Plus Products Generates $3.7 Million Revenue in Q3

Plus Products Reports Third Quarter 2020 Financial Results

PLUS achieves 40% gross margins and first adjusted-EBITDA positive month

San Mateo, CA – November 23, 2020 – 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 September 30, 2020, 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.

Q3 2020 Financial Highlights

  • Revenues: Net revenues reached $3.7M in Q3 2020, up from Q3 2019 net revenues of $3.5M. During the period, the Company continued to have strong cannabis revenues in the California adult-use market with contributions from the Nevada adult-use market and its national hemp CBD product line. In July, the Company increased the wholesale price of its core product line, resulting in a temporary slow-down in sales during the first two months of the period. The Company exited the period with strong sales in the final month and expects Q4 2020 net revenues to exceed $4.0M.
  • Gross Profits: Gross profits climbed to $1.4M in Q3 2020, up from $0.5M in Q3 2019. Gross profit margin was 40% in Q3 2020, up from 13% in Q3 2019. Reduced costs per unit derived from operating at increased scale, along with a higher average selling price per unit, continues to drive the improvement in profitability.
  • Operating Profits (Losses): Operating losses were $(1.5M) in Q3 2020, representing an 84% improvement year-over-year from $(9.5M) in Q3 2019.
  • Cash Balance: The Company reported $12.6M in cash and cash equivalents at September 30, 2020. Cash and cash equivalents fell by $0.4M during the third quarter.

Q3 2020 Business Highlights

  • In July 2020, the Company announced the launch of its new HI-CUBES brand. With 10mg of THC packed into each 5 calorie serving, HI-CUBES are the most concentrated gummy products available by volume within the California market.¹ Manufactured with 100% whole-plant full-spectrum oil, the product delivers an array of cannabinoids, flavonoids and aromatic terpenes to create a powerful effect for consumers looking for an intense cannabis experience.
  • In September 2020, the Company further expanded its product offering by releasing its new PLUS SLEEP brand into the California adult-use market. Containing THC, CBD, CBN, and melatonin, the new product targets the 71% of cannabis sleep aid users who are not satisfied with their current remedies.²
  • In September 2020, the Company achieved its first EBITDA-positive month (adjusted for stock-based compensation), marking a significant milestone in the Company’s path to sustained profitability.

Management Commentary

“The third quarter was an exciting period for PLUS as we continued our steady progress towards profitability, achieving 40% gross margins for the first time and consuming just $0.4M in cash,” stated Jake Heimark, Co-founder and CEO.

“Commercially, we took significant steps in expanding our product portfolio in both size and purpose with two new product launches. We delivered the most concentrated cannabis gummy in the California market to consumers with our HI-CUBES product line,¹ a launch that was followed shortly by the introduction of our first line of sleep-focused products. A majority of consumers looking for cannabis-centric sleep aids are still unsatisfied,² a finding made clear by the success of PLUS SLEEP, which sold into over two-hundred accounts during the first two months following its launch.

“While sales in the third quarter were not as robust as the first half of the year, we believe the short-term slow-down in sales, mostly attributable to the price increase on our core product line, will be well worth the improved unit economics and long-term sustainability of the PLUS brand on shelves.

In Nevada, despite manufacturing complications during the initial wave of COVID-19 restrictions, PLUS achieved over $1.5M in retail sales during its first year on shelves while maintaining a spot as a top-5 brand in a market with over 50 competitors.³

Jake Heimark, Co-founder and CEO

With the expectation of profitability on the horizon, over $12.5M in cash on hand, and one of the leading edibles brands in the industry’s largest legal market, we believe PLUS is poised for continued growth over both the short and long term.

8% Unsecured Convertible Debentures

PLUS is actively working towards a solution to address the maturity of the Company’s 8% unsecured convertible subordinated debentures (the “Debentures”) totaling CAD$25M that mature on February 28, 2021 and expects to engage PI Financial Corp. to support its efforts related to this matter.

COVID-19 Update

In March 2020, there was a global outbreak of COVID-19, which continues to rapidly evolve. The extent to which the virus may impact the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence. The ultimate geographic spread of the disease; the duration of the outbreak; travel restrictions; social distancing; business closures or business disruptions; and the effectiveness of actions taken in the United States and other countries to contain and treat the disease all remain unknown.

While cannabis has been deemed an essential business throughout most of California, it is still too early to understand how COVID-19 will ultimately impact PLUS or the market as a whole. To date, the Company has not seen a sustained downside impact on consumer demand in its core California market and has been able to fulfill orders without interruption. The Company believes it has been well prepared to respond to this crisis. Please visit plusproductsinc.com/coronavirus to see the actions PLUS has taken to respond to this unique challenge.

1 According to internal market research
2 BrightField Consumer Survey (July 2020)
3 Headset.io over the last twelve months

Conference Call Details

At 5:00 pm Eastern Time / 2:00 pm Pacific Time today (Monday, November 23, 2020) 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: 1087279

Please dial-in or log-on to the webcast at least 15 minutes before the start of the call

The call will also be webcast at https://edge.media-server.com/mmc/p/sqg6kpjg.

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 Nate Pearson, Chief Financial Officer, will be conducting a question and answer session following the prepared remarks.

About PLUS

PLUS is a cannabis branded products company focused on using nature to bring balance to consumers’ lives. PLUS’s mission is to make cannabis safe and approachable – that begins with high-quality products that deliver consistent consumer experiences. PLUS is headquartered in San Mateo, CA.

Original press release

Published by NCV Newswire
NCV Newswire
The NCV Newswire by New Cannabis Ventures aims to curate high quality content and information about leading cannabis companies to help our readers filter out the noise and to stay on top of the most important cannabis business news. The NCV Newswire is hand-curated by an editor and not automated in anyway. Have a confidential news tip? Get in touch.

Get Our Sunday Newsletter

#mc_embed_signup{background:#fff; clear:left; }
/* Add your own MailChimp form style overrides in your site stylesheet or in this style block.
We recommend moving this block and the preceding CSS link to the HEAD of your HTML file. */


Latest posts