Quarterly report pursuant to Section 13 or 15(d)

SEGMENTS

v3.22.2
SEGMENTS
6 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract]  
SEGMENTS SEGMENTS
As discussed in Note 1, at December 31, 2021, the Company had two reportable segments which increased to three at March 31, 2022, based on quantitative and qualitative analyses. The Company now also reports E-commerce as a reportable segment. The Company has three primary reportable segments including retail operations, e-commerce and all other which includes the distribution of proprietary brands to wholesale accounts. The Company has segmented its operations to reflect the manner in which management reviews and evaluates the results of its operations. The structure reflects the manner in which the chief operating decision maker regularly assesses information for decision-making purposes, including the allocation of resources. Shared services and other corporate costs are allocated to individual segments based on that segments profitability.

Retail – As of June 30, 2022, the Company owns and operates a chain of 64 hydroponic/gardening centers focused on serving growers and cultivators. Inclusive of commercial sales organizations selling directly to customers outside of the physical retail network. Some of our garden centers have multi-functions, with added capabilities that include warehousing, distribution and fulfillment for direct shipments of products to garden center locations, pick, pack and ship for our online platforms and direct fulfillment to our commercial customers.

E-commerce – Our digital strategy is focused on capturing the home, craft and commercial grower online. GrowGeneration.com offers over 10,000 hydroponic products, all curated by our product team. GrowGeneration.com offers customers the option to have their orders shipped directly to their locations, anywhere in North America. The Company also sells and distributes product through third-party marketplaces.

Distribution and other – In December 2020, GrowGeneration purchased the business of Canopy Crop Management Corp., the developer of the popular PowerSi line of monosilicic acid products, a widely used nutrient additive for plants. On March 12, 2021, the Company purchased CharCoir, a line of premium coco pots, cubes and medium. On December 31, 2021, the Company purchased the assets of Mobile Media, Inc. (“MMI”), a mobile shelving design and build facility. On February 1, 2022, the Company purchased the assets of Horticultural Rep Group, Inc. (“HRG”), a specialty marketing and sales organization of horticultural products based in Ogden, Utah. The Company is in the process of combining the operations and management of these non-retail enterprises. The products these companies provide are integrated into our retail, e-commerce, and direct sales activities and we receive incremental gross profit from the sale of these products. The profit generated from those sales are recorded in our retail and e-commerce segments.

Selected information by segment is presented in the following tables:

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Net sales
Retail 55,354  108,911  $ 119,650  $ 190,138 
E-Commerce 3,695  11,986  8,963  17,946 
Distribution and other 12,044  4,988  24,247  7,823 
Total $ 71,093  $ 125,885  $ 152,860  $ 215,907 


Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Gross profit
Retail $ 15,601  $ 30,572  $ 31,094  $ 52,473 
E-Commerce 709  2,930  2,454  4,927 
Distribution and other 3,917  2,211  8,819  3,690 
Total $ 20,227  $ 35,713  $ 42,367  $ 61,090 
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Income (Loss) from operations
Retail $ (107,103) $ 8,647  $ (114,286) $ 14,905 
E-Commerce (8,607) (15) (9,039) 426 
Distribution and other (21,091) 977  (20,697) 2,014 
Total $ (136,801) $ 9,609  $ (144,022) $ 17,345