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ICZOOM Group Inc. Released 2023 Interim Financial Results

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ICZOOM Group Inc. sustains positive net income for the six months ended December 31, 2022, despite a decrease in total revenue. Total revenue was $120.2 million, down 14.6% from the same period last fiscal year. Net income was $0.9 million. The number of customers decreased by 15.2% to 653. The company remains optimistic and committed to creating value for shareholders.
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-The company sustained positive net income for the six months ended December 31, 2022 -

HONG KONG, July 20, 2023 /PRNewswire/ -- ICZOOM Group Inc. (Nasdaq: IZM) (the "Company" or "ICZOOM"), a B2B electronic component products e-commerce platform, with its financial year ends on June 30 annually, has released its interim unaudited consolidated financial statements for the six months ended December 31, 2022. A full version of the report is available at the Company's website at http://ir.iczoomex.com/index.html or the SEC's website at www.sec.gov.

Mr. Lei Xia, the CEO and the Chairman of the Board of Directors of ICZOOM, commented, "Despite a challenging environment, we've managed to sustain a stable position for the first half of the fiscal year 2023. Our total revenue reached $120.2 million for the six months ended December 31, 2022, decreased by 14.6% from $140.5 million for the same period of last fiscal year, primarily due to the business operation disruption from time to time in PRC due to restrictive measures adopted by local governments to contain the outbreak of Omicron from June to December 2022. Though revenues dipped, we proudly maintained a positive net income. Our strategic initiatives aiming at enhancing efficiency will continue to ensure our business's longevity. We're dedicated to innovation and delivering superior products and services, enabling us to navigate market flux effectively. Ongoing investments in research and development, expansion of our product portfolio, and strengthening key partnerships remain our priority. Looking ahead, we're optimistic and committed to creating values to our shareholders."

First Half of the Fiscal Year 2023 Financial and Operational Highlights

  • Total revenues were $120.2 million, compared to $140.5 million for the same period of last fiscal year.
  • Net income was $0.9 million, compared to $1.1 million for the same period of last fiscal year.
  • Total customers were 653, compared to 770 for the same period of last fiscal year.

First Half of the Fiscal Year 2023 Financial Results

Revenues

Total revenue was $120.2 million for the six months ended December 31, 2022, decreased by 14.5% from $140.5 million for the same period of last fiscal year. The decrease was largely attributable to the business operation disruption from time to time in China due to restrictive measures adopted by local governments to control the outbreak of Omicron from June 2022 to December 2022. In addition, the total revenue was affected by the reduced demand from the customers as some of the customers stocked up heavily in last fiscal year and still carried over comparatively high inventories. The number of customers for electronic component products and services decreased by 117 or 15.2%, from 770 for the six months ended December 31, 2021 to 653 for the six months ended December 31 2022.

Revenue from sales of electronic components was $118.3 million for the six months ended December 31, 2022, decreased by 14.6% from $138.5 million for the same period of last fiscal year. The decrease was primarily due to the decreased sales of integrated circuits("IC") as the ICs were stocked up heavily by some customers last fiscal year and the demand for them decreased during this period.

Service commission fee revenues were $1.86 million for the six months ended December 31, 2022, decreased by 6.8% from $2.0 million for the same period of last fiscal year. We provide customs clearance when customers purchase electronic component products directly from overseas suppliers, as well as temporary warehousing, and logistic and shipping services after the customs clearance. The decrease was primarily due to the number of customers for our services decreased by 2.2% from 135 customers for the six months ended December 31, 2021 to 132 for the six months ended December 31, 2022, which led to total merchandise value involved in the transactions decreased.

Cost of Revenues

Cost of revenues was $117.1 million for the six months ended December 31, 2022, decreased by 14.1% from $136.3 million for the same period of last year.

Gross Profit and Gross Margin

Gross profit was $3.1 million for the six months ended December 31, 2022, decreased by 26.7% from $4.2 million for the same period of last fiscal year. Gross margin was 2.6% for the six months ended December 31, 2022, compared to 3.1% for the same period of last fiscal year.

