• Hour Loop Reports Full Year 2022 Results

    المصدر: Nasdaq GlobeNewswire / 31 مارس 2023 16:05:00   America/New_York

    Demonstrates Strong Revenue Growth Despite Challenging e-Commerce Environment

    Provides Full Year 2023 Revenue and Net Income Guidance

    REDMOND, Wash., March 31, 2023 (GLOBE NEWSWIRE) -- Hour Loop, Inc. (NASDAQ: HOUR) (“Hour Loop”), a leading online retailer, announces its financial and operational results for the year ended December 31, 2022.

    Financial Highlights for 2022:

    • Net revenues increased 52.8% to $95.9 million in 2022, compared to $62.8 million in 2021.
    • Net loss totaled $1.5 million, compared to net income of $4.8 million in 2021.
    • Cash used in operating activities in 2022 was $11.6 million, compared to cash provided by operating activities of $7.8 million in 2021.

    Management Commentary

    “We are pleased to report our full year 2022 results, in which we delivered great performance in terms of revenue growth,” said Sam Lai, CEO of Hour Loop. “The revenue growth rate for the fourth quarter and full year 2022 were 63.1% and 52.8%, respectively, compared with the year-ago period.”

    “However, our gross margin was negatively impacted by the challenging e-commerce environment and intense competition caused by high inventory levels across the industry. Our operating expenses also increased because of increased platform, advertising, and storage fees paid to Amazon, and a significant increase in our labor force. Despite disappointing margins, we believe we’ve built a solid foundation in 2022 to generate strong growth for the years to come. We also plan to make improvements on profitability.”

    Looking forward, we’re cautiously optimistic. Despite an uncertain economy, we continue to see strong demand for our products during the first two months of 2023. We are confident in our ability to continue delivering values to our vendors, customers, and shareholders.

    Full Year 2022 Financial Results

    Net revenues in 2022 were $95.9 million compared to $62.8 million in 2021. The increase was primarily due to continued growth and maturity in our operating model, despite the overall e-commerce traffic slowdown and intense competition.

    Gross profit percentage decreased 4.3% to 51.1%, compared to 55.4% of total revenues in the comparable period a year ago. The decrease was a function of heightened inflationary environment causing higher cost of goods sold, increased FBA fees, and intense competition.

    Operating expenses increased 73.7% to $50.9 million compared to $29.3 million in the year-ago period. This was a function of increased platform, advertising, and storage fees paid to Amazon, and a significant increase in our labor force.

    Net loss in 2022 was $1.5 million, or $0.04 per diluted share, compared to net income of $4.8 million, or $0.14 per diluted share, in 2021. The decrease was driven by increased costs and expenses as a result of the reasons mentioned above.

    As of December 31, 2022, the Company had $4.6 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 December 31, 2022, were $18.7 million compared to $7.0 million as of December 31, 2021. The Company intentionally invested heavily in inventories for strategic reasons.

    Full Year 2023 Financial Outlook

    For the full year 2023, the Company is providing guidance for gross revenue to be in the range of $112 million to $122 million, representing 10% to 20% year-over-year growth. The Company expects 2023 net income to be in the range of $0.5 million to $4 million.

    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 further expanded its operations to other marketplaces such as Walmart, eBay, and Etsy. To date, the Company has generated practically all its revenue as a third-party seller on www.amazon.com and only a negligible amount of revenue from its own website and other marketplaces. Hour Loop manages more than 100,000 stock-keeping units (“SKUs”). Product categories include home/garden décor, toys, kitchenware, apparel, 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 Contact
    Finance Department
    finance@hourloop.com

    HOUR LOOP, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    December 31, 2022 and 2021

      December 31,  December 31, 
      2022  2021 
           
    ASSETS        
    Current assets        
    Cash and cash equivalents $4,562,589  $10,592,572 
    Accounts receivable, net  352,379   125,991 
    Inventory, net  18,801,529   7,041,864 
    Prepaid expenses and other current assets  741,243   965,298 
    Total current assets  24,457,740   18,725,725 
             
    Property and equipment, net  274,195   15,667 
    Deferred tax assets  549,320   45,488 
    Right-of-use lease assets  450,721   30,111 
             
