Company News: Page (1) of 1 - 01/11/17

Kush Bottles Reports First Quarter Fiscal 2017 Results

 

January 11, 2017 --

SANTA ANA, Calif., Jan. 11, 2017 /PRNewswire/ -- Kush Bottles, Inc. (OTCQB: KSHB), a provider of packaging, supplies, accessories and branding solutions for the regulated cannabis industry, reported financial results for its first fiscal quarter ended November 30, 2016.

First Quarter Fiscal 2017 Financial Highlights vs. First Quarter Fiscal 2016

  • Revenue up 44% to $2.47 million
  • Gross margin up 50 basis points to 33.8%
  • Net loss, including $0.12 million in non-cash stock compensation, $30,000 in depreciation and $24,000 for a non-recurring expense, was $(0.16) million compared to net income of $5,000
  • Record cash balance of $2.0 million compared to $0.30 million
  • Working capital up significantly to a record $3.38 million compared to $0.26 million

Executive Commentary
"Our first fiscal quarter began on a strong note, with record revenue and the strongest cash and working capital positions in our company's history," said Nick Kovacevich, co-founder and CEO of Kush Bottles. "This was driven by continued growth in California and Washington. More specifically, our customer base, average order size and number of orders continue to climb, and our e-commerce revenues also continue to increase. Our custom branded packaging revenues increased nearly three times from last year and our SKU count grew by 73%.


"During the quarter, we implemented a new cloud-based accounting, CRM and ERP system which we expect will improve our ability to scale. Our new larger facility in Washington has helped to accommodate continued growth, and we also expanded our sales force to penetrate the new states that legalized cannabis in the November 2016 election.

"As we look towards the remainder of 2017, we believe we are well-positioned to capitalize on the growth opportunities which exist in the developing, regulated cannabis industry. We have increased our customer base, which exceeds 3,000 producers, processers and retailers, and we've created one of the largest product libraries in the industry, with distribution spanning across 28 states and Canada. Also, we have doubled our revenue for two consecutive years, and we believe we remain in the early stages of our growth."

First Quarter Fiscal 2017 Financial Results
Total revenue in the first fiscal quarter of 2017 increased 44% to $2.47 million compared to $1.72 million in the first fiscal quarter of 2016. The increase was primarily attributed to growth in the number of customers, average order size and order volume in the Company's largest markets, as well as continued growth in other states with emerging legalized cannabis programs.

Gross margin in the first fiscal quarter of 2017 increased 50 basis points to 33.8% compared to 33.3% in the first fiscal quarter of 2016.

Operating expenses in the first fiscal quarter of 2017 increased to $0.97 million compared to $0.56 million in the first fiscal quarter of 2016. This was primarily due to a $0.12 million increase in non-cash stock compensation expense and a $0.15 million increase in payroll and related expenses due to an expansion of the Company's sales force and operational personnel.

Net loss in the first fiscal quarter of 2017 was $(0.16) million or $(0.00) per share, compared to net income of $5,000 or $0.00 per share in the first fiscal quarter of 2016. Net loss in the first fiscal quarter of 2017 included $0.12 million in non-cash stock compensation, $30,000 in depreciation and $24,000 for a non-recurring expense. Excluding these charges, net income would have been approximately $7,000 or $0.00 per share.

At November 30, 2016, cash increased significantly to $2.00 million compared to $0.30 million as of November 30, 2015. Total debt was reduced to $55,000 compared to $0.20 million in the first fiscal quarter of 2016.

Working capital was up significantly to $3.38 million as of November 30, 2016 compared to $0.26 million as of November 30, 2015, primarily driven by the increase in cash.

About Kush Bottles
Kush Bottles, Inc. (OTCQB: KSHB) provides packaging products and solutions to producers, processers and retailers operating in the regulated medical and recreational cannabis industry. Founded in 2010, Kush Bottles has sold more than 100 million bottles and regularly services more than 3,000 customers across the United States and Canada. The company primarily services the business-to-business market, which includes legally operated medical and adult-use dispensaries, growers and marijuana-infused product (MIP) manufacturers. Kush Bottles aims to be the gold standard for responsible branding and packaging in the cannabis industry.

Kush Bottles has no direct involvement with cannabis plants or extracts.

The company has been featured in media nationwide, including CNBC, Los Angeles Times, TheStreet.com, Entrepreneur, and Inc. Magazine. For more information, visit www.kushbottles.com or call (888)-920-5874.  

Connect
Website: www.kushbottles.com 
Instagram: instagram.com/kushbottles 
Facebook: facebook.com/kushbottles 
Twitter: twitter.com/kushbottles

Forward Looking Statement
This press release may include predictions, estimates or other information that might be considered forward-looking within the meaning of applicable securities laws. While these forward-looking statements represent our current judgments, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this release. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. When used herein, words such as: "potential," "look forward," "believe," "dedicated," "building," or variations of such words and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are often discussed in filings we make with the United States Securities and Exchange Commission (SEC), available at: www.sec.gov, and on our website, at: www.kushbottles.com.

