Due to the vaping health concerns, 2019 was a bad year for KushCo Holdings (OTCQB:KSHB), and 2020 does not seem any better either. The company, on Wednesday, released its quarter two results for fiscal 2020, reporting a fall in revenue by 14% year over year. The reported figure for revenue amounted to 30.14 million dollars. The analysts, however, forecasted the revenue of 30.13 million dollars.
However, the picture painted by the company’s bottom line added to the company’s woes. The not less so reported amounted to 44.4 million dollars or 4 cents per share as per the rules of GAAP. The company’s loss was also deterioration from year over year figure of 8.9 million dollars or 10 cents a share.
No Good News For The Company In The Near Future
The non-GAAP adjusted net loss also deteriorated to 17.5 million dollars (16 cents per share) in quarter two from the year over year adjusted net loss of 7.8 million dollars (9 cents per share). These losses and poor performance can be attributed to the after-effects of the health concerns surrounding vaping that has been present since last year.
In November 2019, KushCo had launched the hemp trading business with the expectation of the same boosting the profitability for the company. However, the performance of the unit did not meet up the expectations and was rather weak initially. The pandemic also hit the sales of the company. While, in California – the company’s largest cannabis market- adult-use cannabis stores can remain open (being declared as an essential product), the sales for home-orders fell. The company did, however, manage to increase its sales in several other provinces like Illinois, Canada, Michigan, and Massachusetts, expanding its core customer base.
The growth rates don’t seem likely to improve anytime soon for KushCo Holdings. The company’s CEO Nick Kovacevich does claim that the company would be able to deliver positive adjusted EBITDA along with revenue ranging between 35 million dollars to 45 million dollars post the cost restructuring.