Results
Party City Holdco Inc.
11/09/2021 | Press release | Distributed by Public on 11/09/2021 05:57
Party City Reports Third Quarter 2021 Results; Total Revenue for Fiscal October 2021 and Provides Fourth Quarter 2021 Business Outlook
Total Net Sales of $510.2 million; Comparable Sales increased 7.5% versus prior year and 14.2% versus Q3 2019 driven by strength in core categories
GAAP Net Loss of $2.8 million; Adjusted EBITDA of $42.9 million
Strong October Performance across Core and Halloween
ELMSFORD, N.Y., Nov. 09, 2021 (GLOBE NEWSWIRE) -- Party City Holdco Inc. (the "Company" or "PRTY"; NYSE:PRTY) today announced financial results for the quarter ended September 30, 2021.
Brad Weston, Chief Executive Officer of Party City, stated, "We are very pleased with our third quarter results that came in at the high end of our expectations. Our performance was again broad based as we continue to be celebration obsessed and take concrete steps to increase relevancy with our customers to ensure we are top of mind when it comes to anything celebratory. To that end, this strong performance continued into October fueled by ongoing strength in our core categories. We are thrilled with our Halloween results driven by the team's excellent execution of our improved Halloween go-to market strategy across all four channels of our business including Party City, Party City.com, Halloween City and Wholesale."
Mr. Weston added, "As we look to the final quarter of the year, we feel good about our positioning for the holiday season. We will continue to update and improve our product assortments and inventory position, as we expand our relevancy and elevate our customer experience. Given the still dynamic operating environment, we will remain flexible and agile, with our learnings from this year giving us increased confidence in our inflation mitigation strategies and the trajectory of our business."
Third Quarter Summary:
- Total net sales were $510.2 million, a decrease of 4.4% compared to the third quarter 2020 primarily driven by the divestiture of a significant portion of our international operations in the first quarter of 2021, partially offset by strong retail sales growth.
- Total retail sales increased 8.9% versus third quarter 2020 driven by a strong comparable sales increase in our core everyday categories.
- The total number of corporate Party City stores was 754 as of September 30, 2021 compared to 739 in the prior year period.
- Brand comparable sales increased 7.5% in the third quarter versus the 13 weeks ended October 3, 2020 and increased 14.2% compared to the 13 weeks ended October 5, 2019.
- Net third-party wholesale sales decreased 33.6% compared to the third quarter of 2020 principally due to the divestiture of a significant portion of our international operations in the first quarter of 2021. Excluding international operations, net third-party wholesale sales increased 7.8%, driven by strong performance at our Anagram balloon division.
- Total gross profit margin increased 270 basis points to 36.0% of net sales. Excluding certain items not indicative of core operating performance, gross profit margin improved approximately 175 basis points to 36.3% of net sales driven primarily by the divestiture of international operations and leverage on retail occupancy costs.
- Operating expenses totaled $163.6 million or $41.4 million lower than the third quarter of 2020 primarily due to impairment of certain indefinite-lived intangible assets recorded in the third quarter of 2020. Excluding certain items not indicative of core operating performance, operating expenses totaled $157.6 million, or 30.9% of net sales, a 230-basis point increase versus prior-year period primarily driven by the divestiture of a significant portion of our international operations.
- Interest expense was $23.9 million during the third quarter of 2021, compared to $13.4 million during the third quarter of 2020. The increase primarily reflects higher cost debt from the debt refinancing in the first quarter of 2021 and the forgiveness of interest as part of the debt refinancing in the third quarter of 2020.
- Reported GAAP net loss was $2.8 million, or loss of $0.02 per diluted share.
- Adjusted net income was $2.9 million, or earnings of $0.02 per diluted share, compared to adjusted net income of $11.0 million, or income of $0.10 per share, in the third quarter of 2020. (See "Non-GAAP Information")
- Adjusted EBITDA was $42.9 million, versus $49.2 million during the third quarter of 2020. (See "Non-GAAP Information").
Fiscal October 2021 Update:
For fiscal October 2021 (for the Company's retail segment, fiscal October 2021 consisted of the five-week period ended November 6, 2021), the Company reported total revenue of $415.5 million, or 13.9% above the same period of last year. Total Retail revenue increased approximately 19.8%. Brand comparable sales increased 16.0% versus prior year driven by continued strength in core categories and higher Halloween sales. During the month of October 2021, the Company operated 754 total Party City locations vs 739 in the prior year period, and 90 temporary Halloween City stores, compared to 25 in 2020.
