GrowGeneration Corp. (NASDAQ:GRWG) Q4 2022 Results Conference Call March 15, 2023 4:30 PM ET Company Participants Clay Crumbliss - IR, ICR Darren Lampert - Co-Founder and CEO Greg Sanders - CFO Conference Call Participants Mark Smith - Lake Street Capital Brian Nagel - Oppenheimer Chris Carey - Wells Fargo Eric Des Lauriers - Craig-Hallum Capital Group Aaron Grey - Alliance Global Partners Scott Fortune - ROTH Capital MKM Operator Hello, and welcome to GrowGeneration’s Fourth Quarter and Full Year 2022 Earn ...

Financial Data and Key Metrics Changes - The company reported third-quarter revenue of $71 million, a decline of approximately 38.9% compared to $116 million in the same quarter of 2021 [23] - Same-store sales decreased by 58% year-over-year, from $95.4 million to $39.9 million [23] - Adjusted EBITDA for the third quarter was a loss of $2.6 million, compared to income of $10.8 million in the prior year [30] - The net loss for the third quarter was $7.2 million, or negative $0.12 per share, compared to net income of $4 million, or $0.07 per share, in the same quarter last year [29] Business Line Data and Key Metrics Changes - E-commerce revenue fell from $10.5 million to $3 million due to decreased capital expenditure demand from commercial markets [24] - The distribution business saw a $15.1 million increase, positively impacting year-over-year revenue changes [24] - Retail gross margin decreased by 782 basis points compared to the previous year, primarily due to inventory reduction efforts [25] Market Data and Key Metrics Changes - The broader cannabis and hydroponic industry is experiencing a prolonged downturn, affecting all participants from growers to retailers [8] - The company noted a continued oversupply of cannabis in the marketplace, leading to slow hydroponic demand across the U.S. [8] Company Strategy and Development Direction - The company is focusing on cost control, store consolidation, inventory reduction, and cash generation as part of its strategic initiatives [11] - Plans to explore opportunities in the indoor vertical farming market with proprietary fertilizers and solutions are underway [15] - The private label strategy is a key growth initiative, with private label sales accounting for $7.1 million, or 14% of overall retail and e-commerce sales, growing 8% year-over-year [18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about early signs of stabilization in the market, particularly in the Mid-Atlantic region [44] - The company anticipates a challenging fourth quarter but expects to maintain a strong liquidity position with $71 million in cash and no debt [10] - Full-year revenue guidance was updated to between $270 million and $280 million, with adjusted EBITDA expected to be a loss of $10 million to $13 million [34] Other Important Information - The company has reduced payroll expenses by $11.7 million year-to-date, equating to a 41% headcount reduction [13] - Inventory was reduced by $10 million quarter-over-quarter, contributing to a total reduction of over $24.1 million year-to-date [12] - The company is committed to supporting social equity in the cannabis industry through partnerships with organizations like Harvest 360 [40] Q&A Session Summary Question: Are there signals of stabilization in sales despite the pressures? - Management noted that while same-store sales are down 58%, there are signs of increased quoting and business backlog in the Mid-Atlantic region, indicating potential stabilization [44] Question: Is there a pickup in licensing activity in newly legalized states? - Management confirmed a pickup in licensing activity in Eastern states, including New Jersey and Mississippi, where new stores are opening [47] Question: How are inventory levels currently? - Management stated that significant progress has been made in reducing inventory, entering 2023 with a cleaner inventory and a strong balance sheet [52] Question: What impact are private labels having in the current environment? - Management indicated that both cost savings and promotional activity are driving the adoption of private label products, which are performing well in the market [55] Question: How is the competitive landscape shaping up for potential M&A? - Management highlighted that the current market distress is leading to consolidation, with opportunities to acquire stores at favorable prices due to the financial struggles of smaller competitors [58] Question: What are the plans for store openings and operational efficiency? - Management confirmed a shift towards smaller stores and increased reliance on distribution capabilities, with fewer new store openings planned for 2023 [71]

GrowGeneration Corp. (NASDAQ:GRWG) Q2 2022 Earnings Conference Call August 4, 2022 5:00 PM ET Corporate Participants Clay Crumbliss - Managing Director, ICR Darren Lampert - Co-Founder and Chief Executive Officer Jeff Lasher - Chief Financial Officer Conference Call Participants Scott Fortune - ROTH Capital Aaron Grey - Alliance Global Partners Ryan Meyers - Lake Street Capital Markets Andrew Carter - Stifel Eric Des Lauriers - Craig-Hallum Andrew Chasanoff - Oppenheimer Glenn Mattson - Ladenburg Thalmann O ...

