GlobeNewswire Inc | Feb 16, 2021 05:00PM EST

February 16, 2021

-- 3rd Quarter Revenue Increases 107% to $38.4 Million -- 3rd Quarter Operating Profit Increases 290% to $4.7 Million -- Nine month results: Revenue up 151% to $69.1 Million; Income From Operations Rises to $8.7 Million, up from a Prior Year loss of $918 Thousand

BOULDER, Colo., Feb. 16, 2021 (GLOBE NEWSWIRE) -- AeroGrow International, Inc. (OTCQB:AERO) (AeroGrow" or the Company"), the manufacturer and distributor of AeroGardens - the worlds leading family of In-Home Garden Systems announced results for its third quarter ended December 31, 2020.

For the quarter ended December 31, 2020 the Company recorded net revenue of $38.4M, an increase of 107% over the same period in the prior year. Income from Operations was $4.7M, an increase of 290% vs. the prior year. Gross margin improved to 41.1%, an increase of 590 basis points vs the prior year.

For the nine months ended December 31, 2020, net revenue stands at $69.1M, an increase of 151% vs. the same period last year. Income from Operations was $8.7M, up from a loss of $918K the prior year. Gross margin for the period improved to 42.0%, up 760 basis points vs. the prior year.

Forward-Looking StatementsSafe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements by J. Michael Wolfe and/or the Company, statements regarding growth of the AeroGarden product line, ability to raise capital, optimism related to the business, expanding sales, market acceptance of developments and enhancements to our product line, improved margins and profitability, and other statements in this press release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Companys business. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including continued market acceptance of the Companys products or the need to raise additional capital. In addition, actual results could vary materially based on changes or slower growth in the indoor garden market; the potential inability to realize expected benefits and synergies; domestic and international business and economic conditions; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufacturing capacity; future production variables impacting excess inventory and other risk factors listed from time to time in the Companys Securities and Exchange Commission (SEC) filings, including in Item 1A Risk Factors of the Companys Annual Report on Form 10-K for the fiscal year ended March 31, 2020. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

Additional detailed information concerning a number of the important factors that could cause actual results to differ materially from the forward-looking information contained in this release is readily available in the Companys publicly filed quarterly, annual and other reports. The Company disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.

AEROGROW INTERNATIONAL, INC.CONDENSED BALANCE SHEETS

December March 31, 31, 2020 2020 (Derived(in thousands, except share and per share data) (Unaudited) from ASSETS Audited Statements)Current assets Cash $ 13,636 $ 9,046 Restricted cash 15 15 Accounts receivable, net of allowance for doubtfulaccounts of$823 and $376 at December 31, 2020 and 15,155 3,422 March 31, 2020, respectivelyOther receivables 571 257 Inventory, net 11,593 4,788 Prepaid expenses and other 2,888 1,392 Total current assets 43,858 18,920 Property and equipment and intangible assets, netof accumulated depreciation of$5,962 and $5,467 2,224 1,229 atDecember 31, 2020 and March 31, 2020,respectivelyOperating lease right-of-use 1,121 1,229 Deposits 555 669 Total assets $ 47,758 $ 22,047 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities Accounts payable $ 8,102 $ 2,332 Accounts payable related party 2,170 2,396 Accrued expenses 7,844 2,308 Finance lease liability - 29 Notes payable related party-current portion 6,515 - Debt associated with sale of intellectual 10 17 property-current portionOperating lease liability-current portion 146 58 Total current liabilities 24,787 7,140 Long term liabilities Notes payable related party 900 900 Operating lease liability 1,090 1,201 Other liability - 297 Total liabilities 26,777 9,538 Commitments and contingencies Stockholders? equity Common stock, $.001 par value, 750,000,000 sharesauthorized,34,328,036 shares issued and 34 34 outstanding at December 31, 2020 and March 31,2020, respectivelyAdditional paid-in capital 140,817 140,817 Accumulated deficit (119,870 ) (128,342 )Total stockholders? equity 20,981 12,509 Total liabilities and stockholders? equity $ 47,758 $ 22,047

AEROGROW INTERNATIONAL, INC.CONDENSED STATEMENTS OF OPERATIONS(Unaudited)

Three Months ended Nine Months ended December 31, December 31,(in thousands, except per share 2020 2019 2020 2019 data)Net revenue $ 38,367 $ 18,526 $ 69,088 $ 27,424 Cost of revenue 22,594 12,001 40,051 17,978 Gross profit 15,773 6,525 29,037 9,446 Operating expenses Research and development 454 308 1,049 794 Sales and marketing 7,860 3,780 13,563 6,553 General and administrative 2,751 1,230 5,731 3,017 Total operating expenses 11,065 5,318 20,343 10,364 Profit (loss) from operations 4,708 1,207 8,694 (918 ) Other expense, net Interest expense ? related party (136 ) (137 ) (184 ) (191 )Other expense, net (14 ) (4 ) (38 ) (9 )Total other expense, net (150 ) (141 ) (222 ) (200 ) Net income (loss) $ 4,558 $ 1,066 $ 8,472 $ (1,118 ) Net income (loss) per share, basic $ 0.13 $ 0.03 $ 0.25 $ (0.03 )and diluted Weighted average number of commonshares outstanding, basic and 34,328 34,328 34,328 34,328 diluted

About AeroGrow International, Inc.Headquartered in Boulder, Colorado, AeroGrow International, Inc. is the leader in the rapidly growing indoor gardening category. AeroGardens allow anyone to grow farmers market fresh herbs, salad greens, tomatoes, chili peppers, flowers and more, indoors, year-round, so simply and easily that no green thumb is required. With an AeroGardenyou can grow anything!In April 2013, AeroGrow entered into a strategic partnership with Scotts Miracle-Gro to continue to expand the indoor gardening market.For more information, visit http://www.aerogarden.com.

Investor Relations:Grey GibbsSenior Vice President of Finance and Accountinggrey@aerogrow.com303-444-7755