Hydroponic equipment company iPower Inc. (Nasdaq: IPW) reported its financial results for its fiscal second quarter ended December 31, 2021, with total revenue increasing 52% to $17.1 million. iPower said that the increase was driven by greater in-house product sales and strong demand for ventilation products. The company reported that its net income increased 39% to $0.8 million or $0.03 per share.
“Our fiscal second quarter marked our strongest period of year-over-year revenue growth since completing our IPO last year,” said Lawrence Tan, CEO of iPower. “We are beginning to realize the benefits of continuously rolling out new high-demand, in-house branded products. During the quarter, our in-house product sales increased approximately 72% from the year ago quarter and accounted for approximately 87% of revenue—a company record. These increases demonstrate how well our products are resonating with consumers. In addition, our ability to deliver these products on a timely basis despite global supply chain headwinds provides an important asset to our channel partners.”
The company also reported that the gross profit in the fiscal second quarter of 2022 increased 53% to $7.6 million compared to $4.9 million for the same quarter in fiscal 2021. As a percentage of revenue, the gross margin was 44.1% compared to 44.0% in the year-ago quarter. This small increase in gross margin was driven by a greater mix of in-house product sales partially offset by higher freight and input costs.
“Over the past few months, we have also executed on multiple key growth initiatives, including the launch of our first in-house nutrient line, Flourish™, as well as our initial expansion into Europe through the UK and Germany. Although both initiatives are in their infancy, we believe they present compelling new avenues to drive growth and increase market share.”
iPower noted that the total operating expenses in the fiscal second quarter were $6.4 million compared to $4.1 million for the same period in fiscal 2021. As a percentage of revenue, operating expenses were 37.5% compared to 36.4% in the year-ago quarter. The increase was driven by higher sales volumes, increased advertising to support the launch of new products, as well as increased headcount for new channel sales.
iPower CFO Kevin Vassily added, “We are continuing to navigate the volatile supply chain environment, which has not materially improved since our last quarterly report despite signs of recovery last fall. We plan to continue mitigating the cost volatility through our diversified network of partners and continue to expect fiscal 2022 to be another strong year of growth and execution for iPower.”
Cash and cash equivalents were $1.0 million at December 31, 2021, compared to $6.7 million on June 30, 2021. The decrease was attributed to the timing of accounts receivables with the company’s largest channel partner and is not an indication of any other business or operating trend. Total long-term debt as of December 31, 2021, was $7.4 million compared to $0.5 million as of June 30, 2021. The increase was attributable to increased working capital expenses.