9,962,742 
Cash at beginning of the period  79,000,850   12,814,712 
Effect of foreign exchange on cash  1,835,722   (52,630)
Cash at end of the period $136,286,828  $22,724,824 

[1] Adjusted EBITDA is a non-GAAP financial measure

[2] Adjusted EBITDA is a non-GAAP financial measure

SOURCE: Planet 13 Holdings



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