QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to |
(State of other jurisdiction of incorporation) | (IRS Employer ID No.) |
Title of each class | Trading symbol | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ☐ | ☒ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page No. | ||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities | |||||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
Notes receivable, current, net of allowance for credit losses of $ | |||||||||||
Inventory | |||||||||||
Prepaid income taxes | |||||||||||
Prepaids and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating leases right-of-use assets | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES & STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Payroll and payroll tax liabilities | |||||||||||
Customer deposits | |||||||||||
Sales tax payable | |||||||||||
Current maturities of lease liability | |||||||||||
Current portion of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Commitments and contingencies (Note 12) | |||||||||||
Operating lease liability, net of current maturities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock; $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings (deficit) | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Store operations and other operational expenses | ||||||||||||||||||||||||||
Selling, general, and administrative | ||||||||||||||||||||||||||
Bad debt expense | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Impairment loss | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Income (Loss) from operations | ( | ( | ( | ( | ||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
Total non-operating income (expense), net | ||||||||||||||||||||||||||
Net income (loss) before taxes | ( | ( | ( | ( | ||||||||||||||||||||||
Benefit (provision) for income taxes | ( | |||||||||||||||||||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net income (loss) per share, basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net income (loss) per share, diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Weighted average shares outstanding, basic | ||||||||||||||||||||||||||
Weighted average shares outstanding, diluted |
Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Total Stockholders’ Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balances, June 30, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Common stock issued for share based compensation | — | — | — | — | |||||||||||||||||||||||||
Common stock withheld for employee payroll taxes | — | — | ( | — | ( | ||||||||||||||||||||||||
Share based compensation | — | — | — | ||||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||
Balances, September 30, 2023 | $ | $ | $ | ( | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Total Stockholders’ Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balances, June 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Common stock issued for share-based compensation | — | — | — | — | |||||||||||||||||||||||||
Common stock withheld for employee payroll taxes | — | — | ( | — | ( | ||||||||||||||||||||||||
Share based compensation | — | — | — | ||||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||
Balances, September 30, 2022 | $ | $ | $ | ( | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Total Stockholders’ Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balances, December 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Common stock issued for share based compensation | — | — | — | — | |||||||||||||||||||||||||
Common stock withheld for employee payroll taxes | — | — | ( | — | ( | ||||||||||||||||||||||||
Share based compensation | — | — | — | ||||||||||||||||||||||||||
Noncash repurchase of liability awards | — | — | — | ||||||||||||||||||||||||||
Liability redemption associated with business acquisition | — | — | |||||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||
Balances, September 30, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Total Stockholders’ Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balances, December 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Common stock issued in connection with business combination | — | ||||||||||||||||||||||||||||
Common stock issued for share-based compensation | — | — | — | — | |||||||||||||||||||||||||
Common stock withheld for employee payroll taxes | — | — | ( | — | ( | ||||||||||||||||||||||||
Share based compensation | — | — | — | ||||||||||||||||||||||||||
Common stock issued upon cashless exercise of options | — | — | — | — | |||||||||||||||||||||||||
Common stock issued upon cashless exercise of warrants | — | — | — | — | |||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||
Balances, September 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | ( | $ | ( | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Bad debt expense | |||||||||||
(Gain) loss on asset disposition | |||||||||||
Impairment loss | |||||||||||
Deferred taxes | ( | ||||||||||
Change in value of marketable securities | ( | ||||||||||
Changes in operating assets and liabilities (net of the effect of acquisitions): | |||||||||||
Accounts and notes receivable | ( | ||||||||||
Inventory | |||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Accounts payable and accrued liabilities | ( | ||||||||||
Operating leases | |||||||||||
Payroll and payroll tax liabilities | ( | ( | |||||||||
Customer deposits | ( | ||||||||||
Sales tax payable | ( | ||||||||||
Net cash provided by (used in) operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions, net of cash acquired | ( | ( | |||||||||
Purchase of marketable securities | ( | ||||||||||
Maturities from marketable securities | |||||||||||
Purchase of property and equipment | ( | ( | |||||||||
Disposal of assets | |||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Principal payments on long term debt | ( | ( | |||||||||
Common stock withheld for employee payroll taxes | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ( | |||||||||
Net change | ( | ||||||||||
Cash and cash equivalents at the beginning of period | |||||||||||
Cash and cash equivalents at the end of period | $ | $ | |||||||||
Supplemental disclosures of non-cash activities: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | $ | $ | |||||||||
Common stock issued for business combination | $ | $ | |||||||||
Right-of-use assets acquired under new operating leases | $ | $ | |||||||||
Indemnity holdback from business acquisitions | $ | $ | |||||||||
Noncash repurchase of liability awards | $ | $ | |||||||||
Liability redemption associated with business acquisition | $ | $ | |||||||||
Purchase of property and equipment accrued in accounts payable | $ | $ |
Level | September 30, 2023 | December 31, 2022 | |||||||||||||||
Cash equivalents | 1 | $ | $ | ||||||||||||||
Marketable securities | 2 | $ | $ |
Accounts Receivable, Net | Customer Deposits | ||||||||||
Opening balance, January 1, 2023 | $ | $ | |||||||||
Closing balance, September 30, 2023 | |||||||||||
Increase (decrease) | $ | $ | |||||||||
Opening balance, January 1, 2022 | $ | $ | |||||||||
Closing balance, September 30, 2022 | |||||||||||
Increase (decrease) | $ | $ | ( |
September 30, 2023 | December 31, 2022 | ||||||||||
Vehicles | $ | $ | |||||||||
Building and land | |||||||||||
Leasehold improvements | |||||||||||
Furniture, fixtures and equipment | |||||||||||
Capitalized software | |||||||||||
Construction-in-progress | |||||||||||
Total property and equipment, gross | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Balance, beginning of period | $ | $ | |||||||||
