Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) Q3 2022 Results Conference Call November 9, 2022 4:30 PM ET Company Participants Fitzhugh Taylor - Managing Director of ICR John Lindeman - CFO William Toler - CEO & Chairman Conference Call Participants Andrew Carter - Stifel, Nicolaus & Company Stephen Lengel - Truist Securities Andrea Teixeira - JP Morgan Chris Carey - Wells Fargo Operator Good day, ladies and gentlemen and thank you for standing by. Welcome to the Hydrofarm Holdings Group's Third Quarter 2022 ...

Financial Performance - Net sales for Q3 2022 were $74.2 million, a decrease of $49.7 million, or 40.1% compared to Q3 2021[137]. - Net sales for the nine months ended September 30, 2022, were $283.0 million, a decrease of $86.0 million, or 23.3% compared to the same period in 2021[137]. - Gross profit for Q3 2022 was $5.9 million, a decrease of $24.1 million, or 80.4%, compared to Q3 2021[141]. - Gross profit for the nine months ended September 30, 2022, was $29.8 million, a decrease of $53.0 million, or 64.0%, compared to the same period in 2021[141]. - The decline in Q3 2022 net sales was attributed to a 42.6% decline in volume of products sold, primarily due to agricultural oversupply affecting cannabis growing activity[138]. - The nine-month decline in net sales was due to a 26.0% decline in volume of products sold, with a 42.7% decline in organic sales[139]. - Adjusted EBITDA for the three months ended September 30, 2022, was $(9.048) million, compared to $16.069 million in the same period in 2021[158]. - Net loss for the three months ended September 30, 2022, was $(23.539) million, compared to net income of $17.265 million in the same period in 2021[158]. Operating Expenses - Operating expenses for Q3 2022 were $26.2 million, a decrease of $6.2 million, or 19.2% compared to Q3 2021[136]. - SG&A expenses for the three months ended September 30, 2022, were $26.2 million, a decrease of $6.2 million compared to the same period in 2021[144]. - SG&A expenses for the nine months ended September 30, 2022, were $92.4 million, an increase of $15.9 million compared to the same period in 2021[146]. - The company experienced a $4.4 million charge for inventory obsolescence during Q3 2022, primarily related to certain lighting products[133]. Goodwill and Impairments - The company recorded a goodwill impairment charge of $189.6 million as of June 30, 2022, reducing the goodwill balance to zero[130]. - The company recorded goodwill impairment charges of $189.6 million for the nine months ended September 30, 2022, primarily due to a deterioration in customer demand in the U.S. and Canada[147]. - The company recorded an impairment of a note receivable of $2.6 million during the nine months ended September 30, 2022[160]. - The company recorded a goodwill impairment charge due to market softness in demand in the U.S. and Canada as of June 30, 2022[186]. Cash Flow and Liquidity - Net cash from operating activities was $15.5 million for the nine months ended September 30, 2022, compared to a net cash used of $17.5 million in the same period of 2021[166][167]. - The company experienced a net cash decrease of $11.9 million in cash, cash equivalents, and restricted cash for the nine months ended September 30, 2022, compared to a decrease of $62.5 million in 2021[165]. - Net cash used in investing activities was $7.4 million for the nine months ended September 30, 2022, significantly lower than $419.4 million in 2021, primarily due to fewer business acquisitions[168][169]. - Net cash used in financing activities was $19.5 million for the nine months ended September 30, 2022, compared to a net cash provided of $374.4 million in 2021, reflecting payments to settle contingent consideration[170][171]. - As of September 30, 2022, the company had $16.5 million in cash and cash equivalents, down from $26.6 million at December 31, 2021[183]. Debt and Interest Rates - The company has a borrowing limit of $100 million under its Senior Secured Revolving Credit Facility, with approximately $62 million available to borrow as of September 30, 2022[180][181]. - The company is exposed to interest rate risk with $124.1 million of Term Loan debt subject to variable interest rates, with a potential increase in interest expense of $1.1 million annually if rates rise by 100 basis points[191]. - The company recorded interest expense for the three months ended September 30, 2022, was $3.1 million, an increase of $2.9 million compared to the same period in the prior year[148]. - A 100 basis point increase in interest rates would result in an average annual increase of $1.1 million in interest expense on variable-rate debt[191]. Risk Factors and Controls - The results of operations and financial condition may be impacted by inflation in the future[194]. - The company does not currently hedge its interest rate risk but may consider doing so in the future[191]. - Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[196]. - There were no changes in internal control over financial reporting that materially affected the company's reporting[198]. - The company is not aware of any legal proceedings that would materially affect its business or financial condition[200]. - The company recognizes that controls and procedures can only provide reasonable assurance of achieving their objectives[197].

Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) Q2 2022 Earnings Conference Call August 9, 2022 4:30 PM ET Company Participants Fitzhugh Taylor - IR John Lindeman - CFO William Toler - CEO & Chairman Conference Call Participants William Carter - Stifel, Nicolaus & Company David Shakno - William Blair & Company Stephen Lengel - Truist Securities Operator Good day, ladies and gentlemen, thank you for standing by. Welcome to the Hydrofarm Holdings Group's took Second Quarter 2022 Earnings Conference Call. At thi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number: 001-39773 Hydrofarm Holdings Group, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpor ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number: 001-39773 Hydrofarm Holdings Group, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpo ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number: 001-39773 Hydrofarm Holdings Group, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporatio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number: 001-39773 Hydrofarm Holdings Group, Inc. (Exact name of registrant as specified in its charter) Delaware 81-4895761 (State or other ...

Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) Q3 2021 Earnings Conference Call November 11, 2021 4:30 PM ET Company Participants Fitzhugh Taylor - Managing Director of ICR William Toler - Chairman and Chief Executive Officer John Lindeman - Chief Financial Officer Conference Call Participants Andrew Carter - Stifel, Nicolaus & Co., Inc. Peter Grom - UBS Jon Andersen - William Blair & Company LLC Andrea Teixeira - JPMorgan Chase & Co. William Chappell - Truist Securities, Inc. Operator Good day, ladies and ge ...