DANIA BEACH, Fla., Nov. 16, 2015
/PRNewswire/ -- Vapor Corp. (NASDAQ CM: VPCO, VPCOU) ("Vapor" or
the "Company"), a leading U.S.-based distributor and retailer of
vaporizers, e-liquids and e-cigarettes, today announced its
financial and operating results for the third quarter ended
September 30, 2015.
Third Quarter 2015 Financial Highlights
- Public Offering
On July 29,
2015, the Company closed a public offering for net proceeds
of $38.7 million.
- Gross Profit Increase
Gross profit grew $370,000 or 57% to $1,018,000 in the third quarter of 2015 compared
to $648,000 in the third quarter of
2014. Gross profit from retail stores grew to $640,000 in the third quarter of 2015. The
improved operating profit was attributable to the Company's
acquisition and opening retail store locations in 2015.
- Retail Store Revenue grew to $984,000 in Q3 2015
Retail store revenue
represented 34% of the Company's total revenues for the three
months ended September 30,
2015. Retail store revenue grew to $984,000 in the third quarter of 2015. This
increase was primarily due to the Company's retail vape store
expansion strategy. As the Company acquires more stores,
management expects retail sales to increase in the future.
- Net Loss Reduced by $393,000
or 8% in Q3 2015 vs Q3 2014
Net loss allocable to common
shareholders decreased by $393,000 or
8% to $4,443,000 for the third
quarter 2015 compared to a net loss of $4,836,000 for the third quarter 2014. Adjusted
EBITDA loss, a non-GAAP financial measure, declined to $2,224,800 for the third quarter 2015 compared to
an Adjusted EBITDA of $2,253,000 for
the third quarter 2014. This reduction was a result of a
benefit from operating more vape stores for the third quarter.
Operating loss increased $227,000, or
9%, to $2,878,000 for the third
quarter 2015 compared to a net loss of $2,651,000 for the third quarter 2014. The
increase was due to higher labor costs for the retail locations
acquired and opened in 2015, and the costs for closing retail
kiosks.
"We have delivered on our expansion strategy by opening and
acquiring 11 additional vape retail stores, further strengthening
our position in this vast growing industry. We currently
operate a total of 21 retail locations, with each new store
contributing to the growth of our revenue and putting us on the
path towards profitability. As we achieved a higher gross
profit during the quarter, we are continuing to invest and
build out our retail footprint," said Jeff
Holman, Chief Executive Officer of Vapor Corp.
Gina Hicks, Chief Financial
Officer of Vapor Corp, added, "With effective management of our
retail store expansion and cost control, the Company's gross profit
has grown during this quarter. Retail store sales represented 52%
of our total quarterly net sales, and with the addition of retail
stores we anticipate the retail sales will continue to grow".
Recent Business Highlights
- The opening and acquisition of 11 new stores across four states
is key to the Company's aggressive expansion efforts to develop a
national infrastructure throughout the country.
- Acquired Vulcan Vape in November
2015, an established three-store retail vape chain with
locations in Birmingham, AL.,
Atlanta, GA., and Nashville, TN. The Vulcan Vape stores opened
in Birmingham in May 2011, Atlanta in September
2013, and Nashville in
April 2013.
- Acquired three established retail stores located in
Atlanta, GA. in October 2015. The Atlanta stores opened in February 2014, April
2014 and September
2015.
- Acquired an established vape store located in Fort Myers, FL, in September 2015. We now operate seven retail
stores in southwest Florida.
- Acquired two established retail vape stores, located in
Gainesville, FL in September 2015.
- Opened two new retail stores in Orlando, FL in August
2015.
Non-GAAP Financial Measure
This press release includes both financial measures in
accordance with Generally Accepted Accounting Principles, or GAAP,
as well as a non-GAAP financial measure. Generally, a non-GAAP
financial measure is a numerical measure of a company's
performance, financial position or cash flows that either excludes
or includes amounts that are not normally included or excluded in
the most directly comparable measure calculated and presented in
accordance with GAAP. Non-GAAP financial measures should be viewed
as supplemental to, and should not be considered as alternatives to
net income (loss), operating income (loss), and cash flows from
operating activities, liquidity or any other financial measures.
