GrowGeneration Corp (GRWG) 2024 Q2 法說會逐字稿

Hello, everyone, and welcome to the GrowGeneration second quarter 2024 earnings conference call. My name is Nick, and I will be your operator for today's call. (Operator Instructions)

大家好，歡迎參加 GrowGeneration 2024 年第二季財報電話會議。我叫尼克，我將擔任今天電話的接線生。（操作員說明）

This conference call is being recorded and replay of today's call will be available in the Investor Relations section of GrowGeneration website.

本次電話會議正在錄音，今天電話會議的重播將在 GrowGeneration 網站的投資者關係部分提供。

I will now hand over to Phil Carlson with KCSA for introductions in the reading of the Safe Harbor statement. Please go ahead.

現在我將請 KCSA 的 Phil Carlson 介紹安全港聲明的解讀。請繼續。

Thank you, and welcome everyone to the GrowGeneration's second quarter 2024 earnings results conference call. With us today are Darren Lampert, Co-Founder and Chief Executive Officer, Greg Sanders, Chief Financial Officer of GrowGeneration. The company's second quarter earnings press release was issued after the market closed today. A copy of this press release is available on the Investor Relations section of the GrowGeneration website at ir.growgeneration.com.

謝謝大家，歡迎大家參加 GrowGeneration 2024 年第二季財報電話會議。今天與我們在一起的有 GrowGeneration 聯合創始人兼首席執行官達倫·蘭伯特 (Darren Lampert) 和首席財務官格雷格·桑德斯 (Greg Sanders)。該公司第二季財報新聞稿是在今天收盤後發布的。本新聞稿的副本可在 GrowGeneration 網站 ir.grow Generation.com 的投資者關係部分取得。

I would like to remind everyone that certain comments made on this call include forward-looking statements, which are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statement.

我想提醒大家，本次電話會議中的某些評論包含前瞻性陳述，這些陳述受到 1995 年《私人證券訴訟改革法案》安全港條款的約束。這些前瞻性陳述是基於管理層目前對未來事件的預期和信念，並受到多種風險和不確定性的影響，這些風險和不確定性可能導致實際結果與這些前瞻性陳述中描述的結果有重大差異。

Please refer to today's press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.

請參閱今天的新聞稿和向美國證券交易委員會提交的其他文件，詳細討論可能導致實際結果與今天所做的任何前瞻性聲明中明示或暗示的結果存在重大差異的風險。

During the call, we'll use some non-GAAP financial measures as we describe business performance, the SEC filing, as well as the earnings press release, which provide reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are all available on our website.

在電話會議期間，我們將在描述業務績效、SEC 文件以及收益新聞稿時使用一些非 GAAP 財務指標，這些指標提供非 GAAP 財務指標與最直接可比較的 GAAP 指標的調整表。找到。

Following prepared remarks, management will be happy to take your questions. We ask that you please limit yourself to one question and one follow-up. If you have additional questions, please reenter the queue and we will take them as time allows.

在準備好發言後，管理層將很樂意回答您的問題。我們要求您只提出一個問題和一項後續行動。如果您還有其他問題，請重新進入隊列，我們將在時間允許的情況下回答您的問題。

Now I will hand the call over to our Co-Founder and CEO, Darren Lampert. Darin, please go ahead.

現在我將把電話轉給我們的聯合創始人兼執行長 Darren Lampert。達林，請繼續。

Thanks, Phil, and good afternoon, everyone. Thank you for joining us today to discuss our second quarter 2024 financial results. Today, we reported solid second quarter results that were consistent with our expectations as we continue to leverage our strong portfolio of proprietary brands. As always, I want to thank our GrowGen team members. All of our employees have worked tirelessly to help drive our results, and we appreciate all their hard work and commitment to our company's continued growth.

謝謝菲爾，大家下午好。感謝您今天加入我們討論我們 2024 年第二季的財務表現。今天，我們報告了穩健的第二季業績，這與我們的預期一致，因為我們繼續利用我們強大的自有品牌組合。一如既往，我要感謝我們的 GrowGen 團隊成員。我們所有的員工都孜孜不倦地工作，幫助推動我們取得成果，我們感謝他們的辛勤工作和對我們公司持續發展的承諾。

And then just second quarter results included net revenue of $53.5 million, an increase of 11.7% sequentially from $47.9 million in the first quarter. In addition to sequential sales growth, adjusted EBITDA loss was $1.1 million for the quarter, a $1.7 million improvement from Q1.

第二季的業績包括淨收入 5,350 萬美元，比第一季的 4,790 萬美元成長 11.7%。除了銷售額連續成長外，本季調整後的 EBITDA 虧損為 110 萬美元，比第一季減少 170 萬美元。

Importantly, proprietary brand sales remained relatively flat as a percentage of cultivation and gardening net sales during the quarter but increased from 21.5% compared to 16.7% the same period last year is important to note that proprietary brand sales increased in July with the increase of sales of Drip Hydro, Charcoir and The Harvest Company as customers migrate from trials to sales.

重要的是，自營品牌銷售額佔種植和園藝淨銷售額的百分比在本季度保持相對平穩，但從去年同期的16.7% 上升至21.5%。隨著銷售額的增加而增加。

As some of you may know for quite some time, we've been taking actions to expand sales of these higher-margin proprietary products. This percentage increase highlights the growing market adoption of our proprietary brands, including Charcoir, Drip Hydro and The Harvest Company and the success of these initiatives.

你們中的一些人可能知道很長一段時間以來，我們一直在採取行動擴大這些利潤率較高的專有產品的銷售。這個百分比成長突顯了我們的專有品牌（包括 Charcoir、Drip Hydro 和 The Harvest Company）的市場採用率不斷增長以及這些舉措的成功。

In addition to our top line success, gross margins for the second quarter was 27%, a 110 basis point improvement from last quarter. These results reflect the growing percentage of our proprietary brand sales as well as ongoing focus on streamlining our business with margin expansion and cost reductions front of mine in all our operations.

