Record Revenue of $422.5
million and Adjusted EBITDA of $34.5
million in 2021
- Revenues increased 46% to $90.6
million in the fourth quarter and increased 119% to
$422.5 million for the full year
2021.
- Net income for the full year was $12.8 million, compared to prior year net income
of $5.3 million.
- Net loss for the fourth quarter was $4.1 million, compared to net income of
$1.5 million in the prior
year.
- Adjusted EBITDA was a loss of $1.9
million for the fourth quarter, but increased 82% to
$34.5 million for the full year
2021.
- Expecting full year 2022 revenue in the range of
$415 million to $445 million with adjusted EBITDA of $30 million to $35
million.
- The Company plans to open 15 to 20 new GrowGeneration garden
centers in 2022.
DENVER, March 1, 2022 /PRNewswire/ - GrowGeneration Corp.
(NASDAQ: GRWG), ("GrowGen" or the "Company"), the largest chain of
specialty hydroponic and organic garden centers with 63 locations
across 13 states, today reported record fourth quarter and full
year 2021 financial results. Revenues were $90.6 million in the fourth quarter 2021 compared
to $61.9 million in the same period
last year, and revenues were $422.5
million for the full year 2021 compared to $193.4 million for the full year 2020, an
increase of 118%, including the contribution from acquisitions.
The Company also reported fourth quarter 2021 GAAP net loss of
$4.1 million compared to net income
of $1.5 million in the same period
last year. Diluted loss per share in the fourth quarter was
($0.07) compared to diluted earnings
per share of $0.03 in the same period
last year. GAAP net income for the twelve months ended
December 31, 2021 was $12.8
million, compared to net income of $5.3 million for the twelve months ended
December 31, 2020.
Non-GAAP income before interest, taxes, depreciation,
amortization, and share-based compensation (Adjusted EBITDA) was a
loss of $1.9 million in the fourth
quarter of 2021 or ($0.03) per
diluted share, compared to earnings of $5.5 million in the same period last year,
$0.11 per diluted share.
Adjusted EBITDA for the twelve months ended December 31,
2021 was $34.5 million, compared to
$18.9 million for the twelve months
ended December 31, 2020, an increase of $15.6 million or 82%.
Darren Lampert, GrowGen's
Co-Founder and CEO stated, "The GrowGen team delivered a strong
year despite the persistently difficult macro environment that is
impacting the entire cannabis industry. Same-store sales at
26 locations decreased (12.3)% in the fourth quarter of 2021 versus
the prior year. Full year 2021 same store sales were 24.4% over
last year. At present, we have 63 retail locations in
operation. We increased our inventory positions across all key
product categories to get ahead of price increases, as well as
expanded more private label purchases. Our private label and
proprietary products reached approximately 7.5% of our overall
sales in the fourth quarter. Our online marketplace, including
Agron, reached $36.2 million of
revenue for 2021. In addition to acquired locations, we
opened two greenfield locations in the Los Angeles metro area in 2021, and for next
year, we are looking to open 15 to 20 locations across new and
existing states."
Mr. Lampert continued, "In order to position the company for
2022 and beyond, we have made several strategic decisions to drive
margin improvements and EBITDA. As of December 31, 2021 our balance sheet remains
strong with $81 million of available
liquidity. Given our view of the business today and the
continued challenges across the US market, we expect to generate
full year revenue of $415 to
$445 million in 2022.
Financial Highlights for Fourth Quarter 2021 Compared to
Fourth Quarter 2020
- Net revenues increased 46% to $90.6
million for fourth quarter 2021, compared to $61.9 million for the same period last year.
- Same-store sales at 26 locations open for the same period in
2020 and 2021 were $40.3 million in
fourth quarter 2021, compared to $46.0
million in the same period last year, representing a 12.3%
year-over-year decline.
- Gross profit margin for the fourth quarter 2021 was 25.5%,
compared to 25.8% in the same period last year, a decrease of 30
basis points.
