iPower Reports Fiscal Third Quarter 2022 Results

May 16, 2022

- Fiscal Q3 Revenue up 74% to a Record $22.8 Million -

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

DUARTE, Calif., May 16, 2022 (GLOBE NEWSWIRE) -- iPower Inc. (Nasdaq:IPW) (“iPower” or the “Company”), a leading online hydroponic equipment suppliers and retailers, today announced financial results for its fiscal third quarter ended March 31, 2022.

Fiscal Q3 2022 Results vs. Year-Ago Quarter 

  • Total revenue increased 74% to $22.8 million.
  • Gross profit increased 59% to $9.2 million.
  • As a percentage of revenue, gross margin was 40.3% as compared to 43.9%.
  • Net income increased significantly to $1.2 million or $0.04 per share as compared to $(0.01) per share for Q3 2021.

Management Commentary 

“During our fiscal third quarter 2022 we experienced another period of significant growth with record revenue and gross profit,” said Lawrence Tan, CEO of iPower. “We continued to emphasize in-house product sales, which made up approximately 82% of revenue for the quarter, while driving additional sales velocity through our largest online channel partner. Our continued strong growth and in-house product mix speaks to our superior product research, design and merchandising expertise.

“We began multiple new strategic initiatives this past quarter, including the launch of our business in Europe as well as the launch of two new joint ventures targeting the eCommerce, logistics and social media markets. In addition, we closed our first ever M&A transaction by acquiring our largest global co-engineering partner, serving to expand our production capacity and deepen our R&D capabilities.”

iPower CFO Kevin Vassily added, “Although we experienced record high freight costs in the supply chain, we managed to maintain gross margin above 40% by leveraging our diversified supplier network. We also expanded operating margins despite adding new warehouse capacity during the quarter that is still ramping up to support higher volumes. We expect to close out the year on a strong note as we deliver on our business and operational objectives in fiscal 2022.”

Fiscal Third Quarter 2022 Financial Results 

Total revenue in the fiscal third quarter of 2022 increased 74% to $22.8 million compared to $13.1 million for the same period in fiscal 2021. The increase was driven by greater product sales to the Company’s largest channel partner as well as strong demand for iPower’s ventilation products, commercial fans and shelving products.

Gross profit in the fiscal third quarter of 2022 increased 59% to $9.2 million compared to $5.8 million for the same quarter in fiscal 2021. As a percentage of revenue, gross margin was 40.3% compared to 43.9% in the year-ago quarter. The decrease was driven by product mix as well as higher freight costs.

Total operating expenses in the fiscal third quarter were $7.8 million compared to $5.0 million for the same period in fiscal 2021. As a percentage of revenue, operating expense improved 360 basis points to 34.3% compared to 37.9% in the year-ago quarter. The increase in operating expenses were primarily driven by additional warehouse, selling and fulfillment costs.

Net income in the fiscal third quarter of 2022 increased to $1.2 million or $0.04 per share, compared to net loss of $(0.2) million or $(0.01) per share for the same period in fiscal 2021.

Cash and cash equivalents were $2.6 million at March 31, 2022, compared to $6.7 million at June 30, 2021. The decrease was attributed to the timing of accounts receivables and is not an indication of any other business or operating trend. Long term debt as of March 31, 2022 was $13.4 million compared to $0.5 million as of June 30, 2021. This increase was also a function of timing as the Company utilizes its revolving credit facility to manage working capital.

Conference Call 

The Company will conduct a conference call at 4:30 p.m. Eastern time on Monday, May 16, 2022, to discuss the results for its fiscal third quarter ended March 31, 2022.

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

Date: Monday, May 16, 2022
Time: 4:30 p.m. Eastern time
Toll-free dial-in number: (888) 705-0179
International dial-in number: (833) 730-3981
Conference ID: 6364931
Webcast: iPower FQ3 Earnings Call

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 one of the leading online retailers and suppliers of hydroponics equipment and accessories. 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 occurring 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 in iPower's registration statement 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 March 31, 2022 and June 30, 2021