They may not be indicative of the historical operating results of
Vapor nor are they intended to be predictive of potential future
results. Investors should not consider non-GAAP financial measures
in isolation or as substitutes for performance measures calculated
in accordance with GAAP.
Our management uses and relies on Adjusted EBITDA, a non-GAAP
financial measure, we define as net loss allocable to common
shareholders before interest expense, income taxes, depreciation
and amortization, stock-based compensation, non-cash change in fair
value of derivatives, non-recurring acquisition, offerings,
restructuring, or other expenses, loss on debt extinguishment, loss
on sale or abandonment of assets, and goodwill impairment, if any.
We believe that both management and shareholders benefit from
referring to the following non-GAAP financial measure in planning,
forecasting and analyzing future periods. Our management uses this
non-GAAP financial measure in evaluating its financial and
operational decision making and as a means to evaluate
period-to-period comparison. Our management recognizes that
the non-GAAP financial measure has inherent limitations because of
the excluded items described below.
We have included a reconciliation of our non-GAAP financial
measure to the most comparable financial measures calculated in
accordance with GAAP. We believe that providing the non-GAAP
financial measure, together with the reconciliation to GAAP, helps
investors make comparisons between Vapor and other companies. In
making any comparisons to other companies, investors need to be
aware that companies use different non-GAAP measures to evaluate
their financial performance. Investors should pay close attention
to the specific definition being used and to the reconciliation
between such measure and the corresponding GAAP measure provided by
each company under applicable SEC rules.
About Vapor Corp.
Vapor Corp., a NASDAQ company, is a U.S. based distributor and
retailer of vaporizers, e-liquids and electronic cigarettes. It
recently acquired the retail store chain "The Vape Store" as part
of a merger with Vaporin, Inc. The Company's innovative technology
enables users to inhale nicotine vapor without smoke, tar, ash or
carbon monoxide. Vapor Corp. has a streamlined supply chain,
marketing strategies and wide distribution capabilities to deliver
its products. The Company's brands include VaporX®, Krave®, Hookah
Stix® and Vaporin™ and are distributed to retail stores throughout
the U.S. and Canada. The Company
sells direct to consumer via e-commerce and Company-owned
brick-and-mortar retail locations operating under "The Vape Store"
brand.
Safe Harbor Statement
This press release includes forward-looking statements including
statements regarding future profitability, opening up to 20-30 new
vape stores and minimizing future product returns. The words
"believe," "may," "estimate," "continue," "anticipate," "intend,"
"should," "plan," "could," "target," "potential," "is likely,"
"will," "expect" and similar expressions, as they relate to us, are
intended to identify forward-looking statements. We have
based these forward-looking statements largely on our current
expectations and projections about future events and financial
trends that we believe may affect our financial condition, results
of operations, business strategy and financial needs. The
results anticipated by any or all of these forward-looking
statements might not occur. Important factors that could cause
actual results to differ from those in the forward-looking
statements include a shift in consumer preferences, contractual
difficulties which adversely affect Vapor's acquisition strategy
and future federal and/or state regulation regarding vaporizers and
tobacco alternatives. Further information on our risk factors is
contained in our filings with the SEC, including the Prospectus
dated July 23, 2015. We undertake no
obligation to publicly update or revise any forward-looking
statements, whether as the result of new information, future events
or otherwise.
