iPower Reports Fiscal Second Quarter 2024 Results
- iPower's total revenue for Q2 2024 was $16.8 million, a decrease from $19.3 million in Q2 2023.
- Gross profit for Q2 2024 was $7.3 million, with a gross margin of 43.6%, up from 41.4% in Q2 2023.
- Net loss attributable to iPower improved by 42% to $1.9 million or $(0.06) per share compared to $3.3 million or $(0.11) per share in Q2 2023.
- Net debt was reduced by 56% to $3.6 million as of December 31, 2023, compared to $8.1 million as of June 30, 2023.
- The company aims to return to profitability in 2024 by leveraging supply chain improvements and reducing debt obligations.
- None.
Insights
The reported decrease in total revenue from $19.3 million to $16.8 million for iPower Inc. in the fiscal Q2 2024, compared to the same period the previous year, is a significant indicator of the company's performance. This contraction is primarily attributed to a strategic reduction in promotional activities and a decline in order volumes from a major channel partner. However, the company's ability to improve gross margin by 220 basis points to 43.6% is noteworthy. This improvement suggests a stronger control over costs or a shift towards higher-margin products. The reduction in operating expenses by 18% reflects efficiency gains and cost management which could be a positive signal to investors about the company's operational effectiveness.
From a balance sheet perspective, the substantial reduction in net debt by 56% to $3.6 million demonstrates a strong commitment to financial stability and could be well received by the market. This deleveraging effort can reduce financial risk and potentially improve creditworthiness. However, the decrease in cash and cash equivalents from $3.7 million to $1.5 million may raise concerns about liquidity and the company's ability to fund ongoing operations or invest in growth opportunities.
The e-commerce sector, where iPower operates, is highly competitive and sensitive to supply chain dynamics. The company's mention of an improved supply chain environment, leading to tighter inventory management by a key channel partner, is reflective of broader industry trends where businesses are adapting to post-pandemic supply conditions. While this has resulted in lower order volumes for iPower in the short term, the normalization of inventory levels could position the company for more stable and predictable sales cycles going forward.
The growth in the SuperSuite supply chain offerings indicates a strategic pivot towards value-added services, which could diversify revenue streams and reduce dependency on traditional retail sales. This move towards service-oriented solutions is in line with industry trends where differentiation is increasingly based on offering comprehensive solutions rather than standalone products.
The fiscal results of iPower Inc. reflect broader economic trends, such as the impact of global supply chain adjustments on inventory management and consumer spending behavior. The reported improvements in gross margin and operating cost reductions could be partially due to macroeconomic factors, such as deflation in certain input costs or enhanced supply chain efficiencies. The company's performance in this context suggests resilience amid economic shifts.
However, the reduction in net revenue raises questions about the demand elasticity for iPower's products. The ability to return to profitability in 2024, as indicated by iPower's CFO, will likely depend on broader economic conditions, including consumer confidence and spending power, which are subject to fluctuations influenced by factors such as inflation rates, employment levels and interest rates.
- iPower Management to Host Conference Call Today at 4:30 p.m. Eastern Time -
DUARTE, Calif., Feb. 14, 2024 (GLOBE NEWSWIRE) -- iPower Inc. (Nasdaq: IPW) (“iPower” or the “Company”), a tech and data-driven online retailer and supplier of consumer home and garden products, as well as a provider of value-added ecommerce services, today announced its financial results for the fiscal second quarter ended December 31, 2023.
Fiscal Q2 2024 Results vs. Fiscal Q2 2023 (unless otherwise noted)
- Total revenue was
$16.8 million compared to$19.3 million . - Gross profit was
$7.3 million compared to$8.0 million , with gross margin up 220 bps to43.6% compared to41.4% . - Net loss attributable to iPower improved
42% to$1.9 million or$(0.06) per share, compared to net loss attributable to iPower of$3.3 million or$(0.11) per share. - As of December 31, 2023, net debt (total debt less cash) was reduced by
56% to$3.6 million compared to net debt of$8.1 million as of June 30, 2023.
Management Commentary
“In our fiscal second quarter, we continued to drive gross margin expansion, operating cost reductions and another period of positive cash flow from operations,” said Lawrence Tan, CEO of iPower. “Due to improvements in the supply chain environment, our largest channel partner has progressively tightened their inventory management as shipping lead times have become more favorable. Although this led to lower order volumes for the quarter, we believe this channel partner’s inventory is now at a preferred level and we are well equipped to meet demand with the high-quality products our customers expect.
