Planet 13 Announces Record Third Quarter 2020 Financial Results

Q3 2020 Revenue of $22.8 million; Adjusted EBITDA of $6.2 million

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

LAS VEGAS, NV / ACCESSWIRE / November 24, 2020 / 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 and nine-month period ended September 30, 2020. Planet 13's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").

Larry Scheffler, Co-CEO of Planet 13 said, "Our performance in the third quarter exceeded expectations – leading to our highest quarter of sales ever. Despite being impacted by the ongoing global pandemic and our Las Vegas SuperStore only at 50% capacity, we achieved 36% higher revenue compared to pre-COVID quarters. This is a testament to the strength of Planet 13's business model and the success of the operational improvements we put in place to ensure our ability to serve local customers. As Las Vegas returns to normal and the economy recovers, we will undertake further strategic initiatives to grow revenue at the SuperStore and increase our sales to local customers in Las Vegas."

"In the third quarter, our in-house brands contributed 25% to SuperStore revenue – continuing to be one of the most recognized and fastest-growing segments within the Planet 13 portfolio. In the wholesale market we saw increasing sales month over month throughout the quarter and continuing into October. Building on this momentum, we continue to invest in cultivation with our recently announced acquisition of a 45,000 square foot facility in Las Vegas, better positioning us to supply wholesale and retail sales within the state," commented Bob Groesbeck, Co-CEO. "We are excited to leverage our knowledge and experience from Nevada to California, with the opening of our new dispensary in Santa Ana in 2021 – the world's second largest dispensary. Planet 13 is well capitalized, and we look forward to executing on future expansion into other major growth markets."

Financial Highlights – Q3 – 2020

Operating Results

All comparisons below are to the quarter ended September 30, 2019, unless otherwise noted

Revenues were $22.8 million as compared to $16.7 million, an increase of 36.5%
Gross profit before biological adjustments was $13.0 million or 56.9% as compared to $9.9 million or 59.1%, an increase of 31.4%
Operating expenses, excluding non-cash compensation expense and depreciation and amortization, was $7.2 million as compared to $6.7 million, an increase of 7.9%
Net income before taxes of $3.4 million as compared to a net income of $0.3 million
Net income of $0.2 million as compared to a net loss of $1.7 million
Adjusted EBITDA of $6.2 million as compared to Adjusted EBITDA of $3.4 million

Balance Sheet

All comparisons below are to December 31, 2019, unless otherwise noted

Cash of $56.8 million as compared to $12.8 million
Total assets of $125.5 million as compared to $62.9 million
Total liabilities of $39.3 million as compared to $21.6 million

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 Months and Nine Months Ended September 30, 2020 (the "MD&A").

On July 3, 2020, Planet 13 announced closing of a CDN$11.5 million bought deal public offering.
On July 17, 2020, Planet 13 announced an acquisition of 45,000 square feet of indoor cultivation.
On August 10, 2020, Planet 13 was awarded a Nevada dispensary license.
On August 20, 2020, Planet 13 announced a CDN$15 million bought deal public offering.
On August 21, 2020, Planet 13 announced an upsize to bought deal public offering to CDN$20 million.
On September 10, 2020, Planet 13 announced closing of a CDN$23 million bought deal public offering.
On October 13, 2020, Planet 13 announced the addition of non-cannabis retail space to the Las Vegas SuperStore.
On October 19, 2020, Planet 13 announced expanding the dispensary floor of the Las Vegas SuperStore.
On October 19, 2020, Planet 13 announced a CDN$20 million bought deal public offering.
On October 20, 2020, Planet 13 announced an upsize to bought deal public offering to CDN$25 million.
On November 5, 2020, Planet 13 announced the closing of a CDN$28.8 million bought deal public offering.
On November 20, 2020, Planet 13 announced opening the Medizin dispensary.

Results of Operations (Summary)

The following tables set forth consolidated statements of financial information for the three-month and nine-month periods ending September 30, 2020 and September 30, 2019. 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, 2020 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
 
 
 
 
 
NV Cannabis Ops
 
 
Consolidated
 
 
 
 
 
 
 

 
Three Months
 
 
Three Months
 
 
Three Months
 
 
 
 
 
Nine Months
 
 
Nine Months
 
 
Nine Months
 
 
 
 

 
Ended
 
 
Ended
 
 
Ended
 
 
Percentage
 
 
Ended
 
 
Ended
 
 
Ended
 
 
Percentage
 

 
Sep-30-2020
 
 
Sep-30-2020
 
 
Sep-30-2019
 
 
Change
 
 
Sep-30-2020
 
 
Sep-30-2020
 
 
Sep-30-2019
 
 
Change
 

EBITDA

Profit (loss) before taxes

 
 
