CINCINNATI--(BUSINESS WIRE)--HealthWarehouse.com, Inc. (OTCQB:HEWA), the only VIPPS accredited online and mail-order pharmacy licensed in all 50 states, today announced financial results for the third quarter ended September 30, 2014.
For the three months ended September 30, 2014 net sales were $1,474,986, a 38.5% decrease from the comparable period in 2013. The Company’s gross margin improved to 59.3%, up from 50.1%, while the net loss narrowed by 48.1%, to ($530,257) from ($1,021,129). For the third quarter of 2014, HEWA reported negative adjusted EBITDAS of ($166,161), vs. negative EBITDAS of ($678,978) in the third quarter of 2013. The Company believes that Adjusted EBITDAS (Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation), a non-GAAP financial measure, is useful in evaluating its operating performance compared to that of other companies in our industry.
Mr. Lalit Dhadphale, HealthWarehouse.com’s President and CEO, commented, “In order to position our Company for sustainable and profitable growth, we made the decision to focus our business efforts on the cash pay prescription market and wind down other non-profitable segments in late 2013. With the Affordable Care Act coming into effect, and continued pressures on employers to contain health care costs, consumers are assuming higher co-pays and deductibles, and paying more upfront out of pocket expenses for their prescriptions. Combined with the brand to generic transformation within the industry, the opportunity in the cash prescription market has never been greater.”
“While this transition has negatively impacted our revenue growth, at the same time we continue to realize improved gross margins and operating cost savings from the implementation of our 2013 initiatives and our operating losses continue to shrink. With these right-sizing measures in place and the completion of the capital raise in the second half of this year, we are now turning our attention toward renewing revenue growth through new marketing initiatives and improved customer experience with improvements to our website. The combination of top line growth and improved operating margins should position us for profitable growth going forward.”
Q3 2014 Details:
- Net Sales: Declined by 38.5% due to the reduction in business-to-business sales and cash flow constraints. Due to cash flow constraints, the Company was unable to consistently expand its advertising efforts to grow its core online prescription business and was not able to maintain over-the-counter inventories to satisfy incoming orders.
- Gross Margin. Increased from 50.1% to 59.3% primarily due to improvement in the Company’s costs associated with improved vendor purchasing agreements, the elimination of unprofitable business relations, the reduction of lower-margin business-to-business sales relative to total sales and efforts to improve profitability across the entire product line.
- SG&A Expenses: Declined by 39.2%, primarily due to reductions in legal, salary and contract labor, freight and shipping supply, health benefit, and shareholder expenses.
- Net Loss: Declined by over 48% as a result of the increased profit margins and reduced operating expenses as detailed above.
HealthWarehouse.com, Inc. (OTCQB:HEWA) is a trusted VIPPS accredited online pharmacy based in Florence, Kentucky. The company focuses on the growing cash prescriptions market, which is expected to grow to $60 billion by 2015. With a mission to provide affordable healthcare to every American by eliminating inefficiencies in the drug distribution chain, HealthWarehouse.com has become the largest VIPPS accredited online pharmacy in the United States. The Company is a 3-time winner of the BizRate Circle of Excellence Award and a 2014 Google Trusted Store for outstanding customer satisfaction and service.
HealthWarehouse.com is licensed in all 50 states and only sells drugs which are FDA-approved and legal for sale in the United States.
Visit HealthWarehouse.com online at http://www.HealthWarehouse.com.
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ significantly from management's expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks related to competition, management of growth, new products, services and technologies, potential fluctuations in operating results, international expansion, outcomes of legal proceedings and claims, fulfillment center optimization, seasonality, commercial agreements, acquisitions and strategic transactions, foreign exchange rates, system interruption, inventory, government regulation and taxation, payments and fraud. More information about factors that potentially could affect HealthWarehouse.com's financial results is included in HealthWarehouse.com's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings.
Use of Non-GAAP Measures
HealthWarehouse.com, Inc. (the "Company") prepares its condensed, consolidated financial statements in accordance with the United States generally accepted accounting principles ("GAAP"). In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company discloses information regarding adjusted EBITDAS, which differs from the term EBITDA as it is commonly used. In addition to adjusting operating loss to exclude interest, depreciation and amortization, adjusted EBITDAS also excludes stock issued for services, and certain other non-cash charges. Adjusted EBITDAS is not a measure of performance defined in accordance with GAAP. However, adjusted EBITDAS is used internally in planning and evaluating the Company`s performance. Accordingly, management believes that disclosure of this metric offers investors, bankers and other shareholders an additional view of the Company`s operations that, when coupled with the GAAP results, provides a more complete understanding of the Company’s financial results.
Adjusted EBITDAS should not be considered as an alternative to net loss or to net cash used in operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludes financial information that some may consider important in evaluating the Company`s performance. A reconciliation of GAAP net loss to adjusted EBITDAS is included in the accompanying financial schedules.
Mr. Lalit Dhadphale, CEO
Mr. Scott Greiper
Secure Strategy Group, LLC