CINCINNATI--(BUSINESS WIRE)--HealthWarehouse.com, Inc. (OTC Pink: HEWA) announced today that its net sales for 2017 increased 43% to $14,847,262 compared to $10,384,893 in 2016.
HealthWarehouse.com is a Verified Internet Pharmacy Practice Sites (VIPPS) accredited online and mail-order pharmacy licensed and/or authorized to sell and deliver prescriptions to all 50 states. The Company attributed its 2017 sales performance to growth in core consumer prescription and over-the-counter product sales along with strong customer retention and acquisition.
“I am proud to announce that the Company was able to report the first profitable year in its history, while continuing the significant growth rates in our core consumer prescription and over-the-counter businesses,” said Joseph Peters, the Company’s President and CEO. “Our results for 2017 are a reflection of our team’s dedication to providing our patients with excellent pharmacy experiences through compassion, convenience and transparency. In 2017, we were able to satisfy a large payables balance and invest in the installation of new pharmacy automation equipment. These initiatives will provide us with financial flexibility and increased productivity, positioning us well for 2018 and beyond. Additionally, we are evaluating funding options to support an expansion of our marketing campaigns, an upgrade of our pharmacy software, and the refinancing of our current debt obligations.”
The Company reported net income of $371,775 for the year ended December 31, 2017 compared to a net loss of $1,408,203 for the year ended December 31, 2016. The 2016 results include $854,651 of nonrecurring expenses including annual meeting proxy and solicitation costs and severance expense for departing executives.
In 2017, Adjusted EBITDA was $856,118, versus negative EBITDA of $57,544 for the same period of 2016. Adjusted EBITDA and EBITDA are non-GAAP financial measures and a reconciliation to the GAAP measures is provided below.
2017 Overview:
Net Sales: Total net sales were $14,847,262 for the year ended December 31, 2017 compared to $10,384,893 in 2016, an increase of $4,462,369 or 43%. Core consumer prescription sales were $10,842,910 for the year ended December 31, 2017 as compared to $7,999,818 in 2016, an increase of $2,843,092 or 36%. Over-the-counter net sales grew 75% to $3,436,832 as compared to $1,959,602 in 2016. The growth in both categories has been aided by increased consumer awareness partially a result of being featured in a prominent national magazine.
Gross Profit: Gross profit for the year ended December 31, 2017 was $9,837,599, a $3,100,139 or 46% increase over the 2016 year due to sales growth, improved procurement practices, fulfillment process enhancements and better cost controls.
SG&A Expenses: SG&A expenses were $9,359,593 for the year ended December 31, 2017, an increase of $1,332,957 or 17% as compared to the year 2016. Increases in 2017 resulted from increases in advertising and marketing expenses, headcount, freight and other volume-related expenses.
| HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| Year Ended | ||||||||
| December 31, | ||||||||
| 2017 | 2016 | |||||||
| Net sales | $ | 14,847,262 | $ | 10,384,893 | ||||
| Cost of sales | 5,009,663 | 3,647,433 | ||||||
| Gross profit | 9,837,599 | 6,737,460 | ||||||
| Selling, general and administrative expenses | 9,359,593 | 8,026,636 | ||||||
| Net income (loss) from operations | 478,006 | (1,289,176 | ) | |||||
| Interest expense | 106,231 | 119,027 | ||||||
| Net income (loss) | 371,775 | (1,408,203 | ) | |||||
| Preferred stock: | ||||||||
| Series B convertible contractual dividends | (342,232 | ) | (342,233 | ) | ||||
| Net income (loss) attributable to common stockholders | $ | 29,543 | $ | (1,750,436 | ) | |||
| Per share data: | ||||||||
| Net income (loss) - basic | $ | 0.01 | $ | (0.03 | ) | |||
| Net income (loss) - diluted | $ | 0.01 | $ | (0.03 | ) | |||
| Series B convertible contractual dividends | $ | (0.01 | ) | $ | (0.01 | ) | ||
| Net income (loss) attributable to common stockholders - basic | $ | 0.00 | $ | (0.04 | ) | |||
| Net income (loss) attributable to common stockholders - diluted | $ | 0.00 | $ | (0.04 | ) | |||
|
Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP) |
||||||||||
| Year Ended | ||||||||||
| December 31, | ||||||||||
| (Unaudited) | 2017 | 2016 | ||||||||
| Net income ( loss) | $ | 371,775 | $ | (1,408,203 | ) | |||||
| Non-GAAP adjustments: | ||||||||||
| Interest expense | 106,231 | 119,027 | ||||||||
| Depreciation and amortization | 77,065 | 149,553 | ||||||||
| Stock-based compensation | 351,076 | 327,202 | ||||||||
|
Gain on settlement of accounts payable and accrued expenses |
(139,479 | ) | (99,774 | ) | ||||||
| Proxy solicitation costs | 37,113 | 578,484 | ||||||||
| Severance | 52,337 | 276,167 | ||||||||
| Adjusted EBITDA | $ | 856,118 | $ | (57,544 | ) | |||||
About HealthWarehouse.com
HealthWarehouse.com, Inc. (OTC Pink:HEWA) is a trusted VIPPS accredited online pharmacy based in Florence, Kentucky. The Company is focused on the out of pocket prescription market, which is expected to grow to over $50 billion in 2018. With a mission to provide affordable healthcare to every American by focusing on technology that is revolutionizing prescription delivery, HealthWarehouse.com has become the largest VIPPS accredited online pharmacy in the United States exclusively servicing the cash market.
HealthWarehouse.com is licensed or authorized to ship prescription medication to all 50 states and only sells drugs that are FDA-approved and legal for sale in the United States. Visit HealthWarehouse.com online at http://www.HealthWarehouse.com.
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 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 Financial Measures
HealthWarehouse.com, 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-based compensation, 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.