|[August 20, 2014]
GrowLife Announced Revenues of $2.3 Million for Second Quarter Ending June 30, 2014
SEATTLE --(Business Wire)--
GrowLife, Inc. (OTC: PHOT), one of the largest cultivation service
providers in the nation, reported results for the second quarter ending
on June 30, 2014. The Company recognized revenues of $2.3 million for
the quarter, and maintained a 22% gross margin for the second
consecutive quarter in 2014.
"GrowLife's strong revenue growth in the first six months of 2014
represents 159% increase over last year, and 167% gross margin lift,"
said Marco Hegyi, President of GrowLife, Inc. "While the performance of
our new streamlined business operations including our
direct-to-cultivators service remains to be fully realized, we believe
GrowLife expects to sustain its traction in the market for the rest of
Mr. Hegyi, who assumed leadership over the Company in the second quarter
2014, reduced losses by shrinking operational expenses. Under his
leadership, the Company has met market expectations with a leaner team
that pushes forward to serve customers in 17 states. Additional states
will be added by the end of the year.
"Our customers, as well as our suppliers, have responded well to our
direct-to-cultivator strategy which provides logistics and contractual
services," said Hegyi. "We've filled a void in the market by delivering
supplies and equipment necessary for the design, build out and expansion
of their facilities directly to cultivators."
Noteworthy details from today's extensive quarterly report are as
Q2 2014 Highlights
Net revenue for the three months ended June 30, 2014 increased
$1,384,000 to $2,257,000 as compared to $873,000 for the three months
ended June 30, 2013.
Gross margin was $501,000 for the three months ended June 30, 2014 as
compared to $188,000 for the three months ended June 30, 2013.
The gross margin was 22.2% for the three months ended June 30, 2014 as
compared to 21.5% for the three months ended June 30, 2013.
Net income for the three months ended June 30, 2014 was $19,232,000 as
compared to a net loss of $1,617,000 for the three months ended June
30, 2013. Net income for the three months ended June 30, 2014 included
gain on change - derivative liability of $21,197,000, offset by
non-cash expenses of $1,056,000.
Our cash used in operations for the three months ended June 30, 2014
YTD 2014 Highlights
Net revenue for the six months ended June 30, 2014 increased
$3,015,000 to $4,640,000 as compared to $1,625,000 for the six months
ended June 30, 2013.
Cost of sales for the six months ended June 30, 2014 increased
$2,424,000 to $3,620,000 as compared to $1,196,000 for the sixmonths
ended June 30, 2013.
Gross margin was $1,020,000 for the six months ended June 30, 2014 as
compared to $429,000 for the six months ended June 30, 2013. The gross
margin was 22.0% for the six months ended June 30, 2014 as compared to
26.4% for the six months ended June 30, 2013.
Net loss for the six months ended June 30, 2014 was $52,242,000 as
compared to a net loss of $2,800,000 for the six months ended June 30,
2013. The net loss for the six months ended June 30, 2014 included
non-cash expenses of $50,834,000.
Our cash used in operations for the six months ended June 30, 2014 was
GrowLife has also implemented additional changes to its business
operations that should be reflected in the September 30, 2014 quarter,
such as payroll, rent and other expense reductions, comprehensive market
coverage, and the consolidation of disparate business divisions. These
changes are critical as the Company expands to serve more customers
across the nation.
For more information about GrowLife, please visit: www.growlifeinc.com.
Additional commentary on the Company as well as the industry is also
provided on Mr.
About GrowLife, Inc.
GrowLife, Inc. (PHOT)
aims to become the nation's largest cultivation service provider for
cultivating organics, herbs and greens and plant-based medicines. Our
mission is to best serve more cultivators in the design, build-out and
expansion of their facilities with products of high quality, exceptional
value and competitive price. Through a nationwide network of local
representative, regional centers and its e-Commerce team, GrowLife
provides essential goods and services including media (farming soil),
industry-leading hydroponics equipment, plant nutrients, and thousands
more products to specialty grow operations in 17 states. GrowLife is
headquartered in Seattle, WA and was founded in 2012.
Cautionary Language Concerning Forward-Looking Statements
This release contains "forward-looking statements" that include
information relating to future events and future financial and operating
performance. The words "may," "would," "will," "expect," "estimate,"
"can," "believe," "potential" and similar expressions and variations
thereof are intended to identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future
performance or results, and will not necessarily be accurate indications
of the times at, or by, which that performance or those results will be
achieved. Forward-looking statements are based on information available
at the time they are made and/or management's good faith belief as of
that time with respect to future events, and are subject to risks and
uncertainties that could cause actual performance or results to differ
materially from those expressed in or suggested by the forward-looking
statements. Important factors that could cause these differences
include, but are not limited to: fluctuations in demand for GrowLife's
products, the introduction of new products, the Company's ability to
maintain customer and strategic business relationships, the impact of
competitive products and pricing, growth in targeted markets, the
adequacy of the Company's liquidity and financial strength to support
its growth, and other information that may be detailed from time-to-time
in GrowLife's filings with the United States Securities and Exchange
Commission. Examples of such forward-looking statements in this release
include statements regarding future sales, costs and market acceptance
of products as well as regulatory actions at the State or Federal level.
For a more detailed description of the risk factors and uncertainties
affecting GrowLife, Inc. please refer to the Company's Securities and
Exchange Commission filings, which are available at www.sec.gov.
GrowLife, Inc. undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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