PR Newswire
Record Revenues of
$193.0 Million
, Adjusted EBITDA of
$19.2 Million
, and
Pre-Tax Net Income of
$8.6 Million
-
2021 full-year revenue guidance increased to
$415
–
$430 million
-
2021 full-year adjusted EBITDA guidance updated to
$48.0 million
–
$51.0 million
-
First Quarter 2021 Revenue Guidance
$86.0
–
$88.0 million
-
First Quarter 2021 Adjusted EBITDA Guidance
$9.0
–
$9.5 million
-
The Company expects to reach over 60 Hydroponic garden centers and 15 states in 2021 and over 100 by 2023
DENVER
,
March 24, 2021
/PRNewswire/ –
GrowGeneration
Corp. (NASDAQ: GRWG), (“GrowGen” or the “Company”), the largest chain of specialty hydroponic and organic garden centers, with 52 locations across 12 states, today reported record full-year 2020 revenues of
$193.0 million
, versus
$79.7 million
in the same period last year, an increase of 143%. Full-year 2020 adjusted EBITDA of
$19.2 million
compares to
$5.3 million
in the same period last year. The Company also reported a record full-year 2020 GAAP pre-tax net income of approximately
$8.6 million
, compared to pre-tax net income of
$1.3 million
, in the same period last year. Revenue and adjusted EBITDA guidance for 2021 increases to
$415
–
$430 million
, and
$48
–
$51 million
, respectively. The Company is providing First Quarter 2021 Revenue and Adjusted EBITDA guidance of
$86.0 million
–
$88.0 million
and
$9.0 million
–
$9.5 million
, respectively.
In addition, the company today announced the appointment of
Jeffrey Lasher
as Chief Financial Officer (CFO), following the retirement of
Monty Lamirato
at the end of the first quarter. Mr. Lasher, a seasoned public company CFO at West Marine (formerly Nasdaq: WMAR) and Crocs (NASDAQ: CROX), will begin his tenure as CFO on
April 15, 2021
.
“GrowGen had a transformational year in 2020. The Company generated record revenues of
$193 million
, a 143% increase year over year, with a 63% increase in our same store sales. Our steadfast focus on rapid, strategic growth in key markets, both organically and through acquisitions, has resulted in our record revenues and EBITDA,” said
Darren Lampert
, GrowGen’s co-founder and CEO. “We added 14 new locations to make 52 hydroponic garden centers across 12 states, grew our e-commerce channel and commercial division by over 123% and 188% respectively, and acquired Agron.io, a B2B portal for commercial growers to plan and optimize their operations with real-time online ordering and fulfillment.”
“Our proven ability to scale our business, by successfully integrating acquired operations, while reducing operational costs, has allowed us to grow our revenue and expand our EBITDA in 2021 and beyond. The Company is increasing its guidance to reach over 60 garden centers and 15 states in 2021, and to reach over 100 by 2023. We’ve made significant progress towards this goal in the first quarter of 2021.”
“On a personal note, I also would like to take this time to thank
Monty Lamirato
for his service, hard work and dedication as our CFO who is retiring at the end of the first quarter of 2021,” continued Lampert. “We’ve announced
Jeffrey Lasher
as Monty’s successor, who brings many years of public company CFO experience, scaling businesses, building teams, and collaborating across large organizations.”
Full-Year 2020 Financial Highlights
-
Revenues rose 143% to
$193.0 million
, for full-year 2020, versus
$79.7 million
for the same period last year. -
Same-store sales rose 63% to
$72.3 million
for full-year 2020, versus
$44.3 million
for the full-year 2019. -
Adjusted EBITDA of
$19.2 million
for full-year 2020, versus
$5.3 million
for full-year 2019, an increase of 264% year-over-year, or
$0.44
per share basic for full-year 2020 versus
$0.16
per share basic in full-year 2019. - Gross profit margin for full-year 2020 was 26.4%, compared to 27.6% in the same period last year; the decrease in margin is attributable to a larger percentage of revenue from our expanding commercial and e-commerce business segments.
