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iPower (IPW)

Participants
Kevin Vassily Chief Financial Officer
Lawrence Tan Chairman, Chief Executive Officer, President & Secretary
Scott Fortune ROTH Capital Partners
Call transcript
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Operator

Good afternoon, everyone and thank you for participating in today's conference call to discuss iPower's Financial Results for its Fiscal Third Quarter Ended March 31, 2022.

Joining us today are iPower's Chairman and CEO, Mr. Lawrence Tan; and the company's CFO, Mr. Kevin Vassily. Mr. ahead. go please Vassily,

Kevin Vassily

X:XX Good iPower's to By replay XXXX our was will Investor available at release, Charlie. is be The have in also at available earnings everyone our meetipower.com. had on which the approximately today earlier access fiscal section issued webcast Eastern afternoon, you, website. time. now release of everyone. Relations should press PM website Thank for third call quarter This

your remarks, questions. prepared open we'll call for our Following the

cause described these required to place any call. date as SEC. this on the undue law, are reliance company's Before I'd this that call these Securities Do of to reflected risks the forward-looking from of filings time actual Lawrence, to statements of made from only those known to statements. I not also are which Except being the comments and certain time subject of forward-looking materially the by are results forward-looking as Act under considered listeners with introduce to certain CEO, and Lawrence revise Tan. risks to publicly XXXX. company could and differ no in to unknown forward-looking remind to and Chairman to over undertakes like iPower's uncertainties I'd the obligation turn statements These Lawrence? any With like that release other any the that, or are uncertainties, subject statements made statements. These Private conference on results revision Reform and statements are that forward-looking Litigation forward-looking webcast well the call assumptions in

Lawrence Tan

everyone. Kevin, you, Thank good afternoon, and

sales was XX.X strong our XX% over iPower, largest was by million, another year our increased quarter to channel. in a of period fiscal for up record exceptional year for and continuing revenue which driven product a demand was Our growth third

the quarter. on XX% always quarter third of throughout mentioned up of In this roughly make sale is of products top calls, in-house our revenue previous the As mind. fiscal

to by global continue are our our introduce product categories also recently We each partner moving. slower acquired retiring that in co-engineering while with of diligently including working DHS, new SKUs partner, SKUs

strong in research Over months, channel. increase aligned to the past volumes our volume consistent We have from development largest speaks that with believe order as it this product we our trend. and consumer directly few seen

investment we Our our roll businesses and in further merchandising push demand momentum into products as specifically new only future. the R&D out in in this will

remains environment that large We continue the our a they to the extensive chain global effectively iPower and that us due key to our partners avoid customers know channel as supply deliver can roadblocks many a and manner of others -- face in This for part the in faces navigate during rely quarter, network to other supply on in chain. timely choppy differentiator partners. supply the of products

assistance, tents to Now completion hydroponics This the for we talk into into This filtration, over business and the UK. a delivered I'm about with devices, initiatives Europe order past the service January, consumer accessories air quarter, expanded services trimming the UK going expansion and order contains DIY the abroad. Europe first that of other and our consumer.

hydroponics logistics believe JV, to the to medium us Harmony. long-term in significant opportunity continue present and then We a their as the of e-commerce is its launch European market infancy that consumer for develops. still Box market And

expertise for a online given us This services, us, Plus e-commerce largest company market. Box largest JV Harmony. our in chain a cost is full Europe, on to the service EBay one into natural we auto eCommerce option with low with and seller to of auto into So a hydroponic partnered shortly after value Titanium provides the and create expand parts, collision parts fit related of equipment strategic individuals Amazon which our expansion

first client, be reflecting our signed a interest furniture hydroponics. a fact, which already our vertical In brand, happens outside into to we

both facility will California a BXC for our BXB at service JV client Southern this logistics Our shipments. and for

second that's with supply While combine momentum going e-Commerce to media its formed plan new -- And Media products this entertainment early fully to media Social social This end We social marketing a activity the form their JV, looking own to for solution sell our exposure forward. brand channels. utilize of a is global Global we as and then channels. this expand the as ramp plan and chain And global marketing media end then through partnership benefits various to via as partner’s Global as have Media co-engineering platform. Social JV launch product our to own this -- social for was create manufacturers Information days, also carry social JV geographic with acquired, company Social social Media Global expertise Daheshou our beginning partner, and a to awareness to Shenzhen JV, DHS. Technology to we is our to our businesses commerce just we well known in our

