iPower Reports Fiscal Third Quarter 2024 Results
iPower (Nasdaq: IPW) released its fiscal Q3 2024 results, showing a 15% revenue increase to $23.3 million, driven by the growth of its SuperSuite business and higher product sales to its largest channel partner.
Gross profit rose 41% to $10.9 million with a gross margin of 47%, up from 38.5% in the previous year. Operating expenses decreased to $9.3 million, improving to 40.1% of revenue.
Net income improved to $1.0 million or $0.03 per share, compared to a net loss of $1.5 million in the previous year. Adjusted net income was $1.6 million or $0.05 per share.
iPower reduced its net debt by 59% to $3.3 million. The company has shifted focus from hydroponics to core consumer products, enhancing profitability and growth.
- Revenue increased by 15% to $23.3 million.
- Gross profit rose by 41% to $10.9 million.
- Gross margin improved to 47%, up from 38.5%.
- Net income reached $1.0 million, or $0.03 per share.
- Adjusted net income was $1.6 million, or $0.05 per share.
- Net debt was reduced by 59% to $3.3 million.
- Operating expenses decreased to $9.3 million, improving to 40.1% of revenue.
- The SuperSuite business contributed significantly to revenue growth, making up 10% of total revenue.
- Cash and cash equivalents decreased to $2.7 million from $3.7 million.
- Total debt remained significant at $6.0 million despite the reduction.
Insights
iPower's fiscal third quarter results present a noteworthy improvement in several key financial metrics. The 15% increase in revenue to
The gross margin expansion from 38.5% to 47.0% is particularly commendable, indicating more efficient operations and favorable pricing strategies. Gross profit surged 41% to
The return to profitability, with
For retail investors, iPower's shift from hydroponics to a broader consumer product focus appears to be yielding positive results. Investors should monitor whether the SuperSuite business can maintain its momentum and continue contributing significantly to overall revenue growth.
In summary, the results suggest a positive trend for iPower, with potential for sustained growth and improved profitability in the near term.
From a market perspective, iPower's results reflect a successful pivot in business strategy. The 15% revenue increase driven by the SuperSuite business indicates that the company is tapping into emerging market opportunities effectively. The launch on Temu and early successes in the kitchen and pet categories further underscore the company's adaptability and market-driven approach.
The reduction in operating expenses as a percentage of revenue from 47.5% to 40.1% demonstrates improved operational efficiency and strategic cost management. This is important for long-term sustainability and competitiveness in the e-commerce space.
iPower's focus on enhancing its product catalog and supply chain efficiencies will likely resonate well with investors looking for companies that are agile and capable of capitalizing on market trends. The success of the SuperSuite business can be seen as a litmus test for the company's ability to innovate and scale its operations effectively.
Investors should also consider the broader implications of iPower's strategic shift and how it positions the company within the competitive landscape of consumer products and e-commerce services.
Overall, iPower's results indicate a sound and strategic approach to market expansion and operational excellence.
Fiscal Q3 Revenue up
Accelerated Growth of iPower SuperSuite Business
Gross Margin Expansion and Improved Operating Leverage
Enables Return to Profitability
Strong Fiscal Q3 Performance Lays Foundation
for Further Growth and Profitability
DUARTE, Calif., May 14, 2024 (GLOBE NEWSWIRE) -- iPower Inc. (Nasdaq: IPW) (“iPower” or the “Company”), a tech and data-driven online retailer and supplier of consumer home, pet and garden products, as well as a provider of value-added ecommerce services, today announced its financial results for the fiscal third quarter ended March 31, 2024.
Fiscal Q3 2024 Results vs. Fiscal Q3 2023 (unless otherwise noted)
- Total revenue increased
15% to$23.3 million . - Gross profit increased
41% to$10.9 million , with gross margin up 850 bps to47.0% . - Net income attributable to iPower improved to
$1.0 million or$0.03 per share, compared to net loss attributable to iPower of$1.5 million or$(0.05) per share. - Adjusted net income attributable to iPower (a non-GAAP financial measure defined below) improved to
$1.6 million or$0.05 per share, compared to adjusted net loss attributable to iPower of$1.4 million or$(0.05) per share. - As of March 31, 2024, net debt (total debt less cash) was reduced by
59% to$3.3 million compared to net debt of$8.1 million as of June 30, 2023.
