KushCo Revenue Better Than Originally Forecast

KushCo Holdings, Inc. (OTCQX:KSHB) reported preliminary and unaudited financial results for its fiscal fourth quarter ended August 31, 2020 with revenue expected to be between approximately $25.5 million and $26.0 million, compared to approximately $22.3 million in its fiscal third-quarter 2020. The company noted that this would be an improvement from its previously disclosed guidance of between $24.0 million and $26.0 million.

KushCo said that the 14% to 17% expected sequential increase in revenue is being driven primarily by an increase in sales to its top 100 customers, which consists of leading multi-state operators (MSOs), licensed producers (LPs), and brands. The company had pivoted earlier this year to a focus on its larger more financially stable clients versus trying to service smaller clients who might not be in a position to pay their bills. In addition, the company also said it expects adjusted EBITDA for the fiscal fourth quarter 2020 to be between $0.25 million and $0.75 million, which represents an improvement from its previously disclosed guidance of between ($1.0) million and $1.0 million.

“Fiscal Q4 2020 was arguably the most pivotal quarter in KushCo’s entire 10-year history, as we returned to growth, executed on our strategic plan, and achieved our first quarter of positive adjusted EBITDA in more than three years,” said Nick Kovacevich, KushCo’s Co-founder, Chairman, and Chief Executive Officer. “We realize there is still a lot of work to be done, but we are encouraged with the substantial progress we have made, especially when considering the challenging, but constructive, journey we underwent in fiscal 2020, starting with the illicit market vape crisis and culminating with the ongoing COVID-19 pandemic. Looking ahead, we will continue to focus on aligning deeper with-and cross-selling more to-the large and creditworthy MSOs, LPs, and leading brands, who appear more poised than ever to reap the lion’s share of the benefits from the industry’s next stage of expansion.”

Another bit of positive news was that KushCo ended the fiscal quarter and year with approximately $10.5 million in cash, and did not draw on its revolving credit facility during the fiscal quarter. The company said its expenses will probably remain in the same range (between $6.5 million and $7.5 million) as previously forecast.

KushCo said it expects to report its complete fiscal fourth quarter and full-year 2020 financial results in late October or early November 2020.

 

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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