Cannabis Earnings: GrowGen Announces Record Q3 Revenues, Expects FY21 Sales To Hit $435M-$440M

Hydroponics Innovator GrowGeneration Corp. GRWG posted record third-quarter 2021 revenues Thursday of $116 million, versus $55 million in the same period last year.

"The GrowGen team delivered a strong third quarter, with revenues up 111%, compared to the same period last year in a difficult macro environment," Darren Lampert, the company's co-founder and CEO, said.

Q3 2021 Financial Highlights

• Same-store sales at 25 locations open for the same period in 2020 and 2021 were $59.2 million versus $51.2 million for the same period of last year, representing a 15.7% increase year over year.
• The gross profit margin was 29.4%, compared to 26.5% in the same quarter of 2020, an increase of 290 basis points.
• GAAP net income before tax hovered around $5.1 million.
• Net income was $4 million, or 7 cents per share based on a basic share count of 58.5 million.
• Adjusted EBITDA was $10.8 million, versus $6.6 million for the same period of 2020.
• Private label sales, including Power Si and Char Coir, were 8.7% of revenue, compared to 2.1% for the same period last year.
• E-commerce revenue, including Agron's, was $10.5 million compared to $3.9 million for the same quarter of 2020.
• Cash and short-term securities as of Sept. 30 were $93 million.

Financial Highlights for Nine Months Ended Sept. 30

• Net revenue totaled $331.9 million, compared to $131.4 million for the nine months ended Sept.30, 2020, an increase of $200.5 million or 153%.
• Gross profit margin was 28.7% compared to 26.7% for the same period of last year.
• Net income amounted to $16.9 million, compared to net income of $3.8 million for the corresponding period of 2020.
• Adjusted EBITDA was $36.3 million, compared to $13.4 million for the nine months ended Sept.30.

M&A Activity

• Acquired assets of Aqua Serene, Inc., an indoor and outdoor garden center with stores in Eugene and Ashland, Oregon, in July.
• Purchased assets of Mendocino Greenhouse & Garden Supply, Inc, a hydroponic garden center located in Mendocino, California, in July.
• Bought assets of Commercial Grow Supply, Inc., consisting of a hydroponic and garden supply center serving the Santa Clarita, California area in August.
• Purchased assets of Hoagtech Hydroponics, Inc., consisting of a hydroponic and garden supply center serving the Bellingham, Washington area, in August.

GrowGen's supply chain spans roughly 950,000 square feet of retail and warehouse space across 13 states.

In September, the company launched two greenfield locations in Los Angeles County and is scheduled to open a sixth Oklahoma location in Ardmore in the first three months of 2022.

Lampert said the company has made "several strategic decisions" to position itself for 2022 and beyond.

"At present, we are on track for full-year revenue of $435 to $440 million in 2021," Lampert added.

More recent news from GrowGen:

• Cannabis Movers & Shakers: GrowGen, The CanCoin, TXOG, HempFusion, Cannabis Bioscience International
• GrowGen And Harvest 360 Design Accelerator Program For Social Equity & Micro Licensing In NJ
• GrowGeneration To Invest In Total Grow Control Expanding Controlled Environment Agriculture Offering

GRWG Price Action

GrowGen's shares traded 7.67% lower at $21.55 per share during the pre-market session on Thursday morning.

Photo: Courtesy of GrowGeneration Corp.