• Hour Loop Reports Third Quarter 2022 Results

    来源: Nasdaq GlobeNewswire / 14 11月 2022 08:00:03   America/New_York

    Demonstrates Strong Execution Despite Challenging Macroeconomic Environment and Unfavorable e-Commerce Environment

    Raises Full Year 2022 Revenue Guidance Range of $91 million to $100 million

    REDMOND, Wash., Nov. 14, 2022 (GLOBE NEWSWIRE) -- Hour Loop, Inc. (NASDAQ: HOUR) (“Hour Loop”), a leading online retailer, announces its financial and operational results for the third quarter ended September 30, 2022.

    Financial Highlights for Third Quarter 2022:

    • Total revenues increased 68.4% and 18.6% to $17.6 million, compared to $10.4 million in the year-ago period and $14.8 million for the second quarter of 2022, respectively.
    • Net income totaled $0.15 million, compared to $0.30 million in the year-ago period and net loss of $0.31 million for the second quarter of 2022.
    • Cash used in operating activities for the nine months ended September 30, 2022, was $14.5 million, compared to cash provided by operating activities $1.6 million in the year-ago period.

    Management Commentary

    “We are pleased to report our strong third quarter results, in which we saw accelerated revenue growth and a return to profitability,” said Sam Lai, CEO of Hour Loop, “We take the long term view on growth, which is why we strategically front loaded our investment in the first half of the year. Our headcount grew from 67 to 191 and our inventories grew from $7 million to $21 million. This put tremendous pressure on our bottom line in a very challenging year for e-commerce. Nevertheless, we executed well and continue to position the business for long-term growth and value creation.”

    Third Quarter 2022 Financial Results

    Total revenues in the third quarter of 2022 were $17.6 million compared to $10.4 million in the year-ago period and $14.8 million for the second quarter of 2022, respectively. The increase was primarily due to continued growth and maturity in our operating model, despite a continuation in overall e-commerce traffic slowdown.

    Gross profit percentage increased 1.58% to 54.43%, compared to 52.85% of total revenues in the comparable period a year ago but decreased from 56.46% for the second quarter of 2022. The quarter-over-quarter increase was a function of our aggressive growth initiatives and a heightened inflationary environment causing higher cost of goods sold, increased FBA fees, and strong competition.

    Operating expenses increased 78.8% to $9.5 million compared to $5.3 million in the year- ago period. This was a function of increased platform fees paid to Amazon, and a significant increase in our labor force.

    Net income in the third quarter was $0.15 million, or $0.005 per diluted share, compared to $0.30 million, or $0.009 per diluted share, in the comparable year-ago period. The decrease was driven by increased costs and expenses as a result of the reasons mentioned above. Nevertheless, the Company was able to quickly bounce back to profitability after net loss for consecutive two quarters.

    As of September 30, 2022, the Company had $1.7 million in cash and cash equivalents, compared to $10.6 million as of December 31, 2021. This decrease was driven by the growth of inventory and labor force.

    Inventories as of September 30, 2022, were $21.4 million compared to $7.0 million as of December 31, 2021. The Company intentionally invested heavily in inventories for strategic reasons.

    Full Year 2022 Financial Outlook

    For the full year 2022, the Company is raising its guidance for gross revenue to be in the range of $91 million to $100 million, representing 36% to 50% year-over-year growth.

    About Hour Loop, Inc.
    Hour Loop is an online retailer engaged in e-commerce retailing in the U.S. market. It has operated as a third-party seller on www.amazon.com and has sold merchandise on its website at www.hourloop.com since 2013. The Company expanded its operations to www.walmart.com in October 2020. To date, the Company has generated practically all of its revenue as a third-party seller on www.amazon.com and only a negligible amount of revenue from its own website and Walmart. Hour Loop manages more than 100,000 stock-keeping units (“SKUs”). Product categories include home/garden décor, toys, kitchenware, apparels, and electronics. The Company's primary strategy is to bring most of its vendors product selections to the customers. It has advanced software that assists the Company in identifying product gaps so it can keep such products in stock year-round including the entirety of the last quarter (holiday season) of the calendar year. In upcoming years, Hour Loop plans to expand its business rapidly by increasing the number of business managers, vendors and SKUs.

    Forward-Looking Statements
    This press release contains statements that constitute "forward-looking statements" including with respect to the Company's business strategy, product development and industry trends. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to the Company on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in the Company's filings with the Securities and Exchange Commission, as the same may be updated from time to time. Thus, actual results could be materially different. The Company undertakes no obligation to update these statements whether as a result of new information, future events or otherwise, after the date of this release, except as required by law.