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: March 31, 2022 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 small business issuer as specified in its charter) Colorado 46-5008129 (State of other jurisdiction of incorporation) (I ...

GrowGeneration Corp. (NASDAQ:GRWG) Q1 2022 Earnings Conference Call May 10, 2022 5:00 PM ET Company Participants Clay Crumbliss - Managing Director Darren Lampert - Co-Founder and Chief Executive Officer Jeff Lasher - Chief Financial Officer Conference Call Participants Brian Nagel - Oppenheimer Aaron Grey - Alliance Global Partners Andrew Carter - Stifel Scott Fortune - ROTH Capital Glenn Mattson - Ladenburg Thalmann Ryan Meyers - Lake Street Capital Markets Operator Please stand by. Good day everyone and ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) GrowGeneration Corp. is North America's largest hydroponic garden center chain, operating 63 stores and focusing on acquisitions and proprietary brands for growth - As of year-end 2021, the Company operates **63** specialty retail hydroponic and organic gardening stores across **13 states**, making it the largest chain of its kind in North America[17](index=17&type=chunk) - The company's growth strategy focuses on acquiring and opening new hydroponic stores across North America, acquiring **23 new locations in 2021**[18](index=18&type=chunk)[24](index=24&type=chunk) - The business is structured into three units: Retail (**62 stores**), E-Commerce (GrowGeneration.com), and Proprietary Brands (e.g., Power Si, CharCoir, Ion Lighting)[25](index=25&type=chunk) - A key supplier accounted for **28% of all purchases in 2021**, a decrease from **41% in 2020** and **51% in 2019** (two suppliers)[40](index=40&type=chunk) - The company executed a significant number of acquisitions in **2021, 2020, and 2019**, using cash and common stock to expand its market footprint and add proprietary brands[42](index=42&type=chunk)[58](index=58&type=chunk)[66](index=66&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including material weaknesses in internal controls, acquisition integration challenges, and reliance on the legally complex cannabis industry - The company and its independent auditor identified **material weaknesses in internal control over financial reporting** for fiscal year ended December 31, 2021, potentially leading to a loss of investor confidence[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - Acquisitions, a core strategy, present risks including integration difficulties, diversion of management attention, and unforeseen liabilities[85](index=85&type=chunk)[89](index=89&type=chunk) - The business is indirectly subject to risks from the cannabis industry, which remains illegal under U.S. federal law, creating challenges in banking and insurance[134](index=134&type=chunk)[135](index=135&type=chunk)[137](index=137&type=chunk) - The company faces potential product liability lawsuits and does not maintain product liability insurance, which could result in substantial liabilities[111](index=111&type=chunk) - Operations are vulnerable to IT system failures and cyber-attacks, potentially leading to loss of confidential information and material adverse effects[115](index=115&type=chunk)[116](index=116&type=chunk) [Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[149](index=149&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) The company leases approximately **900,000 square feet** of facilities, including corporate offices, warehouses, and retail stores across **13 states** Leased Property Overview as of December 31, 2021 | State | Number of Locations | | :--- | :--- | | California | 26 | | Colorado | 11 | | Michigan | 7 | | Maine | 5 | | Oklahoma | 5 | | Oregon | 4 | | Washington | 3 | | Nevada | 2 | | Florida | 2 | | Arizona | 1 | | Rhode Island | 1 | | New Mexico | 1 | | Massachusetts | 1 | - The company leases approximately **900,000 square feet** in total, comprising **7,000 sq. ft.** for corporate offices, **100,000 sq. ft.** for warehouses, and **800,000 sq. ft.** for store space[150](index=150&type=chunk) [Legal Proceedings](index=23&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal matters, notably a lawsuit with TGC Systems, LLC regarding a failed acquisition, for which no loss accrual has been recorded - The Company is a defendant in a lawsuit with TGC Systems, LLC ("Total Grow") related to a failed acquisition, believing claims are without merit and seeking to recover a **$1.5 million loan**[153](index=153&type=chunk) - No accruals have been recorded for the Total Grow lawsuit as management believes a loss is not probable or material[153](index=153&type=chunk)[154](index=154&type=chunk) [Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[156](index=156&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "GRWG", has never paid dividends, and has issued unregistered securities for compensation and acquisitions - The company's common stock trades on the Nasdaq Capital Market under the symbol **"GRWG"**[159](index=159&type=chunk) - The company has never paid cash dividends and does not expect to in the foreseeable future, retaining funds for operations and growth[162](index=162&type=chunk) - The company has issued unregistered securities in connection with its **2014 and 2018 Equity Compensation Plans** and for various asset purchase acquisitions[164](index=164&type=chunk)[167](index=167&type=chunk) [Selected Financial Data](index=26&type=section&id=Item%206.%20%5BRESERVED%5D) This item is reserved with no information provided - This item is reserved[168](index=168&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal year 2021, net revenue surged **118.5% to $422.5 million**, driven by acquisitions and same-store sales, though operating expenses outpaced revenue growth, leading to a Q4 net loss Full Year Financial Performance (2019-2021, in millions) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Sales | $422.5 | $193.4 | $79.7 | | Gross Profit | $118.2 | $51.0 | $22.0 | | Gross Margin | 28.0% | 26.4% | 27.6% | | Net Income | $12.8 | $5.3 | $1.3 | | Adjusted EBITDA | $34.5 | $18.9 | $5.3 | Q4 Financial Performance (2020 vs 2021, in millions) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Sales | $90.6 | $61.9 | | Same-Store Sales Growth | -12.3% | 58.0% | | Net Income (Loss) | ($4.1) | $1.5 | | Adjusted EBITDA (Loss) | ($1.9) | $5.5 | - The **118.5% revenue growth in 2021** was driven by a **$40.1 million (24.4%) increase in same-store sales**, **$17.1 million from distributed products**, and **$36.2 million in e-commerce sales**[177](index=177&type=chunk)[178](index=178&type=chunk) - Working capital decreased by **$53.1 million**, from **$222.9 million at year-end 2020** to **$169.8 million at year-end 2021**, primarily due to **$80.8 million in cash used for acquisitions**[203](index=203&type=chunk) - Net cash from operating activities was **$5.2 million in 2021**, a shift from **$213 thousand used in 2020**; cash used in investing activities increased significantly to **$139.3 million**, driven by **$80.8 million in acquisitions** and **$75.0 million in marketable securities purchases**[207](index=207&type=chunk)[209](index=209&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports minimal market risk exposure, with immaterial interest rate risk and strategies to mitigate inflation's impact on costs - The company has minimal exposure to interest rate risk, with less than **$0.1 million of interest-bearing debt** outstanding as of December 31, 2021[219](index=219&type=chunk)[220](index=220&type=chunk) - Inflation is identified as a risk affecting cost of sales and operating costs, with mitigation strategies including cost reduction and passing costs to customers[221](index=221&type=chunk) [Financial Statements and Supplementary Data](index=35&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited financial statements, noting the auditor's adverse opinion on internal controls due to material weaknesses, while total assets grew to **$459.3 million** and total liabilities increased to **$88.0 million** - Plante & Moran, PLLC issued an **ADVERSE opinion** on the Company's internal control over financial reporting as of December 31, 2021, due to identified material weaknesses[228](index=228&type=chunk)[237](index=237&type=chunk) - Identified material weaknesses include accounting for complex transactions, segregation of duties, inadequate IT general controls, and inadequate controls over physical inventory counts[238](index=238&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$459,338** | **$354,734** | | Cash and cash equivalents | $41,372 | $177,912 | | Inventory | $105,571 | $54,024 | | Goodwill | $125,401 | $62,951 | | **Total Liabilities** | **$88,047** | **$37,737** | | **Total Stockholders' Equity** | **$371,291** | **$316,997** | Consolidated Statement of Operations Highlights (in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Sales | $422,489 | $193,365 | $79,734 | | Gross Profit | $118,241 | $51,048 | $22,005 | | Income from Operations | $15,002 | $8,437 | $1,583 | | Net Income | $12,786 | $5,328 | $1,322 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=73&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company refers to a Form 8-K filed on March 27, 2020, regarding a change in accountants, with no disagreements noted in this report - The company directs readers to a Form 8-K filed on **March 27, 2020**, concerning a change in accountants[411](index=411&type=chunk) [Controls and Procedures](index=73&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of December 31, 2021, due to material weaknesses in internal control, with ongoing remediation efforts - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2021, due to material weaknesses in internal control[413](index=413&type=chunk)[416](index=416&type=chunk) - Identified material weaknesses include insufficient resources for complex accounting, inadequate segregation of duties, deficient IT general controls, and poor controls over physical inventory counts[418](index=418&type=chunk) - Remediation efforts in 2021 included hiring additional accounting resources, implementing new controls, and redesigning inventory procedures, with remediation ongoing[420](index=420&type=chunk)[421](index=421&type=chunk) - Management's assessment of internal controls excluded recent 2021 acquisitions (Charcoir, Agron, MMI), which collectively accounted for **10% of total assets** and **5% of total revenues**[415](index=415&type=chunk) [Other Information](index=75&type=section&id=Item%209B.%20Other%20Information) The company reports no other information under this item - None[426](index=426&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=76&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on the company's executive officers and six directors, with detailed governance information incorporated by reference from the 2022 Proxy Statement - The company's key executive officers are **Darren Lampert (CEO)**, **Michael Salaman (President)**, and **Jeff Lasher (CFO)**[430](index=430&type=chunk)[431](index=431&type=chunk)[432](index=432&type=chunk) - The Board of Directors includes **Darren Lampert, Michael Salaman, Eula Adams, Stephen Aiello, Paul Ciasullo, and Sean Stiefel**[430](index=430&type=chunk) - Detailed corporate governance information, including director qualifications and committees, is incorporated by reference from the **2022 Definitive Proxy Statement**[428](index=428&type=chunk) [Executive Compensation](index=77&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from the company's **2022 Definitive Proxy Statement** - All information required by **Item 402 of Regulation S-K** is incorporated by reference from the **2022 Definitive Proxy Statement**[439](index=439&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=78&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information concerning security ownership is incorporated by reference from the company's **2022 Definitive Proxy Statement** - All information required by **Item 201(d) and Item 403 of Regulation S-K** is incorporated by reference from the **2022 Definitive Proxy Statement**[440](index=440&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=78&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information concerning related party transactions and director independence is incorporated by reference from the company's **2022 Definitive Proxy Statement** - All information required by **Items 404 and 407(a) of Regulation S-K** is incorporated by reference from the **2022 Definitive Proxy Statement**[441](index=441&type=chunk) [Principal Accountant Fees and Services](index=78&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information concerning principal accountant fees and services is incorporated by reference from the company's **2022 Definitive Proxy Statement** - All information required by **Item 9(e) of Schedule 14A** is incorporated by reference from the **2022 Definitive Proxy Statement**[442](index=442&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=79&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists exhibits filed as part of the Form 10-K report, including corporate governance documents, material contracts, and required certifications - The report includes a list of exhibits such as corporate governance documents, material agreements, and required certifications[446](index=446&type=chunk)[447](index=447&type=chunk)