Goodwill additions and measurement period adjustments | |||||||||||
Impairment | ( | ||||||||||
Balance, end of period | $ | $ |
Retail | E-commerce | Distribution | Total | |||||||||||
Gross carrying value at December 31, 2021 | $ | $ | $ | $ | ||||||||||
Acquisitions & measurement period adjustments | ( | |||||||||||||
Gross carrying value at December 31, 2022 | ||||||||||||||
Acquisitions & measurement period adjustments | ||||||||||||||
Gross carrying value, at September 30, 2023 | $ | $ | $ | $ | ||||||||||
Accumulated impairment losses at December 31, 2021 | $ | $ | $ | $ | ||||||||||
Impairment | ( | ( | ( | ( | ||||||||||
Accumulated impairment losses at December 31, 2022 | ( | ( | ( | ( | ||||||||||
Impairment | ||||||||||||||
Accumulated impairment losses at September 30, 2023 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Net carrying value at December 31, 2022 | $ | $ | $ | $ | ||||||||||
Net carrying value at September 30, 2023 | $ | $ | $ | $ |
Weighted-Average | ||||||||
Amortization Period | ||||||||
of Intangible Assets | ||||||||
as of September 30, 2023 | ||||||||
(in years) | ||||||||
Trade names | ||||||||
Patents | ||||||||
Customer relationships | ||||||||
Non-competes | ||||||||
Intellectual property | ||||||||
Total |
September 30, 2023 | |||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||
Trade names | $ | $ | ( | $ | |||||||||||||
Patents | ( | ||||||||||||||||
Customer relationships | ( | ||||||||||||||||
Non-competes | ( | ||||||||||||||||
Intellectual property | ( | ||||||||||||||||
Total | $ | $ | ( | $ |
December 31, 2022 | ||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Trade names | $ | $ | ( | $ | ||||||||||||||||
Patents | ( | |||||||||||||||||||
Customer relationships | ( | |||||||||||||||||||
Non-competes | ( | |||||||||||||||||||
Intellectual property | ( | |||||||||||||||||||
Total | $ | $ | ( | $ |
Retail | E-commerce | Distribution | Total | |||||||||||
Gross carrying value at December 31, 2021 | $ | $ | $ | $ | ||||||||||
Acquisitions & measurement period adjustments | ||||||||||||||
Gross carrying value at December 31, 2022 | ||||||||||||||
Acquisitions & measurement period adjustments | ||||||||||||||
Gross carrying value at September 30, 2023 | $ | $ | $ | $ | ||||||||||
Accumulated amortization at December 31, 2021 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Amortization | ( | ( | ( | ( | ||||||||||
Accumulated amortization at December 31, 2022 | ( | ( | ( | ( | ||||||||||
Amortization | ( | ( | ( | ( | ||||||||||
Accumulated amortization at September 30, 2023 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Accumulated impairment losses at December 31, 2021 | $ | $ | $ | $ | ||||||||||
Impairments | ( | ( | ( | |||||||||||
Accumulated impairment losses at December 31, 2022 | ( | ( | ( | |||||||||||
Impairments | ||||||||||||||
Accumulated impairment losses September 30, 2023 | $ | ( | $ | ( | $ | $ | ( | |||||||
Net carrying value at December 31, 2022 | $ | $ | $ | $ | ||||||||||
Net carrying value September 30, 2023 | $ | $ | $ | $ |
2023, remainder | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Operating leases right-of-use assets | $ | $ | |||||||||
Current maturities of lease liability | $ | $ | |||||||||
Operating lease liability, net of current maturities | |||||||||||
Total lease liability | $ | $ |
September 30, 2023 | September 30, 2022 | ||||||||||
Weighted average remaining lease term | |||||||||||
Weighted average discount rate | % | % |
Three Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Operating lease costs | $ | $ | |||||||||
Variable lease costs | |||||||||||
Short-term lease costs | |||||||||||
Total operating lease costs | $ | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Operating lease costs | $ | $ | |||||||||
Variable lease costs | |||||||||||
Short-term lease costs | |||||||||||
Total operating lease costs | $ | $ |
2023 (remainder of the year) | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total lease payments | |||||
Less: Imputed interest | ( | ||||
Lease Liability at September 30, 2023 | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flow from operating leases | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Restricted stock | $ | $ | $ | $ | |||||||||||||||||||
Stock options | |||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Shares | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested, December 31, 2022 | $ | ||||||||||
Granted | $ | ||||||||||
Vested | ( | $ | |||||||||
Forfeited | ( | $ | |||||||||
Nonvested, September 30, 2023 | $ |
Options | Shares | Weighted - Average Exercise Price | Weighted - Average Remaining Contractual Term | Weighted - Average Grant Date Fair Value | ||||||||||||||||||||||
Outstanding at December 31, 2022 | $ | $ | ||||||||||||||||||||||||
Granted | — | |||||||||||||||||||||||||
Exercised | ( | — | ||||||||||||||||||||||||
Forfeited or expired | — | |||||||||||||||||||||||||
Outstanding at September 30, 2023 | $ | $ | ||||||||||||||||||||||||
Vested at September 30, 2023 | $ | $ |
Warrants | Weighted Average Exercise Price | ||||||||||
Outstanding at December 31, 2022 | $ | ||||||||||
Issued | |||||||||||
Exercised | |||||||||||
Forfeited | ( | $ | |||||||||
Outstanding at September 30, 2023 | $ |
Three Months Ended | |||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||
Net income (loss) | $ | ( | $ | ( | |||||||
Weighted average shares outstanding, basic | |||||||||||
Effect of dilution | |||||||||||
Adjusted weighted average shares outstanding, dilutive | |||||||||||
Basic earnings (loss) per share | $ | ( | $ | ( | |||||||
Dilutive earnings (loss) per share | $ | ( | $ | ( |
Nine Months Ended | |||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||
Net income (loss) | $ | ( | $ | ( | |||||||
Weighted average shares outstanding, basic | |||||||||||
Effect of dilution | |||||||||||
Adjusted weighted average shares outstanding, dilutive | |||||||||||
Basic earnings (loss) per share | $ | ( | $ | ( | |||||||
Dilutive earnings (loss) per share | $ | ( | $ | ( |
Alaska | Other | Total | |||||||||
Inventory | $ | $ | $ | ||||||||
Prepaids and other current assets | |||||||||||
Furniture and equipment | |||||||||||
Operating lease right-of-use asset | |||||||||||
Operating lease liability | ( | ( | ( | ||||||||
Customer relationships | |||||||||||
Goodwill | |||||||||||
Total | $ | $ | $ |
Alaska | Other | Total | |||||||||
Cash | $ | $ | $ | ||||||||
Indemnity holdback | |||||||||||
Total | $ | $ | $ |
Alaska | Other | Total | |||||||||
Acquisition date | |||||||||||
Net sales | $ | $ | $ | ||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||
Net sales | $ | $ | $ | |||||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( | ( |
HRG | |||||
Inventory | $ | ||||
Prepaids and other current assets | |||||
Furniture and equipment | |||||
Operating lease right-of-use asset | |||||
Operating lease liability | ( | ||||
Customer relationships | |||||
Trademark | |||||
Non-compete | |||||
Goodwill | |||||
Total | $ |
HRG | |||||
Cash | $ | ||||
Indemnity stock holdback | |||||
Common stock | |||||
Total | $ |
HRG | |||||
Acquisition date | |||||
Net sales | $ | ||||
Net Income (loss) | $ | ( |
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | |||||||||||||
Net sales | $ | $ | ||||||||||||
Net income (loss) | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
Net sales | |||||||||||||||||
Retail | |||||||||||||||||
Private label sales | $ | $ | $ | $ | |||||||||||||
Non-private label sales | |||||||||||||||||
