iPower Reports Fiscal Fourth Quarter and Full Year 2022 Results

Duarte, California, UNITED STATES


- Fiscal Q4 Revenue up 50% to a Record $22.1 Million -

- Fiscal 2022 Revenue up 47% to a Record $79.4 Million -

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

DUARTE, Calif., Sept. 27, 2022 (GLOBE NEWSWIRE) -- iPower Inc. (Nasdaq:IPW) (“iPower” or the “Company”), a leading online hydroponic equipment supplier and retailer, today announced its financial results for its fiscal fourth quarter and full year ended June 30, 2022.

Fiscal Q4 2022 Results vs. Year-Ago Quarter 

  • Total revenue increased 50% to $22.1 million.
  • Gross profit increased 39% to $9.1 million.
  • As a percentage of revenue, gross margin was 41.2% compared to 44.4%.
  • Net loss improved to $1.3 million or $(0.05) per share compared to a net loss of $1.9 million or $(0.08) per share.

Fiscal 2022 Results vs. Fiscal 2021

  • Total revenue increased 47% to $79.4 million.
  • Gross profit increased 46% to $33.2 million.
  • As a percentage of revenue, gross margin was 41.8% compared to 42.2%.
  • Net income increased significantly to $1.5 million or $0.05 per share compared to a net loss of $0.8 million or $(0.04) per share.

Management Commentary 

“We generated a record year of growth and profitability in fiscal 2022, highlighted by an almost 50% increase in revenue while maintaining gross margins above 40% and generating positive net income,” said Lawrence Tan, CEO of iPower. “Throughout the year, we focused on prioritizing our in-house product mix and strategically diversifying our product offerings into categories outside of hydroponics. Our ability to shift the product mix into new categories while continuing to grow sales profitably demonstrates our product research, merchandising and supply chain expertise.

“We delivered on multiple strategic initiatives in fiscal 2022, including the expansion of our business to Europe, the launch of two joint ventures, and closing our first M&A transaction. The joint ventures provided low-cost opportunities to extend our logistics expertise to the ecommerce and social media industries, while the acquisition of our global co-engineering partner strengthened our production capacity and R&D capabilities.”

iPower CFO Kevin Vassily added, “Due to the continued volatility of the global supply chain in our fourth quarter, we leveraged our diversified supply network to increase inventory and ensure product availability for our customers, allowing us to continue to meet strong demand. This bulk purchasing also partially offset the impact of elevated freight costs. The benefit of product availability through the acquisition of our global co-engineering partner has led to some of our strongest months of sales in July and August. Looking ahead, we plan to continue executing on our various product and operational initiatives and deliver on our growth objectives in fiscal 2023.”

Fiscal Fourth Quarter 2022 Financial Results 

Total revenue in the fiscal fourth quarter of 2022 increased 50% to $22.1 million compared to $14.7 million for the same period in fiscal 2021. The increase was driven by greater demand for iPower’s non-hydroponic product portfolio, including commercial fans, shelving products and chairs, among others. iPower’s non-hydroponic portfolio accounted for approximately 54% of revenue in the fiscal fourth quarter.

Gross profit in the fiscal fourth quarter of 2022 increased 39% to $9.1 million compared to $6.5 million for the same quarter in fiscal 2021. As a percentage of revenue, gross margin was 41.2% compared to 44.4% in the year-ago quarter. The decrease in gross margin was driven by product and channel mix, as well as elevated freight costs.

Total operating expenses in the fiscal fourth quarter were $10.6 million compared to $6.3 million for the same period in fiscal 2021. As a percentage of revenue, operating expenses were 48.0% compared to 42.8% in the year-ago quarter. The increase in operating expenses was primarily driven by additional warehouse, selling and fulfillment costs.

Net loss in the fiscal fourth quarter of 2022 was $1.3 million or $(0.05) per share, compared to a net loss of $1.9 million or $(0.08) per share for the same period in fiscal 2021.

Cash and cash equivalents were $1.8 million at June 30, 2022, compared to $6.7 million at June 30, 2021. The decrease was attributed to the Company’s strategic decision to increase inventory to offset supply chain risk and effectively fulfill strong customer demand. Total long-term debt as of June 30, 2022 was $14.1 million compared to $0.5 million as of June 30, 2021. This increase was attributed to the note associated with the DHS acquisition, as well as a function of timing as the Company utilized 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 Tuesday, September 27, 2022, to discuss the results for its fiscal fourth quarter and full year ended June 30, 2022.

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

Date: Tuesday, September 27, 2022
Time: 4:30 p.m. Eastern time
Dial-in registration link: here
Live webcast registration link: here

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 and performance in iPower's Annual Report on Form 10-K for the year ended June 30, 2022 and in its other filings with the SEC.

