Hello everyone, and welcome to GrowGeneration's 4th Quarter and Full Year 2024 Earnings Conference Call. My name is John, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Following the prepared remarks, we will open the call to questions from analysts with instructions to be given at that time. This conference call is being recorded, and a replay of today's call will be available on the Investor Relations section of GrowGeneration's website. I will now hand the call over to Phil Carlson with KCSA for introductions and the reading of Safe Harbor statement. Please go ahead. Thank you and welcome everyone to GrowGeneration's 4th Quarter and Full Year 2024 Earnings Results Conference Call. With us today are Darren Lampert, Co-Founder and Chief Executive Officer, and Greg Sanders, Chief Financial Officer of GrowGeneration. The company's 4th Quarter and Full Year 2024 Earnings Press Release was issued after the market closed today. A copy of this press release is available on the Investor Relations section of the GrowGeneration website at ir.growgeneration.com. I would like to remind everyone that certain comments made on this call include forward-looking statements which are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any of the forward-looking statements made today. During the call, we'll use some non-GAAP financial measures as we describe business performance. The SEC filing, as well as the earnings press release, which provide reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures, are available on our website. Following prepared remarks, management will be happy to take your questions. We ask that you please limit yourself to one question and one follow-up. If you have additional questions, please re-enter the queue, and we'll take them as time allows. Now, I will hand the call over to GrowGeneration's Co-Founder and CEO, Darren Lampert. Darren, please go ahead. Thanks, Phil. Good afternoon, everyone. We appreciate you joining us today as we discuss our fourth quarter and full year 2024 results and talk about our outlook for 2025. Today, we reported full year 2024 results that were consistent with our expectations. This included full year 2024 net revenue of $188.9 million, which was in line with the preliminary results we reported in early February. Total 2024 proprietary brand sales were $39.5 million, representing 24.2% of total net sales, compared to 18.8% in the prior year. 2024 marked a pivotal year for GrowGeneration as we successfully executed a strategic transformation to position the company for sustainable, profitable growth. With this extensive strategic restructuring plan, we have moved away from a focus on stores in order to transform GrowGeneration into a product-driven company with a business-to-business customer focus in order to drive revenue growth, improve margins, and to build a more efficient, profitable company. For proprietary brands, I'm happy to report that 30.4% of our fourth quarter 2024 cultivation and gardening revenue was derived from sales of proprietary products, compared to 21.2% for the fourth quarter of 2023. This is very important because proprietary product sales not only drive higher margins but also create a stable and recurring revenue stream for GrowGeneration. Our goal remains clear: for proprietary brands to reach 35% of cultivation and gardening net sales by the end of 2025. Our portfolio of leading brands such as Char Coir, Drip Hydro Nutrients, The Harvest Company, and our Ion Lighting Solutions continue to drive growth in proprietary brand sales. By integrating these proprietary brands into our commercial and e-commerce platforms, we are providing growers premium products that reduce input costs while maximizing yields. Regarding the digital transformation of sales, our new B2B e-commerce platform was launched as planned in the fourth quarter of 2024. Since its launch, we've received extremely positive customer feedback. We will continue migrating transaction activity from our brick-and-mortar stores to our new digital platform, enhancing the customer purchasing experience while driving operational efficiencies across our supply chain. Lastly, in 2024, we made substantial progress in streamlining operations and reducing expenses throughout our entire organization. We proactively optimized our retail footprint, completing strategic store consolidation ahead of schedule, which significantly reduced operating expenses while preserving sales in key markets. Following these actions, we now have 31 operational stores and two regional distribution centers. Looking forward, we expect to reduce annual expenses by approximately $12 million. We've already made considerable progress. Gross profit margin was 16.4% for the fourth quarter of 2024, compared to 23.5% for the fourth quarter of 2023, primarily due to one-time inventory disposal costs and strategic discounting as part of restructuring efforts. With the increasing revenue contribution we are realizing from proprietary brands, we anticipate sequential margin improvement throughout 2025, with a margin target of 30%, which will drive overall profitability. Complementing all of this, we finished 2024 with no debt on