Record Revenue increased 173% to
$90 million; 2021 Revenue Guidance
Raised to $450-$470 million and Adjusted
EBITDA Guidance to $54 to
$58 million
- First Quarter Revenue Increased by 173%, to $90 million
- Comparable Store Sales for the Quarter Increased 51% from
Prior Year
- Record Earnings of $0.10 Per
Share in the Quarter
DENVER, May 12, 2021 /PRNewswire/
- GrowGeneration Corp. (NASDAQ: GRWG), ("GrowGen" or the
"Company"), the largest chain of specialty hydroponic and organic
garden centers with 53 locations across 12 states, today reported
record first quarter 2021 revenues of $90 million,
versus $33 million in the same period last year.
The Company also reported record first quarter 2021 GAAP pre-tax
net income of approximately $7.7 million, compared to pre-tax
net loss of $2.1 million in the same period last year.
Fully diluted earnings per share, inclusive of tax expense, was
$0.10 compared to a net loss in the
same period last year.
Non-GAAP earnings before interest, taxes, depreciation,
amortization and share-based compensation (Adjusted EBITDA) was
$11.1 million, compared to
$2.4 million in the same period last
year.
"The GrowGen team delivered an exceptionally strong start to the
year, with same store sales up 51%, demonstrating the hard work of
the entire team. For the year so far, we closed 9
acquisitions, adding 15 hydroponic retail locations, bringing our
total store count to 53. The strategies implemented several
quarters ago, are now positively impacting margins. I am
proud and encouraged with our 110-basis point increase in gross
profit margin and 510-basis point increase in adjusted EBITDA
margin. These increases were accomplished despite port delays and
supply chain interruptions. In addition, we acquired Char Coir, a
line of premium coco-based products and Agron.io, a popular B2B
e-commerce website. Both companies are now fully integrated and
contributing to both our top and bottom-line numbers." Darren Lampert, GrowGeneration's co-founder and
CEO stated. "Based upon our strong performance, we are now
raising the financial outlook for the year and expect 2021 revenues
to be between $450 million and
$470 million, more than double the
Company's sales in 2020. Further, at these projected sales,
adjusted EBITDA guidance for 2021 is now $54
million to $58 million."
Financial Highlights for First Quarter 2021 Compared to First
Quarter 2020
- Revenues rose 173% to $90.0 million for first quarter
2021, versus $33.0 million, for the same period last year
- Same-store sales at 22 locations open for the same period in
2020 and 2021 were $43.0 million in first quarter 2021
versus $28.5 million for first quarter 2020, a 51% increase
year over year
- Gross profit margin for first quarter 2021 was 28.2% compared
to 27.1% in the same quarter last year, an increase of 110 basis
points
- Income before tax was $7.7 million for the first
quarter 2021 versus a loss of $2.1
million for the same period last year
- Net income was $6.1 million, or $0.10 per share
based on fully diluted weighted average share count of 60.3
million
- Adjusted EBITDA was $11.1 million for first quarter
2021 versus $2.4 million for the same period last
year
- Private-label sales, inclusive of Power Si and Char Coir, were
6.2% of revenue compared to less than 1% for the same period last
year
- E-Commerce revenue was $4.4
million compared to $1.9
million for the same period in 2020, an increase of
126%
- Cash and short-term securities on March 31,
2021 were $133.1 million, compared $177.9 million at year end December 31, 2020
M&A Activity
The company acquired the following hydroponic equipment and
organic garden centers in the First Quarter of 2021:
- Indoor Garden & Lighting, a two-store chain serving the
Seattle and Tacoma, Washington area
- Grow Depot, a two-store chain in Auburn and Augusta,
Maine
- Grow Warehouse, a four-store chain in Colorado and Oklahoma
- San Diego Hydroponics & Organics, a four-store chain in
San Diego, California
- 55 Hydroponics, a superstore located in Santa Ana, California
- Aquarius Hydroponics, located in Springfield, MA
- Char Coir, an RHP-certified growing medium made from the
highest-grade coconut fiber available
- Agron.io, a B2B e-commerce and marketplace for commercial
growers
Expansion Efforts
The Company's supply chain, spans 900,000 square feet of retail
and warehouse space, across existing locations and signed leases in
new locations, spanning 13 states.
