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Operator
Ladies and gentlemen, today's conference is scheduled to begin shortly. Please continue to stand by to give your patience. Ladies and gentlemen, today's conference is scheduled to begin shortly. Please continue to stand by to give your patience. Thank you. Thank you. Thank you. Thank you.
Box Harmony
Thank you. Thank you. Thank you.
Operator
Good afternoon, everyone, and thank you for participating in today's conference call to discuss iPower's financial results for its fiscal third quarter ended March 31, 2022. Joining us today are iPower's Chairman and CEO, Mr. Lawrence Tan, and the company's CFO, Mr. Kevin Vasily. Mr. Vasily, please go ahead.
Lawrence Tan
Thank you, Charlie. Good afternoon, everyone. By now, everyone should have access to our fiscal third quarter 2022 earnings press release, which was issued earlier today at approximately 4.15 p.m. Eastern time. The release is available in the investor relations section of iPower's website at meetipower.com. This call will also be available for webcast replay on our website. Following our prepared remarks, we'll open the call for your questions. Before I introduce Lawrence, I'd like to remind listeners that certain comments made on this conference call and webcast are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Do not place undue reliance on any forward-looking statements which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to revise or publicly release the results of any revision to any forward-looking statements. With that, I'd now like to turn the call over to iPower's Chairman and CEO, Lawrence Tan. Lawrence?
Charlie
Thank you, Kevin, and good afternoon, everyone. Our fiscal third quarter was another period of exceptional growth for iPower. Revenue was up 74% year-over-year to a record $22.9 million, which was driven by continuing strong demand for our products and increased sales in our largest channel. As mentioned on previous calls, the sale of in-house products is always top of mind. In our fiscal third quarter, this make-up roughly 82% of revenue. Throughout the quarter, we continue to introduce new SKUs in each of our product categories by working diligently with our partner, including recently acquired global co-engineering partner, DHS, while also retiring SKUs that are slower moving. Over the past few months, we have seen strong order volumes from our largest channel. We believe that this consistent increase in volume speaks to our product research and development as it directly aligns with consumer trends. Our investment into our businesses, specifically in R&D and merchandising, will only push this momentum further as we roll out new, in-demand products in the future. We continue to effectively navigate the choppy supply chain environment during the quarter, In large part due to our extensive network of supply partners, this remains a key differentiator for iPower as our channel partners and customers know that they can rely on us to deliver products in a timely manner and avoid many of the roadblocks that others face in the global supply chain. Now I'm going to talk about initiatives over the quarter. expansion into Europe and the UK. This past January, we expanded our business into Europe and the UK with the completion of the first order delivered for consumer abroad. This order contains trimming devices, air filtration, service assistance, tents, and other accessories that services the DIY hydroponics consumer. We continue to believe that the European market is still in its infancy and present a significant medium to long-term opportunity for us as their consumer hydroponics market develops. And then the launch of e-commerce logistics, JV, Box Harmony. So shortly after our expansion into Europe, we partnered with strategic individuals and Titanium Plus Auto Parts, one of the largest sellers of collision-related auto parts on eBay and Amazon, to create a full-service e-commerce logistics company, Box Harmony. This JV provides us with a low-cost option to expand into e-commerce value chain services, which is a natural fit for us given our expertise in the online hydroponics equipment market. In fact, we already signed our first client, which happens to be a furniture brand, reflecting our interest into a vertical outside the hydroponics. Our JV will service logistics for this client at our Southern California facility for both B2B and B2C shipments. While it's early days, this JV is just beginning to ramp, and we plan to carry this momentum going forward. And then we have the launch of a global social media JV. This is our second JV. That's a partnership with a social media marketing and entertainment company to form a global social media, a social commerce platform. This JV was formed to combine our partners' social media marketing expertise with our own supply chain and e-commerce activity to create a fully end-to-end solution for brand manufacturers looking to sell their products via social channels. We plan to utilize global social media for new businesses as well as our own benefits to expand our global product awareness and geographic exposure through various social media channels. And then we acquired the global co-engineering partner, Bakushou Shenzhen Information Technology, also known as DHS. During the COVID-19 pandemic and the recent volatile supply chain environment, we relied heavily on DHS to source consistent, high-quality products in a timely manner. It was for this reason that we decided to acquire 100% interest in the company. This acquisition expands our current supply chain and e-commerce capabilities with in-house product sourcing, manufacturing network management, quantity assurance processes, and R&D expertise. Not only did we bring our key supplier and logistic partner in-house to benefit our businesses, but also reduce the risk of a potential supplier turnover. We plan to utilize DHS in tandem with our other resources to create a new suite of offering that will service a broader set of consumers and partners in the future. And for our own brand, as we continue to grow and execute our organic and inorganic initiatives, we felt it was necessary to invest our core image to properly showcase our business as well as the various components that made up our brand. As such, we are in the process of completing a company rebrand that we expect to unveil later this summer. This development will enable us to optimize how we are perceived and positioned in the market, as well as how we allocate our marketing dollars. Although we are proud of our success and strong momentum in our business, there is still plenty of room to grow and improve. We plan to continue developing new in-house FKU and also expand into additional markets while strengthening our current ones, and all while continuing to deliver value for consumers and channel partners along the way. I'll now turn the call over to our CFO, Kevin Vasily, to take you through our financial results in more details. Kevin.
