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$KSHB Stock: A Smart Bet On Next Green Wave
https://insiderfinancial.com/kshb-stock-a-smart-bet-on-next-green-wave/180614/
Wormiest market I have ever witnessed. Panic due to election, rona, trumps guidance. Jesus marimba. Run away, run away numbers mean nothing.
Awsome quarter! I will be adding tomorrow on a gap up!
https://www.newcannabisventures.com/kushco-holdings-q4-revenue-increases-19-sequentially-to-26-5-million/
$KSHB new article https://investorshub.advfn.com/boards/read_msg.aspx?message_id=159110575
Yeah hopefully loaded up a few weeks back on the news looking good. Seeing some big buys.
Market recognizes Kush effort to gain +ebitda. Stock starting to trend up. Hopefully next quarter will bear it out. In this stock from bottom to top.
NEWS: $KSHB KushCo Holdings Reports Preliminary Fiscal Fourth Quarter 2020 Results
Company Expects Fiscal Q4 2020 Revenue to Increase 14% to 17% Sequentially and to Achieve Positive Adjusted EBITDA For the First Time in Three Years Company Reiterates Fiscal Q4 2020 Cash SG&A Guidance of $6.5 Million to $7.5 Million CYPRESS, CA / ACCESSWIRE / September 24, 20...
Find out more KSHB - KushCo Holdings Reports Preliminary Fiscal Fourth Quarter 2020 Results
Distribution had to change to add more reliability. Its all in their last investors call. This is definitely falling on low volume and I will be tracking it.
This company is a sleeper! Seems like shifting as reduced to all time lows at these levels and were worth 65 million market cap. Last year revnues over 150 of course this year it seems projected about 75-100 million. Either way. We are worth less than our own revenues for this year. Price targets over $1.50 within a year.
Putting this on watch. Revenues look good. What is the company doing to increase their margins? Other than laying off people
We partnered with our friends at KushCo
https://us18.campaign-archive.com/?e=a68865088c&u=b82f7e9ce98878bb82c5c549f&id=73db3cc686
as the whole sector is trying to liberate out of "Shorts".........soon a "short Squeeze" of entire cannabis sector is a possibility..!..Kush is setting up for a breakout!...
checkout:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=157347025
Shhhh loading this quietly... as much as i can. Anything $1
News: $KSHB KushCo Revenue Misses Analysts Estimates As It Drops 46%
KushCo Holdings, Inc. (OTCQX:KSHB) reported that its net revenue dropped 46% in its fiscal third-quarter ending May 31, 2020. The net revenue of $22 million was also lower than what the company has forecast in March when it told investors that it would be roughly $30 million. Analysts acco...
Find out more KSHB - KushCo Revenue Misses Analysts Estimates As It Drops 46%
News: $KSHB KushCo Holdings Reports Fiscal Third Quarter 2020 Results
Successful Execution of Cost-Cutting Initiatives Resulted in a 50%+ Sequential Reduction in Selling, General, and Administrative (SG&A) Expenses Improving Operating Leverage and Reduced Cash Burn Drive Substantial Improvement in Net Loss and Adjusted EBITDA, and Set Stage for Near-T...
Got this from KSHB - KushCo Holdings Reports Fiscal Third Quarter 2020 Results
News: $KSHB Experts See CBG as the Minor Cannabinoid With Major Potential for Medicinal Uses
July 8, 2020 Palm Beach, FL – July 8, 2020 – Although cannabis is a complex plant with more than 400 chemical entities, the cannabis industry has — for the most part — remained fixated on two particular cannabinoids: THC and cannabidiol (CBD). But other...
Find out more KSHB - Experts See CBG as the Minor Cannabinoid With Major Potential for Medicinal Uses
KushCo Holdings Reports Fiscal Third Quarter 2020 Results
KushCo Holdings Reports Fiscal Third Quarter 2020 Results
Successful Execution of Cost-Cutting Initiatives Resulted in a 50%+ Sequential Reduction in Selling, General, and Administrative (SG&A) Expenses
Improving Operating Leverage and Reduced Cash Burn Drive Substantial Improvement in Net Loss and Adjusted EBITDA, and Set Stage for Near-Term Positive Adjusted EBITDA and Cash Flow From Operations
CYPRESS, Calif., — July 8, 2020 — KushCo Holdings, Inc. (OTCQX: KSHB) ("KushCo" or the "Company"), the premier provider of ancillary products and services to the legal cannabis and CBD industries, today reported financial results for its fiscal third quarter ended May 31, 2020.
Recent Operational Highlights
•Completed cost-cutting initiatives as part of the Company's 2020 Plan (the "2020 Plan") to align deeper with larger and more creditworthy multi-state-operators (MSOs), licensed producers (LPs), and leading brands, which has resulted in the Company's SG&A expenses decreasing more than 50% from $27.2 million in fiscal Q2 2020 to $12.7 million in fiscal Q3 2020.
•Strengthened balance sheet and liquidity by proactively converting 18.5%, or $5 million, of the total principal amount of the Company's senior note due April 2021 into equity with limited dilution and zero warrants.
•Appointed industry veteran and former Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) CEO Pete Kadens to Board of Directors.
•Appointed former Executive Vice President of Corporate Development, Stephen Christoffersen, as the Company’s new Chief Financial Officer, effective April 10, 2020.
Fiscal Third Quarter 2020 Financial Summary
•Net revenue decreased 46% from the prior year period to $22.3 million, primarily as a result of the Company’s adoption of the 2020 Plan, which has resulted in tighter credit terms being extended to smaller customers. The decrease was also driven by lower sales from vape and natural products, as well as order lumpiness from the Company's larger customers, in addition to travel and regulatory restrictions in the markets that the Company operates in due to the COVID-19 pandemic.
•On a GAAP basis, gross profit was 10.7%, compared to 17.8% in the prior year period.1
•On a Non-GAAP basis, excluding the impact of certain non-recurring items, gross profit was approximately 28.2% (see note below regarding "About Non-GAAP Financial Measures" for further discussion of this and other non-GAAP measures included in this earnings release), compared to 22.8% in the prior year period. The increase in non-GAAP gross profit margin was driven by a favorable product mix, higher product margins, and lower freight expenses.