除了我們的營收成功外，第二季的毛利率為 27%，比上季提高了 110 個基點。這些結果反映了我們自有品牌銷售的百分比不斷增長，以及我們在所有業務中持續專注於透過擴大利潤和降低成本來精簡我們的業務。

Before Greg takes you through our second quarter financials in more detail, I'd like to talk about our recent announcement regarding our strategic restructuring plan and expected path to profitability. Last month, we provided details on a comprehensive restructuring plan that is designed to fundamentally reposition our company.

在格雷格向您詳細介紹我們第二季的財務狀況之前，我想談談我們最近宣布的有關策略重組計劃和預期盈利路徑的公告。上個月，我們提供了一項全面重組計劃的詳細信息，該計劃旨在從根本上重新定位我們的公司。

Over the past few years, we have already been delivering on our key strategic priorities, which include expanding our proprietary brand portfolio, maximizing operational efficiencies while improving our cost structure and driving increased profitability through margin expansion. This new restructuring plan is the next phase in this process, the decision GrowGen for sustainable recurring revenue growth driven by our commercial and B2B customers as well as long-term profitability. This plan has three major components. One, a focus on proprietary brands. This is more than just a statement.

在過去的幾年裡，我們已經實現了我們的關鍵策略重點，其中包括擴大我們的專有品牌組合、最大限度地提高營運效率、同時改善我們的成本結構以及透過利潤率擴張來提高獲利能力。這項新的重組計劃是這一過程的下一階段，GrowGen 的決定是為了由我們的商業和 B2B 客戶以及長期盈利能力推動可持續的經常性收入增長。該計劃由三個主要部分組成。一是注重自主品牌。這不僅僅是一個聲明。

We have a clear target for our proprietary brands to account for 35% of total sales by the end of 2025. As part of this initiative, we will continue to launch e-commerce enabled brand-specific websites. An example of this is the harvest company, e-commerce enabled website, which went live and has already received positive customer feedback.

我們有一個明確的目標，到 2025 年底，我們的自有品牌銷售佔總銷售額的 35%。作為該計劃的一部分，我們將繼續推出支援電子商務的品牌特定網站。一個例子是收穫公司，它是一個支援電子商務的網站，該網站上線後已經收到了積極的客戶回饋。

We invite you to take a look at it yourself by visiting www.theharvestco.com. We also intend to add approximately 50 new products for the proprietary brand lineup over the next 12 months. Two, digital transformation of sales throughout our entire organization with a B2B customer focus.

我們邀請您造訪 www.theharvestco.com 親自查看。我們還打算在未來 12 個月內為專有品牌陣容添加約 50 種新產品。第二，整個組織的銷售數位轉型，以 B2B 客戶為中心。

This will entail the launch of B2B e-commerce portal migrating some of our transactional activity for our brick-and-mortar retail stores onto this digital platform, we expect to launch the new platform in the fourth quarter of this year. Complementing this digital transformation, we intend to implement a fulfillment strategy where commercial customers will shop online and have access to products at existing warehouse style stores for free and convenient pickup.

這將需要推出 B2B 電子商務門戶，將我們實體零售店的一些交易活動遷移到這個數位平台上，我們預計將在今年第四季推出新平台。作為數位轉型的補充，我們打算實施履行策略，商業客戶將在線上購物，並可以在現有的倉庫式商店中免費方便地取貨。

Three. And lastly, continuing streamlining of our operational infrastructure. Most importantly, we will continue to rightsize grocery and national retail footprint to align with current industry-wide conditions by closing 19 redundant or underperforming stores in 2024.

三。最後，繼續簡化我們的營運基礎設施。最重要的是，我們將在 2024 年關閉 19 家冗餘或表現不佳的商店，繼續調整食品雜貨和全國零售業務規模，以適應當前的全行業狀況。

This process is well underway as seven of these locations were already closed in the first half of the year. The remainder expected to be substantially completed by early Q4 following these closures going forward, the company will have 31 operational stores. As we make this transition. We intend to retain the majority of our commercial customers and direct walk-in customers through adjacent locations, commercial sales force and our new B2B portal.

這一過程正在順利進行，其中 7 個地點已於今年上半年關閉。其餘部分預計將在第四季度初基本完成，之後將關閉這些商店，該公司將擁有 31 家營運商店。當我們進行這種轉變時。我們打算透過鄰近地點、商業銷售團隊和新的 B2B 入口網站保留大部分商業客戶和直接上門客戶。

This streamlining also includes the reorganization of our sales, marketing and administrative activities to reduce expenses while seeking efficiencies to drive sales and conduct operations more cost effectively. As part of this, we'll also look to continue to rationalize our inventory, revisit, enhance our strategic vendor relationships and improve recovery of freight expense.

這種精簡還包括重組我們的銷售、行銷和行政活動，以減少開支，同時尋求效率來推動銷售並更有效地開展營運。作為其中的一部分，我們還將尋求繼續合理化我們的庫存、重新審視、加強我們的策略供應商關係並改善貨運費用的回收。

Although there will be near-term impacts to margins and expenses as we execute on these initiatives as there are with any restructuring, we expect that in the future, they will generate margin gains, improve profitability and reduce expenses by approximately $12 million on an annualized basis. We are committed to implementing these changes swiftly and effectively to solidify GrowGen position as a leader in the hydroponics than organic gardening supply industry.

儘管與任何重組一樣，我們執行這些舉措會對利潤率和費用產生短期影響，但我們預計，未來這些舉措將產生利潤率收益，提高盈利能力，並按年化成本減少約 1200 萬美元的費用。基礎。我們致力於迅速有效地實施這些變革，以鞏固 GrowGen 作為水耕有機園藝供應產業領導者的地位。

And as such, our cash position remains strong reflected by the Company's share repurchase program, which was authorized in March by our Board of Directors. Throughout the quarter, we repurchased more than $4 million shares.

因此，我們的現金狀況仍然強勁，這反映在該公司的股票回購計劃上，該計劃於三月獲得了董事會的批准。整個季度，我們回購了超過 400 萬美元的股票。

Switching to the topic of guidance as a result of this restructuring plan and the actions we've outlined today, we will now be revisiting our full year 2024 net revenue and adjusted EBITDA guidance for analyzing the full effects of these actions, including our digital transformation, store closures and the related cost savings we expect to achieve at this time, we're estimating full year 2024 for net sales to be in the range of $190 million to $195 million as per our previously stated adjusted EBITDA guidance.

