Three months ended June 30, -------------------- 2008 2007 --------- --------- Revenue Product sales - retail 39.3% 65.8% Product sales - direct to consumer 49.7% 34.2% Product sales - international 11.0% 0.0% --------- --------- Total sales 100.0% 100.0% Operating expenses Cost of revenue 54.9% 56.9% Research and development 10.8% 8.3% Sales and marketing 51.3% 46.5% General and administrative 22.6% 20.0% --------- --------- Total operating expenses 139.6% 131.7% --------- --------- Other (income) expense, net 2.3% 0.5% Loss from operations -41.9% -32.2% ========= =========Earnings Conference Call AeroGrow will host a conference call today, Thursday, August 7, 2008, to review operational results for the quarter ended June 30, 2008. The conference call is scheduled for 12:00 PM ET. To participate in the call, please dial:
U.S. and Canada: 1 (888) 241-0558 International: 1 (647) 427-3417A 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 September 7, 2008. To access the replay by phone, please dial:
U.S. and Canada: 1 (800) 695-1018 International: 1 (402) 220-1753 Conference ID: 58135575
CONDENSED STATEMENT OF OPERATIONS Three months ended June 30, ---------------------------- 2008 2007 ------------- ------------- Revenue Product sales $ 6,720,081 $ 6,278,685 Operating expenses Cost of revenue $ 3,686,823 $ 3,575,276 Research and development 725,415 521,819 Sales and marketing 3,449,883 2,920,987 General and administrative 1,518,712 1,255,008 ------------- ------------- Total operating expenses 9,380,833 8,273,090 ------------- ------------- Loss from operations (2,660,752) (1,994,405) Other (income) expense, net Interest (income) (1,050) (37,859) Interest expense 157,647 66,184 Loss on modification of debt - - Registration rights penalty - - ------------- ------------- Total other (income) expense, net 156,597 28,325 ------------- ------------- Net loss $ (2,817,349) $ (2,022,730) ============= ============= Net loss per share, basic and diluted $ (0.23) $ (0.18) ============= ============= Weighted average number of common shares outstanding, basic and diluted 12,100,387 11,085,389 ============= ============= CONDENSED BALANCE SHEETS June 30, 2008 ------------- ASSETS Current assets Cash $ 344,981 Restricted cash 473,275 Accounts receivable, net 2,419,351 Other receivable 323,451 Inventory 4,951,647 Prepaid expenses and other 730,137 ------------- Total current assets 9,242,842 Property and equipment, net 1,820,669 Other assets Intangible assets, net 132,910 Deposits 101,164 ------------- 234,074 ------------- Total Assets $ 11,297,585 ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion - long term debt $ 1,733,502 Due to factor - Accounts payable 4,275,844 Accrued expenses 2,145,248 Customer deposits 244,857 Deferred rent 35,327 ------------- Total current liabilities 8,434,778 Long term debt 1,214,507 Stockholders' equity Preferred stock - Common stock 12,100 Additional paid-in capital 44,081,632 Accumulated (deficit) (42,445,432) ------------- Total Stockholders' Equity 1,648,300 ------------- Total Liabilities and Stockholders' Equity $ 11,297,585 ============= SALES BY CHANNEL (Unaudited) Three months ended June 30, ---------------------------- 2008 2007 ------------- ------------- Product Revenues Product sales - retail $ 2,642,575 $ 4,129,853 Product sales - direct to consumer 3,339,410 2,148,832 Product sales - international 738,096 - ------------- ------------- Total sales 6,720,081 6,278,685 Product Revenues Product sales - retail 39.3% 65.8% Product sales - direct to consumer 49.7% 34.2% Product sales - international 11.0% 0.0% ------------- ------------- Total sales 100.0% 100.0% SALES BY PRODUCT CATEGORY (Unaudited) Three months ended June 30, ---------------------------- 2008 2007 ------------- ------------- Product Revenues AeroGardens $ 4,983,416 $ 5,643,885 Seed kits and accessories 1,736,665 634,800 ------------- ------------- Total sales 6,720,081 6,278,685 Product Revenues AeroGardens 74.2% 89.9% Seed kits and accessories 25.8% 10.1% ------------- ------------- Total sales 100.0% 100.0% ------------- -------------About AeroGrow International, Inc. Founded in 2002 in Boulder, Colorado, AeroGrow International, Inc. is dedicated to the research, development and marketing of the AeroGarden® line of indoor gardening products. AeroGardens feature dirt-free, aeroponic technology, allowing anyone to grow farmer's market fresh herbs, salad greens, tomatoes, chili peppers, flowers and more, indoors, year-round, so simply and easily that no green thumb is required. See www.aerogrow.com. FORWARD-LOOKING STATEMENTS "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements by Jerry Perkins, and/or the Company, statements regarding growth of the AeroGarden product line, optimism related to the business, expanding sales and other statements in this press release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including continued market acceptance of the Company's products or the need to raise additional capital. In addition, actual results could vary materially based on changes or slower growth in the kitchen garden appliance market; the potential inability to realize expected benefits and synergies; domestic and international business and economic conditions; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufacturing capacity; future production variables impacting excess inventory and other risk factors listed from time to time in the Company's Securities and Exchange Commission (SEC) filings under "risk factors" and elsewhere. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.
Contact Information: CONTACTS: Corporate John Thompson AeroGrow International, Inc. (303) 444-7755 Investor Budd Zuckerman Genesis Select Corporation (303) 415-0200