iPower Reports Fiscal First Quarter 2023 Results

November 14, 2022

- Fiscal Q1 Revenue up 50% to a Record $26.0 Million -

- iPower Management to Host Conference Call Today at 4:30 p.m. Eastern Time -

DUARTE, Calif., Nov. 14, 2022 (GLOBE NEWSWIRE) -- iPower Inc. (Nasdaq:IPW) (“iPower” or the “Company”), a leading online retailer and supplier of consumer home and garden products, today announced its financial results for its fiscal first quarter ended September 30, 2022.

Fiscal Q1 2023 Results vs. Year-Ago Quarter 

  • Total revenue increased 50% to $26.0 million.
  • Gross profit increased 37% to $10.0 million.
  • As a percentage of revenue, gross margin was 38.4% compared to 42.1%.
  • Net loss was $4.3 million or $(0.14) per share as compared to net income of $0.9 million or $0.03 per share. The decline was primarily driven by a $3.1 million goodwill impairment triggered by a decrease in the Company’s market capitalization and the net loss in the quarter.

Management Commentary 

“Fiscal Q1 was a period of strong growth despite contending with lingering challenges in the supply chain,” said Lawrence Tan, CEO of iPower. “We generated 50% year-over-year revenue growth while also increasing our in-house product catalog and diversifying our sales with non-hydroponic products. This shift, coupled with our ability to materially grow sales, demonstrates our superior product research, design and merchandising expertise.

“In the next week, we will be unveiling our new corporate rebrand and website. With non-hydroponic products now accounting for the majority of sales, we felt it was prudent to revamp our image to better showcase the new iPower businesses alongside our increasingly diverse product portfolio. This strategic decision will unify iPower’s various products and services as we continue to grow the business both domestically and abroad.”

iPower CFO Kevin Vassily added, “Although certain headwinds in the macro environment persist, we have begun to see improvements in shipping lead times and a reduction in freight costs, which will enable us to lower inventory levels and reduce short-term warehouse expenses. We expect this to benefit our operating margins as well as our cash flow. Looking ahead, we plan to continue driving growth in both our hydroponic and non-hydroponic businesses, while maintaining our judicious approach to capital allocation and returning to profitability.”

Fiscal First Quarter 2023 Financial Results 

Total revenue in the fiscal first quarter of 2023 increased 50% to $26.0 million compared to $17.4 million for the same period in fiscal 2022. The increase was driven by strong demand for iPower’s non-hydroponic product portfolio, including commercial fans, shelving equipment and office chairs, among other items.

Gross profit in the fiscal first quarter of 2023 increased 37% to $10.0 million as compared to $7.3 million for the same quarter in fiscal 2022. As a percentage of revenue, gross margin was 38.4% compared to 42.1%. The decrease in gross margin was primarily driven by a greater portion of sales coming from older inventory that incurred higher freight costs.

Total operating expenses in the fiscal first quarter were $11.5 million compared to $6.0 million for the same period in fiscal 2022. As a percentage of revenue, operating expenses were 44.1% compared to 34.7% in the year-ago quarter. The increase in operating expenses was primarily driven by higher warehouse expenses due to elevated inventory levels.

Net loss in the fiscal first quarter of 2023 was $4.3 million or $(0.14) per share, compared to a net income of $0.9 million or $0.03 per share for the same period in fiscal 2022. The decline was primarily driven by a $3.1 million goodwill impairment charge triggered by the decline in the Company’s market capitalization, as well as the aforementioned higher warehouse and freight expenses.

Cash and cash equivalents were $4.8 million at September 30, 2022, compared to $1.8 million at June 30, 2022. The increase was primarily due to lower inventory purchases. Total long-term debt as of September 30, 2022 was $16.1 million compared to $14.1 million as of June 30, 2022. The increase was driven in-part by timing as the Company utilized its revolving line of credit to better manage working capital.

Conference Call 

The Company will conduct a conference call at 4:30 p.m. Eastern time on Monday, November 14, 2022, to discuss the results for its fiscal first quarter ended September 30, 2022.

iPower management will host the conference call, followed by a question-and-answer period. The conference call details are as follows:

Date: Monday, November 14, 2022
Time: 4:30 p.m. Eastern time
Dial-in registration link: here
Live webcast registration link: here

Please call the conference call dial-in 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Elevate IR at (720) 330-2829.

The conference call will also be broadcast live and available for replay in the Events & Presentations section of the Company’s website at www.meetipower.com.

