- GrowLife reports gross revenue of $2,244,279, as compared to revenue of $708,936 for the same period in 2018, an increase of 216%
- GrowLife focused on its solid financial execution in Q1 of 2019, which resulted in gross margin increases to over 34% from 10% in 2018, an increase of 218%
- GrowLife continues to experience growth due to the successful integration of recently acquired EZ-Clone Enterprises, Inc.
KIRKLAND, Wash. — GrowLife, Inc. (OTC: PHOT) (“GrowLife” or the “Company”), one of the nation’s most recognized indoor cultivation product and service providers, today announced financial results for the quarter ending March 31, 2019, and provided an overview of recent operational highlights from that quarter. The company experienced surging growth over last year, showing a 216% increase in revenue over Q1 2018, from $708,936 to $2,244,279. Additionally, the company better positioned itself financially though increasing its gross margins from 10% in 2018 to over 34% in Q1 2019, a 218% increase.
“I could not be more excited to share the tremendous growth that GrowLife delivered in this first quarter of 2019 as shown by the increase in revenues, paired with our over 34% gross margins, compared to last year’s 8-10%,” said GrowLife CEO Marco Hegyi. “As the cannabis and hemp industries continue to experience explosive growth across the globe, GrowLife is keeping pace with this growth, which is a positive sign for our company and our future potential. This quarter’s $2,244,279 in revenue represents nearly half of the sales generated in 2018.”
“The acquisition of EZ-Clone Enterprises proved to be a strategic and successful venture, enabling our continued growth. The renowned commercial EZ-Clone product line is experiencing heavily increased demand from both the legal cannabis and hemp industries. As we look to bring further innovation in cultivation technologies to these burgeoning markets, we utilized this quarter to create a new organizational executive leadership structure that will enable the company to successfully expand further through potential future acquisitions that strategically meet our goals of expanding GrowLife’s proprietary product offering.”
FIRST QUARTER 2019 FINANCIAL RESULTS
Net Revenue: For the period ending March 31, 2019, GrowLife showed net revenue of $2,244,279 as compared to revenue of $708,936 for the period that ended March 31, 2018, an increase of 216%.
Profit Margin: Gross Profit Margin, expressed as a percentage of the difference between revenue and cost of goods sold divided by revenue, was 34% for the period ending on March 31, 2019, compared to 10% for the period ending March 31, 2018, an increase of 218%.
Balance Sheet: Total Current Liabilities for the company were $5,419,672 as of March 31, 2019, compared to $6,787,574 as of March 31, 2018, a decrease of 20%.
FIRST QUARTER 2019 OPERATIONAL HIGHLIGHTS
During Q1 2019, GrowLife, Inc. achieved the following milestones and significant events:
EXPANDED COMMERCIAL CULTIVATOR OFFERING
GrowLife, Inc. Announces Subscription Service Launch Through E-Logistics Platform for Commercial Growers
- GrowLife announced the launch of the Company’s cloning supplies subscription service for commercial plant cultivators through its e-logistics platform as a result of increased demand for cloning supplies and to create recurring revenue for the Company.
- The Company created two subscription packages specific to the customer’s EZ-Clone unit. The packages are a turn-key solution that includes automatic shipments of all nutrients and collars needed to produce two cycles of clones in a given month.
FINANCIAL HEALTH OF COMPANY
Retirement of Over One-Half Billion Shares
- GrowLife and CANX USA, LLC, (“CANX”) completed an agreement to terminate all past agreements between the parties including that which entitled CANX to receive up to 540,000,000 shares of GrowLife Common Stock priced at $0.033 related to the exercise of Warrants.
- Existing agreements and the Warrants were terminated in exchange for a one-time lump sum issuance of $1,000,000 in PHOT common stock priced at the Feb. 7, 2019, closing price of $0.008, or 125,000,000 restricted common stock shares issued directly to CANX.
- The retirement allowed GrowLife to take a significant step towards strengthening the balance sheet.
Reported 112% Quarter-Over-Quarter Revenue Growth in Fourth Quarter and Year End 2018 Financial Results and Operational Highlights Filing
- GrowLife experienced revenue growth of 112% quarter-over-quarter and 86% year-over-year as compared to year-end 2017
- GrowLife completed the acquisition of controlling interest in EZ-Clone Enterprises, Inc., as well as the integration of assets from a commercial flooring company and of GoGreen Hydroponics in Los Angeles County
- GrowLife launched a proof-of-concept study on a proprietary vertical grow system, targeting a market launch in the second half of 2019
Held an Investor Conference Call on March 11, 2019, Highlighting Strong Financial Performance in 2018 and Outlined Path for Continued Growth in 2019
- GrowLife announced a scheduled investor conference call on March 11, 2019, to discuss updates on 2018’s organizational and financial highlights, recent developments and discuss the goals for the Company in 2019.
ORGANIZATIONAL TEAM CHANGES
Launched New Organizational Executive Leadership Structure Enabling Growth
- The Company announced the implementation of a new executive organizational structure that is designed for efficient integration of new acquisitions and continued growth. This new structure introduced new titles and responsibilities for GrowLife team members.