-
Gross profit was
$51.0 million
for full-year 2020, compared to
$22.0 million
for the same period last year, an increase of 132% year-over-year. - Store operating costs, as a percentage of sales, was 9.7 % for full-year 2020, compared to 12.7% for the same period last year, an improvement of 24%, year-over-year.
-
Income from store operations was
$32.3 million
for full-year 2020, versus
$11.9 million
for the same period last year, an increase of 171% year-over-year. - Income from store operations as a percentage of revenue was 16.7% for the full-year 2020 compared to 14.9% for the same period last year.
-
Ecommerce sales increased 123% to
$10.6 million
, compared to the same period last year. -
The commercial division grew 188% to over
$49.0 million
in revenues in the full-year 2020 versus the same period last year. - Corporate payroll and general and administrative expenses, excluding non-cash operating expenses, as a percentage of revenue, was 7% for full-year 2020 versus 8.5% for the same period last year, an improvement of 17% year-over-year.
-
Pre-tax net income was approximately
$8.6 million
for the full-year 2020, versus
$1.3 million
for the same period last year. -
GAAP net income was
$5.3 million
, or
$0.12
per share basic, for full-year 2020 compared to net income of
$1.3 million
, or
$0.04
per share basic, for same period last year, an increase of 308% year-over-year.
Fourth Quarter 2020 Financial Highlights
-
Revenues increased to
$62.0 million
, an increase of 144%. Primarily the result of the addition of 14 stores in 2020, and an increase in same store sales of 58%. - Fourth quarter 2020 margins were 25.8%, versus 23.6%, in the same period last year, due to lower write offs from physical inventories.
- Fourth quarter 2020 store operating costs were 10% of revenues compared to 10.8% for the same period last year.
- Fourth quarter 2020 corporate overhead was 11.5% of revenues compared to 17.1% for the same period last year, a decrease of 33%, as a percentage of revenue in this period.
- Pre-Tax net income was 4.5% of revenue for fourth quarter 2020, compared to -4%, for the same period last year.
-
Adjusted EBITDA was
$5.6 million
for the fourth quarter of 2020, compared to
$0.91 million
, for the same period last year, an increase of 515%.
Working Capital and Cash
On
December 11, 2020
, the Company consummated an underwritten public offering of 5,750,000 shares of its common stock (the “Shares”), which included the exercise in full of the underwriters’ option to purchase an additional 750,000 shares of common stock to cover over-allotments. The Shares were sold at a public offering price of
$30
per share, generating gross proceeds of
$172.5 million
, before deducting the underwriting discounts and commissions and other offering expenses. Net proceeds from the sales of common stock, net of all offering costs and expenses was approximately
$162.5 million
.
On
July 2, 2020
, the Company consummated an underwritten public offering of 8,625,000 shares of its common stock (the “Shares”), which included the exercise in full of the underwriters’ option to purchase an additional 1,125,000 shares of common stock to cover over-allotments. The Shares were sold at a public offering price of
$5.60
per share, generating gross proceeds of
$48.3 million
, before deducting the underwriting discounts and commissions and other offering expenses. Net proceeds from the sales of common stock, net of all offering costs and expenses was approximately
$44.6 million
.
-
Working capital was
$223 million
on
December 31, 2020
, compared to
$29 million
on
December 31, 2019
, an increase of 668%. -
Cash on
December 31, 2020
was
$178 million
, cash on
December 31, 2019
was
$13 million
, and cash as of
March 24, 2021
was
$132 million
. -
Shareholder Equity was
$317 million
on
December 31, 2020
versus
$58 million
on
December 31, 2019
.
Recent Events
-
On
January 25, 2021
, the Company purchased the assets of Indoor Garden & Lighting, Inc., a two-store chain of hydroponic and equipment and indoor gardening supply stores serving the
Seattle
and
Tacoma, Washington
area. -
On
February 15, 2021
, the Company purchased the assets of Grow Warehouse LLC, a four-store chain of hydroponic and organic garden stores in
Colorado
(3) and
Oklahoma
(1). -
On
February 22, 2021
, the Company purchased the assets of San Diego Hydroponics & Organics, a four-store chain of hydroponic and organic garden stores in
San Diego, CA.