由於此次重組計劃和我們今天概述的行動，我們現在將重新審視 2024 年全年淨收入和調整後的 EBITDA 指導，以分析這些行動的全面影響，包括我們的數位轉型。預計實現的相關成本節約，根據我們先前所述的調整後EBITDA 指導，我們預計2024 年全年淨銷售額將在1.9 億美元至1.95 億美元之間。

We are removing this guidance all together as the timing of actions taken in accordance with our previously announced restructuring may cause results to differ as we go through the second half of 2024, we have additional data as well as greater visibility on the specific results and benefits of our restructuring initiatives, and we will make the appropriate revisions to our adjusted EBITDA guidance at a later date.

我們將全部刪除此指導意見，因為根據我們先前宣布的重組採取的行動時間可能會導致結果在 2024 年下半年有所不同，我們擁有更多數據以及對具體結果和收益的更清晰了解我們的重組計劃，我們將在稍後對調整後的EBITDA 指導進行適當的修改。

Finally, before I turn it over to Greg to review our second quarter financials, I want to briefly talk about the latest updates on our storage solutions segment as well as cannabis reform and federal rescheduling. As we've mentioned on previous calls, we hired Blake Street Capital to seek strategic opportunities as it relates to the storage solutions segment of our business and MI.

最後，在我將其交給格雷格審查我們第二季度的財務狀況之前，我想簡要地談談我們儲存解決方案部門的最新更新以及大麻改革和聯邦重新安排。正如我們在先前的電話會議中提到的，我們聘請了 Blake Street Capital 來尋求與我們業務和 MI 的儲存解決方案部分相關的策略機會。

As most of, MMI is a leader in providing mobile shelving and racking solutions, and there's a significant opportunity to further monetize this business. We remain engaged with Lake Street Capital and will share news with our stakeholders and the investment community, we have information to announce.

與大多數公司一樣，MMI 是提供行動貨架和貨架解決方案的領導者，並且有進一步透過該業務獲利的重大機會。我們將繼續與 Lake Street Capital 保持聯繫，並將與我們的利益相關者和投資界分享新聞，我們有資訊要宣布。

Moving to rescheduling, the public comment period regarding the FDA's proposed rescheduling rule for cannabis, which was rescheduled cannabis from schedule one to schedule three controlled substances recently closed on July 22, with over 42,000 comments submitted.

至於重新安排，有關FDA 擬議的大麻重新安排規則的公眾意見徵詢期最近於7 月22 日結束，該規則將大麻從附表一重新安排為附表三種受管制物質，收到了超過42,000 條評論。

According to data from headset. Over 92% of those comments were in favor of rescheduling for the complete the scheduling of cannabis under the Federal Controlled Substance Act. As you said previously, rescheduling would be a major milestone in the regulatory landscape would likely be very beneficial to many of our customers and therefore, to grow Jim's business, it would ease restrictions on cannabis research and strengthen the cash flow and balance sheets of state legal cannabis operators by allowing them to take federal tax deductions for the business expenses.

根據耳機數據。其中超過 92% 的評論贊成重新安排，以根據《聯邦管制物質法》完成大麻的管制。正如您之前所說，重新安排將是監管領域的一個重要里程碑，可能對我們的許多客戶非常有利，因此，為了發展吉姆的業務，它將放寬對大麻研究的限制，並加強國家的現金流和資產負債表合法的大麻經營者允許他們對業務費用進行聯邦稅收減免。

We would also expect this to expand market opportunities for our products as cultivators would have increased access to capital that they could invest into building out new cultivation facilities and refreshing existing ones. While this is all still subject to a final ruling by the DEA, we continue to be encouraged by the rescheduling process. We'll continue to monitor events as they unfold.

我們也預計這將擴大我們產品的市場機會，因為種植者將有更多機會獲得資金，他們可以投資建造新的種植設施和更新現有的種植設施。雖然這一切仍有待 DEA 的最終裁決，但我們繼續對重新安排過程感到鼓舞。我們將繼續關注事件的進展。

In summary, our second quarter results were in line with our expectations and reflect the considerable progress we've made in many facets of our business, including expanding sales of our proprietary brands. While we have already made great strides to date, we recognize there's still more work to do but we are confident that the measures we've outlined for you today will put us on solid path for accelerated and sustainable revenue growth and long-term profitability.

總而言之，我們第二季的業績符合我們的預期，反映了我們在業務的許多方面取得的顯著進展，包括擴大我們自有品牌的銷售。儘管迄今為止我們已經取得了巨大進步，但我們認識到還有更多工作要做，但我們相信，我們今天為您概述的措施將使我們走上加速、可持續收入增長和長期盈利能力的堅實道路。

In addition to our own actions that we control. We are also encouraged by recent industry developments with federal cannabis reform, which have positive implications for both us and our customers. We're excited about the future of our business and look forward to sharing updates on our progress with you as we execute on our strategic plans. I'll now turn the call over to our CFO, Greg Sanders.

除了我們自己控制的行為之外。我們也對聯邦大麻改革的最新產業發展感到鼓舞，這對我們和我們的客戶都產生了積極影響。我們對業務的未來感到興奮，並期待在執行策略計劃時與您分享我們的最新進展。我現在將把電話轉給我們的財務長格雷格·桑德斯。

Right thank you, Darren, and good afternoon, everyone. As Darin mentioned, we are pleased to report that our second quarter results were generally in line with expectations, and we made solid progress in several key areas. Starting with second quarter sales. GrowGeneration reported net revenue of $53.5 million compared to $63.9 million in the year-ago period, representing a 16.3% decline on an absolute basis. This includes 19 fewer retail locations that closed the second quarter. On a sequential basis, revenue increased from $47.9 million to $53.5 million, representing an 11.8% improvement. This improvement was achieved despite closing seven stores between the first and second quarters of 2024 for illustrating the strength of the existing stores in our portfolio.

