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2020 Revenue Guidance Set at $130-$135 MillionAdjusted EBITDA Guidance for 2020 is $11.5 Million-$13.5 MillionQ1 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.
2019 Financial Highlights:
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% "
About GrowGenerationCorp.: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.
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 SUBSIDIARIESCONSOLIDATED 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 CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
For the Years EndedDecember 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 | ||||||
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) | ||||
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SOURCE GrowGeneration