- GAAP net loss was $4.1 million or
$(0.07) per share based on a diluted
share count of 58.4 million, compared to net income of $1.5 million in the same period last year, or
$0.03 per share on a diluted share
count of 51.6 million.
- Adjusted EBITDA was a loss of $1.9
million for the fourth quarter 2021, versus earnings of
$5.5 million in the same period last
year.
- Private label and proprietary brand sales, inclusive of Power
Si and Char Coir, were 7.5% of revenue in the fourth quarter of
2021 compared to 0.5% in the same period last year.
- E-commerce revenue, inclusive of Agron revenue, was
$7.7 million, compared to
$3.2 million in the same period last
year.
- Cash and short-term securities as of December 31, 2021 were $81.2 million.
Financial Highlights for Twelve Months Ended December 31, 2021
- Net revenue for the twelve months ended December 31, 2021, were $422.5 million, compared to $193.4 million for the twelve months ended
December 31, 2020, an increase of
$229.1 million or 118.5%.
- Gross profit margin was 28.0% for the twelve months ended
December 31, 2021 compared to 26.4%
for the twelve months ended December 31,
2020 an increase of 160 basis points.
- GAAP net income for the twelve months ended December 31, 2021 was $12.8 million, compared to net income of
$5.3 million for the twelve months
ended December 31, 2020.
- Adjusted EBITDA for the twelve months ended December 31, 2021 was $34.5 million, compared to $18.9 million for the twelve months ended
December 31, 2020, an increase of
$15.6 million or 82%.
M&A Activity
The Company acquired the following hydroponic equipment and
organic garden centers in the fourth quarter of 2021:
- On October 12, 2021, the Company
purchased the assets of Indoor Store, LLC ("All Seasons
Gardening"), an indoor-outdoor garden supply center specializing in
hydroponics systems, lighting, and nutrients. All Seasons Gardening
is the largest hydroponics retailer in New Mexico.
- On December 31, 2021, the Company
purchased the assets of Mobile Media, Inc and MMI Agriculture
("MMI"), a mobile shelving facility.
In addition, on January 31, 2022,
the Company completed the acquisition of Horticultural Rep Group
(HRG), a specialty marketing and sales organization of
horticultural products based in Ogden,
Utah.
Expansion Efforts
The Company's supply chain spans approximately 895,000 square
feet of retail and warehouse space across 13 states.
In January 2022, the Company
opened a new store in Ardmore, OK,
representing its sixty-third location nationwide and its sixth in
Oklahoma.
Full Year 2022 Outlook
- Net revenues* in the range of $415
million to $445 million,
versus the 2021 base of $422.5
million.
- Adjusted EBITDA* in the range of $30
million to $35 million versus
the 2021 base of $34.5 million.
*Note: Sales and EBITDA guidance metrics are inclusive of
acquisitions and store openings completed in 2021 and 2022,
including MMI and HRG, but do not include unannounced
acquisitions
Conference Call
The Company will host a conference call today, March 1, 2022, at 5:00 PM
Eastern Time. To participate in the call, please dial (888)
204-4368 (domestic) or (647) 794-4605 (international). The
conference code is 9729308. This call is being webcast and
can be accessed on the Investor Relations section of GrowGen's
website at: https://ir.growgeneration.com.
A replay of the webcast will be available approximately two
hours after the conclusion of the call and remain available for
approximately 90 calendar days.
About GrowGeneration Corp:
GrowGen owns and operates specialty retail hydroponic and
organic gardening stores. Currently, GrowGen has 63 stores, which
include 23 locations in California, 8 locations in Colorado, 7 locations in Michigan, 5 locations in Maine, 6 locations in Oklahoma, 4 locations in Oregon, 3 locations in Washington, 2 locations in Nevada, 1 location in Arizona, 1 location in Rhode Island,1 location
in Florida, 1 location in
Massachusetts and 1 location in
New Mexico. GrowGeneration also
operates an online superstore for cultivators at
growgeneration.com. GrowGeneration carries and sells
thousands of products, including organic nutrients and soils,
advanced lighting technology and state of the art hydroponic
equipment to be used indoors and outdoors by commercial and home
growers.
