Plus Products Inc. (CSE: PLUS) (OTCQX: PLPRF) (the “Company” or “PLUS”), a cannabis branded products company in the U.S., today released its unaudited financial and operational results for the three months ended June 30, 2021, expressed in U.S. dollars. These filings are available for review on the Company’s SEDAR profile at www.sedar.com and on the Canadian Securities Exchange (the “CSE”) website at www.thecse.com.
Q2 2021 Financial Highlights
- Revenues: Net revenues increased 12% year-over-year in the three months ended June 30, 2021 to $4.83M, as compared to $4.33M for the three months ended June 30, 2020. Net revenues during the period represent the most sales by the Company in a single quarter. During the period, the Company leveraged the benefits of a self-service distribution partner in California and expanded product offering to increase sales. The Company continues to sell its products in the Nevada THC market and nationwide across its hemp-derived CBD lines.
- Gross Profits: Gross profits in Q2 2021 increased 24% year-over-year to $1.94M as compared to 1.57M in Q2 2020. The increase was due, in part, to greater sales volume combined with operating efficiencies and productivity improvements in the California production facility. Gross profit margin for the period increased year-over year to 40%, as compared to 36% in Q2 2020.
- Operating Profits (Losses): The loss from operations was $0.95M in Q2 2021 as compared to $1.36M in Q2 2020, an improvement of 30% year-over-year. In Q2 2021, the Company more efficiently leveraged advertising, promotion and consulting fees to support the business, while also reducing professional fees.
- Cash Balance: The Company reported $6.69M in cash and cash equivalents at June 30, 2021. This cash balance has also been adjusted to reflect the Company’s semi-annual interest payment of $0.87M occurring at the end of the period.
Q2 2021 Business Highlights
- In April, the Company announced the completion of the previously announced conversion of certain 12.00% secured debentures due February 28, 2024. Debentures in the aggregate principal amount of CAD$4,990,000 (4,990 Debentures) were converted into 5,252,631 Subordinate Voting Shares issued from treasury at a conversion price of CAD$0.95 per share. In addition, accrued interest up to the conversion date in the aggregate amount of CAD$118,096.66 was paid to the former holders of the Debentures subject to conversion.
- Also in April, the Company announced the launch of its PLUS Hash Gummies in concert with Biscotti Brands, a premium hash brand.
- Also in April, the Company announced that its amended debentures were approved for listing on the CSE under the symbol “PLUS.DB.A”.
- In June, the Company announced the re-launch of its best-selling limited edition gummies for Pride 2021, with a portion of proceeds from each tin sold being donated to the Transgender, Gender-Variant and Intersex Justice Project.
- Also in June, the company announced it had filed an Early Warning Report as required by National Instrument 62-103 on behalf of Matt Schmidt regarding his holdings in the Company in connection with an acquisition of Class B Common Shares issued pursuant to Restricted Stock Units awarded to Mr. Schmidt.
- Also in June, the Company announced the resignation of Director Matt Schmidt.
Post-Period End Business Highlights
- In July, the Company announced the release of a second batch of its limited edition PLUS Hash Gummies, made in concert with Biscotti Brands, a premium hash brand, following substantial consumer and retailer demand for the initial product release.
Management Commentary
“We are happy to demonstrate that our revenues are back on the correct trajectory following the one-time accounting changes in Q1 2021. In Q2 2021, we had the highest revenues as a company thus far. We have been successful in our transition to a fulfillment-only distributor in California, and see that change reflected positively in this quarter’s results. In addition to the progress with our new distribution partner, we have continued to gain momentum with our fully-internalized sales team along with our special-edition and collaborative offerings,” stated Jake Heimark, Co-founder and CEO.
“PLUS continues to believe that California is the most strategically valuable market to build a cannabis brand. Not only is California the largest legal Cannabis market in the world today, but more importantly still retains the most growth potential of any market in the U.S. The adult-use market in California is expected to grow significantly over the next three years. With a projected market size of 6.4 billion dollars in 2025, California is expected to be over twice as large as the next largest U.S. market.1
“We look forward to expanding and solidifying our position as one of the strongest brands2 in a California market that we believe will be instrumental in shaping the long term winners in the national and international cannabis market.”
- BDS Analytics Forecast – February 2021 (Colorado – $2.7B)
- According to PLUS’s – Brightfield Brand Health Survey – Wave 2: December 2020; N=1,535 CA edible consumers PLUS had the highest unaided brand awareness among edible users in California.
Conference Call Details
At 6:00 pm Eastern Time / 3:00 pm Pacific Time today (August 4, 2021) the Company will host a conference call and webcast to discuss the financial results and its recent corporate highlights.
Participant Dial-In Numbers:
Toll-Free: (866) 220-4156
Toll / International: (864) 663-5231
*Participants should request the Plus Products Earnings Call or provide conference ID: 7684223
Please dial-in or log-on to the webcast at least 10 minutes before the start of the call
The call will also be webcast at https://edge.media-server.com/mmc/p/9riujrjb. Please visit the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. Following the conclusion of the call, there will be an archived audio webcast of the conference call available for replay on the Company’s website at PlusProductsInc.com.
Jake Heimark, Co-founder and Chief Executive Officer, and Tessa O’Dowd, Chief Financial Officer, will be conducting a question and answer session following the prepared remarks.
