KushCo Holdings Inc (OTCMKTS:KSHB) reported revenues of $22.3 million in Q3 2020. It is on the backdrop of reduced sales of natural and vape products and tightened credit facilities to small customers. The company also suffered from restrictions imposed because of ongoing coronavirus crisis.
Reduces SG&A expenses in Q3 2020
KushCo’s SG&A expenses declined to $12.7 million (down 50%). It slashed the salaries of executives and reduced spending on entertainment, travel and consultancy services.
CEO of KushCo, Nick Kovacevich, said the company completed the transition in Q3 2020. It exhibited the execution strategy to achieve positive EBITDA quickly. The company consolidated warehouses, vendors, and streamlined expenses besides improved inventory to support sales on par. It also ramped up collection efforts.
He said the company posted lower than projected sales because of restrictions imposed on travel to stem the impact of coronavirus and reduce order booking from larger customers. The same trend will continue shortly because the company focuses on serving financially healthy and larger customers.
Takes initiatives to boost sales
KushCo is taking several initiatives like investing resources and time to influence the decision making of top customers. It is establishing long term relationships with customers for supply accords. The company is processing orders from smaller customers efficiently and introduced a support line to address their queries.
KushCo shuts down its facilities in Santa Rosa and Las Vegas, Denver. It achieved additional cost savings by subletting its Garden Grove Warehouse.
Outlook for Q4 2020
KushCo commenced business activity in Q4 with a healthy order book. The company is signing several supply agreements with customers besides recognizing the orders from customers. It is also focusing on core business areas like energy, packaging, and vape to boost revenues. The company also assumed a policy to use capital to support the business going forward prudently. KushCo expects to realize revenues of $26 million in Q4 2020 and lower SG&A expenses to $7.5 million.
KushCo, which is established in the year 2010, engages in providing ancillary products/ services to support legalized cannabidiol and cannabis industries. It is featured in Los Angeles Times, Yahoo Finance, Fox News, CNBC, and Inc Magazine nationwide.
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