Operating Expenses

Total operating expenses were $2.3 million for the six months ended December 31, 2022, decreased by 5.3% from $2.4 million for the same period of last fiscal year.

  • Selling expenses were $0.9 million for the six months ended December 31, 2022, almost the same as selling expenses for the same period of last fiscal year.
  • General and administrative expenses were $1.4 million for the six months ended December 31, 2022, decreased by 7.0% from $1.5 million for the same period of last fiscal year. The decrease was mainly due to the decrease in our salary and employee benefit expense and stock-based compensation expenses as a result of the reduced headcount.

Other Income (Expenses)

Net other income was $0.1 million for the six months ended December 31, 2022, compared to net other expenses of $0.3 million for the same period of last fiscal year.

Net Income

Net income was $0.93 million for the six months ended December 31, 2022, compared to $1.1 million for the same period of last fiscal year.

Basic and Diluted Earnings per Share

Basic and diluted earnings per share were $0.10 and $0.10 for the six months ended December 31, 2022, respectively, compared to $0.13 and $0.11, for the same period of last fiscal year, respectively.

Balance Sheet

As of December 31, 2022, the Company had cash of $0.9 million and restricted cash of $4.0 million, compared to $1.1 million and $1.8 million as of June 30, 2022, respectively.

Cash Flow

Net cash used in operating activities was $1.9 million for the six months ended December 31, 2022, compared to net cash provided by operating activities of $16,154 for the same period of last fiscal year.

Net cash used in investing activities was $94,510 for the six months ended December 31, 2022 compared to net cash provided by investing activities of $917,440 for the same period of last fiscal year.

Net cash provided by financing activities was $2.0 million for the six months ended December 31, 2022, compared to net cash used in financing activities of $5.0 million for the same period of last fiscal year.

Recent Development

On March 18, 2023, the Company announced the closing of its initial public offering (the "Offering") of 1,500,000 Class A ordinary shares at a public offering price of US$4.00 per Class A ordinary share. The Class A ordinary shares began trading on the Nasdaq Capital Market on March 15, 2023 under the ticker symbol "IZM."

About ICZOOM Group Inc.

ICZOOM Group Inc. is primarily engaged in sales of electronic component products to customers in Hong Kong and mainland China through its B2B e-commerce platform. These products are primarily used by China based small and medium-sized enterprises ("SMEs") in the consumer electronic industry, Internet of Things ("IoT"), automotive electronics and industry control segments. By utilizing latest technologies, the Company's platform collects, optimizes and presents product offering information from suppliers of all sizes, all transparent and available to its SME customers to compare and select. In addition to the sales of electronic component products, the Company also provides services to customers such as temporary warehousing, logistic and shipping, and customs clearance. For more information, please visit the Company's website: http://ir.iczoomex.com/index.html.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company 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 "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "we believe," "we intend," "may," "should," "will," "could" and similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company 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 the Company 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 in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.

For more information, please contact:

ICZOOM Group Inc.
Investor Relations
Email:
investors@iczoom.com

ICZOOM GROUP INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS






December 31,
2022
(Unaudited)



June 30,
2022


ASSETS







CURRENT ASSETS:







Cash


$

866,077



$

1,134,416


Restricted cash



3,950,020




1,817,607


Short-term investments



1,436




1,490


Notes receivable



-




18,000


Accounts receivable, net



83,124,017




76,020,296


Inventories, net



30,780




365,615


Advances to suppliers



1,358,170




6,613,280


Prepaid expenses and other current assets



1,738,870




2,432,913


TOTAL CURRENT ASSETS



91,069,370




88,403,617











Property and equipment, net



158,125




119,244


Right-of-use asset, net



549,444




692,571


Intangible assets, net



330,380




378,338


Other non-current assets



11,150




14,491


Deferred tax assets



134,171




24,751


TOTAL NON-CURRENT ASSETS



1,183,270




1,229,395


TOTAL ASSETS


$

92,252,640



$

89,633,012











LIABILITIES AND SHAREHOLDERS' EQUITY









CURRENT LIABILITIES:









Short-term bank loans, net


$

12,646,565



$

11,760,387


Short-term borrowings- third-party loans



300,000




100,000


Accounts payable



59,767,305




59,558,743


Deferred revenue



2,807,848




3,651,700


Due to related parties



954,277




349,684


Taxes payable



3,023,859




2,675,002


Operating lease liability, current



250,106




232,221


Accrued expenses and other current liabilities



808,809




329,924


TOTAL CURRENT LIABILITIES



80,558,769




78,657,661


Operating lease liabilities, non-current



344,815




480,436


TOTAL NON-CURRENT LIABILITY



344,815




480,436


TOTAL LIABILITIES



80,903,584




79,138,097











COMMITMENTS AND CONTINGENCIES


















SHAREHOLDERS' EQUITY









Ordinary shares, $0.16 par value, 35,000,000 shares authorized, 8,826,374 shares
     issued and outstanding as of December 31, 2022 and June 30, 2022*:









        Class A shares, 30,000,000 shares authorized, 4,996,874 shares issued and
           outstanding



799,499




799,499


        Class B shares, 5,000,000 shares authorized, 3,829,500 shares issued and
           outstanding



612,720




612,720


Additional paid-in capital



14,557,811




14,499,213


Statutory reserve



624,097




624,097


Accumulated deficit



(6,158,753)




(7,085,470)


Accumulated other comprehensive income



913,682




1,044,856


TOTAL SHAREHOLDERS' EQUITY



11,349,056




10,494,915


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$

92,252,640



$

89,633,012



* Retrospectively restated for effect of 1-for-4 reverse split on November 2020 and 1-for-2 reverse split on August
8, 2022 of the ordinary shares, see Note 16.


The accompanying notes are an integral part of these consolidated financial statements

 

 

ICZOOM GROUP INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


(UNAUDITED)






For the six months ended
December 31,




2022



2021


Revenue, net







Sales of electronic components, net of sales taxes and value added taxes


$

118,348,676



$

138,531,453


Service commission fees, net of sales taxes and value added taxes



1,858,830




1,993,615


Total revenue, net



120,207,506




140,525,068


Cost of revenue



117,108,678




136,299,375


Gross profit



3,098,828




4,225,693











OPERATING EXPENSES









Selling expenses



899,314




921,587


General and administrative expenses



1,382,358




1,487,099


Total operating expenses



2,281,672




2,408,686


INCOME FROM OPERATIONS



817,156




1,817,007











OTHER INCOME (EXPENSES)









Foreign exchange transaction gain (loss)



418,866




(14,213)


Interest expense



(234,738)




(236,444)


Short-term investment income



6,913




23,981


Subsidy income



31,826




181,086


Loss from termination of the VIE agreements



-




(205,250)


Other expenses, net



(112,254)




(86,716)


Total other income (expenses), net



110,613




(337,556)


INCOME BEFORE INCOME TAX PROVISION



927,769




1,479,451


PROVISION FOR INCOME TAXES



1,052




374,863


NET INCOME



926,717




1,104,588


Foreign currency translation adjustments



(131,174)




873,622


TOTAL COMPREHENSIVE INCOME


$

795,543



$

1,978,210











EARNINGS PER ORDINARY SHARE:









– BASIC


$

0.10



$

0.13


– DILUTED


$

0.10



$

0.11











WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES*:









– BASIC



8,826,374




8,826,374


– DILUTED



9,547,346




9,748,141




* Retrospectively restated for effect of 1-for-4 reverse split on November 2020 and 1-for-2 reverse split on August
8, 2022 of the ordinary shares, see Note 16.