felt showcase continue we up the supply our made inorganic supplier to broader reduce to products well was as in manner. the only the expands sourcing, we business and capabilities brands, as company. organic our assurance our XX a own to did also our our supply network on Not in product e-commerce DHS in but that interest grow and was for bring we risk consumers as various supplier It logistic core to with source with to this decided will components to our brand. other necessary service in-house our in and a quality image in-house R&D and invest partners processes, DHS potential the set pandemic future. And and of expertise. of plan relied new properly turnover. recent timely manufacturing of a acquisition current offering consistent heavily for to execute businesses, We resources environment, suite and During to create benefit key XXX% we a partner the chain our COVID This a initiatives, it management, our that reason volatile and acquire that high chain utilize we tandem quantity

are we such, the we we perceived optimize completing process later will are positioned our This summer. the in market, allocate us company how of development As we in that expect well marketing how and to to end enable a rebrand dollars. as as the

We our success to to plenty Vassily new continue our is Although consumers and we expand and call results way. more in you to through momentum in-house to turn over CFO, the to while for a developing our strengthening markets there now SKUs details. plan current continuing grow and into and take along of of are the all proud Kevin ones, our in deliver business, still value improve. and while strong also channel room I’ll financial Kevin? additional partners

Kevin Vassily

Thanks, Lawrence.

of million percentage execute iPower. to product As of as growth up As ago XX.X% sales revenue as brands, fiscal the XX.X% XX.X Lawrence demand product QX mentioned, was shelving increased revenue XX% ago as quarter. partner, period strong in-house the strong million our in largest and products, to for Total fans, channel on XX% continue XX% to gross accounted ventilation we million for X.X our approximately third fiscal compared our the the for new which was compared by mentioned, year in year some in Gross ago a sale revenue, to of to quarter quarter, profit million in year was of margin of to the XX.X our Lawrence well the compared another greater to commercial quarter. driven period, X.X prioritizing in our

some our Total margins it costs, XX%, costs, to us. operating direct higher were With we in gross were to record Yeah, higher the expenses operating despite addition for for fiscal also stronger X QX same fiscal import freight by by maintain overseas. able X.X in product but million better extensive million in which for decrease to experiencing mix driven to supplier freight high orders well period program, ’XX. input carries thanks was lower compared as impacted channel above the margins gross costs as our margins, network

this or million net for loss same well increased as primarily basis operating have to revenue, As partners. channel operating of to capacity penny We associated quarter, of large one DHS G&A a acquisition. points as XXXX. able share the new were of quarter. the compared to to we one impact period to or aforementioned fiscal the was XXX in with import by positive year from the increase share coming of X.X improved XX.X% compared leverage in expense costs our driven income direct third fiscal quarter percentage X.X online the ago a X% per The of program with operating leverage per of higher XX.X% the despite costs warehouse Net loss increased million

XXXX, onto cash million timing cash million was March business indication receivable, Moving at of compared of the X.X not the decrease and sheet, were to the in of balance other XXXX, trend. an June equivalents to accounts was and operating any X.X attributed XX,

March at function our forward to company credit XXXX. a million the a final note. as and was facility of quarter close growth on executing on then revolving June XX, XX, increase of debt X.X as long-term XXXX, at As to stood XX.X compared total utilizes also million This timing we to plan finally, capital. out the fiscal strong looking our And continue the of to year working manage strategy year, its

environment plan prudent. shows up to where more prepared And impacts as runs, of Operator? can mitigate as about this forward this summer by concludes product it in road and base channel that, of production managing and larger for supply now we'll done remarks, we As various well mix, going and with you we strategy doing touching We talk we've investor our the look program to to questions. the chain prior channel with open non-deal the bulk conferences many procurement mix, quarters, company through forward. its we're

Operator

comes Scott from Your of line the with question Instructions] Partners. [Operator first Capital ROTH Fortune

Scott Fortune

going more into the channel can looking update or coming fiscal those were year or big color quick, box channels, here? there into sales is new progress you coming you for opportunities quarter any those initiatives? potential and little know at next with as this onboard provide box on big retailers retailers I look Real down we a

