Market Overview

AeroGrow Reports Results for the Fourth Quarter and Full Year Ended March 31, 2017

Share:
  • Full Year Sales up 20% to $23.6 million
  • Full Year Adjusted EBITDA up 365% to $1.4 million; Operating Income up $953K to ($346)K
  • Fourth Quarter Sales up 19% to $6.0 million
  • Fourth Quarter Adjusted EBITDA up 295% to $718K; Operating Income up $472K to $312K
  • YOY Gross Margin Improves by 60 Basis Points to 36.3%
  • Highly Successful Launch of New Products, More Planned for FY 2018             

BOULDER, Colo., June 26, 2017 (GLOBE NEWSWIRE) -- AeroGrow International, Inc. (OTCQB:AERO) ("AeroGrow" or the "Company"), which is the manufacturer and distributor of the world's leading indoor gardening systems – the AeroGarden line of Smart Countertop Gardens™  – announced results for the fourth quarter and fiscal year (FY) ended March 31, 2017.

For the year ended March 31, 2017 the Company recorded total revenue of $23.6 million, an increase of 20% over the same period in the prior year.  Adjusted EBITDA for the full year was $1.4 million, an increase of 365% vs. $304K in the prior year period.  Results for the 4th quarter ended March 31, 2017 saw net revenue increase 19% year over year to $6.0 million and Adjusted EBITDA for the quarter improved $536K to $718K.

"Fiscal Year 2017 was a strong year by any measure – overall the best in our Company's history," said President and CEO J. Michael Wolfe.  "Sales were up a solid 20% and adjusted EBITDA – the measure we use to evaluate our profitability and cash flow – was up a very strong 365%, indicating the leverage that exists in the business.  We also showed significant progress on our balance sheet, which as of March 31, 2017 showed no debt and over $8.8 million of cash on hand.

"Our focus this past year was to continue the growth in our highly successful on-line channels and to establish in-store success with prominent national retailers.  The results were exceptional as we experienced + 38% sell-thru growth at Amazon.com and + 144% at Amazon.ca.  We also had good results with our other on-line retailers, including a very successful launch at Target.com.  But I think the big breakthrough for us this past year was the success we had in selected in-store initiatives as we experienced nearly 100% chain-wide sell-thru at Bed, Bath & Beyond and Sur La Table, with national roll-outs at both stores.

"We also had strong double-digit growth in our Direct-to-Consumer business.  Additionally, we had a very successful launch into Europe – with encouraging results on the Amazon platforms in the UK, France and Germany.

"Our new products were extremely well received – particularly our launch of the world's first Wi-Fi enabled indoor garden.  In addition, we introduced a series of gardens that feature stainless steel and colorful, high-end finishes, a major contributor to our success with housewares retailers.  Look for us to continue to be aggressive in bringing new and innovative products to market – with several significant launches planned for this fall.

"Given all of the progress we have made, I am more excited about our future than I have ever been.  In Amazon and our Direct-to-Consumer business, we have two very well-established channels of distribution that continue to grow and generate significant contribution to our profitability.  In addition, we've now proven that we can be successful in-store, a highly scalable distribution channel that can help us grow significantly beginning in FY 2018.  We will also look to expand upon the very promising start to our international distribution efforts by growing our sales on the Amazon platform in Europe.  And all of this is against the backdrop of our product line becoming increasingly well positioned in the market place – smart gardens, indoor gardening and hydroponic gardening all appear to be trending significantly upward, and we are uniquely qualified to address each of these major trends.

"We are better capitalized than we have ever been, with no debt and a strong cash position due to improved performance and the warrant exercise by The Scotts Miracle-Gro Company last November.  When you combine our strong balance sheet with our sales momentum, expanding distribution, and the continued innovation of our product line, we believe we are in a very strong position to grow rapidly in FY 2018 and beyond."


AEROGROW INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
 
        Years ended March 31,  
(in thousands, except per share data)       2017     2016  
Net revenue       $ 23,609     $ 19,612  
Cost of revenue         15,044       12,618  
Gross profit         8,565       6,994  
                     
Operating expenses                    
Research and development         392       480  
Sales and marketing         6,125       5,410  
General and administrative         2,394       2,403  
Total operating expenses         8,911       8,293  
                     
Loss from operations         (346 )     (1,299 )
                     
Other income (expense), net                    
Fair value changes in derivative warrant liability         (2,108 )     1,044  
Interest expense – related party         (108 )     (293 )
Other (expense), net         (36 )     (5 )
Total other income (expense), net         (2,252 )     746  
                     
Net loss       $ (2,598 )   $ (553 )
Change in fair value of stock to be distributed for Scotts Miracle-Gro transactions         (2,167 )     (675 )
Net loss attributable to common shareholders       $ (4,765 )   $ (1,228 )
                     
Net loss per common share, basic and diluted       $ (0.31 )   $ (0.18 )
                     
Weighted average number of common shares outstanding, basic and diluted         15,547       6,666  
                     


AEROGROW INTERNATIONAL, INC.
BALANCE SHEETS
 
    March 31,     March 31,  
    2017     2016  
(in thousands, except share and per share data)            
ASSETS            
Current assets            
Cash and cash equivalents   $ 8,804     $ 1,401  
Restricted cash     15       15  
Accounts receivable, net of allowance for doubtful accounts of $20 and $14 at March 31, 2017 and 2016, respectively     2,484       1,577  
Other receivables     258       232  
Inventory, net     2,921       3,149  
Prepaid expenses and other     511       196  
Total current assets     14,993       6,570  
Property and equipment and intangible assets, net of accumulated depreciation of $4,020 and $3,652 at March 31, 2017 and 2016, respectively     415       622  
Deposits     106       156  
Total assets   $ 15,514     $ 7,348  
 
View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com