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HYDROFARM®Ⓡ Hydrofarm Holdings Group Announces Third Quarter 2021 Results November 11 , 2021 Company Reiterates Updated Full Year 2021 Outlook FAIRLESS HILLS , Pa . , Nov. 11 , 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 third quarter ended September 30 , 2021 . Third Quarter 2021 Highlights vs. Prior Year Period : • Net sales increased 28.1 % to $ 123.8 million compared to $ 96.7 million . • Gross profit increased 64.9 % to $ 30.0 million , or 24.2 % of net sales , compared to $ 18.2 million , or 18.8 % of net sales . • Net income attributable to common stockholders was $ 17.3 million or $ 0.37 per diluted share , compared to $ 2.0 million or $ 0.08 ( 1 ) per diluted share . Pro forma adjusted net income ( 2 ) was $ 7.7 million or $ 0.17 per pro forma diluted share , compared to $ 4.3 million or $ 0.13 per pro forma diluted share . ● Adjusted EBITDA ( 2 ) increased 116.7 % to $ 16.1 million compared to $ 7.4 million . • Completed two acquisitions during the quarter : Aurora Innovations and Greenstar Plant Products . Recent Developments : • Closed on new $ 125 million Senior Secured Term Loan Facility . • Completed one acquisition : Innovative Growers Equipment and related entities ( " IGE " ) . Reaffirm Full Year 2021 Outlook vs. Prior Year : • Net sales growth of 37 % to 43 % , or approximately $ 470.0 million to $ 490.0 million . • Adjusted EBITDA ( 2 ) of $ 47.0 million to $ 53.0 million , or approximately 10 % to 11 % of net sales . • Pro Forma ( 3 ) net sales of $ 580.0 million to $ 600.0 million ; Pro Forma Adjusted EBITDA ( 3 ) of $ 85.0 million to $ 95.0 million . ( 1 ) Net income attributable to common stockholders after adjustment for assumed conversions of $ 0.2 million . ( 2 ) 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 the release . Note that Pro Forma Adjusted Net Income is pro forma as if our Initial Public Offering ( IPO ) had occurred at the beginning of each period presented . Please see the " Non - GAAP Financial Measures " for definitions used herein . ( 3 ) Pro Forma net sales and Pro Forma Adjusted EBITDA assumes that all five acquisitions had occurred on January 1 , 2021 . Bill Toler , Chairman and Chief Executive Officer of Hydrofarm , said , “ During the third quarter , we grew our top line by over 28 % and improved gross profit by over 540 basis points year - over - year . We also benefited from a reconfiguring of our product portfolio driven by this year's M & A activity , as over 76 % of our sales now come from our proprietary and preferred brands compared to approximately 65 % last year , contributing to a 117 % improvement in Adjusted EBITDA . " Mr. Toler added , " Looking ahead , as we have previously noted we continue to expect the agriculture oversupply that has put downward pressure on cannabis growing activity , predominantly in California and Canada , to impact results for the balance of the year . This is reflected in our recently updated 2021 guidance , which , despite the near - term challenges , projects full - year organic growth of 18 % to 23 % , above our long - term 15 % historical baseline growth , in addition to M & A growth of 19 % to 20 % . We would also note that the midpoint of our outlook implies 2 - year growth of over 75 % or an approximately 32 % 2 - year compound annual organic growth rate . " Mr. Toler concluded , " All in all , we believe our long - term growth algorithm remains intact and that we are uniquely positioned to capitalize on the unprecedented longer - term expansion of Controlled Environment Agriculture . " Recent Developments Senior Secured Term Loan On October 25 , 2021 , the Company also entered into a new $ 125.0 million senior secured term loan facility ( the " Term Loan " ) . The Term Loan bears interest at a rate of either LIBOR ( with a 1.00 % floor ) plus 5.50 % , or an alternate base rate ( with a 2.00 % floor ) plus 4.50 % , and matures on October 25 , 2028. The Company used a portion of the net proceeds from the Term Loan to fund the cash portion of the IGE purchase price and to repay the outstanding balance under the Company's existing revolving credit facility . Acquisition of Innovative Growers Equipment On November 1 , 2021 , the Company completed the acquisition of Innovative Growers Equipment , Inc. and related entities ( " IGE " ) , an Illinois - based manufacturer of horticulture benches , racking and LED lighting systems . IGE also has a commercial equipment product range that will complement