SOURCE: Her Imports

June 19, 2017 09:00 ET

Her Imports Reports Record Revenue and Net Income for the 2017 First Quarter

LAS VEGAS, NV--(Marketwired - Jun 19, 2017) - Her Imports (OTCQB: HHER), a leading retailer of human hair extensions and related beauty products, today reported its financial results for the first quarter ended March 31, 2017 during which the Company generated record revenue of $4.4 million, income from operations of $648,329 and net income attributable to the Company of $418,899 before preferred dividends of $180,000.

Barry Hall, Chief Executive Officer of Her Imports, commented, "During the first quarter of 2017 we experienced growth in our retail footprint while maintaining a strong financial position which yielded year-over-year revenue growth as well as positive net income and cash flow. Today our revenue streams include 32 retail locations, three shopping mall kiosks and a newly designed Website supported by our proprietary e-commerce platform. Retail revenue, year-over-year, increased 10.6%. Finally, we remain on track to achieve our goal of operating 100 retail locations throughout the United States by the end of 2019."

Mr. Hall continued, "We are also proud to be a product innovator in the hair and beauty industry. Our revolutionary product, Cling™, an improved adhesive for hair extensions, wigs and false eyelashes, is generating notable interest among our customer base and target customers. We continue to focus on expanding our product offerings to provide our customers with a one-stop-shop for their beauty needs." 

2017 First Quarter Business Highlights:

  • Ended the first quarter with 35 retail locations throughout the United States
  • Announced an exclusive agreement with OSIworks to market and sell new health and beauty products including Cling, an improved adhesive for hair extensions and wigs
  • 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
  • Expanded the management team with the strategic hire of renowned celebrity hair stylist Tippi Shorter as Vice President, Product Development & Marketing

2017 First Quarter Financial Highlights:
Revenue totaled $4.4 million for the first quarter 2017, as compared to $4.2 million, an increase of 4.5%, for the first quarter 2016. The year-over-year increase of 10.6% in retail revenue was primarily due to new retail locations opened in the fourth quarter 2016 and first quarter 2017. This increase was partially off-set by a decrease in online sales due to the discontinuation of financing sales due to customer.

Cost of products sold for the three months ended March 31, 2017 were $2.1 million, an increase of 1.9% as compared to cost of products sold of $2.1 million for the three months ended March 31, 2016. Gross margin was 51% for the first quarter 2017, as compared with 50% for the first quarter 2016.

Operating expenses consist of selling expense and general and administrative expense. Total operating expenses for the three months ended March 31, 2017 was $1.6 million, representing a 14.6% or $270,501 decrease from $1.8 million for the three months ended March 31, 2016 which included royalties of $381,994 which the Company no longer pays. The absence of royalty expense was partially offset by an increase in both selling expense and general and administrative expense. Selling expense for the three months ended March 31, 2017 increased $18,433 or 1.5% for the three months ended March 31, 2017 when compared to the same 2016 period. The increase in selling expense was attributable to an increase in store operating expenses due to the addition of new retail location and was offset by a decrease in advertising expense.

The above resulted in income from operations of $648,329 for the three months ended March 31, 2017 compared to an income from operations of $229,286 for the three months ended March 31, 2016.

Net income attributable to the Company totaled $417,899 during the first quarter of 2017 as compared to $141,343 for the same period the prior year. Net income available to common shareholders totaled $237,899, or 0.01 per share, for the first quarter 2017, compared with net income of $141,383, or 0.01 per share, for the first quarter 2016. The Company paid $180,000 in preferred stock dividends during the three months ended March 31, 2017. 

Net cash provided by operating activities totaled $232,466 for the first quarter of 2017 as compared to $43,313 for the same period the prior year.

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.

