Demonstrates Strong Revenue Growth Despite Challenging e-Commerce Environment
Increases Full Year 2023 Revenue Guidance
Financial Highlights for Third Quarter 2023:
- Net revenues increased 66.1% to
$29.2 million , compared to$17.6 million in the year-ago period; - Net loss totaled
$0.02 million , compared to net income$0.15 million in the year-ago period; and - Cash used for operating activities was
$3.8 million and$14.5 million for the nine months endedSeptember 30, 2023 and 2022, respectively.
Management Commentary
“We are pleased to report our third quarter 2023 results, in which we continued to deliver significant revenue growth,” said
“However, our gross margin, compared with the year-ago period, was negatively affected by the inflation impacted macroeconomy, a challenging e-commerce environment and intense competition across the industry. Nevertheless, our QoQ margin improvement remained. Gross margin for the third quarter was 52.6%, compared with 50.7% and 45.6% in the second and first quarters of 2023, respectively.
“Our operating expenses percentage was reduced compared with the year-ago period because of efforts made for expense 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 value to our vendors, customers, and shareholders.”
Third Quarter 2023 Financial Results
Net revenues in the third 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, and higher Amazon fees.
Operating expenses percentage decreased 1.7% to 52.5%, compared to 54.2%, of net revenues in the year-ago period. The decrease reflected better management of shipping charges and labor costs.
Net loss in the third 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 (Unaudited) | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 562,612 | $ | 4,562,589 | ||||
Accounts receivable, net | 737,154 | 352,379 | ||||||
Inventory, net | 23,725,207 | 18,801,529 | ||||||
Prepaid expenses and other current assets | 1,153,552 | 741,243 | ||||||
Total current assets | 26,178,525 | 24,457,740 | ||||||
Property and equipment, net | 175,139 | 274,195 | ||||||
Deferred tax assets | 1,057,710 | 549,320 | ||||||
Right-of-use lease assets | 195,047 | 450,721 | ||||||
Total non-current assets | 1,427,896 | 1,274,236 | ||||||
TOTAL ASSETS | $ | 27,606,421 | $ | 25,731,976 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Short-term loan | $ | 620,732 | $ | 652,316 | ||||
Accounts payable | 16,909,757 | 11,883,253 | ||||||
Accrued expenses and other current liabilities | 900,654 | 1,742,972 | ||||||
Operating lease liabilities-current | 171,626 | 385,216 | ||||||
Total current liabilities | 18,602,769 | 14,663,757 | ||||||
Non-current liabilities | ||||||||
Operating lease liabilities-non-current | 5,598 | 64,945 | ||||||
Due to related parties | 4,170,418 | 4,170,418 | ||||||
Total non-current liabilities | 4,176,016 | 4,235,363 | ||||||
Total liabilities | 22,778,785 | 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 | (842,596 | ) | 1,177,072 | |||||
Accumulated other comprehensive loss | (42,927 | ) | (23,042 | ) | ||||
Total stockholders’ equity | 4,827,636 | 6,832,856 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 27,606,421 | $ | 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 Nine Months Ended (Unaudited) | ||||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues, net | $ | 29,152,360 | $ | 17,556,053 | $ | 72,637,417 | $ | 44,710,554 | ||||||||
Cost of revenues | (13,819,798 | ) | (7,999,769 | ) | (36,331,604 | ) | (20,340,948 | ) | ||||||||
Gross profit | 15,332,562 | 9,556,284 | 36,305,813 | 24,369,606 | ||||||||||||
Operating expenses | ||||||||||||||||
