Record Revenue of $422.5 million and Adjusted EBITDA of $34.5 million in 2021
- Revenues increased 46% to $90.6 million in the fourth quarter and increased 119% to $422.5 million for the full year 2021.
- Net income for the full year was $12.8 million, compared to prior year net income of $5.3 million.
- Net loss for the fourth quarter was $4.1 million, compared to net income of $1.5 million in the prior year.
- Adjusted EBITDA was a loss of $1.9 million for the fourth quarter, but increased 82% to $34.5 million for the full year 2021.
- Expecting full year 2022 revenue in the range of $415 million to $445 million with adjusted EBITDA of $30 million to $35 million.
- The Company plans to open 15 to 20 new GrowGeneration garden centers in 2022.
GrowGeneration Corp. (NASDAQ: GRWG), (“GrowGen” or the “Company”), the largest chain of specialty hydroponic and organic garden centers with 63 locations across 13 states, today reported record fourth quarter and full year 2021 financial results. Revenues were $90.6 million in the fourth quarter 2021 compared to $61.9 million in the same period last year, and 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.
The Company also reported 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. 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.
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.
Adjusted EBITDA for the twelve months ended December 31, 2021 was $34.5 million, compared to $18.9 million for the twelve months ended December 31, 2020, an increase of $15.6 million or 82%.
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.”
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.
Financial Highlights for Fourth Quarter 2021 Compared to Fourth Quarter 2020
- Net revenues increased 46% to $90.6 million for fourth quarter 2021, compared to $61.9 million for 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 fourth quarter 2021, compared to $46.0 million in the same period last year, representing a 12.3% year-over-year decline.
- Gross profit margin for the fourth quarter 2021 was 25.5%, compared to 25.8% in the same period last year, a decrease of 30 basis points.
- GAAP net loss was $4.1 million or $(0.07) per share based on a diluted share count of 58.4 million, compared to net income of $1.5 million in the same period last year, or $0.03 per share on a diluted share count of 51.6 million.
- Adjusted EBITDA was a loss of $1.9 million for the fourth quarter 2021, versus earnings of $5.5 million in the same period last year.
- Private label and proprietary brand sales, inclusive of Power Si and Char Coir, were 7.5% of revenue in the fourth quarter of 2021 compared to 0.5% in the same period last year.
- E-commerce revenue, inclusive of Agron revenue, was $7.7 million, compared to $3.2 million in the same period last year.
- Cash and short-term securities as of December 31, 2021 were $81.2 million.
Financial Highlights for Twelve Months Ended December 31, 2021
- Net revenue for the twelve months ended December 31, 2021, were $422.5 million, compared to $193.4 million for the twelve months ended December 31, 2020, an increase of $229.1 million or 118.5%.
- Gross profit margin was 28.0% for the twelve months ended December 31, 2021 compared to 26.4% for the twelve months ended December 31, 2020 an increase of 160 basis points.
- 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.
- Adjusted EBITDA for the twelve months ended December 31, 2021 was $34.5 million, compared to $18.9 million for the twelve months ended December 31, 2020, an increase of $15.6 million or 82%.
M&A Activity
The Company acquired the following hydroponic equipment and organic garden centers in the fourth quarter of 2021:
- On October 12, 2021, the Company purchased the assets of Indoor Store, LLC (“All Seasons Gardening”), an indoor-outdoor garden supply center specializing in hydroponics systems, lighting, and nutrients. All Seasons Gardening is the largest hydroponics retailer in New Mexico.
- On December 31, 2021, the Company purchased the assets of Mobile Media, Inc and MMI Agriculture (“MMI”), a mobile shelving facility.
In addition, on January 31, 2022, the Company completed the acquisition of Horticultural Rep Group (HRG), a specialty marketing and sales organization of horticultural products based in Ogden, Utah.
Expansion Efforts
The Company’s supply chain spans approximately 895,000 square feet of retail and warehouse space across 13 states.
In January 2022, the Company opened a new store in Ardmore, OK, representing its sixty-third location nationwide and its sixth in Oklahoma.
Full Year 2022 Outlook
- Net revenues* in the range of $415 million to $445 million, versus the 2021 base of $422.5 million.
- Adjusted EBITDA* in the range of $30 million to $35 million versus the 2021 base of $34.5 million.
*Note: 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
Conference Call
The Company will host a conference call today, March 1, 2022, at 5:00 PM Eastern Time. To participate in the call, please dial (888) 204-4368 (domestic) or (647) 794-4605 (international). The conference code is 9729308. This call is being webcast and can be accessed on the Investor Relations section of GrowGen’s website at: https://ir.growgeneration.com.
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.