 
Her Imports
Condensed Consolidated Balance Sheets
 
    March 31, 2017     December 31, 2016  
    (Unaudited)        
ASSETS                
                 
Current assets                
  Cash   $ 346,921     $ 355,568  
  Receivables     137,156       45,576  
  Related Party receivable     94,521       26,612  
  Inventories     2,258,703       2,047,453  
  Prepaid maintenance fees - current     75,000       75,000  
  Other prepaid expenses     83,489       46,411  
  Deposits     356,179       32,950  
Total current assets     3,351,969       2,629,570  
                 
Property, equipment and software, net     251,004       256,525  
  Prepaid maintenance fees - non current     265,625       284,375  
  Other Asset     25,000       -  
  Trademark     8,200,000       8,200,000  
Total assets   $ 12,093,598     $ 11,370,470  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current liabilities                
  Accounts payable and accrued liabilities   $ 998,248     $ 728,425  
  Income tax liability     357,263       127,651  
  Notes payable     29,599       43,805  
Total current liabilities     1,385,110       899,881  
                 
Total liabilities     1,385,110       899,881  
                 
Stockholders' equity                
  Callable $0.072 per share per year non-cumulative dividend liquidation preference of $1.00 per share, preferred stock, $0.001 par value, 10,000,000 shares authorized and outstanding as of March 31, and December 31, 2016, respectively     10,000       10,000  
  Common stock, $0.001 par value, 65,000,000 shares authorized and 24,899,788 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively     24,900       24,900  
  Additional paid-in capital     26,625,497       26,625,497  
  Accumulated deficit     (15,951,909 )     (16,189,808 )
Total stockholders' equity     10,708,488       10,470,589  
Total liabilities and stockholders' equity   $ 12,093,598     $ 11,370,470  
                 
                 
 
Her Imports
Condensed Consolidated Statements of Income
(Unaudited)
 
    For the Three Months  
    March 31,  
    2017     2016  
Product sales   $ 4,361,020     $ 4,172,312  
Cost of products sold     2,135,064       2,094,898  
Gross profit     2,225,956       2,077,414  
                 
Operating expenses                
  Royalties     -       381,994  
  Selling expense     1,264,781       1,246,348  
  General and administrative expense     312,846       219,786  
Total operating expenses     1,577,627       1,848,128  
                 
Income from operations     648,329       229,286  
                 
Other (expense) income                
  Interest income     49       -  
  Interest expense     (866 )     (317 )
Total other (expense) income     (817 )     (317 )
Income before provision for income taxes     647,512       228,969  
                 
  Provision for income taxes     (229,613 )     (87,626 )
Net income attributable to Company     417,899       141,343  
Preferred stock dividends     (180,000 )     -  
Net income available to common stockholders   $ 237,899     $ 141,343  
                 
  Net basic income per share attributable to common Stockholders: basic and diluted   $ 0.01     $ 0.01  
                 
  Weighted average number of common shares outstanding: basic and diluted     24,899,788       16,299,788  
                 
 
Her Imports
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
    For the Three Month Ended  
    March 31,  
    2017     2016  
OPERATING ACTIVITIES                
  Net income   $ 417,899     $ 141,343  
    Adjustments to reconcile net income to net cash provided by operating activities:                
      Depreciation and amortization     27,428       310,090  
  Changes in operating assets and liabilities:                
      Receivables     (91,580 )     (16,486 )
      Related party receivables     (67,909 )     (256,205 )
      Inventories     (211,250 )     (115,830 )
      Prepaid maintenance fees     18,750       18,750  
      Other prepaid expenses     (37,078 )     17,014  
      Deposits     (323,229 )     (288,536 )
      Accounts payable and accrued liabilities     269,823       145,547  
      Income tax liability     229,612       87,626  
Net cash provided by operating activities     232,466       43,313  
                 
INVESTING ACTIVITIES                
      Purchase of fixed assets     (21,907 )     (7,685 )
      Investment in subsidiary     (25,000 )     -  
Net cash used in investing activities     (46,907 )     (7,685 )
                 
FINANCING ACTIVITIES                
      Repayment on notes payable     (14,206 )     (7,183 )
      Cash paid for preferred stock dividends     (180,000 )     -  
Net cash used in financing activities     (194,206 )     (7,183 )
                 
NET (DECREASE) INCREASE IN CASH     (8,647 )     28,445  
                 
  CASH - BEGINNING OF PERIOD     355,568       449,675  
  CASH - END OF PERIOD   $ 346,921     $ 478,120  
                 
SUPPLEMENTAL DISCLOSURES:                
      Interest paid   $ 944     $ 317  
      Income taxes paid   $ -     $ -  
                 

Contact Information

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