•Sales, general and administrative (SG&A) expenses were approximately $12.7 million, compared to $20.7 million in the prior year period and $27.2 million in the prior quarter. The decrease was driven by reductions in headcount, executive salaries, consulting spend, and travel and entertainment expenses, as a result of the COVID-19 pandemic.
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•On a Non-GAAP basis, Cash SG&A expenses (which exclude non-cash expenses, such as bad debt expense, stock-based compensation, depreciation, and amortization) were approximately $7.7 million, compared to $16.4 million in the prior year period and $13.8 million in the prior quarter.
•On a GAAP basis, net loss was approximately $13.5 million, compared to approximately $10.6 million in the prior year period. Basic loss per share was $0.11 compared to $0.12 in the prior year period.2
•On a Non-GAAP basis, excluding the impact of certain non-recurring charges and gains such as the Company’s restructuring costs, net loss for the quarter was $5.5 million, or $0.05 per share, compared to a net loss of $8.6 million, or $0.10 per basic share, in the prior year period.
•Adjusted EBITDA totaled ($2.7) million compared to approximately ($7.5) million in the prior year period and approximately ($14.8) million in the prior quarter. The improvement in adjusted EBITDA was driven by the aforementioned cost reductions.
•Cash was approximately $11.1 million as of May 31, 2020, compared to approximately $11.4 million as of February 29, 2020 and $3.9 million as of August 31, 2019.
Management Commentary
Nick Kovacevich, KushCo’s Co-founder, Chairman and Chief Executive Officer, commented: “Q3 2020 was a successful transition quarter for KushCo, demonstrating the execution of our strategy to accelerate our path to positive adjusted EBITDA. We substantially reduced our cost structure, consolidated our vendors and warehouses, vastly improved our inventory to align with our actual sales, ramped up our collections activity, stemmed the cash burn, and drove meaningful operating leverage.
"Revenue for the quarter came in lower than we anticipated due to regulatory and travel restrictions in various markets in which we operate due to the COVID-19 pandemic, as well as order lumpiness from some of our larger customers who pushed out their orders due to a general lack of visibility in their businesses. We expect the latter phenomenon to continue for the foreseeable future due to the fact that we now cater to a more concentrated group of larger and financially healthier customers that have longer sales cycles and more measured purchasing patterns. Despite the sequential decline in revenue, however, we have started Q4 on the front foot with a healthy level of purchase orders secured thus far, leading us to believe that Q3 will be the bottom in terms of revenue for fiscal 2020. More importantly, we continue to focus on the things we can better control, such as gaining more efficiencies in our business, significantly right-sizing the organization, and reducing our overall cash burn.
"Along with achieving our highest level of non-GAAP gross margins in recent years during the quarter, we also reduced our cash SG&A by more than 40% sequentially to $7.7 million, due to the headcount reductions, executive salary reductions and reduced consulting spend we completed during the quarter. The $7.7 million is ahead of the cash SG&A target we previously set out for ourselves, and represents a strong foundation for us to achieve positive adjusted EBITDA in the near term. In fact, even though our revenue for Q3 was lower than in the previous quarter, because of the substantial cost reductions we have implemented, we were actually able to drive a significant improvement in adjusted EBITDA from ($14.8) million in fiscal Q2 2020 to ($2.7) million in fiscal Q3 2020, demonstrating the increasing operating leverage in our business. These cost-cutting initiatives, coupled with our heightened fiscal prudence and disciplined capital management, also contributed to a much lower cash burn than we have historically experienced, with cash flow from operations improving notably from ($10.7) million in fiscal Q2 to ($1.4) million in fiscal Q3. In addition to the strong financial performance we generated, we are also pleased to have made considerable strides on the operational front.
"During the quarter, we ramped up our efforts to become more entrenched with our top customers' decision-making processes, investing the time and resources to serve as a trusted partner, and working to formalize these strong relationships into long-term supply agreements. We have already been able to secure several supply agreements with leading MSOs and LPs, and we have been focused on establishing more of these longer-term relationships, while also working to cross-sell these customers across our entire product and service ecosystem. We also launched our customer support line and have been processing smaller orders more efficiently and without the need for multiple sales reps, which has minimized our working capital needs and operating expenses. Lastly, we successfully renegotiated our lease obligations and closed our Las Vegas, Denver, and Santa Rosa facilities, and sublet our Garden Grove warehouse, which has resulted in additional annual cost savings. We believe all of these actions have made us into a stronger organization better-equipped to power our customers' businesses and, more broadly, the global cannabis ecosystem.
"Looking ahead, we expect to realize revenue growth in Q4 not just by recognizing the customer orders that were pushed out, but also by signing additional supply agreements with our customers and focusing more on the areas that we believe
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we are good at, such as our core businesses of vape, packaging, and energy. We are also going to be focusing even more on controlling our costs and deploying a prudent capital allocation policy, so that we can continue to support the business with the cash and liquidity resources currently at our disposal. The end result of these efforts should lead to what could be a pivotal Q4 for KushCo, and one in which we can achieve our goal of positive adjusted EBITDA."
Fiscal Q4 2020 Financial Outlook
KushCo expects net revenue for the fourth quarter of its fiscal 2020 to be between $24.0 million and $26.0 million. In addition, the Company expects cash SG&A to be between $6.5 million and $7.5 million, and adjusted EBITDA to be between ($1.0) million and $1.0 million.
Conference Call Information
The company will host a conference call on Wednesday, July 8, 2020 at 4:30 PM Eastern Time.
Date: Wednesday, July 8, 2020
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free Number: 1-877-407-9039
International Number: 1-201-689-8470
Conference ID: 13706146
KushCo management will host the conference call and presentation followed by a question and answer session. The call will be webcast with an accompanying slide deck, which can be accessed by visiting the Financial Results page of the Company’s investor relations website.