Total retail | |||||||||||||||||
E-Commerce | |||||||||||||||||
Private label sales | |||||||||||||||||
Non-private label sales | |||||||||||||||||
Total e-commerce | |||||||||||||||||
Distribution and other | |||||||||||||||||
Private label sales | |||||||||||||||||
Non-private label sales | |||||||||||||||||
Commercial fixture sales | |||||||||||||||||
Total distribution and other | |||||||||||||||||
Total net sales | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||
Net sales | ||||||||||||||
Retail | $ | $ | $ | $ | ||||||||||
E-Commerce | ||||||||||||||
Distribution and other | ||||||||||||||
Total net sales | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||
Gross profit | ||||||||||||||
Retail | $ | $ | $ | $ | ||||||||||
E-Commerce | ||||||||||||||
Distribution and other | ||||||||||||||
Total gross profit | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||
Income (Loss) from operations | ||||||||||||||
Retail | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
E-Commerce | ( | ( | ( | ( | ||||||||||
Distribution and other | ( | |||||||||||||
Total income (loss) from operations | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(000) | (000) | ||||||||||
Net income (loss) | $ | (7,349) | $ | (7,202) | |||||||
Income taxes | — | (718) | |||||||||
Interest income | — | (143) | |||||||||
Interest expense | 1 | 3 | |||||||||
Depreciation, and amortization | 4,721 | 3,875 | |||||||||
EBITDA | $ | (2,627) | $ | (4,185) | |||||||
Share based compensation (option compensation, warrant compensation, stock issued for services) | 938 | 1,291 | |||||||||
Impairment, restructuring, and other charges | 717 | — | |||||||||
Fixed asset disposal | 64 | 165 | |||||||||
Adjusted EBITDA | $ | (908) | $ | (2,729) | |||||||
Adjusted EBITDA per share, basic | $ | (0.01) | $ | (0.04) | |||||||
Adjusted EBITDA per share, diluted | $ | (0.01) | $ | (0.04) |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(000) | (000) | ||||||||||
Net income (loss) | $ | (19,182) | $ | (148,758) | |||||||
Income taxes | 93 | (2,637) | |||||||||
Interest income | — | (190) | |||||||||
Interest expense | 6 | 16 | |||||||||
Depreciation, and amortization | 12,477 | 13,164 | |||||||||
EBITDA | $ | (6,606) | $ | (138,405) | |||||||
Impairment, restructuring, and other charges | 2,215 | 127,831 | |||||||||
Share based compensation (option compensation, warrant compensation, stock issued for services) | 2,452 | 3,980 | |||||||||
Fixed asset disposal | 85 | 81 | |||||||||
Adjusted EBITDA | $ | (1,854) | $ | (6,513) | |||||||
Adjusted EBITDA per share, basic | $ | (0.03) | $ | (0.11) | |||||||
Adjusted EBITDA per share, diluted | $ | (0.03) | $ | (0.11) |
Exhibit | Exhibit Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101 | Interactive Data Files | |||||||
101.INS | XBRL Instance Document | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Definition |
* | Furnished and not filed. |
GrowGeneration Corp. | ||||||||
By: | /s/ Darren Lampert | |||||||
Darren Lampert, Chief Executive Officer (Principal Executive Officer) | ||||||||
By: | /s/ Gregory Sanders | |||||||
Gregory Sanders, Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer) |
By: | /s/ Darren Lampert | |||||||
Darren Lampert, Chief Executive Officer | ||||||||
(Principal Executive Officer) |
By: | /s/ Gregory Sanders | |||||||
Gregory Sanders, Chief Financial Officer | ||||||||
(Principal Financial Officer) |
By: | /s/ Darren Lampert | |||||||
Darren Lampert, Chief Executive Officer | ||||||||
(Principal Executive Officer) |
By: | /s/ Gregory Sanders | |||||||
Gregory Sanders, Chief Financial Officer | ||||||||
(Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
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Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit loss, current | $ 1.1 | $ 0.7 |
Notes receivable, allowance for credit loss, current | $ 1.7 | $ 1.3 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares, issued (in shares) | 61,309,456 | 61,010,155 |
Common stock, shares, outstanding (in shares) | 61,309,456 | 61,010,155 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Income Statement [Abstract] | ||||
Net sales | $ 55,678 | $ 70,850 | $ 176,430 | $ 223,710 |
Cost of sales (exclusive of depreciation and amortization shown below) | 39,490 | 52,516 | 126,816 | 163,009 |
Gross profit | 16,188 | 18,334 | 49,614 | 60,701 |
Operating expenses: | ||||
Store operations and other operational expenses | 11,930 | 13,585 | 37,165 | 41,884 |
Selling, general, and administrative | 7,582 | 8,796 | 21,923 | 28,164 |
Bad debt expense | 257 | 172 | 681 | 1,774 |
Depreciation and amortization | 4,721 | 3,875 | 12,477 | 13,164 |
Impairment loss | 0 | 0 | 0 | 127,831 |
Total operating expenses | 24,490 | 26,428 | 72,246 | 212,817 |
Income (Loss) from operations | (8,302) | (8,094) | (22,632) | (152,116) |
Other income (expense): | ||||
Other income (expense) | 954 | 34 | 3,549 | 547 |
Interest income | 0 | 143 | 0 | 190 |
Interest expense | (1) | (3) | (6) | (16) |
Total non-operating income (expense), net | 953 | 174 | 3,543 | 721 |
Net income (loss) before taxes | (7,349) | (7,920) | (19,089) | (151,395) |
Benefit (provision) for income taxes | 0 | 718 | (93) | 2,637 |
Net income (loss) | $ (7,349) | $ (7,202) | $ (19,182) | $ (148,758) |
Net income (loss) per share, basic (in dollars per share) | $ (0.12) | $ (0.12) | $ (0.31) | $ (2.45) |
Net income (loss) per share, diluted (in dollars per share) | $ (0.12) | $ (0.12) | $ (0.31) | $ (2.45) |
Weighted average shares outstanding, basic (in shares) | 61,272 | 60,855 | 61,127 | 60,771 |
Weighted average shares outstanding, diluted (in shares) | 61,272 | 60,855 | 61,127 | 60,771 |
GENERAL |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
GENERAL | GENERAL GrowGeneration Corp. (together with its direct and indirect wholly owned subsidiaries, collectively “GrowGeneration” or the “Company”) is a leading marketer and distributor of nutrients, growing media, lighting, benching and racking, environmental control systems, and other products for both indoor and outdoor hydroponic and organic gardening, including proprietary brands such as Charcoir, Drip Hydro, Power Si, MMI benching and racking, Ion lights, Harvest Company scissors, and more. Incorporated in Colorado in 2014, GrowGeneration is the largest chain of specialty retail hydroponic and organic garden centers in the U.S. As of September 30, 2023, GrowGeneration has 56 retail locations across 18 states in the U.S. The Company also operates an online superstore for cultivators at growgeneration.com, as well as a wholesale business for resellers, Horticultural Rep Group ("HRG"), and a benching, racking, and storage solutions business, Mobile Media ("MMI"). GrowGeneration also provides facility design services to commercial growers. Basis of Presentation The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“2022 Form 10-K”). There were no significant changes to the Company's significant accounting policies as disclosed in our 2022 Form 10-K. The results reported in these unaudited Condensed Consolidated Financial Statements are not necessarily indicative of results for the full fiscal year. All amounts included in the accompanying footnotes to the consolidated financial statements, except per share data, are in thousands (000). Use of Estimates Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with U.S. GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported revenues and expenses during the reporting period. Actual results could vary from the estimates that were used.
