-The company sustained positive net
income for the six months ended December 31,
2022 -
HONG KONG, July 20, 2023 /PRNewswire/ -- ICZOOM Group
Inc. (Nasdaq: IZM) (the "Company" or "ICZOOM"), a B2B electronic
component products e-commerce platform, with its financial year
ends on June 30 annually, has
released its interim unaudited consolidated financial statements
for the six months ended December 31,
2022. A full version of the report is available at the
Company's website at http://ir.iczoomex.com/index.html or the
SEC's website at www.sec.gov.
Mr. Lei Xia, the CEO and the Chairman of the Board of Directors
of ICZOOM, commented, "Despite a challenging environment, we've
managed to sustain a stable position for the first half of the
fiscal year 2023. Our total revenue reached $120.2 million for the six months ended
December 31, 2022,
decreased by 14.6% from $140.5
million for the same period of last fiscal year, primarily due to the business
operation disruption from time to time in PRC due to restrictive
measures adopted by local governments to contain the outbreak of Omicron from
June to December
2022. Though revenues dipped, we proudly maintained a
positive net income. Our strategic initiatives aiming at enhancing
efficiency will continue to ensure our business's longevity. We're
dedicated to innovation and delivering superior products and
services, enabling us to navigate market flux effectively. Ongoing
investments in research and development, expansion of our product
portfolio, and strengthening key partnerships remain our priority.
Looking ahead, we're optimistic and committed to creating values to
our shareholders."
First Half of the Fiscal Year 2023 Financial and Operational
Highlights
- Total revenues were $120.2
million, compared to $140.5
million for the same period of last fiscal year.
- Net income was $0.9 million,
compared to $1.1 million for the same
period of last fiscal year.
- Total customers were 653, compared to 770 for the same period
of last fiscal year.
First Half of the Fiscal Year 2023 Financial Results
Revenues
Total revenue was $120.2 million
for the six months ended December 31,
2022, decreased by 14.5% from $140.5
million for the same period of last fiscal year. The decrease was largely
attributable to the business operation disruption from time to time
in China due to restrictive
measures adopted by local governments to control the outbreak of
Omicron from June 2022 to
December 2022. In addition, the total
revenue was affected by the reduced demand from the customers as
some of the customers stocked up heavily in last fiscal year and
still carried over comparatively high inventories. The number of
customers for electronic component products and services decreased
by 117 or 15.2%, from 770 for the six months ended December 31, 2021 to 653 for the six months ended
December 31 2022.
Revenue from sales of electronic components was $118.3 million for the six months ended
December 31, 2022, decreased by 14.6%
from $138.5 million for the same
period of last fiscal year. The
decrease was primarily due to the decreased sales of integrated
circuits("IC") as the ICs were stocked up heavily by some customers
last fiscal year and the demand for them decreased during this
period.
Service commission fee revenues were $1.86 million for the six months ended
December 31, 2022, decreased by 6.8%
from $2.0 million for the same period
of last fiscal year. We provide
customs clearance when customers purchase electronic component
products directly from overseas suppliers, as well as temporary
warehousing, and logistic and shipping services after the customs
clearance. The decrease was primarily due to the number of
customers for our services decreased by 2.2% from 135 customers for
the six months ended December 31,
2021 to 132 for the six months ended December 31, 2022, which led to total merchandise
value involved in the transactions decreased.
Cost of Revenues
Cost of revenues was $117.1
million for the six months ended December 31, 2022, decreased by 14.1% from
$136.3 million for the same period of
last year.
Gross Profit and Gross Margin
Gross profit was $3.1 million for
the six months ended December 31,
2022, decreased by 26.7% from $4.2
million for the same period of last fiscal year. Gross margin was 2.6% for the
six months ended December 31, 2022,
compared to 3.1% for the same period of last fiscal year.
Operating Expenses
Total operating expenses were $2.3
million for the six months ended December 31, 2022, decreased by 5.3% from
$2.4 million for the same period of
last fiscal year.
