DANIA BEACH, Fla., Feb. 26, 2014
/PRNewswire/ -- Vapor Corp. (OTCQB:VPCO; "Vapor", the
"Company"), a leading U.S. based electronic cigarette company whose
brands include Krave®, Fifty-One®, VaporX®, Alternacig®, EZ
Smoker®, Green Puffer®, Americig®, Fumare™, Hookah Stix® and Smoke
Star®, today announced its financial and operating results for the
fourth quarter and year ended December 31,
2013.
2013 Operational and Financial Highlights:
- Achieved record revenues for the fourth quarter and year ended
December 31, 2013:
- Total revenues for the fourth quarter of 2013 grew 56% to
$7 million
- Total revenues for the full year 2013 grew 22% to $26 million;
- Family Dollar stores across the U.S. started selling KRAVE®
KING brand of disposable e-cigarette products;
- Vapor's products are now in more than 60,000 retail outlets in
the U.S. and Canada;
- Completed a $10 million private
placement of common stock that is being used to fund the Company's
growth initiatives; and
- Effected a 1-for-5 reverse stock split of the Company's common
stock to satisfy the minimum bid price requirement in order to seek
listing of the common stock on The NASDAQ Capital
Market.
Jeffrey Holman, President of
Vapor Corp., commented, "We significantly expanded our retail
footprint and marketing activities over the past year, as we
continued to experience increased customer demand across the U.S.
and Canada for our portfolio of
e-cigarettes and vaporizers. This is mostly being driven by a
rapidly growing number of users of tobacco-burning cigarettes who
view e-cigarettes and vaping as a bona fide alternative to
combustible cigarettes.
"In December 2013, we increased
our presence in the retail market by adding 6,600 Family Dollar
stores nationwide that will carry our flagship brand of disposable
e-cigarettes, KRAVE® KING. The growing presence of our products in
large retailers and national chains is helping us establish our
brands and build a loyal customer base.
"Looking ahead, we plan to expand our retail footprint and
increase our marketing efforts. In order to help fund these
activities, we raised $10 million in
October 2013," concluded Mr.
Holman.
Financial and Operating Results for the fourth quarter ended
December 31, 2013
Net sales grew 56% to approximately $7.0
million in the fourth quarter of 2013, as compared with
approximately $4.5 million during the
same quarter last year.
Cost of goods sold increased 96% to approximately $5.0 million as compared with approximately
$2.5 million for the same quarter in
the previous year, primarily resulting from increased sales
volume.
Gross margins decreased to 30% as compared with 44% for the same
period in 2012 as a result of increased private label sales, which
have lower gross margins.
Selling, general and administrative expenses for the quarter
ended December 31, 2013 decreased by
approximately 10% from the same quarter in the prior year primarily
due to a decrease in professional and consulting fees.
Advertising expenses decreased approximately 84% to $111,316 for the quarter ended December 31, 2013, compared with $705,613 during the same quarter in
2012.
Operating income was $345,352,
compared with an operating loss of ($510,892) for the same quarter in the prior
year.
Interest expense for the quarters ended December 31, 2013 and 2012 was $132,705 and $46,275 respectively. The increase was
attributable to the interest and amortization of debt discount on
the senior convertible notes and the senior note issued during
2012, the senior convertible note issued in January 2013, the $425,000 senior convertible notes issued in
July 2013, and the $750,000 term loan entered into in August 2013.
The Company incurred a non-cash induced conversion expense of
$299,577 for the quarter ended
December 31, 2013 related to the
conversion of senior convertible notes into common stock in
conjunction with completing the private placement.
Income tax expense (benefit) for the quarters ended December 31, 2013 and 2012 was ($538,561) and $168,344, respectively.
Net income for the quarter ended December
31, 2013 was $451,631 compared
with a net loss of ($725,511) for the
quarter ended December 31, 2012, as a
result of the items discussed above.
Financial and Operating Results for the Year ended
December 31, 2013
Net sales grew 22% to approximately $26.0
million for the year ended December
31, 2013 as compared with approximately $21.4 million for the prior year. This increase
was mainly attributable to our ability to more efficiently meet
consumer demand for our products with optimized inventory and
enhanced distribution efforts.
Cost of goods sold increased 23% to approximately $16.3 million as compared with approximately
$13.2 million for the year ended
December 31, 2012, primarily due to
the increase in sales volume and product mix.
Gross margins decreased slightly to 37.2% compared with 38.1%
for the prior year due to a change in the product mix.
Selling, general and administrative expenses for the year ended
December 31, 2013 decreased by 6% to
approximately $6.5 million from
approximately $6.9 million for the
prior year, primarily due to a decrease in professional and
consulting fees and merchant service and bank fees; net of
increases in compensation and insurance expenses, among
others.
