On March 13, 2024, Planet 13 Holdings Inc (PLNH, Financial), a leading vertically-integrated cannabis company, released its 8-K filing, disclosing its financial results for the fourth quarter and full year ended December 31, 2023. The company, known for its award-winning cultivation, production, and dispensary operations, faced a challenging quarter with a decrease in revenue and an expanded net loss, which included a significant non-cash impairment loss.
Planet 13's Q4 2023 revenue fell to $23.0 million, a 7.5% decrease from the same period in the previous year. This decline was attributed to lower sales at the SuperStore and a reduction in wholesale revenue in Nevada. Despite the revenue dip, the company improved its gross margin to 47.8%, up from 43.0% in Q4 2022, due to a decrease in product discounting at retail. Operating expenses saw a significant decrease of 60.5%, reflecting the company's effective cost management strategies.
However, the net loss for the quarter widened to $14.3 million, compared to a net loss of $49.2 million in the prior year. This included a non-cash impairment loss of $7.2 million. On a positive note, Adjusted EBITDA for Q4 2023 was $1.3 million, a substantial improvement from the Adjusted EBITDA loss of $0.6 million in Q4 2022. The Adjusted EBITDA margin also saw an increase due to better gross margin performance and strong cost control.
Full-Year Financial Performance
For the full year 2023, Planet 13 reported revenues of $98.5 million, a 5.8% decrease from the previous year. The company's gross profit remained relatively flat, with a slight decrease to $44.8 million from $48.0 million. Total expenses for the year included a one-time, non-cash impairment of $46.8 million. Excluding this impairment, total expenses were $59.1 million. The net loss for the year increased to $73.6 million, up from a net loss of $59.6 million in the previous year, primarily due to the impairment charge. Adjusted EBITDA for the full year was $1.4 million, compared to an Adjusted EBITDA loss of $7.5 million in the previous year.
Planet 13's balance sheet showed a cash position of $17.3 million, a decrease from $38.8 million at the end of 2022. Total assets stood at $151.7 million, while total liabilities were $44.1 million as of December 31, 2023.
Operational Highlights and Strategic Moves
Despite the financial headwinds, Planet 13 maintained a strong presence in the Nevada market, holding approximately 9% of the state's retail market share. The company also made strategic moves, including the acquisition of VidaCann, which positions Planet 13 for growth, especially with the potential for adult-use cannabis in Florida.
Throughout the quarter, Planet 13 made several key announcements, including the opening of a new dispensary in Waukegan, Illinois, and the introduction of Koolsville Tattoo at the SuperStore. The company also sold a redundant Medical Marijuana Treatment Center License in Florida and expanded its leadership team and board.
Planet 13's Co-CEOs, Larry Scheffler and Bob Groesbeck, expressed satisfaction with the company's ability to maintain solid revenue and positive Adjusted EBITDA amidst economic uncertainties and pressure on cannabis prices. They highlighted the company's resilience and brand appeal in Nevada and its strategic positioning for future growth opportunities.
Value investors and potential GuruFocus.com members interested in the cannabis industry may find Planet 13's efforts to navigate a challenging market and its strategic positioning for future growth to be of particular interest. The company's focus on maintaining market share and expanding gross margins, despite revenue declines and net losses, demonstrates a commitment to long-term success.
For more detailed financial information and operational insights, investors are encouraged to review Planet 13's full financial statements and accompanying notes, as well as the Management's Discussion and Analysis for the year ended December 31, 2023, available on the SEC's website and the company's investor relations page.
Explore the complete 8-K earnings release (here) from Planet 13 Holdings Inc for further details.