our balance sheet and a strong cash equivalent and marketable securities position of $56.5 million. Additionally, in 2024, we completed a $6 million share repurchase program, demonstrating our commitment to returning value to our shareholders. This strong financial footing provides us significant financial flexibility for future growth investments and initiatives, as well as potential acquisitions. With our strong cash position, we can opportunistically acquire businesses that complement our proprietary brand portfolio, expand our market share, and increase our profitability. Lastly, before I discuss guidance, I want to talk about our storage solutions business, MMI. During 2024, MMI continues to exceed our expectations, with full year 2024 revenue of $25.4 million and $6.3 million in operating profit. As previously communicated, in 2024, we engaged Lake Street Capital to explore strategic opportunities for this business. After a thorough evaluation process, the board determined current market conditions do not support an optimal value creation scenario for a divestiture at this time. Instead, we will continue to focus on executing our long-term expansion plans for MMI, leveraging its strong profitability to drive additional value within the GrowGen portfolio. Turning to guidance for the full year 2025, we expect net revenue to be in the range of $170 million-$180 million and adjusted EBITDA in the range of a $2 million loss to a positive $2 million profit. Before we take your questions, I want to briefly talk about investor concerns related to the impact of proposed global tariffs. We have already implemented measures to mitigate these effects. These include diversifying our material sourcing strategy, including optimizing costs, renegotiating with vendors, and exploring manufacturing options, and improving supply chain efficiencies to optimize logistics and fulfillment, reduce unnecessary costs, and improve margins, including utilizing our larger stores as regional fulfillment hubs to improve inventory flow and lower shipping costs. In cases where tariffs may impact our businesses, surcharges will be put in place to reflect additional costs. In summary, 2024 was a transformational year for GrowGen, and we entered 2025 with a leaner, more efficient, and more product-driven business model. With our proprietary brand, digital transformation, and cost optimization strategies in place, we are confident that 2025 will be a year of revenue growth and innovation for GrowGen, as we aim to reach profitability in the 2nd Quarter of 2025. I will now hand the call over to our CFO, Greg Sanders. Greg? Thank you, Darren. Good afternoon, everyone. Today, I'll review the highlights of our fourth quarter and full year 2024 financial results, and then I'll discuss our outlook for 2025. During the fourth quarter, we continue to place heavy emphasis on rapid execution of our restructuring plan in order to position the business for 2025. We will highlight proprietary brand sales, which outpaced our expectations; the delivery of our second consecutive quarter of same-store sales growth; additional improvements to our expense base; and measures taken to right-size inventory. Fourth quarter net revenue was $37.4 million, compared to $49.5 million in the year-ago period. The decline was mainly due to the closure of 19 retail locations during 2024. As anticipated, these store closures and consolidations impacted overall net revenue. This was partially offset by an increase in same-store sales, which rose 1% year-over-year. The fourth quarter represented our second consecutive quarter of positive same-store sales growth, which was primarily driven from consolidation efforts, along with year-over-year growth of our commercial customer base. Cultivation and gardening net sales was $32.9 million for the fourth quarter of 2024, compared to $41.7 million for the comparable year-ago period. Proprietary brand sales increased to 30.4% of cultivation and gardening sales for the fourth quarter of 2024, compared to 21.2% for the fourth quarter of 2023. Our fourth quarter proprietary brand sales outpaced our internal expectations and provide us with confidence in our long-term ability to expand gross margin. Net sales of commercial fixtures within our store solution segment decreased 41% to $4.5 million for the fourth quarter of 2024, compared to $7.7 million in the comparable year-ago quarter. This decrease was largely due to timing of revenue recognition on various large projects that went into the third quarter of 2024. Gross profit margin was 16.4% for the fourth quarter of 2024, compared to 23.5% for the fourth quarter of 2023, a decrease of 710 basis points, primarily due to inventory disposal costs, which was a component of our restructuring plan. We continued to lower expenses in the fourth quarter. Store and other operating expenses declined 21.1% to $9.3 million, compared to $11.8 million in the fourth quarter of 2023. Selling, general and administrative expenses for the quarter were $6.8 million, compared to $7.9 million in the fourth quarter of 2023, a 13.3% improvement. We expect to recognize additional cost improvements into the first quarter of 