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 1^st, 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%

_____________________

¹ https://tax.nv.gov/Publications/Marijuana_Statistics_and_Reports/

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.

LodeRock Advisors Inc., Planet 13 Investor Relations, [email protected], [phone] ext. 2230; Robert Groesbeck or Larry Scheffler, Co-Chief Executive Officers, [email protected]

Related Links

https://planet13lasvegas.com/