    TOTAL ASSETS $25,731,976  $18,816,991 
             
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities        
    Short-term loan $652,316  $- 
    Accounts payable  11,883,253   9,539,258 
    Accrued expenses and other current liabilities  1,583,930   1,282,161 
    Due to related parties  -   5,214,794 
    Income taxes payable  -   126,333 
    Operating lease liabilities-current  385,216   - 
    Total current liabilities  14,504,715   16,162,546 
             
    Non-current liabilities        
    Operating lease liabilities-non-current  64,945   - 
    Due to related parties  4,329,460   - 
    Total non-current liabilities  4,394,405   - 
    Total liabilities  18,899,120   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 December 31, 2022 and 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 December 31, 2022 and 2021, respectively  3,506   3,330 
    Additional paid-in capital  5,675,320   4,291 
    Retained earnings  1,177,072   2,654,695 
    Accumulated other comprehensive loss  (23,042)  (7,871)
    Total stockholders’ equity  6,832,856   2,654,445 
             
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $25,731,976  $18,816,991 

    The accompanying footnotes are an integral part of these audited condensed consolidated financial statements.


    HOUR LOOP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
    For the years Ended December 31, 2022 and 2021

      2022  2021 
           
    Revenues, net $95,930,091  $62,792,981 
    Cost of revenues  (46,942,770)  (27,984,335)
             
    Gross profit  48,987,321   34,808,646 
             
    Operating expenses        
    Selling and marketing  42,221,425   25,098,497 
    General and administrative  8,685,254   4,236,000 
    Total operating expenses  50,906,679   29,334,497 
             
    (Loss) income from operations  (1,919,358)  5,474,149 
             
    Other (expenses) income        
    Other expense  (17,520)  (12,299)
    Interest expense  (144,479)  (56,509)
    Other income  141,571   87,637 
    Total other (expenses) income, net  (20,428)  18,829 
             
    (Loss) income before income taxes  (1,939,786)  5,492,978 
    Income tax benefit (expense)  462,163   (709,205)
             
    Net (loss) income  (1,477,623)  4,783,773 
             
    Other comprehensive loss        
    Foreign currency translation adjustments  (15,171)  (4,690)
             
    Total comprehensive (loss) income $(1,492,794)  4,779,083 
             
    Basic and diluted (loss) income per common share $(0.04)  0.14 
    Weighted-average number of common shares outstanding  34,991,666   33,300,000 

    The accompanying footnotes are an integral part of these audited condensed consolidated financial statements.


    HOUR LOOP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    For the years Ended December 31, 2022 and 2021

      2022  2021 
           
    Cash flows from operating activities        
    Net (loss) income $(1,477,623) $4,783,773 
    Adjustments to reconcile of net (loss) income to net cash (used in) provided by operating activities:        
    Depreciation expenses  79,084   448 
    Noncash lease expenses  310,161   73,343 
    Noncash forgiven borrowing  -   (27,012)
    Inventory allowance  657,543   (246,593)
    Stockbased Compensation  91,013   - 
    Changes in operating assets and liabilities:        
    Accounts receivable  (226,388)  90,716 
    Inventory  (12,417,208)  (2,433,382)
    Prepaid expenses and other current assets  (352,113)  (602,911)
    Deferred Tax Assets  (503,832)  (45,488)
    Accounts payable  2,343,995   6,335,002 
    Accrued expenses and other current liabilities  175,436   (102,312)
    Operating lease liabilities  (283,244)  (61,527)
    Net cash (used in) provided by operating activities  (11,603,176)  7,764,057 
             
    Cash flows from investing activities:        
    Purchases of property and equipment  (339,518)  (16,115)
    Net cash used in investing activities  (339,518)  (16,115)
             
    Cash flows from financing activities:        
    Payments to related parties  138,854   3,023 
    Repayments from related parties  (1,024,188)  - 
    Capital contribution  -   2,800 
    Distribution to stockholders  -   (2,132,000)
    Proceeds from Issuance of shares  5,580,192   - 
    Prepaid expenses and other current assets  576,168   - 
    Proceeds from Short-term debt  652,316   - 
    Net cash provided by (used in) financing activities  5,923,342   (2,126,177)
             
    Effect of changes in foreign currency exchange rates  (10,631)  2,743 
             
    Net (decrease) increase in cash and cash equivalents  (6,029,983)  5,624,508 
             
    Cash and cash equivalents at beginning of the year  10,592,572   4,968,064 
             
    Cash and cash equivalents at end of the year $4,562,589  $10,592,572 

    The accompanying footnotes are an integral part of these audited condensed consolidated financial statements.

     


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