Hour Loop Reports Second Quarter 2022 Results
Demonstrates Strong Execution Despite Challenging Macroeconomic Environment and Unfavorable e-Commerce Traffic in Q2
Provides Full Year 2022
Financial Highlights for Second Quarter 2022:
- Total revenues increased 27.1% and 19.8% to
$14.8 million , compared to$11.6 million in the year-ago period and$12.4 million for the first quarter of 2022, respectively. - Net loss totaled
$0.31 million , compared to net income of$1.1 million in the year-ago period and net loss of$0.65 million for the first quarter of 2022. - Cash used in operating activities for the six months ended
June 30, 2022 was$13.2 million , compared to$0.2 million in the year-ago period.
Management Commentary
“We’re pleased with our second quarter 2022 performance as we reported strong financial and operational results despite the significantly impacted consumer spending environment driven by inflationary and supply chain pressures and the trending down traffic in overall e-commerce,” said
“While we are encouraged by our progress, we are not immune to the challenging macroeconomic environment, which impacted our gross profit percentage as a result of increased operating expenses, FBA fees, and a strong competitive environment. However, despite these challenges, we are frontloading our investments for the year while projecting to show profitability and maintain double digit growth for the full year 2022. We believe our investments are necessary to grow our headcount, rapidly scale, and set a foundation for future success once these headwinds ease, and we are building on our momentum since our IPO. We look forward to continuing to execute, drive growth, and ultimately deliver increased value for our shareholders.”
Second Quarter 2022 Financial Results
Total revenues in the second quarter of 2022 were
Gross profit percentage declined 1.92% to 56.46%, compared to 58.38% of total revenues in the comparable period a year ago but improved from 52.3% for the first quarter of 2022. The year-over-year decrease 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 52.8% to
Net loss in the second quarter was
As of
Inventories as of
Full Year 2022 Financial Outlook
For the full year 2022, the Company maintains its guidance for 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 | $ | 2,306,430 | $ | 10,592,572 | ||||
Accounts receivable, net | 151,607 | 125,991 | ||||||
Inventory, net | 14,601,346 | 7,041,864 | ||||||
Prepaid expenses and other current assets | 831,839 | 965,298 | ||||||
Total current assets | 17,891,222 | 18,725,725 | ||||||
Property and equipment, net | 156,335 | 15,667 | ||||||
Deferred tax assets | 325,030 | 45,488 | ||||||
Right-of-use lease assets | 485,066 | 30,111 | ||||||
TOTAL ASSETS | $ | 18,857,653 | $ | 18,816,991 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 5,358,935 | $ | 9,539,258 | ||||
Accrued expenses and other current liabilities | 1,255,714 | 1,282,161 | ||||||
Due to related parties | 4,294,731 | 5,214,794 | ||||||
Income taxes payable | 126,333 | 126,333 | ||||||
Current operating lease liabilities | 303,923 | - | ||||||
Total current liabilities | 11,339,636 | 16,162,546 | ||||||
Non-current liabilities | ||||||||
Long-term operating lease liabilities | 184,704 | - | ||||||
Total liabilities | 11,524,340 | 16,162,546 | ||||||
Commitments and contingencies | - | - | ||||||
Stockholders’ equity | ||||||||
Preferred stock: |
- | - | ||||||
Common stock: |
