The Company completed the first six months of 2014 with revenues at $4.6 million and $1.0 million gross margins

GrowLife, Inc. (OTC: PHOT), one of the largest cultivation service providers in the nation, reported results for the second quarter ending on June 30, 2014. The Company recognized revenues of $2.3 million for the quarter, and maintained a 22% gross margin for the second consecutive quarter in 2014.

"GrowLife’s strong revenue growth in the first six months of 2014 represents 159% increase over last year, and 167% gross margin lift," said Marco Hegyi, President of GrowLife, Inc. "While the performance of our new streamlined business operations including our direct-to-cultivators service remains to be fully realized, we believe GrowLife expects to sustain its traction in the market for the rest of 2014.”

Mr. Hegyi, who assumed leadership over the Company in the second quarter 2014, reduced losses by shrinking operational expenses. Under his leadership, the Company has met market expectations with a leaner team that pushes forward to serve customers in 17 states. Additional states will be added by the end of the year.

“Our customers, as well as our suppliers, have responded well to our direct-to-cultivator strategy which provides logistics and contractual services,” said Hegyi. “We’ve filled a void in the market by delivering supplies and equipment necessary for the design, build out and expansion of their facilities directly to cultivators."

Noteworthy details from today’s extensive quarterly report are as follows:

Q2 2014 Highlights

  • Net revenue for the three months ended June 30, 2014 increased $1,384,000 to $2,257,000 as compared to $873,000 for the three months ended June 30, 2013.
  • Gross margin was $501,000 for the three months ended June 30, 2014 as compared to $188,000 for the three months ended June 30, 2013.
  • The gross margin was 22.2% for the three months ended June 30, 2014 as compared to 21.5% for the three months ended June 30, 2013.
  • Net income for the three months ended June 30, 2014 was $19,232,000 as compared to a net loss of $1,617,000 for the three months ended June 30, 2013. Net income for the three months ended June 30, 2014 included gain on change – derivative liability of $21,197,000, offset by non-cash expenses of $1,056,000.
  • Our cash used in operations for the three months ended June 30, 2014 was $438,000.

YTD 2014 Highlights

  • Net revenue for the six months ended June 30, 2014 increased $3,015,000 to $4,640,000 as compared to $1,625,000 for the six months ended June 30, 2013.
  • Cost of sales for the six months ended June 30, 2014 increased $2,424,000 to $3,620,000 as compared to $1,196,000 for the six months ended June 30, 2013.
  • Gross margin was $1,020,000 for the six months ended June 30, 2014 as compared to $429,000 for the six months ended June 30, 2013. The gross margin was 22.0% for the six months ended June 30, 2014 as compared to 26.4% for the six months ended June 30, 2013.
  • Net loss for the six months ended June 30, 2014 was $52,242,000 as compared to a net loss of $2,800,000 for the six months ended June 30, 2013. The net loss for the six months ended June 30, 2014 included non-cash expenses of $50,834,000.
  • Our cash used in operations for the six months ended June 30, 2014 was $1,568,000.

GrowLife has also implemented additional changes to its business operations that should be reflected in the September 30, 2014 quarter, such as payroll, rent and other expense reductions, comprehensive market coverage, and the consolidation of disparate business divisions. These changes are critical as the Company expands to serve more customers across the nation.

For more information about GrowLife, please visit: www.growlifeinc.com. Additional commentary on the Company as well as the industry is also provided on Mr. Hegyi’s blog.

About GrowLife, Inc.

GrowLife, Inc. (PHOT) (www.growlifeinc.com) aims to become the nation’s largest cultivation service provider for cultivating organics, herbs and greens and plant-based medicines. Our mission is to best serve more cultivators in the design, build-out and expansion of their facilities with products of high quality, exceptional value and competitive price. Through a nationwide network of local representative, regional centers and its e-Commerce team, GrowLife provides essential goods and services including media (farming soil), industry-leading hydroponics equipment, plant nutrients, and thousands more products to specialty grow operations in 17 states. GrowLife is headquartered in Seattle, WA and was founded in 2012.

Cautionary Language Concerning Forward-Looking Statements

This release contains "forward-looking statements" that include information relating to future events and future financial and operating performance. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential" and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for GrowLife's products, the introduction of new products, the Company's ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company's liquidity and financial strength to support its growth, and other information that may be detailed from time-to-time in GrowLife's filings with the United States Securities and Exchange Commission. Examples of such forward-looking statements in this release include statements regarding future sales, costs and market acceptance of products as well as regulatory actions at the State or Federal level. For a more detailed description of the risk factors and uncertainties affecting GrowLife, Inc. please refer to the Company's Securities and Exchange Commission filings, which are available at www.sec.gov. GrowLife, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

GrowLife, Inc.Media Relations:Tina QunellGrowLife Communication Team206-919-9652tina@growlifeinc.comorInvestor Relations:Tina QunellShareholders Support Team206-919-9652tina@growlifeinc.com

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