- Revenue Increases 224% to
$14.3M ; Favorable Sales Trends Continue in Early Q3 - Income From Operations Rises to
$1.3M – Gross Margin Improves 800+ basis points to 41.3% - Six month results: Revenue up 245% to $30.7M; Income From Operations Rises to
$4.0M , up from a PY loss of$2.1M ; Gross Margin Improves 1,000+ basis points to 43.2% - Effective 11/11/20, The Company Enters into a Merger Agreement with a Subsidiary of
the Scotts Miracle-Gro Company
The Company recorded Net Revenue of
“Our string of excellent results continued in the second quarter,” said
“Over the past six months we have focused on refining our pricing model and reducing our product costs. This focus helped drive our gross margin up to 43.2%, an increase of over 1,000 bps vs. the same period last year. Our gross margin has also benefited from a larger portion of our sales coming through our Direct-to-Consumer channel (AeroGarden.com), which affords us better margins. In addition, our digital marketing programs continued to help drive our growth with significantly improved efficiencies. These factors drove the significant improvement in our sales and operating profit and demonstrate the leverage in our business as it continues to scale.
“Our general marketing and public relations campaigns for the upcoming holiday selling season launch in earnest beginning later this week. The hallmark of our campaign will be a television spot that you can view here: https://vimeo.com/478249976/71bff315ff. We are also partnering with Olympic Gold Medalist and avid gardener
“A key challenge in the business has been managing our world-wide supply chain to support our triple-digit growth and what appears to be continued strong demand for our products as we approach our peak holiday selling season. While our key vendors have done a good job of delivering for us in a timely fashion, we must acknowledge that there is general infrastructural stress affecting the world’s supply chain (e.g., ocean freight, customs clearance, availability of trucks and trains, FedEx and
“Last month we introduced a new Farm model and an all new Sprout into our AeroGarden product line. We are also nearing the launch of “Bloom by Botanicare,” our large-plant growing device that we believe is the most advanced in the world. Bloom monitors and dynamically adjusts key environmental factors for each stage of a plant’s development – maximizing the speed of growth, yields, flavor and consistency of thousands of potential plant varieties. While the launch of our Bloom product has experienced several slight delays, we now have numerous units in the field and the feedback is exceptional. We expect the initial launch of the Bloom web site and preliminary marketing efforts to begin in the coming weeks.
“I am extremely pleased with our results for the first six months of this fiscal year. Moreover, we believe we are well prepared to deliver a successful holiday selling season and to continue building on our recent success.”
On
The Merger Agreement provides that each share of common stock of the Company (other than Excluded Shares and Dissenting Shares), will be automatically converted into the right to receive
Forward-Looking Statements
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements by
Additional detailed information concerning a number of the important factors that could cause actual results to differ materially from the forward-looking information contained in this release is readily available in the Company’s publicly filed quarterly, annual and other reports. The Company disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.
CONDENSED BALANCE SHEETS | ||||||||
2020 | 2020 | |||||||
(in thousands, except share and per share data) | (Unaudited) | (Derived from Audited Statements) | ||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 3,815 | $ | 9,046 | ||||
Restricted cash | 15 | 15 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $694 and | ||||||||
at September 30, 2020 and | 6,217 | 3,422 | ||||||
Other receivables | 391 | 257 | ||||||
Inventory, net | 12,849 | 4,788 | ||||||
Prepaid expenses and other | 3,773 | 1,392 | ||||||
Total current assets | 27,060 | 18,920 | ||||||
Property and equipment and intangible assets, net of accumulated depreciation of $5,789 and | ||||||||
2,142 | 1,229 | |||||||
Operating lease right-of-use | 1,158 | 1,229 | ||||||
Deposits | 754 | 669 | ||||||
Total assets | $ | 31,114 | $ | 22,047 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 5,583 | $ | 2,332 | ||||
Accounts payable related party | 1,075 | 2,396 | ||||||
Accrued expenses | 3,842 | 2,308 | ||||||
Finance lease liability | 7 | 29 | ||||||
Notes payable related party | 2,000 | - | ||||||
Debt associated with sale of intellectual property | 14 | 17 | ||||||
Operating lease liability-current portion | 141 | 58 | ||||||
Total current liabilities | 12,662 | 7,140 | ||||||
Long term liabilities | ||||||||
Notes payable related party | 900 | 900 | ||||||
Operating lease liability | 1,129 | 1,201 | ||||||
Other liability | - | 297 | ||||||
Total liabilities | 14,691 | 9,538 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock, | ||||||||
at | - | - | ||||||
Common stock, | ||||||||
shares issued and outstanding at September 30, 2020 and | 34 | 34 | ||||||
Additional paid-in capital | 140,817 | 140,817 | ||||||
Accumulated deficit | (124,428 | ) | (128,342 | ) | ||||
Total stockholders' equity | 16,423 | 12,509 | ||||||
Total liabilities and stockholders' equity | $ | 31,114 | $ | 22,047 | ||||
CONDENSED STATEMENTS OF OPERATIONS | ||||||||||||||||
Three Months ended | Six Months ended | |||||||||||||||
(in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Net revenue | $ | 14,310 | $ | 4,423 | $ | 30,721 | $ | 8,898 | ||||||||
Cost of revenue | 8,403 | 2,958 | 17,457 | 5,977 | ||||||||||||
Gross profit | 5,907 | 1,465 | 13,264 | 2,921 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development | 294 | 276 | 595 | 487 | ||||||||||||
Sales and marketing | 2,888 | 1,369 | 5,703 | 2,772 | ||||||||||||
General and administrative | 1,406 | 893 | 2,980 | 1,787 | ||||||||||||
Total operating expenses | 4,588 | 2,538 | 9,278 | 5,046 | ||||||||||||
Income (loss) from operations | 1,319 | (1,073 | ) | 3,986 | (2,125 | ) | ||||||||||
Other (expense), net | ||||||||||||||||
Interest expense – related party | (24 | ) | (52 | ) | (47 | ) | (54 | ) | ||||||||
Other (expense), net | (29 | ) | (1 | ) | (25 | ) | (5 | ) | ||||||||
Total other (expense), net | (53 | ) | (53 | ) | (72 | ) | (59 | ) | ||||||||
Net income (loss) | $ | 1,266 | $ | (1,126 | ) | $ | 3,914 | $ | (2,184 | ) | ||||||
Net income (loss) per share, basic and diluted | $ | 0.04 | $ | (0.03 | ) | $ | 0.11 | $ | (0.06 | ) | ||||||
Weighted average number of common | ||||||||||||||||
shares outstanding, basic and diluted | 34,328 | 34,328 | 34,328 | 34,328 | ||||||||||||
About
Headquartered in
Investor Relations:Grey Gibbs Senior Vice President of Finance and Accounting grey@aerogrow.com 303-444-7755
Source:
2020 GlobeNewswire, Inc., source