KushCo Shares Fizzle On Q1 Print, CEO Says Vaping Crisis Impacted Results

KushCo Holdings, Inc. KSHB reported fiscal first-quarter revenue of $35 million Wednesday compared to $25.32 million in the same quarter of the prior year.

KushCo posted a net loss of $12.51 million or 12 cents per share versus a net loss of $8.58 million and 11 cents per share in the corresponding period in 2018.  

On a GAAP basis, the company achieved a gross profit of 20.8%, whereas on a non-GAAP basis it was 22.6%.

Among important operational milestones in the quarter, KushCo hired ex-

NESTLE S A/S ADR NSRGY Nestle and Cetera Financial Group human resources executive Rhiana Barr as chief people officer; and laid off 53 employees for $4.3 million in net annual cost savings.  

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"Building off of an exceptional year for KushCo in fiscal 2019, Q1 2020 helped us start off the new fiscal year on the right foot, with significant progress on all fronts operationally and financially, “ Nick Kovacevich, KushCo's co-founder, chairman and CEO, said in a statement.

"Financially, we completed a $30.1 million capital raise and produced another strong quarter of year-over-year revenue growth and margin enhancement, despite a challenging market backdrop that has affected the entire industry."

Revenue was up year-over-year but down on a sequential basis, the CEO said, adding that this was due to a widespread industry slowdown largely driven by the black market vaping crisis. 

KushCo reiterated its net revenue guidance of between $230 and $250 million i 2020 and restated its projections for positive adjusted EBITDA on a quarterly basis in the second half of fiscal 2020.

KushCo Price Action

The stock was down 7.4% at $1.56 at the time of publication Thursday. 

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