Her Imports Reports Record Revenue and Net Income for the 2017 First Quarter

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		$	-			$	-