Aerogrow International, Inc. (AERO) SEC Filing 10-Q Quarterly report for the period ending Sunday, December 31, 2017

Exhibit 99.1

 

AeroGrow Reports Strong Third Quarter Results

·	Quarterly Net Revenue up 31% to $17.4MM

·	9 Month Net Revenue up 45% to $25.6MM

·	Profitable Quarterly Operating Results

·	Strong Sell-thru in e-Commerce and Retail Channels

·	Successful New Product Launches

Boulder, CO - (February 13, 2018) - AeroGrow International, Inc. (OTCQB: AERO) (“AeroGrow” or the “Company”), which is the manufacturer and distributor of the world’s leading indoor gardening systems – the AeroGarden line of Smart Countertop Gardens  – announced results for the third quarter of its fiscal year, ended December 31, 2017.

For the quarter ended December 31, 2017 the Company recorded net revenue of $17.4 million, an increase of 31% over the same period in the prior year. Year-to-date, net revenue increased by 45% to $25.6 million.  Income from operations for the quarter was $406 thousand, a slight decline from $622 thousand in the prior year period due to increased marketing expenditures.  For the 9 month period, loss from operations improved to ($452) thousand from ($658) thousand in the prior year.

“Our third quarter results continued the strong momentum we’ve been generating for the past several years,” said AeroGrow President & CEO J. Michael Wolfe.  “The key takeaway from our third quarter – which included the critical holiday selling season – was that we had exceptional sell-thru results at all of our key retailers, driving our 31% overall top line growth year-over-year.  Distribution successes included double-digit sell-thru increases at established accounts including Amazon.com and Bed, Bath & Beyond. We also achieved successful first year results at Kohl’s, Macy’s, Canadian Tire and Target, and solid results from established partners like Sur La Table, Walmart.com and others. Our Direct-to-Consumer business continued to show good results and we generated 200%+ growth on our Amazon platforms in Europe, albeit off of a relatively small base.

“In addition to our strong sell-thru, our new products were very well received – particularly the AeroGarden Farm, which is our most advanced indoor garden ever with 24 pods, automatically-adjustable 120 watt LED grow lights, and 24 inches of growing height that offer our biggest and best growing experience yet.  The Farm experienced exceptional sales results on our Direct-to-Consumer platform – encouraging at its greater than $500 price point.  We also launched our all new Harvest Wi-Fi AeroGarden on Amazon’s Cyber Monday Deal of the Day event – and were completely sold out within just hours.

“To help drive our double digit sales growth and build the brand for the long-term, we increased some of our marketing investments which caused a slight decline in our operating income vs. last year.  Margins also declined slightly due to significantly increased sales to Brick and Mortar accounts, which are sold at lower margins.  However, both our operating income and our margins were in-line with our internal plans.  We had no debt as of December 31^st along with a cash balance of $2.2 million, and $9.7 million of healthy receivables.

“There is one other matter, related to Board governance, that I would like to report.  Effective March 31, 2018, Mr. Jack J. Walker and Mr. Wayne Harding will be stepping down from the AeroGrow Board of Directors.  I know I speak for the entire Board and the employees of AeroGrow in expressing my deep gratitude for Jack and Wayne’s steady guidance, wisdom and support during their time on our Board.  Both of these gentlemen have been instrumental in helping build AeroGrow into the company that it has become.  To both Jack and Wayne:  A truly heartfelt “thank you.”  Nominated to take their place as independent directors on our Board will be Mr. H. MacGregor Clarke and Mr. David B. Kent.  Greg Clarke formerly served as AeroGrow’s Chief Financial Officer and now holds the post of Senior Vice President & CFO for Johns Manville, a Berkshire Hathaway company.  Dave Kent has an extensive background in growing consumer product companies through his experience with Proctor & Gamble Co., E. & J. Gallo Winery, and The Wine Group LLC.  I’m looking forward to working with both Greg and Dave, along with the other members of our Board, in continuing to build AeroGrow in the years to come.

“We had a terrific holiday selling season, and I believe it sets us up for continued strong growth through increased distribution, exciting new products and strong innovation.  I look forward to updating you with our continued progress.”