Generates positive cash flow for 3rd consecutive year
HealthWarehouse.com, Inc. HEWA announced today that its net sales for 2019 were $15,755,577. It reported income from operations of $155,703 for the year and positive cash flow for the third consecutive year, as reflected by its internal measure of Adjusted EBITDA as defined below, which was $712,312 in 2019.
HealthWarehouse.com is an online and mail-order pharmacy authorized to sell and deliver prescription medications to all 50 states, and is one of the first National Association of Boards of Pharmacy (NABP) Approved Digital Pharmacies.
"We were pleased to maintain our revenue levels while generating positive cash flow during a year that the Company focused on improving operational efficiencies, customer service and retention, and our balance sheet," said Joseph Peters, the Company's President and CEO. "These improvements were made possible by our investments in prior years to our infrastructure and automation equipment. By generating positive cash flow, we were able to dedicate resources to new advertising campaigns and customer retention initiatives over the course of the year.
"Going into 2020, we shifted attention and resources to new marketing channels, business units and growth initiatives. In addition, we positioned ourselves well for 2020 and the current COVID–19 pandemic, allowing us to continue to provide the high level of service our customers have come to expect, serving as a trusted source for purchasing medications delivered direct to consumers while adhering to stay-at-home directives."
Peters noted that Healthwarehouse.com is an essential business and continues to operate during the pandemic. Sixty percent of its 115 employees work from home, with an eventual goal of having 75 percent perform all of their functions from outside its facility.
"Work-from-home programs and on-site measures have assured business continuity when it is most essential and enabled us to handle the recent surge in our prescription and over-the-counter businesses. These efforts mean we can continue to help the millions of Americans turning to digital healthcare services," he added.
2019 Annual Overview:
Net Sales: Total net sales were $15,755,577 for the year ended December 31, 2019, compared to $15,748,162 in 2018, an increase of $7,415. Prescription sales were $12,767,927, as compared to $12,545,097, an increase of $222,830 or 2%. Over-the-counter net sales declined by 1% to $2,680,820 as compared to $2,707,461 due to a reduction in sales through alternative e-commerce channels.
Gross Profit: Gross profit for the year ended December 31, 2019 was $10,361,187, a $139,890 or 1% increase over 2018.
Operating Expenses: Operating expenses were $10,205,485 for the year ended December 31, 2019, a decrease of $563,383 or 5% as compared to 2018. Annual results in 2018 included a $170,000 charge to write down certain fixed assets. In 2019, reductions in expenses related to staffing, stock-based compensation and shipping costs were offset by a 19% increase in advertising and marketing expenses. The reduction in staffing was related to efficiency gains from automation in our pharmacy operations, offset by additional customer support and retention staffing.
Net Income and Adjusted EBITDA: The Company reported a net loss of $99,400 for the year ended December 31, 2019, compared to net loss of $817,055 for the year ended December 31, 2018. In 2019, Adjusted EBITDA was $712,312 versus $380,428 for the same period of 2018.
2019 Fourth Quarter Overview:
Net Sales: Total net sales were $3,870,413 for the fourth quarter ended December 31, 2019 compared to $4,301,612 in the fourth quarter of 2018, a decrease of $431,199 or 10%. Prescription sales were $3,391,645 as compared to $3,378,308, an increase of $13,337. Over-the-counter sales declined by 43% to $403,707 compared to $707,149, due a significant reduction in sales through alternative e-commerce channels.
Gross Profit: Gross profit for the fourth quarter was $2,523,416, a $267,358 or 10% decrease when compared to the 2018 fourth quarter, due to a decline in sales.
Operating Expenses: Operating expenses were $2,480,706 for the fourth quarter, a decrease of $452,954 or 15% as compared to the same quarter in 2018. The quarterly results in 2018 included a $170,000 charge to write down values of certain fixed assets. The decreases in 2019 were related to accounting services, staffing, stock-based compensation, shipping and other volume-related expenses, offset by a 20% increase in advertising and marketing expenses.
Net Income and Adjusted EBITDA: The Company reported a net loss of $16,199 for the fourth quarter of 2019 compared to a net loss of $215,964 during the same period in 2018. For the fourth quarter, Adjusted EBITDA was $178,259 in 2019 compared to $315,716 in 2018.
HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES | |||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Audited) | |||||||||||||||||
For the Three Months Ended |
|
For the Twelve Months Ended |
|||||||||||||||
December 31, |
|
December 31, |
|||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||||
Net sales | $ |
3,870,413 |
|
$ |
4,301,612 |
|
$ |
15,755,577 |
|
$ |
15,748,162 |
|
|||||
Cost of sales |
|
1,346,997 |
|
|
1,510,838 |
|
|
5,394,390 |
|
|
5,526,865 |
|
|||||
Gross profit |
|
2,523,416 |
|
|
2,790,774 |
|
|
10,361,187 |
|
|
10,221,297 |
|
|||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative expenses |
|
2,480,706 |
|
|
2,763,660 |
|
|
10,205,484 |
|
|
10,598,867 |
|
|||||
Impairment of fixed assets |
|
- |
|
|
170,000 |
|
|
- |
|
|
170,000 |
|
|||||
Total operating expenses |
|
2,480,706 |
|
|
2,933,660 |
|
|
10,205,484 |
|
|
10,768,867 |
|
|||||
Net income (loss) from operations |
|
42,710 |
|
|
(142,886 |
) |
|
155,703 |
|
|
(547,570 |
) |
|||||
Interest expense |
|
(58,909 |
) |
|
(73,078 |
) |
|
(255,103 |
) |
|
(269,484 |
) |
|||||
Net loss |
|
(16,199 |
) |
|
(215,964 |
) |
|
(99,400 |
) |
|
(817,054 |
) |
|||||
Preferred stock: | |||||||||||||||||
Series B convertible contractual dividends |
|
(85,558 |
) |
|
(85,558 |
) |
|
(342,233 |
) |
|
(342,233 |
) |
|||||
Net loss attributable to common stockholders | $ |
(101,757 |
) |
$ |
(301,522 |
) |
$ |
(441,633 |
) |
$ |
(1,159,287 |
) |
|||||
Per share data: | |||||||||||||||||
Net loss - basic and diluted | $ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.01 |
) |
|||||
Series B convertible contractual dividends | $ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.01 |
) |
$ |
(0.01 |
) |
|||||
Net loss attributable to common stockholders | |||||||||||||||||
- basic and diluted | $ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.01 |
) |
$ |
(0.02 |
) |
|||||
Weighted average common shares outstanding | |||||||||||||||||
- basic and diluted |
|
50,300,107 |
|
|
48,889,100 |
|
|
49,923,926 |
|
|
48,695,935 |
|
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 EBITDA and Adjusted EBITDA, which are commonly used. In addition to adjusting net loss to exclude interest, taxes, depreciation and amortization ("EBITDA"), Adjusted EBITDA also excludes stock-based compensation, and certain nonrecurring charges. EBITDA and Adjusted EBITDA are not measures 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 lenders and other shareholders an additional view of the Company`s operations that, when coupled with 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.
Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP)
Three Months Ended |
|
Twelve Months Ended |
|||||||||||||||
December 31, |
|
December 31, |
|||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||||
Net loss | $ |
(16,199 |
) |
$ |
(215,964 |
) |
$ |
(99,400 |
) |
$ |
(817,054 |
) |
|||||
Interest expense |
|
58,909 |
|
|
73,078 |
|
|
255,103 |
|
|
269,484 |
|
|||||
Depreciation and amortization |
|
35,316 |
|
|
41,316 |
|
|
163,653 |
|
|
123,862 |
|
|||||
EBITDA (non-GAAP) |
|
78,026 |
|
|
(101,570 |
) |
|
319,356 |
|
|
(423,708 |
) |
|||||
Adjustments to EBITDA: | |||||||||||||||||
Stock-based compensation |
|
100,233 |
|
|
247,286 |
|
|
421,935 |
|
|
626,329 |
|
|||||
Impairment of fixed assets |
|
- |
|
|
170,000 |
|
|
170,000 |
|
||||||||
Loss (Gain) on disposal of equipment |
|
- |
|
|
- |
|
|
(28,979 |
) |
|
7,807 |
|
|||||
Adjusted EBITDA | $ |
178,259 |
|
$ |
315,716 |
|
$ |
712,312 |
|
$ |
380,428 |
|
About HealthWarehouse.com
HealthWarehouse.com, Inc. HEWA is America's Leading Online Pharmacy and a pioneer in affordable healthcare. Based in Florence, Kentucky, the Company's services are available nationwide, shipping FDA approved prescription medication and over-the-counter products direct to patients' doors. As one of the first National Association of Boards of Pharmacy ("NABP") Approved Digital Pharmacies, HealthWarehouse.com services the mission of providing affordable healthcare and incredible patient services to help Americans in all 50 states. Learn more at 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 audited Annual Reports and Quarterly Reports available at otcmarkets.com and prior filings with the Securities and Exchange Commission.
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