- On March 9, 2021, the company
announced the addition 52,000 square feet in downtown Los Angeles and 70,000 square feet in
Rancho Dominguez, California, that
will serve as distribution and fulfillment locations for the
Company
- The Company is in the process of building several additional
locations that will serve as fulfillment centers that include
25,000 square feet in Phoenix,
Arizona and 58,000 square feet in Medley, Florida. These locations are expected
to be opened by summer of 2021
- In April 2021, the Company
acquired Downriver Hydroponics, a Michigan garden center located in Wayne County
- In April 2021, the Company
entered into a lease for a 40,000 sq. ft facility in Jackson, MS, the 13th state of operation
- In May 2021, the Company
announced the building of a sixth Oklahoma location in Ardmore
Subsequent Events
- On May 10, 2021, the Company
hired Dennis Sheldon as Senior Vice
President of Global Supply Chain. Mr. Sheldon
is a highly accomplished operations and supply chain executive
with over 30 years of global experience. From 2007 to 2017, he was
SVP of global supply chain for Crocs, Inc. (Nasdaq: CROX) and most
recently from 2018-2020, COO at Pop Sockets, Inc.
COVID-19 Response
The Company continues to be mindful of the COVID-19 pandemic and
is thankful for the dedication of health care workers and first
responders, as well as the essential workers who are keeping
communities running. As a result of the Company's first-rate
preparedness, all personnel have been working at full capacity and
Company management has been inspired by the efforts and dedication
of GrowGen's team as they have worked tirelessly to service all of
the customers of the Company and communities.
Conference Call
The company will host a conference call on May 13, 2021 at 9:00AM
Eastern Time. To participate in the call, please dial
(888)-390-0605 (domestic). Participants should request the
GrowGeneration Earnings Call or provide confirmation code:
30427092. This call is being webcast and can be accessed on
the Investor Relations section of GrowGeneration website at:
https://ir.growgeneration.com/news-events/ir-calendar.
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 centers. Currently, GrowGen has 53 stores, which
include 18 locations in California, 8 locations in Colorado, 7 locations in Michigan, 5 locations in Maine, 5 locations in Oklahoma, 2 locations in Nevada, 2 locations in Washington, 2 locations in Oregon, 1 location in Arizona, 1 location in Rhode Island,1 location
in Florida, and 1 location in
Massachusetts.
GrowGen also operates an online superstore for cultivators
at growgeneration.com and B2B ERP platform, agron.io. GrowGen
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.
Contacts:
Michael Salaman
michael@growgeneration.com
John Evans
Investor Relations
415-309-0230
john.evans@growgeneration.com
ITEM 1. FINANCIAL
STATEMENTS
GROWGENERATION CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
|
March 31,
2021
|
|
December 31,
2020
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
92,042
|
|
$
|
177,912
|
Marketable
securities
|
|
41,077
|
|
|
-
|
Accounts receivable,
net
|
|
4,276
|
|
|
3,901
|
Notes receivable,
current
|
|
3,905
|
|
|
2,612
|
Inventory,
net
|
|
77,862
|
|
|
54,024
|
Income taxes
receivable
|
|
-
|
|
|
655
|
Prepaids and other
current assets
|
|
20,338
|
|
|
11,125
|
Total current
assets
|
|
239,500
|
|
|
250,229
|
|
|
|
|
|
|
Property and
equipment, net
|
|
8,338
|
|
|
6,475
|
Operating leases
right-of-use assets, net
|
|
14,389
|
|
|
12,088
|
