Record Revenue increased 111% to
$116.0 million
- Adjusted EBITDA of $10.8
million for the third quarter
- Comparable store sales for the quarter increased 15.7% from
prior year
- Earnings of $0.07 per share in
the quarter
- 2021 Full Year revenue guidance updated to $435 to $440
million
- Adjusted EBITDA guidance updated to $41 million to $43
million
DENVER, Nov. 11, 2021 /PRNewswire/ - GrowGeneration Corp.
(NASDAQ: GRWG), ("GrowGen" or the "Company"), the largest chain of
specialty hydroponic and organic garden centers with 62 locations
across 13 states, today reported record third quarter 2021 revenues
of $116.0 million, versus
$55.0 million in the same period last
year.
The Company also reported third quarter 2021 GAAP net income of
approximately $4.0 million compared
to net income of $3.3 million in the
same period last year. Diluted earnings per share was
$0.07 compared to a $0.06 in the same period last year.
Non-GAAP earnings before interest, taxes, depreciation,
amortization, and share-based compensation (Adjusted EBITDA)
of $10.8 million was a record for the
third quarter, compared to $6.6
million in the same period last year, or $0.18 per share, versus $0.13 in the same period last year.
Darren Lampert, GrowGen's
Co-Founder and CEO stated, "The GrowGen team delivered a strong
third quarter, with revenues up 111%, compared to the same period
last year in a difficult macro environment. Same-store sales at 25
locations increased 15.7% from the prior year. At present, we have
62 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 8.7%
of our overall sales in the third quarter. Our online marketplace,
including Agron, is on pace to reach $35
million of revenue for 2021. We opened two locations
in the Los Angeles metro area, and
for next year, we are looking to open 15 to 20 locations."
Mr. Lampert continued, "In order to position the company for
2022 and beyond, we have made several strategic decisions.
Most importantly, we have organized the management team to focus on
key deliverables. Over the past several months, we have
brought on key leaders including Paul
Rutenis, our Chief Merchant, to lead the private label and
proprietary brands, Dennis Sheldon
to run technology and supply chain, and Becky Gebhardt to run e-commerce and
marketing. Tony Sullivan, our
COO, will lead our effort to open new locations and retail
operations. At present, we are on track for full year revenue
of $435 to $440 million in 2021."
Financial Highlights for Third Quarter 2021 Compared to Third
Quarter 2020
- Revenues rose 111% to $116.0
million for third quarter 2021, versus $55.0 million for the same period last year.
- Same-store sales at 25 locations open for the same period in
2020 and 2021 were $59.2 million in
third quarter 2021, versus $51.2
million for third quarter 2020, a 15.7% increase year over
year.
- Gross profit margin for third quarter 2021 was 29.4%, compared
to 26.5% in the same quarter last year, an increase of 290 basis
points.
- GAAP net income before tax was $5.1
million for the third quarter 2021, versus $5.1 million for the same period last year.
- Net income was $4.0 million, or
$0.07 per share based on a basic
share count of 58.5 million.
- Adjusted EBITDA was $10.8 million
for third quarter 2021, versus $6.6
million for the same period last year.
- Private label sales, inclusive of Power Si and Char Coir, were
8.7% of revenue, compared to 2.1% for the same period last
year.
- E-commerce revenue, inclusive of Agron revenue, was
$10.5 million, compared to
$3.9 million for the same period last
year.
- Cash and short-term securities as of September 30, 2021 was $93.0 million.
Financial Highlights for Nine Months Ended September 30, 2021
- Net revenue for the nine months ended September 30, 2021, was $331.9 million, compared to $131.4 million for the nine months ended
September 30, 2020, an increase of
$200.5 million or 153%.
- Gross profit margin was 28.7% for the nine months ended
September 30, 2021 compared to 26.7%
for the nine months ended September 30,
2020.
- Net income for the nine months ended September 30, 2021 was $16.9 million, compared to net income of
$3.8 million for the nine months
ended September 30, 2020.
- Adjusted EBITDA for the nine months ended September 30, 2021 was $36.3 million, compared to $13.4 million for the nine months ended
September 30, 2020.
