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
 
$

 
 
$

 
 
 
 
 
 
 
 
 
 
Copyright © 2017 Marketwired. All Rights ReservedThe above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.

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