KushCo Holdings Inc (OTCQX:KSHB) reported fiscal 2021 first-quarter revenue of $26.8 million along with its second consecutive quarter of positive adjusted EBITDA, as the company achieved record December sales of $14.7 million.
KushCo also increased its net revenue guidance for its fiscal year 2021 to be between $130 million and $160 million, from between $120 million and $150 million previously, and reiterated its expectation for adjusted EBITDA for the fiscal year to be between $5 million and $7 million.
“We're starting to see some of our higher value custom packaging projects finally come to fruition, after months of hard work with our customers to bring these products to life. We recognized initial revenue from these projects in Q1, but have a strong backlog of projects that are expected to ship in Q2 and throughout the remainder of the fiscal year,” KushCo Holdings CEO Nick Kovacevich said in a statement.
READ: KushCo Holdings has positioned itself as a premier ‘picks and shovels’ provider of cannabis and CBD-related ancillary products
“In addition, we have been locking in additional long-term supply contracts with our major MSO and LP customers, including a top 5 public MSO during the fiscal first quarter, which brings our total to four customer supply contracts in place, with several more in progress.”
He added: “With some of the early sales trends we're seeing in fiscal Q2, we believe we're in a strong position to continue gaining momentum going into the second half of the fiscal year, which should coincide with several new adult use programs going live, as well as our customers continuing to ramp up their footprint both organically and inorganically.”
“We are excited to have delivered another quarter of profitable growth, despite some headwinds that not only impacted our industry, but the entire global economy as well. Fiscal Q2 is shaping out to be a much stronger quarter, as we further penetrate the leading MSOs and LPs with supply contracts, higher-margin custom projects, and a wider array of products and solutions through our cross-selling efforts. We believe that as we continue to penetrate these elite customers-and as they make up a greater part of our overall business-that our growth trajectory will start to reflect their impressive growth.”
Other notable highlights for KushCo during the quarter included the company securing a long-term supply contract with a Top 5 public MSO, with four total customer contracts secured to date, as well as securing more than 20 new supply contracts for the company's stainless steel tanks.
KushCo said its net revenue for the quarter slipped 23% year-over-year as the company eliminated its hemp trading division and tightened credit terms to smaller and less creditworthy customers.
Its Adjusted EBITDA for 1Q 2021, though, totaled $0.5 million compared to a loss of approximately $6.8 million in the prior-year period.
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