Balance Sheet and Cash Flow Highlights:
As of the end of the third quarter 2021, the Company had $60.7 million in cash and approximately $280.3 million of availability under the ABL Facility and approximately $14.6 million of availability under the Anagram ABL Facility, for total liquidity of $355.6 million.
The carrying value of the Company's debt as of September 30, 2021 was $1,539.3 million. The principal balance of debt net of cash on September 30, 2021 was $1,374.5 million versus $1,333.7 million in the prior-year period. The principal balance of debt is used for the purpose of all leverage ratio calculations under our debt agreements. The following table reflects both principal amounts as well as net carrying amounts of debt across the Company's debt instruments:
| Party City Credit Group | Anagram Holdings, LLC | PCHI Consolidated | |||||||||||||||
| September 30, 2021 | September 30, 2021 | ||||||||||||||||
| (in Thousands) | Principal Amount | Net Carrying Amount | Net Carrying Amount | Net Carrying Amount | |||||||||||||
| 8.75% Senior Secured First Lien Notes - due 2026 | $ | 750,000 | $ | 732,124 | - | $ | 732,124 | ||||||||||
| 6.125% Senior Notes - due 2023 | 22,924 | 22,820 | - | 22,820 | |||||||||||||
| 6.625% Senior Notes - due 2026 | 92,254 | 91,555 | - | 91,555 | |||||||||||||
| First Lien Party City Notes - due 2025 | 161,669 | 198,076 | - | 198,076 | |||||||||||||
| First Lien Anagram Notes - due 2025 | 115,804 | - | 149,676 | 149,676 | |||||||||||||
| Second Lien Anagram Notes - due 2026 | 89,155 | - | 144,665 | 144,665 | |||||||||||||
| Finance lease obligations | 13,267 | 13,267 | - | 13,267 | |||||||||||||
| Total long-term obligations | 1,245,073 | 1,057,842 | 294,341 | 1,352,183 | |||||||||||||
| Less: current portion | N/A | (1,297 | ) | - | (1,297 | ) | |||||||||||
| Long-term obligations, excluding current portion | 1,245,073 | 1,056,545 | 294,341 | 1,350,886 | |||||||||||||
| Loans and notes payable* | 190,150 | 187,084 | - | 187,084 | |||||||||||||
| Less: Cash | (60,740 | ) | (33,050 | ) | (27,691 | ) | (60,741 | ) | |||||||||
| Principal balance net of cash | $ | 1,374,483 | $ | 1,210,579 | $ | 266,650 | $ | 1,477,229 |
*Balance consists of ABL Facility.
Net cash used in operating activities in the first nine months of 2021 was $73.6 million, compared to net cash used in operating activities of $56.8 million in the prior year period. The increase in cash used is primarily attributable to an increase in seasonal inventory and the related freight, as well as the repayment of rents deferred from 2020. Free cash flowa in the first nine months of 2021 was $111.9 million compared to $(13.8) million in the prior year period, with the improvement driven by higher Adjusted EBITDA due to improved operating results, partially offset by higher capital expenditures.
aFree cash flow defined as Adjusted EBITDA less capital expenditures (See "Non-GAAP Financial Information").
Outlook:
The Company is providing the following fiscal fourth quarter 2021 outlook*. This outlook is subject to potential consumer and marketplace volatility due to the COVID-19 pandemic:
- Total revenue of $685 to $700 million
- Brand comparable sales percentage increase of high-teens compared to fourth quarter 2020 and low-teens versus fourth quarter 2019
- GAAP net income of $39 million to $47 million with an assumed Q4 tax rate of 26%
- Adjusted EBITDA of $100 to $110 million
* As previously disclosed, in the fourth quarter of 2020, the 53rd week contributed $40 million in revenue and approximately $12 million in Adjusted EBITDA.
