iPower Inc (IPW) 2023 Q3 法說會逐字稿

Good afternoon, everyone, and thank you for participating in today's conference call to discuss iPower's financial results for its fiscal third quarter 2023 ended March 31, 2023. Joining us today are iPower's Chairman and CEO, Mr. Lawrence Tan, and the company's CFO, Mr. Kevin Vassily. Mr. Vassily, please go ahead.

大家下午好，感謝大家參加今天的電話會議，討論 iPower 截至 2023 年 3 月 31 日的 2023 財年第三季度的財務業績。今天加入我們的是 iPower 董事長兼首席執行官 Lawrence Tan 先生以及公司的首席財務官，凱文·瓦西里先生。瓦西里先生，請繼續。

Thank you, operator, and good afternoon, everyone. By now, everyone should have access to our fiscal third quarter earnings press release, which was issued earlier today at approximately 4:05 PM Eastern Time. The release is available in the Investor Relations section of our website at meetiPower.com. This call will also be available for webcast replay on our website. Following our prepared remarks, we'll open the call for your questions.

謝謝接線員，大家下午好。到目前為止，每個人都應該可以訪問我們的第三財季收益新聞稿，該新聞稿於今天早些時候東部時間下午 4:05 左右發布。該新聞稿可在我們網站 meetiPower.com 的投資者關係部分獲取。此次電話會議也可在我們的網站上進行網絡直播重播。在我們準備好的發言之後，我們將開始電話詢問您的問題。

Before I introduce Lawrence, I'd like to remind listeners that certain comments made on this conference call and webcast are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements.

在介紹勞倫斯之前，我想提醒聽眾，根據 1995 年《私人證券訴訟改革法案》，本次電話會議和網絡廣播中的某些評論被視為前瞻性陳述。這些前瞻性陳述受到某些已知和未知的因素的影響。風險和不確定性以及可能導致實際結果與這些前瞻性陳述中反映的結果存在重大差異的假設。

These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Do not place undue reliance on any forward-looking statements, which are being made only as of the date of this call. Except as required by law, company undertakes no obligation to revise or publicly release the results of any revision to forward-looking statements.

這些前瞻性陳述還受到該公司向 SEC 提交的文件中不時描述的其他風險和不確定性的影響。請勿過分依賴任何前瞻性陳述，這些陳述僅截至本次電話會議之日作出。除法律要求外，公司不承擔修改或公開發布前瞻性陳述任何修改結果的義務。

With that, I'd like to turn the call now over to iPower's Chairman and CEO, Lawrence Tan. Lawrence?

現在，我想將電話轉給 iPower 的董事長兼首席執行官 Lawrence Tan。勞倫斯？

Thank you, Kevin, and good afternoon, everyone. We had a challenging comp this quarter, given the record 74% revenue growth we achieved in fiscal Q3 2022. Nonetheless, we demonstrated a continued momentum in setting through inventory buildup from prior periods, as reflected by our 16% reduction of inventory from last quarter and 36% reduction from our fiscal yearend.

謝謝你，凱文，大家下午好。鑑於我們在 2022 財年第三季度實現了創紀錄的 74% 收入增長，本季度的業績比較具有挑戰性。儘管如此，我們在前期庫存積累方面表現出了持續的勢頭，從上季度庫存減少 16% 就可以看出與本財年末相比減少了 36%。

Throughout the quarter, we continued to emphasize our in-house brand, which made up of more than 90% of the revenue and the scoring the consistent demand for our market-leading products. Some of our strongest brand sales come from several of our newer products, most notably in our shopping category. Consumer feedback for our product remains strong and we expect those categories to grow further as we add new in-demand products to our catalog.

整個季度，我們繼續強調我們的自有品牌，該品牌佔收入的 90% 以上，並滿足了市場領先產品的持續需求。我們最強勁的一些品牌銷售來自於我們的幾種新產品，尤其是在我們的購物類別中。消費者對我們產品的反饋依然強勁，隨著我們在目錄中添加新的需求產品，我們預計這些類別將進一步增長。

As mentioned on prior calls, we have made the strategical decision to diversify our product portfolio beyond hydroponics. What once was the vast majority of our business now accounts for approximately 35% of sales. Although hydroponics has become a smaller segment of our business today, it remains a important catalog and we'll continue to invest in the product line as the market dictates.

