The results of KushCo Holdings’ first fiscal quarter of 2021 are in and the cannabis ancillary services company should like what was seen. KushCo offers a wide range of products and services to the cannabis industry, which saw substantial growth last year and which is expected to continue throughout 2021. As a result, KushCo’s first fiscal quarter, which ended on November 30, proved to give the company stronger sequential revenue and record sales.
The quarterly results indicate revenue of $26.8 million, coupled with a positive adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). It was the second consecutive quarter saw improved growth, backed by an increase in sales and new long-term supply contracts with several different entities. KushCo also added over 20 new supply contracts for the delivery of its stainless steel tanks.
Despite an increase in gross revenue, net revenue dropped by 23% to $26.8 million. This was due, in part, to the decision by KushCo to eliminate its hemp trading division, as well as the introduction of a new strategic plan that will bring it on par with the goals of a number of multi-state operators and licensed producers. However, the company was able to maintain its gross profit margins, which remain at 21%.
KushCo co-founder, Chairman and CEO Nick Kovacevich remarked about the results, “Fiscal Q1 2021 built on the strong momentum we achieved in the previous quarter with modest revenue growth and positive adjusted EBITDA for the second quarter in a row. We were expecting more significant growth during the quarter, but like many other importers of goods, we were faced with temporary, yet unexpected and uncontrollable, shipping delays due to record-breaking shipments to U.S. ports around the holiday season, which were exacerbated by new COVID-19 restrictions. As a result, some of the revenue that we were expecting to realize in Q1 was pushed into Q2, especially in the month of December where we had one of our strongest months in company history with $14.7 million in revenue.”