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 financial results for its fiscal first
quarter ended September 30, 2023.
Fiscal Q1 2024 Results vs. Fiscal Q1
2023 (unless otherwise noted)
- Total revenue
increased 2% to $26.5 million compared to the Company’s record
$26.0 million in Q1 2023.
- Gross profit
increased 18% to $11.8 million, while gross margin increased 600
bps to 44.4% compared to 38.4%.
- Net loss
attributable to iPower improved 69% to $1.3 million or $(0.04) per
share, compared to net loss attributable to iPower of $4.2 million
or $(0.14) per share.
- As of September 30, 2023, net debt
(total debt less cash) was reduced by 48% to $4.3 million compared
to net debt of $8.1 million as of June 30, 2023.
Management Commentary
“We continued to generate revenue growth during
the quarter, surpassing the challenging comp against our record
revenues in fiscal Q1 2023,” said Lawrence Tan, CEO of iPower.
“Sales of our non-hydroponic products remained strong at more than
75% of revenue, largely driven by categories such as fans, shelving
and outdoor patio furniture. Business generated by our SuperSuite
supply chain partnerships has reached an annualized revenue
run-rate of approximately $7.0 million and continues to gain
momentum as we work through our growing pipeline of prospective
partnerships. We are pleased with the early financial results as
well as the invaluable insights that we are gaining from this
accelerating area of our business.”
iPower CFO, Kevin Vassily, added, “As
highlighted last quarter, we have continued to drive reductions to
our supply of higher cost inventory and are now beginning to
realize the benefit of our efforts through gross margin expansion,
which has reached our highest level in nearly two years.
Additionally, we made material improvements to our capitalization
during the quarter, with net debt decreasing 48% as compared to the
close of fiscal 2023. These actions place us in a good position to
capitalize on prospective acquisition opportunities as we continue
to drive growth and target a return to profitability in fiscal
2024.”
Fiscal First Quarter 2024 Financial
Results
Total revenue in the fiscal first quarter of
2024 increased 2% to $26.5 million as compared to $26.0 million for
the same period in fiscal 2023. The increase was driven in-part by
growth from the Company’s SuperSuite supply chain offerings, which
is generating approximately $600,000 in revenue per month, as well
as favorable seasonality in the Company’s product mix.
Gross profit in the fiscal first quarter of 2024
increased 18% to $11.8 million as compared to S10.0 million in the
same quarter in fiscal 2023. As a percentage of revenue, gross
margin increased 600 basis points to 44.4% compared to 38.4% in the
year-ago period. The increase in gross margin was primarily driven
by a favorable product mix.
Total operating expenses in the fiscal first
quarter of 2024 improved 11% to $13.0 million compared to $14.6
million for the same period in fiscal 2023. The decrease was driven
primarily by a $3.1 million decrease in impairment loss on
goodwill, partially offset by increased selling and fulfillment
expenses.
Net loss attributable to iPower in the fiscal
first quarter of 2024 improved to $1.3 million or $(0.04) per
share, as compared to a net loss attributable to iPower of $4.2
million or $(0.14) per share for the same period in fiscal 2023.
The improvement was driven by the aforementioned higher gross
profit and lower operating expenses.
Cash and cash equivalents were $2.7 million at
September 30, 2023, as compared to $3.7 million at June 30, 2023.
Total debt as of September 30, 2023 was $7.0 million as 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 48% to
$4.3 million compared to $8.1 million as of June 30, 2023.
Conference Call
The Company will hold a conference call today,
November 14, 2023, at 4:30 p.m. Eastern Time to discuss the results
for its fiscal first quarter ended September 30, 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: Tuesday, November 14, 2023Time: 4:30 p.m. Eastern
timeDial-in registration link: hereLive 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
Report on Form 10-Q, as filed with the SEC on November 14, 2023,
and in its other SEC filings.
Investor Relations Contact:
Sean Mansouri, CFAElevate IR(720)
330-2829IPW@elevate-ir.com
iPower Inc. and
Subsidiaries |
Unaudited Condensed
Consolidated Balance Sheets |
As of September 30,
2023 and June 30, 2023 |
|
|
|
September 30, |
|
June 30, |
|
|
2023 |
|
2023 |
|
|
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalent |
|
$ |
2,729,161 |
|
|
$ |
3,735,642 |
|
Accounts receivable, net |
|
|
13,237,282 |
|
|
|
14,071,543 |
|
Inventories, net |
|
|
15,056,623 |
|
|
|
20,593,889 |
|
Other receivable - related party |
|
|
- |
|
|
|
- |
|
Prepayments and other current assets |
|
|
1,811,499 |
|
|
|
2,858,196 |
|
Total current assets |
|
|
32,834,565 |
|
|
|
41,259,270 |
|
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