謝謝你，達倫，大家下午好。正如達林所提到的，我們很高興地報告，我們第二季度的業績總體符合預期，並且我們在幾個關鍵領域取得了紮實的進展。從第二季的銷售額開始。GrowGeneration 公佈的淨收入為 5,350 萬美元，而去年同期為 6,390 萬美元，絕對下降了 16.3%。其中包括第二季關閉的 19 家零售店。環比收入從 4,790 萬美元增至 5,350 萬美元，成長 11.8%。儘管在 2024 年第一季和第二季之間關閉了 7 家門市，但仍實現了這一改善，以證明我們投資組合中現有門市的實力。

Same-store sales for the second quarter were $41.1 million compared to $43.9 million in the prior year, a decrease of 6.2%. Excluding e-commerce sales from the same store sales comparison, the retail business declined by 3.4% compared to the year over year period.

第二季同店銷售額為 4,110 萬美元，較上年同期的 4,390 萬美元下降 6.2%。剔除電商同店銷售額比較，零售業務較去年同期下降3.4%。

While we saw signs of strength in the California and Michigan markets, we felt continued pressure in Oklahoma as well as headwinds in the Northeast markets that had an impact on the overall same-store sales metrics. As we have highlighted, we will continue to rightsize our retail footprint in the back half of 2024 to prioritize our strongest performing store locations that serve as higher volumes of commercial growers.

雖然我們在加州和密西根市場看到了強勁的跡象，但我們在俄克拉荷馬州感受到了持續的壓力，以及東北市場的逆風對整體同店銷售指標產生了影響。正如我們所強調的，我們將在 2024 年下半年繼續調整我們的零售足跡，優先考慮我們表現最強勁的商店位置，以服務更多的商業種植者。

Storage Solutions revenue for the second quarter was $7.4 million compared to $8.4 million in the prior year, a decrease of 11.3%, which was largely due to various projects being pushed into the third quarter from a timing perspective.

儲存解決方案第二季營收為740萬美元，較上年同期的840萬美元下降11.3%，這主要是由於從時間角度來看，多個專案被推到了第三季。

On an absolute basis, private-label proprietary brand sales were $9.9 million for the second quarter compared to $9.3 million in the second quarter of 2023. Proprietary brands accounted for 21.5% of gardening and cultivation sales in the second quarter of 2024 compared to 16.7% in the comparable year-ago period.

從絕對值來看，第二季自有品牌銷售額為 990 萬美元，而 2023 年第二季為 930 萬美元。2024 年第二季度，自有品牌佔園藝和栽培銷售額的 21.5%，去年同期為 16.7%。

The 4.7% year over year. Improvement is due to stronger penetration of our DRIP nutrient line chart core solo products and ion lights, which has become the company's best-selling lighting brand. The development of our proprietary brands has become one of our core competencies, and we are now targeting proprietary brands to account for 35% of total sales in fiscal year 2025.

較去年同期成長4.7%。進步得益於我們的DRIP營養線圖核心單品和離子燈的滲透力更強，已成為公司最暢銷的照明品牌。自有品牌的發展已成為我們的核心競爭力之一，我們現在的目標是到2025財年自有品牌佔總銷售額的35%。

Gross profit margin was 26.9% in the second quarter of 2024, representing a sequential improvement of 110 basis points for the first quarter of 2024 and a 10 basis point improvement year over year. The improvements in gross margin on a year-over-year and quarter-over-quarter basis were achieved despite continued challenging macroeconomic in industry conditions, we continue to see positive impacts from expansion of proprietary brand sales, which have been partially offset from pricing pressure on distributed products and higher freight costs.

2024年第二季毛利率為26.9%，較2024年第一季較上季提高110個基點，年增10個基點。儘管行業宏觀經濟狀況持續充滿挑戰，但毛利率仍實現同比和環比改善，我們繼續看到自有品牌銷售擴張帶來的積極影響，這已部分被定價壓力所抵消分散式產品和更高的運費。

Looking into the back half of 2024, we are planning to reduce our distributed inventory position, and we expect that this activity will have a negative impact on gross margin as we position the business for our 2025 proprietary brand goal of 35% of sales. However, we remain confident that our long-term focus on margin expansion through proprietary brand development and a nimbler footprint will lead towards long-term gross margin growth.

展望 2024 年下半年，我們計劃減少分散式庫存頭寸，我們預計這項活動將對毛利率產生負面影響，因為我們將業務定位為 2025 年自有品牌銷售額的 35% 目標。然而，我們仍然相信，我們長期專注於透過專有品牌開發和更靈活的足跡來擴大利潤率，這將帶來長期毛利率成長。

Store operating expenses decreased to $10.2 million in the second quarter compared to $12 million in the year ago period, representing a $1.8 million improvement sequentially to the first quarter, store operating expenses decreased $400,000 as we continue to see cost savings flow through our results from our strategic rationalization efforts.

第二季商店營運費用下降至1,020 萬美元，而去年同期為1,200 萬美元，比第一季度增加了180 萬美元，商店營運費用減少了40 萬美元，因為我們繼續看到成本節約透過我們的業績實現。

Meanwhile, selling, general and administrative or SG&A costs were $7.1 million in the second quarter compared to $7.5 million in the comparable year ago period, representing a $400,000 improvement. The progress that we have communicated regarding our cost base was in line with our expectations, and we see continued opportunity to further reduce costs through the remainder of the year and into 2025.

同時，第二季的銷售、一般和管理或 SG&A 成本為 710 萬美元，而去年同期為 750 萬美元，減少了 40 萬美元。我們就成本基礎所傳達的進展符合我們的預期，我們認為在今年剩餘時間和 2025 年期間仍有進一步降低成本的機會。

As we outlined in our restructuring plans, we expect to generate approximately $12 million in annualized cost savings over the next 12 months to help achieve long-term sustainable profitability.

正如我們在重組計劃中概述的那樣，我們預計在未來 12 個月內每年節省約 1200 萬美元的成本，以幫助實現長期可持續盈利。

Net loss for the second quarter 2024 was $5.9 million or negative $0.1 per share compared to a net loss of $5.7 million or negative $0.09 per share for the comparable year ago period compared to the first quarter of 2024. Net loss improved by 2.9 million sequentially compared to a net loss of $8.8 million last quarter. Adjusted EBITDA, as defined in our press release was negative $1.1 million compared to a $0.9 million profit in the second quarter of 2023. On a quarter-over-quarter basis, adjusted EBITDA loss improved from $2.9 million loss to a $1.1 million loss, a $1.7 million improvement to the sequential period.