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value Measurements Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: •Level 1—Quoted prices in active markets for identical assets or liabilities. •Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. •Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgement. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable, available for sale securities, accounts payable, and all other current liabilities approximate fair values due to their short-term nature. Changes in fair value of marketable securities, principally derived from accretion of discounts, was $0.5 million and $1.0 million for the three and nine months ended September 30, 2023, and included in Other income (expense) on the Condensed Consolidated Statements of Operations. The fair value of notes receivable approximates the outstanding balance net of reserves for expected credit loss.
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RECENT ACCOUNTING PRONOUNCEMENTS |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Pronouncements From time to time, the Financial Accounting Standards Board (“FASB”) or other standard setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). The Company has implemented all new accounting pronouncements that are in effect and that may impact our financial statements. In addition to the accounting pronouncement discussed below, no other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material effect on the Company’s consolidated financial statements or disclosures. Recently Adopted Accounting Pronouncements In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326),” changing the impairment model for most financial instruments by requiring companies to recognize an allowance for expected losses based upon a company’s historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts, rather than incurred losses as required previously by the other-than-temporary impairment model. The ASU applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, available-for-sale and held-to-maturity debt securities, net investments in leases, and off-balance sheet credit exposures. ASU No. 2016-13 was effective January 1, 2020, and the Company adopted this standard effective January 1, 2023. The adoption of this standard primarily applied to the valuation of the Company’s accounts receivable. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or disclosures, and the Company’s estimate of expected credit losses as of January 1, 2023, using the expected credit loss evaluation process described above, resulted in no adjustments to the provision for credit losses and no cumulative-effect adjustment to accumulated deficit on the adoption date of the standard.
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REVENUE RECOGNITION |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregation of Revenues Net sales are disaggregated by the Company's segments, which represent its principal lines of business, as well as by the type of good or service, including sales of private label products, non-private label products or distributed brands, and sales of commercial fixtures. See Note 13, Segments, for disaggregated revenue by segment. Contract Assets and Liabilities The opening and closing balances of the Company’s customer trade receivables and customer deposit liability are as follows:
Of the total amount of customer deposit liability as of January 1, 2023, $2.9 million was reported as revenue during the nine months ended September 30, 2023. Of the total amount of customer deposit liability as of January 1, 2022, $11.1 million was reported as revenue during the nine months ended September 30, 2022.
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PROPERTY AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT
Depreciation expense for the three and nine months ended September 30, 2023 was $2.5 million and $5.8 million. Depreciation expense for the three and nine months ended September 30, 2022 was $1.7 million and $5.4 million.
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GOODWILL AND INTANGIBLE ASSETS |
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GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The changes in goodwill are as follows:
During the second quarter of 2022, the Company’s market capitalization fell below total net assets. In addition, financial performance continued to weaken during the quarter, which was contrary to prior experience. Management reassessed business performance expectations following persistent adverse developments in equity markets, deterioration in the environment in which the Company operates, inflation, lower than expected sales, and an increase in operating expenses. These indicators, in the aggregate, required impairment testing for finite-lived intangible assets at the asset group level and goodwill at the reporting unit level as of June 30, 2022. As a result, the Company performed a cash recoverability test on the following finite-lived intangible assets: customer relationships, trade names, and non-competes. For goodwill impairment testing purposes, the Company identified four reporting units, of which three were subject to a quantitative assessment. The Company determined the fair value of its reporting units using the income approach, where estimated future returns are discounted to present value at an appropriate rate of return. The Company recognized impairment losses for related to its finite-lived intangibles and goodwill on June 30, 2022 as disclosed in the table below. There were no goodwill or finite-lived intangible impairments recognized during the nine months ended September 30, 2023. The goodwill balance and impairment by segment are as follows:
A summary of intangible assets is as follows:
Intangible assets consist of the following:
Intangibles and impairment by segment are as follows:
Amortization expense for the three and nine months ended September 30, 2023 was $2.2 million and $6.9 million. Amortization expense for the three and nine months ended September 30, 2022 was $2.2 million and $7.7 million. Future amortization expense as of September 30, 2023 is as follows:
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INCOME TAXES |
9 Months Ended |
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Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the nine months ended September 30, 2023, the effective tax rate was (0.42)%, compared to 1.74% for the nine months ended September 30, 2022. The effective tax rate for each of the nine months ended September 30, 2023 and 2022 is lower than the U.S. federal statutory rate of 21.0% primarily due to the Company’s valuation allowance against deferred tax assets. As of September 30, 2023, the Company concluded that its deferred tax assets are not expected to be realizable, based on positive and negative evidence, therefore it has assigned a full valuation allowance against them. |
LEASES |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The right-of-use assets and corresponding liabilities related to the Company's operating leases are as follow:
The weighted-average remaining lease terms and weighted-average discount rates for operating leases were as follows:
Lease expense is recorded within the Company’s Condensed Consolidated Statements of Operations based upon the nature of the operating lease right-of-use assets. Where assets are used to directly serve our customers, such as retail locations and distribution centers, lease costs are recorded in Store operations and other operational expenses. Facilities and assets which serve management and support functions are expensed through Selling, general, and administrative. Additionally, the Company recorded sublease income of $0.3 million and $0.9 million for the three and nine months ended September 30, 2023, respectively, within Other income (expense) related to the sublease of a closed retail location. The components of lease expense are as follows:
Future maturities of the Company’s operating lease liabilities as of September 30, 2023:
Supplemental and other information related to leases was as follows:
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SHARE BASED PAYMENTS |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE BASED PAYMENTS | SHARE BASED PAYMENTS The Company maintains long-term incentive plans for employees, non-employee members of its Board of Directors, and consultants. The plans allow us to grant equity-based compensation awards, including stock options, stock appreciation rights, performance share units, restricted stock units, restricted stock awards, or a combination of awards (collectively, "share-based awards"). The Company accounts for share-based payments through the measurement and recognition of compensation expense for share-based awards made to employees and directors of the Company, including stock options and restricted shares. The Company also issues share-based awards in the form of common stock warrants to non-employees. The following table presents share-based award expense for the three and nine months ended September 30, 2023 and 2022:
As of September 30, 2023, the Company had approximately $4.5 million of unamortized share-based compensation for share based awards, which are expected to be recognized over a weighted average period of approximately 1.9 years. Restricted Stock The Company issues shares of restricted stock to eligible employees, which are subject to forfeiture until the end of an applicable vesting period. The awards generally vest on the first, second, third, or fourth anniversary of the date of grant, subject to the employee’s continuing employment as of that date. Restricted stock is valued using market value on the grant date. Restricted stock activity for the nine months ended September 30, 2023 is presented in the following table:
The table below summarizes all option activity under all plans during the nine months ended September 30, 2023:
A summary of the status of the Company’s outstanding stock purchase warrants for the nine months ended September 30, 2023 is as follows:
Liability Awards In August 2022, the Company issued certain stock awards classified as liabilities based on the guidance set forth at ASC 480-10-25 and ASC 718-10-25. These awards entitled the employees to receive an equity award with a specified dollar value of common stock on future dates ranging from June 15, 2023, through June 15, 2025. The awards generally vested over three years subject to the employee’s continued employment. On June 15, 2023, the three employees subject to these awards entered into new employment agreements which superseded the prior agreements and removed the liability awards from their compensation package. In accordance with ASC 718-20-35-2A through 718-20-35-9, these awards were evaluated and accounted for as modified awards. The liability of $0.7 million was relieved to additional paid-in capital and the incremental expense of $0.1 million will be recognized over the remaining term of the modified awards.
