Record Revenue increased 190% to

$125.9 million

;





Net Income of

$6.7 million

up 161%;





Adjusted EBITDA of

$14.5 million

, a 229% increase;





2021 Revenue Guidance Raised to

$455

to

$475 Million

• 
  Comparable Store Sales for the Quarter Increased 60% from Prior Year
  
• 
  Record Diluted Earnings of
  
  $0.11
  
  Per Share in the Quarter
  

DENVER

,

Aug. 12, 2021

/PRNewswire/ – GrowGeneration Corp. (NASDAQ: GRWG), (“GrowGen” or the “Company”), the largest chain of specialty hydroponic and organic garden centers with 58 locations across 12 states, today reported record second quarter 2021 revenues of

$125.9 million

, versus

$43.5 million

in the same period last year.

The Company also reported record second quarter 2021 GAAP pre-tax net income of approximately

$9.6 million

compared to pre-tax net income of

$2.7 million

in the same period last year.  Diluted earnings per share, inclusive of tax expense, was

$0.11

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) was

$14.5 million

, compared to

$4.4 million

in the same period last year, or

$0.24

per share, versus

$0.11

in the prior years quarter.

Darren Lampert

, GrowGeneration’s Co-Founder and CEO stated, “The GrowGen team delivered an exceptionally strong second quarter, with revenues up 190% compared to the same period last year, with same store sales up 60%. The entire enterprise generated more revenue in the first half of 2021 than all of 2020 and adjusted EBITDA in the first half of 2021 was more than all previous periods combined.  For the year, we closed 12 acquisitions, adding 20 hydroponic retail locations, bringing our total store count to 58. Our ability to attract and purchase the “best of breed” and largest hydroponic operators in the country was again evident with our signing of HGS Hydro, the country’s third largest hydroponic chain. The strategies implemented several quarters ago are now positively impacting margins. 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 now account for approximately 7% of our overall sales.  I am proud and encouraged with our 170 basis point increase in gross profit margin. On a per share basis, adjusted EBITDA was

$0.24

for the quarter versus

$0.11

last year.  These increases were accomplished despite port delays, supply chain interruptions, and increases in container costs. Due to construction and building delays, we now believe the two

Southern California

and the

Ardmore, OK

, store openings will open in the fourth quarter.  The company continues to focus on building out a world-class supply chain, with omni-channel functionality, that will allow the company to continue to deliver ” just in time” inventory for all types of growers and cultivators.”

Financial Highlights for Second Quarter 2021 Compared to Second Quarter 2020

• Revenues rose 190% to
  
  $125.9 million
  
  for second quarter 2021, versus
  
  $43.5 million
  
  , for the same period last year.
• Same-store sales at 24 locations open for the same period in 2020 and 2021 were
  
  $62.1 million
  
  in second quarter 2021 versus
  
  $38.9 million
  
  for the same period last year, a 60% increase year over year.
• Gross profit margin for second quarter 2021 was 28.4% compared to 26.7% in the same quarter last year, an increase of 170 basis points.
• Income before tax was
  
  $9.6 million
  
  for the second quarter 2021 versus
  
  $2.7 million
  
  for the same period last year.
• Net income was
  
  $6.7 million
  
  , or
  
  $0.11
  
  per share based on a diluted share count of 60.2 million.
• Adjusted EBITDA was
  
  $14.5 million
  
  for second quarter 2021 versus
  
  $4.4 million
  
  for the same period last year.
• Private-label sales, inclusive of Power Si and Char Coir, were 7% of revenue compared to less than 1% for the same period last year.
• Ecommerce revenue was
  
  $12 million
  
  compared to
  
  $3.3 million
  
  for the same period last year, including Agron.io and all of our e-commerce sites.
• Cash and short-term securities as of
  
  June 30, 2021
  
  was
  
  $124.5 million
  
  .

Financial Highlights for Six Months 2021 compared to the same period 2020

• Net revenue for the six months ended
  
  June 30,2021
  
  , was
  
  $215.9 million
  
  , compared to
  
  $76.4 million
  
  for the six months ended
  
  June 30, 2020
  
  , an increase of
  
  $139.5 million
  
  or 182%.
• Gross profit margin was 28.3% for the six months ended
  
  June 30, 2021
  
  compared to 26.9% for the six months ended
  
  June 30, 2020
  
  .
• Net income for the six months ended
  
  June 30, 2021
  
  was
  
  $12.9 million
  
  , compared to net income of
  
  $0.5 million
  
  for the six months ended
  
  June 30,2020
  
  .

M&A Activity

The company acquired the following hydroponic equipment and organic garden centers in the second quarter of 2021:

• In
  
  April 2021
  
  , the Company acquired Downriver Hydroponics, a
  
  Michigan
  
  -based indoor garden center in
  
  Wayne County
  
  .
• In
  
  May 2021
  
  , the Company acquired The Harvest Company, a
  
  Northern California
  
  -based garden center with operations in
  
  Redding
  
  and
  
  Hayfork, CA.
  

Expansion Efforts

The Company’s supply chain spans approximately 875,000 square feet of retail and warehouse space, across existing locations and signed leases in new locations, spanning 13 states.

• 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
  
  .
• The Company announced the addition of 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 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 fall of 2021.

Subsequent Events

• In
  
  July 2021
  
  , the Company entered into an asset purchase agreement to acquire HGS Hydro, the nation’s third largest chain of hydroponic garden centers, with six stores across
  
  Michigan
  
  and a seventh store slated to open in the fall of 2021.
• In
  
  July 2021
  
  , the Company acquired Aqua Serene, a southern
  
  Oregon
  
  -based hydroponic garden center with stores in
  
  Eugene
  
  and
  
  Ashland, Oregon
  
  .
• In
  
  July 2021
  
  , the Company acquired Mendocino Greenhouse and Garden Supply, a
  
  Northern California
  
  -based hydroponic garden center, located in
  
  Mendocino, California
  
  .

Conference Call

The company will host a conference call

August 12, 2021

at

9:00AM Eastern Time

.  To participate in the call, please dial 888-390-0546 (domestic); 416-764-8688 (International). Participants should request the GrowGeneration Earnings Call or provide confirmation code: 94991680.  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 58 stores, which include 21 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

, 4 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)

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