GrowGeneration Reports Record First Quarter 2021 Financial Results and Raises Full-Year 2021 Guidance
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.” Darren Lampert, GrowGeneration’s co-founder and CEO stated
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
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.
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):