“We also continued to gain traction in our SuperSuite business as we leverage our superior supply chain, warehousing and merchandising expertise to drive sales growth for partners with innovative product catalogs. We look forward to growing this exciting segment of our business as we further evaluate prospective partners in the months ahead.”
iPower CFO, Kevin Vassily, added, “Our gross margin and operating expense improvements were primarily driven by the reduction of high-cost inventory and excess warehousing space. Additionally, we reduced total debt obligations by approximately
Fiscal Second Quarter 2024 Financial Results
Total revenue in the fiscal second quarter of 2024 was
Gross profit in the fiscal second quarter of 2024 was
Total operating expenses in the fiscal second quarter of 2024 improved
Net loss attributable to iPower in the fiscal second quarter of 2024 improved
Cash and cash equivalents were
Conference Call
The Company will hold a conference call today, February 14, 2024, at 4:30 p.m. Eastern Time to discuss its results for the fiscal second quarter ended December 31, 2023.
iPower’s management will host the conference call, which will be followed by a question-and-answer session.
The conference call details are as follows:
Date: Wednesday, February 14, 2024
Time: 4:30 p.m. Eastern Time
Dial-in registration link: here
Live webcast registration link: here
Please dial into the conference call 5-10 minutes prior to the start time. If you have any difficulty connecting with the conference call, please contact the Company’s investor relations team at IPW@elevate-ir.com.
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 tech and data-driven online retailer and supplier of consumer home and garden products, as well as a provider of value-added ecommerce services for third-party products and brands. 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 websites, www.zenhydro.com and www.simpledeluxe.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 press release 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 15, 2023, its Quarterly Reports on Form 10-Q, as filed with the SEC on November 15, 2023 and February 14, 2024, and in its other SEC filings.
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, 2023 and June 30, 2023 | ||||||||
| December 31, | June 30, | |||||||
| 2023 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 1,488,027 | $ | 3,735,642 | ||||
| Accounts receivable, net | 11,765,833 | 14,071,543 | ||||||
| Inventories, net | 15,782,322 | 20,593,889 | ||||||
| Prepayments and other current assets | 1,483,209 | 2,858,196 | ||||||
| Total current assets | 30,519,391 | 41,259,270 | ||||||
| Non-current assets | ||||||||
| Right of use - non-current | 7,141,633 | 7,837,345 | ||||||
| Property and equipment, net | 456,006 | 536,418 | ||||||
| Deferred tax assets | 3,122,363 | 2,155,250 | ||||||
| Non-current prepayments | 390,612 | 531,456 | ||||||
| Goodwill | 3,034,110 | 3,034,110 | ||||||
| Investment in joint venture | 31,287 | 33,113 | ||||||
| Intangible assets, net | 3,955,385 | 4,280,071 | ||||||
| Other non-current assets | 419,289 | 427,254 | ||||||
| Total non-current assets | 18,550,685 | 18,835,017 | ||||||
| Total assets | $ | 49,070,076 | $ | 60,094,287 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 13,931,800 | $ | 13,244,957 | ||||
| Credit cards payable | 340,912 | 366,781 | ||||||
| Customer deposit | 340,876 | 350,595 | ||||||
| Other payables and accrued liabilities | 3,715,996 | 4,831,067 | ||||||
| Advance from shareholders | 87,305 | 85,200 | ||||||
| Lease liability - current | 2,065,177 | 2,159,173 | ||||||
| Short-term loan payable - related party | 1,032,189 | – | ||||||
| Long-term promissory note payable - current portion | 1,150,508 | 2,017,852 | ||||||
