Her Imports Reports Full Year 2016 Results

LAS VEGAS, NV--(Marketwired - Apr 18, 2017) - Her Imports (OTCQB: HHER), a leading retailer of human hair extensions and related beauty products, today reported its financial results for the full year ended December 31, 2016. Revenue for the full year totaled $13.6 million with gross profit margins of 43%.

Barry Hall, Chief Executive Officer of Her Imports, stated, "In 2016, our focus was on growth via retail, low cost, 'pop-up' locations throughout the United States. We ended the year with 30 locations generating $13.6 million revenue. At our retail locations, our customers receive an intimate one-on-one consultation from our experienced professional staff. After our consumer experiences and purchases our high quality hair and beauty products in person, it is quite common to reorder through our e-commerce platform. Online sales accounted for approximately 25% of revenue during 2016. Since the end of the year, we have opened 5 additional retail locations as well as three kiosks in malls, initially testing each market with minimal risk and increasing the marketing and overhead investment based on the data we collect from consumer demand. By the end of 2019, we anticipate operating 100 retail locations throughout the United States."

2016 to Date Business Highlights:

• Ended the 2016 year with 30 retail locations and has since opened an additional six locations throughout the United States and closed one location
• 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
• Announced the strategic hire of renowned celebrity hair stylist Tippi Shorter as Vice President, Product Development & Marketing
• Successfully completed reverse stock split, company name and new ticker symbol change to further enhance and more appropriately reflect the corporate brand
  
  

Financial Highlights for the Full Year 2016:

• Revenue totaled $13.6 million for the full year 2016, as compared to $13.3 million, an increase of 2%, for the full year 2015. The year-over-year increase in store revenue was partially off-set by a greater decrease in online sales due to the discontinuation of financing sales due to customer.
• Gross margin was 43% for the full year 2016, as compared with 50% for the full year 2015. The decrease in gross margin year-over-year reflects the shift to retail sales vs. sales online as a percentage of total sales.
• Net loss was $1.8 million, or (0.11) per share, for the full year of 2016, compared with net income of $1.9 million, or 0.13 per share, for the full year 2015. In 2015, the Company received a one-time gain on the sale of subsidiaries in the amount of approximately $1.4 million.
• The Company was cash flow positive from operations in 2016. In 2015, the Company generated $948,258 in cash flow from operations however, accounting for the one time gain of approximately $1.4 million, the Company had a cash flow from operations deficit in 2015.
  
  

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.

Consolidated Statements of Operations
			For the Years Ended
			December 31,
			2016				2015
Product sales			$	13,574,402			$	13,287,173
Cost of product sold				7,806,590				6,706,425
Gross profit				5,767,812				6,580,748
Operating expenses
	Royalties			1,202,727				1,259,990
	Selling expense			4,374,774				3,767,959
	General and administrative expense			887,516				632,305
Total operating expenses				6,465,017				5,660,254
Income (loss) from operations				(697,205	)			920,494
Other income (expense)
	Gain on sale of subsidiaries			-				1,415,444
	Loss on termination of agreement			(1,339,514	)			-
	Gain on debt settlement			-				11,405
	Forgiveness of penalty			-				60,000
	Interest income			165				-
	Interest expense			(1,706	)			(17,549	)
Total other income (expense)				(1,341,055	)			1,469,300
Income (loss) from continuing operations before benefit (provision) for income taxes				(2,038,260	)			2,389,794
	Benefit (provision) for income taxes			208,668				(345,376	)
Income (loss) from continuing operations after provision for income taxes				(1,829,592	)			2,044,418
Loss from discontinued operations				-				(96,604	)
Net income (loss)			$	(1,829,592	)		$	1,947,814
Basic income (loss) per share
	Continuing operations		$	(0.11	)		$	0.14
	Discontinued operations		$	-			$	(0.01	)
	Net basic earnings (loss) per share		$	(0.11	)		$	0.13
Diluted income (loss) per share
	Continuing operations		$	(0.11	)		$	0.14
	Discontinued operations		$	0.00			$	0.00
	Net diluted earnings (loss) per share		$	(0.11	)		$	0.13
Weighted average number of common shares outstanding - basic				17,231,345				15,083,007
Weighted average number of common shares outstanding - fully diluted				17,231,345				15,083,007

