Contact Information: CONTACTS: Corporate John Thompson AeroGrow International, Inc. (303) 444-7755
AeroGrow Continues Aggressive Cost-Cutting Measures
Announces Job Reductions; Targets More Than $5 Million in Annual Cost Savings
| Source: AeroGrow International, Inc.
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.