Forward Looking Statements:
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 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 opinions only as of the
date of this release. Please keep in mind that the company does not
have an obligation 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 "look
forward," "believe," "continue," "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 made
with the United States Securities and Exchange Commission,
available at: www.sec.gov, and on the company's website, at:
www.growgeneration.com.
Company Inquiries
GrowGeneration Corp.
John Evans
(415) 309-0230
john.evans@growgeneration.com
Investor Contact
ICR, Inc.
Clay Crumbliss, CFA
Managing Director
clay.crumbliss@icrinc.com
The accompanying notes are an integral part of
these Condensed Consolidated Financial Statements.
ITEM 1. FINANCIAL STATEMENTS
GROWGENERATION CORP. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
|
December 31,
2021
|
|
December 31,
2020
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
41,372
|
|
$
|
177,912
|
Marketable
securities
|
39,793
|
|
—
|
Accounts receivable,
net
|
5,741
|
|
3,901
|
Notes receivable, net
of allowance for doubtful accounts of $522 and $292 at
December 31, 2021 and 2020
|
2,440
|
|
2,612
|
Inventory
|
105,571
|
|
54,024
|
Prepaid income
taxes
|
5,856
|
|
655
|
Prepaids and other
current assets
|
16,116
|
|
11,125
|
Total current
assets
|
216,889
|
|
250,229
|
|
|
|
|
Property and
equipment, net
|
24,116
|
|
7,416
|
Operating leases
right-of-use assets, net
|
43,730
|
|
12,088
|
Notes receivables,
net of current portion
|
—
|
|
1,200
|
Intangible assets,
net
|
48,402
|
|
20,549
|
Goodwill
|
125,401
|
|
62,951
|
Other
assets
|
800
|
|
301
|
TOTAL
ASSETS
|
$
|
459,338
|
|
$
|
354,734
|
|
|
|
|
LIABILITIES &
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
17,033
|
|
$
|
14,623
|
Accrued
liabilities
|
2,044
|
|
672
|
Payroll and payroll
tax liabilities
|
7,440
|
|
2,655
|
Customer
deposits
|
11,686
|
|
5,155
|
Sales tax
payable
|
1,923
|
|
1,161
|
Current maturities of
lease liability
|
6,858
|
|
3,001
|
Current portion of
long-term debt
|
92
|
|
83
|
Total current
liabilities
|
47,076
|
|
27,350
|
|
|
|
|
Deferred tax
liability
|
2,359
|
|
750
|
Operating lease
liability, net of current maturities
|
38,546
|
|
9,479
|
Long-term debt, net
of current portion
|
66
|
|
158
|
Total
liabilities
|
88,047
|
|
37,737
|
Commitments and
contingencies
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Common
stock
|
60
|
|
57
|
Additional paid-in
capital
|
361,087
|
|
319,582
|
Retained earnings
(deficit)
|
10,144
|
|
(2,642)
|
Total stockholders'
equity
|
371,291
|
|
316,997
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
|
459,338
|
|
$
|
354,734
|
The accompanying notes are an integral part of
these Condensed Consolidated Financial Statements.
