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Aerogrow International, Inc. (AERO) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, March 31, 2009

Aerogrow International, Inc.

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CIK: 1316644 Ticker: AERO
 
 
AeroGrow Reports Results for Fourth Quarter and Year Ending March 31, 2009
 
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Revenue of $5.9 million for the quarter
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Revenue of $37.4 million for the full year
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$7.6 million recapitalization completed June 30, 2009

Boulder, CO - June 30, 2009 - AeroGrow International, Inc. (OTCBB:AERO - News) ("AeroGrow" or the "Company"), makers of the AeroGarden® line of indoor gardening products, announced results for the quarter and year ended March 31, 2009.

For the fiscal year ended March 31, 2009, AeroGrow reported revenue of $37.4 million, down 2.4% from the year ended March 31, 2008. Overall, the decline reflected the impact of the slowdown in economic activity in the United States that began in the calendar fourth quarter. AeroGrow reported a net loss for the year of $10.3 million, or an $0.82 loss per share, from a loss of $9.8 million, or an $0.84 loss per share, for the year ended March 31, 2008.

AeroGrow also announced that on Tuesday, June 30, 2009, it completed a $7.6 million recapitalization including the conversion of $1.4 million in accounts payable to long-term debt, the amendment of terms of its senior secured revolving credit facility, and other fundraising, as detailed in concurrent releases today. 

“Our financial results mirrored that of the overall economy as our high-growth strategy ran into the sudden, severe and unforeseen market contraction,” said AeroGrow CEO Jerry Perkins.  “The speed of the contraction left us with far too much product on the shelves both at retail and in inventory, and this has dramatically impacted our wholesale shipments, marketing spend and overall sales for the last two quarters.  The rate of deceleration was significant – we went from a 60% year-over-year increase in sales in the first two quarters of the year, to finishing the fiscal year about flat versus the previous year.

“The economic crisis forced us to quickly shift from targeting double digit growth to targeting the cost containment, overhead reduction and recapitalization needed to survive the downturn and preserve the long-term equity in the products and brand that we’ve built. In the last few months we’ve executed initiatives that reduce our costs by about $10 million annually, and we’ve just completed a major restructuring of our balance sheet. Our lenders, vendors and shareholders have supported this transition because consumer demand for AeroGardens has remained strong, validating the consumer proposition for the product category we’ve defined and built. We saw a better than 20% increase in the recurring revenue side of our business, and home vegetable gardening has seen double-digit increases this year. This burgeoning interest in home growing leaves us uniquely positioned to benefit in the coming months and years.”

The year ended March 31, 2009, represented AeroGrow's third full fiscal year of operations. The following table sets forth our quarterly financial results for the last 12 months of operations:
 
QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)
 
   
FISCAL YEAR ENDED MARCH 31, 2009
   
Quarter Ended
        
   
30-Jun-08
    
30-Sep-08
    
31-Dec-08
    
31-Mar-09
    
Fiscal Year
  
                               
Total Revenue
   $ 6,720,081     $ 13,854,930     $ 11,010,885     $ 5,863,972     $ 37,449,868  
                                         
Operating expenses
                                        
Cost of revenue
     3,686,823       8,026,325       7,558,322       4,439,317       23,710,787  
Research and development
     725,415       416,778       703,133       301,167       2,146,493  
Sales and marketing
     3,449,883       2,875,729       4,704,912       2,742,298       13,772,822  
General and administrative
     1,518,712       1,902,113       2,037,797       1,584,769       7,043,391  
Total operating expenses
     9,380,833       13,220,945       15,004,164       9,067,551       46,673,493  
                                         
Total other (income) expense, net
     156,597       215,615       408,943       308,734       1,089,889  
                                         
Net profit (loss)
   $ (2,817,349 )   $ 418,370     $ (4,402,222 )   $ (3,512,313 )   $ (10,313,514 )
                                         
Net profit (loss) per share, basic and diluted
   $ (0.23 )   $ 0.03     $ (0.35 )   $ (0.26 )   $ (0.82 )

The following information was filed by Aerogrow International, Inc. (AERO) on Tuesday, June 30, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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