KushCo Holdings sees its 2Q revenue climb 23% to $33M as its best customers buy more

KushCo Holdings Inc (OTCQX:KSHB) reported 2Q 2021 revenue that rose 23% quarter over quarter to $32.9 million, driven by increased sales to the company’s top customers, including leading multi-state operators (MSOs) and licensed producers (LPs).

KushCo’s cash position at quarter’s end was about $35 million as of February 28, compared with $5.7 million in the previous quarter, boosted by the company’s $40 million equity raise.

The company’s net revenue increased 9% year over year.

READ: KushCo Holdings agrees to transformative merger; to become subsidiary of Greenlane Holdings

“We are thrilled to have not only achieved meaningful sequential revenue growth in fiscal Q2 2021, but more importantly, to return to generating robust year-over-year revenue growth, as we make further progress on our strategy of aligning deeper with the top MSOs, LPs, and leading brands,” KushCo Holdings CEO Nick Kovacevich said in a statement.

“In fact, our top 25 customers together made up 77% of our total revenue for the quarter, up from 61% in the prior year period, demonstrating our success in deepening our relationships with these elite customers who are continuing to rapidly scale and consolidate the industry,” Kovacevich added.

The company also noted its adjusted EBITDA loss in the second quarter narrowed to $700,000 from about $14.8 million during the same period last year, following corporate rightsizing initiatives that included headcount reductions and lower travel and entertainment expenses.  

As well, KushCo secured a long-term supply contract with a leading West Coast operator during the quarter and was awarded 38 supply contracts for its stainless steel tanks.

The company added that it expects its pending merger with Greenlane Holdings Inc (NASDAQ:GNLN) to close in late 2Q or early 3Q this year, which it says positions the company well to capitalize on the macro tailwinds (more states legalizing cannabis) through the combined entity’s enhanced scale, differentiated customer offering, and significant cross-selling opportunities.

The combination of KushCo and Greenlane is expected to generate some $15 million to $20 million of annual run-rate cost synergies within two years, the companies said.

Contact Sean at [email protected]

Story by ProactiveInvestors