Notes receivables,
net of current portion
|
|
881
|
|
|
1,200
|
Intangible assets,
net
|
|
42,771
|
|
|
21,490
|
Goodwill
|
|
101,043
|
|
|
62,951
|
Other
assets
|
|
591
|
|
|
301
|
TOTAL
ASSETS
|
$
|
407,513
|
|
|
354,734
|
|
|
|
|
|
|
LIABILITIES &
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
24,965
|
|
|
14,623
|
Accrued
liabilities
|
|
1,083
|
|
|
672
|
Payroll and payroll
tax liabilities
|
|
2,916
|
|
|
2,655
|
Customer
deposits
|
|
9,939
|
|
|
5,155
|
Sales tax
payable
|
|
2,374
|
|
|
1,161
|
Income taxes
payable
|
|
455
|
|
|
-
|
Current maturities of
lease liability
|
|
3,870
|
|
|
3,001
|
Current portion of
long-term debt
|
|
83
|
|
|
83
|
Total current
liabilities
|
|
45,685
|
|
|
27,350
|
|
|
|
|
|
|
Deferred tax
liability
|
|
1,134
|
|
|
750
|
Operating lease
liability, net of current maturities
|
|
10,824
|
|
|
9,479
|
Long-term debt, net
of current portion
|
|
131
|
|
|
158
|
Total
liabilities
|
|
57,774
|
|
|
37,737
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
Common
stock
|
|
58
|
|
|
57
|
Additional paid-in
capital
|
|
346,176
|
|
|
319,582
|
Retained earnings
(deficit)
|
|
3,505
|
|
|
(2,642)
|
Total stockholders'
equity
|
|
349,739
|
|
|
316,997
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
|
407,513
|
|
|
354,734
|
|
The accompanying
notes are an integral part of these Condensed Consolidated
Financial Statements.
|
1
GROWGENERATION CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands,
except per share amounts)
(Unaudited)
|
For the Three
Months
Ended March 31,
|
|
2021
|
|
2020
|
|
|
|
|
Sales
|
$
|
90,022
|
|
$
|
32,982
|
Cost of
sales
|
|
64,645
|
|
|
24,036
|
Gross
profit
|
|
25,377
|
|
|
8,946
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Store
operations
|
|
8,182
|
|
|
3,639
|
Selling, general, and
administrative
|
|
7,405
|
|
|
7,065
|
Depreciation and
amortization
|
|
2,054
|
|
|
359
|
Total operating
expenses
|
|
17,641
|
|
|
11,063
|
|
|
|
|
|
|
Net income (loss)
from operations
|
|
7,736
|
|
|
(2,117)
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Miscellaneous
(expense) income
|
|
(38)
|
|
|
5
|
Interest
income
|
|
4
|
|
|
25
|
Interest
expense
|
|
(2)
|
|
|
(7)
|
Total non-operating
(expense) income, net
|
|
(36)
|
|
|
23
|
|
|
|
|
|
|
Net income (loss)
before taxes
|
|
7,700
|
|
|
(2,094)
|
|
|
|
|
|
|
Provision for income
taxes
|
|
(1,553)
|
|
|
-
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
6,147
|
|
$
|
(2,094)
|
|
|
|
|
|
|
Net income per share,
basic
|
$
|
.11
|
|
$
|
(.06)
|
Net income per share,
diluted
|
$
|
.10
|
|
$
|
(.06)
|
|
|
|
|
|
|
Weighted average
shares outstanding, basic
|
|
58,394
|
|
|
37,823
|
Weighted average
shares outstanding, diluted
|
|
60,317
|
|
|
37,823
|
|
The accompanying
notes are an integral part of these Condensed Consolidated
Financial Statements.
|
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):
|
Three Months
Ended
|
|
March 31,
2021
|
|
March 31,
2020
|
|
|
(000)
|
|
|
(000)
|
Net income
|
$
|
6,147
|
|
$
|
(2,094)
|
Income
taxes
|
|
1,553
|
|
|
-
|
Interest
|
|
2
|
|
|
7
|
Depreciation and
Amortization
|
|
2,054
|
|
|
359
|
EBITDA
|
|
9,756
|
|
|
(1,728)
|
Share based
compensation (option compensation, warrant compensation, stock
issued for services)
|
|
1,327
|
|
|
4,115
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
11,083
|
|
$
|
2,387
|
|
|
|
|
|
|
Adjusted EBITDA per
share, basic
|
$
|
.19
|
|
$
|
.06
|
Adjusted EBITDA per
share, diluted
|
$
|
.18
|
|
$
|
.06
|
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SOURCE GrowGeneration