KushCo Holdings, Inc. (OTCQX: KSHB) announced a new company record for quarterly revenue only one day after the company announced that it had filed an application to list onto the NASDAQ Global Select Market. The company’s third fiscal quarter results showed that a year-over-year net revenue increase of 221% to $41.5 million had occurred. It was also revealed within the third quarter report that gross profit increased by 4.9% to 17.8% on a GAAP Basis when compared to the previous quarter.
Nick Kovacevich, Chairman and Chief Executive Officer of KushCo, stated: “Revenue for the third fiscal quarter of 2019 saw strong growth of 221% year-over-year, reaching a record $41.5 million, compared with $12.9 million in the third fiscal quarter of 2018 and $35.2 million in the second fiscal quarter of 2019. More importantly, we saw gross margins move up ~490bps on a GAAP basis quarter over quarter which is a testament to our commitment of profitable and sustainable growth over time. The Company’s organic revenue growth and overall performance were attributable to the growth of our customer base and effective cross-selling of our offerings.”
Operations within the third quarter for the company included numerous achievements such as the successful launch of the first biodegradable packaging solution. The biodegradable packaging solution came to be through a contract with SunGrown Packaging, LLC. SunGrown is a California-based provider of custom packaging solutions for the cannabis industry in specific. Both corporations have agreed to work together on the early stages of a new product line launch for biodegradable and compostable packaging products that are to be utilized in cannabis, hemp, and CBD product markets.
The company also completed a warehouse management system implementation, secured $21.3 million in senior unsecured notes, and signed an exclusive development and distribution agreement with IEKO Corporation for the production of cannabis and CBD industry related packaging products that are compostable and biodegradable. As per the terms of the agreement, KushCo and IEKO will work together to develop packaging products that are environmentally friendly and adhere to ASTM and BPI standards for a guarantee of biodegradable certification.
Robert J. Meers, Chief Executive Officer of IEKO, stated: “Our partnership allows us to be a vertically-integrated formulating, compounding, processing, and producing solution committed to making 100 percent commercially compostable, sustainable packaging without exception. Partnering with KushCo gives us the ability to continue to develop the next generation of renewably resourced, zero-waste packaging materials and we are thrilled to be partnering with a company that shares our commitment to the IEKO mission of ‘do no harm.'”
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