Management Commentary
“We generated strong financial results in our fiscal third quarter as we achieved double-digit revenue growth, material gross margin expansion and improved operating leverage, resulting in our return to profitability,” said Lawrence Tan, CEO of iPower. “As anticipated, we saw stronger order volumes from our largest channel partner during the quarter as they have returned to a more normalized inventory position and purchasing cycle. We will continue to invest in our product catalog to ensure we are stocked with high-quality products to meet the growing demand across our sales channels.
“We are also gaining momentum in our SuperSuite supply chain business, which contributed to our strong top-line growth in the current quarter, and now accounts for approximately
iPower CFO, Kevin Vassily, added, “Over the last few years, we’ve purposefully shifted away from hydroponics to focus on our core competency as a data-driven, consumer products and services company. More recently, we’ve begun to wind down our legacy commercial hydroponics business, where we sold directly to local commercial distributors, and we are working through the remaining inventory to shutter this channel altogether. These initiatives, combined with the accelerating growth in our SuperSuite business and optimized cost structure, have enabled us to deliver impressive results this quarter and achieve our target of returning to profitability. We look forward to closing out the fiscal year on a strong note as we continue to execute on our objectives in the months ahead.”
Fiscal Third Quarter 2024 Financial Results
Total revenue in the fiscal third quarter of 2024 increased
Gross profit in the fiscal third quarter of 2024 increased
Total operating expenses in the fiscal third quarter of 2024 were
Net income attributable to iPower in the fiscal third quarter of 2024 improved to
Adjusted net income attributable to iPower (a non-GAAP financial measure defined below), which excludes legal fees for arbitration net of tax impact, improved to
Cash and cash equivalents were
Conference Call
The Company will hold a conference call today, May 14, 2024, at 4:30 p.m. Eastern Time to discuss its results for the fiscal third quarter ended March 31, 2024.
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: Tuesday, May 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, pet and garden products, as well as a provider of value-added ecommerce services for third-party products and brands. Our capabilities include a full spectrum of online channels, robust fulfillment capacity, a network of warehouses serving the US, competitive last mile delivery partners and a differentiated business intelligence platform. With these capabilities, iPower efficiently moves a diverse catalog of SKUs from its supply chain partners to end consumers every day, providing the best value to customers in the US and other countries. For more information, please visit iPower's website at www.meetipower.com.
Non-GAAP Financial Measures
iPower has disclosed non-GAAP net income/(loss) and non-GAAP earnings per share in this press release, which are non-GAAP financial measures as defined by SEC Regulation G. The Company defines non-GAAP net income/(loss) as net income excluding legal fees for arbitration net of tax impact. A table providing a reconciliation of non-GAAP net income/(loss) and non-GAAP EPS is included at the end of this press release.
The Company's management believes that presenting non-GAAP net income/(loss) and non-GAAP EPS provides useful information to investors regarding the underlying business trends and performance of the Company's ongoing operations, as well as providing for more consistent period-over-period comparisons. This non-GAAP measure assists management in its operational and financial decision-making, as well as monitoring the Company's performance, non-GAAP net income/(loss) and non-GAAP EPS are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure.
