GrowGeneration Archives - Green Market Report

Debra BorchardtMarch 1, 2022
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GrowGeneration Corp. (NASDAQ: GRWG) reported record fourth-quarter and full-year 2021 financial results. Revenues for GrowGen were $90.6 million in the fourth quarter of 2021 compared to $61.9 million in the same period last year. Same-store sales at 26 locations open for the same period in 2020 and 2021 were $40.3 million in the fourth quarter of 2021, compared to $46.0 million in the same period last year, representing a 12.3% year-over-year decline.

The company also reported a fourth-quarter 2021 GAAP net loss of $4.1 million compared to net income of $1.5 million in the same period last year. Diluted loss per share in the fourth quarter was ($0.07) compared to diluted earnings per share of $0.03 in the same period last year. Non-GAAP income before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) was a loss of $1.9 million in the fourth quarter of 2021 or ($0.03) per diluted share, compared to earnings of $5.5 million in the same period last year, $0.11 per diluted share.

For the full year, revenues were $422.5 million for the full year 2021 compared to $193.4 million for the full year 2020, an increase of 118%, including the contribution from acquisitions. GAAP net income for the twelve months ended December 31, 2021, was $12.8 million, compared to net income of $5.3 million for the twelve months ended December 31, 2020.

Darren Lampert, GrowGen’s Co-Founder and CEO stated, “The GrowGen team delivered a strong year despite the persistently difficult macro-environment that is impacting the entire cannabis industry. Same-store sales at 26 locations decreased (12.3)% in the fourth quarter of 2021 versus the prior year. Full-year 2021 same-store sales were 24.4% over last year. At present, we have 63 retail locations in operation. 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 reached approximately 7.5% of our overall sales in the fourth quarter. Our online marketplace, including Agron, reached $36.2 million of revenue for 2021. In addition to acquired locations, we opened two greenfield locations in the Los Angeles metro area in 2021, and for next year, we are looking to open 15 to 20 locations across new and existing states.”

Outlook

For the full year, GrowGen is forecasting net revenues in the range of $415 million to $445 million, versus the 2021 base of $422.5 million. The adjusted EBITDA will be in the range of $30 million to $35 million versus the 2021 base of $34.5 million. The company said that sales and EBITDA guidance metrics are inclusive of acquisitions and store openings completed in 2021 and 2022, including MMI and HRG, but do not include unannounced acquisitions.

Mr. Lampert continued, “In order to position the company for 2022 and beyond, we have made several strategic decisions to drive margin improvements and EBITDA. As of December 31, 2021, our balance sheet remains strong with $81 million of available liquidity. Given our view of the business today and the continued challenges across the US market, we expect to generate full-year revenue of $415 to $445 million in 2022.”


StaffJanuary 31, 2022
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GrowGeneration Corp. (NASDAQ: GRWG) has acquired Horticultural Rep Group (HRG) for an undisclosed amount. HRG is a specialty marketing and sales organization of horticultural products based in Ogden, Utah. HRG represents hundreds of product SKU’s for GrowGen and other companies that are popular brands in the hydroponics market. In addition, HRG has participated in the sourcing of products across the horticultural and hydroponics industry. HRG will continue to supply the 800+ retail customers it currently services. HRG generated estimated revenue of $10 million in 2021 from sales agent commissions and distribution activity.

“With this acquisition, GrowGen is strengthening its global product supply chain and adding significant distribution of its growing list of private label products,” said Michael Salaman, President and co-founder of GrowGen. “Keith Harrington is one of the most respected executives and one of the early innovators of the U.S. modern horticultural market. We are excited that he will contribute his multi-decade expertise to the GrowGen team.”

Mr. Harrington has been in the lighting and heavy manufacturing industry his entire career. He started a horticultural lighting supply chain in the 1990’s and was also the majority owner of one of the two major hydroponic distributors at that time, Diamond Garden Supplies. Harrington established manufacturing and product sourcing offices in Xiamen, China in 1995, and he developed many of the original sources of product for the horticultural market coming out of China, many of which are still utilized today. Over the last 25 years, he has helped to develop, manufacture, and distribute many of the environmental/lighting controllers and horticultural lighting fixtures that have been sold in the 52 countries making up the global hydroponic market.

