Hydrofarm Holdings Group, Inc. · NASDAQ:HYFM
Hydrofarm — Q3 2024 Earnings Presentation
15 slides from Hydrofarm's earnings presentation, Nov 7, 2024
Slide 1: Third Quarter 2024 Earnings Presentation
T h i rd Qu a r te r 2 0 24 E a r ni n g s P r e se n t at io n November 7, 2024
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements. This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materi
Slide 3: Business Overview
B u si n e ss O ve r v i e w
Slide 4: Third Quarter 2024 Results
Third Quarter 2024 Results Net Sales on track to achieve our full year outlook • Tracking toward the middle of our outlook range • Proprietary brands increased as percentage of revenue in Q3’24 vs. Q3’23 • Overall revenue stream was more diverse in Q3’24 vs. Q3’23 Positive Adjusted EBITDA in Q3’24 a
Slide 5: Reminder on 2024 Strategic Priorities
Reminder on 2024 Strategic Priorities ✓ Positioning brand and product portfolio for potential industry catalysts ✓ Focusing on diverse revenue streams ✓ Driving improved sales mix via Proprietary Brands ✓ Continue right-sizing our cost structure ✓ Further improving our Adjusted EBITDA margin Adjuste
Slide 6: Financial Overview
F i n an ci a l O ve r v i e w
Slide 7: Financial Summary
Financial Summary 2023 2024 Three months ending ($ in thousands) Q3 Q3 Net Sales 54,168 44,009 Adjusted Gross Profit 12,455 10,699 % of Net Sales 23.0% 24.3% Adjusted SG&A 11,960 10,679 % of Net Sales 22.1% 24.3% Adjusted EBITDA 495 20 % of Net Sales 0.9% 0.0% Adjusted Gross Profit, Adjusted SG&A an
Slide 8: Solid Adjusted Gross Profit Margin Expansion and Successful Adjusted SG&A Reduction
Solid Adjusted Gross Profit Margin Expansion and Successful Adjusted SG&A Reduction Q3 Adjusted Gross Profit Margin % Q3 Adjusted SG&A Higher AGPM% despite lower sales level Continued reduction in Adjusted SG&A expenses • Manufacturing consolidation and productivity increases provided • +11% Adjuste
Slide 9: Improvement Trend in Adjusted GPM% and Adjusted SG&A$
Improvement Trend in Adjusted GPM% and Adjusted SG&A$ Quarterly Adjusted Gross Profit Margin Quarterly Adjusted SG&A Expense Basis points (bps) indicates year-over-year rounded increase or decrease % indicates year-over-year savings percentage Continued Adjusted GPM% improvement Continued Adjusted S
Slide 10: Liquidity Remains Strong
Liquidity Remains Strong Balance Sheet Highlights as of September 30, 2024 Cash and cash equivalents $24.4MM Total Debt $128.2MM Net Debt $103.8MM Cash Flow Highlights 3 months ended September 30, 2024 Net Cash Used In Operations $(4.5)MM Capital Expenditures $(0.8)MM Free Cash Flow $(5.3)MM 'Total
Slide 11: Debt Details
Debt Details Un-utilized Revolving Credit facility and Covenant-light Term Loan that does not mature until 2028 Revolving Line of Credit ✓ $35MM Total Facility Size (effective Nov 1, 2024) ✓ $0MM Drawn and $17MM available as of 9/30/24 ✓ Adjusted Term SOFR Rate + grid-based spread ✓ Availability var
Slide 12: Reaffirming Fiscal 2024 Outlook on Key Metrics
Reaffirming Fiscal 2024 Outlook on Key Metrics Reaffirming 2024 Outlook on Key Metrics Decline low to high • Proprietary brand mix % to increase as % of total sales 1 Net Sales teens in % terms, tracking • Improving revenue diversity toward middle of the range • Productivity in manufacturing and dis
Slide 13: Appendix
: “3 : Appendix
Slide 14: Branded manufacturer and distributor serving the CEA market
Branded manufacturer and distributor serving the CEA market Adding value within a complex value chain with barriers to entry Selling to a fragmented …that reaches an evolving Hydrofarm’s Value Proposition customer base… mix of end users Proprietary brands Full Solution Provider Specialty hydroponic
Slide 15: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures ($ in thousands) We define Adjusted EBITDA (non-GAAP) as net loss (GAAP) excludi ng interest expense, income taxes, depreciation, depletion and amorti zati on, stock-based compensation including employer payroll taxes on st
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