Advertising expenses decreased 36% to approximately $2.3 million for the year ended December 31, 2013, compared with approximately
$3.6 million for the prior year.
Operating income was approximately $960,000 compared with an operating loss of
approximately $2.3 million for the
prior year.
Interest expenses for the years ended December 31, 2013 and 2012 was $383,981 and $89,347 respectively. The increase was
attributable to the interest and amortization of debt discount on
the senior convertible notes and the senior note issued during
2012, the senior convertible note issued in January 2013, the $425,000 senior convertible notes issued in
July 2013, and the $750,000 term loan and the factoring facility
entered into in August 2013.
The Company incurred a non-cash induced conversion expense of
$299,577 for the year ended
December 31, 2013 related to the
conversion of senior convertible notes into common stock in
conjunction with completing the private placement.
Income tax benefit for the years ended December 31, 2013 and 2012 was $524,791 and $465,941, respectively.
Net income for the year ended December
31, 2013 increased by approximately $2.7 million to $801,352, compared with a net loss of
$1,920,972, as a result of the items
discussed above.
Conference Call Information
The Company's management
team will host a conference call tomorrow, Thursday, February 27, 2014 at 10:30 A.M. Eastern Time to discuss the Company's
historical financial and operating performance during the fourth
quarter and the year ended December 31,
2013. To listen to the call, please dial (888) 438-5519 (US
Toll Free) or (719) 325-2402 (International) and enter the pin
number 3032957 at least five minutes before the scheduled start
time. Investors and other interested parties can also access the
call in a "listen only" mode via webcast at the Company's website,
www.vapor-corp.com. Please allow extra time prior to the call to
visit the site and download any necessary audio software.
A digital replay of the conference call will be available
through March 13, 2014 at (877)
870-5176 (US Toll Free) or (858) 384-5517 (International), pin
number 3032957. The replay also will be available at the Company's
website for a limited time.
About Vapor Corp.
Vapor Corp., a publicly traded
company, is a leading U.S. based electronic cigarette company,
whose brands include Fifty-One®, Krave®, VaporX®, EZ Smoker®,
Alternacig®, Green Puffer®, Americig®, Fumare™, Hookah Stix® and
Smoke Star®. We also design and develop private label brands for
some of our distribution customers. "Electronic cigarettes" or
"e-cigarettes," are battery-powered products that enable users to
inhale nicotine vapor without smoke, tar, ash or carbon monoxide.
Vapor's electronic cigarettes and accessories are available online,
through direct response to our television advertisements and
through retail locations throughout the
United States. For more information on Vapor Corp. and its
e-cigarette brands, please visit us at www.vapor-corp.com.
Safe Harbor Statement
This press release contains
certain forward-looking statements that are made pursuant to the
"Safe Harbor" provisions of the Private Securities Litigation
Reform Act of 1995, as amended. Words such as "expects,"
"anticipates," "plans," "believes," "scheduled," "estimates" and
variations of these words and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements concern Vapor's operations, economic performance and
financial condition and are based largely on Vapor's beliefs and
expectations. These statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of Vapor to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Certain of these
factors and risks, as well as other risks and uncertainties are
stated in Vapor's Annual Report on Form 10-K for the fiscal year
ended December 31, 2013 and in
Vapor's subsequent filings with the U.S. Securities and Exchange
Commission. These forward-looking statements are made as of the
date of this press release, and Vapor assumes no obligation to
update the forward-looking statements or to update the reasons why
actual results could differ from those projected in the
forward-looking statements.
