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iPower Reports Fiscal Fourth Quarter and Full Year 2022 Results

iPower, Inc.
iPower, Inc.

- 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

)