- Joe Barnes was appointed to be GrowLife’s Executive Vice-President of Sales and Marketing. In this role he leads the sales and marketing divisions of the Company.
- William Blackburn, a founder of GrowLife’s recently acquired EZ-Clone, now acts as the Executive Vice-President of Research and Development. He is tasked with further developing the Company’s proprietary product line including new EZ-Clone products and GrowLife’s commercial Vertical Growing System.
- Mark Scott remains the Chief Financial Officer for the Company as well as holds the title of Executive Vice-President of Mergers and Acquisitions. Scott oversees the financial operations of the Company with assistance from newly hired Corporate Controller Foday Dean in addition to his new role of managing negotiations and integration of future acquisition targets.
Hired National Sales Director Brian Knight to Expand Sales Program for Commercial Division Focusing on National Accounts
- The Company announced the hire of National Sales Director Brian Knight. Knight oversees the national sales team as well as the expansion of the Company’s commercial division. Knight comes to GrowLife with more than 10 years of experience working for large-scale sales organizations, such as The Home Depot. His experience will help GrowLife capitalize on the Company’s growth momentum and ensure customers continue to receive high-level customer service.
Deepened Financial Bench with Appointment of Foday Deen as Corporate Controller
- The Company announced the appointment of Foday Deen, CPA, MBA as its new Corporate Controller. This announcement came as the Company continued its rapid growth through recent acquisitions and it enabled the Company to continue its growth trajectory.
SALES EVENTS AND TRADESHOWS
Executives Attended Leading European Cannabis Conference and Gain New Insight into Global Markets and Expansion Opportunities
- GrowLife attended Spannabis, the world’s largest hemp expo in Barcelona, Spain, which provided the Company with invaluable insight into the industry’s current European market and confirmation of demand for the Company’s products worldwide.
- As the Company continues to eye global expansion, Spannabis provided valuable insight for GrowLife executives into the well-established hemp cultivation industry that continues to grow globally and the increased demand for the EZ-Clone Pro commercial product line. Additionally, the Company spent valuable time with large distributors of plant cultivation equipment who have footprints in various areas of the world and leaders who shared support for the idea of the global expansion of GrowLife and the EZ-Clone product line.
Exhibited at Lift & Co. Cannabis Business Expo in Vancouver, Canada, Where Company Supplied Licensed Cannabis Producers with Equipment
- The Company exhibited at Canada’s premier cannabis event, Lift & Co., as the country began to roll out its new adult use program. Participation at the show allowed GrowLife to showcase various products and services to licensed producers and other show participants and demonstrate how GrowLife products and services can help reduce production costs and increase quality.
- The invitation to speak on the panel came from ACG-based on Hegyi’s extensive knowledge of operations and trends within the cannabis industry.
Exhibited at Cannabis Industry’s Leading Trade Conference “Seed to Sale Show”
- The Company showcased the EZ-Clone Pro commercial propagation solution at the Seed to Sale Show in Boston, a show that is known as the cannabis industry’s most influential trade association event. The show was as an opportunity for the Company to network with prominent people and companies in the industry and acted as a platform for learning and demonstrating the latest advances in science and technology.
- GrowLife was able to educate the rapidly expanding Massachusetts cannabis market on how GrowLife and EZ-Clone stand out in the cannabis industry. Additionally, exhibiting at the show allowed the Company to form new business prospects and strengthen client relationships.
CEO Marco Hegyi Spoke on Y20 Seattle: Cannabis Panel Hosted by the Association for Corporate Growth
- Hegyi was invited to join other business leaders on the Cannabis Panel at Y20 Seattle, hosted by the Association for Corporate Growth (“ACG”). ACG has chapters worldwide and its membership is comprised of investors, executives, lenders, and advisers who support the organization’s mission of growing middle-market companies.
For more information about GrowLife, please visit the company’s website. Products can be purchased at ShopGrowLife.com. Additional commentary on the company and the industry as a whole can be found on the CEO’s blog.
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 help make our customers successful. Through a network of local representatives covering the United States and Canada, regional centers and its e-Commerce team, GrowLife provides essential goods and services including media, industry-leading hydroponics and soil, plant nutrients, and thousands more products to specialty grow operations. GrowLife is headquartered in Kirkland, Washington and was founded in 2012.
For more information, The GrowLife 2018 Stockholder Review presentation can be found on the Company’s homepage at www.GrowLifeInc.com.
Public Relations Contact:
Cassandra Dowell, 858-264-6600
Investor Relations Contact:
FORWARD LOOKING STATEMENT:
This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of GrowLife, Inc., its directors or its officers with respect to, among other things: (i) financing plans; (ii) trends affecting its financial condition or results of operations; (iii) growth strategy and operating strategy. The words may, would, will, expect, estimate, can, believe, potential and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond GrowLife, Inc.’s ability to control, and actual results may differ materially from those projected in the forward-looking statements as a result of various factors.