iPower Reports Fiscal Second Quarter 2024 Results

February 14, 2024

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

DUARTE, Calif., Feb. 14, 2024 (GLOBE NEWSWIRE) -- iPower Inc. (Nasdaq: IPW) (“iPower” or the “Company”), a tech and data-driven online retailer and supplier of consumer home and garden products, as well as a provider of value-added ecommerce services, today announced its financial results for the fiscal second quarter ended December 31, 2023.

Fiscal Q2 2024 Results vs. Fiscal Q2 2023 (unless otherwise noted)

  • Total revenue was $16.8 million compared to $19.3 million.
  • Gross profit was $7.3 million compared to $8.0 million, with gross margin up 220 bps to 43.6% compared to 41.4%.
  • Net loss attributable to iPower improved 42% to $1.9 million or $(0.06) per share, compared to net loss attributable to iPower of $3.3 million or $(0.11) per share.
  • As of December 31, 2023, net debt (total debt less cash) was reduced by 56% to $3.6 million compared to net debt of $8.1 million as of June 30, 2023.

Management Commentary 

“In our fiscal second quarter, we continued to drive gross margin expansion, operating cost reductions and another period of positive cash flow from operations,” said Lawrence Tan, CEO of iPower. “Due to improvements in the supply chain environment, our largest channel partner has progressively tightened their inventory management as shipping lead times have become more favorable. Although this led to lower order volumes for the quarter, we believe this channel partner’s inventory is now at a preferred level and we are well equipped to meet demand with the high-quality products our customers expect.

“We also continued to gain traction in our SuperSuite business as we leverage our superior supply chain, warehousing and merchandising expertise to drive sales growth for partners with innovative product catalogs. We look forward to growing this exciting segment of our business as we further evaluate prospective partners in the months ahead.”

iPower CFO, Kevin Vassily, added, “Our gross margin and operating expense improvements were primarily driven by the reduction of high-cost inventory and excess warehousing space. Additionally, we reduced total debt obligations by approximately $2 million during the quarter, demonstrating our commitment to strengthening the balance sheet. We believe these actions, coupled with early signs of normalized order volumes with our largest channel partner, will enable us to deliver on our goals with the aim of returning to profitability in 2024.”

Fiscal Second Quarter 2024 Financial Results 

Total revenue in the fiscal second quarter of 2024 was $16.8 million compared to $19.3 million for the same period in fiscal 2023. The decrease was driven primarily by lower promotional activity given iPower’s normalized inventory level, as well as lower order volumes from the Company’s largest channel partner who is more tightly managing inventory levels due to the improved supply chain environment. This was partially offset by growth in the Company’s SuperSuite supply chain offerings.

Gross profit in the fiscal second quarter of 2024 was $7.3 million compared to $8.0 million in the same quarter in fiscal 2023. As a percentage of revenue, gross margin increased 220 basis points to 43.6% compared to 41.4% in the year-ago period. The increase in gross margin was primarily driven by favorable product mix.

Total operating expenses in the fiscal second quarter of 2024 improved 18% to $9.9 million compared to $12.1 million for the same period in fiscal 2023. The decrease was driven primarily by lower selling, fulfillment and marketing expenses.

Net loss attributable to iPower in the fiscal second quarter of 2024 improved 42% to $1.9 million or $(0.06) per share, compared to net loss attributable to iPower of $3.3 million or $(0.11) per share for the same period in fiscal 2023. The improvement was driven primarily by the higher gross margin and lower operating expenses.

Cash and cash equivalents were $1.5 million at December 31, 2023, compared to $3.7 million at June 30, 2023. Total debt as of December 31, 2023 was $5.0 million compared to $11.8 million as of June 30, 2023. As a result of the Company’s debt paydown, net debt (total debt less cash) was reduced by 56% to $3.6 million compared to $8.1 million as of June 30, 2023.

Conference Call 

The Company will hold a conference call today, February 14, 2024, at 4:30 p.m. Eastern Time to discuss its results for the fiscal second quarter ended December 31, 2023.

iPower’s management will host the conference call, which will be followed by a question-and-answer session.

The conference call details are as follows:

Date: Wednesday, February 14, 2024
Time: 4:30 p.m. Eastern Time
Dial-in registration link: here
Live webcast registration link: here

Please dial into the conference call 5-10 minutes prior to the start time. If you have any difficulty connecting with the conference call, please contact the Company’s investor relations team at IPW@elevate-ir.com.

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 tech and data-driven online retailer and supplier of consumer home and garden products, as well as a provider of value-added ecommerce services for third-party products and brands. iPower offers thousands of stock keeping units from its in-house brands as well as hundreds of other brands through its ecommerce channel partners and its websites, www.zenhydro.com and www.simpledeluxe.com. iPower has a diverse customer base that includes both commercial businesses and individuals. For more information, please visit iPower's website at www.meetipower.com.

Forward-Looking Statements 

All statements other than statements of historical fact in this press release 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 15, 2023, its Quarterly Reports on Form 10-Q, as filed with the SEC on November 15, 2023 and February 14, 2024, and in its other SEC filings.