“I am looking forward to working with GrowGen to build out a tri-continent supply chain to offer developing markets around the world a best-of-breed supply of products from AsiaEurope, and the United States on one platform.” said Keith Harrington, Founder and President of HRG. “Given the current pace of consolidation happening in the U.S. market, I chose to partner with GrowGen because I believe it currently has the best management team in the industry and the best understanding of the culture of the market, which is important to me. I am excited to help them grow that culture and their business at the same time.” Mr. Harrington has been appointed Senior Vice President of Business Development at GrowGen.

 

 


Debra BorchardtJanuary 13, 2022
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4min11050

Hydroponic chain GrowGeneration Corp. (NASDAQ: GRWG) announced revised full-year 2021 revenue expectations of $420 million to $422 million, versus $193 million for 2020, an increase of 118%.  The important news though was that same stores sales are expected to decline in the fourth quarter by 12.3%. This follows other hydroponic companies like Hydrofarm and Scotts Miracle-Gro that also warned of slowing sales.

Having said that, the fourth quarter revenue expectation is between $88 million to $90 million and same-store-sales for 2021 is expected to grow 24.4% for the full year.

“We delivered strong shareholder value in 2021 with triple digit revenue growth despite unprecedented persistent challenges and an uncertain operating environment. Although we continue to grow our business significantly, we experienced stronger-than-expected pressures in Q4 from the general slowdown in the hydroponics market. The sales results for Q4 combined with one-time expenses will result in a loss for the quarter of between $2 million and $4 million in EBITDA on an adjusted basis. We did improve our inventory position throughout the quarter to align inventory levels with sales activities,” said GrowGen CEO Darren Lampert.

2021 Financial Highlights:

  • Full year 2021 projected revenue between $420 million to $422 million, versus $193 million for full-year 2020
  • Full year 2021 projected EBITDA adjusted for stock-based compensation between $31.5 million to $33.5 million, versus $19.2 million for full-year 2020
  • Same-store-sales increase of 24.4% for full-year 2021 compared to 2020
  • Same-store sales decrease of 12.3% for fourth quarter 2021 compared to the same year-ago period
  • A total of 24 new and acquired store locations in 2021, now with 62 locations nationwide
  • On January 1, 2022, we acquired Mobile Media, Inc, a leading indoor vertical mobile racking and benching system manufacturer

Lampert added, “As we remain focused on our long-term strategy, we continue to use the Company’s strong balance sheet and cash flow generation to drive growth by focusing energies and investments on new greenfield stores, business technology, distribution capabilities, private and proprietary brands, and integration of the Company’s e-commerce distribution channels. These initiatives, supported by a team-oriented approach, give us confidence in our ability to deliver revenue and EBITDA growth in 2022. We believe the management team in place now is better suited than any other team in the industry to drive profitable growth over the next decade.”

 


StaffNovember 11, 2021
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3min14050

GrowGeneration Corp. (NASDAQ: GRWG) reported third-quarter 2021 revenues of $116.0 million, versus $55.0 million in the same period last year. This beat the Yahoo Finance average analyst estimate for revenue of $114 million. GrowGen also delivered a net income of $4.0 million, or $0.07 per share based on a basic share count of 58.5 million. This missed the analyst estimate for earnings of $0.09 per share.

“The GrowGen team delivered a strong third quarter, with revenues up 111%, compared to the same period last year in a difficult macro environment,” said Darren Lampert, GrowGen’s Co-Founder and CEO. “Same-store sales at 25 locations increased 15.7% from the prior year. At present, we have 62 retail locations in operation. 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 reached approximately 8.7% of our overall sales in the third quarter. Our online marketplace, including Agron, is on pace to reach $35 million of revenue for 2021. We opened two locations in the Los Angeles metro area, and for next year, we are looking to open 15 to 20 locations.”

Same-store sales at 25 locations open for the same period in 2020 and 2021 were $59.2 million in third-quarter 2021, versus $51.2 million for third quarter 2020, a 15.7% increase year over year. GrowGen reported that private label sales, inclusive of Power Si and Char Coir, were 8.7% of revenue, compared to 2.1% for the same period last year. E-commerce revenue, inclusive of Agron revenue, was $10.5 million, compared to $3.9 million for the same period last year.

