HealthWarehouse.com, Inc. (OTC:HEWA) announced today its results of operations for the three and nine months ended September 30, 2024. The Company reported net sales for the third quarter of $9.0 million, an 89% increase over the same period in 2023, resulting from strong growth in prescription sales revenue. The Company reported net income of $74,000 and Adjusted EBITDA, a non-GAAP measure defined below, of $405,000 for the quarter.
HealthWarehouse.com, a technology company with a focus on healthcare e-commerce, sells and delivers prescription and over-the-counter medications to all 50 states as an Approved Digital Pharmacy through the National Association of Boards of Pharmacy (NABP). HealthWarehouse.com provides a platform focused on increasing access to and reducing costs of healthcare products for consumers and business partners nationwide.
Joseph Peters, President and CEO, commented, “I’m proud to announce that we had a record quarter of sales and cash flow, benefiting from growth in sales of our expanded catalog of GLP-1 weight loss medications in both our partner services and direct-to-consumer (B2C) businesses. The investment in our technology platform over the past few years enabled us to efficiently scale to take advantage of the rise in demand for these products as evidenced by reduced salary expense and little to no impact on order processing times during the quarter.”
HealthWarehouse.com continues to invest in proprietary technology to remain at the forefront of new developments and offerings in the world of healthcare, focusing on patient experience, operational efficiency, and scalability.
“I am also happy to announce that the investors in our convertible notes recommitted their financial support of the Company to April 2026, strengthening our capital position while we continue to take advantage of growth opportunities. Our pipeline of new customers in our partner services business remains strong, which will contribute to significant future revenue growth. Along with our investors, we appreciate the continued dedication of our employees to push our Company to new milestones while providing world-class service to our customers,” added Peters.
Overview of Results for Three and Nine Months Ended September 30, 2024
Net Sales: Total net sales for the three and nine months ended September 30, 2024, were $9.0 million and $19.9 million, respectively, increasing by $4.2 million (89.0%) and $4.5 million (29.5%), respectively, versus the same periods in 2023.
Prescription sales were $8.3 million and $17.9 million for the three and nine months ended September 30, 2024, respectively, an increase of $4.1 million (96.3%) and $4.8 million (36.6%), respectively, compared with the same periods in 2023. The growth in sales of GLP-1 medications was the main contributor to growth in our partner services and direct-to-consumer (B2C) revenues.
Sales of over-the-counter products were $621,000 and $1.8 million for the three and nine months ended September 30, 2024, respectively, an increase of $167,000 (36.8%) and a decrease of $246,000 (12.2%), respectively, versus the same periods in 2023. The increase during the quarter was primarily due to improved marketplace sales and an increase in our partner services business.
Gross Profit: Gross profit for the three and nine months ended September 30, 2024, was $3.8 million and $9.7 million, respectively, representing increases of $853,000 and $484,000, respectively, compared with the same periods in 2023. The increases were the result of higher sales volumes, offset by lower margins on partner services. Gross margins were 42.0% and 48.8% of revenues for the three and nine months ended September 30, 2024, respectively, which were 19.5 and 11.2 percentage points lower, respectively, versus prior-year periods. The reduction was primarily due to lower margins in the B2C and partner services prescription businesses due to price competition.
Operating Expenses: Selling, general and administrative expenses were $3.6 million and $10.0 million for the three and nine months ended September 30, 2024, respectively, which were an increase of $453,000 (14.2%) and a decrease of $213,000 (2.1%), respectively, compared to the same periods in 2023. Volume driven expenses, including shipping, shipping supplies and credit card fees, were higher during the quarter, offset in part by decreases in stock-based compensation, salary and related expenses, and corporate tax expense. The decreases during the year-to-date period included reductions in advertising and marketing expenses, salaries, and stock-based compensation, offset by increases in shipping and shipping supplies expenses, credit card fees, depreciation and amortization, and employee benefits expenses.