正如之前電話中提到的，我們已做出戰略決策，使我們的產品組合多樣化，超越水培法。曾經是我們絕大多數業務的業務現在約佔銷售額的 35%。儘管水培技術如今已成為我們業務中較小的一部分，但它仍然是一個重要的目錄，我們將根據市場的需要繼續投資於產品線。

Investing resources in new product development has been and will always be a key focus for us, to keep our portfolio stocked with high-quality products our cost customer has come to expect. In the next few weeks, we are planning to unveil our new countertop hydroponics line, iFarm. iFarm provides consumer with the easy-to-operate, space-saving appliance to grow herbs, green leafy vegetables, tomatoes, peppers, and other produce in their kitchen year-round.

在新產品開發上投入資源一直是並將永遠是我們的重點，以保持我們的產品組合備有我們的成本客戶所期望的高質量產品。在接下來的幾週內，我們計劃推出新的檯面水培系列 iFarm。 iFarm 為消費者提供易於操作、節省空間的設備，可全年在廚房種植香草、綠葉蔬菜、西紅柿、辣椒和其他農產品。

After extensive research and data collection, we saw a niche in the market that was not being well served. And we built the product with attributes consumer were demanding and at a compelling price. We are excited to launch this new product line and look forward to releasing additional products later this year.

經過廣泛的研究和數據收集，我們發現市場上有一個尚未得到良好服務的利基市場。我們生產的產品具有消費者所要求的屬性，並且價格具有吸引力。我們很高興推出這個新產品線，並期待在今年晚些時候發布更多產品。

In recent months, we have experienced promising traction on the services side of our business as well. Our focus is to leverage our supply chain and merchandising expertise to drive sales growth from partners with cutting-edge product portfolio. This is a small segment of our business today. However, the early demand is encouraging as reflected by recent partnership with former good companies in home goods and electronic categories. We are providing merchandising and sales services as well as some logistics support for these initial pilots.

近幾個月來，我們的業務服務方面也取得了可喜的進展。我們的重點是利用我們的供應鍊和銷售專業知識來推動擁有尖端產品組合的合作夥伴的銷售增長。這是我們今天業務的一小部分。然而，早期需求令人鼓舞，這從最近與家居用品和電子產品領域的前優秀公司的合作夥伴關係可以看出。我們正在為這些初始試點提供推銷和銷售服務以及一些物流支持。

Since launching the program two months ago, we have already begun to see strong momentum with increasing order volumes. We will have more to say about these programs in the next several quarters and look forward to offering our sales, marketing, and merchandising expertise to service more brands and partners in the future.

自兩個月前啟動該計劃以來，我們已經開始看到訂單量不斷增加的強勁勢頭。我們將在接下來的幾個季度對這些計劃進行更多討論，並期待在未來提供我們的銷售、營銷和推銷專業知識，為更多品牌和合作夥伴提供服務。

As mentioned earlier on the call, we proactively stockpiled inventory in calendar 2022 to offset supply chain challenges and to account for increased demand for our in-house products. This led to a surplus of inventory with very high associated freight costs and the need for additional warehousing space, which increased our operating expenses that impacted our profitability. The supply chain began stabilizing in late calendar 2022, so we no longer require the access entry levels or the associated warehousing space.

正如之前在電話會議中提到的，我們在 2022 年積極儲備庫存，以抵消供應鏈挑戰並滿足對我們內部產品的需求增長。這導致庫存過剩，相關貨運成本非常高，並且需要額外的倉儲空間，從而增加了我們的運營費用，影響了我們的盈利能力。供應鏈於 2022 年末開始穩定，因此我們不再需要進入級別或相關的倉儲空間。

To date, we have sold through the majority of the inventory carrying the elevated cost of goods sold. However, we still have a smaller portion to work through.

迄今為止，我們已經售出了大部分庫存，但銷售成本較高。然而，我們還有一小部分需要完成。

Our selling and the marketing costs have been higher than usual to move through the excess inventory. However, we expect that to normalize in the quarters ahead, which will lower our total operating expenses. We see these, as combined with the continued strong demand for our in-house product, will enable us to return to profitability through fiscal 2024.

