Exhibit 99.1
AeroGrow Reports Results for Fourth Quarter and Year Ending March 31, 2008
| · | Revenues of $11.2 million for the quarter |
| · | Revenues of $38.4 million for the full year |
Boulder, CO - June 26, 2008 -- AeroGrow International, Inc. (NASDAQ:AERO - News) ("AeroGrow" or the "Company"), makers of the AeroGarden® line of indoor gardening products, announced results for the quarter and year ended March 31, 2008.
For the fiscal year ended March 31, 2008, AeroGrow reported revenues of $38.4 million, up from $13.1 million for the year ended March 31, 2007, an almost three times increase in revenue. This was AeroGrow’s second full year of operations since the introduction of the first AeroGardens in March 2006. AeroGrow reported a net loss for the year of $9.8 million, or ($0.84) per share, down from a loss of $10.4 million for the year ended March 31, 2007.
For the quarter ended March 31, 2008, AeroGrow reported revenues of approximately $11.2 million, an increase of 73% over the $6.4 million reported for the quarter ended March 31, 2007. For the quarter ended March 31, 2008, AeroGrow reported a net loss of $3.8 million or ($0.32) per share.
Significant events for the year include:
| · | Growth from less than 1,000 storefronts in March 2007 to more than 5,100 storefronts as of March 31, 2008, a more than five times increase. |
| · | Expansion into seven countries internationally. |
| · | Initiation of trading on the NASDAQ Capital Markets, ticker symbol AERO, on June 13, 2007. |
| · | The launch of a successful direct mail catalog channel that now mails approximately 750,000 catalogs every 45 to 60 days to customers and modeled prospects. |
| · | Seed kit, grow bulb and accessory sales increased from 13% of revenues in Fiscal 2007 to 18% for the year ended March 31, 2008, a 40% increase and evidence of strong customer acceptance and continued use. Nearly 25% of consumers in AeroGrow’s database own more than one AeroGarden. |
| · | Successful chain-wide launches at Sears, Linens ‘n Things, Bed Bath & Beyond, JCPenney and Macy’s, and successful tests at Target and leading warehouse clubs. |
| · | Expansion of the product line to include differentiated gardens with price points from $99 to $229 and the introduction and acceptance of these new products by retailers. |
“Our second full year of operations was marked by continued, substantial growth across all channels, successful penetration into new channels, dramatic expansion of our product line, and investment in improving our systems, processes and management team to capitalize on the opportunity and continue our growth,” said Jerry Perkins, CEO of AeroGrow. “In the coming year we expect storefronts to increase to more than 8,600, featuring our full line of products priced from $99 to $229, with continued and new expansion into lawn and garden, mass retail and clubs, and tests in the planning stage for grocery, drug and office supply chains.”
“While our growth was exceptional,” continued Mr. Perkins, “we did experience internal stresses as a result of that growth. We did not effectively manage to the bottom line and experienced losses higher than we expected. We have implemented significant changes across the organization to address this, including new management of our Finance Department, new financial systems and procedures, and significant logistical and product cost reductions that we believe will have a strong, bottom line impact in the coming year. Our goals for the coming year include the continued rapid growth of our business, expansion of the category, and the profitable operations of our business to ensure continued growth and success.”
