12% increase in revenues, and positive cash flow for sixth consecutive year
HealthWarehouse.com, Inc. (OTCQB:HEWA) announced today that its net sales for the year ended December 31, 2022, totaled $18,142,633, a 12% increase over the year ended December 31, 2021, resulting from strong growth in partner services revenue. The Company reported a net loss of $952,029 for the year, but positive cash flow for the sixth consecutive year, as reflected by its internal non-GAAP measure of Adjusted EBITDA as defined below, which was $146,787 in 2022.
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 and reducing costs of healthcare products for consumers and business partners nationwide.
Joseph Peters, President and CEO, commented, “We are happy to report revenue growth and positive cash flow for 2022 amid significant changes in our industry. New companies entered our market, while others bowed out or refocused. HealthWarehouse.com remains a leader in the industry because we provide essential products and world-class service to our own customers and those of our healthcare partners. We could not have accomplished this without the dedication and caring nature of our employees.”
Relative to the industry, Peters added “With the tightening of the capital markets, 2022 proved to be a tough year for business models that resulted in significant cash burn rates and the never-ending reliance on fundraising. In contrast, we continued to invest in our technology and capabilities while generating positive cash flow. In addition, we remain vigilant on compliance with the national and state pharmacy laws and regulations, which is in the vital interest of our national patient base.”
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.
“In 2023, we will feature the launch of our proprietary e-commerce platform and new pharmacy technology, expanded healthcare partner offerings, new application programming interfaces to customize our platform, and more resources to grow and support our partner services business, all in an effort to support our continued growth. Our goal is to extend our position as a technological leader in the industry, providing transparent and affordable healthcare solutions while maintaining world-class service levels,” added Peters.
2022 Annual Overview
Net Sales: Net sales increased from $16,143,906 for the year ended December 31, 2021, to $18,142,633 for the year ended December 31, 2022, an increase of $1,998,727, or 12.4%. Direct-to-consumer sales were $13,160,691, lower by $473,152, or 3.5%, versus the prior year. B-2-C prescription sales were $9,838,538, down $1,387,322, or 12.4%. B-2-C over-the-counter net sales increased by $900,614, or 42.5%, to $3,018,453. Partner Services revenue of $4,933,822 nearly doubled versus $2,504,106 in 2021.
Gross Profit: Gross profit for the year ended December 31, 2022, was $11,941,351, an $808,259 or 7.3% increase compared with 2021, due to the increase in sales volume, which was offset by lower gross margins. Gross margin percentage decreased year-over-year from 68.9% in 2021 to 65.8% in 2022, primarily due to (i) a higher percentage of overall sales coming from our lower-margin partner services business versus our direct-to-consumer business, and (ii) lower year-over-year margins on the B-2-C over-the-counter business, including a $177,814 write down of inventory to market value.
Operating Expenses: Selling, general and administrative expenses were $12,725,433 in 2022 compared with $11,492,710 for 2021, an increase of $1,232,723, or 10.7%. Expense increases included shipping and shipping supplies, salaries, and related stock-based compensation expenses.
Net Income and Adjusted EBITDA: The Company reported a net loss of $952,029 in 2022 compared to a net loss of $572,502 in 2021. In 2022, Adjusted EBITDA was $146,787, versus $459,208 for 2021.
2022 Fourth Quarter Overview
Net Sales: Total net sales were $4,946,520 for the fourth quarter ended December 31, 2022, an increase of $787,918, or 19%, compared with $4,158,602 in the fourth quarter of 2021. Direct-to-consumer sales were $3,377,179 for the fourth quarter, an increase of $17,956 or 0.5%. Sales of B-2-C over-the-counter products rose 92.9% to $926,128, but that increase was offset by a decrease in B-2-C prescription sales of 15.3% to $2,373,950. Fourth-quarter revenues in 2022 from partner services nearly doubled to $1,568,383, from $796,807 in 2021.
Gross Profit: Gross profit for the fourth quarter of 2022 was $3,034,919, a $158,673 or 5.5% increase compared with the fourth quarter of 2021. Higher revenues offset the effect of lower gross margins from partner services. Gross margin was 61.4% in the fourth quarter of 2022 versus 69.2% in the same period in 2021. The decrease was due to lower margins on B-2-C prescription sales due to higher branded product sales, and over-the-counter sales, including the effect of a write down of inventory to market value.
