GlobeNewswire Inc | Nov 11, 2021 04:03PM EST

November 11, 2021

Fiscal Q1 Revenue up 16% to $17.4 Million; In-House Branded Product Sales Drive Continued Gross Margin Expansion Despite Supply Chain Headwinds

iPower Management to Host Conference Call Today at 4:30 p.m. Eastern Time

DUARTE, Calif., Nov. 11, 2021 (GLOBE NEWSWIRE) -- iPower Inc. (Nasdaq:IPW) (iPower or the Company), one of the leading online hydroponic equipment suppliers and retailers in the United States, today announced financial results for its fiscal first quarter ended September 30, 2021.

Fiscal Q1 2022 Results vs. Year-Ago Quarter

-- Total revenue increased 16% to a record $17.4 million. -- Gross profit increased 31% to $7.3 million. As a percentage of revenue, gross margin increased 490 basis points to 42.1%. -- Net income increased 16% to $0.89 million or $0.03 per share.

Management Commentary

We continued to execute on our growth initiatives during the quarter, as reflected by another period of double-digit year over year revenue growth and gross margin expansion, said Lawrence Tan, CEO of iPower. Given the broader industry weakness in commercial hydroponics and comping a record quarter last year, we were pleased with our top-line performance. We continued to emphasize in-house product sales, which grew by 21% to approximately $13 million and accounted for 75% of revenue in fiscal Q1 compared to 72% in the year-ago quarter. This helped offset the rapid increase in freight costs we experienced over the summer.

From a product perspective, our in-house ventilation line was our strongest category during the quarter. This was a much smaller category for us prior to the pandemic, and its growth is a reflection of our superior product design and merchandising capability, as well as the work we put in to effectively manage our supply partner network.

iPower CFO Kevin Vassily added, We have started to see lower shipping costs in fiscal Q2 as congestion in the California ports has begun to ease, however the supply chain more broadly remains volatile, particularly around input costs and COVID-19 disruptions that continue to impact our partners overseas. Our focus is nevertheless unchanged. We will continue to bring new in-house SKUs to market and plan to continue working with our suppliers to navigate this unique supply chain environment as we deliver on our various growth objectives in fiscal 2022.

Fiscal First Quarter 2022 Financial Results

Total revenue in the fiscal first quarter of 2022 increased 16% to $17.4 million compared to $15.0 million for the same period in fiscal 2021. The increase was primarily driven by greater in-house product sales, as well as increased sales of ventilation and nutrient products.

Gross profit in the fiscal first quarter of 2022 increased 31% to $7.3 million compared to $5.6 million. As a percentage of revenue, gross margin increased 490 basis points to 42.1% compared to 37.2%. The increase was driven by a greater mix of in-house product sales, partially offset by increased freight and product input costs.

Total operating expenses in the fiscal first quarter were $6.0 million compared to $4.5 million for the same period in fiscal 2021. The increase was primarily driven by increased sales volumes, increases in advertising, and an increase in expenses associated with being a publicly traded company.

Net income in the fiscal first quarter of 2022 increased 17% to $0.89 million or $0.03 per diluted share, compared to net income of $0.76 million or $0.04 per diluted share for the same period in fiscal 2021.

Cash and cash equivalents were $1.2 million as of September 30, 2021, compared to $6.7 million as June 30, 2021. The decrease was attributed to the timing of receivables with the Companys largest channel partner and is not an indication of any other business or operating trend. Total debt as of September 30, 2021 was $0.5 million compared to $0.7 million as of June 30, 2021.

Conference Call

The Company will conduct a conference call today at 4:30 p.m. Eastern time to discuss the results for its fiscal first quarter ended September 30, 2021.

iPower management will host the conference call, followed by a question-and-answer period.

Date: Thursday, November 11, 2021Time: 4:30 p.m. Eastern timeToll-free dial-in number: (888) 705-0179International dial-in number: (409) 981-0009Conference ID: 5848879Webcast: iPower FQ1 2022 Conference Call

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 (949) 200-4603.

The conference call will also be broadcast live and available for replayin the Events & Presentations section of the Companys website at www.meetipower.com.

