Hydrofarm Q2 2021 Earnings Report
Key Takeaways
Hydrofarm Holdings Group reported a strong second quarter in 2021, with net sales increasing by 46.7% to $133.8 million and adjusted EBITDA more than doubling to $16.2 million. The company completed two acquisitions during the quarter and revised its full-year outlook upward, anticipating continued growth and profitability.
Net sales increased by 46.7% to $133.8 million compared to the prior year period.
Gross profit increased by 65.5% to $29.6 million, representing 22.1% of net sales.
Adjusted EBITDA increased by 127.5% to $16.2 million.
The company completed the acquisitions of HEAVY 16 and House & Garden during the quarter, expanding its proprietary consumable offerings.
Hydrofarm
Hydrofarm
Forward Guidance
Hydrofarm anticipates net sales growth between 45% and 50% and adjusted EBITDA of $55.0 million to $62.0 million for the full fiscal year 2021. These estimates include partial-period contributions from recent acquisitions.
Positive Outlook
- Net sales growth between 45% and 50%.
- Adjusted EBITDA of $55.0 million to $62.0 million, representing margin expansion to approximately 11.0% to 12.1% for the full fiscal year.
- Partial period contributions from the acquisitions of Heavy 16, House & Garden, Aurora Innovations and Greenstar Plant Products.
- Moderating organic growth in the second half augmented by acquisition growth from the completed transactions.
- An effective tax rate of 10% to 14% of pre-tax book income enabled by the utilization of tax credits and carryforwards.
Challenges Ahead
- The ongoing COVID-19 pandemic could have a material adverse effect on the Company’s business, results of operation, financial condition and/or cash flows.
- Interruptions in the Company's supply chain, whether due to COVID-19 or otherwise could adversely impact expected sales growth and operations.
- The highly competitive nature of the Company’s markets could adversely affect its ability to maintain or grow revenues.
- Compliance with environmental and other public health regulations or changes in such regulations or regulatory enforcement priorities could increase the Company’s costs of doing business or limit the Company’s ability to market all of its products.
- Acquisitions, other strategic alliances and investments could result in operating and integration difficulties, dilution and other harmful consequences that may adversely impact the Company’s business and results of operations.