Healthier Choices Management Corp. Reports Fourth Quarter 2020 Financial Results and Full Year Fiscal 2020 Results

Delivers Improvement in Adjusted EBITDA for Fiscal Year 2020
Despite 8% Reduction in Net Sales Due to the Pandemic

HOLLYWOOD, FL, March 05, 2021 (GLOBE NEWSWIRE) -- Healthier Choices Management Corp. (OTC Pink: HCMC) today announced financial results for the fourth quarter and fiscal year ended December 31, 2020.

Fourth Quarter and Full Year Fiscal 2020 Results and Recent Highlights:

• Net sales from continued operations for the year ended December 31, 2020 amounted to $13.9 million, compared to $15.1 million during the same period last year.

• Gross profit from continued operations decreased by $0.7 million for the year, resulting in a year-end amount of $5.8 million, compared to $6.5 million for the same period last year.

• Operating expenses as a percentage of sales decreased 16% in the fourth quarter versus prior year. For the year ended December 31, 2020, operating expenses as a percentage of sales decreased 6%, reflecting continued reduction of corporate administrative expenses.
  

• Adjusted EBITDA for the twelve months ended 2020 improved approximately $0.5 million compared to the prior year.

Jeffrey Holman, Chairman and Chief Executive Officer of Healthier Choices Management Corp. said, “We are delighted with our performance in the fourth quarter and especially proud of the improvement in our adjusted EBITDA results for the year, especially given the Covid related challenges our sectors faced.”

Mr. Holman continued, “Despite lower net sales volume by $1.2 million dollars due in large part to the pandemic, our teams ability to reinvent the way in which we do business on many levels, and actually improve our adjusted EBITDA by $500,000, year over year, is a testament to the culture of hard work and dedication that we have fostered over the past 13 years.”

Mr. Holman concluded, “The team has continued to execute on the strategic vision for our company. We remain focused on the commitment to improve the fundamentals of the business, expand our business lines where accretive, and continue our endeavors to enforce our intellectual property rights against any infringers upon a patent suite that has taken the better part of a decade to build.”

About Healthier Choices Management Corp.

Healthier Choices Management Corp. (www.healthiercmc.com) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives. Through its wholly owned subsidiary HCMC Intellectual Property Holdings, LLC, the Company manages and intends to expand on its intellectual property portfolio. The Company currently operates nine retail vape stores in the Southeast region of the United States, through which it offers e-liquids, vaporizers and related products. The Company also operates Ada’s Natural Market, a natural and organic grocery store, through its wholly owned subsidiary Healthy Choice Markets, Inc. and Paradise Health and Nutrition, stores that offer fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items through its wholly owned subsidiary Healthy Choice Markets 2, LLC. The Company also sells vitamins and supplements on the Amazon.com marketplace through its wholly owned subsidiary Healthy U Wholesale, Inc. The Company markets its Q-Cup™ technology under the vape segment. This patented technology is based on a small, quartz cup called the Q-Cup™, which a customer can purchase already filled by a third party in some regions or can partially fill themselves with either cannabis or CBD concentrate (approximately 50mg), also purchased from a third party. The Q-Cup™ can then be inserted into the patented Q-Unit™, which heats the cup from the outside without coming in direct contact with the solid concentrate. This Q-Cup™ and Q-Unit™ technology provides significantly more efficiency and an “on the go” solution for consumers who prefer to vape concentrates either medicinally or recreationally. The Q-Cup™ can also be used in other devices as a convenient micro-dosing system.

Forward Looking Statements.

This press release contains forward looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Additional written or oral forward-looking statements may be made by the Company from time to time in filings with the Securities and Exchange Commission (SEC) or otherwise. Statements contained in this press release that are not historical facts are forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are based on management's estimates, assumptions and projections and are not guarantees of future performance. The Company assumes no obligation to update these statements. Forward looking statements may include, but are not limited to, projections or estimates of revenue, income or loss, exit costs, cash flow needs and capital expenditures, statements regarding future operations, expansion or restructuring plans, including our recent exit from and winding down of our wholesale distribution operations. In addition, when used in this release, the words "anticipates," "believes," "estimates," "expects," "intends," and "plans" and variations thereof and similar expressions are intended to identify forward looking statements.

