Demonstrates Strong Revenue Growth Despite Challenging e-Commerce Environment
Revises up Full Year 2023 Revenue Guidance
Financial Highlights for Second Quarter 2023:
- Net revenues increased 51.5% to
$22.4 million , compared to$14.8 million in the year-ago period; - Net loss totaled
$0.8 million , compared to$0.3 million in the year-ago period; and - Cash used for operating activities was
$3.4 million and$12.7 million for the six months endedJune 30, 2023 and 2022, respectively.
Management Commentary
“We are pleased to report our second quarter 2023 results, in which we continue to deliver significant revenue growth,” said
“However, our gross margin, compared with the year-ago period, was negatively impacted by the challenging e-commerce environment and intense competition caused by high inventory levels across the industry. Nevertheless, we had some success with the QoQ margin improvement to 50.7% from 45.6%.
Our operating expenses percentage remains at a similar percentage to the first quarter because of efforts made for expenses management this year. Overall, we believe we’ve built a solid foundation to continue generating strong growth. We also aim to continue making improvements on profitability.”
“Looking forward, we’re cautiously optimistic. Despite an uncertain economy, we continue to see strong demand for our products so far in 2023. We are confident in our ability to continue delivering values to our vendors, customers, and shareholders.”
Second Quarter 2023 Financial Results
Net revenues in the second quarter of 2023 were
Gross profit percentage decreased 5.8% to 50.7%, compared to 56.5% of net revenues in the comparable period a year ago. The decrease was a function of increased market competition, overstocked inventories, and higher Amazon fees.
Operating expenses percentage decreased 4.8% to 54.4%, compared to 59.2% of net revenues in the year-ago period. The decrease reflected better management of shipping, labelling, and preparation costs, as well as legal and professional fees.
Net loss in the second quarter of 2023 was
As of
Inventories as of
Full Year 2023 Financial Outlook
For the full year 2023,
About
Forward-Looking Statements
This press release contains statements that constitute "forward-looking statements" including with respect to Hour Loop’s business strategy, product development and industry trends. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of
Investor Contact
finance@hourloop.com
CONSOLIDATED BALANCE SHEETS
(In
As of
2023 | 2022 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 1,118,671 | $ | 4,562,589 | ||||
Accounts receivable, net | 322,334 | 352,379 | ||||||
Inventory, net | 14,417,742 | 18,801,529 | ||||||
Prepaid expenses and other current assets | 871,771 | 741,243 | ||||||
Total current assets | 16,730,518 | 24,457,740 | ||||||
Property and equipment, net | 208,297 | 274,195 | ||||||
Deferred tax assets | 1,095,258 | 549,320 | ||||||
Right-of-use lease assets | 294,678 | 450,721 | ||||||
Total non-current assets | 1,598,233 | 1,274,236 | ||||||
TOTAL ASSETS | $ | 18,328,751 | $ | 25,731,976 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Short-term loan | $ | 643,294 | $ | 652,316 | ||||
Accounts payable | 7,448,841 | 11,883,253 | ||||||
Accrued expenses and other current liabilities | 929,294 | 1,742,972 | ||||||
Operating lease liabilities-current | 266,672 | 385,216 | ||||||
Total current liabilities | 9,288,101 | 14,663,757 | ||||||
Non-current liabilities | ||||||||
Operating lease liabilities-non-current | 15,508 | 64,945 | ||||||
Due to related parties | 4.170,418 | 4,170,418 | ||||||
Total non-current liabilities | 4,185,926 | 4,235,363 | ||||||
Total liabilities | 13,474,027 | 18,899,120 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity | ||||||||
Preferred stock: | - | - | ||||||
Common stock: | 3,507 | 3,506 | ||||||
Additional paid-in capital | 5,709,652 | 5,675,320 | ||||||
(Accumulated deficit) retained earnings | (827,540 | ) | 1,177,072 | |||||
Accumulated other comprehensive loss | (30,895 | ) | (23,042 | ) | ||||