4,811,541
 
 
 
3,371,829
 
 
 
251,122
 
 
 
1242.7
%
 
 
5,124,677
 
 
 
389,503
 
 
 
1,457,619
 
 
 
(73.3
%)

Add back:

Biological asset adjustments

 
 
504,069
 
 
 
504,069
 
 
 
52,291
 
 
 
864.0
%
 
 
225,294
 
 
 
225,294
 
 
 
129,101
 
 
 
74.5
%

Non-cash share based payments

 
 
–
 
 
 
569,227
 
 
 
2,016,803
 
 
 
(71.8
%)
 
 
–
 
 
 
2,006,067
 
 
 
3,128,417
 
 
 
(35.9
%)

Depreciation and amortization

 
 
1,076,774
 
 
 
1,076,774
 
 
 
680,056
 
 
 
58.3
%
 
 
3,103,847
 
 
 
3,103,847
 
 
 
1,945,186
 
 
 
59.6
%

Depreciation included in COGS

 
 
406,322
 
 
 
406,322
 
 
 
157,297
 
 
 
158.3
%
 
 
819,579
 
 
 
819,579
 
 
 
286,987
 
 
 
185.6
%

Interest and non-operating expense (income)

 
 
264,542
 
 
 
264,542
 
 
 
211,298
 
 
 
25.2
%
 
 
1,041,745
 
 
 
1,041,745
 
 
 
625,674
 
 
 
66.5
%

EBITDA

 
 
7,063,248
 
 
 
6,192,763
 
 
 
3,368,867
 
 
 
83.8
%
 
 
10,315,142
 
 
 
7,586,035
 
 
 
7,572,984
 
 
 
(0.2
%)

Margin

 
 
31.0
%
 
 
27.2
%
 
 
20.2
%
 
 
 
 
 
 
20.5
%
 
 
15.1
%
 
 
16.1
%
 
 
 
 

Expressed in USD$

 
Three Months
 
 
Three Months
 
 
 
 

 
Ended
 
 
Ended
 
 
Percentage
 

 
Sep-30-2020
 
 
Sep-30-2019
 
 
Change
 

Revenue

Revenues, net of discounts

 
 
22,797,338
 
 
 
16,696,932
 
 
 
36.5
%

Cost of Goods Sold

 
 
(9,821,561
)
 
 
(6,820,706
)
 
 
44.0
%

Gross Profit, Before Biological Asset Adjustment

 
 
12,975,777
 
 
 
9,876,226
 
 
 
31.4
%

Gross Profit Margin %

 
 
56.9
%
 
 
59.1
%
 
 
 
 

Realized fair value amounts included in COGS

 
 
(961,235
)
 
 
(562,461
)
 
 
70.9
%

Unrealized fair value gain on growth of biological assets

 
 
457,166
 
 
 
510,170
 
 
 
(10.4
%)

Gross profit

 
 
12,471,708
 
 
 
9,823,935
 
 
 
27.0
%

Gross Profit Margin %

 
 
54.7
%
 
 
58.8
%
 
 
 
 

Expenses

General and Administrative

 
 
6,198,121
 
 
 
4,902,355
 
 
 
26.4
%

Sales and Marketing

 
 
991,215
 
 
 
1,762,301
 
 
 
(43.8
%)

Depreciation and Amortization

 
 
1,076,774
 
 
 
680,056
 
 
 
58.3
%

Share based payments

 
 
569,227
 
 
 
2,016,803
 
 
 
(71.8
%)

Total Expenses

 
 
8,835,337
 
 
 
9,361,515
 
 
 
(5.6
%)

Income (Loss) From Operations

 
 
3,636,371
 
 
 
462,420
 
 
 
686.4
%

Other (Income) Expense:

Interest Expense, net

 
 
438,687
 
 
 
314,389
 
 
 
39.5
%

Realized Foreign Exchange gain (loss)

 
 
–
 
 
 
(6,203
)
 
 
(100.0
%)

Other expense (income)

 
 
(174,145
)
 
 
(96,888
)
 
 
79.7
%

Total Other Expense (Income)

 
 
264,542
 
 
 
211,298
 
 
 
25.2
%

Income (loss) for the period before tax

 
 
3,371,829
 
 
 
251,122
 
 
 
1242.7
%

Provision for income tax (current and deferred)

 
 
3,010,880
 
 
 
1,973,475
 
 
 
52.6
%

Income (Loss) for the period

 
 
360,949
 
 
 