  March 31,  June 30, 
  2022  2021 
Current assets        
Cash and cash equivalent $2,641,584  $6,651,705 
Accounts receivable, net  19,083,554   7,896,347 
Inventories, net  22,410,936   13,065,741 
Other receivables – related party  20,746    
Prepayments and other current assets  7,813,772   4,693,000 
Total current assets  51,970,592   32,306,793 
Non-current assets        
Right of use - non current  9,095,158   1,819,421 
Property and equipment, net  165,071   55,659 
Non-current prepayments  1,033,541   1,357,292 
Goodwill  6,094,144    
Investment in joint venture  37,711    
Intangible assets, net  5,091,785    
Other non-current assets  300,346   99,645 
Total non-current assets  21,817,756   3,332,017 
Total assets $73,788,348  $35,638,810 
Current liabilities        
Accounts payable  6,342,835   3,940,963 
Credit cards payable  745,585   584,311 
Customer deposit  204,490   297,407 
Other payables and accrued liabilities  4,895,528   2,487,441 
Advance from shareholders  97,476    
Short-term loans payable     162,769 
Investment payable  1,500,000    
Lease liability - current  1,790,688   731,944 
Long-term loan payable - current portion  29,244   29,244 
Long-term promissory note payable - current portion  1,826,564    
Income taxes payable  864,109   790,823 
Total current liabilities  18,296,519   9,024,902 
Non-current liabilities        
Long-term loan payable  434,201   458,571 
Long-term revolving loan payable, net  11,166,577    
Long-term promissory note payable, net  1,800,315    
Deferred tax liabilities  836,330    
Lease liability - non-current  7,573,610   1,169,552 
Total non-current liabilities  21,811,033   1,628,123 
Total liabilities  40,107,552   10,653,025 
Commitments and contingency      
Stockholders' Equity        
Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2022 and June 30, 2021      
Common stock, $0.001 par value; 180,000,000 shares authorized; 29,572,382 and 26,448,663 shares issued and outstanding at March 31, 2022 and June 30, 2021  29,573   26,449 
Additional paid in capital  29,046,300   23,214,263 
Retained earnings  4,612,219   1,745,073 
Non-controlling interest  (4,070)   
Accumulated other comprehensive income (loss)  (3,226   
Total equity  33,680,796   24,985,785 
Total liabilities and equity $73,788,348  $35,638,810 

iPower Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income
For the Three and Nine Months Ended March 31, 2022 and 2021

  For the Three Months Ended March 31,  For the Nine Months Ended March 31, 
  2022  2021  2022  2021 
  (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited) 
REVENUES $22,808,214  $13,133,902  $57,300,642  $39,348,154 
TOTAL REVENUES  22,808,214   13,133,902   57,300,642   39,348,154 
COST OF REVENUES  13,598,563   7,369,127   33,219,677   23,073,000 
GROSS PROFIT  9,209,651   5,764,775   24,080,965   16,275,154 
OPERATING EXPENSES:                
Selling and fulfillment  5,030,267   3,071,897   12,338,027   9,070,320 
General and administrative  2,802,395   1,904,144   7,940,349   4,486,621 
Total operating expenses  7,832,662   4,976,041   20,278,376   13,556,941 
INCOME FROM OPERATIONS  1,376,989   788,734   3,802,589   2,718,213 
OTHER INCOME (EXPENSE)                
Interest income (expenses)  (152,030)  (60,118)  (227,142)  (109,656)
Other financing expenses  (71,010)  (60,692)  (80,010)  (98,139)
PPP loan forgiveness     175,500      175,500 
Gain (Loss) on equity method investment  (12,289)     (12,289)   
Other non-operating income (expense)  75,882   (812,434)  85,473   (794,582)
Total other (expenses), net  (159,447)  (757,744)  (233,968)  (826,877)
INCOME BEFORE INCOME TAXES  1,217,542   30,990   3,568,621   1,891,336 
PROVISION FOR INCOME TAXES  39,855    237,813   705,545   760,687 
NET INCOME (LOSS)  1,177,687   (206,823)  2,863,076   1,130,649 
Non-controlling interest  (4,070)     (4,070)   
NET INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC. $1,181,757  $(206,823) $2,867,146  $1,130,649 
Foreign currency translation adjustments  (3,226     (3,226   
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC. $1,178,531  $(206,823) $2,863,920  $1,130,649 
Basic  28,045,130   20,204,496   26,999,342   20,204,496 
Diluted  28,045,130   20,204,496   26,999,342   20,204,496 
Basic $0.042  $(0.010) $0.106  $0.056 
Diluted $0.042  $(0.010) $0.106  $0.056