Factors that may affect our future results of operations and financial condition include, but are not limited to, fluctuations in demand for our products, the introduction of new products, our ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of our liquidity and financial strength to support its growth, and other information that may be detailed from time-to-time in our filings with the SEC.

Contact Information:

Healthier Choices Management Corp.
3800 North 28^th Way, #1
Hollywood, FL 33020
Office: 305-600-5004 / Fax: 954-272-7773

Results of Operations.

The following table sets forth our Condensed Consolidated Statements of Continuing Operations for the Quarter and Twelve-months ended December 31, 2020 and 2019:

HEALTHIER CHOICES MANAGEMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2020				2019				2020				2019
Total sales, net		$	3,227,869			$	3,498,558			$	13,920,745			$	15,114,006
Total cost of sales			1,893,951				1,982,641				8,143,524				8,629,762
GROSS PROFIT			1,333,918				1,515,916				5,777,221				6,484,244
Total operating expenses			2,109,133				2,841,075				9,225,593				10,898,528
LOSS FROM OPERATIONS			(775,215	)			(1,325,159	)			(3,448,372	)			(4,414,284	)
Total other (expense) income, net			(136,239	)			1,692,928				(274,020	)			1,614,908
NET LOSS FROM CONTINUING OPERATIONS		$	(911,454	)		$	367,769			$	(3,722,392	)		$	(2,799,376	)

See non-GAAP financial measure discussion

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2020				2019				2020				2019
Adjusted EBITDA
Loss from operations		$	(775,215	)		$	(1,325,159	)		$	(3,448,372	)		$	(4,414,284	)
Impairment of goodwill and intangible assets			-				481,314				380,646				481,314
Depreciation and amortization			126,078				145,868				550,098				594,940
Stock compensation			1,875				30,417				78,029				374,241
Adjusted EBITDA		$	(647,262	)		$	(667,560	)		$	(2,439,599	)		$	(2,963,789	)

Consolidated Balance Sheets

The following table sets forth our Condensed Consolidated Balance Sheets for the periods ended December 31, 2020 and December 31, 2019:

HEALTHIER CHOICES MANAGEMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS

		December 31 , 2020				December 31 , 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	925,475			$	1,525,415
Other current assets			2,081,717				2,116,245
TOTAL CURRENT ASSETS			3,007,192				3,641,660
Other assets			8,867,801				10,365,009
TOTAL ASSETS		$	11,874,993			$	14,006,669
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Other current liabilities		$	5,654,095			$	3,690,986
TOTAL CURRENT LIABILITIES			5,654,095				3,690,986
Other liabilities			3,963,530				4,413,952
TOTAL LIABILITIES			9,617,625				8,104,938
COMMITMENTS AND CONTINGENCIES (SEE NOTE 12)
TOTAL STOCKHOLDERS’ EQUITY			2,257,368				5,901,731
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	11,874,993			$	14,006,669

Non-GAAP – Financial Measure

The following discussion and analysis contain a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (GAAP). Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternative to, net income, operating income, and cash flow from operating activities, liquidity or any other financial measures. Non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive of potential future financial results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.

Management believes stockholders benefit from referring to the Adjusted EBITDA in planning, forecasting, and analyzing future periods. Management uses this non-GAAP financial measure in evaluating its financial and operational decision making and as a means of evaluating period to period comparison.

We define Adjusted EBITDA as net loss from operations adjusted for non-cash charges from depreciation and amortization and stock compensation. Management believes Adjusted EBITDA is an important measure of our operating performance because it allows management, investors and analysts to evaluate and assess our core operating results from period to period after removing the impact of significant non-cash charges that effect comparability between reporting periods. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items.

We have included a reconciliation of our non-GAAP financial measure to loss from operations as calculated in accordance with GAAP. We believe that providing the non-GAAP financial measure, together with the reconciliation to GAAP, helps investors make comparisons between the Company and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to specific definitions being used and to the reconciliation between such measures and the corresponding GAAP measures provided by each company under applicable rules of the Securities and Exchange Commission (“SEC”).