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SHOEMAKERSVILLE, Pa. - Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM), a manufacturer and distributor of hydroponics equipment currently trading at $0.62 with a market capitalization of $28.78 million, announced a reverse stock split approved by its Board of Directors, set to take effect after market close on February 12, 2025. This 1-for-10 split aims to bring the company’s common stock above the Nasdaq Capital Market’s minimum bid price requirement of $1.00 per share for continued listing.
Trading on a split-adjusted basis will commence on February 13, 2025, under the ticker HYFM. The reverse stock split will proportionally decrease the number of outstanding shares from approximately 46.1 million to 4.6 million. The authorized share count remains unchanged, and fractional shares will not be issued. Instead, shareholders will receive a cash payment for any fractional entitlement based on the closing price on February 12, 2025. According to InvestingPro, the company faces significant financial challenges, with 12 key risk factors identified in their analysis. Subscribers can access the comprehensive Pro Research Report for detailed insights into the company’s financial health.
The reverse split also affects the number of shares available under the company’s equity incentive plans and the exercise prices of outstanding stock options, restricted stock units, and performance stock units, which will be adjusted accordingly. Continental Stock Transfer and Trust Company is the designated exchange agent for this corporate action.
Hydrofarm, with over 40 years of experience, specializes in products for controlled environment agriculture, such as grow lights, climate control solutions, and nutrients. The company’s mission is to empower growers with products that enhance quality, efficiency, consistency, and speed in their cultivation projects. Recent InvestingPro data shows the company facing headwinds with a 16.9% revenue decline and a weak financial health score, though maintaining a healthy current ratio of 3.24, indicating sufficient liquid assets to meet short-term obligations.
The information provided in this article is based on a press release statement from Hydrofarm Holdings Group, Inc.
In other recent news, Hydrofarm Holdings Group Inc . reported a decrease in third-quarter net sales, with figures falling 18.8% year-over-year to $44 million. Despite this dip, the company reaffirmed its full-year 2024 guidance, anticipating net sales to decline in the low to high teens percentage range, but with expectations of positive adjusted EBITDA and free cash flow by year-end. In the same announcement, Hydrofarm disclosed a CEO transition, with Bill Toler moving to the position of Executive Chairman and John Lindeman succeeding him as CEO.
These recent developments also revealed that Hydrofarm’s proprietary brands accounted for 56% of total net sales and adjusted SG&A expenses decreased by nearly 11% from the previous year. The company also reported a sales volume decrease by 13.7% and a pricing decline of 4.9%. Despite these challenges, Hydrofarm maintains a total liquidity of over $41 million and has been profitable in five of the last six quarters.
In addition to these financial updates, Hydrofarm’s leadership provided insight into the company’s future plans. The company is optimistic about future growth, with diversification efforts increasing non-cannabis sales. Furthermore, Lindeman suggested potential further reductions in SG&A expenses in 2025, despite the challenges it might present.
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