All interested parties are invited to listen to the live conference call and presentation by dialing the number above or by clicking the webcast link available on the Financial Results page of the Company’s investor relations website.
Please visit the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. An operator will register your name and organization. If you have any difficulty connecting with the conference call or webcast, please contact KushCo’s investor relations at ir@kushco.com or 714-539-7653.
A replay of the call will be available on the Financial Results page of the Company’s investor relations website approximately two hours after the conference call has ended.
About KushCo Holdings, Inc.
KushCo Holdings, Inc. (OTCQX: KSHB) (www.kushco.com) is the premier provider of ancillary products and services to the legal cannabis and CBD industries. KushCo Holdings' subsidiaries and brands provide product quality, exceptional customer service, compliance knowledge and a local presence in serving its diverse customer base.
Founded in 2010, KushCo Holdings has now sold more than 1 billion units to growers, processors and producers across North America, South America, and Europe. The Company has been featured in media nationwide, including CNBC, Fox News, Yahoo Finance, Cheddar, Los Angeles Times, TheStreet.com, and Entrepreneur, Inc Magazine.
For more information, visit www.kushco.com or call (888)-920-5874.
About Non-GAAP Financial Measures
This press release and the accompanying tables include certain non-GAAP (Generally Accepted Accounting Principles) financial measures. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. The Company computes non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. The Company may consider whether other significant items that arise in the future should be excluded from the non-GAAP financial measures. The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's operating results primarily because they exclude amounts that are not considered part of ongoing operating results when planning and forecasting and when assessing the performance of the organization. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company's historical results and in providing estimates of future performance and that failure to
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report these non-GAAP measures could result in confusion among analysts and others and create a misplaced perception that the Company's results have underperformed or exceeded expectations. For a description of these non-GAAP financial measures and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP, please see the accompanying table titled "Reconciliation of GAAP to Non-GAAP Financial Measures".
Forward-Looking Statements
This press release may include predictions, estimates or other information that might be considered forward-looking within the meaning of applicable securities laws. While these forward-looking statements represent the Company's current judgments, they are subject to risks and uncertainties that could cause actual results to differ materially, including the ongoing effects of the COVID-19 pandemic on our operations, the economy generally, and consumer and business practices. You are cautioned not to place undue reliance on these forward-looking statements, which reflect the opinions of the Company's management only as of the date of this release. Please keep in mind that the Company is not obligating itself to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. When used herein, words such as: "potential," "look forward," "expect," “anticipate,” “project,” “should,” "believe," or variations of such words and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those contemplated in any forward- looking statements made by the Company herein are often discussed in the Company’s filings with the United States Securities and Exchange Commission (SEC), which are available at: www.sec.gov, and on the Company's website, at: www.kushco.com.
KushCo Holdings Contact
Investor Contact:
Najim Mostamand, CFA
Director of Investor Relations
714-539-7653
ir@kushco.com
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KUSHCO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
For the Three Months Ended For the Nine Months Ended May 31, 2020 May 31, 2019 May 31, 2020 May 31, 2019 Net revenue $ 22,264 $ 41,486 $ 87,369 $ 101,982 Cost of goods sold 19,892 34,090 86,634 86,834 Gross profit (loss) 2,372 7,396 735 15,148 Operating expenses: Selling, general and administrative 12,719 20,719 60,977 52,032 Gain on disposition of assets — — — (1,254) Change in fair value of contingent consideration — 2,961 — (2,247) Restructuring costs 952 — 8,253 — Total operating expenses 13,671 23,680 69,230 48,531 Loss from operations (11,299) (16,284) (68,495) (33,383) Other income (expense): Change in fair value of warrant liability (1,160) 6,254 3,435 7,309 Change in fair value of equity investment (9) (71) (1,100) (663) Interest expense (1,487) (474) (4,594) (1,452) Other income (expense), net 468 (10) 386 110 Total other income (expense) (2,188) 5,699 (1,873) 5,304 Loss before income taxes (13,487) (10,585) (70,368) (28,079) Income tax expense — (13) — (13) Net loss $ (13,487) $ (10,598) $ (70,368) $ (28,092) Net loss per share: Basic net loss per common share $ (0.11) $ (0.12) $ (0.64) $ (0.34) Diluted net loss per common share $ (0.11) $ (0.19) $ (0.64) $ (0.42) Basic weighted average number of common shares outstanding 119,574 88,286 110,440 83,338 Diluted weighted average number of common shares outstanding 119,574 88,377 110,440 83,535
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KUSHCO HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
May 31, 2020 August 31, 2019 ASSETS CURRENT ASSETS Cash $ 11,088 $ 3,944 Accounts receivable, net 11,162 25,972 Inventory 24,048 43,768 Prepaid expenses and other current assets 15,655 12,209 Total current assets 61,953 85,893 Goodwill 52,267 52,267 Intangible assets, net 2,393 3,103 Property and equipment, net 9,296 11,054 Other assets 9,759 6,917 TOTAL ASSETS $ 135,668 $ 159,234 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 5,497 $ 10,907 Customer deposits 4,217 2,992 Accrued expenses and other current liabilities 10,424 6,468 Line of credit — 12,261 Total current liabilities 20,138 32,628 Notes payable 24,084 18,975 Warrant liability 2,009 5,444 Other non-current liabilities 4,562 833 Total long-term liabilities 30,655 25,252 TOTAL LIABILITIES 50,793 57,880 Total stockholders' equity 84,875 101,354 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 135,668 $ 159,234
