– 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, 202229,573   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 
               
               

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