SOURCE: AeroGrow International, Inc.

December 12, 2008 14:00 ET

AeroGrow Continues Aggressive Cost-Cutting Measures

Announces Job Reductions; Targets More Than $5 Million in Annual Cost Savings

BOULDER, CO--(Marketwire - December 12, 2008) - AeroGrow International, Inc. (NASDAQ: AERO) ("AeroGrow" or the "Company"), makers of the AeroGarden® line of indoor gardening products, announced a series of aggressive actions that accelerate the Company's profitability initiatives in light of current economic conditions.

The cost-cutting measures include a planned reduction of approximately 35 jobs, including managers, salaried and hourly workers, and contract employees. AeroGrow had approximately 100 full-time employees as of December 1, 2008. AeroGrow estimates approximately $2 million in annual savings from the reductions.

The reduction in workforce is part of a larger strategy of cost reduction and organizational efficiency goals instituted earlier in the year, which included a downsizing of the work force and improved logistical and manufacturing efficiencies.

Further cost savings and efficiency improvements are planned for 2009, targeting an additional $3 million in savings. Measures include 7-figure savings from additional product assembly automation, package re-engineering to increase shipping efficiency, and added distribution and shipping savings.

"Last quarter we reported the first profitable quarter in AeroGrow's history, thanks to a combination of increased distribution, improved efficiencies, and aggressive cost cutting," said Jerry Perkins, CEO of AeroGrow. "However, given the dramatic changes in market conditions we've seen since the end of that quarter, and the depth and likely duration of the downturn, we have had to expedite our planned actions. To achieve our longer term goals of continued growth, broader distribution and improved profitability, we have had to act more aggressively than we anticipated in the short term. We do regret the need to reduce employment at present and the impact that has on people's lives and in our community. However, these steps set the stage for AeroGrow to manage through the downturn while continuing to build the brand franchise and position us well for strong continued growth and profitability as economic conditions improve."

About AeroGrow International, Inc.

Founded in 2002 in Boulder, Colorado, AeroGrow International, Inc. is dedicated to the research, development and marketing of the AeroGarden® line of indoor gardening products. AeroGardens feature dirt-free technology, allowing anyone to grow farmer's market fresh herbs, salad greens, tomatoes, chili peppers, flowers and more, indoors, year-round, so simply and easily that no green thumb is required. See www.aerogrow.com.

FORWARD-LOOKING STATEMENTS

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements by Jerry Perkins, and/or the Company, statements regarding growth of the AeroGarden product line, optimism related to the business, expanding sales and other statements in this press release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including continued market acceptance of the Company's products or the need to raise additional capital. In addition, actual results could vary materially based on changes or slower growth in the kitchen garden appliance market; the potential inability to realize expected benefits and synergies; domestic and international business and economic conditions; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufacturing capacity; future production variables impacting excess inventory and other risk factors listed from time to time in the Company's Securities and Exchange Commission (SEC) filings under "risk factors" and elsewhere. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

Contact Information

  • CONTACTS:
    Corporate
    John Thompson
    AeroGrow International, Inc.
    (303) 444-7755
    Email Contact