Hour Loop Reports Full Year 2022 Results
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
“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
Gross profit percentage decreased
Operating expenses increased
Net loss in 2022 was
As of December 31, 2022, the Company had
Inventories as of December 31, 2022, were
Full Year 2023 Financial Outlook
For the full year 2023, the Company is providing guidance for gross revenue to be in the range of
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: | - | - | ||||||
| Common stock: | 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.
