Online mail-order pharmacy’s consumer prescription sales grow by 20%
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 2018 third-quarter growth in prescription sales to strong customer retention, targeted advertising campaigns, improved order conversion rates and quicker processing times.
“In the second quarter of this year we reached a great milestone in processing over 100,000 prescriptions for the first time in company history. We are proud to announce that trend continued in the third quarter. Our 20% growth in core prescription revenue, coupled with the growth in customers and prescription fills, shows that consumers appreciate HealthWarehouse.com as an affordable option for their prescription medications. As a result of our sales growth, along with improved efficiencies, we generated approximately $150,000 in adjusted EBITDA during the quarter,” said Joseph Peters, the Company’s President and CEO.
“It is no secret that Americans value affordability and convenience. Thanks to our investments in pharmacy robotics and infrastructure, we have maintained affordable rates in the midst of direct price competition and shortened our processing times during periods of increased prescription fill volume. As we look to 2019, we plan to provide an improved customer experience by investing in pharmacy software and platform development,” Peters added. “We have built an energetic team, executing at a high level on behalf of our customers. We treat our customers like we treat our family and our team is doing a fantastic job of providing excellent pharmacy experiences through compassion, convenience and transparency.”
The Company reported a net loss of $601,091 for the nine months ended September 30, 2018, compared to net income of $547,653 for the same period in 2017. The net loss resulted primarily from reduced pharmacy efficiencies during the first quarter due to changes required to prepare for the installation of the robotics, costs associated with development of marketing strategy and creative, lower over-the-counter revenue and higher stock-based compensation expense.
During the three and nine months ended September 30, 2018, Adjusted EBITDA was $149,863 and $64,711, respectively, as compared to Adjusted EBITDA of $138,772 and $775,041, respectively, for the three and nine months ended September 30, 2017. Adjusted EBITDA is a non-GAAP financial measure. Definitions and reconciliations to GAAP measures are provided below.
2018 Overview:
Net Sales: Core consumer prescription sales were $3,268,979 for the three months ended September 30, 2018, as compared to $2,733,690 for the same period of 2017, an increase of $535,289, or 20%. For the nine months ended September 30, 2018, core consumer prescription sales were $9,166,789, an increase of $943,259, or 11%, over the $8,223,530 of sales reported for the same period in 2017. The year-to-date sales growth was achieved despite substantial prescription price reductions during the first half of the year. The number of prescriptions shipped for the three and nine months ended September 30, 2018, was 102,691 and 295,424, representing increases of 16,053 (19%) and 37,159 (14%), respectively, compared to the prior-year periods.
Over-the-counter product net sales were $654,240 for the three months ended September 30, 2018, a decrease of $403,444, or 38% from $1,057,684 in the comparable period in 2017. For the nine months ended September 30, 2018, over-the-counter product sales were $2,000,312, a $573,593 or 22% decrease from $2,573,905 of sales reported for the same period in 2017. The decline in over-the-counter product sales was directly attributable to reduced advertising spend for over-the-counter products and additional regulatory requirements imposed on the sale of certain products, which mandated the receipt of personal documentation to process the sale.
Gross Profit: Gross profit for the three and nine months ended September 30, 2018, was $2,615,312 and $7,430,524, increases of $86,693 and $23,435, respectively, as compared to the same periods of 2017. The increases are due to the increase in prescription sales volume, which offset the impact of the prescription price reductions and the decline in over-the-counter sales.
SG&A Expenses: SG&A expenses were $2,650,862 and $7,835,208 for the three and nine months ended September 30, 2018, resulting in increases of $204,705 (8%) and $1,049,737 (15%), respectively, compared to the same periods of 2017. Increases in 2018 resulted primarily from volume-related expenses such as increased staffing, freight costs and payment processing fees, and marketing and advertising expenses.
| HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net sales | $ | 4,011,248 | $ | 3,932,446 | $ | 11,446,550 | $ | 11,214,751 | ||||||||
| Cost of sales | 1,395,936 | 1,403,827 | 4,016,027 | 3,807,663 | ||||||||||||
| Gross profit | 2,615,312 | 2,528,619 | 7,430,523 | 7,407,088 | ||||||||||||
| Selling, general and administrative expenses | 2,650,862 | 2,446,157 | 7,835,208 | 6,785,471 | ||||||||||||
| Net income (loss) from operations | (35,550 | ) | 82,462 | (404,685 | ) | 621,617 | ||||||||||
| Interest expense | (72,261 | ) | (21,958 | ) | (196,406 | ) | (73,964 | ) | ||||||||
| Net income (loss) | (107,811 | ) | 60,504 | (601,091 | ) | 547,653 | ||||||||||
| Preferred stock: | ||||||||||||||||
| Series B convertible contractual dividends | (85,558 | ) | (73,582 | ) | (256,674 | ) | (256,675 | ) | ||||||||
| Net income (loss) attributable to common stockholders | $ | (193,369 | ) | $ | (13,078 | ) | $ | (857,765 | ) | $ | 290,978 | |||||
| Per share data: | ||||||||||||||||
| Net income (loss) - basic | $ | (0.00 | ) | $ | 0.00 | $ | (0.01 | ) | $ | 0.01 | ||||||
| Net income (loss) - diluted | $ | (0.00 | ) | $ | 0.00 | $ | (0.01 | ) | $ | 0.01 | ||||||
| Series B convertible contractual dividends | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
| Net income (loss) attributable to common stockholders: | ||||||||||||||||
| - basic | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | 0.01 | |||||
| - diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | 0.01 | |||||
| Weighted average common shares outstanding: | ||||||||||||||||
| - basic | 48,833,093 | 45,711,118 | 48,597,139 | 44,630,004 | ||||||||||||
| - diluted | 48,833,093 | 45,711,118 | 48,597,139 | 53,175,132 | ||||||||||||
| Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Net income (loss) | $ | (107,811 | ) | $ | 60,504 | $ | (601,091 | ) | $ | 547,653 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Interest expense | 72,261 | 21,958 | 196,406 | 73,964 | |||||||||||||||
| Depreciation and amortization | 41,605 | 17,970 | 82,546 | 60,708 | |||||||||||||||
| Stock-based compensation | 143,808 | 87,005 | 379,043 | 223,495 | |||||||||||||||
| Gain on settlement of accrued expenses | - | (48,665 | ) | - | (144,479 | ) | |||||||||||||
| Impairment loss on website development costs | - | - | - | 13,700 | |||||||||||||||
| Loss on disposal of equipment | - | - | 7,807 | - | |||||||||||||||
| Adjusted EBITDA | $ | 149,863 | $ | 138,772 | $ | 64,711 | $ | 775,041 | |||||||||||
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 and/or authorized to ship prescription medication to all 50 states and sells only 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, cyberattacks, 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 on http://www.otcmarkets.com.
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 Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA). In addition to adjusting net loss to exclude interest, taxes, 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 stakeholders 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181112005364/en/
Contacts
HealthWarehouse.com, Inc.
Joseph Peters, 800-748-7001
Source: HealthWarehouse.com, Inc.
View this news release online at:
http://www.businesswire.com/news/home/20181112005364/en