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EARNINGS (LOSS) PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE The following table sets forth the composition of the weighted average shares (denominator) used in the basic and dilutive earnings per share computation for the three and nine months ended September 30, 2023 and 2022:
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ACQUISITIONS |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS The Company's acquisition strategy is primarily to acquire (i) well-established, profitable hydroponic garden centers in markets where the Company does not have a market presence or in markets where it is increasing its market presence; and (ii) proprietary brands and private label brands. The Company accounts for acquisitions in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed are recorded in the accompanying Condensed Consolidated Balance Sheets at their estimated fair values, as of the acquisition date. For all acquisitions, the preliminary allocation of purchase price was based upon the preliminary valuation, and the Company's estimates and assumptions are subject to change within the measurement period as valuations are finalized, not to exceed one year from the acquisition date. The Company has made adjustments to the preliminary valuations of the acquisitions based on valuation analyses prepared by independent third-party valuation consultants. There have been no measurement period adjustments during the current year. During the nine months ended September 30, 2022, measurement period adjustments included increasing goodwill by $1.3 million offset with intangible assets, which resulted in an insignificant reduction in amortization expense. All acquisition costs are expensed as incurred and recorded in Selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations. Acquisitions during the nine months ended September 30, 2023 On May 23, 2023, the Company purchased substantially all of the assets of Southside Garden Supply ("Alaska"), a two-store chain of indoor/outdoor garden centers. The total consideration for the purchase of the Alaska assets was approximately $2.0 million, including $1.9 million in cash and an indemnity holdback of $0.1 million. The Alaska asset acquisition also included acquired goodwill of approximately $0.6 million, which represents the value expected to rise from organic growth and an opportunity for the Company to expand into a new market. Alaska is included in our Retail segment. Additionally, the Company made other, individually immaterial acquisitions during the nine months ended September 30, 2023. Total consideration for these purchases was approximately $1.2 million, including $1.1 million paid in cash and indemnity holdbacks of less than $0.1 million. These individually immaterial acquisitions also included aggregate acquired goodwill of approximately $0.3 million, which represents the value expected to rise from organic growth and an opportunity for the Company to expand into a new market. These acquisitions are included in our Retail segment. The table below represents the allocation of the purchase price to the acquired net assets during the nine months ended September 30, 2023.
The table below represents the consideration paid for the net assets acquired in business combinations during the nine months ended September 30, 2023.
The following table discloses the date of the acquisitions noted above and the revenue and earnings included in the Condensed Consolidated Statement of Operations for the nine months ended September 30, 2023.
The following represents the pro forma Condensed Consolidated Statement of Operations as if the acquisitions had been included in the consolidated results of the Company for the entire period for the three and nine months ended September 30, 2023, and 2022.
Acquisitions during 2022 On February 1, 2022, the Company purchased all of the assets of Horticultural Rep Group, Inc. ("HRG"), a specialty marketing and sales organization of horticultural products based in Ogden, Utah. The total consideration for the purchase of the assets of HRG was approximately $13.4 million, including $6.8 million in cash and common stock valued at $5.7 million. The asset purchase agreement also provided for an indemnity holdback to be settled in common stock of the Company valued at $0.9 million. Acquired goodwill represents the value expected to rise from organic growth and an opportunity to expand into a well-established market for the Company. HRG is included in our Distribution and other segment. The table below represents the allocation of the purchase price to the acquired net assets during the nine months ended September 30, 2022.
The table below represents the consideration paid for the net assets acquired in business combinations during the nine months ended September 30, 2022.
The following table discloses the date of the acquisition noted above and the revenue and earnings included in the Condensed Consolidated Statement of Operations for the nine months ended September 30, 2022. Revenue and earnings amounts include other proprietary brands now being included under HRG for operations.
The following represents the pro forma Condensed Consolidated Statement of Operations as if the acquisition had been included in the consolidated results of the Company for the entire period for the three and nine months ended September 30, 2022.
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Matters The Company is involved in lawsuits and claims that arise in the normal course of business, including the initiation and defense of proceedings related to contract and employment disputes. In the Company's opinion, these claims individually and in the aggregate are not expected to have a material adverse effect on its financial condition, results of operations, or cash flows. In December 2021, the Company was sued in the U.S. District Court for the Southern District of Texas related to a Promissory Note & Asset Acquisition Rights Option (“Note & Option”) with TGC Systems, LLC (“Total Grow”). The case was dismissed and the parties submitted the matter to arbitration pursuant to the arbitration clause of the Note & Option. Among other claims, Total Grow alleged that the Company was liable to Total Grow based on promissory estoppel and breach of contract for failing to consummate the acquisition of Total Grow by the Company. The Company counterclaimed for repayment of $1.5 million principal plus interest loaned by the Company to Total Grow pursuant to the Note & Option. The Company accrued a reserve of $1.5 million against the Note & Option. On July 26, 2023, the arbitrator denied all of Total Grow's claims and defenses, determined that the Company prevailed in its counterclaim, and awarded the Company an award in full settlement of the matter. The Company is in the process of attempting to collect the arbitration award from Total Grow. There can be no assurance that future developments related to pending claims or claims filed in the future, whether as a result of adverse outcomes or as a result of significant defense costs, will not have a material effect on the Company’s financial condition, results of operations, or cash flows. The Company believes that its assessment of contingencies is reasonable and that the related accruals, in the aggregate, are adequate; however, there can be no assurance that the final resolution of these matters will not have a material effect on the Company's financial condition, results of operations, or cash flows. Indemnifications In the ordinary course of its business, the Company makes certain indemnities under which it may be required to make payments in relation to certain transactions. As of September 30, 2023, the Company did not have any liabilities associated with indemnities. In addition, the Company, as permitted under Colorado law and in accordance with its amended and restated certificate of incorporation and amended and restated bylaws, in each case, as amended to date, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity. The duration of these indemnifications varies. The Company has a director and officer insurance policy that may enable it to recover a portion of any future amounts paid. The Company accrues for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. No such losses have been recorded to date.
