KushCo Holdings Inc (OTCQX:KSHB) reported third-quarter 2021 revenue of $28.3 million, a 27% year-over-year increase, boosted primarily by an increase in sales to the company's top 25 customers that included leading multi-state operators (MSOs), licensed producers (LPs), and brands.
KushCo also realized an improvement in its quarterly adjusted EBITDA with a loss of $1.1 million in 3Q, compared with a deficit of about $2.7 million during the same period last year, mainly as a result of higher revenue and company-wide cost reductions.
“Fiscal Q3 represented another major step forward for KushCo, as we achieved our second consecutive quarter of year-over-year growth with $28.3 million in revenue, which was up 27% from the prior year period,” KushCo CEO Nick Kovacevich said in a statement.
READ: KushCo has positioned itself as a premier ‘picks and shovels’ provider of cannabis and CBD-related ancillary products
“More importantly, sales to our top 25 customers, which include many of the industry's top MSOs, LPs, and leading brands, was up by more than 60% year-over-year, as we continue to penetrate these customers and secure new ones,” Kovacevich added.
“Not only are our sales to these customers continuing to grow, but the quality of the customers we are serving is also continuing to improve, putting us in a strong position to capitalize on the industry's next stage of growth-one which we believe will be dominated by the elite operators who have shown successful track records of scaling, acquiring, and integrating.”
The company also noted that its cash selling, general and administrative expense (SG&A) for the quarter was $7.1 million, which it said was one of the lowest levels in recent quarters as it continues to “operate with fiscal prudence.”
KushCo ended the quarter with about $1.1 million in cash as of May 31, 2021, after paying off its $17 million term debt and the existing balance on its revolving line of credit.
At the end of 3Q, the company had $0.7 million of total debt outstanding.
California-based KushCo has established itself as a premier provider of ancillary products and services to the global cannabis and CBD industries. The company has been operating for more than 10 years, selling more than one billion units to growers, processors, producers, and brands across North America, South America, and Europe.
KushCo expects its pending merger with Greenlane Holdings Inc (NASDAQ:GNLN) to close in 3Q this year, the combination of which is expected to generate some $15 million to $20 million of annual run-rate cost synergies within two years, the companies have said.
Contact Sean at sean@proactiveinvestors.com