Hydrofarm(US:HYFM)2025-05-13 11:05Financial Performance - Net sales decreased by 25.2% to $40.5 million compared to $54.2 million in the prior year period, primarily due to a 22.6% decline in volume/mix of products sold and a 1.8% decrease in price [5]. - Gross profit decreased to $6.9 million, representing 17.0% of net sales, down from $10.9 million or 20.2% of net sales in the prior year [6]. - Adjusted gross profit decreased to $8.5 million, or 21.0% of net sales, compared to $12.7 million, or 23.4% of net sales in the prior year [6]. - Net loss increased to $14.4 million, or $(3.12) per diluted share, compared to a net loss of $12.6 million, or $(2.75) per diluted share in the prior year [9]. - Adjusted EBITDA decreased to $(2.4) million compared to $0.3 million in the prior year period [10]. Cash Flow and Operating Activities - Cash used in operating activities was $(11.8) million, with free cash flow of $(12.0) million during the first quarter [11]. - Free Cash Flow (Non-GAAP) for Q1 2025 was $(12,007) million, compared to $(3,739) million in Q1 2024, indicating a worsening cash flow situation [26]. Expenses - Selling, general and administrative (SG&A) expense decreased by 9.0% to $17.9 million, while adjusted SG&A expense decreased by 11.0% to $11.0 million [7]. - Selling, general and administrative expenses (GAAP) for Q1 2025 were $17,863 million, down from $19,621 million in Q1 2024, a decrease of 9.0% [25]. - Adjusted SG&A (Non-GAAP) for Q1 2025 was $10,980 million, compared to $12,336 million in Q1 2024, a decline of 10.9% [25]. Strategic Outlook - The company is withdrawing its full year 2025 outlook for net sales, adjusted EBITDA, and free cash flow due to macroeconomic uncertainty and prolonged industry headwinds [11]. - The company remains committed to strategic priorities including driving diverse high-quality revenue streams and improving profit margins [12]. Asset and Liability Changes - Total assets decreased from $426,104 million as of December 31, 2024, to $410,557 million as of March 31, 2025, a decline of approximately 3.9% [23]. - Total current liabilities increased from $34,987 million in December 2024 to $39,941 million in March 2025, an increase of approximately 14.0% [23]. Profit Margin - The proprietary brand sales mix increased to 55% compared to 52% in the fourth quarter of 2024, contributing to improvements in gross profit margin [4]. - Gross Profit (GAAP) for Q1 2025 was $6,877 million, down 37.3% from $10,925 million in Q1 2024 [25]. - Adjusted Gross Profit (Non-GAAP) decreased to $8,532 million in Q1 2025, compared to $12,665 million in Q1 2024, reflecting a decline of 32.4% [25]. - Net loss (GAAP) for Q1 2025 was $(14,385) million, compared to $(12,608) million in Q1 2024, representing an increase in loss of 14.1% [26]. - Adjusted EBITDA (Non-GAAP) for Q1 2025 was $(2,448) million, a significant decrease from $329 million in Q1 2024 [26]. - The company reported a Gross Profit Margin (GAAP) of 17.0% for Q1 2025, down from 20.2% in Q1 2024 [25].