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, February 14, 2024 and May 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 March 31, 2024 and June 30, 2023 | ||||||||||||
| March 31, | June 30, | |||||||||||
| 2024 | 2023 | |||||||||||
| (Unaudited) | ||||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalent | $ | 2,714,724 | $ | 3,735,642 | ||||||||
| Accounts receivable, net | 16,843,692 | 14,071,543 | ||||||||||
| Inventories, net | 11,872,286 | 20,593,889 | ||||||||||
| Prepayments and other current assets | 1,632,113 | 2,858,196 | ||||||||||
| Total current assets | 33,062,815 | 41,259,270 | ||||||||||
| Non-current assets | ||||||||||||
| Right of use - non-current | 6,632,349 | 7,837,345 | ||||||||||
| Property and equipment, net | 405,621 | 536,418 | ||||||||||
| Deferred tax assets, net | 2,756,420 | 2,155,250 | ||||||||||
| Non-current prepayments | 320,190 | 531,456 | ||||||||||
| Goodwill | 3,034,110 | 3,034,110 | ||||||||||
| Investment in joint venture | 30,495 | 33,113 | ||||||||||
| Intangible assets, net | 3,793,042 | 4,280,071 | ||||||||||
| Other non-current assets | 381,631 | 427,254 | ||||||||||
| Total non-current assets | 17,353,858 | 18,835,017 | ||||||||||
| Total assets | $ | 50,416,673 | $ | 60,094,287 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | 14,199,052 | 13,244,957 | ||||||||||
| Credit cards payable | 236,000 | 366,781 | ||||||||||
| Customer deposit | 339,968 | 350,595 | ||||||||||
| Other payables and accrued liabilities | 3,242,002 | 4,831,067 | ||||||||||
| Advance from shareholders | 85,581 | 85,200 | ||||||||||
| Lease liability - current | 2,106,867 | 2,159,173 | ||||||||||
| Revolving loan payable | 6,011,860 | - | ||||||||||
| Income taxes payable | 277,921 | 276,683 | ||||||||||
| Total current liabilities | 26,499,251 | 23,332,308 | ||||||||||
| Non-current liabilities | ||||||||||||
| Long-term revolving loan payable, net | - | 9,791,191 | ||||||||||
| Lease liability - non-current | 4,949,802 | 6,106,047 | ||||||||||
| Total non-current liabilities | 4,949,802 | 15,897,238 | ||||||||||
| Total liabilities | 31,449,053 | 39,229,546 | ||||||||||
| Commitments and contingency | - | - | ||||||||||
| Stockholders' Equity | ||||||||||||
| Preferred stock, | ||||||||||||
| outstanding at March 31, 2024 and June 30, 2023 | - | - | ||||||||||
| Common stock, | ||||||||||||
| 29,710,939 shares issued and outstanding at March 31, 2024 and June 30, 2023 | 29,819 | 29,712 | ||||||||||
| Additional paid in capital | 30,013,997 | 29,624,520 | ||||||||||
| Accumulated deficits | (10,887,703 | ) | (8,702,442 | ) | ||||||||
| Non-controlling interest | (34,519 | ) | (24,915 | ) | ||||||||
| Accumulated other comprehensive loss | (153,974 | ) | (62,134 | ) | ||||||||
| Total stockholders' equity | 18,967,620 | 20,864,741 | ||||||||||
| Total liabilities and stockholders' equity | $ | 50,416,673 | $ | 60,094,287 | ||||||||
| iPower Inc. and Subsidiaries | |||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Operations | |||||||||||||||||||
| For the Three and Nine Months Ended March 31, 2024 and 2023 | |||||||||||||||||||
| For the Three Months Ended March 31, | For the Nine Months Ended March 31, | ||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| REVENUES | $ | 23,308,508 | $ | 20,225,619 | $ | 66,617,004 | $ | 65,502,882 | |||||||||||
| TOTAL REVENUES | 23,308,508 | 20,225,619 | 66,617,004 | 65,502,882 | |||||||||||||||
| COST OF REVENUES | 12,360,170 | 12,433,898 | 36,591,581 | 39,755,919 | |||||||||||||||
| GROSS PROFIT | 10,948,338 | 7,791,721 | 30,025,423 | 25,746,963 | |||||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||||