M&A Activity
The Company acquired the following hydroponic equipment and
organic garden centers in the third quarter of 2021:
- In July 2021, the Company
acquired the assets of Aqua Serene, Inc., an indoor/outdoor garden
center with stores in Eugene and
Ashland, Oregon.
- In July 2021, the Company
purchased the assets of Mendocino Greenhouse & Garden Supply,
Inc, a hydroponic garden center located in Mendocino, California.
- In August 2021, the Company
purchased the assets of Commercial Grow Supply, Inc., consisting of
a hydroponic and garden supply center serving the Santa Clarita, California area.
- In August 2021, the Company
purchased the assets of Hoagtech Hydroponics, Inc., consisting of a
hydroponic and garden supply center serving the Bellingham, Washington area.
Expansion Efforts
The Company's supply chain spans approximately 950,000 square
feet of retail and warehouse space across 13 states. The
Company opened two greenfield locations in Los Angeles county in September, 2021. The
Company is scheduled to open a sixth Oklahoma location in Ardmore in the first quarter of 2022, and is
in the process of building several additional locations which will
serve as fulfillment centers, including 25,000 square feet in
Phoenix, Arizona and the recently
opened 58,000 square feet in Medley,
Florida.
Conference Call
The Company will host a conference call today, November 11, 2021, at 9:00AM Eastern Time.
To participate in the call, please dial (866) 269-4260 (domestic)
or (647) 792-1241 (international). The conference code is
8073498. This call is being webcast and can be accessed on
the Investor Relations section of GrowGen's 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 stores. Currently, GrowGen has 62 stores, which
include 23 locations in California, 8 locations in Colorado, 7 locations in Michigan, 5 locations in Maine, 5 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.
GrowGen also operates an online superstore for cultivators at
growgeneration.com and B2B e-commerce platform, agron.io. and
distribution centers. 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
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)
|
September
30,
2021
|
|
December
31,
2020
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
63,035
|
|
|
$
|
177,912
|
|
Marketable
securities
|
29,961
|
|
|
—
|
|
Accounts receivable,
net
|
6,953
|
|
|
3,901
|
|
Notes receivable,
current
|
7,734
|
|
|
2,612
|
|
Inventory,
net
|
113,281
|
|
|
54,024
|
|
Income taxes
receivable
|
2,546
|
|
|
655
|
|
Prepaids and other
current assets
|
28,169
|
|
|
11,125
|
|
Total current
assets
|
251,679
|
|
|
250,229
|
|
|
|
|
|
Property and
equipment, net
|
16,755
|
|
|
6,475
|
|
Operating leases
right-of-use assets, net
|
36,155
|
|
|
12,088
|
|
Notes receivables,
net of current portion
|
550
|
|
|
1,200
|
|
Intangible assets,
net
|
49,397
|
|
|
21,490
|
|
Goodwill
|
123,875
|
|
|
62,951
|
|
Other
assets
|
777
|
|
|
301
|
|
TOTAL
ASSETS
|
$
|
479,188
|
|
|
$
|
354,734
|
|
|
|
|
|
LIABILITIES &
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
39,627
|
|
|
$
|
14,623
|
|
Accrued
liabilities
|
2,716
|
|
|
672
|
|
Payroll and payroll
tax liabilities
|
6,705
|
|
|
2,655
|
|
Customer
deposits
|
13,743
|
|
|
5,155
|
|
Sales tax
payable
|
3,376
|
|
|
1,161
|
|
Income taxes
payable
|
—
|
|
|
—
|
|
Current maturities of
lease liability
|
6,205
|
|
|
3,001
|
|
Current portion of
long-term debt
|
111
|
|
|
83
|
|
Total current
liabilities
|
72,483
|
|
|
27,350
|
|
|
|
|
|
Deferred tax
liability
|
2,351
