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Cannabis Supplier KushCo Announces Earnings, Aims To Achieve Positive Adjusted EBITDA

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Cannabis Supplier KushCo Announces Earnings, Aims To Achieve Positive Adjusted EBITDA

Cannabis industry supplier KushCo Holdings Inc. (OTC: KSHB) reported Wednesday its second quarter financial results with net revenue of $30.1 million, down by 14% from the same period in 2019.

The Cypress, California-based company said revenue from its “core” customers was of $24.6 million, accounting for 82% of total revenue, and being up by 227% from the same period in the prior year.

During the quarter, KushCo had a net loss on a GAAP basis, of around $44.4 million or 40 cents per share, which compares to a net loss of $8.9 million or 10 cents per share in the corresponding quarter of 2019.

KushCo also disclosed an adjusted EBITDA loss of $14.8 million, compared to an adjusted EBITDA loss of $6.7 million in the prior year period. Higher adjusted EBITDA loss, was mainly because of its $9.1 million bad debt expense, the company noted, adding this should only be a one-time expense.

At the end of the second quarter, on Feb. 29, the company had around $11.4 million in cash, which compares to $3.9 million at the end of August 2019.

Nick Kovacevich, KushCo's Co-founder, Chairman and Chief Executive Officer, stated that even though the company has experienced the decrease in net revenue there were some other positive achievements, such as “continued robust sequential growth in many of our key markets, such as Illinois, Michigan, Massachusetts, and Canada, where sales in those regions nearly doubled or tripled quarter-over-quarter.”

Kovacevich noted that one of the most important strategic moves during fiscal Q2 was “right-sizing” of their business to help reach positive adjusted EBITDA.

“Since we started this workforce optimization process back in September 2019, we have right-sized our workforce by approximately 50%, which altogether is expected to generate approximately $12 million in annual cash compensation savings," he added.

KushCo’s shares were trading 9.81% higher at 67 cents per share on Thursday morning.

Related Links:

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Photo courtesy of KushCo

 

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