Aerogrow International, Inc. (AERO) 10-K Annual Report July 2013

Boulder, CO – July 1, 2013 - AeroGrow International, Inc. (OTCQB:AERO) ("AeroGrow" or the "Company"), makers of the AeroGarden® line of indoor gardening products, announced results for the fiscal year ended March 31, 2013.

AeroGrow reported a modest EBITDA loss of $757,791, down from a $298,498 EBITDA profit in the previous fiscal year and a significant improvement over the almost $3 million EBITDA loss for the fiscal year ended March 31, 2011. The decrease in profitability was due to a 10.9% overall decrease in sales, combined with increased forward-looking business development activities such as new product development and marketing, designed to grow the business ongoing.

“It has been a transformational year at AeroGrow, and despite our down tick in sales and EBITDA profitability I’m quite proud of what we’ve achieved,” said Mike Wolfe, AeroGrow’s President and Chief Executive Officer. “On the heels of our first-ever EBITDA profitable year in 2012, we focused in 2013 on developing a solid foundation from which to grow. To that end, we invested heavily in product R&D and made numerous marketing expenditures intended to drive brand awareness, completely restructured the balance sheet and successfully re-kindled relationships with some of our most profitable retail partners.”

“These activities led to our formation, after the close of the fiscal year, of a crucial strategic partnership with The Scott’s Miracle-Gro company,” continued Mr. Wolfe. “In addition to a significant working capital infusion from Scotts, the partnership affords AeroGrow the use of the globally recognized and highly trusted Miracle-Gro brand name, while providing us a broad base of support in sales, marketing, distribution, supply chain logistics, R&D, and sourcing.”

Sales into the Company’s retail channel posted its first year over year increase in 4 years, increasing 24.9% and demonstrating the ongoing strong demand for AeroGardens through other channels. This growth was led by a successful holiday sales partnership at retail giant Amazon.com. The retail sales growth was offset by a 14.7% decrease in our direct-to-consumer sales, which principally reflects the lower sales in the fiscal third quarter caused in part by a labor strike at the Ports of Los Angeles and Long Beach in late November and early December. The strike delayed container loads of AeroGardens in the critical pre-Christmas time period.

Year over year, gross margin dropped 4 percentage points from 49.4% to 45.4%, primarily the result of channel mix due to sales increases in lower margin retail and international sales and lower overall sales in the high margin direct response channel.

General and Administrative expenses declined 20.2% year over year, down $460,397 and continuing a 4 year trend as the Company continued its focus on cost controls.

On April 23, 2013 the Company announced that Scotts Miracle-Gro had made a $4.5 million equity investment and IP acquisition with the Company, resulting in a 27% beneficial ownership interest in AeroGrow. In the process, AeroGrow took steps to entirely eliminate its long term debt, restructured the balance sheet to facilitate potential future transactions, and gained a valuable partnership for growth.

The following information was filed by Aerogrow International, Inc. (AERO) on Monday, July 1, 2013 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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Aerogrow International, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: AERO
CIK: 1316644
Form Type: 10-K Annual Report
Accession Number: 0001185185-13-001395
Submitted to the SEC: Mon Jul 01 2013 5:22:44 PM EST
Accepted by the SEC: Mon Jul 01 2013
Period: Sunday, March 31, 2013
Industry: Retail Building Materials Hardware Garden Supply

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Aerogrow International, Inc. (AERO) SEC Filing 10-K Annual report for the fiscal year ending Sunday, March 31, 2013

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