Contacts:
Media:
Alison Crisci
KCSA Strategic Communications
acrisci@kcsa.com / (212)-896-1252
IR: Jeffrey Goldberger /
Garth Russell
KCSA Strategic Communications
jgoldberger@kcsa.com / grussell@kcsa.com
(212)-896-1249 / (212)896-1250
VAPOR
CORP.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
FOR THE YEARS
ENDED
DECEMBER
31,
|
FOR THE THREE
MONTHS ENDED
DECEMBER
31,
|
|
2013
|
2012
|
2013
|
2012
|
SALES
NET
|
$
25,990,228
|
$
21,352,691
|
$
7,032,032
|
$
4,508,594
|
Cost of goods
sold
|
16,300,333
|
13,225,008
|
4,953,637
|
2,521,402
|
|
|
|
|
|
Gross
Profit
|
9,689,895
|
8,127,683
|
2,078,395
|
1,987,192
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
Selling, general and
administrative
|
6,464,969
|
6,865,633
|
1,621,727
|
1,792,471
|
Advertising
|
2,264,807
|
3,559,616
|
111,316
|
705,613
|
|
|
|
|
|
Total operating
expenses
|
8,729,776
|
10,425,249
|
1,733,043
|
2,498,084
|
|
|
|
|
|
Operating income
(loss)
|
960,119
|
(2,297,566)
|
345,352
|
(510,892)
|
|
|
|
|
|
Other
expense:
|
|
|
|
|
Induced conversion
expense
|
299,577
|
-
|
299,577
|
-
|
Interest
expense
|
383,981
|
89,347
|
132,705
|
46,275
|
|
|
|
|
|
Total other
expenses
|
683,558
|
89,347
|
432,282
|
46,275
|
|
|
|
|
|
INCOME (LOSS)
BEFORE INCOME
TAX EXPENSE
(BENEFIT)
|
276,561
|
(2,386,913)
|
(86,930)
|
(557,167)
|
Income tax expense
(benefit)
|
(524,791)
|
(465,941)
|
(538,561)
|
168,344
|
|
|
|
|
|
NET INCOME
(LOSS)
|
$
801,352
|
$
(1,920,972)
|
$
451,631
|
$
(725,511)
|
|
|
|
|
|
BASIC EARNINGS (LOSS)
PER
COMMON
SHARE
|
$
0.06
|
$
(0.16)
|
$
0.03
|
$
(0.06)
|
|
|
|
|
|
DILUTED EARNINGS
(LOSS) PER
COMMON
SHARE
|
$
0.06
|
$
(0.16)
|
$
0.03
|
$
(0.06)
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF
COMMON
SHARES
OUTSTANDING –
BASIC
|
12,818,487
|
12,037,597
|
15,081,780
|
12,037,597
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF
COMMON
SHARES
OUTSTANDING –
DILUTED
|
13,186,365
|
12,037,597
|
15,573,903
|
12,037,597
|
|
|
|
|
|
VAPOR
CORP.
CONSOLIDATED
BALANCE SHEETS
|
|
|
DECEMBER 31,
|
|
2013
|
2012
|
ASSETS
|
|
CURRENT
ASSETS:
|
|
Cash
|
$
6,570,215
|
$
176,409
|
Due from merchant
credit card processors, net of reserve for charge-backs of $2,500
and $15,000, respectively
|
205,974
|
1,031,476
|
Accounts receivable,
net of allowance of $256,833 and $61,000,
respectively
|
1,802,781
|
748,580
|
Inventories
|
3,321,898
|
1,670,007
|
Prepaid expenses and
vendor deposits
|
1,201,040
|
465,860
|
Income tax
receivable
|
-
|
47,815
|
Deferred tax asset,
net
|
766,498
|
222,130
|
|
|
|
TOTAL CURRENT
ASSETS
|
13,868,406
|
4,362,277
|
Property and
equipment, net of accumulated depreciation of $27,879 and $16,595,
respectively
|
28,685
|
25,190
|
Other
assets
|
65,284
|
12,000
|
|
|
|
TOTAL
ASSETS
|
$
13,962,375
|
$
4,399,467
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIENCY)
|
|
|
CURRENT
LIABILITIES:
|
|
|
Accounts
payable
|
$
1,123,508
|
$
3,208,595
|
Accrued
expenses
|
420,363
|
350,151
|
Term loan
|
478,847
|
-
|
Customer
deposits
|
182,266
|
477,695
|
Income taxes
payable
|
5,807
|
-
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
2,210,791
|
4,036,441
|
|
|
|
LONG-TERM
DEBT:
|
|
|
Senior convertible
notes payable to related parties, net of debt discount of $0 and
$3,530, respectively
|
-
|
346,470
|
Senior note payable
to stockholder
|
-
|
500,000
|
|
|
|
TOTAL LONG-TERM
DEBT
|
-
|
846,470
|
|
|
|
TOTAL
LIABILITIES
|
2,210,791
|
4,882,911
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
STOCKHOLDERS'
EQUITY (DEFICIENCY):
|
|
|
Preferred stock,
$.001 par value, $1,000,000 shares authorized, none
issued
|
|
|
Common stock, $.001
par value, 50,000,000 shares authorized 16,214,528 and 12,038,163
shares issued and outstanding,
respectively
|
16,214
|
12,038
|
Additional paid-in
capital
|
13,115,024
|
1,685,524
|
Accumulated
deficit
|
(1,379,654)
|
(2,181,006
)
|
|
|
|
TOTAL
STOCKHOLDERS' EQUITY (DEFICIENCY)
|
11,751,584
|
(483,444
)
|
|
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
$
13,962,375
|
$
4,399,467
|
|
|
|
SOURCE Vapor Corp.