About iPower Inc. 

iPower Inc. is a leading online retailer and supplier of consumer home and garden products. iPower offers thousands of stock keeping units from its in-house brands as well as hundreds of other brands through its website, www.zenhydro.com, and its online platform partners. iPower has a diverse customer base that includes both commercial businesses and individuals. For more information, please visit iPower's website at https://ir.meetipower.com/.

Forward-Looking Statements 

All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that iPower believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. iPower undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, or changes in its expectations, except as may be required by law. Although iPower believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and iPower cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results and performance in iPower's Annual Report on Form 10-K, as filed with the SEC on September 28, 2022, iPower’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, and in its other filings with the SEC.

Investor Relations Contact:

Sean Mansouri, CFA
Elevate IR
(720) 330-2829

iPower Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
As of September 30, 2022 and June 30, 2022
    September 30, June 30,
    2022  2022
Current assets     
 Cash and cash equivalent$4,842,146  $1,821,947
 Accounts receivable, net 18,989,969   17,432,287
 Inventories, net 30,313,684   30,433,766
 Other receivable - related party 134,262   51,762
 Prepayments and other current assets 3,163,763   5,444,463
   Total current assets 57,443,824   55,184,225
Non-current assets     
 Right of use - non-current 9,805,484   10,453,282
 Property and equipment, net 569,878   544,633
 Non-current prepayments 817,707   925,624
 Goodwill 3,034,110   6,094,144
 Investment in joint venture 39,994   43,385
 Intangible assets, net 4,767,099   4,929,442
 Other non-current assets 412,626   406,732
   Total non-current assets 19,446,898   23,397,242
   Total assets$76,890,722  $78,581,467
Current liabilities     
 Accounts payable 14,818,253   9,533,408
 Credit cards payable 151,125   807,687
 Customer deposit 348,948   273,457
 Other payables and accrued liabilities 2,090,595   5,915,220
 Advance from shareholders 86,847   92,246
 Short-term loans payable -   -
 Investment payable 1,500,000   1,500,000
 Lease liability - current 2,593,995   2,582,933
 Long-term promissory note payable - current portion 2,806,565   1,879,065
 Income taxes payable 282,029   299,563
   Total current liabilities 24,678,357   22,883,579
Non-current liabilities     
 Long-term revolving loan payable, net 15,192,660   12,314,627
 Long-term promissory note payable, net 894,023   1,781,705
 Deferred tax liabilities 271,040   939,115
 Lease liability - non-current 7,616,586   8,265,611
   Total non-current liabilities 23,974,309   23,301,058
   Total liabilities 48,652,666   46,184,637
Commitments and contingency -   -
Stockholders' Equity     
 Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and     
  outstanding at September 30, 2022 and 2021 -   -
 Common stock, $0.001 par value; 180,000,000 shares authorized; 29,572,382 and     
  29,572,382 shares issued and outstanding at September 30, 2022 and June 30, 202229,573   29,573
 Additional paid in capital 29,249,745   29,111,863
 Retained earnings (919,428)  3,262,948
 Non-controlling interest (16,037)  -13,232
 Accumulated other comprehensive (loss) income (105,797)  5,678
   Total equity 28,238,056   32,396,830
   Total liabilities and equity$76,890,722  $78,581,467

iPower Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
For the Three Months Ended September 30, 2022 and 2021
   For the Three Months Ended September 30,
   2022  2021 
   (Unaudited) (Unaudited)
REVENUES$26,022,673  $17,366,765 
TOTAL REVENUES 26,022,673   17,366,765 
COST OF REVENUES 16,036,957   10,053,063 
GROSS PROFIT 9,985,716   7,313,702 
 Selling and fulfillment 8,418,812   3,665,921 
 General and administrative 3,100,176   2,357,466 
 Impairment loss - goodwill 3,060,034   - 
  Total operating expenses 14,579,022   6,023,387 
(LOSS) INCOME FROM OPERATIONS (4,593,306)  1,290,315 
 Interest expenses (248,041)  - 
 Other financing expenses -   (59,000)
 Loss on equity method investment (3,390)  - 
 Other non-operating income (expense) 211,760   (812)
  Total other expenses, net (39,671)  (59,812)
(LOSS) INCOME BEFORE INCOME TAXES (4,632,977)  1,230,503 
NET (LOSS) INCOME (4,185,181)  887,528 
 Non-controlling interest (2,805)  - 
 Foreign currency translation adjustments (111,475)  - 
 Basic 29,665,716   26,484,528 
 Diluted 29,665,716   26,495,420 
 Basic$(0.14) $0.03 
 Diluted$(0.14) $0.03