Aerogrow International, Inc. (AERO) SEC Filing 10-Q Quarterly report for the period ending Tuesday, June 30, 2020

Exhibit 99.1

AeroGrow Reports Record 1^st Quarter Results

Boulder, CO - (August 11, 2020) - 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 today its results for the Quarter ended June 30, 2020.

For the 1^st quarter of Fiscal Year (FY) 2021 ended June 30, 2020 the Company recorded net revenue of $16.4 million, an increase of 267% from $4.5M in the same period in the prior year.  Income from Operations was $2.7M, up from a loss of $1.1M in the prior year period. 

“Our 1^st Quarter results were exceptional by every measure,” said President and CEO J. Michael Wolfe.  “Sales across all three of our distribution channels – Amazon, Direct-to-Consumer and Retail – were extremely strong throughout the quarter. This is our third consecutive quarter with record sales and profitability, and we saw further acceleration of our results due to the Covid-19 pandemic beginning in March. This was driven by increased interest in gardening, at-home meal preparation and access to fresh, safe food sources...and the AeroGarden certainly meets all of these needs. We experienced an increase in sales across all product types, including gardens, seed pod kits and accessories.

“During the quarter we were able to refine our pricing model, which primarily drove our gross margin up to 44.8%, an increase of 1,230 bps from 32.5% in the same period last year. Our gross margin also benefited from a larger portion of our sales coming through our Direct-to-Consumer channel (AeroGarden.com), which affords us better margins. In addition, we continued to see very good results and improved efficiencies in our digital marketing programs which played an important role in our sales growth. We believe these programs are further scalable as we enter what is traditionally our peak sales periods. These factors, in addition to increased sales, drove the significant improvement in our operating profit and demonstrate the leverage in our business as it continues to scale.

“We have also successfully expanded capacity with all of our critical suppliers to keep up with what appears to be continued strong demand for our products. Our July sales – while having moderated from the original surge we experienced during the early days of the pandemic – have remained at a considerably higher level on a YOY basis. If this sales trend continues, we believe our expanded supply chain and distribution infrastructure will be prepared to meet it.

“Looking ahead, we have three new product introductions planned for the coming months. We will be introducing a new Farm model and an all new Sprout into our AeroGarden product line, as well as launching the Grow Anything Appliance, our most ambitious product to date. To be known as the “Bloom by Botanicare,” we believe this refrigerator-sized, large-plant growing system is the most advanced in the world. Bloom monitors and dynamically adjusts key environmental factors for each stage of a plant’s development – maximizing the speed of growth, yields, flavor and consistency of thousands of potential plant varieties. Bloom will launch later in our 2^nd Quarter with an initial release designed to begin cultivating our community of growers, followed by distribution ramping throughout the fall. Apply to be a part our initial release program at Launch.BloomGrows.com.

“Our balance sheet as of June 30 had $10.3 million in cash on hand and $3.8 million in receivables. In addition, on August 3^rd we secured a $7.5 million working capital line of credit from the Scotts Miracle-Gro Company. We believe the combination of our strong balance sheet and working capital line will support our efforts to have sufficient inventory for the upcoming season and take full advantage of additional upside opportunities that may present themselves. Finally, I want to recognize our incredible team here at AeroGrow, all of whom have worked tirelessly to deliver these results while preparing for our upcoming holiday season.

“Thank you for your interest in AeroGrow and I look forward to updating you on our progress.”