GrowGeneration (GRWG) came out with a quarterly loss of $0.14 per share versus the Zacks Consensus Estimate of a loss of $0.10. This compares to loss of $0.10 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -40%. A quarter ago, it was expected that this company would post a loss of $0.12 per share when it actually produced a loss of $0.18, delivering a surprise of -50%.Over the last four quarters, the company has not been able ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Unaudited financial statements show decreased assets and equity, a widened **$8.8 million** net loss in Q1 2024, and negative operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$230.4 million** by March 31, 2024, from **$239.1 million** at year-end 2023, primarily due to reduced marketable securities and prepaid assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $141,720 | $147,451 | | Cash and cash equivalents | $31,050 | $29,757 | | Marketable securities | $30,280 | $35,212 | | Inventory | $66,028 | $64,905 | | **Total Assets** | **$230,393** | **$239,090** | | **Total Current Liabilities** | $29,337 | $30,930 | | **Total Liabilities** | **$65,085** | **$65,695** | | **Total Stockholders' Equity** | **$165,308** | **$173,395** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2024 net sales decreased by **15.7%** to **$47.9 million**, resulting in a widened net loss of **$8.8 million** compared to **$6.1 million** in Q1 2023 Q1 2024 vs. Q1 2023 Statement of Operations (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net sales | $47,888 | $56,827 | | Gross profit | $12,364 | $16,289 | | Income (loss) from operations | $(9,432) | $(7,420) | | **Net income (loss)** | **$(8,837)** | **$(6,134)** | | **Net income (loss) per share, basic & diluted** | **$(0.14)** | **$(0.10)** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$3.7 million** for Q1 2024, a reversal from the prior year, with cash and equivalents increasing by **$1.3 million** to **$31.1 million** Q1 2024 vs. Q1 2023 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash from operating activities | $(3,676) | $3,457 | | Net cash from investing activities | $4,997 | $19,313 | | Net cash from financing activities | $(28) | $(86) | | **Net increase (decrease) in cash** | **$1,293** | **$22,684** | | **Cash at end of period** | **$31,050** | **$62,738** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business structure, accounting policies, segment realignment, a **$6.0 million** share repurchase program, and a **$0.3 million** legal settlement recovery - The company operates through two main business segments: **Cultivation and Gardening** and **Storage Solutions**, with **46 retail locations** in **18 states** as of March 31, 2024[22](index=22&type=chunk)[23](index=23&type=chunk) - In March 2024, the Board authorized a share repurchase program for up to **$6.0 million** of its common stock, commencing April 1, 2024[60](index=60&type=chunk) - A legal dispute with Total Grow was resolved, resulting in a **$0.3 million** settlement recovery in February 2024[64](index=64&type=chunk) Disaggregated Revenue by Segment (in thousands) | Segment | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Cultivation and Gardening** | **$43,108** | **$49,127** | | Proprietary brand sales | $9,726 | $9,027 | | Non-proprietary brand sales | $33,382 | $40,100 | | **Storage Solutions** | **$4,780** | **$7,700** | | **Total Net Sales** | **$47,888** | **$56,827** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **15.7%** Q1 2024 net sales decline to store consolidations and lower Storage Solutions sales, resulting in a **$8.8 million** net loss and **$2.9 million** Adjusted EBITDA loss, while maintaining adequate liquidity [Overview and Growth Strategy](index=18&type=section&id=Overview%20and%20Growth%20Strategy) The company operates two segments, focusing on consolidating the fragmented hydroponics industry, while reducing costs through store consolidations and expanding commercial sales and proprietary brands - The company's main growth strategy is to consolidate assets in the fragmented hydroponics industry[85](index=85&type=chunk) - In response to market conditions, the company is reducing costs by closing and consolidating retail locations, with **four stores** consolidated in early 2024[87](index=87&type=chunk) - Key growth strategies for the Cultivation and Gardening segment include expanding commercial sales, distribution, and promoting proprietary brands[89](index=89&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Q1 2024 net sales decreased by **15.7%** to **$47.9 million**, driven by declines in both segments, while gross profit margin fell to **25.8%** due to pricing pressure and consolidation costs, leading to a **$9.4 million** operating loss - Net sales decreased by **$8.9 million** (**15.7%**) year-over-year, primarily due to the consolidation of **17 retail locations** and lower sales in the Storage Solutions segment[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - Gross profit margin decreased by **290 basis points** to **25.8%**, driven by industry pricing compression and non-recurring store consolidation costs[104](index=104&type=chunk) - Proprietary brand sales increased to **23%** of Cultivation and Gardening net sales, up from **18%** in the prior year[100](index=100&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company had **$112.4 million** in working capital and **$61.3 million** in cash and marketable securities, deemed adequate for the next twelve months, with a **$6.0 million** share repurchase program authorized - The company had **$61.3 million** in cash, cash equivalents, and marketable securities as of March 31, 2024[113](index=113&type=chunk) - Management believes the company is adequately funded to support operations for the next twelve months[114](index=114&type=chunk) - A share repurchase program for up to **$6.0 million** was authorized, commencing April 1, 2024[115](index=115&type=chunk) [Non-GAAP Financial Information](index=23&type=section&id=Non-GAAP%20Financial%20Information) The company reported an EBITDA loss of **$5.6 million** and an Adjusted EBITDA loss of **$2.9 million** for Q1 2024, compared to smaller losses in Q1 2023, with adjustments primarily for share-based compensation and restructuring Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income (loss) | $(8,837) | $(6,134) | | EBITDA | $(5,643) | $(2,628) | | **Adjusted EBITDA** | **$(2,871)** | **$(1,802)** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company refers to its 2023 Form 10-K for quantitative and qualitative disclosures about market risk - For information on market risk, the company directs investors to Item 7A of its **2023 Form 10-K**[122](index=122&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2024, due to identified material weaknesses, with an ongoing remediation plan in place - Management concluded that disclosure controls and procedures were not effective as of March 31, 2024, due to previously identified material weaknesses[125](index=125&type=chunk)[127](index=127&type=chunk) - Identified material weaknesses exist across the Control Environment, Risk Assessment, Information and Communication, Monitoring Activities, and Control Activities components of the COSO framework[132](index=132&type=chunk)[133](index=133&type=chunk) - A remediation plan is underway, including engaging third-party specialists, hiring a dedicated controls manager, implementing new systems, and adding personnel with technical accounting experience[136](index=136&type=chunk)[137](index=137&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material legal proceedings during the quarter - There were no legal proceedings to report for the period[143](index=143&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company refers to its 2023 Form 10-K for a summary of its risk factors - For information on risk factors, the company directs investors to Item 9A of its **2023 Form 10-K**[144](index=144&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board authorized a **$6.0 million** share repurchase program commencing April 1, 2024, with no repurchases made in Q1 2024 - A share repurchase program for up to **$6.0 million** was authorized on March 20, 2024, to begin on April 1, 2024[145](index=145&type=chunk) - No common stock was repurchased under the program during the first quarter of 2024[145](index=145&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files - The report includes required exhibits such as CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906, and XBRL data files[151](index=151&type=chunk)