Right of use - non-current |
|
|
7,763,712 |
|
|
|
7,837,345 |
|
Property and equipment, net |
|
|
496,901 |
|
|
|
536,418 |
|
Deferred tax assets |
|
|
2,432,439 |
|
|
|
2,155,250 |
|
Non-current prepayments |
|
|
461,034 |
|
|
|
531,456 |
|
Goodwill |
|
|
3,034,110 |
|
|
|
3,034,110 |
|
Investment in joint venture |
|
|
32,088 |
|
|
|
33,113 |
|
Intangible assets, net |
|
|
4,117,728 |
|
|
|
4,280,071 |
|
Other non-current assets |
|
|
417,639 |
|
|
|
427,254 |
|
Total non-current assets |
|
|
18,755,651 |
|
|
|
18,835,017 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
51,590,216 |
|
|
$ |
60,094,287 |
|
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
|
|
12,031,323 |
|
|
|
13,244,957 |
|
Credit cards payble |
|
|
693,327 |
|
|
|
366,781 |
|
Customer deposit |
|
|
362,826 |
|
|
|
350,595 |
|
Other payables and accrued liabilities |
|
|
3,292,581 |
|
|
|
4,831,067 |
|
Advance from shareholders |
|
|
84,718 |
|
|
|
85,200 |
|
Investment payable |
|
|
- |
|
|
|
- |
|
Lease liability - current |
|
|
2,169,603 |
|
|
|
2,159,173 |
|
Short-term loan payable - related party |
|
|
1,006,060 |
|
|
|
2,017,852 |
|
Long-term promissory note payable - current portion |
|
|
1,149,961 |
|
|
|
- |
|
Income taxes payable |
|
|
275,117 |
|
|
|
276,683 |
|
Total current liabilities |
|
|
21,065,516 |
|
|
|
23,332,308 |
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
|
Long-term revolving loan payable, net |
|
|
4,808,322 |
|
|
|
9,791,191 |
|
Long-term promissory note payable, net |
|
|
0 |
|
|
|
- |
|
Deferred tax liabilities |
|
|
- |
|
|
|
- |
|
Lease liability - non-current |
|
|
6,023,813 |
|
|
|
6,106,047 |
|
|
|
|
|
|
|
|
Total non-current liabilities |
|
|
10,832,135 |
|
|
|
15,897,238 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
31,897,651 |
|
|
|
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 June 30, 2023 and 2022 |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value; 180,000,000 shares authorized;
29,710,939 and |
|
|
|
|
|
|
29,572,382 shares issued and outstanding at June 30, 2023 and
2022 |
|
|
29,712 |
|
|
|
29,712 |
|
Additional paid in capital |
|
|
29,742,402 |
|
|
|
29,624,520 |
|
(Accumulated deficits) Retained earnings |
|
|
(9,988,957 |
) |
|
|
(8,702,442 |
) |
Non-controlling interest |
|
|
(27,751 |
) |
|
|
(24,915 |
) |
Accumulated other comprehensive income (loss) |
|
|
(62,841 |
) |
|
|
(62,134 |
) |
Total equity |
|
|
19,692,565 |
|
|
|
20,864,741 |
|
|
|
|
|
|
|
|
Total
liabilities and equity |
|
$ |
51,590,216 |
|
|
$ |
60,094,287 |
|
|
|
|
|
|
|
|
iPower Inc. and
Subsidiaries |
Unaudited Condensed
Consolidated Statements of Operations |
For the Three Months
Ended September 30, 2023 and 2022 |
|
|
|
For the Three Months
Ended September 30, |
|
|
2023 |
|
2022 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
REVENUES |
|
$ |
26,508,487 |
|
|
$ |
26,022,673 |
|
|
|
|
|
|
|
|
TOTAL
REVENUES |
|
|
26,508,487 |
|
|
|
26,022,673 |
|
|
|
|
|
|
|
|
COST OF
REVENUES |
|
|
14,749,529 |
|
|
|
16,036,957 |
|
|
|
|
|
|
|
|
GROSS
PROFIT |
|
|
11,758,845 |
|
|
|
9,985,716 |
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
Selling and fulfillment |
|
|
10,063,471 |
|
|
|
8,418,812 |
|
General and administrative |
|
|
2,964,051 |
|
|
|
3,100,176 |
|
Impairment loss - goodwill |
|
|
- |
|
|
|
3,060,034 |
|
Total operating expenses |
|
|
13,027,522 |
|
|
|
14,579,022 |
|
|
|
|
|
|
|
|
(LOSS)
INCOME FROM OPERATIONS |
|
|
(1,268,677 |
) |
|
|
(4,593,306 |
) |
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
Interest expenses |
|
|
(228,365 |
) |
|
|
(248,041 |
) |
Other financing expenses |
|
|
- |
|
|
|
- |
|
Loss on equity method investment |
|
|
(1,025 |
) |
|
|
(3,390 |
) |
Other non-operating income |
|
|
(67,166 |
) |
|
|
211,760 |
|
Total other expenses, net |
|
|
(296,556 |
) |
|
|
(39,671 |
) |
|
|
|
|
|
|
|
(LOSS)
INCOME BEFORE INCOME TAXES |
|
|
(1,565,233 |
) |
|
|
(4,632,977 |
) |
|
|
|
|
|
|
|
PROVISION
FOR INCOME TAX (BENEFIT) EXPENSE |
|
|
(275,882 |
) |
|
|
(447,796 |
) |
NET (LOSS)
INCOME |
|
|
(1,289,351 |
) |
|
|
(4,185,181 |
) |
|
|
|
|
|
|
|
Non-controlling interest |
|
|
(2,836 |
) |
|
|
(2,805 |
) |
|
|
|
|
|
|
|
NET (LOSS)
INCOME ATTRIBUTABLE TO IPOWER INC. |
|
$ |
(1,286,515 |
) |
|
$ |
(4,182,376 |
) |
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE LOSS |
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
(707 |
) |
|
|
(111,475 |
) |
|
|
|
|
|
|
|
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO IPOWER INC. |
|
$ |
(1,287,222 |
) |
|
$ |
(4,293,851 |
) |
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON STOCK |
|
|
|
|
|
|
Basic |
|
|
29,764,515 |
|
|
|
29,665,716 |
|
|
|
|
|
|
|
|
Diluted |
|
|
29,764,515 |
|
|
|
29,665,716 |
|
|
|
|
|
|
|
|
(LOSSES)
EARNINGS PER SHARE |
|
|
|
|
|
|
Basic |
|
$ |
(0.04 |
) |
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
Diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
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