2025 and beyond. Depreciation and amortization was $7.1 million for the fourth quarter of 2024, compared to $4.1 million in the comparable year-ago quarter. This increase was due to an acceleration of certain depreciable assets resulting from our restructuring initiatives through year-end. In addition, the company recognized a non-cash impairment of $6.7 million of certain intangible assets and goodwill from acquisitions completed in prior years. Net loss was $23.3 million for the fourth quarter of 2024, or negative $0.39 per share, an improvement of $4 million compared to a net loss of $27.3 million, or negative $0.44 per share in the fourth quarter of 2023. The improvement in net loss was primarily due to improvements in expense structure and lower impairment offset by gross margin. Adjusted EBITDA, as defined in our press release, was negative $8.1 million compared to negative $3.7 million in the same period last year. The decrease to adjusted EBITDA was primarily driven by sales mix and one-time inventory adjustments of more than $3 million that we believe addresses the alignment of our inventory mix to meet go-forward proprietary brand expectations. Now, I will provide a quick overview of our results for the full year 2024. Net sales were $188.9 million compared to $225.9 million for 2023. As mentioned, this was mainly due to the closure of 19 retail locations. In 2024, proprietary brands accounted for 24.2% of cultivation and gardening sales, up from 18.8% in 2023. Additionally, proprietary brand sales increased on an absolute basis from $36.5 million in 2023 to $39.5 million in 2024, an 8.4% improvement. Gross profit was $43.7 million for the full year 2024, a decrease of $17.5 million compared to gross profit of $61.3 million for the full year 2023. Gross profit margin was 23.1% for the full year 2024, compared to 27.1% for the full year 2023, a decrease of 400 basis points. Net loss was $49.5 million for the full year 2024, or negative $0.82 per share, an increase of $3 million compared to a net loss of $46.5 million for the full year 2023, or negative $0.76 per share. Adjusted EBITDA, as defined in our press release, was negative $14.5 million for the full year 2024, compared to a negative $5.6 million for the full year 2023. The decrease in adjusted EBITDA was primarily driven by the pivot that we took in the third quarter of 2024 to restructure the business. The fluctuation was primarily due to softer revenues, along with a decrease in gross profit margin resulting from inventory disposal costs and inventory sales discounts resulting from 19 store closures and rationalizing our product mix. Turning to the balance sheet, as of December 31, 2024, the company had $56.5 million of cash, cash equivalents, and marketable securities, and no debt. During the Full Year 2024, we utilized $6 million to repurchase company shares at an average share price of $2.38 per share. As of December 31, 2024, we had completed all purchases available under the share repurchase program. We continue to maintain a strong cash position and do not foresee any near-term financing needs. Now, I'll discuss our guidance for 2025. As Darren mentioned earlier, for the Full Year 2025, we expect net revenues to be in the range of $170 million-$180 million. We expect Full Year 2025 adjusted EBITDA to be in the range of a $2 million loss to a positive $2 million profit. Further, with the improvements made in our inventory base, we anticipate gross margins for the full year 2025 to be in the range of 29%-31%. Our updated guidance assumes a softer first quarter with profitable second and third quarters emphasized by the outdoor cultivation season, along with continued improvements in gross margin and a lower operating expense base as we emerge into 2025 with a cleaner and more strategic model that better aligns our business to current industry conditions. In closing, during 2024, we made significant progress in streamlining our operations and restructuring our business for long-term profitability. We ended the year with a strong balance sheet and the financial resources to support our continued strategic growth. In 2025, we will remain focused on driving further margin expansion, managing our costs, and focusing our attention towards opportunities that we expect will deliver long-term profit to our shareholders. With that, I will hand the call over to Darren for closing remarks. Thanks, Greg. Thank you for everyone for joining us today. Over the past year, we have taken actions to fundamentally transform GrowGeneration into a leaner, more efficient, and product-driven business. As we move forward, we will continue to expand our high-margin proprietary product offerings, refine our B2B e-commerce platform, and leverage our optimized cost structure to deliver stronger financial performance. With a debt-free balance sheet and strong cash position, GrowGen is well-positioned for sustainable revenue growth and profitability as we move throughout 2025. That concludes our prepared remarks. Operator, please open the line for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you're using a speakerphone, please lift the handset before pressing any keys. Please