Hydrofarm Holdings Group Inc 2024年度报告

W W W. H Y D R O FA R M . C O M Hydrofarm is a leading independent manufacturer anddistributor of branded hydroponic equipment and supplies forcontrolled environment agriculture. MISSION VISION Enabling growers, farmers and cultivators to achievehigher yields and greater quality, consistency,efficiency and sustainability at their farms. Bringing innovative solutions, preferred brands andgold standard service to the growing CEA market. PROPRIETARY BRANDS| 2024 Dear Shareholders: 2024 was a year of notable improvements for Hydrofarm, despitefacing industry headwinds particularly in the second half ofthe year. We successfully achieved sales within our full-yearguidance and continued our cost-saving and restructuringinitiatives, delivering ten consecutive quarters of meaningfulyear-over-year Adjusted SG&A1savings. Our strategic priority to drive sales of our higher-marginproprietary brands has yielded positive results, improvingour proprietary brand sales mix from an estimated 35% in2020 to 56% in 2024. We achieved positive Adjusted EBITDA1for the majority of quarters over the past two years, even asindustry sales have compressed. In 2024, we had strong salesperformances from select proprietary consumable brands,particularly in our grow media and nutrient product categories. Revenue diversification was another important achievement in2024, as we estimate that Hydrofarm increased sales to non-cannabis related end markets and non-U.S./Canada customers.This diversification helps balance cannabis industry fluctuationsin North America. B. John LindemanCEO We made significant progress in operational efficiency sincethe beginning of 2023, reducing our manufacturing footprintby nearly 60% and investing in productivity-enhancing capitalequipment. We’re now operating below our pre-IPO AdjustedSG&A1dollar level, which represents a remarkable achievementin cost management. Looking ahead to 2025, our strategic roadmap is clear: drivediverse, high-quality revenue streams, improve profit margins,manageour financial position,and enhance our overallcapabilities. We plan to reinvigorate our proprietary brand salesmix through targeted marketing investments, enhanced salesforce capabilities, and refined incentive structures. We are alsoworking to further optimize our distribution network, pursuecontract manufacturing opportunities, and continue reducingSG&A expenses in several areas. Continued... 1 Adjusted SG&A and Adjusted EBITDA are non-GAAP measures. For more information on the adjustments and additional reconciliations of non-GAAPmeasures to the most directly comparable GAAP financial measures, see our press release titled “Hydrofarm Holdings Group Announces Fourth Quarter andFull Year 2024 Results” dated March 5th, 2025 on our website at https://investors.hydrofarm.com/news-events/press-releases. We are focused on strategic alternatives that could enhanceshareholder value, whether through strategic combinations,acquisitions, or divestitures that conform to our priorities andstrengthen our business. I am incredibly proud of our team’s resilience and dedication.Their efforts have allowed us to navigate challenging industryconditions while continuing to build a stronger foundation forfuture growth. As a result, we remain optimistic about the long-term prospects for our industry and Hydrofarm’s future. B. John LindemanChief Executive Officer Cautionary Note Regarding Forward-Looking Statements Statements contained in this annual report, other than statements of historical fact, which address activities, events and developments that the Company expectsor anticipates will or may occur in the future, including, but not limited to, information regarding the future economic performance and financial condition of theCompany, the plans and objectives of the Company’s management, and the Company’s assumptions regarding such performance and plans are “forward-lookingstatements” within the meaning of the U.S. federal securities laws that are subject to risks and uncertainties. These forward-looking statements generally can beidentified as statements that include phrases such as “guidance,” “outlook,” “projected,” “believe,” “target,” “predict,” “estimate,” “forecast,” “strategy,” “may,” “goal,”“expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “should” or other similar words or phrases. Actual results could differ materially from the forward-lookinginformation in this release due to a variety of factors, including, but not limited to: The market in which the Company operates has been substantially adversely impacted by conditions of the agricultural and cannabis industries, including oversupplyand decreasing prices of the products the Company’s end customers sell, which, in turn, has materially adversely impacted the Company’s sales and other results ofoperations and which may continue to do so in the future; If industry conditions worsen or are sustained for a lengthy period, the Company could be