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Financial Data and Key Metrics Changes - Full year 2023 net revenue was $226 million, exceeding guidance of $220 million to $225 million, but down from $278 million in 2022, representing an 18.8% decline [3][81] - Adjusted EBITDA for 2023 was a loss of $5.6 million, while the fourth quarter adjusted EBITDA loss improved to $3.7 million from a loss of $10.2 million in Q4 2022 [3][16] - Net loss for Q4 2023 was $27.3 million, or $0.44 per share, compared to a net loss of $15 million, or $0.25 per share, in the same quarter of the previous year [33][81] Business Line Data and Key Metrics Changes - The Gardening and Cultivation segment generated $35.6 million in same-store sales for Q4 2023, down 3.6% from $37 million in Q4 2022 [14] - The Storage Solutions segment revenue was $7.7 million for Q4 2023, slightly down from $7.8 million in the prior year, but gross profit margin increased to 23.5% [36] - Proprietary brands accounted for $36.5 million in sales, approximately 19% of overall gardening and cultivation sales, up from 15% in 2022 [24] Market Data and Key Metrics Changes - The company noted a 19% improvement in gardening and cultivation sales in January 2024 compared to December 2023 [4] - The U.S. market is seeing growing optimism regarding potential federal rescheduling of cannabis, which could significantly impact commercial cultivators [11][42] - Internationally, developments like Germany's legalization are expected to increase global demand for cultivation equipment [34] Company Strategy and Development Direction - The company is focused on three main initiatives for 2024: expanding the brand portfolio, enhancing profitability through cost control and margin expansion, and targeting the home gardening market [23][41] - The company plans to continue consolidating retail locations, having closed 14 in 2023 and three more in early 2024, bringing the total store count to 47 [26][32] - The company is exploring strategic opportunities for its Storage Solutions segment, MMI, to maximize shareholder returns [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for positive same-store sales in 2024 for the first time since 2021, driven by normalized sales trends and improved operating expenses [86] - The management highlighted the importance of consumable products, which typically command higher margins and provide more predictable revenue [27][70] - The company remains cautious but optimistic about the future, expecting a strong second half of 2024 as outdoor growing season approaches [70][74] Other Important Information - The company reported a significant reduction in SG&A costs, down to $7.9 million in Q4 2023 from $8.6 million in Q4 2022 [15][82] - The company recognized $15.7 million in impaired asset value during its annual test of impairment [15] - The company had total cash and equivalents of $65 million as of December 31, 2023, with a focus on maintaining a strong balance sheet [83][89] Q&A Session Summary Question: What is the guidance for store closures and their impact on revenue? - Management indicated that while they expect some revenue loss from store closures, they aim to retain revenue from larger customers during consolidations [53] Question: What is the rationale behind selling the MMI business? - Management stated that while MMI has shown growth, it primarily serves typical retail rather than the agricultural side, and they are looking to maximize its value [56] Question: How is the broader market performing in terms of store closures and CapEx? - Management noted that while many smaller stores are closing, they are optimistic about the potential for growth in 2024, especially with larger customers [60][72] Question: What are the differences in same-store sales across geographies? - Management acknowledged variations in same-store sales, with some states experiencing consolidation, but overall performance is improving [114] Question: What is the outlook for gross margins in 2024? - Management expressed confidence in maintaining and potentially improving gross margins due to increased penetration of private label products and strategic partnerships [79]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal year ended December 31, 2023 OR ¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission File Number 333-207889 GROWGENERATION CORP. (Exact name of registrant as specified in its charter) 5619 DTC Parkway, Suite 900 Greenw ...

