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



[email protected]

John Evans


Investor Relations

415-309-0230


[email protected]

ITEM 1. FINANCIAL STATEMENTS



GROWGENERATION CORPORATION AND SUBSIDIARIES



CONDENSED CONSOLIDATED BALANCE SHEETS



(in thousands)

1


GROWGENERATION CORPORATION AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(in thousands, except per share amounts)


(Unaudited)

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):

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SOURCE GrowGeneration