2024 年第二季的淨虧損為 590 萬美元，即每股負 0.1 美元，而去年同期與 2024 年第一季相比，淨虧損為 570 萬美元，即每股負 0.09 美元。淨虧損比上季淨虧損 880 萬美元減少了 290 萬美元。根據我們新聞稿的定義，調整後 EBITDA 為負 110 萬美元，而 2023 年第二季的利潤為 90 萬美元。與上一季相比，調整後 EBITDA 損失從 290 萬美元減少至 110 萬美元，比上一季減少 170 萬美元。

Turning to the balance sheet, as of June 30, 2024, the Company had total cash, cash equivalents and marketable securities of $56 million, which was a decrease of $5.3 million to the prior quarter. The decrease in cash was primarily due to $4.2 million of capital deployed to repurchase company shares. The company's cash position remains a core strength of the business, and we do not foresee any near-term financing needs.

轉向資產負債表，截至 2024 年 6 月 30 日，公司現金、現金等價物和有價證券總額為 5,600 萬美元，比上一季減少 530 萬美元。現金減少主要是由於用於回購公司股票的 420 萬美元資本。公司的現金狀況仍然是業務的核心優勢，我們預期短期內不會有任何融資需求。

As Darren mentioned, we are reducing our full year 2024 guidance for revenue to be in the range of $190 million to $195 million, and we are eliminating our full year 2024 adjusted EBITDA guidance. These updates regarding full year guidance are the result of the restructuring announcement that was published in July.

正如達倫所提到的，我們正在將 2024 年全年收入指引降低至 1.9 億至 1.95 億美元之間，並且我們將取消 2024 年全年調整後 EBITDA 指引。這些有關全年指引的更新是 7 月發布的重組公告的結果。

In closing, GrowGeneration remains in a strong financial position as we enter the second half of 2024. Our second quarter results demonstrated continued discipline with reduced expenses alongside our margin growth initiatives as the bigger picture remains focused on profitability during the back half of 2020 for the execution of the strategic restructuring plan will be the center of our attention.

最後，進入 2024 年下半年，GrowGeneration 仍維持強勁的財務狀況。我們第二季的業績表明，我們繼續遵守紀律，減少開支，並採取利潤增長舉措，因為 2020 年下半年的大局仍然集中在盈利能力上，因為戰略重組計劃的執行將成為我們關注的焦點。

We believe that the business is poised to emerge in 2025 with a more robust operating model to deliver our shareholders a more profitable and sustainable long-term investment.

我們相信，該業務預計在 2025 年崛起，並以更穩健的營運模式為我們的股東帶來更有利可圖和可持續的長期投資。

With that, I will hand the call back over to Darren for closing remarks.

至此，我將把電話轉回給達倫進行結束語。

Thank you, Greg. We are very proud of the results we delivered for the second quarter, including sequential revenue growth and increased sales from our proprietary branded products. This in turn drove margin adjusted EBITDA improvement during the quarter.

謝謝你，格雷格。我們對第二季的業績感到非常自豪，包括營收連續成長和我們專有品牌產品的銷售額增加。這反過來又推動了本季利潤調整後 EBITDA 的改善。

At the same time even with the progress we've already made, we recognize there is more work to be done. We are looking ahead to the remainder of 2024 and into 2025 as we implement our strategic restructuring plan to expand our brand portfolio, accelerate revenue growth, reduce costs, drive higher margins and position GrowGen for long-term profitability as market landscape continues to evolve and improve.

同時，即使我們已經取得了進展，我們也意識到還有更多工作要做。我們展望2024 年剩餘時間和2025 年，因為我們將實施策略重組計劃，以擴大我們的品牌組合、加速收入成長、降低成本、提高利潤率，並隨著市場格局的不斷發展和發展，使GrowGen 實現長期盈利。

Again, I'd like to thank our investors for their continued support as well as all our team members for their hard work, which makes our success possible. That concludes our prepared remarks. I'll now ask the operator to open the line for questions. Operator?

我要再次感謝我們的投資者的持續支持以及我們所有團隊成員的辛勤工作，這使我們的成功成為可能。我們準備好的演講到此結束。我現在請接線生接通電話詢問問題。操作員？

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) Mark Smith, Lake Street Capital.

謝謝。女士們、先生們，我們現在開始問答環節。（操作員說明）Mark Smith，Lake Street Capital。

I guess, Greg, I wanted to just circle back first off on something that you had said. Just is there any additional kind of guidance or insight you can give us on gross profit margin, but kind of near term, and I know it's going to be choppy as you guys close some stores and maybe liquidate some inventory in those stores, but also kind of long term, if you guys have, can you set kind of goals or an idea of where you would like to be longer term, on gross profit margin?

我想，格雷格，我想先回顧一下你所說的話。您是否可以就毛利率向我們提供任何其他類型的指導或見解，但從短期來看，我知道隨著您關閉一些商店，並可能清算這些商店中的一些庫存，情況將會變得不穩定，但也從長遠來看，如果你們有的話，你們能否設定某種目標或關於你們希望在毛利率方面實現長期目標的想法？

Yeah, Mark, as we work through the restructuring announcement that was published in July, we anticipate moving out a position of certain inventory products that will have an impact in the third and fourth quarter of this year. We believe at this point, the second quarter was our strongest gross margin period relative to the work that we have to do on that end to prepare the business for 2025.

是的，馬克，當我們處理 7 月發布的重組公告時，我們預計會移除某些庫存產品的頭寸，這將在今年第三和第四季度產生影響。我們認為，目前，相對於我們為 2025 年業務做好準備而必須做的工作而言，第二季度是我們毛利率最高的時期。

But we expect it's probably in that low to mid 20s range as we work through a lot of the inventory reductions that we'll experience in the back half of the year. And we believe what that will ultimately lead to for the business in '25 is a margin point in the high 20s, low 30s as we look forward at the business, particularly with our strategic goal in mind of increasing proprietary brand sales next year.

