Page 1

HYDROFARM®Ⓡ Hydrofarm Holdings Group Announces First Quarter 2021 Results May 13 , 2021 Company Updates Full Year 2021 Outlook FAIRLESS HILLS , Pa . , May 13 , 2021 ( GLOBE NEWSWIRE ) -- Hydrofarm Holdings Group , Inc. ( " Hydrofarm " or the " Company " ) ( Nasdaq : HYFM ) , a leading independent distributor and manufacturer of hydroponics equipment and supplies for controlled environment agriculture ( " CEA " ) , today announced financial results for its first quarter ended March 31 , 2021 . First Quarter 2021 Highlights vs. Prior Year Period : • Net sales increased 66.5 % to $ 111.4 million compared to $ 66.9 million . • Gross profit increased 100.8 % to $ 23.2 million , or 20.8 % of net sales , compared to $ 11.6 million , or 17.3 % of net sales . • Net income attributable to common stockholders was $ 4.9 million or $ 0.13 per diluted share compared to a net loss of ( $ 3.7 ) million or ( $ 0.18 ) per diluted share . Pro forma adjusted net income ( ¹ ) was $ 7.3 million or $ 0.19 per pro forma diluted share compared to a loss of $ ( 1.6 ) million or $ ( 0.05 ) per pro forma diluted share . • Adjusted EBITDA ( 1 ) increased to $ 9.9 million compared to $ 1.6 million . Recent Developments : • Completed follow - on equity offering raising approximately $ 309.8 million in net proceeds . ● Completed the acquisition of branded nutrient manufacturer , HEAVY 16 . Revised Full Year 2021 Outlook vs. Prior Year : • Net sales growth of 30 % to 40 % . Adjusted EBITDA ( 1 ) of $ 36.0 million to $ 42.0 million . ● ( 1 ) Adjusted EBITDA and Pro Forma Adjusted Net Income ( Loss ) are non - GAAP measures . For reconciliations of GAAP to non - GAAP measures see the " Reconciliation of Non - GAAP Measures " accompanying this release . Bill Toler , Chairman and Chief Executive Officer of Hydrofarm , said , " We're pleased to report strong results to start 2021 , which included our third straight quarter of organic sales growth of approximately 60 % or more and a new record quarter of Adjusted EBITDA at $ 9.9 million , as we continue to benefit from broad growth across our product lines , geographies , and brand categories . Our impressive results continue to be driven by demand for our differentiated branded product offerings aided by strong tailwinds from a large and rapidly growing controlled environmental agriculture end market . " Mr. Toler added , " With the recent successful completion of our follow - on offering of common stock , and the increased borrowing capacity we have from our new credit facility , we have further strengthened our balance sheet since becoming public and are well positioned to continue to invest in our organic growth , as well as execute our acquisition strategy going forward . Coupled with our innovative , high performance products , and strong service offerings , we believe we are uniquely positioned to capitalize on the unprecedented growth in CEA and we are convinced that we have only scratched the surface of the opportunity in front of us . " Recent Developments Acquisition of HEAVY 16 As previously announced , on May 3 , 2021 , the Company completed the acquisition of Field 16 , LLC , the manufacturer and distributor of HEAVY 16 , a line of premium plant nutrients ( collectively " HEAVY 16 " ) . The strate combination of Hydrofarm's leading distribution capabilities and HEAVY 16's branded nutrient manufacturing capabilities is expected to enable the HEAVY 16 brand to grow more rapidly across the combined company's customer base . The acquisition also fits squarely with Hydrofarm's strategy to acquire branded manufacturers in key CEA product categories , such as plant nutrients . Follow - on Offering of Common Stock Additionally , on May 3 , 2021 , the Company completed a public offering of its common stock . A total of 5,526,861 shares were sold in the offering at a price of $ 59.00 per share , including 720,894 shares sold pursuant to the full exercise of the underwriters ' option . All of the shares in the offering were offered by Hydrofarm . The net proceeds to the Company from this offering , after deducting the underwriting discounts and commissions and offering expenses payable by the Company , were approximately $ 309.8 million . First Quarter 2021 Financial Results Net sales in the first quarter of 2021 were $ 111.4 million , an increase of $ 44.5 million or 66.5 % compared to the first quarter of 2020 , driven by an approximate 59.6 % increase in volume of products sold and an approximate 6.9 % increase in price / mix of products sold . The growth in volume of