為了清理多餘的庫存，我們的銷售和營銷成本比平時要高。然而，我們預計這種情況將在未來幾個季度正常化，這將降低我們的總運營費用。我們認為，這些再加上對我們內部產品的持續強勁需求，將使我們能夠在 2024 財年恢復盈利。

Moving ahead, we will focus our future diversifying our product mix while adding depth to our in-house offerings. We are also optimistic about our services business and looking forward to utilize our best-in-class sales, marketing, and merchandising capabilities to accelerate the growth for high-quality brands looking to elevate their sales channels. These initiatives, coupled with a normalized supply chain environment and lower operating expenses, will enable us to improve our financial and operating results as we enter our next fiscal year.

展望未來，我們將重點關注未來的產品組合多元化，同時增加我們內部產品的深度。我們還對我們的服務業務持樂觀態度，並期待利用我們一流的銷售、營銷和推銷能力來加速尋求提升銷售渠道的優質品牌的增長。這些舉措，加上標準化的供應鏈環境和較低的運營費用，將使我們能夠在進入下一財年時改善我們的財務和運營業績。

I'll now turn the call to our CFO, Kevin Vassily, and take you through our financial results in more detail. Kevin?

現在我將把電話轉給我們的首席財務官凱文·瓦西里 (Kevin Vassily)，並帶您更詳細地了解我們的財務業績。凱文？

Thanks, Lawrence. As mentioned earlier, fiscal Q3 of last year was a period of record growth for iPower that made this quarter a pretty challenging comp on a year-over-year basis, given the circumstances that we were pleased with our results in this quarter, so diving right in.

謝謝，勞倫斯。如前所述，去年第三財季是 iPower 創紀錄增長的時期，考慮到我們對本季度的業績感到滿意的情況，這使得本季度的業績與去年同期相比相當具有挑戰性，因此就在。

Total revenue was $20.2 million compared to $22.8 million in the year-ago period. The decrease was primarily driven by fewer third-party branded sales to our channel partners. Our fiscal third quarter revenue mix from in-house brands increased to over 90% compared to 82% in the year-ago period.

總收入為 2020 萬美元，去年同期為 2280 萬美元。這一下降主要是由於向我們的渠道合作夥伴的第三方品牌銷售減少所致。我們第三財季來自自有品牌的收入組合增加至 90% 以上，而去年同期為 82%。

Gross profit in the fiscal third quarter was $7.8 million compared to $9.2 million in the year-ago quarter. As a percentage of revenue, gross margin was 38.5% compared to 40.4% in the year-ago quarter with the decrease in gross margin, primarily driven by higher cost of goods sold, which resulted from selling inventory that previously incurred much higher freight costs. As we have mentioned, freight and container shipping costs have normalized this year. We expect gross margin to improve as we work through our older inventory.

第三財季的毛利潤為 780 萬美元，而去年同期為 920 萬美元。毛利率佔收入的百分比為 38.5%，而去年同期為 40.4%，毛利率下降的主要原因是銷售成本上升，而銷售成本此前因銷售庫存而產生了更高的運費。正如我們所提到的，今年貨運和集裝箱運輸成本已經正常化。我們預計，隨著我們處理舊庫存，毛利率將會提高。

Total operating expenses for fiscal Q3 were $9.6 million compared to $7.8 million for the same period in fiscal 2022. The increase in operating expenses was primarily driven by higher selling fulfillment and marketing costs related to the sale of inventory we built up over the summer of last year. As our inventory normalizes, we expect lower OpEx levels along with improved working capital as we no longer have to carry that higher cost inventory and our excess warehouse expenses that we had shown in the prior two quarters.

第三財季的總運營費用為 960 萬美元，而 2022 財年同期為 780 萬美元。運營費用的增加主要是由於與我們去年夏天銷售庫存相關的銷售履行和營銷成本增加所致年。隨著我們的庫存正常化，我們預計運營支出水平會降低，營運資金也會改善，因為我們不再需要承擔前兩個季度所顯示的較高成本庫存和超額倉儲費用。

Net loss attributable to iPower in the fiscal third quarter was $1.5 million or $0.05 per share, compared to net income of $1.2 million or $0.04 per share for the same period in fiscal 2022. The decrease in our bottom line was primarily driven by lower gross profit in the aforementioned higher selling fulfillment, marketing, and marketing costs.

