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KushCo Holdings Reviews Fiscal Third Quarter 2021 Outcomes
Income Will increase 27% 12 months-over-12 months to $28.3 Million, Pushed By Continued Success in Penetrating High MSOs, LPs, and Main Manufacturers
CYPRESS, CA / ACCESSWIRE / July 8, 2021 / KushCo Holdings, Inc. (OTCQX:KSHB) (“KushCo” or the “Firm”), a premier supplier of ancillary services and products to the authorized hashish and CBD industries, as we speak reported monetary outcomes for its fiscal third quarter ended Might 31, 2021.
Current Operational and Monetary Highlights
- Introduced particular shareholder assembly date of August 26, 2021 at 12:00 p.m., Jap Time to approve transformative merger with Greenlane Holdings, Inc. (Nasdaq: GNLN) (“Greenlane”), which is anticipated to create the main ancillary hashish firm and home of manufacturers.
- Achieved income of $28.3 million, or 27% year-over-year progress, in fiscal Q3 2021, pushed by elevated gross sales to the Firm’s prime 25 prospects, together with main multi-state operators (“MSOs”) and licensed producers (“LPs”).
- Introduced dismissal of federal shareholder class motion and spinoff go well with.
- Opened new 130,000 sq. foot West Coast warehouse in Moreno Valley, California, as a part of the Firm’s warehouse consolidation technique to reap an mixture of $1.3 million in annual value financial savings.
- Raised $40 million in fairness capital in February 2021, and used a portion of the proceeds to retire senior unsecured time period debt.
Fiscal Third Quarter 2021 Monetary Abstract
- Web income elevated 27% from the prior yr interval to $28.3 million, primarily because of a rise in gross sales to the Firm’s present MSO and LP prospects, in addition to securing new MSO prospects, as a part of the Firm’s continued technique to align with the {industry}’s main operators.
- On a GAAP foundation, gross revenue was 15%, in comparison with 11% within the prior yr interval. The rise in gross revenue proportion was due primarily to extra and out of date (E&O) stock prices of $2.1 million and pay as you go stock write-offs of $1.0 million within the prior yr interval, ensuing from the Firm’s introduction of a complete strategic plan to right-size the group and align it with the {industry}’s main operators (the “2020 Plan”). The rise was partially offset by a lower in direct materials margins.
- On a Non-GAAP foundation, excluding the influence of sure non-recurring gadgets, gross revenue was roughly 20% (see notice under concerning “About Non-GAAP Monetary Measures” for additional dialogue of this and different non-GAAP measures included on this earnings launch), in comparison with 28% within the prior yr interval.
- SG&A bills had been roughly $9.1 million, in comparison with $12.7 million within the prior yr interval. The lower was primarily pushed by reductions in headcount, unhealthy debt expense, consulting spend, and inventory compensation bills, largely because of the COVID-19 pandemic and the Firm’s implementation of the 2020 Plan.
- On a Non-GAAP foundation, Money SG&A bills (which exclude non-cash bills, resembling unhealthy debt expense, stock-based compensation, depreciation, and amortization) had been roughly $7.1 million, in comparison with $7.7 million within the prior yr interval.
- On a GAAP foundation, web loss was roughly $8.0 million, in comparison with roughly $13.5 million within the prior yr interval. Primary loss per share was $0.05 in comparison with $0.11 within the prior yr interval.
- On a Non-GAAP foundation, excluding the influence of sure non-recurring prices and beneficial properties, web loss for the quarter was $3.2 million, or $0.02 per share, in comparison with a web lack of $5.5 million, or $0.05 per primary share, within the prior yr interval.
- Adjusted EBITDA totaled ($1.1) million in comparison with roughly ($2.7) million within the prior yr interval. The advance in adjusted EBITDA was primarily pushed by larger income and the aforementioned value reductions.
- Money was roughly $1.1 million as of Might 31, 2021, in comparison with roughly $35.0 million as of February 28, 2021. The sequential lower in money was primarily pushed by the Firm utilizing a portion of its proceeds from its $40 million fairness elevate in February 2021 to repay its $17 million time period debt and present steadiness on its revolving line of credit score. As of Might 31, 2021, the Firm had $0.7 million of complete debt excellent.