- Selling expenses were $0.9
million for the six months ended December 31, 2022, almost the same as selling
expenses for the same period of last fiscal year.
- General and administrative expenses were $1.4 million for the six months ended
December 31, 2022, decreased by 7.0%
from $1.5 million for the same period
of last fiscal year. The decrease
was mainly due to the decrease in our salary and employee benefit
expense and stock-based compensation expenses as a result of the
reduced headcount.
Other Income (Expenses)
Net other income was $0.1 million
for the six months ended December 31,
2022, compared to net other expenses of $0.3 million for the same period of last
fiscal year.
Net Income
Net income was $0.93 million for
the six months ended December 31,
2022, compared to $1.1 million
for the same period of last fiscal
year.
Basic and Diluted Earnings per Share
Basic and diluted earnings per share were $0.10 and $0.10 for
the six months ended December 31,
2022, respectively, compared to $0.13 and $0.11,
for the same period of last fiscal
year, respectively.
Balance Sheet
As of December 31, 2022, the
Company had cash of $0.9 million and
restricted cash of $4.0 million,
compared to $1.1 million and
$1.8 million as of June 30, 2022, respectively.
Cash Flow
Net cash used in operating activities was $1.9 million for the six months ended
December 31, 2022, compared to net
cash provided by operating activities of $16,154 for the same period of last fiscal year.
Net cash used in investing activities was $94,510 for the six months ended December 31, 2022 compared to net cash provided
by investing activities of $917,440
for the same period of last fiscal
year.
Net cash provided by financing activities was $2.0 million for the six months ended
December 31, 2022, compared to net
cash used in financing activities of $5.0
million for the same period of last fiscal year.
Recent Development
On March 18, 2023, the Company
announced the closing of its initial public offering (the
"Offering") of 1,500,000 Class A ordinary shares at a public
offering price of US$4.00 per Class A
ordinary share. The Class A ordinary shares began trading on the
Nasdaq Capital Market on March 15,
2023 under the ticker symbol "IZM."
About ICZOOM Group Inc.
ICZOOM Group Inc. is primarily engaged in sales of electronic
component products to customers in Hong
Kong and mainland China
through its B2B e-commerce platform. These products are primarily
used by China based small and
medium-sized enterprises ("SMEs") in the consumer electronic
industry, Internet of Things ("IoT"), automotive electronics and
industry control segments. By utilizing latest technologies, the
Company's platform collects, optimizes and presents product
offering information from suppliers of all sizes, all transparent
and available to its SME customers to compare and select. In
addition to the sales of electronic component products, the Company
also provides services to customers such as temporary warehousing,
logistic and shipping, and customs clearance. For more information,
please visit the Company's website:
http://ir.iczoomex.com/index.html.
Forward-Looking Statements
Certain statements in this announcement are forward-looking
statements. These forward-looking statements involve known and
unknown risks and uncertainties and are based on the Company's
current expectations and projections about future events that the
Company 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 "anticipate," "estimate," "plan," "project," "continuing,"
"ongoing," "expect," "we believe," "we intend," "may," "should,"
"will," "could" and similar expressions. The Company undertakes no
obligation to update or revise publicly any forward-looking
statements to reflect subsequent occurring events or circumstances,
or changes in its expectations, except as may be required by law.
Although the Company 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 the
Company 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 the
Company's registration statement and other filings with the U.S.
Securities and Exchange Commission.
For more information, please contact:
ICZOOM Group Inc.
