GrowGeneration Corp.

Good morning, my name is Dennis and I'll be your conference operator today. At this time, I would like to welcome everyone to the Growth Generation First Quarter 2021 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 start then the number one on your telephone keypad. If you would like to withdraw your question, please press start then the number two. Thank you. Mr. Michael Salaman, you may begin your conference.

Good morning. My name is Michael Salaman, co-founder and president of Grow Generation. At this time, I'd like to welcome everyone to the Grow Generation first quarter 2021 earnings conference call. With me this morning is Darren Lampert, our CEO, co-founder, Jeff Lasher, our chief financial officer, 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. undue reliance on forward-looking statements. 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 analysis 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. Legislation is opening more states. to grow more plants. And at the national level, all eyes are focused on Congress and the new administration that seems to be making it easier for people to cultivate plants legally and obtain the ability to bank nationally. In the first quarter of 2021, three new states, New York, Virginia, and New Mexico, legalized cannabis for adult use, bringing the total to 18 states. What sets GrowGen apart is our focus on selection, service, and solutions for our customers. Our leadership in the industry comes from our relentless focus on customer service for all of our customers, from craft growers to delivering end-to-end solutions for large commercial operators. Controlled environment agriculture is emerging as the most efficient, sustainable, and scalable method to grow all types of plants. Controlling your environment is critical to the indoor growers' success. GrowGen continues to lead by having fully stocked hydroponic garden centers, investing in technology, supply chain, omnichannel solutions, and the employment of the largest contingent of grow pro professionals in the U.S. Our first quarter record results were achieved only through the relentless efforts of the best team of professionals in our industry. The strength of our supply chain we have built and are building and our commitment to provide the best of breed and latest innovative products to our customers so they can grow and sell the highest quality plants in the market. I will now turn the call over to Darren who will present our first quarter 2021 results. Darren.

Thank you, Michael. Good morning and welcome to our first quarter 2021 earnings call. Before I begin with my prepared remarks about the quarter, I'd like to thank each and every one of our staff and customers for their hard work, dedication, and loyalty. The company generated revenue of 90 million in the quarter, a 173% increase year over year with a 51% increase in same store sales. The company earned 10 cents per share on a record gap net income of 6.1 million. Record adjusted EBITDA was over 11 million for first quarter 2021 versus 2.4 million for first quarter 2020, an increase of 364% over the same quarter last year. As we continue to expand our operations and serve more customers, we are increasing fiscal year 2021 revenue guidance to 450 to 470 million and increasing adjusted EBITDA guidance for 2021 to 54 to 58 million. The first quarter was very busy for us, and that pace has not abated. We added 14 new locations year to date and plan to acquire at least six additional stores that represent the best in market operations. Additionally, we plan to greenfield six new locations this year in markets such as California, Mississippi, Oklahoma, New York, and New Jersey. That would bring our total location count to at least 65 at the end of 2021. and we remain on target to achieve over 100 locations by 2023. In the first quarter, we had over 100,000 walk-in customers per month to our hydroponic garden centers. Our e-commerce channel grew 126% to 4.4 million in the quarter versus 1.9 million for the same period last year. E-commerce transactions were up almost three times to over 17,000 transactions in 2020, compared to 6,300 in 2019, and attracted over 1.2 million in unique visitors to growgeneration.com. We continue to see strong growth coming from our e-commerce websites. 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 efficiencies at the purchasing level as we continue to scale and grow top line revenue. Our private label sales were 5.6 million in the first quarter 2021, representing 6.2% of our overall revenue, despite port delays and supply chain interruptions. As we have said before, we plan to derive a projected 10% of our revenue from our private label product offerings for full year 2021. Over the past six months, we acquired two of our industry's top-selling product brands, PowerSI, a salicylic acid-enriched additive, and Char-Core, the highest-grade cocoa core substrate available on the market today, with a special growing cocoa cube that is revolutionizing the growing industry. Both of these proprietary brands are now fully integrated into our supply chain and 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 website 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 over 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 revenue in EBITDA. With 900,000 square feet of retail and warehouse space, GrowGen continues to build the largest chain of Supahydroponic Garden Centers in the U.S. that service commercial, retail, and craft growers. We expect new acquisitions and new store openings to continue through the remainder of 2021 that will continue to drive growth and help us achieve our planned 65 plus locations in 2021. Progen has a tremendous team of essential employees who have made a commitment to our company and customers, and it could not be any prouder. I'm inspired by their efforts and dedication as 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 first quarter 2021, and then turn the call to our CFO, Jeff Lasher, who will provide more financial details on our first quarter 2021 results.