Hydrofarm Holdings Group, Inc. · NASDAQ:HYFM
Hydrofarm — Q2 2024 Earnings Presentation
16 slides from Hydrofarm's earnings presentation, Aug 8, 2024
Slide 1: Second Quarter 2024 Earnings Presentation
S e c o n d Q u a r te r 2 0 24 Earnings Presentation August 8, 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 s i n e s s O ve r v i ew
Slide 4: Second Quarter 2024: Key Profitability Metrics Remain On Track
Second Quarter 2024: Key Profitability Metrics Remain On Track Net Sales on track to achieve our full year outlook • Seven consecutive months of sequential net sales growth Nov’23 through May’24 • Q2 industry demand levels were generally in-line with our internal expectations Positive Adjusted EBITD
Slide 5: 2024 Strategic Priorities
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 Adjusted Gross Prof
Slide 6: Financial Overview
F i n a n c i a l O ve r v i ew
Slide 7: Financial Summary
Financial Summary Adjusted Gross Profit, Adjusted SG&A and Adjusted EBITDA are non-GAAP measures. Please see appendix for reconciliation of non-GAAP to GAAP measures. 7
Slide 8: Solid Q2'24 Performance vs. Challenging Q2'23 Lap
Solid Q2’24 Performance vs. Challenging Q2’23 Lap Q2 Adjusted Gross Profit Margin % Q2 Adjusted EBITDA % Lapped Q2’23, highest AGPM% quarter since IPO Positive Adjusted EBITDA despite Lower Sales Level • Favorable weather in Canada led to early Peat harvest • +20% SG&A savings in Q2’24 vs. Q2’23 • S
Slide 9: Perspective on our Adjusted Gross Profit Margin Trend
Perspective on our Adjusted Gross Profit Margin Trend Quarterly Adjusted Gross Profit Margin Annual Adjusted GPM% Since IPO bps indicates sequential quarterly increase or decrease Sequential Adj Gross Profit Margin Improvement Sales Mix Helping Drive Adjusted GPM% Increase • Favorable sales mix and
Slide 10: Liquidity and Cash Flow Remain Strong
Liquidity and Cash Flow Remain Strong Balance Sheet Highlights as of June 30, 2024 Cash and cash equivalents $30.3MM Total Debt $128.8MM Net Debt $98.5MM Cash Flow Highlights 3 months ended June 30, 2024 Net Cash From Operations $3.8MM Capital Expenditures ($0.4)MM Free Cash Flow $3.4MM 'Total Debt'
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 $55MM Total Facility Size Term Loan Maturities Schedule ($ in MMs as of 6/30/2024) $0MM Drawn and $20MM (estimated) available as of 6/30/24 $115.6 Adjusted T
Slide 12: Reaffirming Fiscal 2024 Outlook on Key Metrics
Reaffirming Fiscal 2024 Outlook on Key Metrics Reaffirming 2 0 24 Fu l l Ye a r Outlook • Proprietary brand mix % to increase as % of total sales Decline low to high 1 Net Sales • Improving revenue diversity teens in % terms • Productivity in manufacturing and distribution centers Adjusted Positive
Slide 13: Appendix
: “3 : Appendix
Slide 14: Branded manufacturer and distributor serving the CEA market
Branded manufacturer and distributor serving the CEA market Adding value within a complex value chain with barriers to entry Selling to a fragmented …that reaches an evolving Hydrofarm’s Value Proposition customer base… mix of end users Proprietary brands Full Solution Provider Specialty hydroponic
Slide 15: Leadership combines industry & consumer brands know-how
Leadership combines industry & consumer brands know-how Proven management team with deep experience base Bill Toler John Lindeman Mark Parker Laura Harvey Eric Ceresnie Chairman & EVP & Chief Financial EVP, Business SVP, General Manager SVP, Corporate Dev. Chief Executive Officer Officer Development
Slide 16: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures ($ in thousands) LTM Three months ended Six months ended Three months ended Six months ended ended We define Adjusted EBITDA (non-GAAP) as net loss (GAAP) excluding interest expense, income taxes, June 30, June 30, June 30,
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