Reports Results for First Quarter 2018

Online mail-order pharmacy named most affordable by leading consumer publication; achieves highest quarterly prescription volume in history

CINCINNATI--(), Inc. (OTC: HEWA) announced today that net sales for the first quarter ended March 31, 2018, increased 6% to $3,584,611 compared to $3,380,464 in the first quarter of 2017 as a result of a record breaking quarter for prescriptions filled, an increase of 12% over the same quarter in 2017. 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 2018 first-quarter growth to increased sales due to strong customer retention and a positive article in a leading consumer magazine.

“We were honored to once again be featured by a nationally recognized consumer magazine as the most affordable option for consumers to purchase their prescription medication. We are excited about the opportunity to take care of new patients and we believe the article further validates our direct-to-consumer cash business model. Along with the growth in patients and prescription fills, we are proud to announce another quarter of sales growth in our core consumer prescription and over-the-counter business lines. This sales growth was achieved alongside substantial prescription price reductions and recently imposed regulatory requirements. The new requirements have been addressed and this segment should rebound in the second quarter,” said Joseph Peters, the Company’s President and CEO.

“From an operating income perspective, we experienced higher-than-normal expenses due to a workflow change necessary for the installation of automation equipment and an investment in branding and marketing strategy,” Peters added. “Our pharmacy efficiencies have recovered during the second quarter and we expect to realize the benefits from the automation of our pharmacy, including increased capacity and lower cost to fill prescriptions, as the new equipment comes online by the end of June. The automation and marketing initiatives will provide us with flexibility, increased productivity and targeted marketing efforts, positioning us well for 2018 and beyond. Our team remains dedicated to providing our patients with excellent pharmacy experiences through compassion, convenience and transparency. Additionally, we continue to evaluate 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 a net loss of $340,751 for the three months ended March 31, 2018, compared to net income of $121,731 for the same period in 2017.

In the first quarter of 2018, Adjusted EBITDA was $(162,274), versus Adjusted EBITDA of $232,898 for the same period of 2017. Adjusted EBITDA is a non-GAAP financial measure and a reconciliation to a GAAP measure is provided below.

2018 Overview:

Net Sales: Total net sales were $3,584,611 for the three months ended March 31, 2018, compared to $3,380,464 in 2017, an increase of $204,147 or 6%. Core consumer prescription sales were $2,812,779 for the three months ended March 31, 2018, as compared to $2,609,277 in 2017, an increase of $203,502 or 8%. Over-the-counter net sales grew 4% to $673,799 as compared to $647,444 in 2017. The growth in both categories has been aided by increased consumer awareness partially as a result of being featured in a prominent national magazine.

Gross Profit: Gross profit for the three months ended March 31, 2018 was $2,361,968, a $62,200 or 3% increase over the same period in 2017, due to sales growth.

SG&A Expenses: SG&A expenses were $2,644,403 for the three months ended March 31, 2018, an increase of $490,959 or 23% as compared to the same quarter in 2017. Increases in 2018 resulted from increases in advertising and marketing expenses, headcount, freight and other volume-related expenses.

  For the Three Months Ended
March 31,
2018   2017
Net sales $ 3,584,611 $ 3,380,464
Cost of sales   1,222,643     1,080,696  
Gross profit 2,361,968 2,299,768
Selling, general and administrative expenses   2,644,403     2,153,444  
Net income (loss) from operations (282,435 ) 146,324
Interest expense   (58,316 )   (24,593 )
Net income (loss) (340,751 ) 121,731
Preferred stock:
Series B convertible contractual dividends   (85,558 )   (91,545 )
Net income (loss) attributable to common stockholders $ (426,309 ) $ 30,186  
Per share data:
Net income (loss) - basic ($0.01 ) $ 0.00
Net income (loss) - diluted ($0.01 ) $ 0.00
Series B convertible contractual dividends $ 0.00 $ 0.00
Net income (loss) attributable to common stockholders - basic ($0.01 ) $ 0.00
Net income (loss) attributable to common stockholders - diluted   ($0.01 ) $ 0.00  

Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP)

Three Months Ended
December 31,
(Unaudited) 2018   2017
Net income (loss) $ (340,751 ) $ 121,731
Non-GAAP adjustments:
Interest expense 58,316 24,593
Depreciation and amortization 16,330 22,745
Stock-based compensation 96,024 63,829
Loss on disposal of equipment   7,807     -
Adjusted EBITDA $ (162,274 ) $ 232,898

About, 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, has become the largest VIPPS accredited online pharmacy in the United States exclusively servicing the cash market. 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 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, cyberattacks, 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-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.

Contacts, Inc.
Joseph Peters, 800-748-7001

Contacts, Inc.
Joseph Peters, 800-748-7001