iPower Reports Fiscal First Quarter 2023 Results
- 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.
“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.
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:
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/.
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
|iPower Inc. and Subsidiaries|
|Unaudited Condensed Consolidated Balance Sheets|
|As of September 30, 2022 and June 30, 2022|
|September 30,||June 30,|
|Cash and cash equivalent||$||4,842,146||$||1,821,947|
|Accounts receivable, net||18,989,969||17,432,287|
|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|
|Right of use - non-current||9,805,484||10,453,282|
|Property and equipment, net||569,878||544,633|
|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|
|LIABILITIES AND EQUITY|
|Credit cards payable||151,125||807,687|
|Other payables and accrued liabilities||2,090,595||5,915,220|
|Advance from shareholders||86,847||92,246|
|Short-term loans payable||-||-|
|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|
|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|
|Commitments and contingency||-||-|
|Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and|
|outstanding at September 30, 2022 and 2021||-||-|
|Common stock, $0.001 par value; 180,000,000 shares authorized; 29,572,382 and|
|29,572,382 shares issued and outstanding at September 30, 2022 and June 30, 2022||29,573||29,573|
|Additional paid in capital||29,249,745||29,111,863|
|Accumulated other comprehensive (loss) income||(105,797||)||5,678|
|Total liabilities and equity||$||76,890,722||$||78,581,467|
|iPower Inc. and Subsidiaries|
|Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)|
|For the Three Months Ended September 30, 2022 and 2021|
|For the Three Months Ended September 30,|
|COST OF REVENUES||16,036,957||10,053,063|
|Selling and fulfillment||8,418,812||3,665,921|
|General and administrative||3,100,176||2,357,466|
|Impairment loss - goodwill||3,060,034||-|
|Total operating expenses||14,579,022||6,023,387|
|(LOSS) INCOME FROM OPERATIONS||(4,593,306||)||1,290,315|
|OTHER INCOME (EXPENSE)|
|Other financing expenses||-||(59,000||)|
|Loss on equity method investment||(3,390||)||-|
|Other non-operating income (expense)||211,760||(812||)|
|Total other expenses, net||(39,671||)||(59,812||)|
|(LOSS) INCOME BEFORE INCOME TAXES||(4,632,977||)||1,230,503|
|PROVISION FOR INCOME TAX (BENEFIT) EXPENSE||(447,796||)||342,975|
|NET (LOSS) INCOME||(4,185,181||)||887,528|
|NET (LOSS) INCOME ATTRIBUTABLE TO IPOWER INC.||$||(4,182,376||)||$||887,528|
|OTHER COMPREHENSIVE LOSS|
|Foreign currency translation adjustments||(111,475||)||-|
|COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO IPOWER INC.||$||(4,293,851||)||$||887,528|
|WEIGHTED AVERAGE NUMBER OF COMMON STOCK|
|(LOSSES) EARNINGS PER SHARE|