-
On
February 1, 2021
, the Company purchased the assets of J.A.R.B., Inc., d/b/a Grow Depot Maine, a two-store chain in
Auburn
and
Augusta, Maine
. -
On
March 12, 2021
, the Company purchased the assets of Char Coir, an RHP-certified growing medium made from the highest-grade coconut fiber available. Established in 2014, Char Coir is recognized as the best coco coir on the market. Char Coir’s portfolio of products are 100 percent biodegradable, a sustainable alternative to rockwool. -
On
March 15, 2021
, the Company purchased the assets of 55 Hydroponics, a hydroponic and organic fertilizer superstore located in
Santa Ana, California
. -
On
March 15, 2021
, the Company purchased the assets of Aquarius Hydroponics, an indoor-outdoor garden supply center specializing in hydroponics systems, lighting and nutrients. -
On
March 19, 2021
, the Company purchased the assets of Agron.io, a leading wholesale agricultural business-to-business enterprise resource planning (ERP) platform that allows commercial growers to manage their purchasing and logistics in one platform. Powered by proprietary ERP technology, Agron.io offers commercial pricing, real-time inventory, and the largest product catalog in the industry, with over 10,000 products in over 60 categories, including greenhouses, vertical benching, HVAC, controlled environmental systems, extraction, and industrial equipment.
Conference Call
The company will host a conference call on
March 25, 2021
at
9:00AM Eastern Time
. To participate in the call, please dial (888)-664-6383 (domestic) or 416-764-8650 (international). Participants should request the GrowGeneration Earnings Call or provide confirmation code: 61305331. 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 stores. Currently, GrowGen has 52 stores, which include 8 locations in
Colorado
, 18 locations in
California
, 2 locations in
Nevada
, 1 location in
Arizona
, 2 locations in
Washington
, 6 locations in
Michigan
, 1 location in
Rhode Island
, 5 locations in
Oklahoma
, 2 locations in
Oregon
, 5 locations in
Maine
, and 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. Our mission is to own and operate GrowGeneration branded stores in all the major states in the U.S. and in
North America
. Management estimates that roughly 1,000 hydroponic stores are in operation in the U.S. By 2025, the global hydroponics equipment market is estimated to reach approximately
$16 billion
.
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 our 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 our opinions only as of the date of this release. Please keep in mind that we are not obligating ourselves 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 we make with the United States Securities and Exchange Commission, available at:
www.sec.gov,
and on our website, at:
www.growgeneration.com
.
Contacts:
Michael Salaman
[email protected]
John Evans
Investor Relations
415-309-0230
[email protected]
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:
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GROWGENERATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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GROWGENERATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
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18.
CORRECTION OF ERROR IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS
Background on the Correction
Revision
During the fourth quarter of 2020, we identified amounts presented in our inventory and costs of sales reported in prior years that required revision. The revised amounts resulted from an accumulation of errors related to rebates issued from vendors in our general ledger. We determined these errors accumulated in 2019 and prior years.
Pursuant to the guidance of Staff Accounting Bulletin No. 99, Materiality, we concluded that the errors were not material to any of our prior year consolidated financial statements. The accompanying consolidated balance sheet and income statement as of
December 31, 2019
includes a cumulative revision relating to this error.
This revision did not have any material effect on income from operations, net income, or cash flows. This revision had no effect on our cash balances.
The following table compares previously reported balances, adjustments and restated balances as of
December 31, 2019
.
18.
CORRECTION OF ERROR IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS, continued
The revised consolidated financial statements for the year ended
December 31, 2019
with the adjustment is detailed below.
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View original content to download multimedia:
http://www.prnewswire.com/news-releases/growgeneration-reports-record-fourth-quarter-and-full-year-2020-financial-results-and-raises-full-year-2021-guidance-301255402.html
SOURCE GrowGeneration
