logo-loader

Greenlane Holdings announces preliminary 3Q results reflecting initial impact of successful merger with KushCo Holdings

Published: 07:54 04 Nov 2021 EDT

Greenlane Holdings announces preliminary 3Q results reflecting initial impact of successful merger with KushCo Holdings
Greenland said it is paying close attention to items generating robust cash-to-cash cycles, taking out the lower-margin items that require the company to invest significant working capital and instead reallocating those resources to higher-margin goods

Greenlane Holdings Inc told investors that its preliminary financial data for its third quarter reflects approximately one month of combined operations following its successful merger with KushCo Holdings Inc which was completed on August 31, 2021.

The company, a leading seller of cannabis accessories, reported net sales of between approximately $40 million and $41 million for the three months ended September 30, 2021, and adjusted gross profit of $8 million to $9 million. That reflected a gross margin of between about 19% and 21%, it added.

Following the merger with Kushco, it said it booked a one-time inventory rationalization charge of $9 million. That resulted in a GAAP gross profit of between zero and a $1 million loss. The rationalization amount is currently under review and represents management’s current estimate, it said.

READ: Greenlane Holdings and KushCo Holdings finalize previously announced merger

"As we shared when announcing our merger with KushCo, we identified a small part of the legacy Greenlane business that competed with KushCo's packaging business," Greenlane CEO Nick Kovacevich said in a statement.

"A significant portion of our rationalization work post-merger has been to eliminate the redundancies between those two units and to write off certain items that are not selling as efficiently,” he added.

Greenland said it is paying close attention to items generating robust cash-to-cash cycles, taking out the lower-margin items that require the company to invest significant working capital and instead reallocating those resources to higher-margin goods. 

“This has resulted in us tightening up our SKU (stock-keeping unit) count and being more judicious with our working capital, while also generating cash in a non-dilutive way by selling inventory that can fund our organic and inorganic growth initiatives,” Kovacevich continued. 

“We believe this initiative will set us up to have a stronger balance sheet that is more flexible to meet the demands of an evolving global supply chain that has been strained in recent months with global container shortages, COVID-19 challenges and restrictions, and higher freight costs."

Greenlane said it will host a scheduled conference call and webcast on November 16 at 8:30am Eastern time to discuss the results for its third quarter ended September 30, 2021, followed by a question-and-answer session.

The call will be webcast and will be accessible by visiting the Financial Results page of Greenlane's investor relations website.

Contact the author at stephen.gunnion@proactiveinvestors.com

ARway.ai announces multiple new SaaS developer contracts in both the United...

ARway.ai (CSE:ARWY, OTCQB:ARWYF) Chief Executive Officer Evan Gappelberg joined Steve Darling from Proactive to announce multiple new SaaS developer sign-ups for its augmented reality experience platform, focusing on AR indoor navigation. These partnerships represent significant milestones in...

1 hour, 40 minutes ago