|[May 22, 2014]
HealthWarehouse.com Reports First Quarter 2014 Results
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 first quarter ended March 31, 2014.
For the three months ended March 31, 2014 net sales declined to
$1,716,964, a 28.8% decrease from the comparable period in 2013. The
Company's gross margin improved to 57.4%, up from 48.7%, while the net
loss narrowed by 92.5%, to ($305,641) from ($4,078,366). For the first
quarter of 2014, HEWA reported positive adjusted EBITDAS of $57,801, vs.
negative ($273,776) in the first 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,
in 2013 we made the decision to focus our business on the cash pay
prescription market and wind down non-profitable business relations.
With the Affordable Care Act coming into effect, consumers are taking
personal responsibility for their healthcare costs as co-pays and
deductibles continue to rise. Combined with the brand to generic
transformation, the opportunity in the cash prescription market has
never been larger."
"While this has impacted our revenue growth in the short term, our gross
margins continue to improve as we focus on higher margin business. As we
reduce operating expenses to "right size" the business and put legacy
legal issues and expenses behind us, we have been able to record two
consecutive quarters of positive EBITDAS. We expect continued positive
results throughout 2014."
Q1 2014 Details:
Net Sales: Declined by 28.8% due to the planned reduction in
lower-margin business-to-business sales and cash flow constraints. Due
to cash flow constraints, the Company was unable to expand its
advertising efforts to grow its core online prescription business and
was not able to maintain over-the-counter inventories to satisfy
Gross Margin. Increased from 48.7% to 57.4% due to the
elimination of unprofitable business relations and the reduction of
lower-margin business-to-business sales relative to total sales.
Management will continue to focus efforts on promoting and offering
its higher margin product lines as part of the narrowing of its
SG&A Expenses: Declined by 49.0%, primarily due to
decreased legal expenses, decreased options expense nd stock based
compensation and a reduction in salary and contract labor expense.
HEWA expects that its SG&A expenses, specifically legal and
professional fees, will continue to decrease over time as outstanding
litigation is resolved and internal controls over financial reporting
will reduce the reliance on outside consulting and accounting
professionals. The Company also expects to continue to benefit from
the significant reduction in salary and related expense in 2014.
Net Loss: Declined by over 92% as a result of the increased
profit margins and reduced operating expenses as detailed above.
Healthwarehouse.com, Inc. operates as a virtual retail pharmacy and
healthcare e-commerce company that sells brand name and generic
prescription drugs, as well as over-the-counter (OTC) medical products
in the United States. The company sells a range of prescription drugs;
diabetic supplies, including glucometers, lancets, syringes, and test
strips; and OTC medications covering a range of conditions from allergy
and sinus to pain and fever to smoking cessation aids. It also offers
home medical supplies, such as incontinence supplies, first aid kits,
and mobility aids; and diet and nutritional products comprising
supplements, weight loss aids, and vitamins and minerals. In addition,
the company operates as a licensed mail-order pharmacy for sales to 50
states and the District of Columbia. It sells its products directly to
the individual consumers of the pharmaceutical and non-pharmaceutical
products. The Company is headquartered in Florence, Kentucky.
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
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 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
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