|
|
|
|
For the Three Months
Ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015 to 2014
Change $
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
SALES:
|
|
|
|
|
|
Wholesale and online
sales, net
|
$ 1,894,822
|
|
$ 2,673,926
|
|
$
(779,104)
|
Retail sales,
net
|
984,323
|
|
-
|
|
984,323
|
Total
Sales
|
2,879,145
|
|
2,673,926
|
|
205,219
|
|
|
|
|
|
|
Cost of sales
wholesale and online
|
1,517,327
|
|
2,026,422
|
|
(509,095)
|
Cost of sales
retail
|
343,528
|
|
-
|
|
343,528
|
GROSS
PROFIT
|
1,018,290
|
|
647,504
|
|
370,786
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
Advertising
|
101,088
|
|
671,817
|
|
(570,729)
|
Selling, general and
administrative
|
3,364,475
|
|
2,626,638
|
|
737,837
|
Retail kiosk closing
cost
|
430,334
|
|
-
|
|
430,334
|
Total operating
expenses
|
3,895,897
|
|
3,298,455
|
|
597,442
|
Operating
loss
|
(2,877,607)
|
|
(2,650,951)
|
|
(226,656)
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES):
|
|
|
|
|
|
Costs associated with
underwritten offering
|
(5,279,003)
|
|
-
|
|
(5,279,003)
|
Amortization of debt
discounts
|
(67,797)
|
|
-
|
|
(67,797)
|
Amortization of
deferred financing costs
|
(32,857)
|
|
-
|
|
(32,857)
|
Loss on debt
extinguishment
|
(1,544,044)
|
|
-
|
|
(1,544,044)
|
Non-cash change in
fair value of derivatives
|
45,209,758
|
|
-
|
|
45,209,758
|
Stock-based expense
in connection with waiver agreements
|
(1,757,420)
|
|
-
|
|
(1,757,420)
|
Interest
income
|
7,183
|
|
-
|
|
7,183
|
Interest
expense
|
(23,244)
|
|
(8,107)
|
|
(15,137)
|
Interest
expense-related party
|
(10,212)
|
|
-
|
|
(10,212)
|
Total other income
(expense)
|
36,502,364
|
|
(8,107)
|
|
36,510,471
|
|
|
|
|
|
|
Income (loss)
before for income tax benefit
|
33,624,757
|
|
(2,659,058)
|
|
36,283,815
|
Income tax
benefit (expense)
|
-
|
|
(2,177,057)
|
|
2,177,057
|
NET INCOME
(LOSS)
|
33,624,757
|
|
(4,836,115)
|
|
38,460,872
|
|
|
|
|
|
|
Deemed
dividend
|
(38,068,021)
|
|
-
|
|
(38,068,021)
|
NET LOSS ALLOCABLE
TO COMMON SHAREHOLDERS
|
$ (4,443,264)
|
|
$ (4,836,115)
|
|
$
392,851
|
|
|
|
For the Three Months
Ended
September 30,
|
|
2015
|
|
2014
|
|
(Unaudited)
|
|
(Unaudited)
|
Reconciliation of
Adjusted EBITDA to net loss allocable to common
stockholders:
|
|
|
|
NET LOSS ALLOCABLE TO
COMMON SHAREHOLDERS
|
$ (4,443,264)
|
|
$ (4,836,115)
|
Interest
|
33,456
|
|
8,107
|
Income tax benefit
(expense)
|
-
|
|
2,177,057
|
Depreciation and
Amortization
|
139,971
|
|
6,937
|
Costs associated with
underwritten offering
|
5,279,003
|
|
-
|
Deemed
dividend
|
38,068,021
|
|
-
|
Non-cash change in
fair value of derivatives
|
(45,209,758)
|
|
-
|
Stock-based expense
in connection with waiver agreements
|
1,757,420
|
|
-
|
Loss on debt
extinguishment
|
1,544,044
|
|
-
|
Amortization of debt
discounts and deferred financing costs
|
100,654
|
|
-
|
Stock-based
compensation expense
|
75,313
|
|
391,236
|
Retail kiosk closing
costs
|
430,334
|
|
-
|
Adjusted
EBITDA
|
$ (2,224,806)
|
|
$ (2,252,778)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/vapor-corp-reports-third-quarter-2015-results-300179584.html
SOURCE Vapor Corp.