Consolidated Balance Sheets
			December 31, 2016				December 31, 2015
ASSETS
Current assets
	Cash		$	355,568			$	449,675
	Receivables			45,576				64,940
	Related party receivables			26,612				88,577
	Inventories			2,047,453				1,767,832
	Prepaid maintenance fees - current			75,000				31,250
	Other prepaid expenses			46,411				52,234
	Deposits			32,950				17,780
Total current assets				2,629,570				2,472,288
	Furniture, equipment and software, net			256,525				307,156
	Prepaid maintenance fees - non current			284,375				-
	Intangible asset, net			-				1,879,111
	Trademark			8,200,000				-
Total assets			$	11,370,470			$	4,658,555
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable and accrued liabilities		$	728,425			$	483,155
	Income tax liability			127,651				345,376
	Notes payable			43,805				21,903
Total current liabilities				899,881				850,434
Total liabilities				899,881				850,434
Stockholders' equity
	Callable $0.072 per share per year non-cumulative dividend, liquidation preference of $1 per share, preferred stock, $0.001 par value, 10,000,000 shares authorized and outstanding and 5,000,000 shares authorized and no shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively			10,000				-
	Common stock, $0.001 par value, 65,000,000 shares authorized and 24,899,788 shares issued and outstanding and 70,000,000 shares authorized and 16,299,788 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively			24,900				16,300
	Additional paid-in capital			26,625,497				18,152,037
	Accumulated deficit			(16,189,808	)			(14,360,216	)
Total stockholders' equity				10,470,589				3,808,121
Total liabilities and stockholders' equity			$	11,370,470			$	4,658,555

Consolidated Statements of Cash Flows
				For the Years Ended
				December 31,
				2016				2015
OPERATING ACTIVITIES
	Net income (loss) from continuing operations			$	(1,829,592	)		$	2,044,418
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			1,047,403				400,066
		Write off of intangible assets			1,339,514				-
		Non-cash gain on debt settlement			-				(11,405	)
		Forgiveness of penalty			-				(60,000	)
		Gain on sale of subsidiaries			-				(1,415,444	)
	Changes in operating assets and liabilities:
		Receivables			19,364				(61,353	)
		Related party receivables			(300,483	)			203,445
		Inventories			(279,622	)			(929,369	)
		Prepaid maintenance fees			-				75,000
		Other prepaid expenses			5,823				(52,234	)
		Deposits			(15,170	)			28,599
		Accounts payable and accrued liabilities			245,271				381,159
		Income tax liability			(217,725	)			345,376
Net cash provided by operating activities					14,783				948,258
INVESTING ACTIVITIES
		Purchase of fixed assets			(47,852	)			(77,168	)
		Purchase of common stock from stockholder			(25,000	)			-
Net cash used by investing activities					(72,852	)			(77,168	)
FINANCING ACTIVITIES
		Repayment on related party secured promissory note			-				(700,000	)
		Repayment on notes payable			(36,038	)			(7,067	)
Net cash used in by financing activities					(36,038	)			(707,067	)
CASH FLOWS PROVIDED BY DISCONTINUED OPERATIONS
		Net cash provided by operating activities			-				4,748
Net cash provided by discontinued operations					-				4,748
NET CHANGE IN CASH					(94,107	)			168,771
CASH AND CASH EQUIVALENTS -
	BEGINNING OF PERIOD				449,675				280,904
	END OF PERIOD			$	355,568			$	449,675
SUPPLEMENTAL DISCLOSURES:
	Interest paid			$	603			$	13,550
	Income taxes paid			$	-			$	-
Non-cash investing and financing activities
	Shares acquired from sale of subsidiaries			$	-			$	(422,500	)
	Shares issued of future royalty reduction			$	-			$	2,200,000
	Shares issued for trademark				8,200,000				-
	Purchase of software maintenance agreement with common stock			$	375,000			$	-
	Issuance of note payable for buy back of stock from stockholder			$	57,940			$	-