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KushCo Q2 Revenue Increases 23% QoQ Ahead Of Merger With Greenlane

KushCo Holdings, Inc. (OTCQX: KSHB) generated $32.9 million in revenue in the second quarter, representing a 23% sequential increase, and 9% year-over-year growth. Gross profit (on a GAAP basis) came in at 20%, versus 30% in the prior year. On a non-GAAP basis, gross profit was roughly 23%. Selling, general, and administrative expenses were around $10.9 million versus $27.2 million in the last year’s corresponding quarter. On a non-GAAP basis, cash selling, general, and administrative expenses amounted to $8.4 million, down by approximately 38% year-over-year. Net loss was roughly $5 million on a GAAP basis and $3.1 million on a non-GAAP basis, compared to $44.4 million and $17.5 million, respectively, in the same period last year. Adjusted EBITDA was negative, with the company reporting a loss of $0.7 million in the second quarter, compared to a $14.8 million loss in the prior-year period. As of February 28, KushCo had $35 million in cash, compared to $5.7 million in the previous quarter. The sequential increase in cash can be attributed to KushCo’s recent equity raise. In March, the Cypress, California-based company secured some million in financing to fund debt repayment, product development, acquisitions, capital expenditures, and other business opportunities, as well as provide working capital. “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,” Nick Kovacevich, the company’s chairman, and CEO said Thursday. Merger With Greenlane Holdings KushCo is poised to close the pending merger with Greenlane Holdings, Inc. (NASDAQ: GNLN) in the late second quarter or early third quarter of calendar 2021. Under the deal, KushCo agreed to become a wholly-owned subsidiary of Greenlane. The transaction is expected to yield roughly $15 to $20 million of yearly run-rate cost synergies in the two years following the closing. The combined entity is projected to boast a market capitalization of over $350 million. Upon finalizing the merger, Kovacevich will become CEO of the combined company. Greenlane’s Bill Mote will oversee its financial department, and co-founder Aaron LoCascio will become president. Photo by Avery Meeker on Unsplash See more from BenzingaClick here for options trades from BenzingaCannabis Dispensary Openings: Trulieve, Ayr, High Tide, Cookies, MedMen, Curaleaf, Inner Spirit, C3 IndustriesCannabis Movers & Shakers: Cresco, Fyllo, Generation Hemp, Treez, Medterra© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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