| Revolving loan payable, net | 2,862,857 | – | ||||||
| Income taxes payable | 283,519 | 276,683 | ||||||
| Total current liabilities | 25,811,139 | 23,332,308 | ||||||
| Non-current liabilities | ||||||||
| Long-term revolving loan payable, net | – | 9,791,191 | ||||||
| Lease liability - non-current | 5,503,365 | 6,106,047 | ||||||
| Total non-current liabilities | 5,503,365 | 15,897,238 | ||||||
| Total liabilities | 31,314,504 | 39,229,546 | ||||||
| Commitments and contingency | – | – | ||||||
| Stockholders' Equity | ||||||||
| Preferred stock, | – | – | ||||||
| Common stock, | 29,712 | 29,712 | ||||||
| Additional paid in capital | 29,883,647 | 29,624,520 | ||||||
| Accumulated deficits | (11,903,785 | ) | (8,702,442 | ) | ||||
| Non-controlling interest | (30,906 | ) | (24,915 | ) | ||||
| Accumulated other comprehensive loss | (223,096 | ) | (62,134 | ) | ||||
| Total stockholders’ equity | 17,755,572 | 20,864,741 | ||||||
| Total liabilities and stockholders’ equity | $ | 49,070,076 | $ | 60,094,287 | ||||
| iPower Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Operations For the Three and Six Months Ended December 31, 2023 and 2022 | ||||||||||||||||
| For the Three Months Ended December 31, | For the Six Months Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| REVENUES | $ | 16,800,122 | $ | 19,254,590 | $ | 43,308,496 | $ | 45,277,263 | ||||||||
| TOTAL REVENUES | 16,800,122 | 19,254,590 | 43,308,496 | 45,277,263 | ||||||||||||
| COST OF REVENUES | 9,481,882 | 11,285,064 | 24,231,411 | 27,322,021 | ||||||||||||
| GROSS PROFIT | 7,318,240 | 7,969,526 | 19,077,085 | 17,955,242 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Selling and fulfillment | 6,936,980 | 9,338,737 | 17,000,451 | 17,757,549 | ||||||||||||
| General and administrative | 2,933,607 | 2,713,355 | 5,897,658 | 5,813,531 | ||||||||||||
| Impairment loss - goodwill | – | – | – | 3,060,034 | ||||||||||||
| Total operating expenses | 9,870,587 | 12,052,092 | 22,898,109 | 26,631,114 | ||||||||||||
| LOSS FROM OPERATIONS | (2,552,347 | ) | (4,082,566 | ) | (3,821,024 | ) | (8,675,872 | ) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest expenses | (182,612 | ) | (314,119 | ) | (410,977 | ) | (562,160 | ) | ||||||||
| Loss on equity method investment | (801 | ) | (3,938 | ) | (1,826 | ) | (7,328 | ) | ||||||||
| Other non-operating income | 128,838 | 59,600 | 61,672 | 271,360 | ||||||||||||
| Total other expenses, net | (54,575 | ) | (258,457 | ) | (351,131 | ) | (298,128 | ) | ||||||||
| LOSS BEFORE INCOME TAXES | (2,606,922 | ) | (4,341,023 | ) | (4,172,155 | ) | (8,974,000 | ) | ||||||||
| PROVISION FOR INCOME TAX BENEFIT | (688,939 | ) | (1,047,749 | ) | (964,821 | ) | (1,495,545 | ) | ||||||||
| NET LOSS | (1,917,983 | ) | (3,293,274 | ) | (3,207,334 | ) | (7,478,455 | ) | ||||||||
| Non-controlling interest | (3,155 | ) | (2,835 | ) | (5,991 | ) | (5,640 | ) | ||||||||
| NET LOSS ATTRIBUTABLE TO IPOWER INC. | $ | (1,914,828 | ) | $ | (3,290,439 | ) | $ | (3,201,343 | ) | $ | (7,472,815 | ) | ||||
| OTHER COMPREHENSIVE LOSS | ||||||||||||||||
| Foreign currency translation adjustments | (160,255 | ) | 47,149 | (160,962 | ) | (64,326 | ) | |||||||||
| COMPREHENSIVE LOSS ATTRIBUTABLE TO IPOWER INC. | $ | (2,075,083 | ) | $ | (3,243,290 | ) | $ | (3,362,305 | ) | $ | (7,537,141 | ) | ||||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK | ||||||||||||||||
| Basic | 29,790,242 | 29,742,620 | 29,777,378 | 29,687,878 | ||||||||||||
| Diluted | 29,790,242 | 29,742,620 | 29,777,378 | 29,687,878 | ||||||||||||
| LOSSES PER SHARE | ||||||||||||||||
| Basic | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.11 | ) | $ | (0.25 | ) | ||||
| Diluted | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.11 | ) | $ | (0.25 | ) | ||||
FAQ
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