iPower Inc. (Nasdaq:IPW), announced its financial results for its fiscal fourth quarter and full year ended June 30, 2022.
Fiscal Q4 2022 Results vs. Year-Ago Quarter
- Total revenue increased 50% to $22.1 million.
- Gross profit increased 39% to $9.1 million.
- As a percentage of revenue, gross margin was 41.2% compared to 44.4%.
- Net loss improved to $1.3 million or $(0.05) per share compared to a net loss of $1.9 million or $(0.08) per share.
Fiscal 2022 Results vs. Fiscal 2021
- Total revenue increased 47% to $79.4 million.
- Gross profit increased 46% to $33.2 million.
- As a percentage of revenue, gross margin was 41.8% compared to 42.2%.
- Net income increased significantly to $1.5 million or $0.05 per share compared to a net loss of $0.8 million or $(0.04) per share.
“We generated a record year of growth and profitability in fiscal 2022, highlighted by an almost 50% increase in revenue while maintaining gross margins above 40% and generating positive net income,” said Lawrence Tan, CEO of iPower. “Throughout the year, we focused on prioritizing our in-house product mix and strategically diversifying our product offerings into categories outside of hydroponics. Our ability to shift the product mix into new categories while continuing to grow sales profitably demonstrates our product research, merchandising and supply chain expertise.
“We delivered on multiple strategic initiatives in fiscal 2022, including the expansion of our business to Europe, the launch of two joint ventures, and closing our first M&A transaction. The joint ventures provided low-cost opportunities to extend our logistics expertise to the ecommerce and social media industries, while the acquisition of our global co-engineering partner strengthened our production capacity and R&D capabilities.”
iPower CFO Kevin Vassily added, “Due to the continued volatility of the global supply chain in our fourth quarter, we leveraged our diversified supply network to increase inventory and ensure product availability for our customers, allowing us to continue to meet strong demand. This bulk purchasing also partially offset the impact of elevated freight costs. The benefit of product availability through the acquisition of our global co-engineering partner has led to some of our strongest months of sales in July and August. Looking ahead, we plan to continue executing on our various product and operational initiatives and deliver on our growth objectives in fiscal 2023.”
Fiscal Fourth Quarter 2022 Financial Results
Total revenue in the fiscal fourth quarter of 2022 increased 50% to $22.1 million compared to $14.7 million for the same period in fiscal 2021. The increase was driven by greater demand for iPower’s non-hydroponic product portfolio, including commercial fans, shelving products and chairs, among others. iPower’s non-hydroponic portfolio accounted for approximately 54% of revenue in the fiscal fourth quarter.
Gross profit in the fiscal fourth quarter of 2022 increased 39% to $9.1 million compared to $6.5 million for the same quarter in fiscal 2021. As a percentage of revenue, gross margin was 41.2% compared to 44.4% in the year-ago quarter. The decrease in gross margin was driven by product and channel mix, as well as elevated freight costs.
Total operating expenses in the fiscal fourth quarter were $10.6 million compared to $6.3 million for the same period in fiscal 2021. As a percentage of revenue, operating expenses were 48.0% compared to 42.8% in the year-ago quarter. The increase in operating expenses was primarily driven by additional warehouse, selling and fulfillment costs.
Net loss in the fiscal fourth quarter of 2022 was $1.3 million or $(0.05) per share, compared to a net loss of $1.9 million or $(0.08) per share for the same period in fiscal 2021.
Cash and cash equivalents were $1.8 million at June 30, 2022, compared to $6.7 million at June 30, 2021. The decrease was attributed to the Company’s strategic decision to increase inventory to offset supply chain risk and effectively fulfill strong customer demand. Total long-term debt as of June 30, 2022 was $14.1 million compared to $0.5 million as of June 30, 2021. This increase was attributed to the note associated with the DHS acquisition, as well as a function of timing as the Company utilized its revolving credit facility to manage working capital.
Image Credit: iPower