SOURCE:
AeroGrow International, Inc.
2008-08-07 08:08:00
AeroGrow Reports First Quarter Financial Results
AeroGrow Reports First Quarter Financial Results
Quarterly Revenues Increase 7% Over Prior Year to $6.7 Million
BOULDER, CO–(EMWNews – August 7, 2008) – AeroGrow International, Inc. (
(“AeroGrow” or the “Company”), makers of the AeroGarden® line of indoor
gardening products, announced results for the quarter ended June 30, 2008.
For the quarter ended June 30, 2008, AeroGrow reported revenues of
approximately $6.7 million, an increase of 7% over the $6.3 million
reported for the prior year’s quarter ended June 30, 2007. For the quarter
ended June 30, 2008, AeroGrow reported a net loss of $2.8 million or $0.23
per share as compared to a net loss of $2.0 million for the quarter ended
June 30, 2007.
“As expected, our revenue growth slowed due to summer seasonality and a
reduction in wholesale orders as retailers sold through existing inventory
in preparation for the fall rollout of our new and expanded product lines,”
said Jerry Perkins, CEO of AeroGrow. “Our net loss was also in line with
our expectations, and up from last year due to increased G&A supporting a
far larger annual sales base. As we head into the fall quarter, we’re
running all factories at full capacity to support our rollout into
thousands of new retail storefronts in the next few months. Also
noteworthy is the 174% increase in our revenues from seed kits and
accessories year over year as we achieve increased levels of repeat sales
from customers adopting the AeroGarden as an ongoing part of their lives.”
The following table sets forth, as a percentage of sales, our quarterly
financial results for the three months ended June 30, 2008, and the three
months ended June 30, 2007:
Three months ended
June 30,
--------------------
2008 2007
--------- ---------
Revenue
Product sales - retail 39.3% 65.8%
Product sales - direct to consumer 49.7% 34.2%
Product sales - international 11.0% 0.0%
--------- ---------
Total sales 100.0% 100.0%
Operating expenses
Cost of revenue 54.9% 56.9%
Research and development 10.8% 8.3%
Sales and marketing 51.3% 46.5%
General and administrative 22.6% 20.0%
--------- ---------
Total operating expenses 139.6% 131.7%
--------- ---------
Other (income) expense, net 2.3% 0.5%
Loss from operations -41.9% -32.2%
========= =========
Earnings Conference Call
AeroGrow will host a conference call today, Thursday, August 7, 2008, to
review operational results for the quarter ended June 30, 2008.
The conference call is scheduled for 12:00 PM ET. To participate in the
call, please dial:
U.S. and Canada: 1 (888) 241-0558
International: 1 (647) 427-3417
A replay of the call will be available within 12 hours of completion. You
will be able to access it for the following 30 days through the AeroGrow
website at www.aerogrow.com/investors or by phone until September 7, 2008.
