Business
Hydrofarm Announces Preliminary Second Quarter 2022 Financial Results and Updates Fiscal 2022 Outlook
Further Reduces Cost Structure and Maintains Solid Liquidity Position SHOEMAKERSVILLE, Pa., Aug. 02, 2022 (GLOBE NEWSWIRE) -- Hydrofarm Holdings Group, Inc.
About this update from Hydrofarm Holdings Group, Inc.
[{"type":"text","content":"Further Reduces Cost Structure and Maintains Solid Liquidity Position\nSHOEMAKERSVILLE, Pa., Aug. 02, 2022 (GLOBE NEWSWIRE) -- Hydrofarm Holdings Group, Inc. (“Hydrofarm” or the “Company”) (Nasdaq: HYFM), a leading manufacturer and distributor of hydroponics equipment and supplies for controlled environment agriculture (“CEA”), announced preliminary unaudited financial results for its second quarter ended June 30, 2022. Bill Toler, Chairman and CEO, stated, “We took positive steps during the second quarter to lower our cost structure and maintained a solid liquidity position; however, the hydroponics industry recession in the US and Canada continued to alter normal seasonal patterns and impacted our results. While we experienced encouraging results in March and April, sales trends weakened in the second half of the second quarter, disrupting our expected sales mix and resulting in net sales, net loss and Adjusted EBITDA below our internal expectations for the full quarter.“ Toler continued, “Through our team’s net working capital management, we increased our cash position, lowered our net debt and maintained a solid liquidity position during the second quarter. Our team has also enacted additional expense-cutting measures, to further reduce our costs. When coupled with our prior cost savings actions, we estimate that we have reduced our costs by approximately $14.0 million on an annualized basis.” Preliminary Second Quarter 2022 Financial Results Preliminary unaudited financial results for our second quarter ended June 30, 2022 include the following: Net sales estimated between $96.0 million to $97.5 million, as compared to $133.8 million for the three months ended June 30, 2021, a decrease of approximately 28% calculated using the midpoint of the range. Declining valuation trends within the industry and in the broader market adversely impacted the Company’s market valuation since its last quarterly report and triggered a full evaluation of the goodwill arising from prior acquisitions. As a result, the Company’s preliminary results for the second quarter include an estimated impairment of goodwill of approximately $189.6 million.Net loss expected to range between ($210.4) million and ($200.4) million, as compared to net income of $2.3 million for the three months ended June 30, 2021. The net loss range includes estimated non-cas...