Revenues Reach $24.1 Million, a 250% Increase Over 2020
Net Earnings of $2.9 Million or $.25 Per Share
HENDERSON, NV – 
Financial Highlights
- $24.1 million in revenue
- $2.9 million in net income
- $0.25 basic earnings per share
- $2.9 million in cash flow provided by operations
- $3.2 million in adjusted EBITDA
- Strong margin expansion quarter over quarter
- Strong revenue growth quarter over quarter
- 4th Quarter revenues of $10.64 million surpassed a 361% growth over 4th quarter revenues in the prior year
Allan Marshall, Chief Executive Officer of Grove, stated, “Our team surpassed every internal and external projection for revenue growth, income growth, earnings per share and customer acquisition numbers. We finished the year with exceptional growth and significant momentum in the second half of the year. Our team has found a way to grow while maintaining profits in an industry that historically has not been able to produce these types of results. We enter 2022 with momentum and look to continue our outperformance in the current year.”
Andrew Norstrud, Chief Financial Officer of Grove, stated, “Cash flow quarter over quarter exceeded our projections and ended with our strongest quarter to date. The company finished the quarter with $14.5 million in cash and minimal debt that has since been paid. The balance sheet is strong with net working capital of $12.5 million and stockholders’ equity of $21.2 million. The company’s financial position strengthened every quarter and we finished with great momentum.”
Liquidity and Capital Resources
Working Capital
| As of June 30, 2021 |
As of June 30, 2020 |
|||||||
| Current assets | $ | 18,293,083 | $ | 2,649,674 | ||||
| Current liabilities | $ | 5,819,161 | $ | 3,519,434 | ||||
| Working capital | $ | 12,473,922 | $ | (869,760 | ) | |||
Cash Flows
| Years Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows provided by (used in) operating activities | $ | 2,939,306 | $ | (4,164,746 | ) | |||
| Cash flows used in investing activities | (1,281,007 | ) | (1,462,915 | ) | ||||
| Cash flows provided by financing activities | 11,988,395 | 2,817,746 | ||||||
| Net increase (decrease) in cash during period | $ | 13,646,694 | $ | (2,809,915 | ) | |||
At June 30, 2021, the Company had cash of $14,534,211 or an increase of $13,646,694 from June 30, 2020. The increase of cash provided by operating activities is primarily related to the net income and the sale of the Company common stock.
About Grove, Inc.
Grove, Inc. is in the business of developing, producing, marketing and selling quality products and end consumer products containing the industrial hemp plant extract Cannabidiol (“CBD”), as well as diversified products in other verticals. The Company sells to numerous consumer markets including the botanical, beauty care, pet care and functional food sectors. It seeks to take advantage of an emerging worldwide trend to re-energize the production of industrial hemp and to foster its many uses for consumers.
Company Contact
Andrew Norstrud
Email: investorinfo@cbd.io
Phone: (702) 332-5591
Investor Relations Contact
TraDigital IR
John McNamara
Email: john@tradigitalir.com
Phone: (917) 658-2602
Forward-Looking Statements
This press release contains statements that constitute “forward-looking statements,” including with respect to the Company’s business strategy, product development and industry trends. No assurance can be given that the offering will be completed on the terms described, or at all. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s registration statement and preliminary prospectus for the offering filed with the SEC. Copies are available on the SEC’s website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Use of Non-GAAP Financial Measures
The Company discloses and uses the above-mentioned non-GAAP financial measures internally as a supplement to GAAP financial information to evaluate its operating performance, for financial planning purposes, to establish operational goals, for compensation plans, to measure debt service capability, for capital expenditure planning and to determine working capital needs and believes that these are useful financial measures also used by investors. Non-GAAP adjusted EBITDA is defined as GAAP net income or net loss before interest, taxes, depreciation and amortization (EBITDA) adjusted for the non-cash stock compensation and stock option expense, acquisition, integration & restructuring expenses, charges and gains or losses from extinguishment of debt and other non-cash items. Non-GAAP EBITDA and non-GAAP adjusted EBITDA are not terms defined by GAAP and, as a result, the Company’s measure of non-GAAP EBITDA and non-GAAP adjusted EBITDA might not be comparable to similarly titled measures used by other companies. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flow that either excludes or includes amounts that are not normally included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP financial measures discussed above, however, should be considered in addition to, and not as a substitute for, or superior to net income or net loss as reported for GAAP on the Consolidated Statements of Operations, cash and cash flows on the Consolidated Statement of Cash Flows or other measures of financial performance prepared in accordance with GAAP, and as reflected on the Company’s financial statements prepared in accordance with GAAP. These non-GAAP financial measures are not a substitute for or presented in lieu of financial measures provided by GAAP and all measures and disclosures of financial information pursuant to GAAP should be read to obtain a comprehensive and thorough understanding of the Company’s financial results. The reconciliations of non-GAAP EBITDA and non-GAAP adjusted EBITDA to GAAP operating income (loss) and/or GAAP net income (net loss) referred to in the highlights or elsewhere are provided in the schedules that are a part of this document.
