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

LAS VEGAS, NV -- (Marketwired) -- 06/19/17 -- 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,     December 31,
                                                    2017           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                        $           -  $           -
                                               =============  =============

Investor Contact:
Valter Pinto / Allison Soss
KCSA Strategic Communications
Phone: (212) 896-1254 / (212) 896-1267
Email: Email Contact / Email Contact

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