Vapor Corp. Reports Full Year 2012 Results

                  Vapor Corp. Reports Full Year 2012 Results

Company Prepares for Future Growth, Makes Key Investments in Infrastructure;
Innovation Fuels Its Continued Leadership Position in Growing Market for
Premium E-Cigarette Products & Accessories

PR Newswire

DANIA BEACH, Fla., April 1, 2013

DANIA BEACH, Fla., April1, 2013 /PRNewswire/ --Vapor Corp. (OTCQB: VPCO;
"Vapor" or the "Company"), a leading U.S. based electronic cigarette company
whose brands include Fifty-One®, Krave®, VaporX®, EZ Smoker®, Alternacig®,
Green Puffer®, Americig®, Fumare™, Hookah Stix™ and Smoke Star®, today
announced its results for the full year ended December 31, 2012.

Financial Highlights for the Full Year Ended December 31, 2012

  oNet sales reached a record $21.4 million, an increase of 33.6%
    year-over-year stemming from increased sales through new distributors and
    wholesale customers, as well as increases in direct to consumer sales.
  oCost of goods sold rose 96.4% to $13.2 million as compared to the previous
    year, primarily resulting from increased distributor and wholesaler sales,
    which have lower gross margins than direct sales to consumers.
  oGross margins decreased to 38.1% from 57.8% the prior year as a result of
    the product mix and the above factors.
  oSelling, general and administrative expenses increased to $6.9 million, up
    65.1% from the prior year due to increases in infrastructure costs and the
    hiring of key management and personnel. These investments in
    infrastructure and personnel will benefit us in 2013 as we are well
    positioned to service and support our customer needs and our anticipated
    growth.
  oAdvertising expenses decreased 10.1% year-over-year to $3.6 million as we
    decreased expenses paid to certain direct marketing campaigns, while
    increasing brand awareness through various product marketing and
    advertising campaigns. Our advertising efforts have created effective
    brand presence and awareness and we expect to continue to leverage and
    increase our brand presence and awareness through our distribution
    channels with effective advertising campaigns in 2013.
  oInterest expense was $89,348 as compared to $0 in the prior year. The
    increase was attributable to the issuance of new debt during 2012.
  oNet loss was ($1,920,972) versus net income of $713,338 for the prior year
    as a result of the above factors.
  oWe ended the year with working capital of $325,836 compared with
    approximately $1.3 million at year end the prior year as a result of the
    above factors.

Kevin Frija, Chief Executive Officer of Vapor Corp., commented, "With
continued sales growth, an increase of 33.6% year-over-year, we are happy to
have achieved our fourth consecutive year of sales growth. This is encouraging
for our efforts in 2013, as we have major initiatives lined up, the most
important of which is the expansion of our soft tip filters and Krave King
product line. 2012's results were as we anticipated with record sales of $21.4
million offset by heightened expenses incurred as we made certain strategic
investments in the business. We brought on our co-founder Jeffrey Holman as
President, Harlan Press as our Chief Financial Officer and Christopher Santi
as our Chief Operating Officer. Assembling this executive team was critical to
building a solid foundation for the Company to operate effectively, strategize
intelligently, and in essence, execute on all of our expansion initiatives. We
now believe we have the right management team in place to take the Company to
its next stage of growth."

In terms of market presence, he continued, "By our estimates, we're holding a
strong position in the e-cigarettes market and continue to see our share of
that market grow. We invested aggressively in expanding our product offerings
including the launch and introduction of our new innovative soft-tip filters
and Krave King product line, which have helped establish our brand presence
and awareness. We believe that our recent customer 'wins' are largely
attributable to these investments. We have enhanced our nationwide
distribution capacity through our existing distributors and master distributor
partners. Our expansion into Canada during 2012 has helped fuel our growth."

Looking ahead, Mr. Frija stated, "We remain staunchly committed to investing
in the long-term growth of the company and its brands, reinvesting in,
marketing & advertising, trade shows and conferences, product development,
patent protection, personnel and operations while offering our customers the
quality, value and thoughtful innovation and improvements they have come to
expect in our products. We believe that these measures will insure that we
continue to gain greater brand presence and awareness with the vaping
community."

About Vapor Corp.

Vapor Corp., a publicly traded company, is a leading U.S. based electronic
cigarette company, whose brands include Fifty-One®, Krave®, VaporX®, EZ
Smoker®, Alternacig®, Green Puffer®, Americig®, Fumare™, Hookah Stix™ and
Smoke Star®. We also design and develop private label brands for some of our
distribution customers. "Electronic cigarettes" or "e-cigarettes," are
battery-powered products that enable users to inhale nicotine vapor without
smoke, tar, ash or carbon monoxide. Vapor's electronic cigarettes and
accessories are available online, through direct response to our television
advertisements and through retail locations throughout the United States. For
more information on Vapor Corp and its e-cigarette brands, please visit us at
www.vapor-corp.com.