Lawrence Tan
Thanks, Lawrence. As Lawrence mentioned, fiscal Q3 was another strong period of growth for iPower. Total revenue was up 74% to $22.8 million compared to $13.1 million in the year-ago period, driven by greater product sales to our largest channel partner, as well as strong demand for our ventilation products, commercial fans, and some of our new shelving products. As Lawrence mentioned, we continue to execute on prioritizing the sale of our in-house brands, which accounted for approximately 82% of revenue in the quarter. Gross profit in the fiscal third quarter increased 59% to $9.2 million compared to $5.8 million in the year-ago quarter. As a percentage of revenue, gross margin was 40.3% compared to 43.9% in the year-ago quarter. With the decrease driven by product mix as well as higher freight costs, it was also impacted by stronger orders in our direct import channel program, which carries lower gross margins but better operating margins for us. Despite experiencing record high freight costs in addition to some higher input costs, we were able to maintain gross margins above 40% thanks to our extensive supplier network overseas. Total operating expenses for fiscal Q3 were $7.8 million compared to $5 million for the same period in fiscal 2021. As a percentage of revenue, operating expense improved 360 basis points to 34.3% compared to 37.9% in the year-ago quarter. The operating leverage was primarily driven by the positive impact of the aforementioned direct import program we have with one of our large channel partners. We were able to increase operating leverage despite higher costs from new warehouse capacity coming online this quarter, as well as increased G&A costs associated with the DHS acquisitions. Net income in the fiscal third quarter increased to $1.2 million, or 4% per share, compared to a net loss of $0.2 million, or loss of one penny per share, for the same period in fiscal 2021. Moving on to the balance sheet, cash and cash equivalents were $2.6 million at March 31, 2022. compared to $6.7 million in June of 2021. The decrease was attributed to the timing of accounts receivable, not an indication of any other business operating trend. As of March 31st, 2022, total long-term debt stood at $13.4 million as compared to $0.5 million at June 30, 2021. This increase was also a function of timing as the company utilizes its revolving credit facility to manage working capital. And then finally, looking forward to the final quarter of our fiscal year, we plan to continue executing on our growth strategy and close out the year on a strong note. As we've done in prior quarters, we plan to mitigate the impact of the supply chain environment where we can by managing channel product mix, channel program mix, supply doing bulk procurement as well as larger production runs where prudent. And we look forward to touching base with many of you this summer through various investor conferences and non-deal roadshows to talk more about the company and its strategy going forward. And with that, this concludes our prepared remarks. And we'll now open it up for questions. Operator?
Operator
Sure, sir. Ladies and gentlemen, if you have a question at this time, please press the star 1 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, press the pound key. Again, that's star 1 to ask a question. Your first question comes from the line of Scott Fortune with Roth Capital Partners. Please go ahead.
Scott Fortune
Good afternoon, and thanks for the questions. Real quick, can you provide a little more color on the new sales channel initiatives? I know you are looking at progress with potential big box retailers and going down those channels. Is there any update or opportunities as we look into this coming quarter or into next fiscal year for those big box retailers coming on board here?
Charlie
Yeah, I'll take that one. We are actively working on it, but as you all understand, the big box retailers, it happens a lot slower than the online channels. But we are actively working on it, and we are making pretty good progress. But I don't know if we're going to see large purchase orders before the end of the fiscal year. Um, so I, I, uh, it's a, it's a working progress, but we need progress.
