Company Overview
AeroGrow is the manufacturer and marketer of the AeroGarden line of indoor gardens for consumer markets worldwide.
Just two years after product launch, the AeroGarden line sells through more than 4,800 retailers worldwide, including Bed, Bath & Beyond, Linens ‘n Things, Target and Sears; through numerous national catalogers like Frontgate and Skymall; through TV home shopping networks including QVC; and direct-to-the-consumer through our own catalog, the web, and through TV commercials and infomercials.
All of our gardening products feature our proprietary aeroponic technology which allows consumers to garden indoors, year round, with no dirt, no weeds and no green thumb needed. AeroGardens are complete indoor gardening systems with built in, full spectrum grow lights, custom time-release nutrients, auto-feed, water and lighting systems, and “smart garden” consumer alerts for guaranteed success. 11 patents have been filed to protect the technologies.
These unique features have helped establish the AeroGarden as an entirely new product category in culinary, home electronics, gardening, and home and office décor. The wide ranging demographics of AeroGarden buyers mean that we can reach our target consumers through a broad spectrum of retail channels, with more than 8,600 retail storefronts targeted for December, 2008.
Since launching our first product in March 2006 we have sold more than 400,000 AeroGardens and have expanded our product line to include multiple gardens with different form factors, price points and consumer benefits.
AeroGrow also develops, manufactures and markets a variety of consumable products for use in its gardens. These seed kits, lights, nutrients and accessory products provide ongoing, repeat sales to the Company and generate continued engagement and interest from our user base. These repeat sales now account for approximately 20% of corporate revenues.
AeroGrow was founded in July 2002, became a publicly-traded company on February 24, 2006, and began trading on the NASDAQ capital markets on June 13, 2007. AeroGrow is headquartered in Boulder, Colorado and employs approximately 100 people.
Investment Highlights
First-to-market, 16 patents pending
3 years in development converting NASA proven aeroponics into a simple, low-cost product for the mass consumer market
193% revenue growth
Significant annual revenue growth (year ended March 31, 2008 over prior year)
Multi-channel distribution strategy
More than 9,000 retail storefronts nationwide including Target, Kohl’s, Sears, JCPenney, Bed Bath & Beyond, Macy’s, Costco and Sam’s
National catalogers including Frontgate, Brookstone, Gardener’s Supply Company and more
Infomercials and television commercials
Direct response and web
Other retail channels including Housewares, Lawn and Garden, Hydroponic and more
International expansion into Europe and Australia
Ongoing recurring revenues
Each sale of an AeroGarden presents the opportunity for recurring sales of Seed Kits, nutrients and lights
Expanding Seed Kit line with more than 50 Seed Kits available, including: Salad Greens, Cherry Tomatoes, Chili Pepper, Gourmet Herb, International Basil, Cascading Petunias, Italian Herb and Green Beans
Seed Kits and accessories equal approximately 20% of sales
Experienced management team
Experience in building highly successful consumer product companies from the ground up
Extensive media coverage
Television – CNBC, Good Morning America, HGTV, The Today Show, The Ellen DeGeneres Show, The View and more
Print – Reader’s Digest, Time Magazine, The New York Times, Redbook, Prevention Magazine and hundreds more
Management
Michael Bissonnette
Founder
Michael Bissonnette has over 25 years of hands-on, battlefield-proven, entrepreneurial experience in the funding, development and marketing of revolutionary, technology-based consumer products. Michael has built three consumer product companies from conception into multi-million dollar businesses - two became sizeable national and international corporations. An experienced fundraiser, he has raised substantial sums of money for his ventures and clients - more than $25 million dollars both privately and publicly. In addition, he has taken two of his companies public, and has negotiated the multi-million dollar acquisition of a third.
Mr. Bissonnette's extensive consumer marketing experience encompasses retail sales distribution and direct-to-the-consumer marketing, including direct mail, radio, television and long form infomercials. He brings hands-on skill in the use of broadcast media, having conceived, developed and produced his own extremely successful radio and television commercials.
Jerry Perkins
President and Chief Executive Officer
Jerry Perkins started with AeroGrow on November 12, 2007, and was promoted to Chief Executive Officer on March 1, 2008. Mr. Perkins has a proven, 30-year track record of delivering exceptional top and bottom line results in a wide variety of market-leading consumer businesses. Perkins most recently served as President and COO of publicly-traded Johnson Outdoors, Inc., a $400 million dollar global manufacturer of outdoor recreation products. There, Mr. Perkins was directly responsible for all aspects of sales, marketing, product development, manufacturing and distribution, with full P&L responsibilities. During his 4-year tenure, sales grew 33% from $300 million to $400 million, net profit increased 76%, and the stock appreciated 80%.
Previously, Mr. Perkins served as Executive Vice President and General Manager at Brunswick Corporation. There, he conceived an innovative product development program which turned around Brunswick's declining bowling business and drove double digit increases in sales and profitability. Prior to Brunswick, Mr. Perkins worked for Quaker Oats for 17 years, serving in a variety of general management and senior marketing roles. As Director of Marketing for the Gatorade® brand, annual sales and profitability grew more than 25% each year as he expanded the brand through multiple new consumer and trade channels. As Vice President of Promotions, he was instrumental in the creation of the company's highly successful, direct-to-consumer, database marketing campaigns.
