POMPANO BEACH, Fla., May 20, 2015 (GLOBE NEWSWIRE) -- DS Healthcare Group, Inc. (Nasdaq:DSKX), "DS Healthcare" or "the Company", a leading developer of personal care products has released financial results for the first quarter 2015.
Q1 2015 Highlights:
- Net revenues were $ 2,803,920 up 4.4% over Q1 2014
- Gross margins increase to 59.4% from 55.2% in Q1 2014
- Gross profits increase to $1,665,160 up 12% over Q1 2014
- Company reports net loss of $(85,138) compared to a loss of $(850,153) in Q1 2014
- Adjusted EBITDAS, a non-GAAP financial measure resulted in a net gain of $ 48,492 from a loss of $(786,845) in Q1 2014
"We are pleased to report our third consecutive profitable EBITADS quarter and remain confident in our ability to improve upon and sustain this path. We also realized an improvement in our gross margins which remains an important priority while keeping our selling and administrative costs down. While the first quarter is historically our slowest quarter, continuing on our trajectory of profitability has been our number one focus," stated DS Healthcare President and CEO Daniel Khesin. "We are experiencing continued demand for our existing products as well as the newly launched Continuum line in the US and internationally and remain very optimistic for the remainder of 2015," Khesin concluded.
Net revenues were $2,803,920 for the three months ended March 31, 2015, an increase of 4.4% over revenues of $2,684,964 in the year-earlier period. Revenue growth in the first quarter was driven by higher demand for the Company products both in the US and internationally.
Gross margin increased to 59.4% in the first quarter of 2015 from 55.2% in the same quarter of the prior year. This increase was a result of several factors including production efficiencies, strategic cost cutting efforts, increased sales of higher margin products and lower returns due to improved product quality. Gross profits were up 12% to $1,665,160 in the first quarter of 2015, as compared to $1,482, 446 in the year-earlier period. Selling and marketing costs decreased by 19.9% to $776,778 in the first quarter from $970,022 in the same period last year. General and administrative costs decreased by 19.2 % to $1,078,140, as compared to $1,333,944 in the same period of 2014. DS Healthcare reported GAAP net loss narrowed by 89% to a net loss of $(85,138) which included a one-time credit to other income of $120,000 in the first quarter of 2015 compared to a net loss $(850,153) in the same period of 2014.
On an adjusted EBITDAS basis, a non-GAAP financial measure, the first quarter of 2015 resulted in a gain of $48,492 compared to a loss of $(786,845) in the year-earlier period.
Adjusted EBITDAS
We believe Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation ("Adjusted EBITDAS"), a non-GAAP financial measure, is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. We believe that:
Adjusted EBITDAS provides investors and other users of our financial information consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and
Adjusted EBITDAS is useful because it excludes non-cash charges, such as depreciation and amortization, stock-based compensation and one-time charges, which the amount of such expense in any specific period may not directly correlate to the underlying performance of our business operations and these expenses can vary significantly between periods
We use Adjusted EBITDAS in conjunction with traditional GAAP measures as part of our overall assessment of our performance, to evaluate the effectiveness of our business strategies and to communicate with our lenders, stockholders and board of directors concerning our financial performance.
Adjusted EBITDAS should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP. There are limitations to using non-GAAP financial measures, including that other companies may calculate these measures differently than we do. We compensate for the inherent limitations associated with using Adjusted EBITDAS through disclosure of these limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDAS to the most directly comparable GAAP measure, specifically net loss.
The following provides a reconciliation of net loss to Adjusted EBITDAS
| Three Months Ended | ||||||
| March 31, | ||||||
| (unaudited) | ||||||
| 2015 | 2014 | |||||
| GAAP Net Loss | $ | (85,138 | ) | $ | (850,153 | ) |
| Depreciation and amortization | 32,307 | 69,898 | ||||
| Interest Expense | 15,588 | 27,545 | ||||
| Loss on disposal of fixed asset | - | 2,468 | ||||
| Recovery of bad debt | (16,504 | ) | (152,875 | ) | ||
| Provision for obsolete inventory | 1,087 | 25,018 | ||||
| Stock issued for services | 100,500 | 91,254 | ||||
| Adjusted EBITDAS | $ | 48,492 | $ | (786,845 | ) | |
About DS Healthcare Group
DS Healthcare Group Inc. (Nasdaq:DSKX) leads in the development of biotechnology for topical therapies. It markets through online and specialty retailers, distributors, cosmetics wholesalers, salons and pharmacies. Its research has led to a highly innovative portfolio of personal care products and additional innovations in pharmaceutical projects. For more information on DS Health Group's flagship brand, visit www.dslaboratories.com
Forward-looking statements
Except for statements of historical fact, the matters discussed in this press release are forward-looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies, and are generally preceded by words such as "future," "plan" or "planned," "expects," or "projected." These forward-looking statements reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond the company's control that may cause actual results to differ materially from stated expectations. These risk factors include, among others, limited operating history, difficulty in developing and marketing products, intense competition, and additional risks factors as discussed in reports filed by the company with the Securities and Exchange Commission, which are available at http://www.sec.gov.