Investor Relations Contact:

Sean Mansouri, CFA
Elevate IR
(720) 330-2829
IPW@elevate-ir.com

 
iPower Inc. and Subsidiaries
Consolidated Balance Sheets
As of June 30, 2022 and 2021
(unaudited)
 
 June 30, June 30,
 2022 2021
      
ASSETS      
Current assets      
Cash and cash equivalent$1,821,947  $6,651,705 
Accounts receivable, net 17,432,287   7,896,347 
Inventories, net 30,433,766   13,065,741 
Other receivable - related party 51,762   - 
Prepayments and other current assets 5,444,463   4,693,000 
Total current assets 55,184,225   32,306,793 
       
Non-current assets      
Right of use - non current 10,453,282   1,819,421 
Property and equipment, net 544,633   55,659 
Non-current prepayments 925,624   1,357,292 
Goodwill 6,094,144   - 
Investment in joint venture 43,385   - 
Intangible assets, net 4,929,442   - 
Other non-current assets 406,732   99,645 
Total non-current assets 23,397,241   3,332,017 
       
Total assets$78,581,467  $35,638,810 
       
LIABILITIES AND EQUITY      
Current liabilities      
Accounts payable 9,533,408   3,940,963 
Credit cards payable 807,687   584,311 
Customer deposit 273,457   297,407 
Other payables and accrued liabilities 5,915,220   2,487,441 
Advance from shareholders 92,246   - 
Short-term loans payable -   162,769 
Investment payable 1,500,000   - 
Lease liability - current 2,582,933   731,944 
Long-term loan payable - current portion -   29,244 
Long-term promissory note payable - current portion 1,879,065   - 
Income taxes payable 299,563   790,823 
Total current liabilities 22,883,579   9,024,902 
       
Non-current liabilities      
Long-term loan payable -   458,571 
Long-term revolving loan payable, net 12,314,627   - 
Long-term promissory note payable, net 1,781,705   - 
Deferred tax liabilities 939,115   - 
Lease liability - non-current 8,265,611   1,169,552 
       
Total non-current liabilities 23,301,058   1,628,123 
       
Total liabilities 46,184,637   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 June 30, 2022 and 2021 -   - 
Common stock, $0.001 par value; 180,000,000 shares authorized; 29,572,382 and 26,448,663 shares issued and outstanding at June 30, 2022 and 2021 29,573   26,449 
Additional paid in capital 29,111,863   23,214,263 
Retained earnings 3,262,948   1,745,073 
Non-controlling interest (13,232)  - 
Accumulated other comprehensive income (loss) 5,678   - 
Total equity 32,396,830   24,985,785 
       
Total liabilities and equity$78,581,467  $35,638,810 


 
iPower Inc. and Subsidiaries
Consolidated Statements of Operations
For the Years Ended June 30, 2022 and 2021
(unaudited)
 
 For the Three Months Ended June 30 For the Years Ended June 30,
 2022  2021 2022 2021
         
            
REVENUES$22,117,831  $14,727,768  $79,418,473  $54,075,922 
            
TOTAL REVENUES 22,117,831   14,727,768   79,418,473   54,075,922 
            
COST OF REVENUES 12,998,903   8,184,358   46,218,580   31,257,358 
            
GROSS PROFIT 9,118,928   6,543,410   33,199,893   22,818,564 
            
OPERATING EXPENSES:           
Selling and fulfillment 6,842,363   4,403,282   19,180,390   13,473,602 
General and administrative 3,767,117   1,897,777   11,707,466   6,384,398 
Total operating expenses 10,609,480   6,301,059   30,887,856   19,858,000 
            
INCOME FROM OPERATIONS (1,490,552)  242,351   2,312,037   2,960,564 
            
OTHER INCOME (EXPENSE)           
Interest income (expenses) (231,017)  (44,129)  (458,159)  (153,785)
Other financing expenses    (50,000)  (80,010)  (148,139)
PPP loan forgiveness       -   175,500 
Gain (Loss) on investment 5,673      (6,616)  - 
Other non-operating income (expense) 210,893   (2,048,545)  296,366   (2,843,127)
Total other (expenses), net (14,451)  (2,142,674)  (248,419)  (2,969,551)
            
INCOME (LOSS) BEFORE INCOME TAXES (1,505,003)  (1,900,323)  2,063,618   (8,987)
            
PROVISION FOR INCOME TAXES (146,570)  6,075   558,975   766,762 
NET INCOME (LOSS) (1,358,433)  (1,906,398)  1,504,643   (775,749)
            
Non-controlling interest (9,162)  0   (13,232)  - 
            
NET INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC.$(1,349,271)  (1,906,398) $1,517,875  $(775,749)
            
OTHER COMPREHENSIVE INCOME (LOSS)           
Foreign currency translation adjustments 8,904   0   5,678   - 
            
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC.$(1,340,367)  (1,906,398) $1,523,553  $(775,749)
            
WEIGHTED AVERAGE NUMBER OF COMMON STOCK           
Basic 29,662,448   23,812,625   27,781,493   21,116,750 
            
Diluted 29,662,448   23,812,625   27,781,493   21,116,750 
            
EARNINGS (LOSSES) PER SHARE           
Basic$(0.05) $(0.08) $0.05  $(0.04)
            
Diluted$(0.05) $(0.08) $0.05  $(0.04)