Hydrofarm Holdings Group Announces Fourth Quarter and Full Year 2024 Results

Core Insights - Hydrofarm Holdings Group, Inc. reported a significant decline in net sales and profitability for the fourth quarter and fiscal year 2024, primarily due to challenging industry conditions in the cannabis sector [5][6][10]. Fourth Quarter Highlights - Net sales decreased by 20.9% to $37.3 million from$47.2 million in the prior year, attributed to a 16.8% decline in volume/mix and a 3.9% decrease in price [6][8]. - Gross profit fell to $1.8 million (4.9$8.4 million (17.9% of net sales) in the prior year [7][8]. - Adjusted EBITDA was $(7.3) million, a decline from$(0.6) million in the previous year [10][8]. - The company experienced a net loss of $17.5 million, compared to a net loss of$15.2 million in the prior year [10][8]. Fiscal Year 2024 Highlights - Total net sales for the fiscal year decreased to $190.3 million from$226.6 million [8]. - Gross profit for the year was $32.1 million (16.9$40.3 million (21.2% of net sales) [8]. - The net loss for the year increased to $66.7 million from$64.8 million in the previous year [10][8]. - Cash generated from operating activities was $2.7 million for the fourth quarter, while the full year saw cash used in operating activities of$0.3 million [12][8]. Cost Management and Strategic Focus - The company achieved over $9 million in adjusted SG&A expense savings in 2024, reflecting its commitment to cost management [5]. - The sales mix of higher-margin proprietary brands increased from approximately 35% in 2020 to 56% in 2024 [5]. - The company reduced its manufacturing footprint by nearly 60% since early 2023 while maintaining product quality [5]. Outlook for 2025 - Hydrofarm anticipates a net sales decrease of 10-20% for 2025, with expectations of improved adjusted EBITDA and free cash flow compared to 2024 [14]. - The company aims to enhance its proprietary brand sales mix and optimize its distribution network while implementing further cost-saving measures [5][14].