Operating Expenses: Operating expenses were $3,211,387 for the fourth quarter of 2022, an increase of $338,835, or 11.8%, compared with the same quarter in 2021. The increases in 2022 were related to increases in shipping and shipping supplies, pharmacy salaries, benefits, and stock-based compensation expenses.
Net Income and (non-GAAP) Adjusted EBITDA: The Company reported a net loss of $218,904 for the fourth quarter of 2022, compared with a net loss of $78,636 during the same period in 2021.
For the fourth quarter, earnings before interest, taxes, depreciation and amortization (“EBITDA”), as adjusted for stock-based compensation and certain non-recurring charges (“Adjusted EBITDA”), was $55,897 in 2022 compared with $157,660 in 2021. 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 |
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CONSOLIDATED STATEMENTS OF OPERATIONS (Audited) |
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For the Three Months |
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For the Twelve Months |
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Ended |
Ended |
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December 31, |
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December 31, |
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2022 |
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2021 |
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2022 |
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2021 |
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| Net sales | $ |
4,946,520 |
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$ |
4,158,602 |
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$ |
18,142,633 |
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$ |
16,143,906 |
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| Cost of sales |
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1,911,601 |
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1,282,356 |
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6,201,282 |
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5,010,814 |
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| Gross profit |
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3,034,919 |
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2,876,246 |
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11,941,351 |
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11,133,092 |
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| Selling, general and administrative expenses |
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3,211,387 |
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2,872,552 |
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12,725,433 |
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11,492,710 |
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| Net income (loss) from operations |
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(176,468 |
) |
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3,694 |
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(784,082 |
) |
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(359,618 |
) |
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| Interest expense |
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(38,604 |
) |
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(43,832 |
) |
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(164,115 |
) |
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(174,386 |
) |
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| Loss before taxes |
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(215,072 |
) |
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(40,138 |
) |
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(948,197 |
) |
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(534,004 |
) |
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| Income tax expense |
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(3,832 |
) |
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(38,498 |
) |
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(3,832 |
) |
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(38,498 |
) |
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| Net loss |
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(218,904 |
) |
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(78,636 |
) |
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(952,029 |
) |
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(572,502 |
) |
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| Preferred stock: | ||||||||||||||||||||
Series B convertible contractual dividends |
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(85,558 |
) |
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(85,558 |
) |
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(342,233 |
) |
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(342,233 |
) |
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| Net loss attributable to common stockholders | $ |
(304,462 |
) |
$ |
(164,194 |
) |
$ |
(1,294,262 |
) |
$ |
(914,735 |
) |
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| Per share data: | ||||||||||||||||||||
| Net loss - basic and diluted | $ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.01 |
) |
$ |
(0.01 |
) |
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| Series B convertible contractual dividends | $ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.01 |
) |
$ |
(0.01 |
) |
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| Net income (loss) attributable to common stockholders - basic and diluted | $ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.02 |
) |
$ |
(0.02 |
) |
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| Weighted average common shares outstanding - basic and diluted |
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54,040,291 |
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52,012,533 |
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53,207,093 |
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51,817,243 |
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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 Loss (GAAP) to Adjusted EBITDA (Non-GAAP) |
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Three Months Ended |
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Twelve Months Ended |
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December 31, |
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December 31, |
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2022 |
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2021 |
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2022 |
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2021 |
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| Net income (loss) | $ |
(218,904 |
) |
$ |
(78,636 |
) |
$ |
(952,029 |
) |
$ |
(572,502 |
) |
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| Interest expense |
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38,604 |
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43,832 |
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164,115 |
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174,386 |
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| Depreciation and amortization |
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38,065 |
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32,806 |
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138,624 |
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133,576 |
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| EBITDA (non-GAAP) |
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(142,235 |
) |
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(1,998 |
) |
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(649,290 |
) |
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(264,540 |
) |
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| Adjustments to EBITDA: | ||||||||||||||||
| Stock-based compensation |
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198,132 |
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180,289 |
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796,077 |
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744,379 |
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| Gain on extinguishment of accounts payable |
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- |
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(20,631 |
) |
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- |
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(20,631 |
) |
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| Adjusted EBITDA | $ |
55,897 |
|
$ |
157,660 |
|
$ |
146,787 |
|
$ |
459,208 |
|
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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 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 patient services to help Americans. Learn more at 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, 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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Contacts
Dan Seliga, Chief Financial Officer, (800) 748-7001
