Exhibit 99.1

 

AeroGrow Reports Strong First Quarter Results

 

 

Revenue up 52% to $3.7 million

 

Operating Loss Reduced and Gross Margin Improved Over Prior Year

 

Continued Retail and e-Commerce Distribution Expansion Planned for Fall, 2018

 

New Products Planned for Fall, 2018 Launch

 

Boulder, CO - (August 13, 2018) - AeroGrow International, Inc. (OTCQB: AERO) ("AeroGrow" or “the Company"), the manufacturer and distributor of AeroGardens - the world’s leading family of In-Home Garden Systems™ – announced results for its first quarter ended June 30, 2018.

 

For the quarter ended June 30, 2018 the Company recorded net revenue of $3.7 million, an increase of 52% over the same period in the prior year.  Loss from operations was $653K, improved from $729K in the prior year period.

  

“I am very pleased to report our results for the 1st Quarter of our Fiscal Year 2019,” said AeroGrow President & CEO J. Michael Wolfe. “With sales up 52%, we continued – and in fact accelerated – the strong momentum we’ve had over the last year and realized particularly good results on our Amazon platforms as well with several other on-line retailers, notably Bed, Bath & Beyond, Home Depot and Kohl’s. Loss from operations was improved year-over-year and I’m especially pleased with the nearly 500 basis point improvement in our gross margin vs. last year (from 33.4% to 38.3%). Our cash position remained strong with $7 million in cash on hand as of June 30th and no debt. We have also lined up a $6 million line of credit with our partners at Scotts Miracle-Gro to support our anticipated growth this fall.

 

“Many of the results we registered in our first quarter speak to the emerging strength in our business. For example, our year-over-year sell-thru on Amazon.com (U.S) was +68%, and on Amazon.ca (Canada) it was +114%. Both of these are off of what are becoming pretty well established revenue bases. Another metric that I watch closely and that has been very encouraging is our Seed Pod Kit sales. For Q1, sales of Seed Pod Kits were up nearly 70% vs. last year, a good indicator that our consumers are continuing to engage with their AeroGardens and that the big increases in consumers coming into the franchise is resulting in strong ongoing usage.

 

“While the first quarter financial results represent a very good start to our year, the real story of the quarter is the excellent progress we made toward achieving our three key goals for this upcoming fall and holiday selling season: (1) increasing our overall distribution both on the web and through retail stores; (2) launching several innovative new products; and (3) driving improvement to our gross margin throughout our product line and our operation.

 

“Beginning later this fall, look for AeroGardens to continue to be a featured product at Bed, Bath & Beyond, Kohl’s and Macy’s – both in-store and on-line. We’ll also begin to have a significant presence in Target Stores and look to build on the success we’ve had in Canada. We also plan to aggressively grow our Amazon business in the U.S. and Canada and anticipate further expansion on the various Amazon platforms throughout Europe. All of this will be in addition to growing our established business on AeroGarden.com.

 

“As much progress as we made on the retail distribution front, I think we’ve matched it with our product development efforts. This fall we’ll be introducing six new products into our Harvest line – our “mid-line” garden with price points typically between $99.95 and $179.95. We are really excited about these new additions to our line and I think when you see them you’ll agree that they are as beautiful as they are functional. In addition to all of the new Harvest gardens, we’ll be expanding on our highly successful line of AeroGarden Farms by introducing a version that will be our biggest-producing garden ever. Look for these new products to be available early this fall.

 

“Another of our key objectives for FY 2019 is to generate meaningful improvement in our gross margin. We are working to drive this improvement through (1) improved manufacturing cost management (2) a complete re-engineering of our seed pod kit manufacturing process designed to not only reduce costs out, but also to deliver better quality and dramatically increased capacity; and (3) a new agreement with SMG that went into effect on April 1 reducing the manner and the amount we pay royalties for use of the Miracle-Gro brand. We began seeing the effect of these initiatives with our Q1 progress on the gross margin line, and hopefully there is more progress to come as the year unfolds.

 

 

The following information was filed by Aerogrow International, Inc. (AERO) on Monday, August 13, 2018 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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