| Selling and fulfillment | 6,025,878 | 6,537,124 | 23,026,329 | 24,294,673 | |||||||||||||||
| General and administrative | 3,321,184 | 3,065,795 | 9,218,842 | 8,879,326 | |||||||||||||||
| Impairment loss - goodwill | - | - | - | 3,060,034 | |||||||||||||||
| Total operating expenses | 9,347,062 | 9,602,919 | 32,245,171 | 36,234,033 | |||||||||||||||
| INCOME (LOSS) FROM OPERATIONS | 1,601,276 | (1,811,198 | ) | (2,219,748 | ) | (10,487,070 | ) | ||||||||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||||||
| Interest expenses | (181,199 | ) | (238,623 | ) | (592,176 | ) | (800,783 | ) | |||||||||||
| Loss on equity method investment | (792 | ) | (1,297 | ) | (2,618 | ) | (8,625 | ) | |||||||||||
| Other non-operating income | (29,669 | ) | (72,235 | ) | 32,003 | 199,125 | |||||||||||||
| Total other expenses, net | (211,660 | ) | (312,155 | ) | (562,791 | ) | (610,283 | ) | |||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | 1,389,616 | (2,123,353 | ) | (2,782,539 | ) | (11,097,353 | ) | ||||||||||||
| PROVISION FOR INCOME TAX EXPENSE (BENEFIT) | 377,147 | (589,581 | ) | (587,674 | ) | (2,085,126 | ) | ||||||||||||
| NET INCOME (LOSS) | 1,012,469 | (1,533,772 | ) | (2,194,865 | ) | (9,012,227 | ) | ||||||||||||
| Non-controlling interest | (3,613 | ) | (3,238 | ) | (9,604 | ) | (8,878 | ) | |||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC. | $ | 1,016,082 | $ | (1,530,534 | ) | $ | (2,185,261 | ) | $ | (9,003,349 | ) | ||||||||
| OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
| Foreign currency translation adjustments | 69,122 | 17,604 | (91,840 | ) | (46,722 | ) | |||||||||||||
| COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC. | $ | 1,085,204 | $ | (1,512,930 | ) | $ | (2,277,101 | ) | $ | (9,050,071 | ) | ||||||||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK | |||||||||||||||||||
| Basic | 29,821,811 | 29,730,914 | 29,791,990 | 29,702,014 | |||||||||||||||
| Diluted | 29,821,811 | 29,730,914 | 29,791,990 | 29,702,014 | |||||||||||||||
| EARNINGS (LOSSES) PER SHARE | |||||||||||||||||||
| Basic | $ | 0.03 | $ | (0.05 | ) | $ | (0.07 | ) | $ | (0.30 | ) | ||||||||
| Diluted | $ | 0.03 | $ | (0.05 | ) | $ | (0.07 | ) | $ | (0.30 | ) | ||||||||
| iPower Inc. and Subsidiaries | |||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| For the Three Months Ended March 31, | For the Nine Months Ended March 31, | ||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| GAAP NET INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC. | $ | 1,016,082 | $ | (1,530,534 | ) | $ | (2,185,261 | ) | $ | (9,003,349 | ) | ||||||
| Legal fees for arbitration | 814,923 | 177,566 | 1,239,337 | 682,411 | |||||||||||||
| Impairment loss - goodwill | - | - | - | 3,060,034 | |||||||||||||
| Adjustments to tax provision | (221,173 | ) | (49,310 | ) | (261,749 | ) | (128,225 | ) | |||||||||
| NON-GAAP NET INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC. | $ | 1,609,832 | $ | (1,402,278 | ) | $ | (1,207,673 | ) | $ | (5,389,129 | ) | ||||||
| GAAP EARNINGS (LOSSES) PER SHARE * | |||||||||||||||||
| Basic and diluted | $ | 0.03 | $ | (0.05 | ) | $ | (0.07 | ) | $ | (0.30 | ) | ||||||
| Impact of Non-GAAP adjustments | 0.02 | 0.00 | 0.03 | 0.12 | |||||||||||||
| NON-GAAP EARNINGS (LOSSES) PER SHARE * | $ | 0.05 | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.18 | ) | ||||||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK* | |||||||||||||||||
| Basic and diluted - GAAP and NON-GAAP | 29,821,811 | 29,730,914 | 29,791,990 | 29,702,014 | |||||||||||||
FAQ
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