| Reconciliation of Non-GAAP Adjusted EBITDA to GAAP Net Income (Net Loss) | ||||||||
| Year Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Net income (Net loss) GAAP | $ | 2,978,948 | $ | (5,383,673 | ) | |||
| Income tax | (1,282,815 | ) | – | |||||
| Interest expense, net | 530,449 | 138,406 | ||||||
| Depreciation and amortization | 1,030,021 | 611,346 | ||||||
| Stock compensation | 738,932 | 372,770 | ||||||
| Impairment of lease cancellation | – | 588,347 | ||||||
| Gain on lease settlement | (387,860 | ) | – | |||||
| Gain on SBA PPP loan extinguishment | (403,277 | ) | – | |||||
| Gain on sale of asset | (8,708 | ) | (180,211 | ) | ||||
| Non-GAAP adjusted EBITDA | $ | 3,195,690 | $ | (3,853,015 | ) | |||
Grove Inc
Consolidated Balance Sheets
| June 30, | June 30, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 14,534,211 | $ | 887,517 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $57,500 and $10,000, respectively | 1,277,662 | 165,147 | ||||||
| Inventory | 2,094,952 | 1,448,448 | ||||||
| Prepaid expenses and other current assets | 386,258 | 148,562 | ||||||
| Total current assets | 18,293,083 | 2,649,674 | ||||||
| Property and equipment, net | 2,832,400 | 1,687,273 | ||||||
| Intangible assets, net | 1,845,166 | 1,240,260 | ||||||
| Goodwill | 2,413,813 | 493,095 | ||||||
| Deferred tax asset | 1,403,591 | – | ||||||
| Other assets | 49,068 | 37,068 | ||||||
| Right-of-use asset | 417,443 | 294,835 | ||||||
| Total other assets | 8,961,481 | 3,752,531 | ||||||
| Total assets | $ | 27,254,564 | $ | 6,402,205 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 1,604,723 | $ | 484,333 | ||||
| Accrued compensation | 1,020,936 | 195,399 | ||||||
| Deferred revenue | 485,973 | 473,320 | ||||||
| Accrued liabilities | 296,021 | 221,664 | ||||||
| Acquisition payable | 1,764,876 | – | ||||||
| Current portion of notes payable | 447,100 | 183,595 | ||||||
| Convertible notes payable | – | 1,500,000 | ||||||
| Current portion of operating lease payable | 199,532 | 461,123 | ||||||
| Total current liabilities | 5,819,161 | 3,519,434 | ||||||
| Notes payable, net of current portion | – | 365,350 | ||||||
| Operating lease payable, net of current portion | 217,430 | 338,040 | ||||||
| Total long-term liabilities | 217,430 | 703,390 | ||||||
| Commitments and contingencies | – | – | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $0.001 par value, 100,000,000 shares authorized, and 500,000 and 0 shares issued and outstanding, respectively | 500 | – | ||||||
| Common stock, $0.001 par value, 100,000,000 shares authorized, and 15,262,394 and 10,222,223 shares issued and outstanding, respectively | 15,262 | 10,223 | ||||||
| Additional paid in capital | 25,372,247 | 7,314,341 | ||||||
| Accumulated deficit | (4,170,036 | ) | (7,098,984 | ) | ||||
| Total stockholders’ equity attributable to Grove, Inc. | 21,217,973 | 225,580 | ||||||
| Non-controlling interest in subsidiary | – | 1,953,801 | ||||||
| Total stockholders’ equity | 21,217,973 | 2,179,381 | ||||||
| Total liabilities and stockholders’ equity | $ | 27,254,564 | $ | 6,402,205 | ||||
Grove Inc.
Consolidated Statements of Operations
| Year Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Revenue | ||||||||
| Product revenue | 24,095,025 | 6,159,013 | ||||||
| Trade show revenue | – | 1,253,847 | ||||||
| 24,095,025 | 7,412,860 | |||||||
| Product costs | 12,196,123 | 4,280,909 | ||||||
| Trade show costs | – | 561,988 | ||||||
| 12,196,123 | 4,842,897 | |||||||
| Gross profit | 11,898,902 | 2,569,963 | ||||||
| Operating expenses | ||||||||
| Sales and marketing | 2,388,211 | 1,370,964 | ||||||
| General and administrative expenses | 8,083,954 | 6,037,329 | ||||||
| 10,472,165 | 7,408,293 | |||||||
| Income (loss) from operations | 1,426,737 | (4,838,330 | ) | |||||
| Other expense (income), net | ||||||||
| Interest expense (income), net | 530,449 | 138,406 | ||||||
| Gain on sale of assets | (8,708 | ) | (180,211 | ) | ||||
| Gain on SBA PPP loan extinguishment | (403,277 | ) | – | |||||
| Settlement of cancelled lease | (387,860 | ) | – | |||||
| Impairment of cancelled lease expense | – | 588,347 | ||||||
| Other expense (income), net | (269,396 | ) | 546,542 | |||||
| Income (loss) before income tax | 1,696,133 | (5,384,872 | ) | |||||
| Income tax benefit (expense) | 1,282,815 | – | ||||||
| Net income (loss) | 2,978,948 | (5,384,872 | ) | |||||
| Net loss attributable to noncontrolling interest | – | (1,199 | ) | |||||
| Deemed dividend related to the issuance of Series A Preferred Stock | (50,000 | ) | – | |||||
| Net income (loss) attributable to Grove, Inc. | $ | 2,928,948 | $ | (5,383,673 | ) | |||
| Basic income (loss) per share | $ | 0.25 | $ | (0.53 | ) | |||
| Diluted income (loss) per share | $ | 0.21 | $ | (0.53 | ) | |||
| Weighted average shares outstanding | 11,930,378 | 10,097,075 | ||||||
| Fully diluted weighted average shares outstanding | 14,257,934 | 10,097,075 | ||||||