Hydrofarm Q4 Revenue Declines 11% Sequentially to $110.4M

Hydrofarm Holdings Group, Inc. HYFM, a leading independent manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture ("CEA"), announced its financial results for its fourth quarter and full fiscal year ended December 31, 2021.

Fourth Quarter 2021 Highlights vs. Prior Year Period:

• Net sales increased 26.3% to $110.4 million compared to $87.4 million.
• Gross profit increased 16.7% to $18.7 million compared to $16.0 million.
• Net loss attributable to common stockholders was ($11.0) million, or ($0.25) per diluted share, compared to a net loss of ($10.0) million, or ($0.43) per diluted share. Pro forma adjusted net loss⁽¹⁾ was ($2.3) million, or ($0.05) per pro forma diluted share, compared to a pro forma adjusted net income of $0.5 million, or $0.02 per pro forma diluted share.
• Adjusted EBITDA⁽¹⁾ decreased 0.7% to $4.9 million compared to $5.0 million.
• Closed on new $125.0 million Senior Secured Term Loan Facility.
• Completed acquisition of Innovative Growers Equipment and related entities ("IGE").

Fiscal Year 2021 Highlights vs. Prior Year:

• Net sales increased 40.1% to $479.4 million compared to $342.2 million.
• Gross profit increased 59.5% to $101.5 million compared to $63.6 million.
• Net income attributable to common stockholders was $13.4 million, or $0.31 per diluted share, compared to a net loss of ($9.9) million, or ($0.46) per diluted share. Pro forma adjusted net income⁽¹⁾ was $25.4 million, or $0.59 per pro forma diluted share, compared to $7.3 million, or $0.21 per pro forma diluted share.
• Adjusted EBITDA⁽¹⁾ increased 123.4% to $47.1 million compared to $21.1 million.
• Completed five acquisitions during the year.

Full Year 2022 Outlook:

• Net sales growth of 20.0% to 28.0%, or approximately $575.0 million to $615.0 million.
• Adjusted EBITDA⁽¹⁾ of $63.0 million to $74.0 million, or approximately 11.0% to 12.0% of net sales. 

• "As we look ahead, we believe we have several momentum builders in the new year, including growth expected both in the commercial channel and in our proprietary brand portfolio," said Bill Toler, chairman and CEO of Hydrofarm.   "Additionally, in late 2021 and early 2022 we acted on several margin enhancing initiatives to reduce costs and mitigate inflationary pressures, including increasing prices where appropriate, as well as right-sizing our headcount as we have begun realizing synergies from our 2021 acquisitions. Together with our unique position as a leading ‘picks and shovels' supplier to the CEA industry and a strong balance sheet that can support future growth, we remain excited about our prospects in 2022 and beyond," Toler concluded.