The table below sets forth a reconciliation from our fourth quarter 2021 forecasted GAAP Net Income to our Adjusted EBITDA.
| Q4 2021 | |||||||
| (in thousands) | High | Low | |||||
| Net Income | $ | 46,700 | $ | 38,700 | |||
| Provision for Income Taxes | 16,400 | 13,600 | |||||
| Interest Expense | 23,800 | 24,200 | |||||
| Depreciation and Amortization Expense | 16,800 | 17,200 | |||||
| EBITDA | $ | 103,700 | $ | 93,700 | |||
| EBITDA Add-Backs | 6,300 | 6,300 | |||||
| Adjusted EBITDA | $ | 110,000 | $ | 100,000 |
Conference Call Information
A conference call to discuss the third quarter 2021 financial results is scheduled for today, November 9, 2021, at 8:30 a.m. Eastern Time, and the Company has posted certain supplemental presentation materials to its investor relations website. Investors and analysts interested in participating in the call are invited to dial 844-757-5731 (U.S. domestic) or 412-542-4126 (international) approximately 10 minutes prior to the start of the call. The conference call will also be webcast at http://investor.partycity.com/. To listen to the live call, please go to the website at least 15 minutes early to register and download any necessary audio software. The webcast will be accessible for one year after the call.
Website Information
We routinely post important information for investors on the Investor Relations section of our website, http://investor.partycity.com/. We intend to use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
Non-GAAP Information
This press release includes non-GAAP measures including Adjusted EBITDA and Adjusted Net Income/Loss. We present these non-GAAP financial measures because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by eliminating items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA: (i) as a factor in determining incentive compensation, (ii) to evaluate the effectiveness of our business strategies and (iii) because our credit facilities use Adjusted EBITDA to measure compliance with certain covenants. We also utilized operating expense excluding certain items not indicative of core operating performance. The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in tables accompanying this release. We also evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We calculate constant currency percentages by converting our prior-period local currency financial results using the current period exchange rates and comparing these adjusted amounts to our current period reported results. We also provide debt principal net of cash, which is calculated by adding Loans and Notes Payable, Current Portion of Long Term Obligations and Long Term Obligations, Excluding Current Portion, subtracting Cash and Cash Equivalents and dividing by Adjusted EBITDA for the trailing twelve month period. We also define free cash flow as Adjusted EBITDA less capital expenditures. We believe providing these non-GAAP measures provides valuable supplemental information regarding our results of operations and leverage, consistent with how we evaluate our performance. In evaluating these non-GAAP financial measures, investors should be aware that in the future the Company may incur expenses or be involved in transactions that are the same as or similar to some of the adjustments in this presentation. The Company's presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. The Company has provided this information as means to evaluate the results of its core operations. Other companies in the Company's industry may calculate these items differently than it does. Each of these measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP.
Forward-Looking Statements
This press release and the commentary in the conference call to be held today each contains forward-looking statements. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance and include Party City's expectations regarding revenues, brand comparable sales, net income, Adjusted EBITDA, Adjusted Net Income, interest expense and capital expenditures. The forward-looking statements contained in this press release are based on management's good-faith belief and reasonable judgment based on current information, and these statements are qualified by important risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those forecasted or indicated by such forward-looking statements. These risks and uncertainties include: our ability to compete effectively in a competitive industry; fluctuations in commodity prices; our ability to appropriately respond to changing merchandise trends and consumer preferences; successful implementation of our store growth strategy; decreases in our Halloween sales; the impact of COVID-19 on our financial performance; disruption to the transportation system or increases in transportation costs; product recalls or product liability; economic slowdown affecting consumer spending and general economic conditions; loss or actions of third party vendors and loss of the right to use licensed material; disruptions at our manufacturing facilities; and the additional risks and uncertainties set forth in "Risk Factors" in Party City's Annual Report on Form 10-K for the year ended December 31, 2020 and in subsequent reports filed with or furnished to the Securities and Exchange Commission. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, outlook, guidance, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. Except as may be required by any applicable laws, Party City assumes no obligation to publicly update or revise such forward-looking statements, which are made as of the date hereof or the earlier date specified herein, whether as a result of new information, future developments or otherwise.
About Party City
Party City Holdco Inc. is the leading party goods company by revenue in North America and, we believe, the largest vertically integrated supplier of decorated party goods globally by revenue. The Company is a popular one-stop shopping destination for party supplies, balloons, and costumes. In addition to being a great retail brand, the Company is a global, world-class organization that combines state-of-the-art manufacturing and sourcing operations, and sophisticated wholesale operations complemented by a multi-channel retailing strategy and e-commerce retail operations. The Company is a leading player in its category, vertically integrated and unique in its breadth and depth. The Company designs, manufactures, sources and distributes party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and stationery throughout the world. The Company's retail operations include 830 specialty retail party supply stores (including franchise stores) throughout North America operating under the names Party City and Halloween City, and e-commerce websites, principally through the domain name PartyCity.com.
