Hydrofarm Holdings Group, Inc. HYFM, a leading independent manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture, announced its financial results late Tuesday for its first quarter ended March 31, 2022.
First Quarter 2022 Highlights vs. Prior Year Period
- Net sales remained flat at $111.4 million.
- Gross Profit decreased to $16.6 million compared to $23.2 million during the same period the year before.
- Adjusted Gross Profit was $22.3 million compared to $23.4 million.
- Net loss was $23.3 million, or a loss of $0.52 per diluted share.
- Adjusted Net Loss was $7.8 million, or $0.17 per diluted share, compared to Adjusted Net Income of $7.2 million, or $0.18 per diluted share.
Adjusted EBITDA decreased to $3.1 million compared to $9.9 million.
Outlook For 2022
Based on first-quarter performance and recent sales trends, the Company is providing an update to its outlook for the full fiscal year 2022:
- Net sales of approximately $480 million to $520 million.
- Adjusted EBITDA of $46 million to $54 million, representing a range of approximately 9.6% to 10.4% of net sales for the full fiscal year.
Impacted By ‘Agricultural Oversupply’
“Over the past year, our team has strengthened our business through a number of initiatives, including our five acquisitions, the expansion of our distribution and manufacturing footprint, and the creation of new leadership roles,” Bill Toler, chairman and CEO of Hydrofarm said in a press release. “While we remain optimistic about the health of our business and our long-term potential, our ability to reap the benefits of our actions has been impacted by the agricultural oversupply that has hampered cannabis growing activity across the US and Canada. This dynamic was apparent in our first-quarter results.
“We believe these industry challenges are transient, and we continue to take aggressive actions to optimize our business through pricing and cost controls that we believe will benefit our business over time,” Toler added. “Moreover, we are seeing bright spots in our IGE business, in our commercial business, in newer legalized states, and in our peat business. With a strong product portfolio and healthy balance sheet, we remain well-positioned to capture the tremendous long-term growth opportunities in the CEA industry.”
Balance Sheet and Liquidity
As of March 31, 2022, the Company had unrestricted cash and cash equivalents of approximately $12.2 million and approximately $99.7 million in available borrowing capacity under its revolving credit facility. The Company also carried a principal amount of debt outstanding of $124.7 million under its term loan at the end of the quarter.
Greenhouse by Richard T On Unsplash.