The year ended March 31, 2008 represented AeroGrow's second full year of revenues from operations. The following table sets forth, as a percentage of sales, our quarterly financial results for the last 12 months of operations:
| Unaudited Quarterly Condensed Financial Information | ||||||||||||||||
| Three months ended | ||||||||||||||||
| March 31, | Dec 31, | Sept 30, | June 30, | |||||||||||||
| 2008 | 2007 | 2007 | 2007 | |||||||||||||
| Revenue ($000) | $ | 11,157 | $ | 14,638 | $ | 6,283 | $ | 6,279 | ||||||||
| Revenue | ||||||||||||||||
| Product sales- retail | 51.9 | % | 62.5 | % | 77.2 | % | 65.8 | % | ||||||||
| Product sales- direct to consumer | 44.9 | % | 34.9 | % | 22.8 | % | 34.2 | % | ||||||||
| Product sales- international | 3.2 | % | 2.6 | % | 0.0 | % | 0.0 | % | ||||||||
| Total sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
| Operating expenses | ||||||||||||||||
| Cost of revenue | 60.0 | % | 61.1 | % | 60.0 | % | 56.9 | % | ||||||||
| Research and development | 6.9 | % | 4.7 | % | 10.0 | % | 8.3 | % | ||||||||
| Sales and marketing | 44.9 | % | 34.1 | % | 50.2 | % | 46.5 | % | ||||||||
| General and administrative | 21.3 | % | 10.1 | % | 15.6 | % | 20.0 | % | ||||||||
| Total operating expenses | 133.1 | % | 110.0 | % | 135.8 | % | 131.7 | % | ||||||||
| Other (income) expense, net | 1.1 | % | 1.4 | % | 1.4 | % | 0.5 | % | ||||||||
| Loss from operations | -34.2 | % | -11.4 | % | -37.2 | % | -32.2 | % | ||||||||
Earnings Conference Call
AeroGrow will host a conference call today, Thursday, June 26, 2008, to review operational results for the three months and fiscal full year ended March 31, 2008.
The conference call is scheduled for 12:00 PM (noon) ET. To participate in the call, please dial:
| U.S. and Canada: | 1 (888) 241-0558 |
| International: | 1 (647) 427-3417 |
A replay of the call will be available within 12 hours of completion. You will be able to access it for the following 30 days through the AeroGrow website at www.aerogrow.com/investors or by phone until July 26, 2008. To access the replay by phone, please dial:
| U.S. and Canada: | 1 (888) 562-2824 |
| International: | 1 (402) 220-7739 |
| Conference ID: | 48675793 |
AEROGROW INTERNATIONAL, INC.
CONDENSED STATEMENT OF OPERATIONS
| Three months ended March 31, | Years ended March 31, | |||||||||||||||
| Revenue | 2008 | 2007 | 2008 | 2007 | ||||||||||||
| Product sales | $ | 11,156,605 | $ | 6,434,179 | $ | 38,356,677 | $ | 13,144,037 | ||||||||
| Operating expenses | ||||||||||||||||
| Cost of revenue | $ | 6,695,876 | 3,619,356 | 22,975,385 | 8,404,507 | |||||||||||
| Research and development | 772,298 | 568,760 | 2,605,112 | 2,113,255 | ||||||||||||
| Sales and marketing | 5,009,151 | 2,831,764 | 16,084,353 | 7,117,613 | ||||||||||||
| General and administrative | 2,376,175 | 1,378,373 | 6,084,728 | 4,050,312 | ||||||||||||
| Total operating expenses | 14,853,500 | 8,398,253 | 47,749,578 | 21,685,687 | ||||||||||||
| Loss from operations | (3,696,895 | ) | (1,964,074 | ) | (9,392,901 | ) | (8,541,650 | ) | ||||||||
| Other (income) expense, net | ||||||||||||||||
| Interest (income) | (13,191 | ) | (18,665 | ) | (115,070 | ) | (176,173 | ) | ||||||||
| Interest expense | 134,337 | 51,149 | 558,089 | 356,594 | ||||||||||||
| Loss on modification of debt | - | - | - | - | ||||||||||||
| Registration rights penalty | - | - | - | 1,664,380 | ||||||||||||
| Total other (income) expense, net | 121,146 | 32,484 | 443,019 | 1,844,801 | ||||||||||||