(1,722,353)
 
 
 
(121.0
%)

Other Comprehensive Income (Loss)

Items that may be reclassified subsequently to profit/loss

Foreign exchange translation adjustment

 
 
(152,313
)
 
 
28,932
 
 
 
 
 

Net Comprehensive Income (Loss) for the period

 
 
208,636
 
 
 
(1,693,421)
 
 
 
 
 

Income (Loss) per share for the period

Basic and fully diluted loss per share

 
$
0.00
 
 
$
(0.01)
 
 
 
 
 

Weighted Average Number of Shares Outstanding

Basic and fully diluted

 
 
162,536,424
 
 
 
135,503,007
 
 
 
 
 

Outstanding Shares

As of November 24, 2020, the Company had 121,987,683 common shares and 55,232,940 class A convertible, restricted voting shares issued and outstanding for a total of 177,220,623 shares outstanding. There were 333,840 options issued and outstanding of which all have fully vested. There were 11,743,904 warrants outstanding and 1,764,250 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 Tuesday, November 24, 2020 at 5:00 p.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 24, 2020 | 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: 38726
Listen to webcast: https://bit.ly/358WpIA

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 13, 2020 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
 

 
September 30,
 
 
December 31,
 

 
2020
 
 
2019
 

Assets

Current Assets

Cash

 
$
56,760,860
 
 
$
12,814,712
 

HST receivable

 
 
63,860
 
 
 
16,544
 

Inventories (Note 5)

 
 
7,721,586
 
 
 
5,474,004
 

Biological assets (Note 6)

 
 
1,370,090
 
 
 
514,526
 

Prepaid expenses and other current assets (Note 10)

 
 
2,153,334
 
 
 
3,694,272
 

Total Current Assets

 
 
68,069,730
 
 
 
22,514,058
 

Property and equipment (Note 7)

 
 
31,638,285
 
 
 
30,211,154
 

Licenses (Note 8)

 
 
6,215,073
 
 
 
–
 

Right of use assets (Note 9)

 
 
18,520,944
 
 
 
9,478,733
 

Long-term deposits and other assets

 
 
1,031,352
 
 
 
694,601
 

 
 
57,405,654
 
 
 
40,384,488
 

Total Assets

 
$
125,475,384
 
 
$
62,898,546
 

Liabilities

Current Liabilities

Accounts payable (Note 16)

 
$
2,095,692
 
 
$
864,260
 

Accrued expenses

 
 
3,026,090
 
 
 
1,910,046
 

Income taxes payable

 
 
12,356,301
 
 
 
7,015,606
 

Notes payable – current portion (Note 11)

 
 
884,000
 
 
 
884,000
 

Total Current Liabilities

 
 
18,362,083
 
 
 
10,673,912
 

Long -term lease liabilities (Note 12)

 
 
20,437,005
 
 
 
10,522,377
 

Other long-term liabilities

 
 
28,000
 
 
 
28,000
 

Deferred tax liability

 
 
467,486
 
 
 
379,665
 

 
 
20,932,491
 
 
 
10,930,042
 

Total Liabilities

 
 
39,294,574
 
 
 
21,603,954
 

Shareholders' Equity

Share capital (Note 13)

 
 
101,809,657
 
 
 
51,986,849
 

Restricted share units (Note 13)

 
 
2,719,357
 
 
 
4,119,485
 

Warrants (Note 13)

 
 
7,753,818
 
 
 
5,961,091
 

Option reserve (Note 13)

 
 
311,401
 
 
 
399,439
 

Accumulated other comprehensive loss

 
 
(812,650
)
 
 
(607,707
)

Deficit

 
 
(25,600,773
)
 
 
(20,564,565
)

Total Shareholders' Equity

 
 
86,180,810
 
 
 
41,294,592
 

Total Liabilities and Shareholders' Equity

 
$
125,475,384
 
 
$
62,898,546
 

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

Expressed in United States Dollars

 
Three months
 
 
Three months
 

 
Ended
 
 
Ended
 

 
September 30,
 
 
September 30,
 

 
2020
 
 
2019
 

Revenue

Revenues, net of discounts

 
$
22,797,338
 
 
$
16,696,932
 

Cost of Goods Sold

 
 
(9,821,561
)
 
 
(6,820,706
)

Gross Profit before fair value asset adjustment

 
 
12,975,777
 
 
 
9,876,226
 

Realized fair value amounts included in inventory sold

 
 
(961,235
)
 
 
(562,461
)

Unrealized fair value gain on growth of biological assets

 
 
457,166
 
 
 
510,170
 

Gross Profit

 
 