|
|
|
750
|
|
Operating lease
liability, net of current maturities
|
31,355
|
|
|
9,479
|
|
Long-term debt, net
of current portion
|
92
|
|
|
158
|
|
Total
liabilities
|
106,281
|
|
|
37,737
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Common
stock
|
60
|
|
|
57
|
|
Additional paid-in
capital
|
358,602
|
|
|
319,582
|
|
Retained earnings
(deficit)
|
14,245
|
|
|
(2,642)
|
|
Total stockholders'
equity
|
372,907
|
|
|
316,997
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
|
479,188
|
|
|
$
|
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)
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Sales
|
$
|
116,003
|
|
|
$
|
55,007
|
|
|
$
|
331,910
|
|
|
$
|
131,440
|
|
Cost of
sales
|
81,940
|
|
|
40,436
|
|
|
236,757
|
|
|
96,338
|
|
Gross
profit
|
34,063
|
|
|
14,571
|
|
|
95,153
|
|
|
35,102
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Store
operations
|
14,842
|
|
|
5,008
|
|
|
35,648
|
|
|
12,524
|
|
Selling, general, and
administrative
|
11,007
|
|
|
4,017
|
|
|
28,975
|
|
|
15,513
|
|
Depreciation and
amortization
|
3,539
|
|
|
443
|
|
|
8,510
|
|
|
1,270
|
|
Total operating
expenses
|
29,388
|
|
|
9,468
|
|
|
73,133
|
|
|
29,307
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
4,675
|
|
|
5,103
|
|
|
22,020
|
|
|
5,795
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Other
expense
|
78
|
|
|
(14)
|
|
|
32
|
|
|
(75)
|
|
Interest
income
|
395
|
|
|
48
|
|
|
435
|
|
|
73
|
|
Interest
expense
|
(25)
|
|
|
—
|
|
|
(31)
|
|
|
(20)
|
|
Total non-operating
income (expense), net
|
448
|
|
|
34
|
|
|
436
|
|
|
(22)
|
|
|
|
|
|
|
|
|
|
Net income before
taxes
|
5,123
|
|
|
5,137
|
|
|
22,456
|
|
|
5,773
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
(1,096)
|
|
|
(1,799)
|
|
|
(5,569)
|
|
|
(1,955)
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
4,027
|
|
|
$
|
3,338
|
|
|
$
|
16,887
|
|
|
$
|
3,818
|
|
|
|
|
|
|
|
|
|
Net income per share,
basic
|
$
|
0.07
|
|
|
$
|
0.07
|
|
|
$
|
0.29
|
|
|
$
|
0.09
|
|
Net income per share,
diluted
|
$
|
0.07
|
|
|
$
|
0.06
|
|
|
$
|
0.28
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, basic
|
58,531
|
|
|
47,878
|
|
|
58,994
|
|
|
41,477
|
|
Weighted average
shares outstanding, diluted
|
59,490
|
|
|
51,626
|
|
|
60,108
|
|
|
44,224
|
|
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
September 30,
|
|
2021
|
|
2020
|
|
(000)
|
|
(000)
|
Net income
|
$
|
4,027
|
|
|
$
|
3,338
|
|
Income
taxes
|
1,096
|
|
|
1,799
|
|
Interest
expense
|
25
|
|
|
—
|
|
Depreciation and
Amortization
|
3,539
|
|
|
443
|
|
EBITDA
|
$
|
8,687
|
|
|
$
|
5,580
|
|
Share based
compensation (option compensation, warrant compensation, stock
issued for services)
|
2,106
|
|
|
1,022
|
|
Adjusted
EBITDA
|
$
|
10,793
|
|
|
$
|
6,602
|
|
|
|
|
|
Adjusted EBITDA per
share, basic
|
$
|
0.18
|
|
|
$
|
0.14
|
|
Adjusted EBITDA per
share, diluted
|
$
|
0.18
|
|
|
$
|
0.13
|
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
|
(000)
|
|
(000)
|
Net income
|
$
|
16,887
|
|
|
$
|
3,818
|
|
Income
taxes
|
5,569
|
|
|
1,955
|
|
Interest
|
31
|
|
|
20
|
|
Depreciation and
Amortization
|
8,510
|
|
|
1,270
|
|
EBITDA
|
$
|
30,997
|
|
|
$
|
7,063
|
|
Share based
compensation (option compensation, warrant compensation, stock
issued for services)
|
5,347
|
|
|
6,324
|
|
Adjusted
EBITDA
|
36,344
|
|
|
$
|
13,387
|
|
|
|
|
|
Adjusted EBITDA per
share, basic
|
$
|
0.62
|
|
|
$
|
0.32
|
|
Adjusted EBITDA per
share, diluted
|
$
|
0.60
|
|
|
$
|
0.30
|
|
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SOURCE GrowGeneration