Investor
Relations
Email: investors@iczoom.com
ICZOOM GROUP
INC. AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
December 31,
2022
(Unaudited)
|
|
|
June 30,
2022
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
Cash
|
|
$
|
866,077
|
|
|
$
|
1,134,416
|
|
Restricted
cash
|
|
|
3,950,020
|
|
|
|
1,817,607
|
|
Short-term
investments
|
|
|
1,436
|
|
|
|
1,490
|
|
Notes
receivable
|
|
|
-
|
|
|
|
18,000
|
|
Accounts receivable,
net
|
|
|
83,124,017
|
|
|
|
76,020,296
|
|
Inventories,
net
|
|
|
30,780
|
|
|
|
365,615
|
|
Advances to
suppliers
|
|
|
1,358,170
|
|
|
|
6,613,280
|
|
Prepaid expenses and
other current assets
|
|
|
1,738,870
|
|
|
|
2,432,913
|
|
TOTAL CURRENT
ASSETS
|
|
|
91,069,370
|
|
|
|
88,403,617
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
158,125
|
|
|
|
119,244
|
|
Right-of-use asset,
net
|
|
|
549,444
|
|
|
|
692,571
|
|
Intangible assets,
net
|
|
|
330,380
|
|
|
|
378,338
|
|
Other non-current
assets
|
|
|
11,150
|
|
|
|
14,491
|
|
Deferred tax
assets
|
|
|
134,171
|
|
|
|
24,751
|
|
TOTAL NON-CURRENT
ASSETS
|
|
|
1,183,270
|
|
|
|
1,229,395
|
|
TOTAL
ASSETS
|
|
$
|
92,252,640
|
|
|
$
|
89,633,012
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Short-term bank loans,
net
|
|
$
|
12,646,565
|
|
|
$
|
11,760,387
|
|
Short-term borrowings-
third-party loans
|
|
|
300,000
|
|
|
|
100,000
|
|
Accounts
payable
|
|
|
59,767,305
|
|
|
|
59,558,743
|
|
Deferred
revenue
|
|
|
2,807,848
|
|
|
|
3,651,700
|
|
Due to related
parties
|
|
|
954,277
|
|
|
|
349,684
|
|
Taxes
payable
|
|
|
3,023,859
|
|
|
|
2,675,002
|
|
Operating lease
liability, current
|
|
|
250,106
|
|
|
|
232,221
|
|
Accrued expenses and
other current liabilities
|
|
|
808,809
|
|
|
|
329,924
|
|
TOTAL CURRENT
LIABILITIES
|
|
|
80,558,769
|
|
|
|
78,657,661
|
|
Operating lease
liabilities, non-current
|
|
|
344,815
|
|
|
|
480,436
|
|
TOTAL NON-CURRENT
LIABILITY
|
|
|
344,815
|
|
|
|
480,436
|
|
TOTAL
LIABILITIES
|
|
|
80,903,584
|
|
|
|
79,138,097
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Ordinary shares, $0.16
par value, 35,000,000 shares authorized, 8,826,374 shares
issued and outstanding as of December 31, 2022
and June 30, 2022*:
|
|
|
|
|
|
|
|
|
Class A shares, 30,000,000 shares authorized, 4,996,874
shares issued and
outstanding
|
|
|
799,499
|
|
|
|
799,499
|
|
Class B shares, 5,000,000 shares authorized, 3,829,500
shares issued and
outstanding
|
|
|
612,720
|
|
|
|
612,720
|
|
Additional paid-in
capital
|
|
|
14,557,811
|
|
|
|
14,499,213
|
|
Statutory
reserve
|
|
|
624,097
|
|
|
|
624,097
|
|
Accumulated
deficit
|
|
|
(6,158,753)
|
|
|
|
(7,085,470)
|
|
Accumulated other
comprehensive income
|
|
|
913,682
|
|
|
|
1,044,856
|
|
TOTAL SHAREHOLDERS'
EQUITY
|
|
|
11,349,056
|
|
|
|
10,494,915
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
$
|
92,252,640
|
|
|
$
|
89,633,012
|
|
|
* Retrospectively
restated for effect of 1-for-4 reverse split on November 2020 and
1-for-2 reverse split on August
8, 2022 of the ordinary shares, see Note 16.