The accompanying notes are an integral part of these consolidated financial statements


 

 

ICZOOM GROUP INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


(UNAUDITED)






For the six months ended
December 31,




2022



2021


Cash flows from operating activities:







Net income


$

926,717



$

1,104,588


Adjustments to reconcile net income to net cash provided by operating
activities:









     Depreciation and amortization



89,128




88,572


     Loss (gain) from disposal of equipment



1,146





     Amortization of right-of-use assets



118,026





     Provision for inventory impairment



1,851





     Amortization of share-based compensation



58,598




161,096


     Amortization of debt issuance costs



110,219




84,095


     Deferred income tax provision



(109,627)




(7,760)


     Unrealized exchange (loss) gain



(477,112)




166,912


     Loss from termination of the VIE agreements






205,250


 Changes in operating assets and liabilities:









     Notes receivable



18,000





     Accounts receivable



(8,401,208)




2,389,739


     Inventories



336,052




1,328,520


     Advances to suppliers



5,255,103




138,623


     Prepaid expenses and other current assets



689,583




(457,815)


     Other noncurrent assets







     Accounts payable



130,523




(4,366,567)


     Deferred revenue



(738,116)




(412,749)


     Taxes payable



421,917




577,378


     Operating Lease liabilities



(117,736)





     Accrued expenses and other current liabilities



(218,230)




(983,728)


Net cash (used in) provided by operating activities



(1,905,166)




16,154











Cash flows from investing activities:









     Purchase of property and equipment



(74,420)




(10,124)


     Proceeds from disposal of PPE



3,096





     Purchase of intangible assets



(23,186)




(1,485)


     Purchase of short-term investments



(2,701,116)




(14,625,930)


     Proceeds upon maturity of short-term investments



2,701,116




15,554,979


Net cash (used in) provided by investing activities



(94,510)




917,440











Cash flows from financing activities:









     Proceeds from short-term bank loans



14,145,794




15,053,570


     Repayments of short-term bank loans



(12,841,626)




(20,200,000)


     Proceeds from loans payable to third-parties



360,000




700,000


     Repayments from loans payable to third-parties



(160,000)




(370,000)


     Proceeds from banker's acceptance notes payable






1,500,000


     Repayment of banker's acceptance notes payable






(1,500,035)


     Proceeds from borrowings from related parties



608,589




448,238


     Payment for deferred IPO costs



(88,810)





     Repayment of related party borrowings






(589,396)


Net cash provided by (used in) financing activities



2,023,947




(4,957,623)


Effect of exchange rate fluctuation on cash and restricted cash



1,839,803




342,622


Net increase (decrease) in cash and restricted cash



1,864,074




(3,681,407)


Cash and restricted cash at beginning of period



2,952,023




6,808,190


Cash and restricted cash at end of period


$

4,816,097



$

3,126,783











Supplemental cash flow information









Cash paid for income taxes


$

(61,473)



$

(56,593)


Cash paid for interest


$

(234,738)



$

(236,444)


Supplemental disclosure of non-cash investing and financing activities









Right-of-use assets obtained in exchange for operating lease obligations


$



$




The accompanying notes are an integral part of these consolidated financial statements


 

Cision View original content:https://www.prnewswire.com/news-releases/iczoom-group-inc-released-2023-interim-financial-results-301881874.html

SOURCE ICZOOM Group Inc.

FAQ

What is the total revenue for ICZOOM Group Inc. for the six months ended December 31, 2022?

The total revenue for ICZOOM Group Inc. for the six months ended December 31, 2022, was $120.2 million.

What is the net income for ICZOOM Group Inc. for the six months ended December 31, 2022?

The net income for ICZOOM Group Inc. for the six months ended December 31, 2022, was $0.9 million.

How many customers did ICZOOM Group Inc. have for the six months ended December 31, 2022?

ICZOOM Group Inc. had 653 customers for the six months ended December 31, 2022.

What was the percentage decrease in total revenue for ICZOOM Group Inc. compared to the same period last fiscal year?

The total revenue for ICZOOM Group Inc. decreased by 14.6% compared to the same period last fiscal year.

What is ICZOOM Group Inc.'s strategy for the future?

ICZOOM Group Inc. is dedicated to innovation, delivering superior products and services, and enhancing efficiency. They will continue to invest in research and development, expand their product portfolio, and strengthen key partnerships.

ICZOOM Group Inc.

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