Source: Party City Holdco Inc.
PARTY CITY HOLDCO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data, unaudited)
|
September 30, 2021 |
December 31, 2020 |
September 30, 2020 |
||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 60,740 | $ | 119,532 | $ | 170,562 | ||||||
| Accounts receivable, net | 100,946 | 90,879 | 149,825 | |||||||||
| Inventories, net | 520,046 | 412,285 | 630,357 | |||||||||
| Prepaid expenses and other current assets | 85,004 | 45,905 | 112,038 | |||||||||
| Income tax receivable | 56,361 | 57,549 | - | |||||||||
| Assets held for sale, net | - | 83,110 | - | |||||||||
| Total current assets | 823,097 | 809,260 | 1,062,782 | |||||||||
| Property, plant and equipment, net | 213,959 | 209,412 | 206,447 | |||||||||
| Operating lease asset | 700,668 | 700,087 | 741,524 | |||||||||
| Goodwill | 662,163 | 661,251 | 669,564 | |||||||||
| Trade names | 383,733 | 384,428 | 383,666 | |||||||||
| Other intangible assets, net | 25,821 | 32,134 | 34,505 | |||||||||
| Other assets, net | 27,385 | 9,883 | 9,521 | |||||||||
| Total assets | $ | 2,836,826 | $ | 2,806,455 | $ | 3,108,009 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Loans and notes payable | $ | 187,084 | $ | 175,707 | $ | 303,894 | ||||||
| Accounts payable | 167,445 | 118,928 | 179,938 | |||||||||
| Accrued expenses | 178,155 | 160,605 | 202,636 | |||||||||
| Liabilities held for sale | - | 68,492 | - | |||||||||
| Current portion of operating lease liability | 131,653 | 176,045 | 194,476 | |||||||||
| Income taxes payable | - | 524 | - | |||||||||
| Current portion of long-term obligations | 1,297 | 13,576 | 14,342 | |||||||||
| Total current liabilities | 665,634 | 713,877 | 895,286 | |||||||||
| Long-term obligations, excluding current portion | 1,350,886 | 1,329,808 | 1,334,338 | |||||||||
| Long-term portion of operating lease liability | 639,560 | 654,729 | 677,183 | |||||||||
| Deferred income tax liabilities, net | 43,537 | 34,705 | 49,508 | |||||||||
| Other long-term liabilities | 34,718 | 22,815 | 15,559 | |||||||||
| Total liabilities | 2,734,335 | 2,755,934 | 2,971,874 | |||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders' equity: | ||||||||||||
| Common stock (112,194,330, 110,781,613 and 110,573,555 shares outstanding and 123,816,514, 122,061,711 and 121,848,074 shares issued at September 30, 2021, December 31, 2020, and September 30, 2020, respectively) | 1,384 | 1,373 | 1,371 | |||||||||
| Additional paid-in capital | 980,399 | 971,972 | 970,145 | |||||||||
| Accumulated deficit | (552,445 | ) | (565,457 | ) | (469,040 | ) | ||||||
| Accumulated other comprehensive income (loss) | 3,128 | (29,916 | ) | (38,907 | ) | |||||||
| Total Party City Holdco Inc. stockholders' equity before common stock held in treasury | 432,466 | 377,972 | 463,569 | |||||||||
| Less: Common stock held in treasury, at cost (11,622,184, 11,280,098 and 11,274,519 shares at September 30, 2021, December 31, 2020, and June 30, 2020, respectively) | (329,975 | ) | (327,182 | ) | (327,170 | ) | ||||||
| Total Party City Holdco Inc. stockholders' equity | 102,491 | 50,790 | 136,399 | |||||||||
| Noncontrolling interests | - | (269 | ) | (264 | ) | |||||||
| Total stockholders' equity | 102,491 | 50,521 | 136,135 | |||||||||
| Total liabilities and stockholders' equity | $ | 2,836,826 | $ | 2,806,455 | $ | 3,108,009 |
PARTY CITY HOLDCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except share and per share data, unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net sales* | $ | 510,199 | $ | 533,775 | $ | 1,472,752 | $ | 1,202,509 | ||||||||
| Cost of sales | 326,501 | 355,923 | 919,596 | 890,587 | ||||||||||||
| Gross profit | 183,698 | 177,852 | 553,156 | 311,922 | ||||||||||||
| Wholesale selling expenses | 7,503 | 11,950 | 23,977 | 37,115 | ||||||||||||