Selling and marketing | 13,632,333 | 7,779,145 | 33,385,216 | 19,785,872 | ||||||||||||
General and administrative | 1,682,242 | 1,740,427 | 5,353,403 | 5,692,033 | ||||||||||||
Total operating expenses | 15,314,575 | 9,519,572 | 38,738,619 | 25,477,905 | ||||||||||||
Income (Loss) from operations | 17,987 | 36,712 | (2,432,806 | ) | (1,108,299 | ) | ||||||||||
Other (expenses) income | ||||||||||||||||
Other expense | (3,702 | ) | (6,651 | ) | (18,419 | ) | (16,045 | ) | ||||||||
Interest expense | (62,476 | ) | (22,876 | ) | (185,964 | ) | (127,001 | ) | ||||||||
Other income | 70,683 | 155,983 | 109,131 | 176,676 | ||||||||||||
Total other income (expenses), net | 4,505 | 126,456 | (95,252 | ) | 33,630 | |||||||||||
Income (Loss) before income taxes | 22,492 | 163,168 | (2,528,058 | ) | (1,074,669 | ) | ||||||||||
Income tax (expense) benefit | (37,548 | ) | (12,963 | ) | 508,390 | 266,579 | ||||||||||
Net (loss) income | (15,056 | ) | 150,205 | (2,019,668 | ) | (808,090 | ) | |||||||||
Other comprehensive (loss) income | ||||||||||||||||
Foreign currency translation adjustments | (12,032 | ) | 12,441 | (19,885 | ) | 8,399 | ||||||||||
Total comprehensive (loss) income | $ | (27,088 | ) | $ | 162,646 | $ | (2,039,553 | ) | $ | (799,691 | ) | |||||
Basic and diluted (loss) income per common share | $ | (0.00 | ) | $ | 0.01 | $ | (0.06 | ) | $ | (0.02 | ) | |||||
Weighted-average number of common shares outstanding | 35,058,340 | 33,300,058 | 35,061,286 | 34,973,580 |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS (In For the Three and Nine Months Ended (Unaudited) | ||||||||
Nine Months | Nine Months | |||||||
Ended | Ended | |||||||
2023 | 2022 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (2,019,668 | ) | $ | (808,090 | ) | ||
Reconciliation of net loss to net cash used in operating activities: | ||||||||
Depreciation expenses | 100,441 | 39,993 | ||||||
Amortization of right-of-use lease assets | 262,913 | 212,126 | ||||||
Deferred tax assets | (508,390 | ) | (266,709 | ) | ||||
Stock-based compensation | 34,333 | 76,013 | ||||||
Inventory allowance | 130,319 | 605,316 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (384,775 | ) | (137,434 | ) | ||||
Inventory | (5,053,997 | ) | (14,921,838 | ) | ||||
Prepaid expenses and other current assets | (412,309 | ) | (467,412 | ) | ||||
Accounts payable | 5,026,504 | 1,474,511 | ||||||
Accrued expenses and other current liabilities | (683,276 | ) | (152,606 | ) | ||||
Operating lease liabilities | (280,333 | ) | (179,701 | ) | ||||
Net cash used in operating activities | (3,788,238 | ) | (14,525,831 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (14,024 | ) | (268,342 | ) | ||||
Net cash used in investing activities | (14,024 | ) | (268,342 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments to related parties | (159,042 | ) | (898,583 | ) | ||||
Proceeds from Short-term debt | - | 630,915 | ||||||
Proceeds from issuance of shares | - | 6,156,360 | ||||||
Net cash provided by financing activities | (159,042 | ) | 5,888,692 | |||||
Effect of changes in foreign currency exchange rates | (38,673 | ) | 17,015 | |||||
Net change in cash | (3,999,977 | ) | (8,888,466 | ) | ||||
Cash at beginning of period | 4,562,589 | 10,592,572 | ||||||
Cash at end of period | $ | 562,612 | $ | 1,704,106 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest | $ | 172,964 | $ | - | ||||
Cash paid for income tax | $ | 362 | $ | - | ||||
Noncash investing and financing activities: | ||||||||
Right-of-use of assets and operating lease liabilities recognized | $ | 27,330 | $ | 688,440 |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
Source:
2023 GlobeNewswire, Inc., source