Cannabis packaging company KushCo Holdings Inc (OTCQB:KSHB) reported its earnings Monday, boosting its revenue 177% year-over-year to $52.1 million.
The California-based company said its net loss, including $1.0 million in depreciation expense, was $23.9 million in selling, general and administrative expenses, and $1.6 million in provisions for income tax, was approximately $10.2 million compared to net income of $69,000 in fiscal 2017.
KushCo sells packaging, containers, and other ancillary products for the cannabis industry.
"We are exceptionally pleased with the financial results we achieved during the fiscal year with revenues of $52.1 million, representing 177% growth compared to approximately $18.8 million in fiscal 2017," said chairman and chief executive officer, Nick Kovacevich.
KushCo is the parent company of industry leaders such as Kush Supply Co., Kush Energy, The Hybrid Creative, and Koleto Packaging Solutions, which provide a range of services and products for a variety of industries including the regulated cannabis and CBD industries.
"Our strong revenue growth was the result of dramatic growth in our most critical markets, with growing customer numbers, an increasingly diversified offering and expanded facility capabilities."
The company said gross margins were 24.2%, compared with 35.2% in the prior year period, and primarily related to the year-end inventory adjustments of C$2.8 million.
“As the industry continues to develop, we have transformed our business model, now operating a diverse group of business units that are transformative leaders across several categories. Our dramatic expansion of services has enabled us to enter new markets and reach a wider customer base. This drove a number of positive trends within the business in 2018, including strong growth in customer numbers, increased spending per customer, increased product consumption and the continued investment in geographic expansion and broader product offerings," said Kovacevich.
"To support this growth, we have implemented several initiatives designed to improve efficiencies and to establish, build and refine stronger, scalable and sustainable processes. These steps are expected to set us up to continue to effectively capitalize on the continued growth of the industry, and we hope to achieve between $110 million and $120 million in topline revenue during fiscal year 2019,” concluded Kovacevich.
Shares of KushCo closed at $5.20 on Monday.