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KUSHCO HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
For the Three Months Ended For the Nine Months Ended May 31, 2020 May 31, 2019 May 31, 2020 May 31, 2019 Net revenue $ 22,264 $ 41,486 $ 87,369 $ 101,982 China tariff surcharge (1,903) (370) (7,532) 37 Non-GAAP Net revenue $ 20,361 $ 41,116 $ 79,837 $ 102,019 GAAP Gross Profit $ 2,372 11% $ 7,396 18% $ 735 1% $ 15,148 15% Adjusted for non-recurring air freight costs — — — 1,502 Adjusted for non-recurring temporary labor costs — — — 1,344 Restructuring – excess and obsolete inventory 2,136 — 14,015 — Purchase order cancellation charges 963 — 4,290 — Adjusted for China tariff impact, net 276 1,972 (97) 3,367 Non-GAAP Gross Profit $ 5,747 28% $ 9,368 23% $ 18,943 24% $ 21,361 21% GAAP Net loss $ (13,488) $ (10,598) $ (70,369) $ (28,092) Adjusted for non-recurring air freight costs — — — 1,502 Adjusted for non-recurring temporary labor costs — — — 1,344 Restructuring – excess and obsolete inventory 2,136 — 14,015 — Purchase order cancellation charges 963 — 4,290 — Adjusted for China tariff impact, net 276 1,972 (97) 3,367 Non-recurring litigation and consulting costs 121 550 2,950 550 Stock-based compensation 2,985 2,667 11,074 8,839 Restructuring costs 952 — 8,253 — Severance costs — — 623 — Gain on disposition of assets — — — (1,254) Lease termination liability release gain (798) — (798) — Equity investment impairment 230 — 230 — Change in fair value of warrant liability 1,160 (6,254) (3,435) (7,309) Change in fair value of equity investment 9 71 1,100 663 Change in fair value of contingent consideration — 2,961 — (2,247) Non-GAAP Net loss $ (5,454) $ (8,631) $ (32,164) $ (22,637) Non-GAAP Net loss per share – basic $ (0.05) $ (0.10) $ (0.29) $ (0.27) Non-GAAP Net loss per share – diluted $ (0.05) $ (0.17) $ (0.29) $ (0.36) Weighted-average common shares – basic 119,574 88,286 110,440 83,338 Weighted-average common shares – diluted 119,574 88,377 110,440 83,535
Non-GAAP Net loss $ (5,454) $ (8,631) $ (32,164) $ (22,637) Depreciation and amortization expense 1,227 633 3,259 1,711 Interest Expense 1,487 474 4,594 1,452 Income Tax Expense — 13 — 13 Adjusted EBITDA $ (2,740) $ (7,511) $ (24,311) $ (19,461)
1 Gross profit during fiscal Q3 2020 was impacted by several restructuring activities the Company implemented to execute its 2020 Plan and accelerate its path to achieving positive adjusted EBITDA. These activities led to a $2.1 million excess and obsolete inventory write-down and a $1.0 million purchase order cancellation charge, both driven by the Company’s
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decision to right size inventory levels and discontinue nearly all of its stock SKUs in order to focus more on custom and best-selling stock inventory demanded by its top customers.
2 Net loss and net loss per share for the fiscal third quarter 2020 were impacted by several restructuring charges and one-time expenses the Company recognized in order to right-size its business and better execute on its 2020 Plan. These expenses include a $1.0 million restructuring charge related to severance and asset impairment charges associated with the Company’s recent reductions in force as well as completed and planned closures of its warehouse facilities to consolidate its warehouse footprint.
https://ir.stockpr.com/kushco/sec-filings-email/content/0001628280-20-010253/ex991earningsreleaseq3.htm
Anybody think we’ll see good news on the 8th? I’ve followed this stock for a long time and owned it when it was up around $4 or so. I’d love to get involved again.
News: $KSHB Will These Two Marijuana Stocks Push Forward This Month?
How Will These Two Marijuana Stocks Fair in July? The last week of June has already shown some great momentum for marijuana stocks . With only a few days left in the month, it looks like July could be off to a great start for the cannabis industry . Of course, it is highly dependent on what ...
In case you are interested KSHB - Will These Two Marijuana Stocks Push Forward This Month?
News: $KSHB KushCo Holdings to Report Fiscal Third Quarter 2020 Financial Results on Wednesday, July 8, 2020
CYPRESS, CA / ACCESSWIRE / July 1, 2020 / KushCo Holdings, Inc. (OTCQX:KSHB) (''KushCo'' or the ''Company''), the premier provider of ancillary products and services to the legal cannabis and CBD industries, is scheduled to host a conference call and webcast on Wednesday, July 8, 2020 at 4:3...
Got this from KSHB - KushCo Holdings to Report Fiscal Third Quarter 2020 Financial Results on Wednesday, July 8, 2020
What happened with these guys thought they’d be in 20’s it 30’s by now
We are showing a bit of life. Hopefully it could hold the momentum.
Pay cuts going to help too. GLTA Stay safe
https://ir.stockpr.com/kushco/sec-filings-email/content/0001104659-20-053355/tm2018094-1_8k.htm
Earnings conference call today 4:30 eastern. Estimate was -.009. Short term won't be good regardless.
So what’s the short term outlook currently for Kush?
Here is the list . 8 Weed Stocks Jump Over 150%
click here to see
KushCo Holdings Inc Makes Its Case
By James Hudson - March 17, 2020
Oracle Dispatch
The story for KushCo Holdings Inc (OTCMKTS:KSHB) may be changing after the company just announced preliminary revenue results for its fiscal second quarter ended February 29, 2020. The Company also provides general corporate updates regarding the business and the recent outbreak of COVID-19.
According to the release, “KushCo expects its fiscal second quarter 2020 revenue to be approximately $30 million, compared to $35.0 million in its fiscal first quarter 2020. The 14% sequential decrease in revenue was driven primarily by a slower-than-expected rebound in demand for the Company’s vape hardware products, continued weakness in the California market, a slower-than-anticipated rollout of its hemp trading business, the extension of the Chinese New Year holiday, and a delay in the rollout of cannabis 2.0 products in Canada, especially due to some provincial bans and taxes on vape products.”
KushCo Holdings Inc (OTCMKTS:KSHB) is the parent company to a diverse group of business units that are transformative leaders in the cannabis, CBD and other related industries. KushCo Holdings’ subsidiaries and brands provide exceptional customer service, product quality, compliance knowledge and a local presence in serving its diverse customer base.
