Reports Third-Quarter Earnings

Online and mail-order pharmacy year-over-year net sales grow 60.8 percent

CINCINNATI--(), Inc. (OTCQB:HEWA) announced today that its net sales for the third quarter ended September 30, 2016 increased 60.8 percent to $2.71 million compared to the same period in 2015, when the company reported net sales of $1.69 million. is America’s only Verified Internet Pharmacy Practice Sites (VIPPs) and Vet-VIPPs accredited online and mail-order pharmacy licensed and/or authorized in all 50 states. The company attributed its third-quarter sales to growth in core consumer prescription and over-the-counter product sales. For the nine-month period ending September 30, 2016, net sales increased 44.4 percent versus the same period a year ago due also to the increase in core consumer prescription and over-the-counter product sales, offset by a reduction in business-to-business sales.

“We are pleased by the continued growth of our core consumer prescription and related over-the-counter medication sales,” said Jeff Holtmeier, the company’s newly appointed President and Chief Executive Officer. “We believe, subsequent to the change of management, the company has implemented a series of process improvements which have already positively impacted core operations and improved the customer experience. We believe these improvements will be more visible in future quarters.”

The company reported a net loss of $978,141 for the quarter, which included $788,303 of nonrecurring annual meeting proxy and solicitation costs and severance expense for departing executives. The net loss was $815,537 greater than the $162,604 net loss during the third-quarter of 2015. The net loss was $1,311,259 for the nine-month period compared to a $443,073 net loss for the same period a year ago.

In the third quarter, Adjusted EBITDA was a loss of $13,105, versus a loss of $20,368 for the third quarter of 2015. For the nine-month period ending September 30, 2016, Adjusted EBITDA was a loss of $91,959 versus income of $109,662 for the same period last year.

3rd Quarter 2016 Overview:

Net Sales: Core consumer prescription net sales grew by 62.6 percent compared to the third quarter of 2015 to $2,127,145. Over-the-counter net sales grew 63.8 percent compared to the third quarter of 2015 to $481,503. The growth in both categories has been aided by increased consumer awareness partially a result of being featured in two prominent national magazines.

Gross Profit: Increased by 64.8 percent to $1,788,640 compared to the third quarter of 2015 due to sales growth, improved procurement practices, fulfillment process enhancements and better expense controls. For the nine-month period ending September 30, 2016, gross profit increased 44.3 percent to $4,789,756 over the same period in 2015 on increased net sales.

SG&A Expenses: SG&A expenses were $2,728,240 for the third quarter of 2016, which included $788,303 of nonrecurring annual meeting, proxy & solicitation costs and severance expenses. Excluding these costs, SG&A increased $728,536 from the third quarter of 2015 predominantly related to an approximate $490,000 increase in personnel costs, freight, and other volume-related expenses. For the nine-month period, SG&A was $6,009,026, which was a $1,614,847 increase, after excluding previously mentioned nonrecurring expenses, over the same period a year ago. Volume related expenses account for approximately $1,160,000 of the increase.

Three Months Ended Nine Months Ended
September 30 September 30
  2016   2015   2016   2015
Net sales $ 2,716,982 $ 1,689,457 $ 7,468,754 $ 5,172,974
Cost of sales   928,342   604,153   2,678,998   1,853,707
Gross profit 1,788,640 1,085,304 4,789,756 3,319,267
Selling, general and administrative expenses   2,728,240   1,211,401   6,009,026   3,605,876
Net loss from operations (939,600) (126,097) (1,219,270) (286,609)
Interest expense   (38,541)   (36,507)   (91,989)   (156,464)
Net loss (978,141) (162,604) (1,311,259) (443,073)
Preferred stock:
Series B convertible contractual dividends   (85,559)   (79,960)   (256,675)   (239,882)
Loss attributable to common stockholders $ (1,063,700) $ (242,564) $ (1,567,934) $ (682,955)
Per share data:
Net loss – basic and diluted $ (0.03) $ (0.01) $ (0.04) $ (0.01)
Series B convertible contractual dividends   (0.00)   (0.00)   (0.01)   (0.01)
Net loss attributable to common stockholders - basic and diluted $ (0.03) $ (0.01) $ (0.04) $ (0.02)
Weighted average number of common shares outstanding - basic and diluted   38,789,595   37,570,383   40,994,678   37,570,383
Three Months Ended Nine Months Ended
September 30 September 30
2016 2015 2016 2015
(unaudited) (unaudited)
Net loss $ (978,141) $ (162,604) $ (1,311,259) $ (443,073)
Non-GAAP adjustments:
Interest expense 38,541 36,507 91,989 156,464
Depreciation and amortization 36,771 46,184 125,148 138,157
Stock-based compensation 101,421 59,546 213,860 258,114
Proxy solicitation costs 548,303 - 548,303 -
Severance   240,000   -   240,000   -
Adjusted EBITDA $ (13,105) $ (20,368) $ (91,959) $ 109,662

About, Inc. (OTCQB:HEWA) is a trusted VIPPS accredited online pharmacy based in Florence, Kentucky. The Company is focused on the growing out of pocket prescription market, which is expected to grow to over $80 billion in 2016. With a mission to provide affordable healthcare to every American by focusing on technology that is revolutionizing prescription delivery, has become the largest VIPPS accredited online pharmacy in the United States. is licensed in all 50 states and only sells drugs that are FDA approved and legal for sale in the United States. Visit online at

Forward-Looking Statements

This announcement and the information incorporated by reference herein contain “forward looking statements” as defined in federal securities laws including but not limited to Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, which statements are based on our current expectations, estimates, forecasts and projections. Statements that are not historical facts, including statements about the beliefs, expectations and future plans and strategies of the Company, are forward-looking statements. Actual results may differ materially from those expressed in forward looking statements or in management's expectations. Important factors which could cause or contribute to actual results being materially and adversely different from those described or implied by forward looking statements include, among others, risks related to competition, management of growth, access to sufficient capital to fund our business and our 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, cyber-attacks, access to sufficient inventory, government regulation and taxation, payments and fraud. More information about factors that potentially could affect's financial results is included in'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 Financial Measures, Inc. (the "Company") prepares its consolidated financial statements in accordance with the United States generally accepted accounting principles ("GAAP"). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding Adjusted EBITDA, which is commonly used. In addition to adjusting net loss to exclude interest, depreciation and amortization, Adjusted EBITDA also excludes stock issued for services, and certain other nonrecurring charges. Adjusted EBITDA is not a measure of performance defined in accordance with GAAP. However, Adjusted EBITDA 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 EBITDA 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.

Contacts, Inc.
Jeff Holtmeier, +1-513-891-8914

Release Summary attributed its 60.8 percent third-quarter sales to growth in core consumer prescription and over-the-counter product sales.

Contacts, Inc.
Jeff Holtmeier, +1-513-891-8914