Following the market close on Monday, Indus Holdings, Inc. (OTCQX: INDXF)reported its financial results for the third quarter ended September 30, 2020, with revenue at $14.1 million. This was a 40% year-over-year growth from the third quarter last year and an increase of 43% from the prior quarter. As a percentage of revenues, owned brands grew from 73% in the prior quarter to 84% in the third quarter. Net income for the quarter was $2.4 million, compared to a net loss of ($4.8 million) in the second quarter. It was a huge improvement over last year’s net loss of $19 million for the same time period.
“Despite the headwinds caused by the wildfires, our Q3 results are the direct result of a strategy that prioritizes increased cultivation output and the Indus family of owned products,” says Mark Ainsworth, Chief Executive Officer for Indus Holdings, Inc. “While exceeding our expectations for the quarter, our performance was well short of where we could have been but for the impact of the wildfires and we are taking steps to be better prepared in the future.”
Indus updated investors on the effects of the fires that devastated the West coast. During the third quarter, the company said it experienced harvest weights that were on average 20% below the second-quarter levels. The company attributed the declines to remediation measures the company adopted to avoid crop-loss during the wildfires. Indus said it did increase in total flower harvest volumes during the quarter due to the increased number of harvests resulting from the expansion efforts in the first half of the year. Indus also said it expects that harvest yields will remain suppressed into the fourth quarter as the company works through the plants in the greenhouse that were impacted by the remediation measures. Indus said it is implementing automated environmental controls to mitigate similar losses in the future.
Indus Brand Updates
Indus owned brands continued to gain market share by strategically expanding in a variety of categories in the third quarter of 2020:
- Flavor grew 71% from Q2 to Q3.
- Original Pot Co. successfully launched two additional new baked good SKUs in Q3 and grew 42% from Q2. Allowing the team to penetrate in over 70 net-new dispensaries and garnered the highest month of revenue for the brand to date.
- Moon, a chocolate edible brand, continues its position in the top three highest selling brands in cannabis-infused chocolates according to BDS Analytics.
- Moon launched four different SKU’s from its highly anticipated gummy line, the first expansion into gummies for the brand.
- Cypress brand sales grew by 42% from Q2 to Q3.
- Due to our cultivation producing higher-quality flower, Indus’ flower continues to fill the void in the market for a higher demand in potency at a competitive price.
The company also announced that Brian Shure was appointed as Chief Financial Officer. He is currently a Board member and Chairman of its Audit Committee. Steve Neil will remain with the company in a senior capacity and will focus his efforts on preparing the company for a potential US registration and other important initiatives in addition to supporting the incoming CFO in his transition.
“The turnaround at Indus has been the result of huge efforts by a highly talented team,” said George Allen, Chairman of the Board of Indus Holdings, Inc. “Not only has Indus solidified its market position as a dominant force in the cannabis industry, but the organization has positioned itself for greater success in the coming fiscal year.