| Retail operating expenses | 105,206 | 97,100 | 291,281 | 250,502 | ||||||||||||
| General and administrative expenses | 45,495 | 44,986 | 137,328 | 174,275 | ||||||||||||
| Art and development costs | 5,440 | 4,257 | 15,415 | 13,095 | ||||||||||||
| Store impairment and restructuring charges | - | 1,926 | - | 20,818 | ||||||||||||
| Loss on disposal of assets in international operations | - | - | 3,211 | - | ||||||||||||
| Goodwill, intangibles and long-lived assets impairment | - | 44,732 | - | 581,380 | ||||||||||||
| Income (loss) from operations | 20,054 | (27,099 | ) | 81,944 | (765,263 | ) | ||||||||||
| Interest expense, net | 23,899 | 13,422 | 64,229 | 63,954 | ||||||||||||
| Other (income) expense, net | (1,444 | ) | (2,873 | ) | (2,317 | ) | 4,287 | |||||||||
| (Gain) on debt refinancing | - | (273,149 | ) | - | (273,149 | ) | ||||||||||
| (Loss) income before income taxes | (2,401 | ) | 235,501 | 20,032 | (560,355 | ) | ||||||||||
| Income tax (benefit) expense | 388 | (4,164 | ) | 7,128 | (128,293 | ) | ||||||||||
| Net (loss) income | (2,789 | ) | 239,665 | 12,904 | (432,062 | ) | ||||||||||
| Less: Net (loss) attributable to noncontrolling interests | - | (42 | ) | (54 | ) | (241 | ) | |||||||||
| Net (loss) income attributable to common shareholders of Party City Holdco Inc. | $ | (2,789 | ) | $ | 239,707 | $ | 12,958 | $ | (431,821 | ) | ||||||
| Net (loss) income per share attributable to common shareholders of Party City Holdco Inc.-Basic | $ | (0.02 | ) | $ | 2.25 | $ | 0.12 | $ | (4.41 | ) | ||||||
| Net (loss) income per share attributable to common shareholders of Party City Holdco Inc.-Diluted | $ | (0.02 | ) | $ | 2.24 | $ | 0.11 | $ | (4.41 | ) | ||||||
| Weighted-average number of common shares-Basic | 112,037,224 | 106,709,307 | 111,431,623 | 97,872,174 | ||||||||||||
| Weighted-average number of common shares-Diluted | 112,037,224 | 106,875,631 | 115,822,121 | 97,872,174 | ||||||||||||
| Dividends declared per share | $ | - | $ | - | $ | - | $ | - | ||||||||
| Comprehensive (loss) income | $ | (5,753 | ) | $ | 244,607 | $ | 45,989 | $ | (435,235 | ) | ||||||
| Less: Comprehensive (loss) attributable to noncontrolling interests | (24 | ) | (42 | ) | (54 | ) | (241 | ) | ||||||||
| Comprehensive (loss) income attributable to common shareholders of Party City Holdco Inc. | $ | (5,729 | ) | $ | 244,649 | $ | 46,043 | $ | (434,994 | ) |
*Includes royalties and franchise fees. Prior year amounts conformed to current year presentation
PARTY CITY HOLDCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
| Nine Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows (used in) operating activities: | ||||||||
| Net income (loss) | $ | 12,904 | $ | (432,062 | ) | |||
| Adjustments to reconcile net income (loss) to net cash (used in) operating activities: | ||||||||
| Depreciation and amortization expense | 50,293 | 57,796 | ||||||
| Amortization of deferred financing costs and original issuance discounts | 3,257 | 3,276 | ||||||
| Provision for doubtful accounts | 1,610 | 5,746 | ||||||
| Deferred income tax expense (benefit) | 9,116 | (76,833 | ) | |||||
| Change in operating lease liability/asset | (58,875 | ) | 32,121 | |||||
| Undistributed (income) loss in equity method investments | (820 | ) | 356 | |||||
| Loss on disposal of assets | 2,796 | 83 | ||||||
| Loss on disposal of assets in international operations | 3,211 | - | ||||||
| Non-cash adjustment for store impairment and restructuring charges | - | 16,595 | ||||||
| Goodwill, intangibles and long-lived assets impairment | - | 581,380 | ||||||
| Non-employee equity-based compensation** | - | 1,033 | ||||||
| Stock option expense - time - based | 310 | 671 | ||||||
| Stock option expense - performance - based | - | 7,847 | ||||||
| Restricted stock unit expense - time-based | 1,643 | 1,568 | ||||||
| Restricted stock unit - performance-based | 2,706 | 510 | ||||||
