Plus Products Q1 Revenue Increases 36% Sequentially to $4.7 Million

Plus Products Reports First Quarter 2020 Financial Results

SAN MATEO, Calif., May 28, 2020 (GLOBE NEWSWIRE) — 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 March 31, 2020, expressed in U.S. dollars. These filings are available for review on the Company’s SEDAR profile at and on the Canadian Securities Exchange (the “CSE”) website at

Q1 2020 Financial Highlights

  • Revenues: Net revenues climbed to $4.7M in Q1 2020, representing 46% year-over-year growth as compared to Q1 2019 net revenues of $3.2M and 36% quarter-over-quarter growth as compared to Q4 2019 net revenues of $3.5M. The Company continues to see revenue growth driven by its core operations in the California adult-use market, with contributions from the Nevada adult-use and national hemp CBD markets. In December 2019, the Company transitioned to a new California distributor, HERBL Distribution Solutions. This transition caused some sales, which otherwise would have taken place in December 2019, to be delayed until January 2020.
  • Gross Profits: Gross profits grew to $1.7M in Q1 2020 compared to $0.7M in Q1 2019. Gross profit margin in Q1 2020 was 35%, up from 21% in Q1 2019. Higher sales volumes and increasing operational efficiencies in the Company’s California production facility diminished the growth of labor and overhead costs relative to sales, thereby increasing gross profits.
  • Operating Profits (Losses): Operating losses were $(2.1)M in Q1 2020, representing a 31% improvement year-over-year from $(3.0)M in Q1 2019 and a 75% improvement quarter-over-quarter from $(8.2)M in Q4 2019. The Company implemented workforce reductions in Q1 2020 and required fewer upfront investments tied to new market entry than previous quarters, thus reducing its operating losses.
  • Cash Balance: The Company reported $14.2M in cash and cash equivalents at March 31, 2020. The Company made significant changes to its business in Q1 2020 to improve cash flow. As a result, cash and cash equivalents fell by $1.0M in Q1 2020, an 86% quarter-over-quarter improvement as compared to the Q4 2019 decrease of $7.1M. The Company experienced some one-time operational benefits to cash and cash equivalents in Q1 2020, but still anticipates a significantly lower rate of cash consumption in 2020 than in 2019.

Q1 2020 Business Highlights

  • In February 2020, the Company entered the wellness and relief segment of the California adult-use market with the introduction of its PLUS CBDRelief brand. The launch represents a significant extension beyond the core PLUS lineup. The new PLUS CBDRelief products were designed with low THC and high CBD ratios to serve the roughly one-third of consumers in the market that are looking to cannabis for relief.¹ The new brand has already been picked up by over 175 licensed retailers across the state.
  • In March 2020, the Company announced a series of material changes to the business in an effort to prioritize an accelerated path towards becoming cash flow generative and continuing to establish itself as a leader in the California edibles market. These changes included workforce and salary reductions, as well as the conclusion of marketing agreements related to non-core businesses. In the first quarter, PLUS consumed $1.0M in cash and cash equivalents with $14.2M remaining on hand at March 31, 2020.

Management Commentary

“The start of this year came with a number of difficult decisions that were made in order to accelerate our path to cash flow generation,” stated Jake Heimark, Co-founder and CEO. “The changes we made helped to cut our cash consumption to less than a fifth of what it was last quarter and, critically, doing so did not undermine our core business which grew more than 35% quarter-over-quarter.

“Our first quarter financial results paint the picture of a much healthier business than previous quarters, but the work is far from done. In 2020, we are focused on leveraging our core capabilities to create capital-efficient growth through known distribution channels.

“To kick off this new strategic direction, we launched a second gummies brand, PLUS CBDRelief, mid-way through the first quarter. The new product line, which was developed with minimal capital investment and is designed to serve a subset of cannabis consumers not currently reached by the core PLUS brand, has already sold into over 175 licensed retailers.

“The rapid success of this initiative is a testament to both PLUS’s reputation for manufacturing innovative, high-quality products and the broad market reach we have built through years as a trusted leader in the California cannabis branded-products space.²

“The majority of our growth initiatives in 2020 will be centered around California. Despite experiencing some growing pains, we believe that California unequivocally remains the most valuable market for building a branded products company in cannabis. In 2019, the state made up 38% of the global adult-use market and is expected to remain 24% of that market through 2024.³

“With the two best-selling products in the state, and one of the largest brands in the California edibles market, we believe that we have established an exceptionally valuable position as a company.4 We are excited to take steps that we believe will continue to grow that position throughout the course of this year.

“In 2020, our strategic initiatives are built around three critical objectives: 1) ensuring the safety and health of our employees, customers, and partners during this pandemic; 2) establishing ourselves as the clear, long-term leader in California edibles; and 3) becoming a cash-flow positive business. We believe we are already executing on all three.”

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 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 is well prepared to respond to this crisis. Please visit to see the actions PLUS is taking to respond to this unique challenge.

(1) According to proprietary research conducted through HJR Associates, a third-party firm contracted by the Company
(2) PLUS had the largest gummies brand and two best-selling cannabis products in California for 2018 and 2019 according to BDS Analytics
(3) According to Arcview | BDS Analytics – State of the Legal Markets 7th Edition
(4) According to BDS Analytics for 2019

Conference Call Details

At 5:00 pm Eastern Time / 2:00 pm Pacific Time today (Thursday, May 28, 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: 4754548

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 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

Jake Heimark, Co-founder and Chief Executive Officer, and Jon Paul, Chief Financial Officer, will be conducting a question and answer session following the prepared remarks.

About PLUS

PLUS is a cannabis and hemp food 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.

Non-GAAP Measures:

Adjusted uncompressed weighted average shares outstanding and loss per share.

The Company has additionally determined the adjusted uncompressed weighted average shares outstanding and loss per share, basic and diluted. The Company believes these measures to be representative of loss and comprehensive loss on a per share basis; however, these performance measures have no standardized meaning. As such, there are likely to be differences in the method of computation when compared to similar measures presented by other issuers. Management believes that, in addition to conventional measures prepared in accordance with GAAP, some investors use this information to evaluate the Company’s performance. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Original press release

Published by NCV Newswire
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