KushCo Holdings’ brands include Kush Bottles, a dynamic sales platform that is the nation’s largest and most respected distributor of packaging, supplies, and accessories, Kush Energy, which provides ultra-pure hydrocarbon gases and solvents to the cannabis and CBD sector, Hybrid Creative, a premier creative design agency for cannabis and non-cannabis ventures, and Koleto Packaging Solutions, the research and development arm driving intellectual property development and acquisitions.
Founded in 2010, KushCo Holdings has now sold more than 1 billion units and regularly services more than 5,000 legally operated medical and adult-use dispensaries, growers, and producers across North America, South America, and Europe. KushCo Holdings subsidiaries maintain facilities in the five largest U.S. cannabis markets as well as having a local sales presence in every major U.S. cannabis market.
According to its materials, “KushCo Holdings, strives to be the industry leader for responsible and compliant products and services in the legal cannabis and CBD industry. The Company has been featured in media nationwide, including CNBC, Los Angeles Times, TheStreet.com, Entrepreneur, and business magazine Inc. While KushCo Holdings services all facets of the cannabis and CBD industries, it has no direct involvement with the cannabis plant or any products that contain THC or CBD.”
As noted above, KSHB just announced preliminary revenue results for its fiscal second quarter ended February 29, 2020.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action KSHB shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -45% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Moreover, the name has seen interest climb, with an increase in recent trading volume of 62% beyond what we have been seeing over the larger time frame.
“Our revenue for fiscal Q2 was negatively impacted by several short-term factors, but we are fortunately seeing strong fundamental trends across the business that give us confidence for a stronger second half of the fiscal year and beyond,” said Nick Kovacevich, KushCo’s Co-founder, Chairman and Chief Executive Officer. “For one, despite a challenging near-term market backdrop in California, we have been actively tightening our customer credit terms, ramping up our collection efforts, and continuing to move away from the smaller and less financially stable customers that historically comprised a core part of our business.
In fact, over the past few years, this regional customer base, especially in recent months due to their heightened liquidity challenges, is gradually comprising a smaller part of our business, whereas our business with our larger MSOs and LPs, which each spend more than $500,000 on a trailing twelve months basis, has ballooned from less than 20% of sales in fiscal 2017 to more than 60% in fiscal 2019. While it will take some time for this transition to fully scale, we are encouraged with the progress thus far in securing and entrenching ourselves even further with these larger and more financially stable customers.
With respect to the broader demand for our vape products, we were disappointed to see a roughly flat quarter-over-quarter contribution from this category, but are encouraged with the underlying trends in our business that show continued robust growth in many of our key markets, such as Illinois, Michigan, Massachusetts, and Canada. As consumer sentiment and the regulatory environment around vape continues to improve, we expect this category to rebound and drive our revenue growth as well.”
Currently trading at a market capitalization of $64M, KSHB has a significant war chest ($14.7M) of cash on the books, which is balanced by about $31.5M in total current liabilities. KSHB is pulling in trailing 12-month revenues of $158.6M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 38.1%.
KushCo Holdings Announces New Strategic Plan, Leadership Changes and Significant Cost-Cutting Efforts to Accelerate Path to Positive Adjusted EBITDA
ACCESSWIRE
March 26, 2020
New Strategic Plan Focuses on Aligning Deeper with the MSOs, LPs, and Leading Brands
Significantly Reducing and Right-Sizing the Company's Cost Structure; and Achieving Positive Adjusted EBITDA
Christopher Tedford to Step Down as Chief Financial Officer
Company's Executive Vice President of Corporate Development Stephen Christoffersen Appointed as New Chief Financial Officer
Latest Reduction in Force of Nearly 50 Employees to Generate an Approximate Annualized Cash Compensation Savings of $4.0 Million
CYPRESS, CA / ACCESSWIRE / March 26, 2020 / KushCo Holdings, Inc. (KSHB) (''KushCo'' or the ''Company''), the premier producer of ancillary products and services to the legal cannabis and CBD industries, today announced the unveiling of its new strategic plan for achieving positive adjusted EBITDA, including recent changes to its leadership team and significant cost-cutting efforts to right-size the business.
KushCo's Strategic Plan to Achieve Positive Adjusted EBITDA
"After more than doubling sales in each of the last five years, we entered fiscal 2020 embarking on a new strategy to rationalize all aspects of our operations, align ourselves deeper with the best and promising cannabis and CBD operators, and pave an achievable pathway toward near-term profitability," said Nick Kovacevich, KushCo's Co-founder, Chairman and Chief Executive Officer. "While this has been the Company's focus since the start of the new fiscal year in September 2019, executing against this strategy has become paramount to everyone within the organization, as the COVID-19 pandemic creates ever-increasing uncertainty in the cannabis industry, especially for many of our smaller customers that were already struggling financially following the aftermath of the black market vape crisis and ensuing cash crunch.
As a result, we have taken quick and decisive steps these past six months, and especially these past few weeks, to significantly reduce our overhead, streamline our warehouses, reduce our inventory, and drastically alter our sales strategy and resources to rely even less on the smaller operators, while doubling down on our efforts to solidify and strengthen our core base of large MSOs, LPs, and leading brands. All these positive changes put us on more solid financial footing and give us an accelerated path toward achieving positive adjusted EBITDA."
The Company has developed and formalized a comprehensive strategic plan to focus its resources on a more optimal customer group, realign its sales organization, reduce its warehouse footprint, simplify its SKU count and inventory position, and implement additional headcount reductions.
The Company's new strategic plan includes:
Focusing deeper on larger and more financially stable MSOs, LPs, and leading brands (the "Core" customers): The Company's customer base has gradually shifted in the past few years from predominantly smaller and regional operators ("Legacy" customers) to financially stronger and more creditworthy MSOs, LPs, and leading brands ("Core" customers). These Core customers generated approximately $52 million of revenue, or 80% of total revenue, in the Company's first half of fiscal 2020.