GROWGENERATION CORP. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands,
except per share amounts)
(Unaudited)
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Sales
|
$
|
90,579
|
|
$
|
61,925
|
|
$
|
422,489
|
|
$
|
193,365
|
Cost of
sales
|
67,490
|
|
45,979
|
|
304,248
|
|
142,317
|
Gross
profit
|
23,089
|
|
15,946
|
|
118,241
|
|
51,048
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Store
operations
|
14,094
|
|
6,200
|
|
49,742
|
|
18,724
|
Selling, general, and
administrative
|
11,922
|
|
5,938
|
|
40,897
|
|
21,451
|
Depreciation and
amortization
|
4,090
|
|
1,166
|
|
12,600
|
|
2,436
|
Total operating
expenses
|
30,106
|
|
13,304
|
|
103,239
|
|
42,611
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
(7,017)
|
|
2,642
|
|
15,002
|
|
8,437
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Other (expense)
income
|
(248)
|
|
187
|
|
(216)
|
|
112
|
Interest
income
|
51
|
|
(29)
|
|
486
|
|
44
|
Interest
expense
|
(12)
|
|
6
|
|
(43)
|
|
(14)
|
Total non-operating
income (expense), net
|
(209)
|
|
164
|
|
227
|
|
142
|
|
|
|
|
|
|
|
|
Net (loss) income
before taxes
|
(7,226)
|
|
2,806
|
|
15,229
|
|
8,579
|
|
|
|
|
|
|
|
|
Benefit (provision)
for income taxes
|
3,126
|
|
(1,296)
|
|
(2,443)
|
|
(3,251)
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(4,100)
|
|
$
|
1,510
|
|
$
|
12,786
|
|
$
|
5,328
|
|
|
|
|
|
|
|
|
Net (loss) income per
share, basic
|
$
|
(0.07)
|
|
$
|
0.03
|
|
$
|
0.22
|
|
$
|
0.12
|
Net (loss) income per
share, diluted
|
$
|
(0.07)
|
|
$
|
0.03
|
|
$
|
0.21
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, basic
|
58,427
|
|
47,878
|
|
59,223
|
|
43,945
|
Weighted average
shares outstanding, diluted
|
58,427
|
|
51,626
|
|
60,464
|
|
46,456
|
GROWGENERATION CORP. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
Years Ended December
31,
|
|
2021
|
|
2020
|
Cash Flows from
Operating Activities:
|
(unaudited)
|
|
|
Net income
|
$
|
12,786
|
|
$
|
5,328
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
12,600
|
|
2,436
|
Provision for doubtful
accounts and notes receivable
|
619
|
|
214
|
Stock based
compensation
|
6,585
|
|
7,856
|
Deferred income
taxes
|
1,609
|
|
750
|
Loss on disposal of
fixed assets
|
198
|
|
—
|
Other
|
—
|
|
(127)
|
Changes in operating
assets and liabilities:
|
|
|
|
(Increase) decrease
in:
|
|
|
|
Accounts and notes
receivable
|
(1,087)
|
|
(3,471)
|
Inventory
|
(34,690)
|
|
(19,188)
|
Prepaid expenses and
other assets
|
(9,937)
|
|
(9,236)
|
Increase (decrease)
in:
|
|
|
|
Accounts payable and
accrued liabilities
|
3,285
|
|
9,989
|
Operating
leases
|
1,282
|
|
375
|
Customer
deposits
|
6,362
|
|
2,651
|
Payroll and payroll
tax liabilities
|
4,785
|
|
1,583
|
Sales taxes
payable
|
762
|
|
627
|
Net Cash and Cash
Equivalents Provided By (Used In) Operating Activities
|
5,159
|
|
(213)
|
Cash Flows from
Investing Activities:
|
|
|
|
Assets acquired in
business combinations
|
(80,784)
|
|
(41,402)
|
Purchase of property
and equipment
|
(18,740)
|
|
(3,401)
|
Purchase of marketable
securities
|
(75,000)
|
|
—
|
Maturities of
marketable securities
|
35,207
|
|
—
|
Purchase of
intangibles
|
—
|
|
(1,027)
|
Net Cash and Cash
Equivalents (Used In) Investing Activities
|
(139,317)
|
|
(45,830)
|
Cash Flows from
Financing Activities:
|
|
|
|
Principal payments on
long term debt
|
(83)
|
|
(111)
|
Stock
