GrowLife Announced Revenues of $2.3 Million for Second Quarter Ending June 30, 2014
August 20 2014 - 9:00AM
Business Wire
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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