|
|
The accompanying notes
are an integral part of these consolidated financial
statements
|
ICZOOM GROUP
INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
|
(UNAUDITED)
|
|
|
|
|
|
For the six
months ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
Revenue,
net
|
|
|
|
|
|
|
Sales of electronic
components, net of sales taxes and value added taxes
|
|
$
|
118,348,676
|
|
|
$
|
138,531,453
|
|
Service commission
fees, net of sales taxes and value added taxes
|
|
|
1,858,830
|
|
|
|
1,993,615
|
|
Total revenue,
net
|
|
|
120,207,506
|
|
|
|
140,525,068
|
|
Cost of
revenue
|
|
|
117,108,678
|
|
|
|
136,299,375
|
|
Gross profit
|
|
|
3,098,828
|
|
|
|
4,225,693
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
899,314
|
|
|
|
921,587
|
|
General and
administrative expenses
|
|
|
1,382,358
|
|
|
|
1,487,099
|
|
Total operating
expenses
|
|
|
2,281,672
|
|
|
|
2,408,686
|
|
INCOME FROM
OPERATIONS
|
|
|
817,156
|
|
|
|
1,817,007
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES)
|
|
|
|
|
|
|
|
|
Foreign exchange
transaction gain (loss)
|
|
|
418,866
|
|
|
|
(14,213)
|
|
Interest
expense
|
|
|
(234,738)
|
|
|
|
(236,444)
|
|
Short-term investment
income
|
|
|
6,913
|
|
|
|
23,981
|
|
Subsidy
income
|
|
|
31,826
|
|
|
|
181,086
|
|
Loss from termination
of the VIE agreements
|
|
|
-
|
|
|
|
(205,250)
|
|
Other expenses,
net
|
|
|
(112,254)
|
|
|
|
(86,716)
|
|
Total other income
(expenses), net
|
|
|
110,613
|
|
|
|
(337,556)
|
|
INCOME BEFORE INCOME
TAX PROVISION
|
|
|
927,769
|
|
|
|
1,479,451
|
|
PROVISION FOR INCOME
TAXES
|
|
|
1,052
|
|
|
|
374,863
|
|
NET
INCOME
|
|
|
926,717
|
|
|
|
1,104,588
|
|
Foreign currency
translation adjustments
|
|
|
(131,174)
|
|
|
|
873,622
|
|
TOTAL COMPREHENSIVE
INCOME
|
|
$
|
795,543
|
|
|
$
|
1,978,210
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
ORDINARY SHARE:
|
|
|
|
|
|
|
|
|
– BASIC
|
|
$
|
0.10
|
|
|
$
|
0.13
|
|
– DILUTED
|
|
$
|
0.10
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF ORDINARY SHARES*:
|
|
|
|
|
|
|
|
|
– BASIC
|
|
|
8,826,374
|
|
|
|
8,826,374
|
|
– DILUTED
|
|
|
9,547,346
|
|
|
|
9,748,141
|
|
|
|
* Retrospectively
restated for effect of 1-for-4 reverse split on November 2020 and
1-for-2 reverse split on August
8, 2022 of the ordinary shares, see Note 16.
