News Press Releases

iPower Reports Fiscal Second Quarter 2023 Results

IPW | February 14, 2023

- Fiscal Q2 Revenue up 12% to 19.3 Million -

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

DUARTE, Calif., Feb. 14, 2023 (GLOBE NEWSWIRE) -- iPower Inc. (Nasdaq:IPW) (“iPower” or the “Company”), a leading online retailer and supplier of consumer home and garden products, today announced financial results for its fiscal second quarter ended December 31, 2022.

Fiscal Q2 2023 Results vs. Year-Ago Quarter (unless otherwise noted)

Total revenue increased 12% to $19.3 million.
Gross profit increased 5% to $8.0 million, with gross margin of 41.4% compared to 44.1%.
Net loss attributable to iPower was $3.3 million or $(0.11) per share, compared to net income of $0.8 million or $0.03 per share.
As of December 31, 2022, net debt (total debt less cash) was reduced by 42% to $8.2 million compared to net debt of $14.2 million as of June 30, 2022.

Management Commentary

“We generated double-digit revenue growth during our fiscal second quarter as we strategically leaned into sales and marketing to offload excess inventory that had built up in recent quarters,” said Lawrence Tan, CEO of iPower. “During the fiscal second quarter, our in-house products accounted for the majority of our revenue mix, demonstrating the consistent, strong demand for iPower’s products. We anticipate our continued investment in product development will ensure our product catalog is stocked with market-leading offerings to drive future growth and profitability.”

iPower CFO Kevin Vassily added, “Toward the end of the calendar year, the supply chain environment began to stabilize with freight and shipping costs returning to pre-covid levels. With an improved supply chain, we made the strategic decision to increase our marketing spend to significantly reduce our inventory. This ongoing effort will enable us to eliminate extra warehousing space and the higher cost associated with it. We expect these actions, coupled with continued revenue growth, will drive improvements to our bottom line in the quarters ahead.”

Fiscal Second Quarter 2023 Financial Results

Total revenue in the fiscal second quarter of 2023 increased 12% to $19.3 million compared to $17.1 million for the same period in fiscal 2022. The increase was driven by strong demand for iPower’s in-house product portfolio, including shelving, office and pet products, as well as hydroponic equipment.

Gross profit in the fiscal second quarter of 2023 increased 5% to $8.0 million compared to $7.6 million for the same quarter in fiscal 2022. As a percentage of revenue, gross margin was 41.4% compared to 44.1% in the year-ago period. The decrease in gross margin was primarily driven by increased freight charges, as well as channel and product category mix.

Total operating expenses in the fiscal second quarter were $12.1 million compared to $6.4 million for the same period in fiscal 2022. The increase in operating expenses was primarily driven by higher selling, fulfilment and marketing costs related to the sale of inventory built-up in prior quarters. iPower anticipates lower operating expenses going forward.

Net loss attributable to iPower in the fiscal second quarter of 2023 was $3.3 million or $(0.11) per share, compared to net income of $0.8 million or $0.03 per share for the same period in fiscal 2022. The decline was primarily driven by the aforementioned higher selling, fulfilment and marketing costs.

Cash and cash equivalents were $4.0 million at December 31, 2022, compared to $1.8 million at June 30, 2022. The increase was primarily due to improved working capital. Total debt as of December 31, 2022 was $12.2 million compared to $16.0 million as of June 30, 2022. As a result of the Company’s debt paydown and improved working capital, iPower’s net debt (total debt less cash) position was reduced 42% to $8.2 million compared to $14.2 million as of June 30, 2022.

Conference Call

The Company will conduct a conference call at 4:30 p.m. Eastern time on Tuesday, February 14, 2023, to discuss the results for its fiscal second quarter ended December 31, 2022.

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

Date: Tuesday, February 14, 2023
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 a leading online retailer and supplier of consumer home and garden products. 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 website, www.zenhydro.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 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 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 28, 2022, iPower’s Quarterly Report on Form 10-Q for the quarter ended December 31, 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
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2022 and June 30, 2022

			December 31,			June 30,
			2022			2022
			(Unaudited)
ASSETS
Current assets
	Cash and cash equivalent		$	3,997,125		$	1,821,947
	Accounts receivable, net			11,646,757			17,432,287
	Inventories, net			23,258,161			30,433,766
	Other receivable - related party			39,853			51,762
	Prepayments and other current assets			3,714,473			5,444,463
		Total current assets		42,656,369			55,184,225

