Vapor Corp. Reports Second Quarter 2015 Results

Source from:  PR Newswire 08/18/2015

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 second quarter ended June 30, 2015.

Second Quarter 2015 Financial Highlights

Net Sales More Than Double Q2 2015 vs Q1 2015

Net sales for the second quarter of 2015 were $3.0 million compared to $1.5 million in the first quarter of 2015, an increase of 105%. This increase was primarily due to the Company's retail Vape Stores expansion strategy and increased wholesale sales.

Gross Margins Increase

Gross margins for the second quarter of 2015 increased to 45.2% from 25.3% the same quarter one year ago and from (-12.4)% from the first quarter of 2015. This increase was primarily related to product returns and discounts that were recognized in the previous quarters, as well as improved operating margins from the Company's retail operations. The Company has struck new wholesale agreements with many of its retail customers to minimize the impact of future product returns and discount programs.

Adjusted EBITDA Loss Reduced 46% in Q2 2015 vs Q1 2015

Adjusted EBITDA, a non-GAAP financial measure, was ($1.5) million in the second quarter of 2015 compared to ($2.8) million in the first quarter of 2015. This significant reduction was a result of the Company's two-pronged strategy to shift its wholesale business to concentrate on smaller retail chains (generally 150 stores and less), while seeing the benefit from operating more of its vape stores for a full quarter.

"In the second quarter of 2015, we drove sequential quarterly revenue growth of 105% through our revised wholesale strategy and the strong performance of our 'The Vape Store' retail locations," said Jeff Holman, CEO of Vapor Corp. "The recent completion of our $41.4 million capital raise offers us the ability to significantly expand our direct-to-consumer model, 'The Vape Store,' by opening new locations and acquiring existing vaporizer retailers, which will be transitioned over to our brand. We currently have 11 'The Vape Store' locations, with a goal of increasing the number of company-owned retail stores by 20 to 30 locations before the end of the calendar year."

Greg Brauser, President of Vapor Corp., stated, "Vapor Corp.'s competitive differentiator is rooted in our buying power and fast-growing network of retail locations. As we continue to acquire stores and expand our brand, our economies of scale and purchasing power will increasingly improve, further enhancing our ability to offer the industry's highest quality e-liquids and vaporizers to customers at reduced prices. These strengths elevate our competitiveness in the approximately $3.5 billion vaporizer market and favorably position us to achieve our long-term goal of being the leading national vaporizer retailer." Enditem