Planet 13 Holdings Inc (NASDAQ:PLTH) Q4 2019 Earnings Conference Call - Final Transcript

Apr 14, 2020 • 05:00 pm ET

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Planet 13 Holdings Inc (NASDAQ:PLTH) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Larry Scheffler

[Technical Issues]

Make the online transition. This is an opportunity for us to become a staple in the lives of the Las Vegas Valley that will last well beyond this crisis.

Through April, we were generating an average of over $80,000 per day in delivery revenue. We believe that once we've added additional drivers, we can move that number easily north of $100,000 per day. This is new revenue for Planet 13 and on top of the 40-ish percent revenue growth that was being driven by Phase II prior to the shutdown. As everyone knows historically, 50% of our revenues come from locals. 100% of our revenue today is coming from residents of the greater Las Vegas Valley. We're optimistic we can retain many of these new customers even after dispensaries reopen and life returns to normal.

With all that said, I'll pass it off to Dennis to discuss our financials and our current daily revenue numbers.

Executive
Dennis Logan

All right. Thanks, Larry. And before I begin, I'd just like to remind everyone that all numbers discussed on today's call are stated in US dollars, unless specifically stated otherwise. So Q4 feels like a lifetime ago for most of us, and everyone is focused on the current operating environment, so let me get right into what the picture looks like today.

As of March 31, 2020, Planet 13 had approximately $14 million in cash. We are in an enviable position -- financial position and are able to withstand any short-term disruptions. As Larry mentioned, we are now up to over $80,000 per day in revenue from delivery operations and have been able to maintain our gross margins in excess of 50%. We've made the appropriate cost reductions in response to the closing of the SuperStore retail dispensary, bringing down our variable cost significantly. And if we can get to our forecasted number of $100,000 in the daily revenue that we are modeling, at least we should be cash flow breakeven for a full 12-month period, if the current situation continues.

I would like to note that Planet 13 is able to operate both its cultivation and production facilities during the shutdown, and we've built up sufficient inventory of our own in-house branded products to meet customer demand. We have modeled several different scenarios to gauge the COVID-related impact on our business and believe we are nimble and have the flexibility to adapt and manage through each scenario accordingly.

We have suspended all non-essential capital expenditures until we have clarity on the length of the time our dispensary will be closed and any potential secondary impact the shutdown has on operation. The biggest project that was underway was our Santa Ana expansion that we have terminated, and we have invited the vendor back to the negotiating table to negotiate a revised agreement in line with the current market environment in California.

I will let Bob talk further about this, but for now, we have pared back expenses, reduced our fixed costs and expect that