第三財季 iPower 的淨虧損為 150 萬美元，即每股 0.05 美元，而 2022 財年同期的淨利潤為 120 萬美元，即每股 0.04 美元。淨利潤下降主要是由於毛利潤下降上述較高的銷售履行、營銷和營銷成本。

Moving to the balance sheet. Cash and cash equivalents were $1.4 million as of March 31, 2023, compared to $1.8 million at June 30, 2022. As of March 31, 2023, total debt stood at $9.7 million compared to $16 million as of June 30, 2022. The decrease was driven by our decision to pay down a significant portion of our revolving credit facility.

轉向資產負債表。截至 2023 年 3 月 31 日，現金和現金等價物為 140 萬美元，而截至 2022 年 6 月 30 日為 180 萬美元。截至 2023 年 3 月 31 日，債務總額為 970 萬美元，而截至 2022 年 6 月 30 日為 1,600 萬美元。是由於我們決定償還大部分循環信貸額度而推動的。

As a result, our net debt position was reduced 42% to $8.2 million compared to $14.2 million as of June 30, 2022. As Lawrence mentioned earlier, we expect to improve both on our gross and operating margins given the stabilization in the supply chain and the reduction in our excess inventory, and the lowering of our excess warehousing costs. We believe these initiatives, in addition to the continued strong demand for those products, would enable us to return to growth and profitability in our fiscal 2024.

因此，我們的淨債務頭寸從截至 2022 年 6 月 30 日的 1,420 萬美元減少了 42% 至 820 萬美元。正如勞倫斯之前提到的，鑑於供應鏈的穩定和減少我們的過剩庫存，並降低我們的過剩倉儲成本。我們相信，除了對這些產品的持續強勁需求之外，這些舉措將使我們能夠在 2024 財年恢復增長和盈利。

So with that, that concludes our prepared remarks, and we will now open it for questions. Operator?

我們準備好的發言就到此結束，現在我們將開始提問。操作員？

Thank you. (Operator Instructions) Scott Fortune, Roth.

謝謝。 （操作員說明）Scott Fortune，Roth。

Good afternoon and thanks for taking the questions. On the inventory level, I just wanted to get a sense for -- obviously you're working through that, but there still seems to be some left in there. You don't want to discount it too much from ample.

下午好，感謝您提出問題。在庫存層面，我只是想了解一下——顯然你正在解決這個問題，但似乎仍然有一些剩餘。你不想把它從充足的東西中打折太多。

When you look at the normalized inventory, what type of turns are you looking at? And then this kind of sense of the levels here and once this is coming completely cycled out, kind of the timing here -- you expect kind of inventory to be normalized from the next couple of quarters standpoint, if -- and that can be helpful from that standpoint. Thanks.

當您查看標準化庫存時，您會看到什麼類型的周轉？然後，這種對水平的感覺，一旦完全循環出去，這裡的時機——你預計從接下來幾個季度的角度來看，庫存會正常化——如果——這可能會有所幫助從這個角度來看。謝謝。

Lawrence, do you want to take that one in terms of timing? Maybe I can talk a little bit about what we think a normalized level would be.

勞倫斯，你想在時間上接受那個嗎？也許我可以談談我們認為的標準化水平。

The timing to -- that we'd return to normal inventory?

我們恢復正常庫存的時機是什麼？

Yes, the cycle time through some of the higher-cost stuff that we still sit on.

是的，我們仍然坐擁一些成本較高的東西的周期時間。

I think by the end of the June quarter, we should be achieving that goal.

我認為到六月季度末，我們應該能夠實現這一目標。

And then from the standpoint of kind of inventory turns and what we think is normal, prior to our IPO, we were running the business at 6, 6.5 turns a year. I don't know that that's necessarily a realistic number. However, we've got a soft inventory gold based on demand expectations of at least initially trying to get our inventory levels down to the 15 million or 16 million level. Some of that will change depending on demand forecast. But I think we still have some absolute levels of inventory reduction that we feel like we can achieve over the next quarter or so.

