Demonstrates Strong Execution Despite Challenging Macroeconomic Environment and Unfavorable e-Commerce Environment
Raises Full Year 2022
Financial Highlights for Third Quarter 2022:
- Total revenues increased 68.4% and 18.6% to
$17.6 million , compared to$10.4 million in the year-ago period and$14.8 million for the second quarter of 2022, respectively. - Net income totaled
$0.15 million , compared to$0.30 million in the year-ago period and net loss of$0.31 million for the second quarter of 2022. - Cash used in operating activities for the nine months ended
September 30, 2022 , was$14.5 million , compared to cash provided by operating activities$1.6 million in the year-ago period.
Management Commentary
“We are pleased to report our strong third quarter results, in which we saw accelerated revenue growth and a return to profitability,” said
Third Quarter 2022 Financial Results
Total revenues in the third quarter of 2022 were
Gross profit percentage increased 1.58% to 54.43%, compared to 52.85% of total revenues in the comparable period a year ago but decreased from 56.46% for the second quarter of 2022. The quarter-over-quarter increase was a function of our aggressive growth initiatives and a heightened inflationary environment causing higher cost of goods sold, increased FBA fees, and strong competition.
Operating expenses increased 78.8% to
Net income in the third quarter was
As of
Inventories as of
Full Year 2022 Financial Outlook
For the full year 2022, the Company is raising its guidance for gross revenue to be in the range of
About
Forward-Looking Statements
This press release contains statements that constitute "forward-looking statements" including with respect to the Company's business strategy, product development and industry trends. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to the Company on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in the Company's filings with the
Investor Contact
finance@hourloop.com
CONDENSED CONSOLIDATED BALANCE SHEETS
As of
2022 | 2021 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 1,704,106 | $ | 10,592,572 | ||||
Accounts receivable, net | 263,425 | 125,991 | ||||||
Inventory, net | 21,358,386 | 7,041,864 | ||||||
Prepaid expenses and other current assets | 856,543 | 965,298 | ||||||
Total current assets | 24,182,460 | 18,725,725 | ||||||
Property and equipment, net | 238,403 | 15,667 | ||||||
Deferred tax assets | 312,197 | 45,488 | ||||||
Right-of-use lease assets | 518,575 | 30,111 | ||||||
TOTAL ASSETS | $ | 25,251,635 | $ | 18,816,991 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Short-term debt | $ | 630,915 | $ | - | ||||
Accounts payable | 11,013,769 | 9,539,258 | ||||||
Accrued expenses and other current liabilities | 1,129,555 | 1,282,161 | ||||||
Due to related parties | 4,316,211 | 5,214,794 | ||||||
Income taxes payable | 126,333 | 126,333 | ||||||
Current operating lease liabilities | 372,579 | - | ||||||
Total current liabilities | 17,589,362 | 16,162,546 | ||||||
Non-current liabilities | ||||||||
Long-term operating lease liabilities | 151,314 | - | ||||||
Total liabilities | 17,740,676 | 16,162,546 | ||||||
Commitments and contingencies | - | |||||||
Stockholders’ equity | ||||||||
Preferred stock: | - | - | ||||||
Common stock: | 3,505 | 3,330 | ||||||
Additional paid-in capital | 5,660,321 | 4,291 | ||||||
Retained earnings | 1,846,605 | 2,654,695 | ||||||
Accumulated other comprehensive income (loss) | 528 | (7,871 | ) | |||||
Total stockholders’ equity | 7,510,959 | 2,654,445 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 25,251,635 | $ | 18,816,991 |
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the Periods Ended
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenues, net | $ | 17,556,053 | $ | 10,425,111 | $ | 44,710,554 | $ | 31,391,254 | ||||||||
Cost of revenues | (7,999,769 | ) | (4,915,116 | ) | (20,340,948 | ) | (13,855,109 | ) | ||||||||