Mr. Perkins holds an MBA in Marketing and Finance from Northwestern University and a BA in American Studies from Williams College.
Greg Clarke
Chief Financial Officer
H. MacGregor (Greg) Clarke is a high-performance, hands-on business leader with an exceptional record of achievement, impact and success in senior executive roles at large multinational and middle market companies. Mr. Clarke brings to AeroGrow an extensive background in finance, operations and strategy, as well as consumer product experience, having served as President, CEO and CFO at a number of high-growth companies during his career.
Most recently, Mr. Clarke worked at Ankmar, LLC, a private equity-owned, nationwide garage door manufacturer, distributor and installer, first as CFO and later as CEO, where he successfully restructured the company's operations and managed the sale of Ankmar to strategic buyers.
Prior to Ankmar, Mr. Clarke served as Vice President and General Manager at Johns Manville Corporation, a $2.2 billion building materials subsidiary of Berkshire Hathaway Inc., where he was responsible for all operations and financial performance for the Building Insulation Division. Previously, Mr. Clarke served as Vice President, Corporate Treasurer and International Division CFO at The Coleman Company, Inc., a $1.3 billion NYSE-listed recreation products company, where he served during a period of substantial top-line growth. Mr. Clarke also worked for nine years at PepsiCo, Inc., most recently as Director, Corporate Strategic Planning, where he led strategy and planning for the worldwide beverage sector.
Mr. Clarke holds an MBA in Finance from Columbia University Graduate School of Business and a BA in Economics from Amherst College.
Jeff Brainard
Vice President of Sales
Jeff Brainard joined the AeroGrow team as Vice President of Sales in March 2006. Mr. Brainard has a proven track record of sales success in the consumer products industry.
As National Sales Manager for Brita, Mr. Brainard drove a dramatic increase in sales, from $5 million to $225 annually during his tenure, with a significant percentage as recurring revenues through the sales of Brita’s filters. Previously, he led the effort to establish Lindt Chocolate in the United States, generating $36 million in sales between 1999 and 2000 while also managing the customer service team.
Mr. Brainard has held sales management positions with the Holmes Group, The Regina Company, Black & Decker Inc. and Gillette Company.
Terry Robertson
Vice President of Engineering, Manufacturing, and Quality
Terry Robertson joined AeroGrow as Executive Vice President of Engineering, Manufacturing, and Quality in May 2006.
Mr. Robertson has a proven track record of building and streamlining product supply lines from product idea generation through overseas sourcing, tooling, and high volume production and shipping.
As Executive Vice President of Engineering, Quality, Sourcing and Manufacturing for Euro-Pro Operating LLC, Mr. Robertson sourced more than 500 unique Housewares products in less than 4 years, with more than 25 million total pieces delivered, and including 125 products sold via direct TV through the Home Shopping Network. Mr. Robertson developed many of these products from product idea generation through rapid prototyping, tooling, manufacture and delivery. Mr. Robertson has worked with more than 50 different overseas factories in sourcing products, and has set up and managed a manufacturing team of 55 R&D, quality and manufacturing personnel to manage the high volume of product development. Euro-Pro sales, including the Fantom Vacuum which sold more than 1.5 million units through direct TV sales, went from $100 million to $250 million in annual revenues in less than two years.
As Senior VP Sourcing/Quality at Holmes Group Inc., makers of Rival cookware and the Bionaire line of air quality products, Mr. Robertson sourced more than 100 new products, many from idea generation through high-volume delivery. Production for Holmes Group was run through their own Chinese manufacturing facility as well as through numerous outsourced facilities.
Mr. Robertson has also held Executive Management positions with Hamilton Beach/Proctor Silex, Inc and Ampex Magnetic Tape Manufacturing Inc.
Mr. Robertson has a BA from Faulkner University, is an ISO-9000 Certified Auditor and has written in over 20 new patents in the last 3 years.
Mike Wolfe
Vice President of Operations
Mike Wolfe joined AeroGrow in April of 2006 as Vice President of Operations. Mr. Wolfe has over 20 years of senior level operations experience in the field of consumer products – with particular emphasis in direct marketing, order fulfillment and customer service/telemarketing.
As Chief Operating Officer of Concepts Direct, Inc., Mr. Wolfe oversaw the launch, development and operation of seven independent catalogs (along with associated e-commerce sites) including the highly successful Colorful Images, Snoopy, Etc. and Linda Anderson brands. In addition, he was responsible for a fulfillment operation that managed 15,000+ SKUs and processed over 3 million orders per year. He held this role from the company’s inception in 1992 and throughout its rapid growth to sales of over $80 million in just six years. The company’s major catalog assets were later sold to the Taylor Corporation.