然後，從庫存周轉率和我們認為正常的角度來看，在我們 IPO 之前，我們的業務每年周轉 6、6.5 次。我不知道這一定是一個現實的數字。然而，我們有一個基於需求預期的軟庫存黃金，至少在最初試圖將我們的庫存水平降至 1500 萬或 1600 萬的水平。其中一些將根據需求預測而改變。但我認為我們仍然有一定程度的庫存減少，我們認為我們可以在下個季度左右實現這一目標。

Yeah, I think our goal is to turn inventory about around five times a year. So that could be -- that's the goal that we are trying to achieve.

是的，我認為我們的目標是每年大約周轉庫存五次。所以這可能是——這就是我們正在努力實現的目標。

Got it. No, I appreciate that color there. And then you mentioned the attractive service side model here that drive growth for partners. You're seeing pretty good demand. I know it's initial and just beginning the start-up. Kind of help us understand the margin profile and the -- or you go after these different categories, the service opportunity where you can see the percentage, what percentage it can be of the revenues and the margin profile on the services going forward. That'd be great, helpful from that standpoint.

知道了。不，我很欣賞那裡的顏色。然後您在這裡提到了有吸引力的服務端模型，可以推動合作夥伴的增長。你看到了相當不錯的需求。我知道這是初始階段，剛剛開始啟動。有點幫助我們了解利潤狀況和——或者你追求這些不同的類別，服務機會，你可以看到百分比，它可以佔收入的百分比，以及未來服務的利潤狀況。從這個角度來看，那太好了，很有幫助。

I'd take this, Kevin.

我會接受這個，凱文。

Sure.

當然。

So it's still early. We have engaged with few partners. We have seen a pretty promising results with these pilots. From the profit standpoint, I think it will be around the similar levels of our in-house products actually in terms of the bottom line.

所以現在還早。我們與少數合作夥伴進行了合作。我們在這些試點項目中看到了非常有希望的結果。從利潤的角度來看，我認為實際上就底線而言，這將與我們內部產品的水平相似。

In terms of the -- I think in the services side of revenue has a much, much higher potential than just like a build apparently from in-house product line point of view. So I think this is something that we could -- I have personally have a high expectation to looking forward.

就收入而言，我認為從內部產品線的角度來看，服務方面的收入潛力比單純的構建要高得多。所以我認為這是我們可以做到的——我個人對未來抱有很高的期望。

Got it. And then one last one for me. Hydroponics is down to 35% of sales. Congratulations on the new iFarm. So I think -- but any color on big box and play initiatives there? I know that there's been a focus from that standpoint. Any additional colors on working with the big box retailers in moving more of your products into lowest cheap built channels going forward here?

知道了。然後是最後一張給我的。水培法佔銷售額的比例下降至 35%。祝賀新 iFarm 上線。所以我想——但是大盒子上有什麼顏色和遊戲倡議嗎？我知道從這個角度來看，這是一個焦點。與大型零售商合作，將更多產品轉移到最低的廉價渠道中，還有什麼其他的亮點嗎？

The big box retailers we've been working with these potential partners are developing brand strategies and product lines to work with them. We have been attending meetings and conferences. But yes, still takes some more time before we can withdraw any like significant achievement.

我們一直與這些潛在合作夥伴合作的大型零售商正在製定與他們合作的品牌戰略和產品線。我們一直在參加會議和大會。但是，是的，我們還需要一些時間才能撤回任何類似的重大成就。

Okay. I appreciate. I will jump back in the queue.

好的。我很欣賞。我會跳回到隊列中。

Thank you. I have no further questions in the queue. I'd like to give the call back over to Kevin for any closing remarks.

謝謝。我在隊列中沒有其他問題了。我想將電話轉給凱文，讓他作結束語。

Okay. Well, thank you, those of you that dialed in and participated in the call. We look forward to speaking with you again at the time that we report our full-year 2023 results in that fiscal year will end June 30 of this year. Thanks again and look forward to talking to you.

好的。好的，謝謝撥通並參與通話的人們。我們期待在我們報告 2023 年全年業績（該財年將於今年 6 月 30 日結束）時再次與您交談。再次感謝並期待與您交談。

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。大家，祝你有美好的一天。