| Net loss | $ | (3,818,041 | ) | $ | (1,996,558 | ) | $ | (9,835,920 | ) | $ | (10,386,451 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.32 | ) | $ | (0.19 | ) | $ | (0.84 | ) | $ | (1.09 | ) | ||||
| Weighted average number of common | ||||||||||||||||
| shares outstanding, basic and diluted | 12,066,080 | 10,121,762 | 11,662,891 | 9,505,926 | ||||||||||||
| CONDENSED BALANCE SHEETS | ||||||||
| March 31, | March 31, | |||||||
| 2008 | 2007 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 1,559,792 | $ | 5,495,501 | ||||
| Restricted cash | 86,676 | 84,363 | ||||||
| Accounts receivable, net | 2,412,101 | 1,884,743 | ||||||
| Other receivable | 422,530 | 182,221 | ||||||
| Inventory | 4,688,444 | 3,940,614 | ||||||
| Prepaid expenses and other | 762,013 | 480,990 | ||||||
| Total current assets | 9,931,556 | 12,068,432 | ||||||
| Property and equipment, net | 1,830,646 | 909,496 | ||||||
| Other assets | ||||||||
| Intangible assets, net | 56,263 | 28,723 | ||||||
| Deposits | 101,164 | 35,155 | ||||||
| 157,427 | 63,878 | |||||||
| Total Assets | $ | 11,919,629 | $ | 13,041,806 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Current portion - long term debt | $ | 128,927 | $ | - | ||||
| Due to factor | 1,480,150 | 645,151 | ||||||
| Accounts payable | 3,023,366 | 3,192,734 | ||||||
| Accrued expenses | 2,452,025 | 1,166,485 | ||||||
| Customer deposits | 232,200 | - | ||||||
| Deferred rent | 65,037 | 53,531 | ||||||
| Total current liabilities | 7,381,705 | 5,057,901 | ||||||
| Long term debt | 129,373 | - | ||||||
| Stockholders' equity | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 12,076 | 11,065 | ||||||
| Additional paid-in capital | 44,024,559 | 37,765,003 | ||||||
| Accumulated (deficit) | (39,628,084 | ) | (29,792,163 | ) | ||||
| Total Stockholders' Equity | 4,408,552 | 7,983,905 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 11,919,629 | $ | 13,041,806 | ||||
| SALES BY CHANNEL (Unaudited) | ||||||||||||||||
| Three months ended March 31, | Years ended March 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Product Revenues | ||||||||||||||||
| Product sales- retail | $ | 5,785,315 | $ | 4,189,871 | $ | 23,910,782 | $ | 8,949,042 | ||||||||
| Product sales- direct to consumer | 5,013,133 | 2,244,308 | 13,704,717 | 4,194,995 | ||||||||||||
| Product sales- international | 358,157 | - | 741,177 | - | ||||||||||||
| Total sales | 11,156,605 | 6,434,179 | 38,356,676 | 13,144,037 | ||||||||||||
| Product Revenues | ||||||||||||||||
| Product sales- retail | 51.9 | % | 65.1 | % | 62.4 | % | 68.1 | % | ||||||||
| Product sales- direct to consumer | 44.9 | % | 34.9 | % | 35.7 | % | 31.9 | % | ||||||||
| Product sales- international | 3.2 | % | 0.0 | % | 1.9 | % | 0.0 | % | ||||||||
| Total sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
| SALES BY PRODUCT CATEGORY (Unaudited) | ||||||||||||||||
| Three months ended March 31, | Years ended March 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Product Revenues | ||||||||||||||||
| AeroGardens | $ | 8,934,286 | $ | 5,464,416 | $ | 31,540,408 | $ | 11,520,202 | ||||||||
| Seed kits and accessories | 2,222,319 | 969,763 | 6,816,269 | 1,623,835 | ||||||||||||
| Total sales | 11,156,605 | 6,434,179 | 38,356,677 | 13,144,037 | ||||||||||||
| Product Revenues | ||||||||||||||||
| AeroGardens | 80.1 | % | 84.9 | % | 82.2 | % | 87.6 | % | ||||||||
| Seed kits and accessories | 19.9 | % | 15.1 | % | 17.8 | % | 12.4 | % | ||||||||
| Total sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||