Lawrence Tan

that take one. I'll Yeah,

pretty It as we making know big than the I of orders year. good box We the are we happens a actively before all if are purchase fiscal working it, slower progress. on don't lot channels. large to on understand, we're it. and the But working see But you retailers. are actively online the end going But

making a in we’re But progress. it's So work progress. good

Scott Fortune

a was what with on seems Got industry. like the it. side And challenges we've you robust significant you're the quickly, big of seen color and driving that commercial and it consumer very also industry hydroponic But headwinds the here. business, remains from going M&A things Can initiatives doing initiatives and on really the channels? unpack those fiscal and quarter slowdown there. pickup partner, oversupply the and I specific growth appreciate really then the from JVs and Europe mentioned yourself the then a -- next year product your new side. much is You channel coming how forward large but next and the in new standpoint the of for here? more and that Is from in

Lawrence Tan

Sure I'll those answer two parts. in questions

fundamental -- So like been of noticed we our product. why in-house company increasing grow, the our we grow share upon --

also We issues others, navigate think, network the chain helped. I able pretty the and we've supply extensive to they well had all supply above been well

category continue noticed the increase. ventilation also We to

think systems, our as to and into the ERP all able be own we’ll to managed use fueled well operate through our business pretty I efficiently fundamentally our model, data ability the growth. workflow as well, that in-house analytics, we've So

have for more Harmony what that we so we to Global more and as enable able grow to have new term, it with ability, Social fast could are we These -- pace bottlenecks. will the combine what at strategical a Box the Now without us be JVs now, Media.

a later revenue start something of Now Media But calendar next from or in the it grow beginning time. this year. year we’ll We’ll I'll I'm are moves just anticipating to so hitting happening. could trying say bottleneck, the two the future placed the -- are the see rapid in these probably Box play, strategically without Social say pace relatively these to that some ahead growth, But we ones. be that start the atleast see can to Harmony

Kevin Vassily

we're I some to orders [Indiscernible] and hoping quarter. this follow-up see think deliveries

We yet. haven't seen them

grant in we'll the bulk our the I Europe, think next in year. So start fiscal of

Operator

for question at to showing turn will I Kevin call the further Vassily back I'm no now this over And remarks. time. Mr. final

Kevin Vassily

to if had queue. think back Do follow-up you ask a was going want said question? he I Scott had to he in he jump the

Operator

ROTH from follow-up Scott Fortune [Operator Instructions] We a from have Capital Mr. question Partners.

Scott Fortune

of XX.X kind that kind cash built I know here. there needs as up kind Can the – kind more initiatives needs? about of timing address your business AR going inventory's additional forward. level and the for thing, million far at your as Kevin, but Last those you little million of been a X.X wise, address for bit -- flexibility

great. Just kind That'd of, of be some address of points there. some those

Kevin Vassily

inventory, in doing the Yeah, New as could portion a the so in quarter. big what quarter the much product we Chinese was earlier bringing of which ahead were was of we as Year,

that so to of And we didn't partners insight of hand caution now sell the somewhat to our and through the we we sufficient able meet from kind China of of we inventory impacting through the of be although wanted to are sure on that get demand. as on channel some information that had kind have COVID make to some lockdowns any real state

kind standpoint, the but within of on credit as line you out as it's the what of now tap if still well one revolving of AR where about our side. to that best risks was of of of credit probably is part know, a the there. are fair are have that be need From feel our we're amount So receivable, flexibility And accounts we we strategy room there. have we topping good most

that So, the some to that we're that both what earlier got resources, including next to Does we think over meet quarter. would if providing undertook -- the need and joint in capital we've flexibility help? I sufficient, to we do the -- several the comfortable ventures quarters, in necessary

Scott Fortune

for that's appreciate Congrats that. And differentiating industry again space, been I congrats yourself challenging again. detail. appreciate challenge hydroponic that in on that I has but Yeah, it. the

Operator

the now back sir, no to There over are Kevin Vassily, for will turn I remark. you this further questions. At time, final call Mr.

Kevin Vassily

earning look wanted with Okay. Bye-bye. will and probably everyone be we to forward call, thank you your Thanks joining, to again. on late for August chatting support Well, next we September. sometime appreciate our or

Operator

you Thank This concludes conference today's call. for participating.

You disconnect. now may