GrowGeneration Corp. (NASDAQ:GRWG) Q4 2021 Earnings Conference Call March 1, 2022 5:00 PM ET Company Participants Clay Crumbliss – Managing Director Darren Lampert – Co-Founder and Chief Executive Officer Jeff Lasher – Chief Financial Officer Conference Call Participants Chris Carey – Wells Fargo Securities Andrew Carter – Stifel Brian Nagel – Oppenheimer Aaron Grey – Alliance Global Partners Glenn Mattson – Ladenburg Thalmann Eric Des Lauriers – Craig-Hallum Capital Group Scott Fortune – ROTH Capital Part ...

GrowGeneration Corp. (NASDAQ:GRWG) Q3 2021 Earnings Conference Call November 11, 2021 9:00 AM ET Company Participants John Evans - Investor Relations Darren Lampert - Co Founder, Chairman and CEO Michael Salaman - Co Founder and President Jeff Lasher - CFO Conference Call Participants Brian Nagel - Oppenheimer Eric Des Lauriers - Craig-Hallum Capital Group Andrew Carter - Stifel Mark Smith - Lake Street Capital Markets Aaron Grey - Allianz Global Partners Mike Grondahl - Northland Securities Scott Fortune - ...

1 INVESTOR PRESENTATION August 12, 2021 growgeneration.com 2 SAFE HARBOR STATEMENT This presentation is being provided for information purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any of the Company's securities. This presentation is not intended, nor should it be distributed, for advertising purposes, nor is it intended for broadcast or publication to the general public. Any such offer of the Company's securities will only be made in compliance with appli ...

Call Start: 09:00 January 1, 0000 9:57 AM ET GrowGeneration Corp. (NASDAQ:GRWG) Q2 2021 Earnings Conference Call August 12, 2021, 09:00 AM ET Company Participants Darren Lampert – CEO and Co-Founder John Evans – GrowGeneration's Head of Investor Relations Michael Salaman – President and Co-Founder Jeff Lasher – CFO Tony Sullivan – COO Conference Call Participants Brian Nagel – Oppenheimer Andrew Carter – Stifel Eric Des Lauriers – Greg-Hallum Capital Group Mark Smith – Lake Street Capital Owen Rickert – N ...