Earnings call transcript Q2 2023

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Operator

Greetings. Welcome to the Planet 13 Second Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Mark Kuindersma.

You may begin.

Mark Kuindersma

you. Thank and us everyone for thanks afternoon, today. joining Good XXXX were released XX Holdings' results quarter second Planet today. financial website, available press The release, the well are MD&A our website, the XX-Q, SEDAR planetXXholdings.com. SEC as on on report, including company's the financial and EDGAR as and quarterly statements

of expectations to management's today's encourage conference of include Before The forward-looking are that the like listeners with and in the forward-looking to affect of call. call could results We or portions as circumstances that this statements management, over are and statements pass conjunction listeners be date on prove of with that United this are detailed can statements. SEDAR. the States made made results information available Securities I such company's developments, Exchange we'd that will or or to in in no Commission call remind to Risk There filings that today's estimates discussion materialize. accurate those be factors the assurances call. read future public will

these and As results of materially events. actual events statements may risks the result uncertainties, differ from or the or predicted a in results forward-looking

non-GAAP will In both addition, financial refer measures. GAAP we and to

financial during measures results unless dollars are For to the GAAP XX's are measure, the presented our indicated. today's on and and information please call in dollars discussed press non-GAAP statements regarding most in our financial otherwise Planet website. refer to U.S. reconciliations directly comparable this release U.S. posted

pass of Holdings. Larry Logan, CFO. Groesbeck, XX Scheffler, the and now Bob Dennis and have Co-Chairman Co-CEO; Larry we today, will to Planet and Scheffler, call over call Co-Chairman the On Co-CEO I Co-CEO;

Larry Scheffler

from core generated quarter we our improvements participating growth SuperStore, This curbside incremental by business and strong market. Nevada, made and second revenue in we afternoon, sequential and from for the Nevada QX, in revenue $X.X over generated business. pricing, in improvement an $X.X a for our Nevada seasonality driven from traditional from rate as XXXX growth sequential delivery our thanks $XX the position solid million Good driven stabilized competitive pricing In X% medicine. we call. Planet XX's by million QX in and and Overall, a second in quarter with million is we've retail, had everyone to

so picked of From total in goal up we we the the Nevada to market and continue data -- have of X% we picked we above market the far, share market. share our quarter exceed our long-term maintaining

generated million In consider and in This was addition $XX.X to quarter we $X.X the a compared of to wholesale sequentially. Nevada from Total other, QX sales, QX year-over-year. a Nevada sales you X% approximately XXXX. million is of $XX.X million X% QX retail especially growth increase This $XX.X statewide was million in in XXXX third impressive with for when XX%. down Nevada of are year-over-year consecutive growth our wholesale revenue

September XXXX, driven our the go The cycles and more rooms. build its new a facility expansion in Bell we improving has to wholesale as the continuing yields of Drive which our in through products of the rest growth in reputation state mix been in a and completed potency by planning

between was HaHa every QX across margin position outside continue wholesale, maintained brand moved to facility number The in concentrate sellers up spot successfully retail Per We're Medizin one brands to XX top the Nevada. number brand and our across own all to the expand state. the BBSA, premium the be category vape continue this by as behind QX, categories ability and was of given brand, Wyld Wana. wide In TRENDI cannabis of chocolate additional and X largest and a like in to of the us the playing only the Medizin candy top in major shelves. brands our number brands. national the its and and has yields from X owned Dreamland X be [ph] flower flower be major presence performers X large our product

which launched ahead and just for in ordering, our prompts Looking new loyalty we Planet Nevada, with XX help will customers. app marketing proactive online delivering

Las the expect in massive drivers and We our service huge billion staffing especially with for during are working $X.X in respectively of $X.X customers the benefit large Southern improving improve and February more we forecasted more as November of will billion, this customers, are to impacts and Vegas. constantly events to faster hosted be these in traffic are FX be times and in regular helpful reducing This Nevada more main to throughput These Super economic spikes. and events Bowl for order like ability needs.

expect we October as QX into line we in roughly expected be in Overall, head with slower QX traffic to to with QX. decrease seasonality

and further coping We are rates inflation. are that successfully current cautiously interest macro higher the that environment uncertain optimistic with won't and consumers deteriorate the

$X to In overall Turning revenue $X.X retail $X.X million driven continue Wholesale XXXX. and breaks XXXX fluctuations in $X.X dynamics retail, we from top XXXX. and $X.X compared million XXXX. QX, declined million down QX market to to California. with statewide macro pricing. due from This pricing by will $X.X to trends million see sales in line into California to QX from million during volume primarily for QX million the in the line with generated in from revenue wholesale wholesale quarter compared QX

on through in improving focus in both gains is California retail efficiency operations. variable and wholesale Our costs

discuss With our I'll to Dennis that, pass it to over financials.