Gross profit | 9,556,284 | 5,509,995 | 24,369,606 | 17,536,145 | ||||||||||||
Operating expenses | ||||||||||||||||
Selling and marketing | 7,779,145 | 4,427,774 | 19,785,872 | 13,058,566 | ||||||||||||
General and administrative | 1,740,427 | 896,993 | 5,692,033 | 2,359,500 | ||||||||||||
Total operating expenses | 9,519,572 | 5,324,767 | 25,477,905 | 15,418,066 | ||||||||||||
Income (loss) from operations | 36,712 | 185,228 | (1,108,299 | ) | 2,118,079 | |||||||||||
Other (expenses) income | ||||||||||||||||
Other expense | (6,651 | ) | (877 | ) | (16,045 | ) | (5,501 | ) | ||||||||
Interest expense | (22,876 | ) | (20,005 | ) | (127,001 | ) | (30,333 | ) | ||||||||
Other income | 155,983 | 106,990 | 176,676 | 161,494 | ||||||||||||
Total other income (expenses), net | 126,456 | 86,108 | 33,630 | 125,660 | ||||||||||||
Income (loss) before income taxes | 163,168 | 271,336 | (1,074,669 | ) | 2,243,739 | |||||||||||
Income tax (expense) benefit | (12,963 | ) | 24,770 | 266,579 | 24,770 | |||||||||||
Net income (loss) | 150,205 | 296,106 | (808,090 | ) | 2,268,509 | |||||||||||
Other comprehensive income (loss) | ||||||||||||||||
Foreign currency translation adjustments | 12,441 | (6,750 | ) | 8,399 | (6,301 | ) | ||||||||||
Total comprehensive income (loss) | $ | 162,646 | $ | 289,356 | $ | (799,691 | ) | 2,262,208 | ||||||||
Basic and diluted income (loss) per common share | $ | 0.01 | $ | 0.01 | $ | (0.02 | ) | 0.07 | ||||||||
Weighted-average number of common shares outstanding | 33,300,058 | 33,300,000 | 34,973,580 | 33,300,000 |
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
(Unaudited)
Nine Months Ended | ||||||||
2022 | 2021 | |||||||
Cash flows from operating activities | ||||||||
Net (loss) income | $ | (808,090 | ) | $ | 2,268,509 | |||
Reconciliation of net (loss) income to net cash (used in) provided by operating activities: | ||||||||
Depreciation expenses | 39,993 | - | ||||||
Noncash lease expenses | 212,126 | 52,668 | ||||||
Distribution to director and supervisor | 76,013 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (137,434 | ) | 68,422 | |||||
Inventory | (14,316,522 | ) | (1,146,755 | ) | ||||
Prepaid expenses and other current assets | (734,121 | ) | (167,231 | ) | ||||
Accounts payable | 1,474,511 | 1,132,211 | ||||||
Accrued expenses and other current liabilities | (152,606 | ) | (598,828 | ) | ||||
Operating lease liabilities | (179,701 | ) | (34,532 | ) | ||||
Net cash (used in) provided by operating activities | (14,525,831 | ) | 1,574,464 | |||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (268,342 | ) | - | |||||
Net cash used in investing activities | (268,342 | ) | - | |||||
Cash flows from financing activities: | ||||||||
Net advances from related parties | (898,583 | ) | 67,291 | |||||
Capital contribution | - | 2,800 | ||||||
Distribution to stockholders | - | (2,132,000 | ) | |||||
Issuance of shares | 5,580,192 | - | ||||||
Prepaid expenses | 576,168 | - | ||||||
Net change in line of credit | 630,915 | (27,012 | ) | |||||
Net cash provided by (used in) financing activities | 5,888,692 | (2,088,921 | ) | |||||
Effect of changes in foreign currency exchange rates | 17,015 | (134 | ) | |||||
Net change in cash and cash equivalents | (8,888,466 | ) | (514,591 | ) | ||||
Cash and cash equivalents at beginning of year | 10,592,572 | 4,968,064 | ||||||
Cash and cash equivalents at end of year | $ | 1,704,106 | $ | 4,453,473 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest | $ | - | $ | - | ||||
Cash paid for income tax | $ | - | $ | - | ||||
Noncash investing and financing activities: | ||||||||
Right-of-use of assets and operating lease liabilities recognized | $ | 688,440 | $ | - | ||||
Noncash distribution to stockholders | $ | 76,013 | $ | - |
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
Source:
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