但我們預計它可能會在 20 多歲左右的範圍內，因為我們將在今年下半年經歷大量庫存削減。我們相信，隨著我們對業務的展望，特別是考慮到明年增加自有品牌銷售額的策略目標，這最終將導致 25 世紀的業務利潤率達到 20 多歲、30 多歲以下。

Perfect. And then the only other question I had kind of restructuring here. Just any update on timing of these closures? I think, Darren, you said you expect to be done by early Q1. Should we expect this to be kind of fluid month-to-month? Or will we see any lumpiness in the closures here over the next couple of months?

完美的。然後是我在這裡進行重組的唯一另一個問題。關於這些關閉時間的最新消息嗎？我想，達倫，你說過你希望在第一季初完成。我們是否應該期望這種情況每月都會有變化？或者在接下來的幾個月裡我們會看到這裡的關閉情況出現波動嗎？

Right. Now we were scheduling three for the next three months. So we believe that all nine stores will be closed probably in that November timeframe. So we believe everything will be closed before year end there may be some legacy leases that don't that go over to 2025. We certainly hope not. We're working hard on transferring leases and working out payment plans and getting rid of leases as we speak.

正確的。現在我們在接下來的三個月安排了三個。因此，我們認為所有九家商店可能會在 11 月的時間範圍內關閉。因此，我們相信一切都將在年底前關閉，可能會有一些遺留租約不會持續到 2025 年。我們當然希望不會。正如我們所說，我們正在努力轉讓租約、制定付款計劃以及廢除租約。

We have some favorable leases within our portfolio that we'll have no issues on getting rid of. But like anything else, we're doing restructuring and closing 19 stores. There are some problem leases always, but though not a more material and we will work through them.

我們的投資組合中有一些有利的租約，我們可以毫無問題地擺脫它們。但與其他事情一樣，我們正在重組並關閉 19 家商店。租賃總是存在一些問題，但雖然不是更多材料，但我們會解決它們。

That's great. Thank you.

那太棒了。謝謝。

Brian Nagel, Oppenheimer.

布萊恩·內格爾，奧本海默。

So my question was just with the restructuring and repositioning of the business, what should how should we think about the investment needed to execute there, something at both maybe from a money standpoint, Mike, but then also just kind of even a process standpoint mean how cumbersome or expensive Could this be?

所以我的問題只是業務的重組和重新定位，我們應該如何考慮在那裡執行所需的投資，麥克，也許從金錢的角度來看，但也只是從流程的角度來看意味著什麼這有多麻煩或多昂貴？

And we believe not much, Brian, on in prior closings, we were up to 65 stores. So we've closed over 20 stores in the last couple of years. They've been running anywhere from 150 to 250 a store right now, we have 9 stores left.

布萊恩，我們相信在之前關閉的門市中，我們的門市數量並不多，我們的門市數量只有 65 家。因此，過去幾年我們關閉了 20 多家商店。他們現在已經開了 150 到 250 家商店，我們還剩下 9 家商店。

So you're talking somewhere in that three to $5 million range and some of it's inventory, some of it's working out leases and some of it's severance to our employees all, but we believe that 80% of that will be done before year end, and we will be going into 2025 pretty a pretty clean company.

所以你說的是 300 到 500 萬美元的範圍，其中一些是庫存，一些是製定租賃，還有一些是我們所有員工的遣散費，但我們相信其中 80% 將在年底前完成，到2025 年，我們將會是一家非常乾淨的公司。

And there was a question asked earlier by Mark Smith with regards to inventory and margins. And the one thing when closing stores, there's two things we do with existing inventory in stores, one as we rationalize it, we put all of it on sale, opposed to moving it. It keeps goodwill with customers who keeps customers with grow Jen on the shop at adjacent stores or online or through our commercial team. So we do a tremendous amount of discounting right now when closing stores, and that's why you will see degradation in margins over the next two quarters.

馬克史密斯早些時候提出了一個關於庫存和利潤的問題。關閉商店時，我們對商店現有庫存做了兩件事，一是合理化庫存，將其全部出售，而不是轉移。它與顧客保持了良好的信譽，從而使 Jen 的顧客能夠在鄰近商店、線上或透過我們的商業團隊成長。因此，我們現在在關閉商店時會進行大量折扣，這就是為什麼您會在接下來的兩個季度看到利潤率下降。

Got it. And I guess it beyond closing stores, the repositioning of the real estate, I would think there's also some other repositioning the business right now, we're not

知道了。我想除了關閉商店、重新定位房地產之外，我認為現在還有其他一些業務重新定位，我們沒有

100% done with 31 stores, We were much more nimble. All we will be focusing on private label brands and really business the business. The industry has changed in our mind. We've seen that over the last couple of years, we've been closing stores and we haven't really been in the market buying and ARM really well positioned in growth.

31 家商店 100% 完成，我們更有彈性。我們將專注於自有品牌並真正開展業務。我們對這個行業的看法已經改變了。我們看到，在過去的幾年裡，我們一直在關閉商店，而且我們還沒有真正進入市場購買產品，而 ARM 在成長方面確實處於有利地位。

Gen four is new product launches on getting our private label division up to 35% of sales, which is our highest margin business and then really, you know, basically taking care of our commercial customers, which amount probably right now to 60% to 70% of our business, 25% of that goes through our commercial team right now, the remainder shops within our stores.

第四代是新產品的推出，使我們的自有品牌部門銷售額佔銷售額的35%，這是我們利潤率最高的業務，然後實際上，你知道，基本上是照顧我們的商業客戶，目前這一比例可能達到60% 到70%我們 % 的業務，其中 25% 目前透過我們的商業團隊進行，其餘的在我們的商店內購物。

But the industry has changed over time and we're changing with it. We believe coming out of this restructuring, you will have a leaner company with a tremendously different cost structure. We've cut over $40 million of expenses to date. There's another $12 million of expenses coming, and you'll see a higher margin business and you'll see a company that's starting to make money and grow, and we couldn't be any more excited about it.

