SOURCE: Her Imports

April 18, 2017 08:00 ET

Her Imports Reports Full Year 2016 Results

LAS VEGAS, NV--(Marketwired - Apr 18, 2017) - Her Imports (OTCQB: HHER), a leading retailer of human hair extensions and related beauty products, today reported its financial results for the full year ended December 31, 2016. Revenue for the full year totaled $13.6 million with gross profit margins of 43%.

Barry Hall, Chief Executive Officer of Her Imports, stated, "In 2016, our focus was on growth via retail, low cost, 'pop-up' locations throughout the United States. We ended the year with 30 locations generating $13.6 million revenue. At our retail locations, our customers receive an intimate one-on-one consultation from our experienced professional staff. After our consumer experiences and purchases our high quality hair and beauty products in person, it is quite common to reorder through our e-commerce platform. Online sales accounted for approximately 25% of revenue during 2016. Since the end of the year, we have opened 5 additional retail locations as well as three kiosks in malls, initially testing each market with minimal risk and increasing the marketing and overhead investment based on the data we collect from consumer demand. By the end of 2019, we anticipate operating 100 retail locations throughout the United States."

2016 to Date Business Highlights:

  • Ended the 2016 year with 30 retail locations and has since opened an additional six locations throughout the United States and closed one location
  • Launched new point-of-sale through three kiosks in highly trafficked shopping locations, utilizing the kiosks as a low-cost leading indicator of the future market opportunity as well as an additional method of acquiring a customer
  • Announced the strategic hire of renowned celebrity hair stylist Tippi Shorter as Vice President, Product Development & Marketing
  • Successfully completed reverse stock split, company name and new ticker symbol change to further enhance and more appropriately reflect the corporate brand

Financial Highlights for the Full Year 2016:

  • Revenue totaled $13.6 million for the full year 2016, as compared to $13.3 million, an increase of 2%, for the full year 2015. The year-over-year increase in store revenue was partially off-set by a greater decrease in online sales due to the discontinuation of financing sales due to customer.
  • Gross margin was 43% for the full year 2016, as compared with 50% for the full year 2015. The decrease in gross margin year-over-year reflects the shift to retail sales vs. sales online as a percentage of total sales.
  • Net loss was $1.8 million, or (0.11) per share, for the full year of 2016, compared with net income of $1.9 million, or 0.13 per share, for the full year 2015. In 2015, the Company received a one-time gain on the sale of subsidiaries in the amount of approximately $1.4 million.
  • The Company was cash flow positive from operations in 2016. In 2015, the Company generated $948,258 in cash flow from operations however, accounting for the one time gain of approximately $1.4 million, the Company had a cash flow from operations deficit in 2015.

About Her Imports:
Her Imports sells human hair extensions and related hair-care and beauty products at retail locations throughout the U.S. and on our Website, www.herimports.com. Additionally, by way of our proprietary ecommerce platform and strategic leveraging of social media buys, we convert prospects into customers while developing long-term personal relationships and loyal customers.

Forward Looking Statements:
Statements in this document contain certain 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, as amended. These statements are based on many assumptions and estimates and are not guarantees of future performance. These statements may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Her Imports to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Her Imports assumes no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by applicable securities laws. For more information, please refer to Her Imports' financial statements as filed with the Securities and Exchange Commission.

   
   
Consolidated Statements of Operations
 
   
    For the Years Ended  
    December 31,  
    2016     2015  
Product sales   $ 13,574,402     $ 13,287,173  
Cost of product sold     7,806,590       6,706,425  
Gross profit     5,767,812       6,580,748  
                 
Operating expenses                
  Royalties     1,202,727       1,259,990  
  Selling expense     4,374,774       3,767,959  
  General and administrative expense     887,516       632,305  
Total operating expenses     6,465,017       5,660,254  
                 
Income (loss) from operations     (697,205 )     920,494  
                 
Other income (expense)                
  Gain on sale of subsidiaries     -       1,415,444  
  Loss on termination of agreement     (1,339,514 )     -  
  Gain on debt settlement     -       11,405  
  Forgiveness of penalty     -       60,000  
  Interest income     165       -  
  Interest expense     (1,706 )     (17,549 )
Total other income (expense)     (1,341,055 )     1,469,300  
Income (loss) from continuing operations before benefit (provision) for income taxes     (2,038,260 )     2,389,794  
                 
  Benefit (provision) for income taxes     208,668       (345,376 )
Income (loss) from continuing operations after provision for income taxes     (1,829,592 )     2,044,418  
                 
Loss from discontinued operations     -       (96,604 )
Net income (loss)   $ (1,829,592 )   $ 1,947,814  
                 
Basic income (loss) per share                
  Continuing operations   $ (0.11 )   $ 0.14  
  Discontinued operations   $ -     $ (0.01 )
  Net basic earnings (loss) per share   $ (0.11 )   $ 0.13  
                 