Scott Fortune
Got it. Appreciate the color there. And then really quickly, you know, we we've seen big headwinds and challenges on the consumer side of things and also on the commercial hydro product industry with oversupply and significant slowdown from that industry. But it seems like you're, you're doing yourself. Business remains very robust here. Can you unpack what was really driving the growth from a product standpoint and the pickup in specific channels? You mentioned your large channel partner. And then how much is coming from the new initiatives in Europe and the JVs and the M&A side? Is that more of a next quarter and the next fiscal year going forward for those new initiatives here?
Charlie
Sure, sure. I'll answer those questions in two parts. So, The fundamental of our company, while we've been growing, we noticed an increasing share of our in-house products. We also had an extensive supply network, and we've been able to navigate the supply chain issues pretty well, I think, well above the others. They all helped, and we also noticed the ventilation category continued to increase. So fundamentally, our business model, our ability to use data analytics, be able to efficiently operate through our own in-house ERP systems, as well as I think we've managed to workflow pretty well. And that all filled into the growth. Now, as for the JV model, box harmony and global social media these are more me term more strategical so that we could you know combine with what we have ability what we have now it will enable us to be able to grow at a fast pace without bottlenecks now the social media play I'll say we'll probably start to see something later this calendar year or beginning next year, but anticipating the growth, these are the moves ahead of time. We start to see some revenue from the Box Harmony ones, but I'm just trying to say that these two are strategically placed so that we can grow in the future in a relatively rapid pace without hitting the bottom X-ray could be happening.
Box Harmony
Thank you.
Lawrence Tan
And Scott, Europe too. I think we're hoping to see some follow-up orders and deliveries this quarter. We haven't seen them yet. So I think the bulk of our grant in Europe will start in the next fiscal year.
Scott Fortune
Perfect. I appreciate that detail, and I will jump back in the queue.
Operator
Thank you, and I'm showing no further question at this time. I will now turn the call back over to Mr. Kevin Vasily for final remarks.
Lawrence Tan
Do you want to ask Scott if he had a follow-up question? I think he said he was going to jump back in the queue.
Operator
Sure, sir. Once again, if you would like to ask a question, please press the star 1 on your telephone keypad. We have a follow-up question from Mr. Scott Fortune from Rock Capital Partners. Please go ahead.
Scott Fortune
Yeah, last thing. As far as more, Kevin, kind of the cash level at $2.6 million, you know, your inventory has been built up a little bit. You're about $22.4 million here. Can you kind of address those needs? I know AR, timing-wise, they kind of address your needs there for flexibility and additional initiatives for the business kind of going forward. Just kind of address some of those points there. That'd be great.
Lawrence Tan
Yeah, yeah, yeah. So inventory, you know, a big portion of what we were doing in the quarter was bringing as much product as we could ahead of the Chinese New Year, which was earlier in the quarter. And so we wanted to make sure, although we didn't have any kind of real insight as to the state of kind of some of the COVID lockdowns that are impacting China now, some of that is a caution. And through some of the sell-through information that we get from our channel partners, that we had sufficient inventory on hand to be able to meet demand. So that was part of the strategy there. From a flexibility standpoint, you know, we still have, you know, a fair amount of room, you know, within our revolving line of credit to tap if need be. But, you know, most of what we're topping now as well is on the air side. And as you know, kind of, you know, we feel good about, you know, where we have our accounts receivable. It's probably one of the best kind of credit risks that are out there. So, you know, I think we're comfortable that we've got, you know, sufficient both capital and flexibility to meet what we need to do over the next several quarters, including providing some resources if necessary to the joint ventures that, you know, we undertook earlier in the quarter. Does that help? Yeah, I appreciate that.
Scott Fortune
Congrats again on differentiating yourself in a challenging hydroponic industry. That's a challenge for a lot of states, but congrats again. That's it. I appreciate the detail.
Lawrence Tan
Yes, I appreciate the compliments.
Operator
And there are no further questions at this time. I will now turn the call over back to you, sir, Mr. Kevin Vasily, for final remarks.
Lawrence Tan
Okay. Well, we wanted to thank everyone for joining. We appreciate your support and look forward to chatting with you on our next earning call. We'll be sometime probably late August or September. Thanks again. Bye-bye.
Charlie
Thank you.
Operator
And this concludes today's conference call. Thank you all for participating. You may now disconnect.
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