3,504 | 3,330 | ||||||
Additional paid-in capital | 5,645,322 | 4,291 | ||||||
Retained earnings | 1,696,400 | 2,654,695 | ||||||
Accumulated other comprehensive loss | (11,913 | ) | (7,871 | ) | ||||
Total stockholders’ equity | 7,333,313 | 2,654,445 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 18,857,653 | $ | 18,816,991 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Periods Ended
(Unaudited)
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenues, net | $ | 14,800,518 | $ | 11,643,230 | $ | 27,154,501 | $ | 20,966,143 | ||||||||
Cost of revenues | (6,443,910 | ) | (4,845,441 | ) | (12,341,179 | ) | (8,939,993 | ) | ||||||||
Gross profit | 8,356,608 | 6,797,789 | 14,813,322 | 12,026,150 | ||||||||||||
Operating expenses | ||||||||||||||||
Selling and marketing | 6,480,625 | 4,803,598 | 12,006,727 | 8,630,792 | ||||||||||||
General and administrative | 2,275,642 | 925,698 | 3,951,606 | 1,462,507 | ||||||||||||
Total operating expenses | 8,756,267 | 5,729,296 | 15,958,333 | 10,093,299 | ||||||||||||
(Loss) income from operations | (399,659 | ) | 1,068,493 | (1,145,011 | ) | 1,932,851 | ||||||||||
Other (expenses) income | ||||||||||||||||
Other expense | (3,944 | ) | (3,754 | ) | (9,394 | ) | (4,624 | ) | ||||||||
Interest expense | (20,567 | ) | (10,328 | ) | (104,125 | ) | (10,328 | ) | ||||||||
Other income | 13,754 | 52,098 | 20,693 | 54,504 | ||||||||||||
Total other (expenses) income, net | (10,757 | ) | 38,016 | (92,826 | ) | 39,552 | ||||||||||
(Loss) income before income taxes | (410,416 | ) | 1,106,509 | (1,237,837 | ) | 1,972,403 | ||||||||||
Provision for income taxes | 97,009 | - | 279,542 | - | ||||||||||||
Net (loss) income | (313,407 | ) | 1,106,509 | (958,295 | ) | 1,972,403 | ||||||||||
Other comprehensive (loss) income | ||||||||||||||||
Foreign currency translation adjustments | (9,497 | ) | 2,893 | (11,913 | ) | 1,671 | ||||||||||
TOTAL COMPREHENSIVE (LOSS) INCOME | $ | (322,904 | ) | $ | 1,109,402 | $ | (970,208 | ) | $ | 1,974,074 | ||||||
Basic and diluted (loss) income per common share | $ | (0.01 | ) | $ | 0.03 | $ | (0.03 | ) | $ | 0.06 | ||||||
Weighted-average number of common shares outstanding | 34,939,695 | 33,300,000 | 33,300,000 | 33,300,000 | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended
(Unaudited)
Common Stock Shares |
Common Stock Amount |
Additional Paid-In Capital |
Retained Earnings |
Accumulated Other Comprehensive (Loss) Income |
Total Stockholders’ Equity |
|||||||||||||||||||
BALANCE AT |
33,300,000 | $ | 3,330 | $ | 4,291 | $ | 4,885,513 | $ | (4,403 | ) | $ | 4,888,731 | ||||||||||||
Contribution | - | |||||||||||||||||||||||
Distribution | (2,132,000 | ) | (2,132,000 | ) | ||||||||||||||||||||
Currency translation adjustments | 1,671 | 1,671 | ||||||||||||||||||||||
Net Income | - | - | - | 1,106,509 | - | 1,106,509 | ||||||||||||||||||
BALANCE AT |
33,300,000 | $ | 3,330 | $ | 4,291 | $ | 3,860,022 | $ | (2,732 | ) | $ | 3,864,911 | ||||||||||||
BALANCE AT |
35,032,753 | $ | 3,503 | $ | 5,615,322 | $ | 2,009,807 | $ | (10,287 | ) | $ | 7,618,345 | ||||||||||||
Stock based compensation | 9,825 | 1 | 30,000 | 30,001 | ||||||||||||||||||||
Currency translation adjustments | (1,626 | ) | (1,626 | ) | ||||||||||||||||||||
Net Loss | - | - | - | (313,407 | ) | - | (313,407 | ) | ||||||||||||||||
BALANCE AT |
35,042,578 | $ | 3,504 | $ | 5,645,322 | $ | 1,696,400 | $ | (11,913 | ) | $ | 7,333,313 | ||||||||||||

Source: Hour Loop, Inc.