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SEGMENTS |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENTS | SEGMENTS 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 an individual segment based on that segment's profitability. Retail – The core of the Company's business strategy is to operate the largest chain of retail garden centers in the U.S. The hydroponic retail landscape is fragmented, which has allowed us to acquire “best of breed” hydroponic retail operations and leverage efficiencies of a centralized organization. Some of our garden centers have multi-functions, with added capabilities that include warehousing, distribution, and fulfillment for the Company's online platforms and commercial customers. The retail segment also includes the Company's commercial sales organization, which is focused on selling products and services, including end-to-end solutions, for large commercial cultivators outside of the physical retail network. When commercial customers gain new cultivation licenses, they need lighting, benching, environmental control systems, irrigation, fertigation, and other products to outfit their facilities. Existing facilities also need consumable products for operations, as well as equipment updates from time to time. Commercial customers typically purchase large dollar amounts, quantities, and sizes of products. The Company offers commercial customers volume pricing, terms, and financing. E-commerce – The Company's digital strategy is primarily focused on capturing the home, craft, and commercial grower online. GrowGeneration.com offers thousands of hydroponic products, all curated by the Company's product team. GrowGeneration.com offers customers the option to have their orders shipped directly to their locations, anywhere in North America. GrowGeneration also sells its products through its distribution website, HRGdist.com, and online marketplaces such as Amazon and Walmart. 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. In March 2021, the Company purchased Charcoir, a line of premium coco pots, cubes and medium. In December 2021, the Company purchased the assets of Mobile Media, Inc., a mobile shelving and storage solutions developer and manufacturer. In February 2022, the Company purchased the assets of Horticultural Rep Group, Inc., a specialty marketing and sales organization specializing in horticultural products. These products are integrated into the Company's retail, e-commerce, and direct sales activities, and it receive incremental revenue from their sale. Disaggregated revenue by segment is presented in the following table:
Selected information by segment is presented in the following tables:
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||
Net income (loss) | $ (7,349) | $ (7,202) | $ (19,182) | $ (148,758) |
GENERAL (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“2022 Form 10-K”). There were no significant changes to the Company's significant accounting policies as disclosed in our 2022 Form 10-K. The results reported in these unaudited Condensed Consolidated Financial Statements are not necessarily indicative of results for the full fiscal year. All amounts included in the accompanying footnotes to the consolidated financial statements, except per share data, are in thousands (000).
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Use of Estimates | Use of Estimates Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with U.S. GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported revenues and expenses during the reporting period. Actual results could vary from the estimates that were used.
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New Accounting Pronouncements and Recently Adopted Accounting Pronouncements | New Accounting Pronouncements From time to time, the Financial Accounting Standards Board (“FASB”) or other standard setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). The Company has implemented all new accounting pronouncements that are in effect and that may impact our financial statements. In addition to the accounting pronouncement discussed below, no other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material effect on the Company’s consolidated financial statements or disclosures. Recently Adopted Accounting Pronouncements In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326),” changing the impairment model for most financial instruments by requiring companies to recognize an allowance for expected losses based upon a company’s historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts, rather than incurred losses as required previously by the other-than-temporary impairment model. The ASU applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, available-for-sale and held-to-maturity debt securities, net investments in leases, and off-balance sheet credit exposures. ASU No. 2016-13 was effective January 1, 2020, and the Company adopted this standard effective January 1, 2023. The adoption of this standard primarily applied to the valuation of the Company’s accounts receivable. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or disclosures, and the Company’s estimate of expected credit losses as of January 1, 2023, using the expected credit loss evaluation process described above, resulted in no adjustments to the provision for credit losses and no cumulative-effect adjustment to accumulated deficit on the adoption date of the standard.
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of impaired notes receivable |
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REVENUE RECOGNITION (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of customer trade receivables and customer deposit liability | The opening and closing balances of the Company’s customer trade receivables and customer deposit liability are as follows:
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PROPERTY AND EQUIPMENT (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property and equipment |
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill | The changes in goodwill are as follows:
During the second quarter of 2022, the Company’s market capitalization fell below total net assets. In addition, financial performance continued to weaken during the quarter, which was contrary to prior experience. Management reassessed business performance expectations following persistent adverse developments in equity markets, deterioration in the environment in which the Company operates, inflation, lower than expected sales, and an increase in operating expenses. These indicators, in the aggregate, required impairment testing for finite-lived intangible assets at the asset group level and goodwill at the reporting unit level as of June 30, 2022. As a result, the Company performed a cash recoverability test on the following finite-lived intangible assets: customer relationships, trade names, and non-competes. For goodwill impairment testing purposes, the Company identified four reporting units, of which three were subject to a quantitative assessment. The Company determined the fair value of its reporting units using the income approach, where estimated future returns are discounted to present value at an appropriate rate of return. The Company recognized impairment losses for related to its finite-lived intangibles and goodwill on June 30, 2022 as disclosed in the table below. There were no goodwill or finite-lived intangible impairments recognized during the nine months ended September 30, 2023. The goodwill balance and impairment by segment are as follows:
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Schedule of intangible assets | A summary of intangible assets is as follows:
Intangible assets consist of the following:
Intangibles and impairment by segment are as follows:
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Schedule of future amortization expense | Future amortization expense as of September 30, 2023 is as follows:
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LEASES (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of lease balances within our condensed consolidated balance sheet | The right-of-use assets and corresponding liabilities related to the Company's operating leases are as follow:
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Schedule of other information related to leases | The weighted-average remaining lease terms and weighted-average discount rates for operating leases were as follows:
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Schedule of operating lease assets | The components of lease expense are as follows:
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Schedule of operating lease liabilities maturity | Future maturities of the Company’s operating lease liabilities as of September 30, 2023:
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Schedule of Supplemental and Other Information For Leases | Supplemental and other information related to leases was as follows:
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SHARE BASED PAYMENTS (Tables) |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share-based award expense | The following table presents share-based award expense for the three and nine months ended September 30, 2023 and 2022:
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Schedule of restricted stock activity | Restricted stock activity for the nine months ended September 30, 2023 is presented in the following table:
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Schedule of stock options | The table below summarizes all option activity under all plans during the nine months ended September 30, 2023:
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Schedule of company’s outstanding stock purchase warrants | A summary of the status of the Company’s outstanding stock purchase warrants for the nine months ended September 30, 2023 is as follows:
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EARNINGS (LOSS) PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted average shares (denominator) used in the basic and dilutive earnings per share | The following table sets forth the composition of the weighted average shares (denominator) used in the basic and dilutive earnings per share computation for the three and nine months ended September 30, 2023 and 2022:
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ACQUISITIONS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of purchase price | The table below represents the allocation of the purchase price to the acquired net assets during the nine months ended September 30, 2023.
The table below represents the consideration paid for the net assets acquired in business combinations during the nine months ended September 30, 2023.
