iPower Reports Fiscal Second Quarter 2023 Results

- 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