|
|
|
|
The accompanying notes
are an integral part of these consolidated financial
statements
|
|
ICZOOM GROUP
INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(UNAUDITED)
|
|
|
|
|
|
For the
six months ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net
income
|
|
$
|
926,717
|
|
|
$
|
1,104,588
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
89,128
|
|
|
|
88,572
|
|
Loss (gain) from disposal of equipment
|
|
|
1,146
|
|
|
|
—
|
|
Amortization of right-of-use assets
|
|
|
118,026
|
|
|
|
—
|
|
Provision for inventory impairment
|
|
|
1,851
|
|
|
|
—
|
|
Amortization of share-based compensation
|
|
|
58,598
|
|
|
|
161,096
|
|
Amortization of debt issuance costs
|
|
|
110,219
|
|
|
|
84,095
|
|
Deferred income tax provision
|
|
|
(109,627)
|
|
|
|
(7,760)
|
|
Unrealized exchange (loss) gain
|
|
|
(477,112)
|
|
|
|
166,912
|
|
Loss from termination of the VIE agreements
|
|
|
—
|
|
|
|
205,250
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Notes receivable
|
|
|
18,000
|
|
|
|
—
|
|
Accounts receivable
|
|
|
(8,401,208)
|
|
|
|
2,389,739
|
|
Inventories
|
|
|
336,052
|
|
|
|
1,328,520
|
|
Advances to suppliers
|
|
|
5,255,103
|
|
|
|
138,623
|
|
Prepaid expenses and other current assets
|
|
|
689,583
|
|
|
|
(457,815)
|
|
Other noncurrent assets
|
|
|
—
|
|
|
|
—
|
|
Accounts payable
|
|
|
130,523
|
|
|
|
(4,366,567)
|
|
Deferred revenue
|
|
|
(738,116)
|
|
|
|
(412,749)
|
|
Taxes payable
|
|
|
421,917
|
|
|
|
577,378
|
|
Operating Lease liabilities
|
|
|
(117,736)
|
|
|
|
—
|
|
Accrued expenses and other current liabilities
|
|
|
(218,230)
|
|
|
|
(983,728)
|
|
Net cash (used in)
provided by operating activities
|
|
|
(1,905,166)
|
|
|
|
16,154
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(74,420)
|
|
|
|
(10,124)
|
|
Proceeds from disposal of PPE
|
|
|
3,096
|
|
|
|
—
|
|
Purchase of intangible assets
|
|
|
(23,186)
|
|
|
|
(1,485)
|
|
Purchase of short-term investments
|
|
|
(2,701,116)
|
|
|
|
(14,625,930)
|
|
Proceeds upon maturity of short-term investments
|
|
|
2,701,116
|
|
|
|
15,554,979
|
|
Net cash (used in)
provided by investing activities
|
|
|
(94,510)
|
|
|
|
917,440
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from short-term bank loans
|
|
|
14,145,794
|
|
|
|
15,053,570
|
|
Repayments of short-term bank loans
|
|
|
(12,841,626)
|
|
|
|
(20,200,000)
|
|
Proceeds from loans payable to third-parties
|
|
|
360,000
|
|
|
|
700,000
|
|
Repayments from loans payable to third-parties
|
|
|
(160,000)
|
|
|
|
(370,000)
|
|
Proceeds from banker's acceptance notes payable
|
|
|
—
|
|
|
|
1,500,000
|
|
Repayment of banker's acceptance notes payable
|
|
|
—
|
|
|
|
(1,500,035)
|
|
Proceeds from borrowings from related parties
|
|
|
608,589
|
|
|
|
448,238
|
|
Payment for deferred IPO costs
|
|
|
(88,810)
|
|
|
|
—
|
|
Repayment of related party borrowings
|
|
|
—
|
|
|
|
(589,396)
|
|
Net cash provided by
(used in) financing activities
|
|
|
2,023,947
|
|
|
|
(4,957,623)
|
|
Effect of exchange
rate fluctuation on cash and restricted cash
|
|
|
1,839,803
|
|
|
|
342,622
|
|
Net increase
(decrease) in cash and restricted cash
|
|
|
1,864,074
|
|
|
|
(3,681,407)
|
|
Cash and restricted
cash at beginning of period
|
|
|
2,952,023
|
|
|
|
6,808,190
|
|
Cash and restricted
cash at end of period
|
|
$
|
4,816,097
|
|
|
$
|
3,126,783
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
$
|
(61,473)
|
|
|
$
|
(56,593)
|
|
Cash paid for
interest
|
|
$
|
(234,738)
|
|
|
$
|
(236,444)
|
|
Supplemental
disclosure of non-cash investing and financing
activities
|
|
|
|
|
|
|
|
|
Right-of-use assets
obtained in exchange for operating lease obligations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
The accompanying notes
are an integral part of these consolidated financial
statements
|
|
View original
content:https://www.prnewswire.com/news-releases/iczoom-group-inc-released-2023-interim-financial-results-301881874.html
SOURCE ICZOOM Group Inc.