GrowLife Provides Mid-year Operational Update and Reaffirms Plans to Turn EBITDA Positive Before the End of 2023
GrowLife, Inc. (OTC: PHOT) (“GrowLife” or the “Company”) announced that it will deliver a mid-year shareholder update by its CEO, Dave Dohrmann, to provide context for both the recent filing of the Company’s Q1 2023 financial results and also its preliminary unaudited revenue results for Q2 2023 that ended June 30. Additionally, the Company is today providing guidance through the remainder of fiscal year 2023 and profitability goals for 2024.
The shareholder update is scheduled on Monday, August 7, 2023 at 4:30 pm ET. Those wishing to participate may register for the webinar here. Those interested in submitting a question for consideration are encouraged to email growlife@cmwmedia.com by August 4, 2023 at 12:00 pm ET. The Company hopes to answer as many questions as possible in adherence with its commitment to transparency with the investment community.
Dave Dohrmann commented:
“The first half of 2023 has been about laying the foundation for what we believe is going to be the beginning of an extended period of sequential revenue growth at GrowLife with the goal of returning to profitability by the end of 2023. This is thanks to the collective work accomplished by our excellent team across all three divisions of our wholly-owned subsidiary, Bridgetown Mushrooms.
“I am looking forward to sharing details regarding why we are so well-positioned to build on our now-strong foundation, what is driving the growth in each division of Bridgetown, and what to expect from us operationally going forward.”
The Background
In January 2023, after closing on the purchase of Bridgetown Mushrooms and refocusing GrowLife to capitalize upon the myriad of opportunities in the mushroom industry, the Company established three divisions within Bridgetown. Each division is generating revenue today and has tremendous growth potential. Here is a brief summary of each division and how each is set to expand going forward.
Bridgetown’s Three Divisions include:
Mycology Supplies
Fresh Gourmet Mushrooms
Functional Mushroom Products
Mycology Supplies – National Expansion underway with GrowGeneration
The Company is expecting significant revenue growth from its Mycology Supply division as this month it begins a nationwide rollout with its exclusive distribution partner, GrowGeneration.
GrowGen will sell Bridgetown’s proprietary substrate in all 62 GrowGen stores across the country as well as to large-scale mushroom farmers through GrowGen’s commercial sales force. This partnership will have a material impact on the Company’s financial results, while at the same time expanding its footprint to a national scale.
Fresh Gourmet Mushrooms – Regional Expansion begins in September
The Company’s fresh gourmet business will begin to expand up and down the West Coast as a result of a partnership with the largest distributor of organic produce in the Pacific Northwest. The Company expects to begin supplying fresh gourmet mushrooms to this prestigious new distributor in September. This was a hard-earned win for the Company that bested the business away from a long time incumbent vendor based on its ability to scale while also grow beautiful specialty mushrooms that are increasingly becoming consumer favorites for culinary use.
Functional Mushroom Products – Bill Walton’s WonderBar and More!
The Company’s third division, Functional Mushroom Products, has already launched a line of functional mushroom tinctures and recently launched Bill Walton’s WonderBar, the first dark chocolate bar to be infused with organic lion’s mane grown at Bridgetown’s own local farm. During 2024, Bill Walton’s WonderBar will see channel expansion to include national grocery accounts where the bars and other products will be sold in the produce sections alongside the Company’s fresh gourmet mushrooms.
As well, the Company’s Chief Product Officer, Rana DiOrio, has been creating a robust pipeline of innovative mushroom products that will roll out over the next year and beyond. While Mycology Supplies and Fresh Gourmet are largely fueling Bridgetown’s growth today and well into 2024 and 2025, the Functional Mushroom Products division will contribute meaningfully soon. Bridgetown products will contain Bridgetown mushrooms and reflect thought leadership and innovation, which is how the Company plans to competitively differentiate and elevate its brand.
First Half Operational Results and Guidance through the end of Fiscal 2023
As disclosed in the Company’s Q1 2023 filing, Bridgetown’s revenue was $79,000, and the Company anticipates that Q2 revenue will be $143,000 when it releases its audited June results.
The recently announced partnership with GrowGeneration to nationalize the Company’s distribution of mycology supplies, the imminent addition of a prominent West Coast produce distributor to materially expand the distribution of Bridgetown’s gourmet mushrooms, and the recent release of Bill Walton’s will not be reflected in the Company’s Q2 2023 financial results. The Company will realize the benefits of these milestones starting in Q3 2023 and into 2024.
The Company forecasts revenue for this current quarter ending September 30 to be in the $400,000 range, followed by another sequential rise to $750,000 in the quarter ending December 31. The Company anticipates exiting 2023 with a $3M annual run rate and gross margins in the 50% to 55% range. Furthermore, the Company reaffirms that it plans to turn EBITDA positive in December 2023.
The Big Picture for GrowLife & Bridgetown
Given the collective work of the Company’s team during the past year, it now has the product, strategic partnerships, and distribution capabilities in place to begin scaling up to a $10M annual run rate which is what current production capacity can accommodate. As well, the Company has the team in place to support this run rate, having added personnel across the organization’s three divisions to prepare for its expansion.
While all of this top line growth is vital to the health of the organization, it is important to note that the Company is being judicious regarding overall expenses by focusing on and prioritizing profitability and free cash flow in 2024 and 2025. The Company has primarily modeled the majority of its revenue over the next 18 months to come from its Mycology Supply and Fresh Gourmet divisions, with the Functional Products division providing potential upside to our forecasts. The long term target is to maintain 50% gross margins and 20 to 25% operating margins.
Corporate Updates
Finally, before the end of 2023, the Company plans to drop the GrowLife name and stock symbol to become Bridgetown with a new stock symbol that reflects its focus on the mushroom industry and enter 2024 with a public profile that represents our evolving brand. The Company believes this is the best way to detach from the legacy business and pursue our future and goal to become “America’s Mushroom Company.”
Also during the past year, the Company has assembled an outstanding new Board of Directors that will matriculate before the end of 2023, providing the corporate governance and expertise needed to oversee the projected growth. The Company will talk more about the incoming Board during next week’s shareholder update.
About GrowLife, Inc. (OTCQB: PHOT)
Founded in 2012, GrowLife, Inc. is focused on investing and operating businesses within the mushroom industry. The Company acquired Bridgetown Mushrooms in January 2023 and serves as its parent company. To learn more, please visit www.growlifeinc.com.
About Bridgetown Mushrooms
Founded in 2018 in Portland, Oregon, Bridgetown Mushrooms is currently one the largest producers of gourmet and functional mushrooms in the Pacific Northwest. Bridgetown Mushrooms grows a variety of functional and gourmet mushrooms that are distributed through multiple commercial and consumer channels. It also develops and markets mushroom-based products nationwide as well as manufactures and sells mycology supplies to meet the large and growing demand for commercial mushroom farmers across the United States. To learn more, please visit bridgetown-mushrooms.com.
Investor Relations Contact:
investors@growlifeinc.com
206-483-0059
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.
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