但隨著時間的推移，這個產業已經發生了變化，我們也隨之改變。我們相信，透過這次重組，您將擁有一家更精簡的公司，其成本結構也將截然不同。迄今為止，我們已削減了超過 4000 萬美元的開支。還有另外 1200 萬美元的支出即將到來，你會看到利潤率更高的業務，你會看到一家公司開始賺錢並成長，我們對此感到無比興奮。

We've done it slowly. We've closed one store a quarter, two stores a quarter. And with that, it hasn't gotten us to where we want to get hasn't gotten us to be able to cut enough from the back end of it from the corporate side of it. And so we're doing what we have to do, and we're doing really going back to our core, which is servicing beauty business, commercial and product launches and our product launches are going well.

我們已經慢慢做到了。我們每季關閉一家商店，每季關閉兩家商店。儘管如此，它並沒有讓我們達到我們想要的目標，也沒有讓我們能夠從企業方面的後端進行足夠的削減。因此，我們正在做我們必須做的事情，我們正在真正回到我們的核心，為美容業務、商業和產品發布提供服務，我們的產品發布進展順利。

We had our highest percentage of private label sales in the month of July. I would have sort of a big bump up in July over the second quarter. So, it's a because it's another two quarters of hard work, right? But we believe that our shareholders and the company will bear the benefits of it going into '25.

七月我們的自有品牌銷售百分比最高。與第二季相比，我在 7 月的業績會有大幅提升。所以，這是因為這還需要兩季的努力，對嗎？但我們相信我們的股東和公司將在進入 25 年後從中受益。

Appreciate the color, and thank you.

欣賞這個顏色，謝謝。

Thank you, Brian.

謝謝你，布萊恩。

Aaron Grey, Alliance Global Partners.

亞倫·格雷，聯盟全球合作夥伴。

Hi, good evening, and thank you very much for the questions. So first one for me, just in terms of the digital initiative, while part of the decision appears to be cost base, I'm just curious, could that also open up the ability to service some new customers that might not have been in the vicinity of your private brick and mortar stores? And then just if you could help ensure that how do we structure?

你好，晚上好，非常感謝你的提問。因此，對我來說，第一個是就數位計劃而言，雖然部分決策似乎是基於成本基礎，但我只是很好奇，這是否也能夠為一些可能不在其中的新客戶提供服務。實體店面附近？然後，如果您能幫助確保我們如何建造？

I've already kind of highlighted how the program will work in terms of the ease of transitioning the customers to the model including the potential to pick up a warehouse or potentially haven't delivered?

我已經強調了該計劃將如何在輕鬆地將客戶過渡到該模型方面發揮作用，包括提貨倉庫或可能尚未交付的可能性？

Yeah, we have I mean, just to start with the vast majority of the stores we're closing are within proximity to stores of ours. And as this industry transforms the business, the business which it is going, our commercial customers want a portal, they want as opposed to calling and sending in orders. They much rather go on the portal know that the product is there an order of the day.

是的，我的意思是，首先我們要關閉的絕大多數商店都在我們自己的商店附近。隨著這個行業改變了業務，正在發生的業務，我們的商業客戶需要一個門戶，他們想要的不是打電話和發送訂單。他們更願意訪問門戶網站，知道該產品是當天的訂單。

We opened a 100,000 square foot, our distribution facility in Ohio this year, we have one out in Sacramento. So and we also have some mini hubs around the country where the growers are. So we are 100% capable of fulfilling orders, especially private label and distributed product. So I think we're there right now. What we're also doing on the B2B side and the product side of it is we're opening up individual portables for products that individuals can now go on, go on our websites and buy the products that will be shipped through our warehouses.

今年我們在俄亥俄州開設了一個 100,000 平方英尺的分銷設施，在薩克拉門託也開設了一個。因此，我們在種植者所在的全國各地也有一些小型中心。因此，我們 100% 有能力履行訂單，尤其是自有品牌和分銷產品。所以我想我們現在就在那裡。我們也在 B2B 方面和產品方面所做的事情是，我們正在為產品開放個人便攜式產品，個人現在可以繼續使用、訪問我們的網站併購買將透過我們的倉庫發貨的產品。

And so just again, cutting costs and just getting back to the industry was a lot about learning and teaching and individuals coming into the stores every day. But over the last couple of years, we've seen definitely the flow within our stores has gone down on and we think that we can service our customers better in a much cheaper way and keep pricing down on by doing what we're doing right now by cutting our store accounts down, increasing our warehouse on capabilities and also our B2B billing online, our capabilities.

所以，再說一遍，削減成本和重返行業需要大量的學習和教學以及每天進入商店的個人。但在過去的幾年裡，我們確實看到商店內的客流量有所下降，我們認為我們可以以更便宜的方式更好地為客戶提供服務，並通過做正確的事情來降低價格現在，通過削減我們的商店帳戶，增加我們的倉庫能力以及我們的B2B 線上計費能力。

Appreciate that color there. A second one from me, Darren, just in terms of the proprietary brands, as you're now at about $50 million run rate based on the quarter, I know you have aspirations to increase at that 35% from 21%.

欣賞那裡的顏色。我的第二個建議是達倫 (Darren)，就專有品牌而言，由於您現在本季度的運行費用約為 5000 萬美元，我知道您希望從 21% 增加到 35%。

But I'm just wondering your take in terms of the brand equity that's been built within the proprietary brands and how that might offer opportunities for you to increasingly build the brands into third party stores and distributor and distributors outside of just own. Thank you.

但我只是想知道您對自有品牌中建立的品牌資產有何看法，以及這如何為您提供機會，將品牌越來越多地建立在自有品牌之外的第三方商店和分銷商中。謝謝。

I think right now about 50% of our brands are going into other stores and go into additional distribution channels outside of GrowGen. So, we have built that to date on, We are building brand equity by the day and on their drip, hydro is off to a wonderful start. We launched the powders back in January. We had almost 500 trial active trials going around the country and they're starting to convert.

我認為現在我們大約 50% 的品牌正在進入其他商店並進入 GrowGen 之外的其他分銷管道。所以，到目前為止，我們已經建立了這一點，我們每天都在建立品牌資產，在他們的滴灌中，Hydro 有了一個美好的開始。我們在一月就推出了粉末。我們在全國範圍內進行了近 500 個正在進行的試驗，並且它們正在開始轉變。

And we saw that in July as we saw a really nice increase in our private label brand sales in July. It was the highest month we've seen and it was again, it was a tremendous bump from what you saw in the second quarter from us.

