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.
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
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.
Darren Lampert, Co-Founder and CEO
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”.
Darren Lampert added, “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 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.
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):