Hour Loop, Inc. (NASDAQ: HOUR) (“Hour Loop”), a leading online
retailer, announces its financial and operational results for the
third quarter ended September 30, 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 Sam Lai, CEO of Hour Loop, “We take
the long term view on growth, which is why we strategically front
loaded our investment in the first half of the year. Our headcount
grew from 67 to 191 and our inventories grew from $7 million to $21
million. This put tremendous pressure on our bottom line in a very
challenging year for e-commerce. Nevertheless, we executed well and
continue to position the business for long-term growth and value
creation.”
Third Quarter 2022 Financial
Results
Total revenues in the third quarter of 2022 were
$17.6 million compared to $10.4 million in the year-ago period and
$14.8 million for the second quarter of 2022, respectively. The
increase was primarily due to continued growth and maturity in our
operating model, despite a continuation in overall e-commerce
traffic slowdown.
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 $9.5
million compared to $5.3 million in the year- ago period. This was
a function of increased platform fees paid to Amazon, and a
significant increase in our labor force.
Net income in the third quarter was $0.15
million, or $0.005 per diluted share, compared to $0.30 million, or
$0.009 per diluted share, in the comparable year-ago period. The
decrease was driven by increased costs and expenses as a result of
the reasons mentioned above. Nevertheless, the Company was able to
quickly bounce back to profitability after net loss for consecutive
two quarters.
As of September 30, 2022, the Company had $1.7
million in cash and cash equivalents, compared to $10.6 million as
of December 31, 2021. This decrease was driven by the growth of
inventory and labor force.
Inventories as of September 30, 2022, were $21.4
million compared to $7.0 million as of December 31, 2021. The
Company intentionally invested heavily in inventories for strategic
reasons.
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 $91 million to
$100 million, representing 36% to 50% year-over-year growth.
About Hour Loop, Inc.Hour Loop
is an online retailer engaged in e-commerce retailing in the U.S.
market. It has operated as a third-party seller on www.amazon.com
and has sold merchandise on its website at www.hourloop.com since
2013. The Company expanded its operations to www.walmart.com in
October 2020. To date, the Company has generated practically all of
its revenue as a third-party seller on www.amazon.com and only a
negligible amount of revenue from its own website and Walmart. Hour
Loop manages more than 100,000 stock-keeping units (“SKUs”).
Product categories include home/garden décor, toys, kitchenware,
apparels, and electronics. The Company's primary strategy is to
bring most of its vendors product selections to the customers. It
has advanced software that assists the Company in identifying
product gaps so it can keep such products in stock year-round
including the entirety of the last quarter (holiday season) of the
calendar year. In upcoming years, Hour Loop plans to expand its
business rapidly by increasing the number of business managers,
vendors and SKUs.
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 Securities and Exchange Commission,
as the same may be updated from time to time. Thus, actual results
could be materially different. The Company undertakes no obligation
to update these statements whether as a result of new information,
future events or otherwise, after the date of this release, except
as required by law.
Investor ContactFinance
Departmentfinance@hourloop.com
HOUR LOOP, INC.CONDENSED
CONSOLIDATED BALANCE SHEETSAs of Sep 30, 2022
(Unaudited) and December 31, 2021
|
|
September 30, |
|
|
December 31, |
|
|
|
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: $0.0001 par value, 10,000,000 shares authorized,
none issued and outstanding as of September 30, 2022 and December
31, 2021 |
|
|
- |
|
|
|
- |
|
Common stock: $0.0001 par value, 300,000,000 shares authorized,
35,047,828 and 33,300,000 shares issued and outstanding
as of September 30, 2022 and December 31, 2021, respectively |
|
|
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.
HOUR LOOP, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOMEFor the Periods Ended September 30, 2022 and
2021 (Unaudited)
|
|
Three Months EndedSeptember 30, |
|
|
Nine Months EndedSeptember 30, |
|
|
|
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.
HOUR LOOP, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWSFor the Nine
Months Ended September 30, 2022 and
2021(Unaudited)
|
|
Nine Months EndedSeptember 30, |
|
|
|
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.
Hour Loop (NASDAQ:HOUR)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Hour Loop (NASDAQ:HOUR)
Graphique Historique de l'Action
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