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, 2022Time: 4:30 p.m. Eastern timeToll-free
dial-in number: (888) 705-0179International dial-in number: (833)
730-3981Conference ID: 6364931Webcast: 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, CFAElevate IR(720)
330-2829IPW@elevate-ir.com
iPower Inc. and
SubsidiariesUnaudited Condensed Consolidated
Balance SheetsAs of March 31, 2022 and June 30,
2021
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
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
SubsidiariesUnaudited Condensed Consolidated
Statements of Operations and Comprehensive
IncomeFor 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON STOCK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSSES) PER
SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.042 |
|
|
$ |
(0.010 |
) |
|
$ |
0.106 |
|
|
$ |
0.056 |
|
Diluted |
|
$ |
0.042 |
|
|
$ |
(0.010 |
) |
|
$ |
0.106 |
|
|
$ |
0.056 |
|
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