Prior to this, Mr. Wolfe served as Vice President of Wiland Services, Inc., a database management company that builds and maintains the databases of many top-flight direct marketing companies, including Sears, Dell Computer, Lillian Vernon and Prudential. Wiland was sold and became a division of EDS in 1992. He has also served as a consultant and as a Board member both to corporations as well as non-profit organizations.
Mr. Wolfe holds a BS degree in Finance and Marketing from the University of Colorado and received his MBA from the University of Denver.
John Thompson
Vice President of Investor Relations
John Thompson brings AeroGrow over 20 years of experience in management, direct marketing, sales management and advertising.
Mr. Thompson’s most recent experience was as Director of Marketing for Productivity Point International (PPI), a $150 million dollar a year direct marketing and direct sales company in the consumer and business training industry.
Prior to PPI, Mr. Thompson was Sales and Marketing Manager for CareerTrack, a local, high profile, direct marketing company with $80 million in revenues, known for using innovative direct mail and telesales methods to sell personal and professional growth products to the consumer and business markets. For ten years Mr. Thompson was a key player, holding senior management positions in sales and marketing during CareerTrack’s high growth years, when the company skyrocketed from $40 to $80 million dollars in sales in just 4 years.
In addition, Mr. Thompson was the founder and President of Innovative Marketing Solutions, a marketing consulting agency to entrepreneurial and high-tech companies.
Sylvia Bernstein
Vice President of Marketing, Innovation and New Product Development
Sylvia Bernstein joined AeroGrow in April 2003 and has driven the research and development of AeroGrow's current, 100 sku product line. Ms. Bernstein also founded and currently heads AeroGrow's Plant Research & Development Laboratories, production greenhouses and nursery. Prior to joining AeroGrow, Ms. Bernstein was one of the top sales reps in the nation for gourmet cooking products company, The Pampered Chef, and had more than 10 years experience in gardening and home greenhouse management. Ms. Bernstein was also previously Director of Operations for David Bruce & Company, a software startup with risk management products for the futures and options industry, where she managed software customization, installation and user training and support. A former business systems consultant for both TSC and Andersen Consulting.
Ms. Bernstein received her MBA from the University of Chicago.
Recent AERO News:
February 12 -
AeroGrow Announces Fiscal 2009 Third Quarter Results
AeroGrow International, Inc. (NASDAQ: AERO) ("AeroGrow" or the "Company"), makers of the AeroGarden® line of indoor gardening products, announced results for the quarter ended December 31, 2008.
AeroGrow reported quarterly revenue of $11.0 million, a decrease of 25% over the $14.6 million reported for the prior year's quarter ended December 31, 2007. For the nine months ended December 31, 2008, AeroGrow reported an increase of 16% over the nine months ended December 31, 2007, with revenue of $31.6 million in 2008, compared to $27.2 million in 2007.
"Consumer demand for the AeroGarden line stayed strong in the quarter," said Jerry Perkins, CEO of AeroGrow. "Consumers bought 63% more gardens and 91% more seed kits than in the prior year's quarter through broader distribution at our top tracked retail accounts. However it was largely accomplished by selling through inventory already on shelves as of the end of September. Disappointing sales for most consumer products continued through the holidays, forcing retailers to focus on managing inventories and cash, resulting in significantly lower wholesale reorder rates than we had forecast.
"In our retail business, reported net revenue was down 39% from last year on declining wholesale shipments of 19%, compounded by the impact of sales allowances offered to our retail customers. In our direct business, revenue increased almost 50% in web marketing and 70% in catalog, as sales to new and existing customers remained strong. These gains were offset by a significant decrease in our direct TV revenue in the quarter as we dialed back media spending in light of the rapidly deteriorating economic conditions. For the quarter, our direct business revenue was down 5% from the same period last year."
AeroGrow reported a $4.4 million loss for the quarter ended December 31, 2008, up from a loss of $1.7 million in the quarter ended December 31, 2007 and down from a profit of $418,000 in the previous quarter ended September 30, 2008. The net loss for the nine months ended December 31, 2008, totaled $6.8 million as compared to a loss of $6.0 million reported for the same period in 2007.
"Lower-than-forecast revenue in conjunction with unusual expenses directly attributable to the economic downturn drove the loss for the quarter," continued Mr. Perkins. "Almost $2 million of the loss reflects pricing actions taken to remain competitive in a highly discounted retail environment. $800,000 of this was due to our share of price markdowns taken at retail in the December quarter and $1 million more was booked in recognition that these economic conditions will persist and additional actions will likely be required. In addition, more than $600,000 of the loss is due to a combination of cash and non-cash expenses including severance costs recognized in the quarter from December's headcount reductions and other cost-cutting measures.
"Our primary goal at present is to preserve the long-term value of the company and brand by resizing our business structure and overhead to the new and dramatically altered retail and consumer landscapes. The steps we have taken and have planned, which include the engagement of an investment banker to assist with raising capital or potential strategic alternatives, should leave us well-positioned for renewed growth when the economy stabilizes. We still have a unique position in the marketplace, with products that consumers love, broad distribution through multiple channels, no established competition, and a recurring revenue model that continues to prove itself through the lifetime value of our customers."
Aerogrow International Inc.
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