12,471,708
 
 
 
9,823,935
 

Expenses

General and Administrative (Note 14)

 
 
6,198,121
 
 
 
4,902,355
 

Sales and Marketing

 
 
991,215
 
 
 
1,762,301
 

Depreciation and Amortization (Note 7 & 9)

 
 
1,076,774
 
 
 
680,056
 

Share-Based Compensation Expense (Note 13 and Note 16)

 
 
569,227
 
 
 
2,016,803
 

Total Expenses

 
 
8,835,337
 
 
 
9,361,515
 

Income (Loss) From Operations

 
 
3,636,371
 
 
 
462,420
 

Other Expense:

Interest expense, net

 
 
438,687
 
 
 
314,389
 

Realized foreign exchange loss

 
 
–
 
 
 
(6,203
)

Other income

 
 
(174,145
)
 
 
(96,888
)

Total Other Expense

 
 
264,542
 
 
 
211,298
 

Income (Loss) before income taxes

 
 
3,371,829
 
 
 
251,122
 

Provision for tax – current

 
 
2,620,603
 
 
 
2,172,429
 

Provision for tax – deferred

 
 
390,277
 
 
 
(198,954
)

Income (Loss) for the Period

 
$
360,949
 
 
$
(1,722,353)
 

Other Comprehensive Income

Foreign exchange translation gain (loss)

 
 
(152,313
)
 
 
28,932
 

Net Comprehensive Income (Loss) for the Period

 
$
208,636
 
 
$
(1,693,421)
 

Income (Loss) per share for the Period

Basic and diluted Income (loss) per share

 
$
0.00
 
 
$
(0.01)
 

Weighted Average Number of Common Shares Outstanding

Basic and Diluted

 
 
162,536,424
 
 
 
135,503,007
 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Expressed in United States Dollars

 
Nine Months
 
 
Nine Months
 

 
Ended
 
 
Ended
 

 
September 30,
 
 
September 30,
 

 
2020
 
 
2019
 

Operating activities

Net loss for the period

 
$
(5,036,208
)
 
$
(4,081,165
)

Add (deduct) non-cash items:

Share based payments (Note 13)

 
 
2,006,067
 
 
 
3,128,417
 

Depreciation and amortization (Note 7 & 9)

 
 
4,451,334
 
 
 
2,417,847
 

Deferred tax liability

 
 
87,821
 
 
 
(198,954
)

Deferred tax asset

 
 
–
 
 
 
–
 

Realized fair value amounts included in inventory sold

 
 
–
 
 
 
(759,856
)

Non-cash interest expense on ROU Liabilities (Note 12)

 
 
1,769,500
 
 
 
–
 

Net change in non-cash working capital

HST receivable

 
 
(47,316
)
 
 
77,473
 

Inventories (Note 5)

 
 
(2,247,582
)
 
 
422,949
 

Biological assets (Note 6)

 
 
(855,564
)
 
 
380,263
 

Prepaid expenses and other assets (Note 10)

 
 
1,540,938
 
 
 
(3,226,185
)

Long term deposits and other assets

 
 
(336,751
)
 
 
(85,000
)

Accounts payable

 
 
1,231,431
 
 
 
2,832,431
 

Accrued expenses

 
 
1,116,045
 
 
 
559,030
 

Income tax payable

 
 
5,340,695
 
 
 
5,737,738
 

Other liabilities

 
 
–
 
 
 
407,593
 

Cash flow provided by operating activities

 
 
9,020,410
 
 
 
7,612,581
 

Investing activities

Purchase of property, plant and equipment (Note 7)

 
 
(3,101,240
)
 
 
(12,682,554
)

Purchase of license (Note 8)

 
 
(1,053,353
)
 
 
–
 

Cash flow used in investing activities

 
 
(4,154,593)
 
 
 
(12,682,554)
 

Financing activities

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

 
 
16,941,543
 
 
 
3,965,736
 

Issuance of shares and warrants on financings

 
 
23,807,651
 
 
 
–
 

Payment on lease liabilities

 
 
(1,463,920
)
 
 
(50,614
)

Cash flow provided by financing activities

 
 
39,285,274
 
 
 
3,915,122
 

Net increase in cash

 
 
44,151,091
 
 
 
(1,154,851)
 

Cash at beginning of the period

 
 
12,814,712
 
 
 
19,364,086
 

Effect of foreign exchange on cash

 
 
(204,943
)
 
 
(106,122
)

Cash at end of the period

 
$
56,760,860
 
 
$
18,103,113
 

SOURCE: Planet 13 Holdings Inc.

ReleaseID: 618215