be reminded to ask one question and one follow-up. Your first question comes from the line of Aaron Gray from Alliance Global Partners. Your line is now open. Hi, good evening, and thank you for the question. First question I want to ask is just on the gross margin. You guys are targeting a lot of improvement there. Just want to talk about the cadence we should expect. You alluded to it a little bit. It seems like a little bit softer 1Q and then a lot more improvement in 2Q. I do not know if that was more broad profitability versus just the gross margin. Just curious there, should we expect some level of a step up in one of the quarters there, or more gradual improvement throughout relative to where we came for 4Q? Thanks. Greg, would you like to take that? Yep, I'll take that one. Aaron, I think when we look at the first quarter, we're coming off of a fourth quarter where 30.4% of our cultivation and gardening net sales were driven from our proprietary brands. In our model, we're assuming a continued ramp throughout the course of the year, which will help support greater gross margin as we proceed through the duration of the year. Traditionally, Q3 is our strongest quarter from a gross margin perspective. Q2 tends to perform quite well also. We are expecting an immediate lift in the first quarter on gross margin. We're seeing it in our results already as we're looking at reporting on a monthly basis, and we're excited to talk about the first quarter in May in our next earnings call. As we get throughout the year, I think you will see continued improvements. We're targeting 30% for the full year in terms of gross margin. Our range on the guidance side from 29-31% kind of gets that midpoint. Hopefully that helps. That's very helpful. Thank you for that. Second question for me, just high level, as you guys have to shift a bit more to the e-commerce versus stores, can you talk about some initiatives you're taking to help transition some of those sales? With the store fleet at 31 today, are you comfortable with that? Or potentially, if you get more traction on shifting sales to e-commerce, is there a potential for that to slim down even more? Thank you. If I could start, Aaron. Our restructuring is largely complete when it comes to the store side of it. We're down to 31 stores, focusing on the higher-performing markets and driving operational efficiencies. As always, we'll continue to evaluate performance and market conditions. We're always looking to optimize if we can. The B2B portals were launched in the fourth quarter. They're up and working well. We are transferring our commercial customers over to the portals as we speak with direct shipments out of our hubs and also out of our warehouses. What we're seeing right now is from GrowGeneration, we're just much more business-to-business company than business-to-consumer. The necessity of overlapping stores in the same area is just starting to disappear. We will continue to rationalize, but I will say that the majority of it is over today. Okay, great. Thanks for the commentary there, and I'll go ahead and jump back into the queue. Your next question comes from the line of Mark Smith from Lake Street. Your line is now open. Hi, guys. First question for me is just looking at the proprietary brands. Can you talk about the sales within different kind of channels? What's going through e-com, B2B business versus kind of in the stores? Greg, would you like to take that? Yep. Yeah. I think when you look at the different channels, right now you're seeing our retail and commercial group really accelerating the penetration of our proprietary brands. Our wholesale business at this point is almost entirely our proprietary brand. We are distributing very little of other organizations' products. It's mostly our own products at this point. E-com is picking up as well. We have spent a lot of time building up brand pages and prioritizing Amazon in recent months. We moved that business to FBA as well. That's all of our proprietary brands. We are no longer distributing other companies' products on Amazon either. You're seeing really growth from all of our channels right now on the proprietary brand side of things, with some of the channels almost exclusively focused on those products right now as we look at the pivot from being a retailer, which we still have 31 retail locations that are very important to our business, but doubling down on our products and finding additional verticals to sell through those products into. I think you'll see more diversification from us in 2025 above and beyond what we've already executed. Okay. I wanted to follow up on gross profit margin. It sounds like there's a lot of kind of clear-out sale-type stuff to clean up the inventory in Q4. Do you feel like you got through all of that, or is there some carryover still of inventory that needs to be cleaned up here in Q1? Yeah, the heavy lifting is really done on the inventory side of things, Mark. When we saw the industry start to turn in late 2021, we had over $20 million in inventory that some companies may have discarded more rapidly. For us, we sold through most of it at a lower margin profile, sometimes at a loss