The table below represents the allocation of the purchase price to the acquired net assets during the nine months ended September 30, 2022.
The table below represents the consideration paid for the net assets acquired in business combinations during the nine months ended September 30, 2022.
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Schedule of revenue and earnings included in consolidated income statement | The following table discloses the date of the acquisitions noted above and the revenue and earnings included in the Condensed Consolidated Statement of Operations for the nine months ended September 30, 2023.
The following table discloses the date of the acquisition noted above and the revenue and earnings included in the Condensed Consolidated Statement of Operations for the nine months ended September 30, 2022. Revenue and earnings amounts include other proprietary brands now being included under HRG for operations.
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Schedule of proforma consolidated income statement | The following represents the pro forma Condensed Consolidated Statement of Operations as if the acquisitions had been included in the consolidated results of the Company for the entire period for the three and nine months ended September 30, 2023, and 2022.
The following represents the pro forma Condensed Consolidated Statement of Operations as if the acquisition had been included in the consolidated results of the Company for the entire period for the three and nine months ended September 30, 2022.
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SEGMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregation of revenues | Disaggregated revenue by segment is presented in the following table:
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Schedule of segment reporting information, by segment | Selected information by segment is presented in the following tables:
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GENERAL (Details) |
Sep. 30, 2023
store
state
|
---|---|
Accounting Policies [Abstract] | |
Number of stores | store | 56 |
Number of states in which entity operates | state | 18 |
FAIR VALUE MEASUREMENTS - Schedule of fair value of impaired notes receivable (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable securities | $ 35,203 | $ 31,852 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 16,560 | 25,087 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable securities | $ 35,203 | $ 31,852 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Change in fair value of marketable securities | $ 981 | $ 0 | |
Other Nonoperating Income (Expense) | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Change in fair value of marketable securities | $ 500 | $ 1,000 |
REVENUE RECOGNITION - Schedule of customer trade receivables and customer deposit liability (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Accounts Receivable, Net | ||
Revenue Recognition, Customer Deposits [Roll Forward] | ||
Opening balance | $ 8,336 | $ 5,741 |
Closing balance | 8,351 | 10,147 |
Increase (decrease) | 15 | 4,406 |
Customer Deposits | ||
Revenue Recognition, Customer Deposits [Roll Forward] | ||
Opening balance | 4,338 | 11,686 |
Closing balance | 4,926 | 5,390 |
Increase (decrease) | $ 588 | $ (6,296) |
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized from contract with customer liability | $ 2.9 | $ 11.1 |
PROPERTY AND EQUIPMENT - Schedule of property and equipment (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 48,021 | $ 42,267 |
Accumulated depreciation | (19,075) | (13,598) |
Property and equipment, net | 28,946 | 28,669 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 2,596 | 2,176 |
Building and land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 2,121 | 2,121 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 12,268 | 12,562 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 14,951 | 13,195 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 16,085 | 2,644 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 0 | $ 9,569 |
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 2.5 | $ 1.7 | $ 5.8 | $ 5.4 |
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2023
USD ($)
reportingUnit
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
reportingUnit
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Number of reporting units | reportingUnit | 4 | ||||
Number of reporting units subject to a quantitative assessment | reportingUnit | 3 | 3 | |||
Goodwill impairment | $ | $ 0 | $ 116,657,000 | |||
Amortization expense | $ | $ 2,200,000 | $ 2,200,000 | $ 6,852,000 | $ 7,700,000 | $ 9,761,000 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of goodwill (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Goodwill [Roll Forward] | ||
Balance, beginning of period | $ 15,978,000 | $ 125,401,000 |
Goodwill additions and measurement period adjustments | 830,000 | 7,234,000 |
Impairment | 0 | (116,657,000) |
Balance, end of period | $ 16,808,000 | $ 15,978,000 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of future amortization expense (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023, remainder | $ 2,229 | |
2024 | 8,799 | |
2025 | 8,426 | |
2026 | 3,663 | |
2027 | 1,217 | |
Thereafter | 132 | |
Total | $ 24,466 | $ 30,878 |
INCOME TAXES (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (0.42%) | 1.74% |
LEASES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
|
Leases [Abstract] | ||
Sublease income | $ 0.3 | $ 0.9 |
LEASES - Schedule of lease balances within our condensed consolidated balance sheet (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
Operating leases right-of-use assets | $ 42,316 | $ 46,433 |
Current maturities of lease liability | 8,374 | 8,131 |
Operating lease liability, net of current maturities | 36,387 | 40,659 |
Total | $ 44,761 | $ 48,790 |
LEASES - Schedule of other information related to leases (Details) |
Sep. 30, 2023 |
Sep. 30, 2022 |
---|---|---|
Leases [Abstract] | ||
Weighted average remaining lease term | 6 years 25 days | 6 years 8 months 4 days |
Weighted average discount rate | 6.00% | 5.50% |
LEASES - Schedule of operating lease assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Leases [Abstract] | ||||
Operating lease costs | $ 2,738 | $ 2,615 | $ 8,434 | $ 8,060 |
Variable lease costs | 176 | 664 | 1,466 | 2,004 |
Short-term lease costs | 98 | 69 | 241 | 306 |
Total operating lease costs | $ 3,012 | $ 3,348 | $ 10,141 | $ 10,370 |
LEASES - Schedule of future minimum rental payments (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
2023 (remainder of the year) | $ 2,797 | |
2024 | 10,519 | |
2025 | 9,694 | |
2026 | 7,844 | |
2027 | 5,446 | |
Thereafter | 17,065 | |
Total lease payments | 53,365 | |
Less: Imputed interest | (8,604) | |
Lease Liability at September 30, 2023 | $ 44,761 | $ 48,790 |
LEASES - Schedule of Supplemental and Other Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Leases [Abstract] | ||
Operating Cash Flow From Operating Leases | $ 8,321 | $ 7,692 |
SHARE BASED PAYMENTS - Schedule of share-based award expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share Based Payments and Stock Options (Details) - Schedule of share-based payment expense [Line Items] | ||||
Total | $ 938 | $ 1,291 | $ 2,452 | $ 3,980 |
Warrants | ||||
Share Based Payments and Stock Options (Details) - Schedule of share-based payment expense [Line Items] | ||||
Total | 0 | 340 | 0 | 1,019 |