Investor Relations Contact:

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

iPower Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2023 and June 30, 2023
  December 31,  June 30, 
  2023  2023 
Current assets        
Cash and cash equivalents $1,488,027  $3,735,642 
Accounts receivable, net  11,765,833   14,071,543 
Inventories, net  15,782,322   20,593,889 
Prepayments and other current assets  1,483,209   2,858,196 
Total current assets  30,519,391   41,259,270 
Non-current assets        
Right of use - non-current  7,141,633   7,837,345 
Property and equipment, net  456,006   536,418 
Deferred tax assets  3,122,363   2,155,250 
Non-current prepayments  390,612   531,456 
Goodwill  3,034,110   3,034,110 
Investment in joint venture  31,287   33,113 
Intangible assets, net  3,955,385   4,280,071 
Other non-current assets  419,289   427,254 
Total non-current assets  18,550,685   18,835,017 
Total assets $49,070,076  $60,094,287 
Current liabilities        
Accounts payable $13,931,800  $13,244,957 
Credit cards payable  340,912   366,781 
Customer deposit  340,876   350,595 
Other payables and accrued liabilities  3,715,996   4,831,067 
Advance from shareholders  87,305   85,200 
Lease liability - current  2,065,177   2,159,173 
Short-term loan payable - related party  1,032,189    
Long-term promissory note payable - current portion  1,150,508   2,017,852 
Revolving loan payable, net  2,862,857    
Income taxes payable  283,519   276,683 
Total current liabilities  25,811,139   23,332,308 
Non-current liabilities        
Long-term revolving loan payable, net     9,791,191 
Lease liability - non-current  5,503,365   6,106,047 
Total non-current liabilities  5,503,365   15,897,238 
Total liabilities  31,314,504   39,229,546 
Commitments and contingency      
Stockholders' Equity        
Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2023 and June 30, 2023      
Common stock, $0.001 par value; 180,000,000 shares authorized; 29,710,939 and 29,710,939 shares issued and outstanding at December 31, 2023 and June 30, 2023  29,712   29,712 
Additional paid in capital  29,883,647   29,624,520 
Accumulated deficits  (11,903,785)  (8,702,442)
Non-controlling interest  (30,906)  (24,915)
Accumulated other comprehensive loss  (223,096)  (62,134)
Total stockholders’ equity  17,755,572   20,864,741 
Total liabilities and stockholders’ equity $49,070,076  $60,094,287 

iPower Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
For the Three and Six Months Ended December 31, 2023 and 2022
  For the Three Months Ended
December 31,
  For the Six Months Ended
December 31,
  2023  2022  2023  2022 
  (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited) 
REVENUES $16,800,122  $19,254,590  $43,308,496  $45,277,263 
TOTAL REVENUES  16,800,122   19,254,590   43,308,496   45,277,263 
COST OF REVENUES  9,481,882   11,285,064   24,231,411   27,322,021 
GROSS PROFIT  7,318,240   7,969,526   19,077,085   17,955,242 
OPERATING EXPENSES:                
Selling and fulfillment  6,936,980   9,338,737   17,000,451   17,757,549 
General and administrative  2,933,607   2,713,355   5,897,658   5,813,531 
Impairment loss - goodwill           3,060,034 
Total operating expenses  9,870,587   12,052,092   22,898,109   26,631,114 
LOSS FROM OPERATIONS  (2,552,347)  (4,082,566)  (3,821,024)  (8,675,872)
OTHER INCOME (EXPENSE)                
Interest expenses  (182,612)  (314,119)  (410,977)  (562,160)
Loss on equity method investment  (801)  (3,938)  (1,826)  (7,328)
Other non-operating income  128,838   59,600   61,672   271,360 
Total other expenses, net  (54,575)  (258,457)  (351,131)  (298,128)
LOSS BEFORE INCOME TAXES  (2,606,922)  (4,341,023)  (4,172,155)  (8,974,000)
PROVISION FOR INCOME TAX BENEFIT  (688,939)  (1,047,749)  (964,821)  (1,495,545)
NET LOSS  (1,917,983)  (3,293,274)  (3,207,334)  (7,478,455)
Non-controlling interest  (3,155)  (2,835)  (5,991)  (5,640)
NET LOSS ATTRIBUTABLE TO IPOWER INC. $(1,914,828) $(3,290,439) $(3,201,343) $(7,472,815)
Foreign currency translation adjustments  (160,255)  47,149   (160,962)  (64,326)
COMPREHENSIVE LOSS ATTRIBUTABLE TO IPOWER INC. $(2,075,083) $(3,243,290) $(3,362,305) $(7,537,141)
Basic  29,790,242   29,742,620   29,777,378   29,687,878 
Diluted  29,790,242   29,742,620   29,777,378   29,687,878 
LOSSES PER SHARE                
Basic $(0.06) $(0.11) $(0.11) $(0.25)
Diluted $(0.06) $(0.11) $(0.11) $(0.25)