KushCo Holdings, Inc. (OTCQX:KSHB) reported that its net revenue increased 135% year-over-year to $47.0 million for its fiscal fourth-quarter ending August 31, 2019. On a GAAP basis, the net loss was approximately $11.5 million versus last year’s $3.2 million for the same time period. Basic and diluted loss per share was $0.13 compared to $0.04 in the prior-year period. On a Non-GAAP basis, the net loss for the quarter was $7.2 million and basic and diluted net loss per share was $0.08.
“Over the past couple of months, KushCo and the entire regulated cannabis industry has been dealing with a vaping crisis that increasingly appears to be connected to counterfeited, adulterated, and untested vape products being sold in the black market, which we do not service,” said Nick Kovacevich, Co-founder, Chairman and Chief Executive Officer. “While we have been seeing a slight pullback in sales for the overall vape market, it’s important to note that we service the entire regulated cannabis and CBD sector, and as a result, benefit from some consumers potentially shifting to other form factors, such as flower, edibles, and pre-rolls. That being said, we believe there will be some topline softness in the first half of fiscal 2020 related to vape, as our customers have been more cautious with their spending and have been slowing down their vape purchasing activity to limit any potential inventory or regulatory risk should there be additional temporary state bans affecting vape product sales. Looking out to the second half of fiscal 2020, we expect orders for vape products to pick up again.”
For the full year, the company said its net revenue increased 186% to $149.0 million, which met the company’s previously issued guidance of between $145.0 million and $150.0 million. net loss was approximately $39.6 million, compared to a net loss of approximately $24.3 million in the prior year. The basic and diluted loss per share were $0.47 and $0.57, respectively, compared to $0.37 in the prior year.
KushCo said its cash was at roughly $3.9 million as of August 31, 2019, compared to approximately $13.5 million as of August 31, 2018. The Company secured a revolving credit facility with Monroe Capital for up to $50.0 million on August 21, 2019, and completed a $30.1 million equity offering on September 26, 2019, with total net proceeds of $27.6 million.
Kovacevich added, “We are currently targeting between $230 million and $250 million in revenue for fiscal 2020. That includes growth from our core business and added $25 million-plus from our new hemp and CBD initiatives. This guidance incorporates a softer first half as it relates to vape sales, but these sales do ramp up significantly in the second half of the fiscal year. And with these top-line factors in mind, along with the efforts to tighten the belt with operational expenses, we believe we can achieve adjusted EBITDA profitability in the back half of fiscal 2020.”