The company is in a solid place with cash and short-term securities as of September 30, 2021, at $93.0 million.

Mr. Lampert continued, “In order to position the company for 2022 and beyond, we have made several strategic decisions. Most importantly, we have organized the management team to focus on key deliverables. Over the past several months, we have brought on key leaders including Paul Rutenis, our Chief Merchant, to lead the private label and proprietary brands, Dennis Sheldon to run technology and supply chain, and Becky Gebhardt to run e-commerce and marketing. Tony Sullivan, our COO, will lead our effort to open new locations and retail operations. At present, we are on track for full year revenue of $435 to $440 million in 2021.”


StaffMay 25, 2021
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4min24210

GrowGeneration Corp . (NASDAQ: GRWG) is buying The Harvest Company, a northern California -based hydroponic supply center and cultivation design innovator with stores in Redding and Trinity County. The Harvest Company serves growers in Northern California’s Emerald Triangle, which is the largest cannabis-producing region in the country. GrowGen will now own 20 stores in the state of California – its largest footprint.

“As the country’s largest legal cannabis market, California continues to be a critical market for GrowGeneration,” said Darren Lampert, GrowGen’s CEO. “The Emerald Triangle, in particular, represents tremendous market potential, with over 500 cultivation licenses in Trinity County alone. Redding also is seen as an important emerging cannabis market, and we are proud to expand our presence in the area through a highly respected and leading hydroponics store such as Harvest Company. ”

Founded by Robert Masterson, Harvest Company has provided Northern California growers with specialty hydroponic supplies and professional horticultural consultation services since 2014. The Harvest Company’s team of 16 employees will join GrowGen’s team of over 600 grow professionals as part of the transaction, while Mr. Masterson will stay on in an advisory role. Masterson said, “The Harvest Company was founded by growers for growers, and that ethos is at the center of everything we do. We look forward to continuing to provide best-in-class supplies and services under the GrowGeneration name.”

GrowGen owns and operates specialty retail hydroponic and organic gardening centers. Currently, GrowGen has 55 stores, which include 20 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.


StaffMarch 17, 2021
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GrowGeneration Corp . (NASDAQ: GRWG) announced its latest acquisition as the chain continues to add to its nationwide empire. Today, the company said it was buying Aquarius Hydroponics, which is one of the largest hydroponics retailers in New England and was founded in 2013. The stock was slipping by over 3% in early trading to lately sell at $49.76. The average price target for GrowGen stock according to Yahoo Finance is $56.43.

The retailer has annual revenues approaching $5 million and carries both indoor and outdoor garden supplies at its 14,600-square-foot retail location in Agawam, Massachusetts.

“The Aquarius Hydroponics acquisition is a testament to our continued investment in best-in-class hydroponic suppliers in emerging adult-use markets across the U.S.,” said Darren Lampert, GrowGen’s CEO. “Importantly, it represents our entry into Massachusetts’ cannabis market, which is projected to become a $1 billion industry in 2021.”

As part of the transaction, the Aquarius Hydroponics team of 10 employees will join the GrowGen team. Owner Mark Hynes also will stay on in a technical support position. With the acquisition of Aquarius Hydroponics, GrowGen’s portfolio of hydroponic garden centers now includes 52 stores across 12 states.

“Aquarius Hydroponics has long been proud to serve growers in Western Massachusetts with our comprehensive catalog of indoor-outdoor growing supplies. Joining forces with GrowGeneration, the nation’s clear leader in hydroponics retail, allows us to leverage our combined decades of cultivation experience to meet the growing demands of Massachusetts’ flourishing legal cannabis industry,” said Aquarius Hydroponics founder John Eaton.

The Aquarius Hydroponics acquisition is GrowGen’s seventh this year and follows yet another quarter of record earnings. In January, GrowGen pre-announced fourth-quarter revenues of $61.5 million, bringing full-year 2020 revenue to $192 million, up 140% from 2019. Same-store sales increased 63% for full-year 2020, compared to the previous year. The company also raised its 2021 revenue guidance to $335 million – $350 million and raised its 2021 adjusted EBITDA guidance to $38 million – $40 million. GrowGen plans to have 55 garden center locations by the end of 2021.

