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GrowGeneration Reports Record Fiscal Year 2019 Revenues of $80 Million

  • 2020 Revenue Guidance Set at $130-$135 Million
  • Adjusted EBITDA Guidance for 2020 is $11.5 Million-$13.5 Million
  • Q1 2020 Revenue Guidance $31.5-$32.5 Million

DENVER, March 27, 2020 /PRNewswire/ – GrowGeneration Corp. (NASDAQ:GRWG), (“GrowGen” or the “Company”), the largest chain of specialty hydroponic and organic garden centers, with currently 27 locations, today reported record revenue of $80 million for the 2019 fiscal year end.

GrowGeneration (CNW Group/GrowGeneration)

2019 Financial Highlights:

  • Revenues up 174.9% to $79.7 million for 2019 compared to $29 million for 2018
  • Revenue up 180% to $25.4 million for Q4 2019 compared to $9.1 million for Q4 2018
  • Same store sales were $13 million for 2019 vs $9.5 million for 2018, a 36% increase
  • Same store sales were $11.9 million for Q4 2019 compared to $7.4 million for Q4 2018, an increase of $4.5 million or 62%
  • Adjusted EBITDA of $6.6 million for 2019 compared to $(823,843) for 2018, $.20 per share, basic
  • Adjusted EBITDA was $2.2 million for Q4 2019 compared to $(178,520) for Q4 2018
  • Net income of $1.9 million for 2019 compared to Net (loss) of $5.1 million for 2018
  • Gross profit margin percentage of 28.3% for 2019 compared to 22.2% for 2018
  • Gross profit was 25.8% for Q4 2019 compared to 15.1% for Q4 2018
  • Store operating costs as a percentage of sales was 12.7% for 2019 vs 17.9% for 2018
  • Store operating costs as a percentage of sales was 10.8% for Q4 2019 compared to 19.3% for Q4 2018
  • Corporate overhead as a percentage of revenue was 12.4% for 2019 vs 18.9% for 2018
  • Corporate payroll and general and administrative as a percentage of revenue was 8% for 2019 vs 11.2% for 2018
  • Net income (loss) per share, basic, was $.06 for 2019 vs $(.22) for 2018
  • Net income (loss) per share, fully diluted, was $.05 for 2019 vs $(.22) for 2018
  • Cash at December 31, 2019 was $13 million, Cash at March 23, 2020 is $10.4 million
  • Working capital was $30.6 million at December 31, 2019 vs $21.5 million at December 31, 2018
  • Proceeds from the sale of common stock and warrants was $10.4 million for 2019
  • All remaining convertible debt converted to commons stock in 2019
  • For 2020 we changed our independent auditors to Plante Moran, a 90-year-old, 3100-man public accounting firm, with 25 offices in the US and Internationally
  • Total new store and acquired stores for 2019 totaled 10 new store locations
  • Fully deployed enterprise resource planning (ERP) platform across all locations.
  • Up listed to the NASDAQ Exchange

Darren Lampert, Co-Founder and CEO, said, “the Company’s fiscal year ending 2019 record financial results reflect our continued focus on revenue growth and EBITDA expansion. Revenue was up 174% year over year to $80 million. Adjusted EBITDA of $6.6 million for 2019 compared to $(823,843) for 2018, $.20 per share. Our same store sales were up 62% Q4 2019 versus Q4 2018. For the full year, same store sales were up 36% versus full year 2018. Our online business is now branded GrowGen.Pro and is being integrated as part of our omni channel strategy with all our stores locations, “Order online and Pickup in store”. Our commercial division is now approaching $20 million in annual sales. The Company completed the rollout of its new ERP platform and all of our store operations are on our ERP platform. The GrowGen ERP platform is now fully deployed, providing business intelligence to lower costs, improve departmental productivity, integrate our online and store sales and supply channels and provides forecasting and reporting tools.

The 10 newly acquired stores and new store openings are all performing better than expected and have been successfully integrated into the operations of the overall company. The Company successfully integrated both GrowGen Miami, a February 2020 acquisition, and GrowGen Portland, a December 2019 acquisition, into its portfolio, with both operations now contributing revenue and EBITDA to the overall company. On March 7, 2020, we opened the largest hydroponic garden center in the US, a 40,000 sq ft commercial and online fulfillment center, located in Tulsa, OK.

As we continue to monitor the COVID-19 situation, GrowGen is considered an “essential” supplier to the agricultural industry, suppling the nutrients and nourishment required to feed their plants. Accordingly, we are open during this difficult time and will remain open for the foreseeable future. We have plans and procedures in place to ensure our customers and employees stay safe during this time of uncertainty. All of us at GrowGeneration remain committed to the safety and well-being of our customers and employees and send our prayers and thoughts to all in the growing community.

However, due to COVID-19 outbreak, the Company is focusing more on internal growth versus external growth for the next few quarters. We are focused on margin expansion strategies that include furthering the deployment of more private label products, executing and growing our Buy Online Pick Up In-Store plan and improving our customer service from both an acquisition and retention perceptive. With Portland, Miami and Tulsa 2 now contributing revenue and EBITDA, we continue to drive growth during these difficult times.

To do our part, GrowGeneration has committed to donate up to $500,000 of free product to our loyal customers that have been severely affected.