KushCo believes that having the vast majority of its revenue being driven by this more stable, predictable, creditworthy, and financially stronger customer base will allow the Company to better forecast demand, reduce inventory and warehouse space, improve collections and cash flow, and benefit from further expansion and consolidation in the marketplace.
Implementing a more profitable, efficient, and automated approach toward doing business with Legacy customers: KushCo intends to continue providing the highest level of customer service to its Legacy customers, but in more efficient and cost-effective ways that minimize working capital and operating expenses.
Going forward, transactions with these customers will be moved towards a cash-only basis, will not include any custom projects, and will be performed through a general customer service support line without a dedicated sales representative or project manager. KushCo expects to retain most of the revenue from this customer group, while also significantly reducing costs.
Right-sizing the workforce to better align the Company's resources with its elevated focus on Core customers: Due to the Company's elevated focus on Core customers and more automated approach to transacting with Legacy customers, KushCo took further steps to reduce headcount that was not essential to the new strategic plan. In March 2020, KushCo completed another round of layoffs, letting go 49 employees, which the Company expects will result in approximately $4.0 million in annual cash compensation savings.
The reduction in force encompassed a broad spectrum of divisions, including sales representatives that were formerly catering directly to Legacy customers, who will now be better serviced through automation. In total, the Company has reduced its headcount by approximately 50% since September 2019, which it expects will result in an aggregate annual cash compensation savings of approximately $12 million.
Consolidating warehouse footprint and reducing other operating expenses to drive further cost savings: The Company is making further progress toward consolidating and rationalizing its warehouse footprint, while ensuring that all customers continue to receive the same premier level of service and responsiveness. In addition, KushCo is in the process of substantially reducing its third-party consulting costs, as well as other operating expenses.
For its fiscal first quarter ended November 30, 2019, the Company's selling, general and administrative (SG&A) expenses were $21.1 million, or $15.6 million when excluding non-cash expenses, including depreciation, amortization, and stock-based compensation. Following the full execution of its plan, which the company expects to complete before the start of its fiscal 2020 in September, the Company expects its quarterly SG&A expenses to reduce to $12.5 million in fiscal Q4 2020, which is a decrease of approximately 40% compared to its SG&A expenses in fiscal Q1 2020. Excluding non-cash expenses, the Company expects its quarterly SG&A expenses to reduce to $9.5 million in fiscal Q4 2020, which is a decrease of approximately 40% compared to its SG&A expenses in fiscal Q1 2020.
Jason Vegotsky, KushCo's President and Chief Revenue Officer, added: "We are fortunate to have started this new strategic plan already having secured many of the most valued MSOs, LPs, and leading brands in our client roster. However, executing a broad reorganization and cost-cutting initiative-something that is largely in our control-remains the critical next step, and we're encouraged to have made significant inroads on that front, which should greatly reduce the revenue levels required to achieve positive adjusted EBITDA.
We believe it will take a few months for this restructuring to fully take shape, but expect the end result to be a much leaner, stronger, and more focused organization that is truly aligned on all aspects-revenue and cost-with the industry's best and leading operators. Ultimately, we believe we have the right strategy, liquidity, customers, and talent to execute on our plan and to ensure we are in prime position to continue capturing the industry's robust growth."
KushCo expects to provide more details on its new strategic plan when it reports its complete fiscal second quarter 2020 financial results in April 2020.
Changes to the Leadership Team
In order to better execute on its new strategic plan, the Company also implemented changes to its leadership team. Stephen Christoffersen, Executive Vice President of Corporate Development, has been named the Company's new Chief Financial Officer, replacing Christopher Tedford, who will be leaving the Company, effective April 10, 2020.
Mr. Christoffersen has served as KushCo's Executive Vice President of Corporate Development since November 2018, where he oversees and manages the Company's business development functions, including expanding KushCo's hemp trading and retail services divisions. Since Mr. Christoffersen joined the Company, he has played an active role in KushCo's capital raising efforts, partnerships, and strategic investments, including securing the Company's line of credit with Monroe Capital, its partnership with C.A. Fortune, and its investment in and partnership with Xtraction Services, where he currently serves as a Board member. He brings nearly 15 years of capital markets, portfolio management, and corporate development experience to the role of Chief Financial Officer. Prior to joining KushCo, he managed a $500 million equity portfolio for a large bank and served as the Chief Financial Officer of an emerging beef jerky brand, as well as advised on M&A and fundraising initiatives for several seed and growth stage companies. He received his Chartered Financial Analyst designation in 2015 and holds a Bachelor of Science in Finance from the University of Nevada, Las Vegas.
"On behalf of the entire Board and management team, I am truly excited to welcome Stephen as our new Chief Financial Officer," said Kovacevich. "Stephen has made a resounding impact since joining the team less than two years ago, constantly finding new ways to add value on multiple fronts. His intimate knowledge of our business and financial state-as well as his active role in launching and developing our newer, higher-margin services-makes him a perfect candidate to step into this role as we enter this next chapter of our evolution-one that will require a broad cross-section of skills and experiences, including an ability to wear multiple hats and embrace our new ethos of ‘doing more with less.'"
Mr. Tedford had been serving as KushCo's Chief Financial Officer since November 2018, and played an instrumental role in bolstering the Company's financial and risk management capabilities, treasury management, and strategic financial planning and reporting.
Kovacevich continued: "We are beyond grateful for Chris' many contributions and insight while serving as the Company's Chief Financial Officer. When he joined KushCo in late 2018, we were running a very lean finance staff that was grappling with the challenging dynamics of a start-up operating in a hyper growth and constantly evolving industry. Under his leadership, we have been able to significantly bolster our finance and accounting capabilities, and put standards and processes in place designed to ensure we have a well-oiled financial reporting, forecasting, and budgeting machine across the entire organization. I am encouraged by the solid platform Chris and his team have put in place, which can now be easily picked up by Stephen, for whom we have the utmost confidence. Overall, we thank Chris for all his service and wish him nothing but the best in his next endeavors."
