iPower Reports Fourth Quarter and Fiscal 2021 Results
Strong Demand for In-House Branded Products Drives Fiscal 2021 Revenue Up 35% to $54.1 Million
iPower Management to Host Conference Call Today at 4:30 p.m. Eastern Time
DUARTE, Calif., Sept. 27, 2021 /PRNewswire/ — 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 fourth quarter and fiscal year ended June 30, 2021.
Fiscal Q4 2021 Results vs. Year-Ago Quarter
- Total revenue increased slightly to $14.7 million.
- Gross profit was $6.5 million compared to $6.6 million. As a percentage of revenue, gross margin was 44.4% compared to 44.7%.
- Net loss was $(1.9) million or $(0.08) per share, compared to net income of $1.2 million or $0.06 per share.
- Non-GAAP net income (a non-GAAP financial measure defined below) was $0.6 million or $0.02 per share, compared to $1.2 million or $0.06 per share.
Fiscal 2021 Results vs. Fiscal 2020
- Total revenue increased 35% to $54.1 million compared to $39.9 million.
- Gross profit increased 51% to $22.8 million compared to $15.1 million. As a percentage of revenue, gross margin increased 430 basis points to 42.2% compared to 37.9%.
- Net loss was $(0.8) million or $(0.04) per share, compared to net income of $2.0 million or $0.10 per share.
- Non-GAAP net income increased 47% to $2.9 million or $0.14 per share, compared to $2.0 million or $0.10 per share.
Management Commentary
“Fiscal 2021 was a solid year for iPower, highlighted by strong revenue growth of more than 35% with considerable gross margin expansion due to a growing mix of in-house product sales,” said Lawrence Tan, CEO of iPower. “The growing demand for our in-house products, which made up 72% of sales in fiscal 2021, is a testament to our superior product research, design and merchandising expertise. Sales of our proprietary products grew nearly 80% in fiscal 2021. We introduced hundreds of new proprietary SKUs in that same period, with the majority of them introduced in the second half of our fiscal year. We believe we have the right products with the right features to address the needs of our customers.
“During our fiscal fourth quarter, we utilized the growth capital raised from our IPO to make significant investments and lay the groundwork for continued growth in the coming years. This included increased advertising on new products launched in the second half of 2021, expansion of our fulfillment infrastructure, and multiple new programs with our co-engineering and supply chain logistics partners.”
iPower CFO Kevin Vassily added, “As we look toward fiscal 2022, we expect a continued robust demand environment. Historically, our organic revenue growth has ranged between 25-35%, excluding the extraordinary year of fiscal 2020 that benefited from COVID-19 stay-at-home mandates. Hydroponic industry growth at-large appears to be moderating, however, our unique eCommerce model has enabled us to consistently outpace the industry. Given our extensive proprietary SKU introductions over the last six months, we expect to continue outpacing the industry going forward with organic revenue growth of at least 25% in fiscal 2022.”
From a profitability perspective, the cost environment has been more volatile with increased container and product input costs. While we plan to offset some of these costs, we nonetheless believe it is prudent to avoid forecasting exact margin targets until the global supply chain becomes more stable.
iPower CFO Kevin Vassily
That said, we are planning a meaningful number of new in-house product introductions, including our own nutrients brand, which we expect will provide margin support during this volatile period. We remain in the early stages of capitalizing on our unique approach to hydroponic eCommerce sales and look forward to another year of strong execution ahead.
Fiscal Fourth Quarter 2021 Financial Results
Total revenue in the fiscal fourth quarter of 2021 increased slightly to $14.73 million compared to $14.66 million for the same period in fiscal 2020. The Company benefitted from heightened eCommerce demand during the fiscal fourth quarter 2020 as a result of mandatory stay-at-home orders due to COVID-19, and such benefits continued into 2021.
Gross profit in the fiscal fourth quarter of 2021 decreased slightly to $6.5 million compared to $6.6 million. As a percentage of revenue, gross margin was 44.4% compared to 44.7%.
Total operating expenses in the fiscal fourth quarter were $6.3 million compared to $4.8 million for the same period in fiscal 2020. The increase was primarily driven by higher merchant fees related to channel program mix, increases in advertising, and an increase in spending with co-engineering partners.
Net loss in the fiscal fourth quarter of 2021 was $(1.9) million or $(0.08) per share, compared to net income of $1.2 million or $0.06 per share for the same period in fiscal 2020.
Non-GAAP net income in the fiscal fourth quarter was $0.6 million or $0.02 per share, compared to $1.2 million or $0.06 per share. The decrease was driven by the aforementioned higher merchant fees and increased spending.
Cash and cash equivalents were $6.7 million at June 30, 2021, compared to $1.0 million at June 30, 2020. The increase was attributed to proceeds raised from the Company’s initial public offering earlier this fiscal year.
Conference Call
The Company will conduct a conference call today at 4:30 p.m. Eastern Time to discuss the results for its fourth quarter and fiscal year ended June 30, 2021.
iPower management will host the conference call, followed by a question-and-answer period.
Date: September 27, 2021
Time: 4:30 p.m. Eastern time
Toll-free dial-in number: (833) 882-8474
International dial-in number: (409) 981-0009
Conference ID: 3283489
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
The conference call will be broadcast live and available for replay here and on the Company’s investor relations 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/.
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/(loss) before stock-based compensation, one-time IPO related costs, D&O insurance, amortization of debt and non-cash financing costs, changes in fair value of warrants and conversion features, and adjustments to tax provisions. 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 provide 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.