 


StaffFebruary 23, 2021
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GrowGeneration Corp . (NASDAQ: GRWG) is buying San Diego Hydroponics & Organics, a four-store chain of organic, hydroponic and aquaponics garden centers in San Diego, California. The company said that San Diego Hydroponics & Organics is San Diego County’s premier hydroponic equipment supplier, with annual revenues approaching $10 million. GrowGen did not say what it paid for the company.

This latest acquisition brings the total number of GrowGen hydroponic garden centers to 50 stores.  In California, the country’s largest legal cannabis market, GrowGen now has 17 stores,  with eight of those stores located in Southern California.

Southern California is a priority market for GrowGeneration, and we are excited to add San Diego Hydroponics & Organics to our ever-expanding footprint there,” said Darren Lampert, GrowGen’s CEO. “As the leading hydroponics supplier, San Diego Hydroponics & Organics strategically positions GrowGen to conveniently provide our services to commercial growers in the Southern California market.”

San Diego Hydroponics & Organics was founded in 2001 by Todd Kent. The company first opened its doors with an 800-square-foot store in Pacific Beach, California, and has since expanded to four locations with more than 20,000-square-feet of retail space and 20 employees, who will join GrowGeneration’s team of over 500 grow professionals as part of the transaction.

“Since 2001, we’ve remained committed to our goal of supplying Southern California with top-quality products, cutting-edge horticultural technology, and unbeatable customer service. Our partnership with GrowGen, the nation’s clear leader in hydroponics, allows us to marry decades of combined cultivation expertise and knowledge to better serve the Southern California market,” said San Diego Hydroponics & Organics’ founder Todd Kent .

The San Diego Hydroponics & Organics acquisition is GrowGen’s fourth this year and follows yet another quarter of record earnings. In January, GrowGen pre-announced fourth-quarter revenues of $61.5 million, bringing full-year 2020 revenue to $192 million, up 140% from 2019. Same-store sales increased 63% for full-year 2020, compared to the previous year. The Company also raised its 2021 revenue guidance to $335 million – $350 million and raised its 2021 adjusted EBITDA guidance to $38 million – $40 million. GrowGen plans to have 55 garden center locations by the end of 2021.

The four analysts covering GrowGen have an average price target of $56.43 according to Yahoo Finance. The stock was lately trading at $49.50, down from its 52-week high of $67.


StaffFebruary 1, 2021
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It seems a month doesn’t go by without  GrowGeneration Corp . (NASDAQ: GRWG ) making another acquisition. February is only just starting  and the hydroponic store chain has said it is buying Grow Depot, a two-store chain in Auburn and Augusta, Maine. The acquisition brings the total number of GrowGen hydroponic garden centers in Maine to five, with locations in AuburnAugustaBiddefordBrewer, and York.

“It’s a very exciting time in Maine’s adult-use market, and we’re pleased to expand our footprint in the state through our acquisition of Grow Depot, which has proudly served the Central Maine area for nearly a decade,” said Darren Lampert, GrowGeneration’s CEO. “With our expanded footprint, the Maine market is expected to generate 2021 annual revenues of over $20 million for GrowGen.”

Founded in 2012 by Jim Parisi, Grow Depot carries a large catalog of equipment for indoor growing and hydroponic systems. As part of the transaction, both Jim and Anthony Parisi, with over two decades of experience in the indoor growing supply industry, and their 10 employees will join GrowGen’s team of more than 450 grow professionals.

The Grow Depot acquisition is the company’s second of the year and follows yet another quarter of record earnings. Last month, the Company pre-announced fourth-quarter revenues of $61.5 million, bringing full-year 2020 revenue to $192 million, up 140% from 2019. Same-store sales increased 63% for full-year 2020, compared to the previous year. The Company also raised its 2021 revenue guidance to $335 million – $350 million and raised its 2021 adjusted EBITDA guidance to $38 million – $40 million. GrowGen plans to have 55 garden center locations by the end of 2021.

The stock hit the $53 mark in January, but then it seemed investors took some profits as the stock has slid back to the $43 range. Both Roth Capital and Ladenburg Thalmann downgraded the company to neutral which may have been the reason why the stock slipped. The average price target is $52.71 according to Yahoo! Finance.