About KushCo Holdings
KushCo Holdings, Inc. (KSHB) (www.kushco.com) is the premier producer of ancillary products and services to the legal cannabis and CBD industries. KushCo Holdings' subsidiaries and brands provide product quality, exceptional customer service, compliance knowledge and a local presence in serving its diverse customer base.
Founded in 2010, KushCo Holdings has now sold more than 1 billion units to growers, processors and producers across North America, South America, and Europe.
The Company has been featured in media nationwide, including CNBC, Fox News, Yahoo Finance, Cheddar, Los Angeles Times, TheStreet.com, and Entrepreneur, Inc Magazine. While KushCo Holdings provides products and solutions to customers in the cannabis and CBD industries, it has no direct involvement with the cannabis plant or any products that contain THC.
I read a news release. Looked OK. I will post.
KushCo Holdings Moves to Reduce Costs and Names Stephen Christoffersen as CFO
March 26, 2020
Published by NCV Newswire
KushCo Holdings Announces New Strategic Plan, Leadership Changes and Significant Cost-Cutting Efforts to Accelerate Path to Positive Adjusted EBITDA
New Strategic Plan Focuses on Aligning Deeper with the MSOs, LPs, and Leading Brands; Significantly Reducing and Right-Sizing the Company’s Cost Structure; and Achieving Positive Adjusted EBITDA
Christopher Tedford to Step Down as Chief Financial Officer
Company’s Executive Vice President of Corporate Development Stephen
Christoffersen Appointed as New Chief Financial Officer
Latest Reduction in Force of Nearly 50 Employees to Generate an Approximate Annualized Cash Compensation Savings of $4.0 Million
CYPRESS, CA / ACCESSWIRE / March 26, 2020 / KushCo Holdings, Inc. (OTCQX:KSHB) (”KushCo” or the ”Company”), the premier producer of ancillary products and services to the legal cannabis and CBD industries, today announced the unveiling of its new strategic plan for achieving positive adjusted EBITDA, including recent changes to its leadership team and significant cost-cutting efforts to right-size the business.
KushCo’s Strategic Plan to Achieve Positive Adjusted EBITDA
After more than doubling sales in each of the last five years, we entered fiscal 2020 embarking on a new strategy to rationalize all aspects of our operations, align ourselves deeper with the best and promising cannabis and CBD operators, and pave an achievable pathway toward near-term profitability.
Kovacevich continued: “While this has been the Company’s focus since the start of the new fiscal year in September 2019, executing against this strategy has become paramount to everyone within the organization, as the COVID-19 pandemic creates ever-increasing uncertainty in the cannabis industry, especially for many of our smaller customers that were already struggling financially following the aftermath of the black market vape crisis and ensuing cash crunch.
As a result, we have taken quick and decisive steps these past six months, and especially these past few weeks, to significantly reduce our overhead, streamline our warehouses, reduce our inventory, and drastically alter our sales strategy and resources to rely even less on the smaller operators, while doubling down on our efforts to solidify and strengthen our core base of large MSOs, LPs, and leading brands. All these positive changes put us on more solid financial footing and give us an accelerated path toward achieving positive adjusted EBITDA.”
The Company has developed and formalized a comprehensive strategic plan to focus its resources on a more optimal customer group, realign its sales organization, reduce its warehouse footprint, simplify its SKU count and inventory position, and implement additional headcount reductions.
The Company’s new strategic plan includes:
Focusing deeper on larger and more financially stable MSOs, LPs, and leading brands (the “Core” customers): The Company’s customer base has gradually shifted in the past few years from predominantly smaller and regional operators (“Legacy” customers) to financially stronger and more creditworthy MSOs, LPs, and leading brands (“Core” customers). These Core customers generated approximately $52 million of revenue, or 80% of total revenue, in the Company’s first half of fiscal 2020. KushCo believes that having the vast majority of its revenue being driven by this more stable, predictable, creditworthy, and financially stronger customer base will allow the Company to better forecast demand, reduce inventory and warehouse space, improve collections and cash flow, and benefit from further expansion and consolidation in the marketplace.
Implementing a more profitable, efficient, and automated approach toward doing business with Legacy customers: KushCo intends to continue providing the highest level of customer service to its Legacy customers, but in more efficient and cost-effective ways that minimize working capital and operating expenses. Going forward, transactions with these customers will be moved towards a cash-only basis, will not include any custom projects, and will be performed through a general customer service support line without a dedicated sales representative or project manager. KushCo expects to retain most of the revenue from this customer group, while also significantly reducing costs.
Right-sizing the workforce to better align the Company’s resources with its elevated focus on Core customers: Due to the Company’s elevated focus on Core customers and more automated approach to transacting with Legacy customers, KushCo took further steps to reduce headcount that was not essential to the new strategic plan. In March 2020, KushCo completed another round of layoffs, letting go 49 employees, which the Company expects will result in approximately $4.0 million in annual cash compensation savings.
The reduction in force encompassed a broad spectrum of divisions, including sales representatives that were formerly catering directly to Legacy customers, who will now be better serviced through automation. In total, the Company has reduced its headcount by approximately 50% since September 2019, which it expects will result in an aggregate annual cash compensation savings of approximately $12 million.
Consolidating warehouse footprint and reducing other operating expenses to drive further cost savings: The Company is making further progress toward consolidating and rationalizing its warehouse footprint, while ensuring that all customers continue to receive the same premier level of service and responsiveness. In addition, KushCo is in the process of substantially reducing its third-party consulting costs, as well as other operating expenses.
For its fiscal first quarter ended November 30, 2019, the Company’s selling, general and administrative (SG&A) expenses were $21.1 million, or $15.6 million when excluding non-cash expenses, including depreciation, amortization, and stock-based compensation. Following the full execution of its plan, which the company expects to complete before the start of its fiscal 2020 in September, the Company expects its quarterly SG&A expenses to reduce to $12.5 million in fiscal Q4 2020, which is a decrease of approximately 40% compared to its SG&A expenses in fiscal Q1 2020. Excluding non-cash expenses, the Company expects its quarterly SG&A expenses to reduce to $9.5 million in fiscal Q4 2020, which is a decrease of approximately 40% compared to its SG&A expenses in fiscal Q1 2020.
