GrowGeneration Corp.

Good morning. My name is Joanna, and I will be your conference operator today. At this time, I would like to welcome everyone to the Growth Generation Fourth Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two. Thank you. Mr. Michael Salaman, you may begin your conference.

Thank you. Good morning. My name is Michael Salaman, co-founder and president of Grow Generation. At this time, I would like to welcome everyone to the Grow Generation fourth quarter and full year 2020 earnings conference call. With me this morning is Darren Lampert, our CEO, co-founder, Monty Lammaretto, our CFO, and Tony Sullivan, our chief operating officer, who will all be participants on our call this morning. After our management remarks, there will be an analyst Q&A session. As always, we expect to make forward-looking statements this morning, but I want to caution you that our actual results could differ materially from what we say here. Such statements can be identified by terms such as believe, expect, intend, and may. You should not place undue reliance on forward-looking statements as actual results may differ materially from these forward-looking statements. and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued yesterday as well as risks and uncertainties included in the section under the caption risk factors and management discussion and analysts of financial condition and results of operations in our annual report on Form 10-K, filed with the SEC, and any subsequent Form 10-Qs and Form 8-Ks filed with the SEC. Following prepared remarks today, we will open the call for questions. I also remind everyone that today's call is being recorded and an archived version will be available on our website later today. The hydroponic industry that we serve has gone through monumental changes in 2020 and 2021. Legislation is opening more states to grow more plants on the national level. All eyes are focused on Washington as they seem to be making it easier for people to cultivate plants legally and obtain the ability to bank safely and nationally. These actions will help contribute to statewide economies providing jobs and revenues going forward. GrowGeneration sells products for the growers from small craft growers to large MSOs to build sustainable, standardized, and profitable hydroponic operations. Our leadership in the industry comes from our relentless focus on customer service, delivering end-to-end solutions for large commercial operators. We lead by having fully stocked hydroponic garden centers, investments in technology, Supply Chain, Omnichannel Solutions, and the employment of the largest contingent of GrowPro professionals. GrowGen's multi-sales channel platform focused on the acquisitions of the best of breed hydroponic operations and delivering end-to-end solutions for our commercial customers is working as we continue to grow our business with a relentless focus on execution, and Financial Discipline. I will now turn the call over to Darren who will present our full year 2020 results. Darren. Thank you, Michael.

Good morning and welcome to our full year 2020 earnings call. Before I begin with my prepared remarks, I would like to thank each and every one of our staff and customers for their hard work, dedication and loyalty. I also would like to take this time to thank Monty Lammaretto, for his service, hard work, and dedication as our CFO who is retiring at the end of Q1 2021. The company has announced Jeffrey Lasher as Monty's successor, who brings many years of public company CFO experience at both West Marine and Crocs. BroGen has had a transformational year in 2020. As we continue to outpace our guidance, we are increasing fiscal year 2021 revenue guidance to $415 million to $430 million and increasing adjusted EBITDA guidance for 2021 to $48 million to $51 million. The company is providing first quarter 2021 revenue and adjusted EBITDA guidance of $86 to $88 million and $9 million to $9.5 million respectively. The company is also increasing its guidance to reach over $60 million to $31 million and over 100 garden centers by 2023. The company generated revenues of almost $200 million in 2020, 143% increase year over year with a 63% increase in same store sales. Adjusted EBITDA was 19.2 million for full year 2020 versus 5.3 million for full year 2019, an increase of 264% year over year were 44 cents per share basic for full year 2020 versus 16 cents per share basic for the same period last year. We added 14 new so far in 2020 to our now 52 hydroponic garden centers across 12 states. Today, we have over 100,000 walk-in customers per month to our hydroponic garden centers. Our e-commerce channel grew over 123%. and our commercial division, now over 49 million in sales, grew at 188%. Our private label initiative is now well over 10 million in purchasing in the first quarter of 2021. We plan to derive a projected 10% of revenue from our . We acquired two of our industry's top selling product brands in Charcor. Both of these proprietary brands are expected to contribute well over $10 million each in revenue in 2021. In addition, on March 19th, 2021, the company purchased the business-to-business ERP platform, agron.io, a leading agricultural portal that allows commercial growers to manage their purchasing and logistics in one platform. Our best-in-class staff is now close to 600, with over 500 of our teammates experienced GrowPros. We have created the largest sales team of hydroponic product specialists in the country. Our steadfast focus on rapid strategic growth in key markets, both organically and through acquisitions, has resulted in our record revenues in EBITDA. With 800,000 square feet of retail and warehouse space, GrowGen is building the largest super hydroponic garden centers in the U.S., that service commercial, retail, and craft growers. Income from store operations was $32.3 million for full year 2020 versus $11.9 million for the same period last year, an increase of 171% year over year. Income from store operations as a percentage of revenue was 16.7% for the full year 2020 compared to 14.9% for the same period last year. Our commercial revenues for the full year were $49 million, 188% increase year-over-year, and our e-commerce revenue finished 2020 at $10.6 million, an increase of 123%. Our online division transactions were up almost three times to over 17,000 transactions, compared to 6,300 in 2019, and attracted over 1.2 million in unique visitors to growgeneration.com. We continue to focus on margin expansion strategies that include furthering the deployment of more private label products, acquisitions of proprietary products, and driving more efficiency at the purchasing level as we continue to scale and grow top line revenue. Store operating costs as a percentage of sales was 9.7% for full year 2020 compared to 12.7% for the same period last year, an improvement of 24% year over year. Corporate payroll and general and administrative expenses, excluding non-cash operating expenses as a percentage of revenue is 7% for full year 2020 versus 8.5% for the same period last year. We expect new acquisitions and new store openings to continue through the remainder of 2021 and continue to drive growth and help us to achieve our planned 60 plus locations in 2021. GROGEN has a tremendous team of essential employees who have made a commitment to our company and customers, and I cannot be any prouder. I'm inspired by their efforts and dedication that they have worked tirelessly to service our customers and communities. I will now turn the call over to Tony Sullivan, our Chief Operating Officer, who will brief everyone on our key operating initiatives executed in the full year 2020, and then to our CFO, Monty Lammaretto, who will provide more financial details on our full year 2020 year results. Tony?