Net Income and Adjusted EBITDA: The Company reported net income of $74,000 and a net loss of $522,000 for the three and nine months ended September 30, 2024, respectively, compared with net losses of $299,000 and $1.1 million, respectively, for the same periods in 2023.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”), as adjusted for stock-based compensation and certain non-recurring charges (“Adjusted EBITDA”), increased to $405,000 for the three months and $496,000 for the nine months ended September 30, 2024. That compares with Adjusted EBITDA of $53,000 and negative $136,000, respectively, for the three and nine months ended September 30, 2023. EBITDA and Adjusted EBITDA are non-GAAP financial measures. Definitions of these non-GAAP terms and a reconciliation to GAAP measures are provided below.
| 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, |
||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
||
| In thousands | ||||||||||||||||
| Net sales |
$ |
9,011 |
|
$ |
4,768 |
|
$ |
19,912 |
|
$ |
15,372 |
|
||||
| Cost of sales |
|
5,226 |
|
|
1,836 |
|
|
10,205 |
|
|
6,149 |
|
||||
| Gross profit |
|
3,785 |
|
|
2,932 |
|
|
9,707 |
|
|
9,223 |
|
||||
| Selling, general and administrative expenses |
|
3,647 |
|
|
3,194 |
|
|
10,015 |
|
|
10,228 |
|
||||
| Net income (loss) from operations |
|
138 |
|
|
(262 |
) |
|
(308 |
) |
|
(1,005 |
) |
||||
| Other expense: | ||||||||||||||||
| Loss on extinguishment of debt |
|
(3 |
) |
|
– |
|
|
(3 |
) |
|
– |
|
||||
| Interest expense |
|
(61 |
) |
|
(37 |
) |
|
(211 |
) |
|
(119 |
) |
||||
| Total other expense |
|
(64 |
) |
|
(37 |
) |
|
(214 |
) |
|
(119 |
) |
||||
| Net income (loss) |
|
74 |
|
|
(299 |
) |
|
(522 |
) |
|
(1,124 |
) |
||||
| Preferred stock: | ||||||||||||||||
| Series B convertible contractual dividends |
|
(86 |
) |
|
(86 |
) |
|
(257 |
) |
|
(257 |
) |
||||
| Net loss attributable to common stockholders |
$ |
(12 |
) |
$ |
(385 |
) |
$ |
(779 |
) |
$ |
(1,381 |
) |
||||
| Per share data: | ||||||||||||||||
| Net loss – basic and diluted |
$ |
0.00 |
|
$ |
(0.01 |
) |
$ |
(0.01 |
) |
$ |
(0.02 |
) |
||||
| Series B convertible contractual dividends |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
||||
| Net loss attributable to common stockholders – basic and diluted |
$ |
(0.00 |
) |
$ |
(0.01 |
) |
$ |
(0.01 |
) |
$ |
(0.02 |
) |
||||
| Weighted average common shares outstanding – basic and diluted |
|
55,251 |
|
|
54,462 |
|
|
55,056 |
|
|
54,307 |
|
||||
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 income or 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 income, net loss or to net cash provided by or 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 |
|
Nine Months Ended |
|||||||||||||
|
September 30, |
|
September 30, |
|||||||||||||
| (Unaudited) |
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
||
| In thousands | |||||||||||||||
| Net loss |
$ |
74 |
$ |
(299 |
) |
$ |
(522 |
) |
$ |
(1,124 |
) |
||||
| Interest expense |
|
61 |
|
37 |
|
|
211 |
|
|
119 |
|
||||
| Depreciation and amortization |
|
81 |
|
80 |
|
|
242 |
|
|
175 |
|
||||
| EBITDA (non-GAAP) |
|
216 |
|
(182 |
) |
|
(69 |
) |
|
(830 |
) |
||||
| Adjustments to EBITDA: | |||||||||||||||
| Stock-based compensation |
|
186 |
|
235 |
|
|
562 |
|
|
694 |
|
||||
| Loss on extinguishment of debt |
|
3 |
|
– |
|
|
3 |
|
|
– |
|
||||
| Adjusted EBITDA |
$ |
405 |
$ |
53 |
|
$ |
496 |
|
$ |
(136 |
) |
||||
About HealthWarehouse.com
HealthWarehouse.com, Inc. (OTCQB: HEWA), a technology company with a focus on healthcare e-commerce, sells and delivers prescription and over-the-counter medications to customers in all 50 states as an Approved Digital Pharmacy through the National Association of Boards of Pharmacy (“NABP”). HealthWarehouse.com provides a platform focused on increasing access and reducing costs of healthcare products for consumers and business partners nationwide. Based in Florence, Kentucky, the Company operates America’s Leading Online Pharmacy and is a pioneer in affordable healthcare. As one of the first National Association of Boards of Pharmacy Approved Digital Pharmacies, HealthWarehouse.com services the mission of providing affordable healthcare and incredible services to its American customers. Learn more at www.HealthWarehouse.com
Forward-Looking Statements
This announcement may 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 that 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, 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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