redemptions
|
(4,391)
|
|
(119)
|
Proceeds from the
sales of common stock and exercise of warrants and options, net of
expenses
|
2,092
|
|
211,206
|
Net Cash and Cash
Equivalents (Used In) Provided by Financing Activities
|
(2,382)
|
|
210,976
|
|
|
|
|
Net Increase
(decrease) in Cash and Cash Equivalents
|
(136,540)
|
|
164,933
|
Cash and Cash
Equivalents at Beginning of year
|
177,912
|
|
12,979
|
Cash and Cash
Equivalents at End of year
|
$
|
41,372
|
|
$
|
|
177,912
|
|
|
|
|
Supplemental
Information:
|
|
|
|
Common stock and
warrants issued for prepaid services
|
$
|
—
|
|
$
|
—
|
Common stock issued
for intangible assets
|
$
|
168
|
|
$
|
—
|
Common stock issued
for accrued payroll liability
|
$
|
—
|
|
$
|
718
|
Debt converted to
equity
|
$
|
—
|
|
$
|
—
|
Assets acquired by
issuance of stock
|
$
|
37,272
|
|
$
|
39,282
|
Cash paid for
interest
|
$
|
43
|
|
$
|
14
|
Right to use assets
acquired under new operating leases
|
$
|
32,875
|
|
$
|
7,887
|
Cash paid for income
taxes
|
$
|
6,072
|
|
$
|
3,156
|
Use of Non-GAAP Financial Information
The Company believes that the presentation of results excluding
certain items in "Adjusted EBITDA," such as non-cash equity
compensation charges, provides meaningful supplemental information
to both management and investors, facilitating the evaluation of
performance across reporting periods. The Company uses these
non-GAAP measures for internal planning and reporting purposes.
These non-GAAP measures are not in accordance with, or an
alternative for, generally accepted accounting principles and may
be different from non-GAAP measures used by other companies. The
presentation of this additional information is not meant to be
considered in isolation or as a substitute for net income or net
income per share prepared in accordance with generally accepted
accounting principles.
Set forth below is a reconciliation of Adjusted EBITDA to net
income (loss) (unaudited):
|
Three Months Ended
December 31,
|
|
2021
|
|
2020
|
|
(000)
|
|
(000)
|
Net (loss)
income
|
$
|
(4,100)
|
|
$
|
1,510
|
Income
taxes
|
(3,126)
|
|
1,296
|
Interest
expense
|
12
|
|
(6)
|
Depreciation and
Amortization
|
4,090
|
|
1,166
|
EBITDA
|
$
|
(3,124)
|
|
$
|
3,966
|
Share based
compensation (option compensation, warrant compensation, stock
issued for services)
|
1,238
|
|
1,532
|
|
|
|
|
Adjusted
EBITDA
|
$
|
(1,886)
|
|
$
|
5,498
|
|
|
|
|
Adjusted EBITDA per
share, basic
|
$
|
(0.03)
|
|
$
|
0.11
|
Adjusted EBITDA per
share, diluted
|
$
|
(0.03)
|
|
$
|
0.11
|
|
|
|
|
|
Twelve Months
Ended
December 31,
|
|
2021
|
|
2020
|
|
(000)
|
|
(000)
|
Net income
|
$
|
12,786
|
|
$
|
5,328
|
Income
taxes
|
2,443
|
|
3,251
|
Interest
|
43
|
|
14
|
Depreciation and
Amortization
|
12,600
|
|
2,436
|
EBITDA
|
$
|
27,872
|
|
$
|
11,029
|
Share based
compensation (option compensation, warrant compensation, stock
issued for services)
|
6,585
|
|
7,856
|
|
|
|
|
Adjusted
EBITDA
|
34,457
|
|
$
|
18,885
|
|
|
|
|
Adjusted EBITDA per
share, basic
|
$
|
0.58
|
|
$
|
0.43
|
Adjusted EBITDA per
share, diluted
|
$
|
0.57
|
|
$
|
0.41
|
|
|
|
|
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multimedia:https://www.prnewswire.com/news-releases/growgeneration-reports-record-fourth-quarter-and-full-year-2021-financial-results-introduces-full-year-2022-guidance-301493320.html
SOURCE GrowGeneration