Administration Commentary
Nick Kovacevich, KushCo’s Co-founder, Chairman and Chief Government Officer, commented: “Fiscal Q3 represented one other main step ahead for KushCo, as we achieved our second consecutive quarter of year-over-year progress with $28.3 million in income, which was up 27% from the prior yr interval. Extra importantly, gross sales to our prime 25 prospects, which embody most of the {industry}’s prime MSOs, LPs, and main manufacturers, was up by greater than 60% year-over-year, as we proceed to penetrate these prospects and safe new ones. Not solely are our gross sales to those prospects persevering with to develop, however the high quality of the purchasers we’re serving can also be persevering with to enhance, placing us in a powerful place to capitalize on the {industry}’s subsequent stage of growth-one which we consider might be dominated by the elite operators who’ve proven profitable monitor data of scaling, buying, and integrating.
“Our gross margins for fiscal Q3 continued to replicate the uncontrollable delivery delays we, and different importers of products, have been experiencing for the previous couple of quarters. Although the state of affairs has considerably improved because the finish of 2020-where there have been record-breaking shipments in the course of the vacation season, extreme COVID-19-related restrictions at home ports, and a worldwide scarcity of containers-a important proportion of all merchandise coming from abroad proceed to expertise delays, leading to larger freight prices throughout the board. As well as, we skilled decrease direct materials margins on a number of of our merchandise, as we cycle by larger priced stock and proceed to work with our distributors to acquire extra favorable pricing. Whereas we anticipate these dynamics to persist for the subsequent couple of quarters, we’re happy to have been in a position to management the variables we will management, together with our prices. Money SG&A for the quarter was $7.1 million, representing one of many lowest ranges in latest quarters, as we proceed to function with fiscal prudence amidst an ever-evolving macro panorama.
Wanting forward, we’re excited to maneuver nearer towards consummating our merger with Greenlane and creating the {industry}’s main ancillary hashish firm and home of manufacturers. One of many remaining milestones left is acquiring the requisite approval from our stockholders to approve the merger.
Nick Kovacevich, KushCo’s Co-founder, Chairman and Chief Government Officer
We strongly encourage all stockholders to make their voices heard and vote their shares by following the directions included within the proxy supplies which can be being delivered to them.
Kovacevich added, “We’re thrilled by the prospects of becoming a member of forces with Greenlane and producing important worth for our stockholders by creating enhanced monetary scale and a platform for worthwhile progress, capitalizing on important anticipated value financial savings, cross-selling Greenlane’s proprietary owned manufacturers to our prospects and vice versa, and uplisting to Nasdaq, amongst many different advantages we anticipate to reap from the mixed firm.”
Convention Name Data
The corporate will host a convention name on Thursday, July 8, 2021 at 4:30 PM Jap Time.
Date: Thursday, July 8, 2021
Time: 4:30 p.m. Jap time (1:30 p.m. Pacific time)
Toll-free Quantity: 877-407-9124
Worldwide Quantity: 201-689-8584
Webcast Hyperlink: Here
KushCo administration will host the convention name and presentation adopted by a query and reply session. The decision might be webcast with an accompanying slide deck, which will be accessed by visiting the Financial Results web page of the Firm’s investor relations web site.
All events are invited to hearken to the stay convention name and presentation by dialing the quantity above or by clicking the webcast hyperlink accessible on the Financial Results web page of the Firm’s investor relations web site.
Please go to the web site not less than quarter-hour previous to the decision to register, obtain, and set up any crucial audio software program. An operator will register your title and group. You probably have any issue connecting with the convention name or webcast, please contact KushCo’s investor relations at ir@kushco.com or 714-539-7653.
A replay of the decision might be accessible on the Financial Results web page of the Firm’s investor relations web site roughly two hours after the convention name has ended.
About KushCo Holdings, Inc .
KushCo Holdings, Inc. (OTCQX: KSHB) (www.kushco.com) is a premier supplier of ancillary services and products to the authorized hashish and CBD industries. KushCo Holdings’ subsidiaries and types present product high quality, distinctive customer support, compliance information and an area presence in serving its various buyer base, which consists of main multi-state operators (MSOs), licensed producers (LPs), and types.
Based in 2010, KushCo Holdings has now offered greater than 1 billion items to growers, model house owners, processors and producers throughout North America, South America, and Europe, specializing in child-resistant appropriate and totally customizable packaging, unique vape {hardware} and know-how, and complementary solvents and pure merchandise.
As a pioneer within the {industry}, KushCo continues to work to create a constructive influence on the atmosphere, society, and neighborhood by CSR and ESG initiatives, resembling: providing sustainable and compostable packaging; donating PPE provides to healthcare employees on the frontline preventing the COVID-19 pandemic; partnering with organizations resembling Mission Inexperienced to supply social fairness applications for {industry} inclusion; being one of many first within the {industry} to award paid time-off for all staff on November 3, 2020 (“Election Day”); and dealing to include industry-leading company governance practices and a extra various board make-up.