Total stockholders’ equity | 4,854,724 | 6,832,856 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 18,328,751 | $ | 25,731,976 |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In
For the Three and Six Months Ended
(Unaudited)
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues, net | $ | 22,417,448 | $ | 14,800,518 | $ | 43,485,057 | $ | 27,154,501 | ||||||||
Cost of revenues | (11,059,899 | ) | (6,443,910 | ) | (22,511,806 | ) | (12,341,179 | ) | ||||||||
Gross profit | 11,357,549 | 8,356,608 | 20,973,251 | 14,813,322 | ||||||||||||
Operating expenses | ||||||||||||||||
Selling and marketing | 10,245,912 | 6,480,625 | 19,752,883 | 12,006,727 | ||||||||||||
General and administrative | 1,957,975 | 2,275,642 | 3,671,161 | 3,951,606 | ||||||||||||
Total operating expenses | 12,203,887 | 8,756,267 | 23,424,044 | 15,958,333 | ||||||||||||
Loss from operations | (846,338 | ) | (399,659 | ) | (2,450,793 | ) | (1,145,011 | ) | ||||||||
Other (expenses) income | ||||||||||||||||
Other expense | (2,438 | ) | (3,944 | ) | (14,717 | ) | (9,394 | ) | ||||||||
Interest expense | (62,392 | ) | (20,567 | ) | (123,488 | ) | (104,125 | ) | ||||||||
Other income | 20,818 | 13,754 | 38,448 | 20,693 | ||||||||||||
Total other expenses, net | (44,012 | ) | (10,757 | ) | (99,757 | ) | (92,826 | ) | ||||||||
Loss before income taxes | (890,350 | ) | (410,416 | ) | (2,550,550 | ) | (1,237,837 | ) | ||||||||
Income tax benefit | 120,982 | 97,009 | 545,938 | 279,542 | ||||||||||||
Net loss | (769,368 | ) | (313,407 | ) | (2,004,612 | ) | (958,295 | ) | ||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustments | (9,192 | ) | (9,497 | ) | (7,853 | ) | (11,913 | ) | ||||||||
Total comprehensive loss | $ | (778,560 | ) | $ | (322,904 | ) | $ | (2,012,465 | ) | $ | (970,208 | ) | ||||
Basic and diluted loss per common share | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.03 | ) | ||||
Weighted-average number of common shares outstanding | 35,055,293 | 34,939,695 | 35,056,510 | 33,300,000 |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
For the Six Months Ended
(Unaudited)
Six Months | Six Months | |||||||
Ended | Ended | |||||||
2023 | 2022 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (2,004,612 | ) | $ | (958,295 | ) | ||
Reconciliation of net loss to net cash used in operating activities: | ||||||||
Depreciation expenses | 68,634 | 22,498 | ||||||
Amortization of right-of-use lease assets | 179,774 | 124,570 | ||||||
Deferred tax assets | (545,938 | ) | (279,542 | ) | ||||
Inventory allowance | 211,979 | 169,192 | ||||||
Stock-based compensation | 34,333 | 61,013 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 30,045 | (25,616 | ) | |||||
Inventory | 4,171,808 | (7,745,521 | ) | |||||
Prepaid expenses and other current assets | (130,528 | ) | 191,294 | |||||
Accounts payable | (4,434,412 | ) | (4,180,324 | ) | ||||
Accrued expenses and other current liabilities | (813,678 | ) | 48,803 | |||||
Operating lease liabilities | (191,845 | ) | (98,930 | ) | ||||
Net cash used in operating activities | (3,424,440 | ) | (12,670,858 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (5,881 | ) | (164,174 | ) | ||||
Net cash used in investing activities | (5,881 | ) | (164,174 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments to related parties | - | (1,024,188 | ) | |||||
Deferred IPO expenses | - | (576,167 | ) | |||||
Proceeds from issuance of shares | - | 6,156,360 | ||||||
Net cash provided by financing activities | - | 4,556,005 | ||||||
Effect of changes in foreign currency exchange rates | (13,597 | ) | (7,115 | ) | ||||
Net change in cash | (3,443,918 | ) | (8,286,142 | ) | ||||
Cash at beginning of period | 4,562,589 | 10,592,572 | ||||||
Cash at end of period | $ | 1,118,671 | $ | 2,306,430 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest | $ | 167,017 | $ | - | ||||
Cash paid for income tax | $ | - | $ | - | ||||
Noncash investing and financing activities: | ||||||||
Right-of-use of assets and operating lease liabilities recognized | $ | 28,407 | $ | 606,443 |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
Source:
2023 GlobeNewswire, Inc., source