Non-current assets
	Right of use - non-current			9,161,836			10,453,282
	Property and equipment, net			603,518			544,633
	Deferred tax assets			849,579			-
	Non-current prepayments			709,790			925,624
	Goodwill			3,034,110			6,094,144
	Investment in joint venture			36,057			43,385
	Intangible assets, net			4,604,756			4,929,442
	Other non-current assets			401,312			406,732
		Total non-current assets		19,400,958			23,397,242

		Total assets	$	62,057,327		$	78,581,467

LIABILITIES AND EQUITY
Current liabilities
	Accounts payable			12,109,715			9,533,408
	Credit cards payble			223,039			807,687
	Customer deposit			368,717			273,457
	Other payables and accrued liabilities			2,070,567			5,915,220
	Advance from shareholders			89,592			92,246
	Investment payable			-			1,500,000
	Lease liability - current			2,563,468			2,582,933
	Long-term promissory note payable - current portion			1,977,502			1,879,065
	Income taxes payable			290,946			299,563
		Total current liabilities		19,693,546			22,883,579

Non-current liabilities
	Long-term revolving loan payable, net			9,334,819			12,314,627
	Long-term promissory note payable, net			881,445			1,781,705
	Deferred tax liabilities			-			939,115
	Lease liability - non-current			7,023,320			8,265,611

		Total non-current liabilities		17,239,584			23,301,058

		Total liabilities		36,933,130			46,184,637

Commitments and contingency				-			-

Stockholders' Equity
	Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and
		outstanding at December 31, 2022 and 2021		-			-
	Common stock, $0.001 par value; 180,000,000 shares authorized; 29,572,382 and
		29,572,382 shares issued and outstanding at December 31, 2022 and June 30, 2022		29,573			29,573
	Additional paid in capital			29,382,011			29,111,863
	(Accumulated deficits) Retained earnings			(4,209,867	)		3,262,948
	Non-controlling interest			(18,872	)		(13,232	)
	Accumulated other comprehensive income (loss)			(58,648	)		5,678
		Total equity		25,124,197			32,396,830

		Total liabilities and equity	$	62,057,327		$	78,581,467

iPower Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
For the Three and Six Months Ended December 31, 2022 and 2021

			For the Three Months Ended December 31,						For the Six Months Ended December 31,
			2022			2021			2022			2021
			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

REVENUES			$	19,254,590		$	17,125,663		$	45,277,263		$	34,492,428

TOTAL REVENUES				19,254,590			17,125,663			45,277,263			34,492,428

COST OF REVENUES				11,285,064			9,568,051			27,322,021			19,621,114

GROSS PROFIT				7,969,526			7,557,612			17,955,242			14,871,314

OPERATING EXPENSES:
	Selling and fulfillment			9,338,737			3,641,839			17,757,549			7,307,760
	General and administrative			2,713,355			2,780,488			5,813,531			5,137,954
	Impairment loss - goodwill			-			-			3,060,034			-
		Total operating expenses		12,052,092			6,422,327			26,631,114			12,445,714

(LOSS) INCOME FROM OPERATIONS				(4,082,566	)		1,135,285			(8,675,872	)		2,425,600

OTHER INCOME (EXPENSE)
	Interest expenses			(314,119	)		(75,112	)		(562,160	)		(75,112	)
	Other financing expenses			-			-			-			(9,000	)
	Loss on equity method investment			(3,938	)		-			(7,328	)		-
	Other non-operating income			59,600			60,403			271,360			9,591
		Total other expenses, net		(258,457	)		(14,709	)		(298,128	)		(74,521	)

(LOSS) INCOME BEFORE INCOME TAXES				(4,341,023	)		1,120,576			(8,974,000	)		2,351,079

PROVISION FOR INCOME TAX (BENEFIT) EXPENSE				(1,047,749	)		322,715			(1,495,545	)		665,690
NET (LOSS) INCOME				(3,293,274	)		797,861			(7,478,455	)		1,685,389

	Non-controlling interest			(2,835	)		-			(5,640	)		-

NET (LOSS) INCOME ATTRIBUTABLE TO IPOWER INC.			$	(3,290,439	)	$	797,861		$	(7,472,815	)	$	1,685,389

OTHER COMPREHENSIVE LOSS
	Foreign currency translation adjustments			47,149			-			(64,326	)		-

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO IPOWER INC.			$	(3,243,290	)	$	797,861		$	(7,537,141	)	$	1,685,389

WEIGHTED AVERAGE NUMBER OF COMMON STOCK
	Basic			29,742,620			26,491,103			29,687,878			26,487,816

	Diluted			29,742,620			26,491,103			29,687,878			26,487,816

(LOSSES) EARNINGS PER SHARE
	Basic		$	(0.11	)	$	0.03		$	(0.25	)	$	0.06

	Diluted		$	(0.11	)	$	0.03		$	(0.25	)	$	0.06