Dennis Logan

Larry. you, Thank

sequentially to year-over-year deal in million market. $XX.X in sales in QX compared specifically call lower a overall everyone continue In in today's X% QX down like generated just U.S. on revenue unless I'd that stated compression we all begin, 'XX, million volume to $XX.X I in dollars our X.X% significant core growth stated revenue otherwise. are 'XX, the as numbers we with remind price but and Nevada still to Before

California Nevada year-over-year XX%. For down down were state statewide comparison, of the entire sales sales and X% were

for seasonality. line in QX our results with sales relatively a with flat 'XX sequentially of performance expectations are due some increased Our to

XXXX through in by the performance that the impact of with our end year dispensary a driven in We relatively XXXX. Illinois near on will the year and operations the growth expect results have flat of opening of greater further end the a

compression In control result we yield owned our XQ good The facility, increased rates gross XXXX, brands 'XX. at QX margins XX%, higher reaching XX.X% and both again, in a from utilization and our cultivation increase improvements cost for of was our up sequential of which fluctuations will operations this between see quarter-to-quarter gross and We've margins. productivity cause on for our products retail purchasing profit as purchased. and in in gains which some helped we continuous also battle price gross improved with has a

Las our improved and This to of California. the a activities. marketing continue margins modest We in gross $X.X expense sales sign for XXXX expense is efficiency improvement quarter ratio, the at low-XXs to at high-XXs Sales in our target QX operations marketing in marketing million. in the the and be was with to Vegas of consistent retail a

We on continue new we'll this traffic evaluate conventions quarter. through of running to from assessing out and QX events and marketing sales further our after tourist expect impact in level the in the QX and

approved million, is G&A a on the spent AGM. to planning company related $XX shareholders the $XX.X at event. This approximately our U.S. $XX.X on QX $XXX,XXX by the million million The XXXX. onetime for of which was in to compared G&A was Of domestication

accretive and pursuit $XXX,XXX would market that We in to manner Nevada. a for also our continued in spent activities our scale time approximately of in M&A Florida speed cost-effective increase

structure. not cost of While it item, our regular this operating is is not part strictly a onetime

our clear, be M&A that flow consistent with are the that cash X year. advance we goal To at strategic flow through not laid net adding and prioritizing new and company-wide looking position, our -- on existing in This our competitive the of states profitability the only out focus beginning markets. at goals we acquisitions but cash is

a had XX, half with the million first a no of consumed to XXXX, million the position, the of balance see in of rest we we $XX.X operating and As Through across healthy debt, June the $X.X of compared flow sector. cash cash balance the the year, especially sheet changes distress investing that our as mainly continue gray the and consumption to shelf $X.X creating to working our used dispensary for spent Illinois million of capital out our build about $X tax income in lounge activities inventory. of We and we million on for cash payments and Cannabition. related position, company of

position and on strong our by and the in in core costs a traffic rebound while as who balance incur As parties cost will will second the run Between projects heading the upcoming be running the third drive low the the us museum focusing majority flow of of to SuperStore, the our a are in good the of operations. XXXX. This growth markets, fixed of planned sales half into reminder, completion we priority. sheet, cash additional utilization of keeping Cannabition the building and allows increase

turn with discuss that, ongoing growth And the I'll and our to over Bob call initiatives corporate to strategy.

Bob Groesbeck

Dennis you, update good at outlined and on beginning spend delivering the providing like how afternoon, everyone. year. to an my deliverables on we I'd call the time against the the X Thank we're of

maintain core. was one The build and first to on the

north about sales X% target. we QX, market of of gained During X% year retail full our and share kept our market share total

X and the to our app of also are these of the We will additional new cultivation revenue exciting cannabis just of and as wholesale go. become in launched customer. grew productive. are more completing expansion revenue continues e-commerce traffic All loyalty Nevada our museum per where and We our drivers lounge process and space

will to the entertainment renowned help The worldwide. plans brand destination produce, are Director, excited XX one-of-a-kind David Planet name are further build they a the returning immersive be Cannabition for as have establish Planet We XX Korins. under Creative very Broadway and

expand of final state depending entertainment. as similarly in live activities. there to engaging the the watching We consume while legal space is and to XXXX, entertainment my appeal this or approvals. Cannabition will issued be destination a expected were cannabis where Construction completed be lounge the QX our you for can course, both launches shortly cannabis knowledge, for will lounge first for afterwards, and immersive The on in XX's of with first other and both license lounge; Planet

is goal operating second to scale and leverage. The increase

dispensary progressing on and late budget. on opening is XXXX track Our Illinois is for in QX

are extremely We excited location. this for

think will addition our store to I great our location be and robust Waukegan portfolio. market a the adult-use Illinois in

and be In the is position right the any due and M&A conduct operations fit take opportunity plan current of to financial environment, the asset. as our the to is overall As we are Nevada. increasing of touched scale as our cost-effective an pursuing Dennis scale, we Planet increase at in in up is attractiveness at All XX aimed market Florida time M&A are make and operating M&A diligence profitability M&A company. crucial for time to on we it the deliberative a We any looking speed target. to to and sure on, rigorous our

and Third goal profitability capital. preserve is to improve flow cash and

saw the During margin improvements second made. gross quarter, the some we in from improvements we've

paid, while We in flow professional cash for an breakeven the also up cash to cash improvement and date staying usage the on payments. are saw essentially our in fees quarter, excluding

revenue half that is total macro that the burning uncertain that first are smaller year, we there was the aren't many debt-free, our pleased Through on in and well the tax paid some have we're are stability sheet While with cash. despite obligations initiatives. of progressing of environment cannabis our seeing isn't growth others balance on than and most a the companies, up Nevada

dispensary will museum half Illinois end followed SuperStore at year of lounge completion are for and the and cannabis the year of the new be XXXX expected While the quo, the the excited of location. relatively by when launch and consumption we'll status we our opening back

I'll thank participating. for analysts. call again, with for from And covering the And open you that, questions

Planet 13 (PLNH) 9 Aug 232023 Q2 Earnings call transcript