Jason Vegotsky, KushCo’s President and Chief Revenue Officer, added: “We are fortunate to have started this new strategic plan already having secured many of the most valued MSOs, LPs, and leading brands in our client roster. However, executing a broad reorganization and cost-cutting initiative-something that is largely in our control-remains the critical next step, and we’re encouraged to have made significant inroads on that front, which should greatly reduce the revenue levels required to achieve positive adjusted EBITDA.
We believe it will take a few months for this restructuring to fully take shape, but expect the end result to be a much leaner, stronger, and more focused organization that is truly aligned on all aspects-revenue and cost-with the industry’s best and leading operators. Ultimately, we believe we have the right strategy, liquidity, customers, and talent to execute on our plan and to ensure we are in prime position to continue capturing the industry’s robust growth.”
KushCo expects to provide more details on its new strategic plan when it reports its complete fiscal second quarter 2020 financial results in April 2020.
Changes to the Leadership Team
In order to better execute on its new strategic plan, the Company also implemented changes to its leadership team. Stephen Christoffersen, Executive Vice President of Corporate Development, has been named the Company’s new Chief Financial Officer, replacing Christopher Tedford, who will be leaving the Company, effective April 10, 2020.
Mr. Christoffersen has served as KushCo’s Executive Vice President of Corporate Development since November 2018, where he oversees and manages the Company’s business development functions, including expanding KushCo’s hemp trading and retail services divisions. Since Mr. Christoffersen joined the Company, he has played an active role in KushCo’s capital raising efforts, partnerships, and strategic investments, including securing the Company’s line of credit with Monroe Capital, its partnership with C.A. Fortune, and its investment in and partnership with Xtraction Services, where he currently serves as a Board member.
He brings nearly 15 years of capital markets, portfolio management, and corporate development experience to the role of Chief Financial Officer. Prior to joining KushCo, he managed a $500 million equity portfolio for a large bank and served as the Chief Financial Officer of an emerging beef jerky brand, as well as advised on M&A and fundraising initiatives for several seed and growth stage companies. He received his Chartered Financial Analyst designation in 2015 and holds a Bachelor of Science in Finance from the University of Nevada, Las Vegas.
“On behalf of the entire Board and management team, I am truly excited to welcome Stephen as our new Chief Financial Officer,” said Kovacevich. “Stephen has made a resounding impact since joining the team less than two years ago, constantly finding new ways to add value on multiple fronts. His intimate knowledge of our business and financial state-as well as his active role in launching and developing our newer, higher-margin services-makes him a perfect candidate to step into this role as we enter this next chapter of our evolution-one that will require a broad cross-section of skills and experiences, including an ability to wear multiple hats and embrace our new ethos of ‘doing more with less.'”
Mr. Tedford had been serving as KushCo’s Chief Financial Officer since November 2018, and played an instrumental role in bolstering the Company’s financial and risk management capabilities, treasury management, and strategic financial planning and reporting.
Kovacevich continued: “We are beyond grateful for Chris’ many contributions and insight while serving as the Company’s Chief Financial Officer. When he joined KushCo in late 2018, we were running a very lean finance staff that was grappling with the challenging dynamics of a start-up operating in a hyper growth and constantly evolving industry.
Under his leadership, we have been able to significantly bolster our finance and accounting capabilities, and put standards and processes in place designed to ensure we have a well-oiled financial reporting, forecasting, and budgeting machine across the entire organization. I am encouraged by the solid platform Chris and his team have put in place, which can now be easily picked up by Stephen, for whom we have the utmost confidence. Overall, we thank Chris for all his service and wish him nothing but the best in his next endeavors.”
About KushCo Holdings
KushCo Holdings, Inc. (OTCQX:KSHB) (www.kushco.com) is the premier producer of ancillary products and services to the legal cannabis and CBD industries. KushCo Holdings’ subsidiaries and brands provide product quality, exceptional customer service, compliance knowledge and a local presence in serving its diverse customer base.
Founded in 2010, KushCo Holdings has now sold more than 1 billion units to growers, processors and producers across North America, South America, and Europe.
The Company has been featured in media nationwide, including CNBC, Fox News, Yahoo Finance, Cheddar, Los Angeles Times, TheStreet.com, and Entrepreneur, Inc Magazine. While KushCo Holdings provides products and solutions to customers in the cannabis and CBD industries, it has no direct involvement with the cannabis plant or any products that contain THC.
Picked up a position first time. And Medipharm, ahead of earnings.
Yep. Tried warning this is a scam LONG ago up when it broke down thru 5 and the suspicious activity began surfacing. Was an easy short
Lukes bought 2x as much hwre for same px :)
Had to buy a little more today, I am sure it will drop now that I bought.
Lol.. wait another few weeks. Going right to .10 like I said Months ago.. scams can’t survive black swans
Have to love the price now if you are buying! eom
Don’t plan on being here in a few months
Ok. Enjoy the .20 price in a few months when they continue to a siphon more money from the outstanding shares and triple the float
Financial Markets Tumble as Coronavirus Concerns Intensify, These Cannabis Stocks Could Get Hit the Worst
Pot Stock Pandemic
Read Here
This is 100% a legitimate company
Been calling this scam since it broke down thru 5.. their numbers and repeated release of shares to put more money in their pockets is a screaming red flag.. 1 MAYBE 2 raises but they’ve been continually taking $ out of this for years.. that’s why it’s going to .01 eventually. Next near term will be .50. Total sucker play
Exactly, it should be lower. Next stop .50
https://seekingalpha.com/author/the-cannabis-investing-podcast
G.Allen says better than 50% chance Trump deschedules dope prior to primaries.
Yes, it should. These KSHB dickheads are like baby monkeys...what they don't fuck up, they shit on.
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