Hour Loop(US:HOUR)2025-11-12 13:00Financial Performance - Net revenues increased by 7.6% to $33.4 million, compared to $31.1 million in the same period last year[4] - Net income rose to $0.53 million, up from $0.47 million in the year-ago period, reflecting improved operational efficiency despite increased costs[7] - Net income for the nine months ended September 30, 2025, was $2,362,109, an increase from $2,184,611 in 2024, representing a growth of approximately 8.1%[17] Operational Efficiency - Gross profit margin decreased by 3.4% to 51.4% of net revenues, primarily due to strategic price adjustments and tariff surcharges[6] - Operating expenses as a percentage of net revenues decreased by 3.3% to 49.2%, indicating improved operational efficiency[6] - Cash used in operating activities for the nine months ended September 30, 2025, was $0.4 million, a significant improvement from $1.2 million in the prior year[4] - Net cash used in operating activities improved to $(425,000) in 2025 from $(1,231,885) in 2024, indicating a significant reduction in cash outflow[17] Assets and Equity - Total assets as of September 30, 2025, were $31.6 million, up from $20.0 million as of December 31, 2024[14] - Total stockholders' equity increased to $7.67 million as of September 30, 2025, compared to $5.16 million at the end of 2024[14] Inventory and Receivables - Inventories increased to $28.9 million as of September 30, 2025, compared to $14.6 million as of December 31, 2024, in preparation for the holiday season[8] - Accounts receivable increased to $1,104,073 in 2025 compared to $199,426 in 2024, showing a substantial rise in receivables[17] - Inventory allowance decreased to $499,752 in 2025 from $578,622 in 2024, reflecting improved inventory management[17] Cash Flow and Tax - Cash at the end of the period was $796,307 in 2025, down from $1,194,239 in 2024, indicating a decrease in cash reserves[17] - Cash paid for income tax decreased to $163,015 in 2025 from $210,811 in 2024, suggesting a reduction in tax liabilities[17] - Cash flows from investing activities resulted in a net cash outflow of $(48,963) in 2025, compared to $(35,031) in 2024, indicating increased investment activity[17] Strategic Plans and Guidance - The company is unable to provide forward-looking guidance for the full year 2025 due to ongoing economic uncertainty influenced by current tariff conditions[9] - The company plans to expand its business rapidly by increasing the number of business managers, vendors, and SKUs in upcoming years[10] Depreciation and Currency Management - Depreciation expenses decreased to $31,109 in 2025 from $98,624 in 2024, indicating a reduction in asset depreciation[17] - The effect of changes in foreign currency exchange rates resulted in a loss of $(10,311) in 2025, compared to $(22,998) in 2024, showing improved currency management[17] Related Party Transactions - Payments to related parties amounted to $(839,000) in 2025, with no corresponding payments in 2024, highlighting a new financial strategy[17]