KushCo Holdings, Inc. Reports Preliminary Fiscal Year 2018 Revenue of Approximately $51M
2018-09-18 09:00 ET - News Release
Strong fourth quarter sales growth sees KushCo Holdings expect to become first U.S. based publicly-traded company in the cannabis industry to generate over $51 million in revenue annually
GARDEN GROVE, Calif., Sept. 18, 2018 (GLOBE NEWSWIRE) -- KushCo Holdings, Inc. (OTCQB: KSHB) (“KushCo” or the “Company”), the parent company of innovative cannabis industry leaders such as Kush Bottles, Kush Energy, The Hybrid Creative, and Koleto Packaging Solutions, which provide a range of services and products for the regulated cannabis, CBD and other related industries, announced today that the Company is expecting to report over $51 million in annual revenue for the fiscal year ended August 31st, 2018, representing an increase of approximately 171% compared with the fiscal year ended August 31st, 2017.
The record setting revenue numbers demonstrate the continued rapid growth of the Company, following a series of initiatives to drive organic growth, as well as strategic M&A activity. These efforts have allowed the Company to expand its product portfolio and implement a more efficient distribution platform. Key highlights powering this achievement include:
- The launch of Kush Energy, a new division focused on supplying the cannabis industry with tested, ultra-high purity solvents and hydrocarbons.
- The acquisition of Zack Darling Creative Associates and its wholly-owned subsidiary, The Hybrid Creative, which offers brand strategy, creative design and marketing, web application development, and e-commerce solutions to cannabis and non-cannabis clients.
- The opening of several new distribution centers including Worcester, Massachusetts and Las Vegas, Nevada.
- International expansion with launch of Kush Supply Co. Canada headquartered in Toronto.
- The launch of Koleto Packaging Solutions, the research and development arm focused on developing innovative packaging products and creating Intellectual Property.
Nick Kovacevich, CEO and Chairman of KushCo Holdings, noted, “Our fiscal year 2018 revenue serves as a historic milestone, not just for KushCo Holdings, but for the entire cannabis industry. We believe that no U.S. based public cannabis-related company has ever before generated this level of annual sales revenue. Building on the Company’s year to date momentum, our expected fourth quarter achievement of approximate revenues in excess of $19 million is a testament to the highly innovative and strategic work by our team, completing and integrating key acquisitions, and the effectiveness of our sales model in meeting the evolving needs of the market. We are witnessing just how our scale allows us to leverage synergies which benefit both us and our great customers.”
“Crossing the $51 million revenue mark is another significant indicator that the U.S. cannabis space is now a legitimate industry, producing major revenues, employment, and tax income. As more and more states move towards legalization of medical and adult use cannabis programs, we expect the industry will continue to see rapid growth and a race amongst businesses to achieve the scale needed to serve this major industry,” added Mr. Kovacevich. “While we see our fiscal 2018 achievement as an important milestone for our company, heading into fiscal year 2019 we are going to continue to put our heads down, invest in our platform and focus on gaining market share, growing revenues, and building value for both customers and shareholders. In other words, we are just getting started.”
The Company did however experience growing pains associated with the significant growth witnessed during 2018. The Company expects to take a $1.8 million inventory adjustment charge resulting largely from opening multiple new distribution centers and the Company’s lack of a global warehouse management system. This situation will be addressed with software solutions being evaluated for implementation in the first half of the 2019 fiscal year.