Diluted income (loss) per share                
  Continuing operations   $ (0.11 )   $ 0.14  
  Discontinued operations   $ 0.00     $ 0.00  
  Net diluted earnings (loss) per share   $ (0.11 )   $ 0.13  
                 
Weighted average number of common shares outstanding - basic     17,231,345       15,083,007  
                 
Weighted average number of common shares outstanding - fully diluted     17,231,345       15,083,007  
   
   
Consolidated Balance Sheets
 
   
    December 31, 2016     December 31, 2015  
             
ASSETS                
                 
Current assets                
  Cash   $ 355,568     $ 449,675  
  Receivables     45,576       64,940  
  Related party receivables     26,612       88,577  
  Inventories     2,047,453       1,767,832  
  Prepaid maintenance fees - current     75,000       31,250  
  Other prepaid expenses     46,411       52,234  
  Deposits     32,950       17,780  
Total current assets     2,629,570       2,472,288  
                 
  Furniture, equipment and software, net     256,525       307,156  
  Prepaid maintenance fees - non current     284,375       -  
  Intangible asset, net     -       1,879,111  
  Trademark     8,200,000       -  
Total assets   $ 11,370,470     $ 4,658,555  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current liabilities                
  Accounts payable and accrued liabilities   $ 728,425     $ 483,155  
  Income tax liability     127,651       345,376  
  Notes payable     43,805       21,903  
Total current liabilities     899,881       850,434  
                 
Total liabilities     899,881       850,434  
                 
Stockholders' equity                
  Callable $0.072 per share per year non-cumulative dividend, liquidation preference of $1 per share, preferred stock, $0.001 par value, 10,000,000 shares authorized and outstanding and 5,000,000 shares authorized and no shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively     10,000       -  
  Common stock, $0.001 par value, 65,000,000 shares authorized and 24,899,788 shares issued and outstanding and 70,000,000 shares authorized and 16,299,788 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively     24,900       16,300  
  Additional paid-in capital     26,625,497       18,152,037  
  Accumulated deficit     (16,189,808 )     (14,360,216 )
Total stockholders' equity     10,470,589       3,808,121  
Total liabilities and stockholders' equity   $ 11,370,470     $ 4,658,555  
   
   
Consolidated Statements of Cash Flows
 
   
    For the Years Ended  
    December 31,  
    2016     2015  
OPERATING ACTIVITIES                
  Net income (loss) from continuing operations   $ (1,829,592 )   $ 2,044,418  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     1,047,403       400,066  
    Write off of intangible assets     1,339,514       -  
    Non-cash gain on debt settlement     -       (11,405 )
    Forgiveness of penalty     -       (60,000 )
    Gain on sale of subsidiaries     -       (1,415,444 )
  Changes in operating assets and liabilities:                
    Receivables     19,364       (61,353 )
    Related party receivables     (300,483 )     203,445  
    Inventories     (279,622 )     (929,369 )
    Prepaid maintenance fees     -       75,000  
    Other prepaid expenses     5,823       (52,234 )
    Deposits     (15,170 )     28,599  
    Accounts payable and accrued liabilities     245,271       381,159  
    Income tax liability     (217,725 )     345,376  
Net cash provided by operating activities     14,783       948,258  
                 
INVESTING ACTIVITIES                
    Purchase of fixed assets     (47,852 )     (77,168 )
    Purchase of common stock from stockholder     (25,000 )     -  
Net cash used by investing activities     (72,852 )     (77,168 )
                 
FINANCING ACTIVITIES                
    Repayment on related party secured promissory note     -       (700,000 )
    Repayment on notes payable     (36,038 )     (7,067 )
Net cash used in by financing activities     (36,038 )     (707,067 )
                 
CASH FLOWS PROVIDED BY DISCONTINUED OPERATIONS                
    Net cash provided by operating activities     -       4,748  
Net cash provided by discontinued operations     -       4,748  
                 
NET CHANGE IN CASH     (94,107 )     168,771  
                 
CASH AND CASH EQUIVALENTS -                
  BEGINNING OF PERIOD     449,675       280,904  
  END OF PERIOD   $ 355,568     $ 449,675  
                 
SUPPLEMENTAL DISCLOSURES:                
  Interest paid   $ 603     $ 13,550  
  Income taxes paid   $ -     $ -  
                 
Non-cash investing and financing activities                
  Shares acquired from sale of subsidiaries   $ -     $ (422,500 )
  Shares issued of future royalty reduction   $ -     $ 2,200,000  
  Shares issued for trademark     8,200,000       -  
  Purchase of software maintenance agreement with common stock   $ 375,000     $ -  
  Issuance of note payable for buy back of stock from stockholder   $ 57,940     $ -  

Contact Information

  • Investor Contact:
    Valter Pinto / Allison Soss
    KCSA Strategic Communications
    Phone: (212) 896-1254 / (212) 896-1267
    Email: Email Contact / Email Contact