For extra data on KushCo’s dedication to CSR and ESG initiatives, please go to the Firm’s #KushCares web page at www.kushco.com/kushcares.
KushCo has been featured in media nationwide, together with CNBC, Fox Information, Yahoo Finance, Cheddar, Los Angeles Occasions, TheStreet.com, and Entrepreneur, Inc Journal. For extra data, go to www.kushco.com or name (888) 920-5874.
About Non-GAAP Monetary Measures
This press launch and the accompanying tables embody sure non-GAAP (Usually Accepted Accounting Ideas) monetary measures. Non-GAAP monetary measures shouldn’t be thought-about as an alternative choice to, or superior to, measures of monetary efficiency ready in accordance with GAAP. These non-GAAP monetary measures don’t replicate a complete system of accounting, differ from GAAP measures with the identical names and will differ from non-GAAP monetary measures with the identical or comparable names which can be utilized by different firms. The Firm computes non-GAAP monetary measures utilizing the identical constant methodology from quarter to quarter and yr to yr. The Firm could take into account whether or not different important gadgets that come up sooner or later ought to be excluded from the non-GAAP monetary measures. The Firm believes that these non-GAAP monetary measures present significant supplemental data concerning the Firm’s working outcomes primarily as a result of they exclude quantities that aren’t thought-about a part of ongoing working outcomes when planning and forecasting and when assessing the efficiency of the group. As well as, the Firm believes that non-GAAP monetary data is utilized by analysts and others within the funding neighborhood to research the Firm’s historic outcomes and in offering estimates of future efficiency and that failure to report these non-GAAP measures might end in confusion amongst analysts and others and create a misplaced notion that the Firm’s outcomes have underperformed or exceeded expectations. For an outline of those non-GAAP monetary measures and reconciliation of those non-GAAP monetary measures to probably the most straight comparable monetary measures ready in accordance with GAAP, please see the accompanying desk titled “Reconciliation of GAAP to Non-GAAP Monetary Measures”.
Necessary Data for Traders and Stockholders
In reference to the proposed transaction, Greenlane has filed with the Securities and Alternate Fee (“SEC”) a registration assertion on Kind S-4 (File No. 333-256582) (as amended, the “Registration Assertion”) that was declared efficient by the SEC on July 2, 2021. The Registration Assertion features a preliminary joint proxy assertion of Greenlane and KushCo that additionally constitutes a prospectus of Greenlane. The definitive joint proxy assertion is being mailed to KushCo stockholders on or about July 9, 2021. KushCo and Greenlane additionally plan to file different related paperwork with the SEC concerning the proposed transaction. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Traders and safety holders could receive free copies of the joint proxy assertion/prospectus and different related paperwork filed by KushCo and Greenlane with the SEC on the SEC’s web site at www.sec.gov. Copies of the paperwork filed by the businesses might be accessible freed from cost on their respective web sites at www.kushco.com and www.gnln.com.
Individuals in Solicitation
This press launch shouldn’t be a proxy assertion or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the potential transaction with Greenlane. KushCo, Greenlane and their respective administrators and govt officers could also be thought-about members within the solicitation of proxies in reference to the proposed transaction. Details about the administrators and govt officers of KushCo is ready forth in its proxy assertion for its 2021 annual assembly of stockholders, which was filed with the SEC on December 28, 2020. Details about the administrators and govt officers of Greenlane is ready forth in its joint proxy assertion/prospectus dated July 2, 2021 for its 2021 annual assembly of stockholders forming part of its registration assertion on Kind S-4 (File No. 333-256582), which was declared efficient by the SEC on July 2, 2021. These paperwork will be obtained freed from cost from the sources indicated above. Extra data concerning the members within the proxy solicitations and an outline of their direct and oblique pursuits, by safety holdings or in any other case, is included within the proxy assertion filed by KushCo with the SEC.
No Supply or Solicitation
This communication shouldn’t be meant to and shall not represent a suggestion to promote or the solicitation of a suggestion to promote or the solicitation of a suggestion to purchase any securities or a solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction wherein such provide, solicitation or sale could be illegal previous to registration or qualification below the securities legal guidelines of any such jurisdiction. No provide of securities shall be made besides by the use of a prospectus assembly the necessities of Part 10 of the Securities Act.
For fact-based data on KushCo Holdings, view the corporate’s sponsored Investor Dashboard.
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