To access the replay by phone, please dial:
U.S. and Canada: 1 (800) 695-1018
International: 1 (402) 220-1753
Conference ID: 58135575
CONDENSED STATEMENT OF OPERATIONS
Three months ended June 30,
----------------------------
2008 2007
------------- -------------
Revenue
Product sales $ 6,720,081 $ 6,278,685
Operating expenses
Cost of revenue $ 3,686,823 $ 3,575,276
Research and development 725,415 521,819
Sales and marketing 3,449,883 2,920,987
General and administrative 1,518,712 1,255,008
------------- -------------
Total operating expenses 9,380,833 8,273,090
------------- -------------
Loss from operations (2,660,752) (1,994,405)
Other (income) expense, net
Interest (income) (1,050) (37,859)
Interest expense 157,647 66,184
Loss on modification of debt - -
Registration rights penalty - -
------------- -------------
Total other (income) expense, net 156,597 28,325
------------- -------------
Net loss $ (2,817,349) $ (2,022,730)
============= =============
Net loss per share, basic and diluted $ (0.23) $ (0.18)
============= =============
Weighted average number of common
shares outstanding, basic and diluted 12,100,387 11,085,389
============= =============
CONDENSED BALANCE SHEETS
June 30,
2008
-------------
ASSETS
Current assets
Cash $ 344,981
Restricted cash 473,275
Accounts receivable, net 2,419,351
Other receivable 323,451
Inventory 4,951,647
Prepaid expenses and other 730,137
-------------
Total current assets 9,242,842
Property and equipment, net 1,820,669
Other assets
Intangible assets, net 132,910
Deposits 101,164
-------------
234,074
-------------
Total Assets $ 11,297,585
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion - long term debt $ 1,733,502
Due to factor -
Accounts payable 4,275,844
Accrued expenses 2,145,248
Customer deposits 244,857
Deferred rent 35,327
-------------
Total current liabilities 8,434,778
Long term debt 1,214,507
Stockholders' equity
Preferred stock -
Common stock 12,100
Additional paid-in capital 44,081,632
Accumulated (deficit) (42,445,432)
-------------
Total Stockholders' Equity 1,648,300
-------------
Total Liabilities and Stockholders' Equity $ 11,297,585
=============
SALES BY CHANNEL (Unaudited)
Three months ended June 30,
----------------------------
2008 2007
------------- -------------
Product Revenues
Product sales - retail $ 2,642,575 $ 4,129,853
Product sales - direct to consumer 3,339,410 2,148,832
Product sales - international 738,096 -
------------- -------------
Total sales 6,720,081 6,278,685
Product Revenues
Product sales - retail 39.3% 65.8%
Product sales - direct to consumer 49.7% 34.2%
Product sales - international 11.0% 0.0%
------------- -------------
Total sales 100.0% 100.0%
SALES BY PRODUCT CATEGORY (Unaudited)
Three months ended June 30,
----------------------------
2008 2007
------------- -------------
Product Revenues
AeroGardens $ 4,983,416 $ 5,643,885
Seed kits and accessories 1,736,665 634,800
------------- -------------
Total sales 6,720,081 6,278,685
Product Revenues
AeroGardens 74.2% 89.9%
Seed kits and accessories 25.8% 10.1%
------------- -------------
Total sales 100.0% 100.0%
------------- -------------
About AeroGrow International, Inc.
Founded in 2002 in Boulder, Colorado, AeroGrow International, Inc. is
dedicated to the research, development and marketing of the AeroGarden®
line of indoor gardening products. AeroGardens feature dirt-free, aeroponic
technology, allowing anyone to grow farmer’s market fresh herbs, salad
greens, tomatoes, chili peppers, flowers and more, indoors, year-round, so
simply and easily that no green thumb is required. See www.aerogrow.com.
FORWARD-LOOKING STATEMENTS
“Safe Harbor” Statement under the Private Securities Litigation Reform Act
of 1995: Statements by Jerry Perkins, and/or the Company, statements
regarding growth of the AeroGarden product line, optimism related to the
business, expanding sales and other statements in this press release are
forward-looking statements within the meaning of the Securities Litigation
Reform Act of 1995. Such statements are based on current expectations,
estimates and projections about the Company’s business. Words such as
expects, anticipates, intends, plans, believes, sees, estimates and
variations of such words and similar expressions are intended to identify
such forward-looking statements. These statements are not guarantees of
future performance and involve certain risks and uncertainties that are
difficult to predict. Actual results could vary materially from the
description contained herein due to many factors including continued market
acceptance of the Company’s products or the need to raise additional
capital. In addition, actual results could vary materially based on changes
or slower growth in the kitchen garden appliance market; the potential
inability to realize expected benefits and synergies; domestic and
international business and economic conditions; changes in customer demand
or ordering patterns; changes in the competitive environment including
pricing pressures or technological changes; technological advances;
shortages of manufacturing capacity; future production variables impacting
excess inventory and other risk factors listed from time to time in the
Company’s Securities and Exchange Commission (SEC) filings under “risk
factors” and elsewhere. The forward-looking statements contained in this
press release speak only as of the date on which they are made, and the
Company does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of this press
release.
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