Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) released financial results for its second quarter ended June 30, 2022, revealing net sales decreased 27% to $97.5 million compared to $133.8 million in Q2 2021.
Q2 2022 Financial Highlights vs. Prior Year Period:
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Gross profit decreased 75% to $7.3 million compared to $29.6 million.
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Net loss was $(203.3) million, or $(4.53) per diluted share, compared to net income of $2.3 million, or $0.05 per diluted share. Net loss in the second quarter of 2022 included a non-cash charge of $189.6 million in goodwill impairment and a $10.2 million inventory reserve.
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Adjusted EBITDA decreased to $(6.8) million compared to $16.2 million.
Bill Toler, chairman and CEO of Hydrofarm, stated, “Our second quarter results reflect the ongoing impact of the hydroponic industry recession in the U.S. and Canada. Nonetheless, we took positive steps to lower our cost structure and maintain a solid liquidity position."
Balance Sheet and Liquidity
As of June 30, 2022, the company had $27.4 million in cash, cash equivalents and restricted cash, an aggregate principal amount of debt outstanding of $126.7 million, $15.3 million in contingent payments and approximately $70 million of available borrowing capacity under its revolving credit agreement. The company decreased its net debt by approximately $14.1 million during the second quarter by improving its working capital position and controlling costs.
Full Year 2022 Outlook:
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Net sales of approximately $330 million to $347 million.
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Adjusted EBITDAof $(25) million to $(16) million.
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Photo by Giorgio Trovato on Unsplash
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