我們在 7 月就看到了這一點，因為我們的自有品牌銷售額在 7 月出現了非常好的成長。這是我們見過的最高月份，而且又是，與您在第二季度看到的相比，這是一個巨大的提升。

And we're also starting to launch a lot of new products under the charcoal brands as new sales coming out, there's Coco coins and propagation coming out of that company that we believe will land in the IGC world. What's the feedback that we're getting from customers from other stores and distributors. It has been nothing short of amazing.

隨著新銷售的出現，我們也開始以木炭品牌推出許多新產品，我們相信該公司將推出 Coco 幣和傳播產品，這些產品將登陸 IGC 世界。我們從其他商店和經銷商的客戶那裡得到的回饋是什麼？這真是令人驚嘆。

And as we've said earlier that we will have another 50 products being launched over the next 12 months to get us to where we want to go.

正如我們之前所說，我們將在未來 12 個月內推出另外 50 款產品，幫助我們實現我們的目標。

And with that, and you know, again, when we talk about margins again during the next two quarters, we are rationalizing certain distributed products on companies that haven't been good partners to grow just on. And we're again, we're shrink. We're shrinking the amount of products that we are carrying in our stores and our warehouses are, but we have a lot of great partners out there that we continue to support. They continue to support projects.

有了這個，你知道，當我們在接下來的兩個季度再次談論利潤時，我們正在合理化那些不是良好成長合作夥伴的公司的某些分散式產品。我們又萎縮了。我們正在減少商店和倉庫中的產品數量，但我們有很多優秀的合作夥伴，我們將繼續為他們提供支援。他們繼續支持項目。

Greg, I appreciate that, and I'll go and jump back in the queue.

格雷格，我很感激，我會回去插隊。

Thank you, Aaron.

謝謝你，亞倫。

(Operator Instructions) Andrew Carter, Stifel.

（操作員說明）Andrew Carter，Stifel。

Hey thank you very much. Kind of a question I wanted to ask here about kind of gave the gross margin, high 20s, low 30s. Could you kind of speak to what it is this revenue base of 195, what your kind of EBITDA margin kind of prospects are? And do you need to meaningfully grow to get to mid-single digit. Do you think you can grow next year? Anything that could kind of help on that side? Thanks.

嘿非常感謝你。我想在這裡問一個關於毛利率的問題，高 20 多，低 30 多。您能否談談 195 的營收基礎是什麼，您的 EBITDA 利潤率前景如何？您是否需要有意義地成長才能達到中個位數。你認為明年你能成長嗎？在那方面有什麼可以幫忙的嗎？謝謝。

Greg, you want to unpack that, and I'll finish it up.

格雷格，你想打開它，我來完成它。

Yeah. So as we look at it next year, it's a little bit early for us to meaningfully say what our EBITDA is going to look like and we do anticipate for the remainder of the year, that revenue is going to be in that 190 to 195 mix, which we feel comfortable with bringing down revenue for the back half of the year is really just a symptom of the amount of stores we've decided to close in the third quarter being 12 more than anything else, but we do expect margins to return in 2025. And we do believe that, that positions the business back for profitability in '25.

是的。因此，當我們展望明年時，我們現在有意義地談論我們的 EBITDA 會是什麼樣子還為時過早，我們確實預計今年剩餘時間裡，收入將在 190 到 195 的組合中，我們對下半年收入下降感到滿意，這實際上只是我們決定在第三季度關閉的商店數量比其他任何時候都多12 家的一個症狀，但我們確實預計利潤率會回升2025年。我們確實相信，這將使該業務在 25 年重新實現盈利。

I couldn't give an exact figure out yet just because it's too early for us.

我還不能給出確切的數字，因為現在對我們來說還為時過早。

I guess the second question is with the focus on proprietary products, proprietary brands minus you don't own a lot of manufacturing, I mean, to hit your goals, do you think that you might need to invest in that? Or do you have enough kind of in a co-packer co-manufacturing network to kind of support your needs and your penetration goals, Thanks.

我想第二個問題是重點關注專有產品、專有品牌，減去您不擁有大量製造業務，我的意思是，為了實現您的目標，您認為您可能需要對此進行投資嗎？或者您在代加工廠聯合製造網路中是否有足夠的資源來支持您的需求和滲透目標，謝謝。

Yeah I think right now Andrew, co-packers around the country and around the world that we use. We have wonderful relationships with and so we usually ahead of the game on with bringing products in certainly in our Drip liquids are being manufactured in California on really our hub right now on and put a lot of our products are still being manufactured overseas, but we have a pretty decent handle on it.

是的，我想現在安德魯，我們在全國和世界各地使用的代加工商。我們與我們有著良好的關係，因此我們通常會領先一步，將產品引入我們的滴灌液體中，目前我們的中心正在加利福尼亞州生產，並且我們的許多產品仍在海外生產，但我們對它有相當好的處理能力。

We know our co-packers well; we visit with them. I was with our Chaircoir owners, the other day, not in Seattle, they fill in from India. So I think it's at this time, we're not a manufacturer. So I think we're going to stick to what we're doing on the co-packing side of it.

我們非常了解我們的代加工商；我們和他們一起拜訪。前幾天我和我們的 Chaircoir 老闆在一起，不是在西雅圖，他們是從印度過來的。所以我認為現在我們不是製造商。所以我認為我們將堅持我們在聯合包裝方面所做的事情。

Thanks. I'll pass it on.

謝謝。我會把它傳遞下去。

There are no further questions at this time. I'd now like to turn the call back over to Mr. Darren. Now for final closing comments.

目前沒有其他問題。我現在想把電話轉回達倫先生。現在進行最後的總結評論。

I'd like to thank our shareholders and our employees for their hard work for their dedication and for their support of GrowGen. We look forward to keeping you apprised of our progress on our restructuring, and we look forward to talking to everyone in September. Thank you.

我要感謝我們的股東和員工的辛勤工作、奉獻精神以及對 GrowGen 的支持。我們期待隨時向您通報我們重組的進展情況，並期待在 9 月與大家交談。謝謝。

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.

女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。