Company Contact
Ryan Selewicz
Director of Marketing
714-243-4017
ryan@kushbottles.com

Investor Relations
Liolios
Cody Slach or Sean Mansouri
949-574-3860
ir@kushbottles.com

 KUSH BOTTLES, INC 

Condensed Consolidated Balance Sheets


(Unaudited)
















November 30,


August 31,




2016


2016

ASSETS







CURRENT ASSETS











Cash

$       2,000,439


$       1,027,003


Accounts receivable, net of allowance

266,018


199,844


Prepaid expenses and other current assets

882,227


596,456


Inventory

1,236,720


1,142,458









Total Current Assets

4,385,404


2,965,761








Goodwill

2,376,589


2,376,589


Deposits

12,220


12,220


Property and equipment, net

593,234


273,597









TOTAL ASSETS

$       7,367,447


$       5,628,167







LIABILITIES AND STOCKHOLDERS' EQUITY 







CURRENT LIABILITIES











Accounts payable 

$          546,332


$          369,636


Accrued expenses and other current liabilties

437,750


549,101


Notes payable - current portion

20,637


20,247









Total Current Liabilities

1,004,719


938,984







LONG-TERM DEBT











Notes payable 

33,950


39,307









TOTAL LIABILITIES

1,038,669


978,291







COMMITMENTS and CONTINGENCIES

-


-







STOCKHOLDERS' EQUITY 











Preferred stock, $0.001 par value, 10,000,000 shares





authorized, no shares issued and outstanding

-


-


Common stock, $0.001 par value, 265,000,000 shares authorized,





49,391,896 and 48,300,162 shares issued and outstanding, respectively

49,390


48,300


Additional paid-in capital

7,118,054


5,278,284


Accumulated deficit

(838,666)


(676,708)









Total Stockholders' Equity 

6,328,778


4,649,876









TOTAL LIABILITIES AND  STOCKHOLDERS' EQUITY

$       7,367,447


$       5,628,167













 

KUSH BOTTLES, INC

Condensed Consolidated Statements of Operations

(Unaudited)










For the Three Months Ended




November 30,




2016


2015













REVENUE

$        2,472,295


$      1,720,581

COST OF GOODS SOLD

1,637,652


1,148,209







GROSS PROFIT

834,643


572,372







OPERATING EXPENSES











Depreciation 

9,304


5,890


Stock compensation expense

115,244


-


Selling, general and administrative 

847,076


559,283









Total Operating Expenses

971,624


565,173







INCOME (LOSS) FROM OPERATIONS

(136,981)


7,199







OTHER INCOME (EXPENSES)











Other income (expense)

(23,944)


19


Interest expense, net

(1,033)


(2,298)









Total Other Income (Expenses)

(24,977)


(2,279)







INCOME (LOSS) BEFORE INCOME TAXES

(161,958)


4,920







PROVISION FOR INCOME TAXES

-


-







NET INCOME (LOSS)

$          (161,958)


$             4,920







BASIC INCOME (LOSS) PER SHARE

$                 0.00


$              (0.00)







DILUTED INCOME (LOSS) PER SHARE

$                 0.00


$              (0.00)







WEIGHTED AVERAGE NUMBER OF




COMMON SHARES OUTSTANDING - BASIC

48,713,496


46,132,779







WEIGHTED AVERAGE NUMBER OF




COMMON SHARES OUTSTANDING - DILUTED

50,511,299


47,054,237













 

KUSH BOTTLES, INC

Condensed Consolidated Statements of Cash Flows


(Unaudited)














For the Three Months Ended






November 30, 






2016


2015










CASH FLOWS FROM OPERATING ACTIVITIES






Net income (loss)

$          (161,958)


$              4,920



Adjustments to reconcile net income (loss) to net






   cash provided by (used in) operating activities:







Depreciation

29,735


19,788




Stock compensation expense

115,244


-











Changes in operating assets and liabilities







Accounts receivable

(66,174)


(12,100)




Prepaids 

(366,550)


8,320




Inventory

(94,262)


(257,281)




Accounts payable

176,696


328,410




Accrued expenses and other current liabilities

(111,351)


26,736













Net cash provided by (used in) operating activities

(478,620)


118,793










CASH FLOWS FROM INVESTING ACTIVITIES














Purchase of property and equipment

(164,976)


(47,282)













Net cash used in investing activities

(164,976)


(47,282)










CASH FLOWS FROM FINANCING ACTIVITIES














Repayment of related party loan

-


(33,332)



Repayment of notes payable

(4,967)


(12,442)



Proceeds from sale of stock

1,621,999


71,000













Net cash provided by financing activities

1,617,032


25,226










NET INCREASE IN CASH

973,436


96,737










CASH AT BEGINNING OF PERIOD

1,027,003


201,259










CASH AT END OF PERIOD

$         2,000,439


$          297,996










SUPPLEMENTAL DISCLOSURES OF






CASH FLOW INFORMATION:














CASH PAID FOR:







Interest

$                1,033


$              2,298




Income taxes

$                        -


$                      -










NON-CASH INVESTING AND FINANCING ACTIVITIES







Prepaid services paid in stock

$            103,617


$                     -


















 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/kush-bottles-reports-first-quarter-fiscal-2017-results-300389225.html

SOURCE Kush Bottles, Inc.

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