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, 2024Time: 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
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, CFAElevate IR(720)
330-2829IPW@elevate-ir.com
iPower Inc. and SubsidiariesUnaudited Condensed Consolidated
Balance SheetsAs of December 31, 2023 and June 30, 2023 |
|
|
|
|
|
December 31, |
|
|
June 30, |
|
|
|
2023 |
|
|
2023 |
|
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
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 SubsidiariesUnaudited Condensed Consolidated
Statements of OperationsFor the Three and Six Months Ended December
31, 2023 and 2022 |
|
|
|
|
|
For the Three Months EndedDecember 31, |
|
|
For the Six Months EndedDecember 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 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
) |
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