About iPower Inc.

iPower Inc. is one of the leading online retailers and suppliers of hydroponics equipment and accessories in the United States. iPower offers thousands of stock keeping units from its in-house brands as well as hundreds of other brands through its website, www.zenhydro.com, and its online platform partners. All orders are fulfilled from its two fulfillment centers in Southern California. iPower has a diverse customer base that includes both commercial businesses and individuals. For more information, please visit iPower's website at https://ir.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 occurring 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 in iPower's registration statement and in its other filings with the SEC.

US & Canada Investor Relations Contact:Sean Mansouri, CFAElevate IR(949) 200-4603IPW@elevate-ir.com

Asia Investor Relations Contact:Sherry ZhengWeitian Group LLC(718) 213-7386shunyu.zheng@weitian-ir.com

iPower Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets As of September 30, 2021 and June 30, 2021 September 30, June 30, 2021 2021 (Unaudited) ASSETS Current assets Cash and cash equivalent $ 1,219,580 $ 6,651,705 Accounts receivable 13,083,946 7,896,347 Inventories, net 14,594,078 13,065,741 Prepayments and other current assets 6,243,929 4,693,000 Total current assets 35,141,533 32,306,793 Non-current assets Right of use - non-current 1,648,133 1,819,421 Property and equipment, net 102,026 55,659 Non-current prepayments 1,249,375 1,357,292 Other non-current assets 328,643 99,645 Total non-current assets 3,328,177 3,332,017 Total assets $ 38,469,710 $ 35,638,810 LIABILITIES AND EQUITY Current liabilities Accounts payable 6,186,446 3,940,963 Credit cards payble 787,176 584,311 Customer deposit 248,384 297,407 Other payables and accrued liabilities 2,690,163 2,487,441 Short-term loans payable - 162,769 Lease liabilty - current 749,132 731,944 Long-term loan payable - current portion 29,244 29,244 Income taxes payable 377,145 790,823 Total current liabilities 11,067,690 9,024,902 Non-current liabilities Long-term loan payable 448,823 458,571 Lease liability - non-current 976,830 1,169,552 Total non-current liabilities 1,425,653 1,628,123 Total liabilities 12,493,343 10,653,025 Commitments and contingency - - Stockholders' Equity Preferred stock, $0.001 par value;20,000,000 shares authorized; 0 shares - - issued and outstanding at September 30,and June 30, 2021Common stock, $0.001 par value;180,000,000 shares authorized; 26,448,663and26,448,663 shares issued and 26,449 26,449 outstanding at September 30, and June 30,2021Additional paid in capital 23,317,317 23,214,263 Retained earnings 2,632,601 1,745,073 Total equity 25,976,367 24,985,785 Total liabilities and equity $ 38,469,710 $ 35,638,810

iPower Inc. and SubsidiariesUnaudited Condensed Consolidated Statements of OperationsFor the Three Months Ended September 30, 2021 and 2020

For the Three Months Ended September 30, 2021 2020 (Unaudited) (Unaudited) REVENUES $ 17,366,765 $ 14,959,935 TOTAL REVENUES 17,366,765 14,959,935 COST OF REVENUES 10,053,063 9,397,147 GROSS PROFIT 7,313,702 5,562,788 OPERATING EXPENSES: Selling and fulfillment 3,665,921 3,213,674 General and administrative 2,357,466 1,272,741 Total operating expenses 6,023,387 4,486,415 INCOME FROM OPERATIONS 1,290,315 1,076,373 OTHER INCOME (EXPENSE) Interest income (expenses) - (25,830 )Other financing expenses (59,000 ) - Other non-operating income (expense) (812 ) 7,397 Total other (expenses), net (59,812 ) (18,433 ) INCOME BEFORE INCOME TAXES 1,230,503 1,057,940 PROVISION FOR INCOME TAXES 342,975 295,944 NET INCOME $ 887,528 $ 761,996 WEIGHTED AVERAGE NUMBER OF COMMON STOCKBasic 26,484,528 20,204,496 Diluted 26,495,420 20,204,496 EARNINGS PER SHARE Basic $ 0.03 $ 0.04 Diluted $ 0.03 $ 0.04