throughout the last several years. It really burdened our results. As we're looking at the heavy focus on restructuring in the back half of 2024, we did make a pretty significant cut in the fourth quarter to go through all of our SKUs on a qualitative basis and move on from what no longer serves as business as we look at 2025 and beyond and focusing on our proprietary brands, cleaning up our warehouses and our distribution centers, and repositioning the business. In short, there will always be continuous improvements made to inventory, but I mean, the heavy lift is gone. That really reflects what we believe we'll achieve on a gross margin perspective for 2025. Mark, what you also saw during the cleansing of the inventory, these were 19 stores closed in the last six months of the year. There was a lot of inventory running through those 19 closed stores where we put products on sale to better serve our customers as opposed to spending additional capital on moving products from store to store. I think it was twofold. One, it was cleansing of the inventory, but it was the amount of stores that were closed in such a short period of time that is why you saw 16% margins in the fourth quarter. Again, we do believe that you'll see those numbers even in the first quarter in the high 20% range and certainly reaching the 30% range hopefully by the second quarter this year. Excellent. Thank you. Your next question comes from the line of Brian Nagel from Oppenheimer. Your line is now open. Hey, this is William Dawson. I'm on for Brian Nagel. Thanks for taking our questions. Very broadly, just wanted to ask about demand in the space. With respect to your 2025 outlook, wanted to just understand better growth and demand assumptions embedded within that outlook. Hey, Greg, you can go over the outlook, and then I'll take the other part of it. Yeah. So when we look at 2025 from a demand perspective, we foresee a rebound from our MMI business, a drop from $30 million to $25 million in the prior year. We expect some growth back in that business into 2025, more diversification in revenue streams. The largest part of that business from a revenue perspective in 2024 was on the retail side of things, and we're seeing more and more opportunities within retail, but in other places as well. We're optimistic about MMI, and that's part of the basis of why we believe the valuation is worth holding on to long-term and continuing to double down on that business. Within the cultivation and gardening side of things, which is our core business, I think we're seeing most of the growth coming in from our proprietary brands and our ability to service the B2B customers. Over the last several months, we rolled out B2B portals for both our wholesale business as well as our commercial customer base. We're beginning to see very strong adoption within the portals and more interest in our proprietary brands. We launched the Drip Hydro powder line in Q2 of 2024, and we're starting to see a lot more conversion as time progresses. Char Coir continues to evolve and become a higher-demand product. I think when we look at our business, we're focused on the demand of our proprietary brands as much as anything right now. We continue to stay focused state by state and in different markets just based on how the laws are structured in the U.S. around cannabis and cannabis growers. Lastly, we're continuing to place emphasis as well on diversifying our revenue streams outside of cannabis into lawn and garden, nurseries, greenhouses, and eventually big box as well. There are a lot of moving parts, but we feel good about really our brands and our ability to drive more sales through those brands. I appreciate that. My next question was going to be on the regulatory environment. A lot has changed since we last spoke, and just wanted to see if there's been any updated thinking around cannabis reclassification, banking policies, APEC, that type of thing. Thank you. As of today, I think most of us are still very confused. We are waiting. We still do believe that it's not if, it's when. The Trump administration has certainly signaled prior to the election that they stood for rescheduling it state by state. Most of it's been pushed back without any some certain date. We do believe that if you see rescheduling or safe banking, that it'll bring tremendous capital into the industry, which will slow down to GrowGeneration on the build-out side, and also on the consumer side of it. We are waiting like the rest of us. Our numbers that you see today, $170 million-$180 million, are based on nothing happening with our federal government this year. We still remain optimistic. We remain optimistic that President Trump will reschedule as he promised in his pre-election campaign. Greg Sanders, good luck, guys. Thank you. Thank you. As a reminder, if you have a question, please press star one on your telephone keypad. There are no further questions at this time. I will now turn the call over to Darren Lampert. Please continue. Thank you for joining us on the call today. We look forward to updating you on our progress on our first quarter call in May. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.