LOS ANGELES – Ispire Technology Inc., a leader in vapor technology, providing high-quality, innovative products with first-class performance, reported results for the fiscal second quarter, which ended December 31, 2023, and filed its quarterly report on Form 10-Q on February 20, 2024.
Fiscal Second Quarter 2024 Financial Results
Revenue
increased 30.7% to $41.7 million as compared to $31.9 million in the same period of 2023. Tobacco vaping products contributed $22.1 million and
cannabis vaping products contributed $19.5 million to revenue during the fiscal second quarter 2024;
Gross profit
increased 24.1% to $6.4 million as compared to $5.1 million in the same period of 2023;
Gross margin
decreased to 15.3% as compared to 16.1% in the same period of 2023;
Total operating expenses
increased 114% to $10.3 million as compared to $4.8 million in the same period of 2023; and
Net loss
of $4.0 million as compared to net loss of $0.1 million in the same period of 2023.
Michael Wang, Co-Chief Executive Officer of Ispire commented, “This quarter proved to
be quite pivotal for not only our product expansions but also our business operations. We commenced several strategic initiatives, including ISO and GMP certification for our Malaysian facility and a path to receive Pre-market Tobacco Product Application approval
in the U.S. After seeing such remarkable growth trends related to our cannabis vaping hardware sales, we aim to intensify our presence and further expand our footprint in this domestic market.”
“As we further execute on our growth strategy, we continue to expand our footprint in existing and new markets, which helps to grow our diverse customer base. This quarter we launched a key celebrity partnership with Nigerian Afrobeats star, Burna Boy, highlighting
our BRKFST-branded products and fortifying our global brand presence. We anticipate that our strategic initiatives this quarter will position Ispire to capitalize on emerging opportunities as well as drive sustainable and future growth across our key markets,”
concluded Wang.
Daniel Machock, Chief Financial Officer of Ispire, added, “In the fiscal second quarter
of 2024, Ispire’s key growth metrics highlighted rapid expansion for our cannabis vaping hardware business. Overall revenues increased 30% to $41.7 million for the fiscal second quarter while cannabis vaping products increased 149% to $19.5 million for the
same period last year. This significant growth in cannabis vaping hardware revenues is a testament to our commitment to innovation and the immense potential of our industry. Looking ahead, we remain steadfast in our commitment to driving sustainable growth,
maximizing shareholder value, and solidifying our position as a leader in the industry.”
Financial Results for the Three and Six-Month Periods Ended December 31, 2023
Revenue increased 30% to $41.7 million for the fiscal second quarter ended December 31,
2023, compared to $31.9 million for the second quarter of fiscal 2023. The increase in the second quarter of fiscal 2024, was primarily attributable to an increase in North American cannabis vaping hardware sales which increased 149% year over year from $7.8
million to $19.5 million.
For the six-month period ended December 31, 2023, Ispire reported revenue of $84.5 million,
compared to $58.8 million during the same period last year, an increase of 43.7%. The increase in revenue was primarily attributable to an increase in North American cannabis vaping hardware sales which increased 133% from $15.8 million for the first six-months
of fiscal 2023 to $36.9 million for the first six-months of fiscal 2024.
Gross Profit increased by 24.1% to $6.4 million for the three-month period ended December
31, 2023, compared to $5.1 million in the second quarter of fiscal 2023. Gross Profit for the six-month period ended December 31, 2023, was $13.3 million, compared to $10.0 million for the same period in fiscal 2023.
Gross Margin for the three months ended December 31, 2023, was 15.3% compared to 16.1%
for the same period in fiscal 2023. For the six-month period ended December 31, 2023, gross margin was 15.7%, compared to 16.9% during the same period in the prior fiscal year.
Total Operating Expenses increased by 114% to $10.3 million for the second quarter in
fiscal 2024, compared to $4.8 million for the same period of fiscal 2023. This increase was primarily due to marketing expenses and working capital related to maintain our manufacturing plant in Malaysia and increased professional fees for expenses incurred
as a public company. Total Operating Expenses for the six-months ended December 31, 2023, were $18.1 million as compared to $10.8 million in the same period in fiscal 2023.
Net loss was $4.0 million, or $(0.07) per share, for the second quarter of fiscal 2024,
compared to a net loss of $130 thousand, or $(0.01) per share for the second quarter of fiscal 2023. For the first six-months of fiscal 2024, net loss was approximately $5.4 million, or $(0.10) per share, compared to a net loss of approximately $2.1 million,
or $(0.04) per share for the first six-months of fiscal 2023.
As of December 31, 2023, Ispire had approximately $17.5 million of cash and cash equivalents.
As of December 31, 2023, and June 30, 2023, we had working capital of $24.8 million and $28.8 million, respectively.
Fiscal Year 2024 Outlook
Ispire is providing the following outlook for the cannabis and tobacco vaping products for fiscal year 2024, which ends on June 30, 2024. Revenue
for cannabis vaping products for fiscal year 2024 is projected to be in the range of $80 million to $90 million, representing growth of 100% to 125% from fiscal year 2023. Revenue for tobacco vaping products for fiscal year 2024 is projected to be in the range
of $95 million to $105 million, representing growth in the range of 33% to 47% from fiscal year 2023.
About Ispire Technology Inc.
Ispire is engaged in the research and development, design, commercialization, sales, marketing, and distribution of branded e-cigarettes and
cannabis vaping products. The Company’s operating subsidiaries own or license from a related party more than 200 patents received or filed globally. Ispire’s tobacco products are marketed under the Aspire brand name and are sold worldwide (except in the United
States, People’s Republic of China, and Russia) primarily through its distribution network. Ispire’s cannabis vaping hardware products are marketed under the Ispire brand name primarily on an original design manufacturer (ODM) basis to other cannabis vapor
companies. Ispire currently sells its cannabis vaping hardware only in the United States, and it recently commenced marketing activities in Canada and Europe, primarily in the European Union.
Please visit www.ispiretechnology.com.
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Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities
Act”) as well as Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created by those sections. Forward-looking statements,
which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “would,” “could,” “seek,” “intend,”
“plan,” “goal,” “project,” “estimate,” “anticipate,” “strategy,” “future,” “likely” or other comparable terms, although not all forward-looking statements contain these identifying words. All statements other than statements of historical facts included in
this press release regarding the Company’s strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Important factors that could cause the Company’s actual results and financial condition to differ
materially from those indicated in the forward-looking statements. Such forward-looking statements include, but are not limited to, risks and uncertainties including those regarding: the Company’s business strategies, the ability of the Company to market to
the Ispire ONE™, Ispire ONE™’s success if meeting its goals, the ability of its customers to derive the anticipated benefits of the Ispire ONE™ and the success of their products on the markets; the Ispire ONE™ proving to be safe, and the risk and uncertainties
described in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Cautionary Note on Forward-Looking Statements” and the additional risk described in Ispire’s Form 10-K annual report for the year ended June
30, 2023 and any subsequent filings which Ispire makes with the Securities and Exchange Commission. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in the press release relate only to
events or information as of the date on which the statements are made in the press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on
which the statements are made or to reflect the occurrence of unanticipated events except as required by law. You should read this press release with the understanding that our actual future results may be materially different from what we expect.
