KushCo Holdings Inc (OTCMKTS:KSHB) has reported revenues of $30.1 million in Q2 2020. It is a decline of 14% when compared to the same period last year. The company’s general, sales, and administrative expenses have surged to $27.2, mainly on account of bad debt of $9.1 million. However, KushCo has posted improved revenues of $24.6 million (up 227%) from the core customers.
Implements a strategic plan
To align with creditworthy, financially stable, and established customers, KushCo has implemented a strategic plan. The company adopted measures to downsize overheads and other expenses and focus on customers like licensed producers, multi-state operators, and leading brands.
Accordingly, the company has achieved several milestones that comprise a reduction in inventory and overheads, improved sales approach to the small customers, and improvement in warehouse consolidation. The company has laid off 26 persons in Q2 and saved $3.7 million annually. It has also removed 49 persons in March 2020 and achieved cost savings of $4 million annually. The restructuring efforts will help the company to maintain stable finances going forward and focus on core customers.
KushCo also lowered third-party consulting costs. As part of the restructuring amid the coronavirus crisis, it has removed the existing Chief Finance Officer – Christopher Tedford. Stephen Christoffersen, the Executive Vice President (Corporate Development), is appointed as Chief Finance Officer with effect from April 10, 2020.
Bad debt and slow demand for vape hardware
CEO, Chairman, and Co-founder of KushCo, Nick Kovacevich said the company is successful in executing its strategic plan despite market challenges. The company posted a drop in net revenues because of multiple factors like slower demand for its Vape Hardware, sluggish beginning of hemp trading business, and prevailing weakness in the market in California.
Sequential growth in key markets
However, KushCo has reported several positives that comprise sequential growth in several vital markets, including Canada, Massachusetts, Michigan, and Illinois. Its sales have almost tripled in these regions. Also, the company continues to gain core customers like LPs, larger MSOs, and leading brand customers. KushCo has improved customer base and cross-sold additional products. KushCo plans to add more large cannabis companies in the US and Canada to solidify growth because several mid-sized and small companies struggling.
Published at Mon, 27 Apr 2020 12:24:50 +0000