StaffJanuary 26, 2021
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GrowGeneration Corp . (NASDAQ: GRWG ) is at it again. The hydroponic chain has acquired Indoor Garden & Lighting, a two-store chain of hydroponic equipment and indoor gardening supply stores serving the Seattle and Tacoma, Washington area. GrowGen said it will be consolidating its current Seattle operation into the acquired stores. This acquisition brings the total number of GrowGen hydroponic garden centers nationwide to 40 stores. The company stock was jumping over 2% in early trading to lately sell at $49.66, closing in on its 52-week high of $53.

“We’re thrilled to kickstart 2021 with our acquisition of Indoor Garden & Lighting, which boasts a strong commercial customer base and a talented team of grow professionals,” said Darren Lampert, GrowGeneration’s CEO. “This deal expands our footprint in the Pacific Northwest and puts us in close proximity to Tacoma’s large commercial operators. With the addition of Indoor Garden & Lighting, we expect Washington’s thriving adult-use market to generate annual revenues of $10 million for GrowGen.”

Founded in 1995, by Mike Long, Indoor Garden & Lighting has operations in Tacoma and Mountlake Terrace.  GrowGeneration also plans to operate out of Indoor Garden & Lighting’s 10,000-square-foot warehouse in Tacoma. As part of the deal, Long and his team of cultivation experts will join GrowGeneration.

The Indoor Garden & Lighting acquisition is the Company’s first acquisition this year and follows yet another quarter of record earnings. Earlier this month, GrowGen pre-announced fourth-quarter revenues of $61.5 million, bringing full-year 2020 revenue to $192 million, up 140% from 2019. Same-store sales increased 63% for full-year 2020, compared to the previous year. The company also raised its 2021 revenue guidance to $335 million – $350 million and raised its 2021 adjusted EBITDA guidance to $38 million – $40 million. GrowGen plans to have 55 garden center locations by the end of 2021.


StaffJanuary 11, 2021
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Ahead of the Virtual ICR Conference 2021, being held from Monday, January 11, hydroponic chain GrowGeneration Corp. (NASDAQ: GRWG) released preliminary record full-year 2020 revenue of $192 million, versus $80 million for 2019, an increase of 140%.  The company also said that its fourth-quarter 2020 revenue rose 142% to $61.5 million, versus $25.4 million for the fourth quarter of 2019.

In addition to that, GrowGen reported that same-store sales were up 63% for full-year 2020 versus full-year 2019. Same-store sales were up 58% for the fourth quarter of 2020 versus the fourth quarter of 2019. A total of 14 new and acquired store locations in 2020, increasing locations nationwide to 39.

“We delivered strong shareholder value in 2020, with triple-digit revenue growth despite unprecedented challenges and an uncertain environment. This growth came through strategic acquisitions of best-in-class hydroponic stores, exceptional same-store sales growth, and the expansion of our omnichannel and private label offerings – a strategy we will accelerate this year,” said GrowGen CEO Darren Lampert. “We expect significant revenue growth in the year ahead as we continue to execute on these initiatives. Accordingly, we have raised our 2021 revenue guidance to $335 – $350 million, our 2021 adjusted EBITDA guidance to $38 million – $40 million, and increased the number of projected GrowGen store locations to 55.”

The four analysts covering GrowGen have an average price target of $36 according to Yahoo Finance. The stock was lately trading at $45, near its 52-week high of $48.

Buying Binge

Since 2014, GrowGen has acquired 34 stores and opened 16 new stores. The company has identified Ohio, Illinois, Pennsylvania, New York, New Jersey, Massachusetts, and Missouri as new markets where it plans to open new operations.  On August 10, 2020, it acquired the assets of Benzakry Family Corp, d/b/a Emerald City Garden, in Concord, Ca. On October 12, 2020, the company acquired the assets of Hydroponics Depot, LLC, a single store located in Phoenix, Arizona. On October 20, 2020, the company acquired the assets of Big Green Tomato, a two-store chain in Battle Creek and Taylor, Michigan. On November 17, 2020, the company acquired the assets of The GrowBiz, which we believe is the third-largest chain of hydroponic garden centers in the United States, with four stores in California and one store in Oregon. In connection with the GrowBiz acquisition, Ross Haley, the founder of The GrowBiz and the former CEO of Hawthorne Gardening Company, a Division of Scott’s Miracle-Gro, joined the Company as a senior strategic advisor.


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