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Sep 30, 2023
Hydrofarm Q3 2023 Earnings Report
Hydrofarm's financial performance reflected a decrease in net sales but an improvement in adjusted EBITDA due to cost reduction measures and focus on higher margin products.
Key Takeaways
Hydrofarm Holdings Group reported a decrease in net sales to $54.2 million compared to $74.2 million in the third quarter of 2022. However, the company achieved positive adjusted EBITDA of $0.5 million, and improved its adjusted gross profit margin. They also initiated a second phase of restructuring to further improve efficiency and reduce costs.
Net sales decreased to $54.2 million compared to $74.2 million.
Adjusted EBITDA increased to $0.5 million compared to $(9.0) million.
Gross Profit Margin decreased to 6.1% of net sales compared to 7.9%.
Initiated a second phase of restructuring plan to improve efficiency and generate further cost savings.
Hydrofarm
Hydrofarm
Forward Guidance
The Company is reaffirming its full year 2023 outlook with net sales of approximately $230 million to $240 million, and expect results to be around the low end of the range.
Positive Outlook
- Adjusted EBITDA that is modestly positive for the full year.
- Free Cash Flow that is positive for the full year.
- Improved year-over-year Adjusted Gross Profit and Adjusted Gross Profit margin resulting primarily from cost savings associated with restructuring and related productivity initiatives.
- Expectation of minimal additional non-restructuring inventory and accounts receivable reserves or related charges beyond the amounts already incurred in the nine months year-to-date.
- Reduction in inventory and net working capital helping to generate positive Free Cash Flow for the full year.