    Investor Contact
    Finance Department
    finance@hourloop.com


    HOUR LOOP, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    As of Sep 30, 2022 (Unaudited) and December 31, 2021

      September 30,  December 31, 
      2022  2021 
       (unaudited)     
    ASSETS        
    Current assets        
    Cash and cash equivalents $1,704,106  $10,592,572 
    Accounts receivable, net  263,425   125,991 
    Inventory, net  21,358,386   7,041,864 
    Prepaid expenses and other current assets  856,543   965,298 
    Total current assets  24,182,460   18,725,725 
             
    Property and equipment, net  238,403   15,667 
    Deferred tax assets  312,197   45,488 
    Right-of-use lease assets  518,575   30,111 
             
    TOTAL ASSETS $25,251,635  $18,816,991 
             
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities        
    Short-term debt $630,915  $- 
    Accounts payable  11,013,769   9,539,258 
    Accrued expenses and other current liabilities  1,129,555   1,282,161 
    Due to related parties  4,316,211   5,214,794 
    Income taxes payable  126,333   126,333 
    Current operating lease liabilities  372,579   - 
    Total current liabilities  17,589,362   16,162,546 
             
    Non-current liabilities        
    Long-term operating lease liabilities  151,314   - 
    Total liabilities  17,740,676   16,162,546 
    Commitments and contingencies      - 
             
    Stockholders’ equity        
    Preferred stock: $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding as of September 30, 2022 and December 31, 2021  -   - 
    Common stock: $0.0001 par value, 300,000,000 shares authorized, 35,047,828 and 33,300,000 shares issued and outstanding   as of September 30, 2022 and December 31, 2021, respectively  3,505   3,330 
    Additional paid-in capital  5,660,321   4,291 
    Retained earnings  1,846,605   2,654,695 
    Accumulated other comprehensive income (loss)  528   (7,871)
    Total stockholders’ equity  7,510,959   2,654,445 
             
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $25,251,635  $18,816,991 

    The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.



    HOUR LOOP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
    For the Periods Ended September 30, 2022 and 2021
    (Unaudited)

      Three Months Ended
    September 30,
      Nine Months Ended
    September 30,
     
      2022  2021  2022  2021 
                 
    Revenues, net $17,556,053  $10,425,111  $44,710,554  $31,391,254 
    Cost of revenues  (7,999,769)  (4,915,116)  (20,340,948)  (13,855,109)
                     
    Gross profit  9,556,284   5,509,995   24,369,606   17,536,145 
                     
    Operating expenses                
    Selling and marketing  7,779,145   4,427,774   19,785,872   13,058,566 
    General and administrative  1,740,427   896,993   5,692,033   2,359,500 
    Total operating expenses  9,519,572   5,324,767   25,477,905   15,418,066 
                     
    Income (loss) from operations  36,712   185,228   (1,108,299)  2,118,079 
                     
    Other (expenses) income                
    Other expense  (6,651)  (877)  (16,045)  (5,501)
    Interest expense  (22,876)  (20,005)  (127,001)  (30,333)
    Other income  155,983   106,990   176,676   161,494 
    Total other income (expenses), net  126,456   86,108   33,630   125,660 
                     
    Income (loss) before income taxes  163,168   271,336   (1,074,669)  2,243,739 
    Income tax (expense) benefit  (12,963)  24,770   266,579   24,770 
                     
    Net income (loss)  150,205   296,106   (808,090)  2,268,509 
                     
    Other comprehensive income (loss)                
    Foreign currency translation adjustments  12,441   (6,750)  8,399   (6,301)
                     
    Total comprehensive income (loss) $162,646  $289,356  $(799,691)  2,262,208 
                     
    Basic and diluted income (loss) per common share $0.01  $0.01  $(0.02)  0.07 
    Weighted-average number of common shares outstanding  33,300,058   33,300,000   34,973,580   33,300,000 

    The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.



    HOUR LOOP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    For the Nine Months Ended September 30, 2022 and 2021
    (Unaudited)

      Nine Months Ended
    September 30,
     
      2022  2021 
           
    Cash flows from operating activities        
    Net (loss) income $(808,090) $2,268,509 
    Reconciliation of net (loss) income to net cash (used in) provided by operating activities:        
    Depreciation expenses  39,993   - 
    Noncash lease expenses  212,126   52,668 
    Distribution to director and supervisor  76,013   - 
    Changes in operating assets and liabilities:        
    Accounts receivable  (137,434)  68,422 
    Inventory  (14,316,522)  (1,146,755)
    Prepaid expenses and other current assets  (734,121)  (167,231)
    Accounts payable  1,474,511   1,132,211 
    Accrued expenses and other current liabilities  (152,606)  (598,828)
    Operating lease liabilities  (179,701)  (34,532)
    Net cash (used in) provided by operating activities  (14,525,831)  1,574,464 
             
    Cash flows from investing activities:        
    Purchases of property and equipment  (268,342)  - 
    Net cash used in investing activities  (268,342)  - 
             
    Cash flows from financing activities:        
    Net advances from related parties  (898,583)  67,291 
    Capital contribution  -   2,800 
    Distribution to stockholders  -   (2,132,000)
    Issuance of shares  5,580,192   - 
    Prepaid expenses  576,168   - 
    Net change in line of credit  630,915   (27,012)
    Net cash provided by (used in) financing activities  5,888,692   (2,088,921)
             
    Effect of changes in foreign currency exchange rates  17,015   (134)
             
    Net change in cash and cash equivalents  (8,888,466)  (514,591)
             
    Cash and cash equivalents at beginning of year  10,592,572   4,968,064 
             
    Cash and cash equivalents at end of year $1,704,106  $4,453,473 
             
    Supplemental disclosures of cash flow information:        
    Cash paid for interest $-  $- 
    Cash paid for income tax $-  $- 
    Noncash investing and financing activities:        
    Right-of-use of assets and operating lease liabilities recognized $688,440  $- 
    Noncash distribution to stockholders $76,013  $- 

    The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.


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