Safe Harbor Statement

This press release contains certain forward-looking statements that are made
pursuant to the "Safe Harbor" provisions of the Private Securities Litigation
Reform Act of 1995, as amended. Words such as "expects," "anticipates,"
"plans," "believes," "scheduled," "estimates", "will" and variations of these
words and similar expressions are intended to identify forward-looking
statements. These forward-looking statements concern Vapor's operations,
economic performance and financial condition and are based largely on Vapor's
beliefs and expectations. These statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of Vapor to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Certain of these factors and risks, as well as other risks and
uncertainties are stated in Vapor's Annual Report on Form 10-K for the fiscal
year ended December 31, 2012 and in its subsequent filings with the U.S.
Securities and Exchange Commission. These forward-looking statements are made
as of the date of this press release, and Vapor assumes no obligation to
update the forward-looking statements or to update the reasons why actual
results could differ from those projected in the forward-looking statements.

VAPOR CORP.
CONSOLIDATED BALANCE SHEETS
                                               DECEMBER31,
                                               2012           2011
ASSETS
CURRENT ASSETS:
Cash                                           $   176,409 $   356,485
Due from merchant credit card processors, net
of reserve for charge-backs of $15,000 and     1,031,476      661,575

$40,000, respectively
Accounts receivable, net of allowance of       748,580        624,593
$61,000 and $80,000, respectively
Inventories                                    1,670,007      2,234,834
Prepaid expenses                               465,860        639,660
Income tax receivable                          47,815         -
Deferred tax asset, net                        222,130        143,037
TOTAL CURRENT ASSETS                           4,362,277      4,660,184
Property and equipment, net of accumulated                   
depreciation of $16,595 and $5,144
                                               25,190         27,323
respectively
Other assets                                   12,000         12,000
TOTAL ASSETS                                   $  4,399,467  $  4,699,507
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts payable                               $  3,208,595  $1,628,940
Accrued expenses                               350,151        284,042
Customer deposits                              477,695        675,000
Income taxes payable                           -              724,356
TOTAL CURRENT LIABILITIES                      4,036,441      3,312,338
LONG-TERM DEBT:
Senior convertible notes payable to related                   
parties, net of debt discount of $3,530 and $0 346,470
                                                              -
respectively
Senior note payable to stockholder             500,000        -
TOTAL LONG-TERM DEBT                           846,470        -
TOTAL LIABILITIES                              4,882,911      3,312,338
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY):
Preferred stock, $.001 par value, $1,000,000
shares authorized, none issued
Common stock, $.001 par value, 250,000,000                    
shares authorized 60,185,344 shares issued     60,185
                                                              60,185
and outstanding
Additional paid-in capital                     1,637,377      1,587,018
Accumulated deficit                            (2,181,006)    (260,034)
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)        (483,444)      1,387,169
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $  4,399,467  $  4,699,507
(DEFICIENCY)
VAPOR CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
                           FOR THE YEAR ENDED

                           DECEMBER31,
                           2012                               2011
SALES NET                  $21,352,691                        $15,982,097
Cost of goods sold         13,225,008                         6,732,335
Gross Profit               8,127,683                          9,249,762
EXPENSES:
Selling, general and       6,865,633                          4,157,638
administrative
Advertising                3,559,616                          3,961,946
Total operating expenses   10,425,249                         8,119,584
Operating (loss) income    (2,297,566)                        1,130,178
Other expense:
Interest expense           89,347                             -
Total other expenses       89,347                             -
(LOSS) INCOME BEFORE
INCOME TAX (BENEFIT)       (2,386,913)                        1,130,178
EXPENSE
Income tax (benefit)       (465,941)                          416,840
expense
NET (LOSS) INCOME          $(1,920,972)                       $713,338
BASIC AND DILUTED NET
(LOSS) INCOME PER COMMON   $                         $       
                            (0.03)                           0.01
SHARE
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES                                                

OUTSTANDING – BASIC AND    60,185,344                         60,176,303
DILUTED



SOURCE Vapor Corp.

Website: http://www.vapor-corp.com
Contact: Investors: Howard Gostfrand, President, American Capital Ventures,
305.918.7000, info@amcapventures.com
 
Press spacebar to pause and continue. Press esc to stop.