Restricted stock | ||||
Share Based Payments and Stock Options (Details) - Schedule of share-based payment expense [Line Items] | ||||
Total | 938 | 951 | 2,452 | 2,902 |
Stock options | ||||
Share Based Payments and Stock Options (Details) - Schedule of share-based payment expense [Line Items] | ||||
Total | $ 0 | $ 0 | $ 0 | $ 59 |
SHARE BASED PAYMENTS - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 15, 2023
USD ($)
|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Jul. 15, 2023
employee
|
|
Share Based Payments and Stock Options (Details) [Line Items] | ||||||
Stock-based compensation expense | $ 938 | $ 1,291 | $ 2,452 | $ 3,980 | ||
Liability Awards | ||||||
Share Based Payments and Stock Options (Details) [Line Items] | ||||||
Award vesting period | 3 years | |||||
Number of employee subjected to awards | employee | 3 | |||||
Liability relieved to additional paid-in capital | $ 700 | |||||
Incremental expense | $ 100 | |||||
Option | ||||||
Share Based Payments and Stock Options (Details) [Line Items] | ||||||
Unamortized share-based compensation | $ 4,500 | |||||
Weighted average period | 1 year 10 months 24 days | |||||
Common Stock Warrants | ||||||
Share Based Payments and Stock Options (Details) [Line Items] | ||||||
Stock-based compensation expense | $ 0 | $ 340 | $ 0 | $ 1,019 |
SHARE BASED PAYMENTS - Schedule of restricted stock activity (Details) - Restricted stock |
9 Months Ended |
---|---|
Sep. 30, 2023
$ / shares
shares
| |
Shares | |
Nonvested, beginning balance (in shares) | shares | 614,875 |
Granted (in shares) | shares | 1,110,000 |
Vested (in shares) | shares | (305,167) |
Forfeited (in shares) | shares | (345,750) |
Nonvested, ending balance (in shares) | shares | 1,073,958 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 9.41 |
Granted (in dollars per share) | $ / shares | 3.77 |
Vested (in dollars per share) | $ / shares | 5.77 |
Forfeited (in dollars per share) | $ / shares | 7.01 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 5.42 |
SHARE BASED PAYMENTS - Schedule of company’s outstanding stock purchase warrants (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
$ / shares
shares
| |
Warrants | |
Outstanding, beginning balance (in shares) | shares | 32,500 |
Issued (in shares) | shares | 0 |
Exercised (in shares) | shares | 0 |
Forfeited (in shares) | shares | (32,500) |
Outstanding, ending balance (in shares) | shares | 0 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, beginning (in dollars per share) | $ / shares | $ 10.61 |
Weighted Average Exercise Price, Issued (in dollars per share) | $ / shares | 0 |
Weighted Average Exercise Price, Exercised (in dollars per share) | $ / shares | 0 |
Weighted Average Exercise Price, Forfeited (in dollars per share) | $ / shares | 10.61 |
Weighted Average Exercise Price Outstanding, ending (in dollars per share) | $ / shares | $ 0 |
EARNINGS (LOSS) PER SHARE - Schedule of weighted average shares (denominator) used in the basic and dilutive earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ (7,349) | $ (7,202) | $ (19,182) | $ (148,758) |
Weighted average shares outstanding, basic (in shares) | 61,272 | 60,855 | 61,127 | 60,771 |
Effect of dilution (in shares) | 0 | 0 | 0 | 0 |
Adjusted weighted average shares outstanding, dilutive (in shares) | 61,272 | 60,855 | 61,127 | 60,771 |
Basic earnings (loss) per share (in dollars per share) | $ (0.12) | $ (0.12) | $ (0.31) | $ (2.45) |
Dilutive earnings (loss) per share (in dollars per share) | $ (0.12) | $ (0.12) | $ (0.31) | $ (2.45) |
EARNINGS (LOSS) PER SHARE - Narrative (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Employee Stock Option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1.1 | 0.6 | 1.1 | 0.6 |
Restricted stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.6 | 0.7 | 0.6 | 0.7 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.3 | 0.3 |
ACQUISITIONS - Schedule of consideration paid (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
May 23, 2023 |
Sep. 30, 2022 |
Feb. 01, 2022 |
---|---|---|---|---|
Business Acquisition, Contingent Consideration [Line Items] | ||||
Cash | $ 3,050 | |||
Indemnity stock holdback | 147 | |||
Total | 3,197 | |||
Alaska | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Cash | 1,922 | $ 1,900 | ||
Indemnity stock holdback | 107 | 100 | ||
Total | 2,029 | $ 2,000 | ||
Other | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Cash | 1,128 | |||
Indemnity stock holdback | 40 | |||
Total | $ 1,168 | |||
HRG | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Cash | $ 6,806 | |||
Indemnity stock holdback | 875 | $ 900 | ||
Common stock | 5,710 | |||
Total | $ 13,391 |
ACQUISITIONS - Schedule of revenue and earnings included in consolidated income statement (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Acquisitions (Details) - Schedule of revenue and earnings included in consolidated income statement [Line Items] | ||
Net sales | $ 3,171 | |
Net Income (loss) | $ (69) | |
HRG | ||
Acquisitions (Details) - Schedule of revenue and earnings included in consolidated income statement [Line Items] | ||
Acquisition date | Feb. 01, 2022 | |
Net sales | $ 13,474 | |
Net Income (loss) | $ (209) | |
Alaska | ||
Acquisitions (Details) - Schedule of revenue and earnings included in consolidated income statement [Line Items] | ||
Acquisition date | May 23, 2023 | |
Net sales | $ 1,127 | |
Net Income (loss) | (52) | |
Other | ||
Acquisitions (Details) - Schedule of revenue and earnings included in consolidated income statement [Line Items] | ||
Net sales | 2,044 | |
Net Income (loss) | $ (17) |
ACQUISITIONS - Schedule of pro forma consolidated income statement (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Alaska | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net sales | $ 55,499 | $ 74,747 | $ 178,465 | $ 228,915 |
Net income (loss) | $ (7,726) | (7,193) | $ (19,217) | (148,863) |
HRG | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net sales | 80,901 | 235,443 | ||
Net income (loss) | $ (135,514) | $ (149,316) |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Loss Contingencies [Line Items] | |||
Notes receivable | $ 0 | $ 1,214 | |
Notes receivable, allowance for credit loss, current | 1,700 | $ 1,300 | |
Grow Generation Corp. vs TGC Systems, LLC | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Notes receivable | $ 1,500 | ||
Notes receivable, allowance for credit loss, current | $ 1,500 |
SEGMENTS - Schedule of segment information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Segment Reporting Information [Line Items] | ||||
Net sales | $ 55,678 | $ 70,850 | $ 176,430 | $ 223,710 |
Gross profit | 16,188 | 18,334 | 49,614 | 60,701 |
Income (Loss) from operations | (8,302) | (8,094) | (22,632) | (152,116) |
Retail | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 41,397 | 47,948 | 127,715 | 167,598 |
Gross profit | 10,747 | 10,354 | 33,005 | 41,448 |
Income (Loss) from operations | (7,584) | (23,653) | (21,206) | (137,939) |
E-Commerce | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2,760 | 3,073 | 9,755 | 12,036 |
Gross profit | 885 | 826 | 2,566 | 3,280 |
Income (Loss) from operations | (754) | (2,830) | (1,682) | (11,869) |
Distribution and other | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 11,521 | 19,829 | 38,960 | 44,076 |
Gross profit | 4,556 | 7,154 | 14,043 | 15,973 |
Income (Loss) from operations | $ 36 | $ 18,389 | $ 256 | $ (2,308) |
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