Revenue guidance for 2020 is $130M-$135M. Adjusted EBITDA guidance for 2020 is $11.5M-$13.5M. Revenue guidance for Q1 2020 is $31.5M-$32.5M. Q1 2020  projected revenue of approximately $32 million compared to  actual Q1 2019 revenue of $13.1 million, represents an increase of 144% ”

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About GrowGeneration Corp.:
GrowGen owns and operates specialty retail hydroponic and organic gardening stores. Currently, GrowGen has 27 stores, which include 5 locations in Colorado, 5 locations in California, 2 locations in Nevada, 1 location in Washington, 4 locations in Michigan, 1 location in Rhode Island, 4 locations in Oklahoma, 1 location in Oregon, 3 locations in Maine and 1 location in Florida. GrowGen also operates an online superstore for cultivators, located at https://growgen.pro/. 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 Canada. Management estimates that roughly 1,000 hydroponic stores are in operation in the U.S. By 2020 the market is estimated to reach over $23 billion with a compound annual growth.

GrowGeneration Reports Record Fiscal Year 2019 Revenues of $80 Million

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.

Connect:

GROWGENERATION CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

December 31,
2019

December 31,
2018

ASSETS

Current assets:

Cash

$

12,979,444

$

14,639,981

Accounts receivable, net of allowance for doubtful accounts of $291,372 and
$133,288 at December 31, 2019 and 2018

4,455,209

862,397

Inventory

22,659,357

8,869,469

Prepaid expenses and other current assets

2,549,559

606,037

Total current assets

42,643,569

24,977,884

Property and equipment, net

3,340,616

1,820,821

Operating leases right-of-use assets, net

7,628,591

Intangible assets, net

233,280

114,155

Goodwill

17,798,932

8,752,909

Other assets

377,364

227,205

TOTAL ASSETS

$

72,022,352

$

35,892,974

LIABILITIES & STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

6,024,750

$

1,819,411

Other accrued liabilities

40,151

Payroll and payroll tax liabilities

1,072,142

410,345

Customer deposits

2,503,785

516,038

Sales tax payable

533,656

191,958

Current maturities of right-of-use assets

1,836,700

Current portion of long-term debt

110,231

436,813

Total current liabilities

12,081,264

3,414,716

Long-term convertible debt, net of debt discount and debt issuance costs

2,044,113

Operating leases right-of-use assets, net of current maturities

5,807,266

Long-term debt, net of current portion

242,079

375,626

Total liabilities

18,130,609

5,834,455

Commitments and contingencies

Stockholders’ Equity:

Common stock; $.001 par value; 100,000,000 shares authorized; 36,876,305 and 27,948,609 shares issued and outstanding as of December 31, 2019 and 2018, respectively

36,876

27,949

Additional paid-in capital

60,742,055

38,796,562

Accumulated deficit

(6,887,188)

(8,765,992)

Total stockholders’ equity

53,891,743

30,058,519

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

72,022,352

$

35,892,974

GrowGeneration Reports Record Fiscal Year 2019 Revenues of $80 Million

GROWGENERATION CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended
December 31,

2019

2018

Sales

$

79,733,568

$

29,000,730

Cost of sales

57,171,721

22,556,172

Gross profit

22,561,847

6,444,558

Operating expenses:

Store operations

10,095,422

5,202,330

General and administrative

3,172,018

1,603,421

Share based compensation

2,490,535

1,895,219

Depreciation and amortization

1,044,553

351,070

Salaries and related expenses

3,619,197

1,648,166

Total operating expenses

20,421,726

10,700,206

Net income (loss) from operations

2,140,121

(4,255,648)

Other income (expense):

Other income (expense)

(4,545)

115,875

Interest income

144,725

79,184

Interest expense

(45,191)

(23,565)

Amortization of debt discount

(356,306)

(989,601

Total non-operating income (expense), net

(261,317)

(818,107

Net income (loss)

$

1,878,804

$

(5,073,755)

Net income (loss) per shares, basic

$

.06

$

(.22)

Net income (loss) per shares, diluted

$

.05

$

(.22)

Weighted average shares outstanding, basic

32,833,594

23,492,650

Weighted average shares outstanding, diluted

39,228,696

23,492,650

GrowGeneration Reports Record Fiscal Year 2019 Revenues of $80 Million

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):

Year ended

December
31, 2019

December
31, 2018

Net Income (loss)

$

1,878,804

$

(5,073,755)

Interest

45,191

23,565

Depreciation and Amortization

1,044,553

351,070

EBITDA

2,968,548

(4,699,120)

Lease termination fees

35,000

Audit fees related to business combinations

85,200

Non-cash operating lease expense

16,375

Inventory valuation adjustments

809,286

870,257

Amortization of debt discount

356,306

989,601

Share based compensation (option comp, warrant comp, stock issued for services)

2,490,535

1,895,219

Adjusted EBITDA

$

6,641,05

$

(823,843)

Adjusted EBITDA per share, basic

$

.20

$

(.04)

Adjusted EBITDA per share, diluted

$

.17

$

(.04)

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/growgeneration-reports-record-fiscal-year-2019-revenues-of-80-million-301031097.html

SOURCE GrowGeneration

GrowGeneration Reports Record Fiscal Year 2019 Revenues of $80 Million


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