iPower Inc. Q2 FY2024 earnings call

• Expanded gross margin and drove down operating costs, generating positive cash flow from operations. - Gained traction in the SuperSuite supply chain business with a robust pipeline of prospects. - Diversified revenue through the launch of SuperSuite supply chain offerings and a strong brand presence on TikTok shop. - Worked with Lowe's and Home Depot for omnichannel opportunities. - Reduced inventory level by 23% compared to June 30, 2023, and outsourced warehouse staffing to lower production overhead.

In fiscal second quarter 2024, total revenue was $16.8 million, down from $19.3 million in the prior year period. Gross profit was $7.3 million compared to $8 million in the same quarter of fiscal 2023. Gross margin increased to 43.6% from 41.4% year-over-year. Total operating expenses improved to $9.9 million from $12.1 million in the prior year. Net loss attributable to iPower improved to $1.9 million from $3.3 million in the same period last year. Cash and cash equivalents were $1.5 million as of December 31, 2023, down from $3.7 million in June 2023. Total debt decreased to $5 million from $11.8 million, with net debt reducing to $3.6 million from $8.1 million. The SuperSuite supply chain business showed growth, offsetting some of the revenue decline from the largest channel partner.

• Aim to return to profitability in 2024. - SuperSuite business is growing at a strong clip, optimistic about adding more partners in the coming quarters. - Continue to evaluate new partners for the SuperSuite business and expand sales channels in the U.S. - Expect further gross margin improvement through cost control measures, selective price adjustments, and logistics cost savings.

• Forward-looking statements are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside the company's control. - Actual results may differ materially from forward-looking statements due to various factors such as economic conditions and market changes.

Q: Scott Fortune asked about seasonality, the hydroponics segment, big box partnerships, and SuperSuite growth.

A: Lawrence Tan and Kevin Vassily responded that the inventory from the largest channel partner has normalized, the hydroponics segment is stable, big box partnerships are in the early stages with slow progress, and the SuperSuite business is growing with plans to expand into consumer electronics and food and beverage.

Q: Shawn Severson asked about the criteria for the bricks-and-mortar rollout and the international update.

A: Lawrence Tan stated that the bricks-and-mortar rollout is based on sales volume and product roadmap, initially a trial in limited stores, and there are no specific international updates to report.