DS Healthcare Third Quarter Revenues Grow 11% and Fifth

POMPANO BEACH, Fla., Nov. 17, 2015 (GLOBE NEWSWIRE) -- DS Healthcare Group, Inc. ( DSKX ), "DS Healthcare" or "the Company" which engages in the development and discovery of drug therapies for specialty pharmaceuticals and the production of innovative personal care products for its consumer brand portfolio, has released financial results for the third quarter 2015.

Q3 2015 Highlights:

• Net revenues were $3,637,629 up 11.0% over Q3 2014
• Gross margins decreased to 66.6% from 75.2% in Q3 2014
• Gross profits decreased to $2,421,243 down 1.8% over Q3 2014
• Adjusted EBITDAS, a non-GAAP financial measure resulted in a net gain of $278,741 from a gain of $140,489, a 98% increase over Q3 2014
• Signed agreements to acquire W/R Group
• Entered into a non-binding $35 million non-convertible senior debt term sheet
• Named Renee Barch-Niles as its Chief Executive Officer

Renee Barch-Niles, Chief Executive Officer of DS Healthcare Inc. stated, “Our third quarter results included double-digit revenue growth driven by ongoing demand for our products both domestically and internationally.  We’ve seen increased sell-through attributable to recently undertaken marketing initiatives—notably, our newly-optimized online store and associated digital advertising thereto. We believe the renewed attention given to all digital channels will provide a steady and significant source of future income, complementing our traditional physical footprint with global distributors. This marks the fifth consecutive quarter of EBITDAS profitability, and while EBITDAS was offset by non-recurring acquisition cost, we are pleased with the overall results. We continue to make progress in completing the independent W/R Group audit and lender due diligence.”

“Overall, we achieved strong results that were fueled both by our business domestically and abroad, despite significant currency headwinds, particularly from the Mexican Peso. Of particular note are early, entries that we’ve made into the Chinese market,” Barch-Niles continued. “An array of product launches, some already through the R&D pipeline and with imminent release into major retail channels, will help us continue to deliver long-term, sustainable, profitable growth,” Barch-Niles concluded.

Financial results:

Gross sales for the three months ending September 30, 2015 were $4,073,088. Various credits and marketing allowances to customers resulted in net revenues of $3,637,629, an increase of 11% over revenues of $3,278,117 in the year-earlier period. Revenue in the third quarter was offset by an unfavorable exchange rate of the Mexican Peso to the US Dollar.

The gross margin for the three months ending September 30, 2015 declined to 66.6% from 75.2% in the same period the year prior.  Gross profits were $2,421,243 in the third quarter of 2015, as compared to $2,464,446 in the year-earlier period. Selling and marketing costs for the three months ended September 30, 2015 increased $651,275 or 71.4% from $912,345 in the third quarter 2014 to $1,563,620. General and administrative costs decreased $272,747 or 16.3%, from $1,668,807 in the third quarter 2014 to $1,396,060 for the third quarter 2015.

On an adjusted EBITDAS basis, a non-GAAP financial measure, the third quarter of 2015 resulted in EBITDAS of $278,741 compared to $140,491 in the year-earlier period.

DS Healthcare reported net loss increase of $517,106 to a net loss of $571,602 in the third quarter of 2015 compared to a net loss $54,496 in the same period of 2014.

For the prior nine months ending September 30, 2015, total net revenues increased $393,593 or 4.1%, from $9,707,504 to $10,101,097 from the same period a year earlier.

On an adjusted EBITDAS basis, a non-GAAP financial measure, the nine months ending September 30, 2015 resulted in a EBITDAS of $441,161 compared to $(1,395,925) in the year-earlier period.

The gross margin for the nine months ending September 30, 2015 declined to 60.7% from 60.9% in the same period the year prior.  Gross profits were up 4.5% to $6,150,770 in 2015, as compared to $5,888,426 in the same year-earlier period. Selling and marketing costs for the nine months ended September 30, 2015 increased $154,559 or 5.0% from $3,076,605 to $3,231,164. General and administrative costs decreased $716,761 or 16.6%, from $4,341,287 to $3,621,526 in the same period this year.

On September 30, 2015, the Company had cash of $1,375,290 and working capital of approximately $5.7 million. Total shareholders' equity on September 30, 2015 was $6,923,566.

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.

About DS Healthcare Group

DS Healthcare Group Inc. develops novel biotechnology for topical therapies. It markets through online channels, specialty retailers, distributors, pharmacies, and salons. Its research has led to a highly innovative portfolio of personal care products and additional innovations in pharmaceutical projects. For more information on DS Healthcare Group's flagship brand, visit  www.dslaboratories.com

Forward-looking statements

This press release contains statements relating to anticipated financial statements that have not, as yet, been audited or reviewed by the Company’s auditors, as well as statements relating to future results or events, which are forward-looking statements.  Words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import may identify forward-looking statements. These statements are not historical facts, but instead represent only the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the control of either or both of the Company and WR Group.  It is possible that the actual results and financial condition of the Company and/or WR Group may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.  Further, information concerning the Company, WR Group and their businesses, including factors that potentially could materially affect such businesses and financial and other results, are and will be contained in the Company's filings with the Securities and Exchange Commission, available at www.sec.gov . There can be no assurance that we will be able to obtain the financing contemplated by the senior lender’s term sheet or consummate the acquisition of the WR Group. All forward-looking statements included in this press release are made only as of the date of this press release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.

DS Healthcare Group, Inc. Daniel Khesin President (888) 404-7770 ext. 3 investors@DSHealthgroup.com