Benzinga | Nov 12, 2021 11:37AM EST

Hydrofarm Holdings Q3 Net Sales Improve 28% YoY To $123.8M, Reaffirms Guidance

Hydroponics equipment provider Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) announced its financial results Thursday for the third quarter ended September 30, 2021, reporting net sales of $123.8 million, compared to $96.7 million in the prior-year period.

Third Quarter 2021 Highlights vs. Prior Year Period

* Gross profit increased 64.9% to $30.0 million, or 24.2% of net sales, compared to $18.2 million, or 18.8% of net sales.

* Net income attributable to common stockholders was $17.3 million or $0.37 per diluted share, compared to $2.0 million or $0.08 per diluted share. Pro forma adjusted net income was $7.7 million or $0.17 per pro forma diluted share, compared to $4.3 million or $0.13 per pro forma diluted share.

* Adjusted EBITDA increased 116.7% to $16.1 million compared to $7.4 million.

* Completed two acquisitions during the quarter: Aurora Innovations and Greenstar Plant Products.

* At the end of the reporting period on Sep. 30, the company held $14.5 million in cash.

Recent Developments

* Closed on new $125 million Senior Secured Term Loan Facility.

* Completed one acquisition: Innovative Growers Equipment and related entities.

Reaffirm Full Year 2021 Outlook vs. Prior Year

* Net sales growth of 37% to 43%, or approximately $470.0 million to $490.0 million.

* Adjusted EBITDA of $47.0 million to $53.0 million, or approximately 10% to 11% of net sales.

* Pro Forma net sales of $580.0 million to $600.0 million; Pro Forma Adjusted EBITDA of $85.0 million to $95.0 million.

"During the third quarter, we grew our top line by over 28% and improved gross profit by over 540 basis points year-over-year," Bill Toler, chairman and CEO of Hydrofarm stated. "We also benefited from a reconfiguring of our product portfolio driven by this year's M&A activity, as over 76% of our sales now come from our proprietary and preferred brands compared to approximately 65% last year, contributing to a 117% improvement in Adjusted EBITDA."

Price Action

Hydrofarm's shares were trading 4.84% higher at $42.69 per share at the time of writing Friday morning.

Photo: Courtesy of Drew Taylor on Unsplash