U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: September 30, 2023 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 333-207889 GROWGENERATION CORP. (Exact name of registrant as specified in its charter) (State of other jurisdiction of incorporation) 5619 DTC Parkway, Suite 900 G ...

GrowGeneration Corp. (NASDAQ:GRWG) Q2 2023 Earnings Conference Call August 8, 2023 4:30 PM ET Company Participants Clay Crumbliss - ICR Darren Lampert - Co-Founder & Chief Executive Officer Greg Sanders - Chief Financial Officer Conference Call Participants Aaron Grey - Alliance Global Partners Brian Nagel - Oppenheimer Andrew Carter - Stifel Eric Des Lauriers - Craig-Hallum Capital Group Scott Fortune - ROTH MKM Mark Smith - Lake Street Capital Markets Glenn Mattson - Ladenburg Thalmann & Co. Operator Hel ...

U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: June 30, 2023 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 333-207889 GROWGENERATION CORP. (Exact name of registrant as specified in its charter) (State of other jurisdiction of incorporation) 5619 DTC Parkway, Suite 900 Greenw ...

GrowGeneration Corporation (NASDAQ:GRWG) Q1 2023 Earnings Conference Call May 9, 2023 4:30 PM ET Company Participants Clay Crumbliss - ICR Darren Lampert - Co-Founder, CEO & Director Gregory Sanders - CFO Conference Call Participants Brian Nagel - Oppenheimer Mark Smith - Lake Street Capital Markets William Carter - Stifel, Nicolaus & Company Aaron Grey - Alliance Global Partners Eric Des Lauriers - Craig-Hallum Scott Fortune - ROTH MKM Glenn Mattson - Ladenburg Thalmann & Co. Operator Hello, and welcome to ...