| Directors - non-cash compensation | 171 | 75 | ||||||
| Gain on debt refinancing | (1,105 | ) | (273,149 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) in accounts receivable | (17,339 | ) | (8,562 | ) | ||||
| (Increase) decrease in inventories | (109,227 | ) | 27,959 | |||||
| (Increase) in prepaid expenses and other current assets | (49,570 | ) | (64,715 | ) | ||||
| Increase in accounts payable, accrued expenses and income taxes payable | 75,368 | 61,478 | ||||||
| Net cash (used in) operating activities | (73,551 | ) | (56,827 | ) | ||||
| Cash flows (used in) investing activities: | ||||||||
| Cash paid in connection with acquisitions, net of cash acquired | (4,405 | ) | (362 | ) | ||||
| Capital expenditures | (49,211 | ) | (32,095 | ) | ||||
| Proceeds from disposal of property and equipment | 3 | 82 | ||||||
| Proceeds from sale of international operations, net of cash disposed | 20,556 | - | ||||||
| Net cash (used in) investing activities | (33,057 | ) | (32,375 | ) | ||||
| Cash flows provided by financing activities: | ||||||||
| Repayment of loans, notes payable and long-term obligations | (844,952 | ) | (122,373 | ) | ||||
| Proceeds from loans, notes payable and long-term obligations | 882,500 | 369,785 | ||||||
| Treasury stock purchases | (2,793 | ) | (85 | ) | ||||
| Exercise of stock options | 3,621 | - | ||||||
| Debt issuance costs | (21,437 | ) | (19,955 | ) | ||||
| Net cash provided by financing activities | 16,939 | 227,372 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 100 | (2,659 | ) | |||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | (89,569 | ) | 135,511 | |||||
| Change in cash classified within current assets held for sale | 31,628 | - | ||||||
| Cash and cash equivalents and restricted cash at beginning of period | 119,681 | 35,176 | ||||||
| Cash and cash equivalents and restricted cash at end of period* | $ | 61,740 | $ | 170,687 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the period for interest expense | $ | 56,748 | $ | 55,999 | ||||
| Cash paid during the period for income taxes, net of refunds | $ | 5,303 | $ | 24,421 |
*Includes $1,000 and $125 of restricted cash for the nine months ended September 30, 2021 and 2020. The Company recorded restricted cash in other assets, net as presented in the consolidated balance sheet at September 30, 2021 and in prepaid expenses and other current assets as presented in the consolidated balance sheets at December 31, 2020 and September 30, 2020.
** See Note 17 - Kazzam, LLC of Item 1, "Condensed Consolidated Financial Statements (Unaudited)" in the September 30, 2021 Quarterly Report on Form 10-Q 2021.
PARTY CITY HOLDCO INC.
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
| Three Months Ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Net (loss) income | $ | (2,789 | ) | $ | 239,665 | $ | 12,904 | $ | (432,062 | ) | ||||||
| Interest expense, net | 23,899 | 13,422 | 64,229 | 63,954 | ||||||||||||
| Income tax expense (benefit) | 388 | (4,164 | ) | 7,128 | (128,293 | ) | ||||||||||
| Depreciation and amortization | 15,433 | 17,278 | 50,293 | 57,796 | ||||||||||||
| EBITDA | 36,931 | 266,201 | 134,554 | (438,605 | ) | |||||||||||
| Store impairment and restructuring charges (a) | - | 6,763 | - | 36,285 | ||||||||||||
| Inventory restructuring and early lease terminations (j) | 520 | - | 7,157 | - | ||||||||||||
| Other restructuring, retention and severance (b) | - | 2,957 | 2,082 | 11,701 | ||||||||||||
| Goodwill, intangibles and long-lived assets impairment (c) | - | 44,732 | - | 581,380 | ||||||||||||
| Deferred rent (d) | 904 | 254 | 2,032 | (2,618 | ) | |||||||||||
| Closed store expense (e) | 603 | 1,247 | 3,739 | 2,882 | ||||||||||||
| Foreign currency losses/(gains), net | 343 | (3,312 | ) | (968 | ) | 955 | ||||||||||
| Stock option expense - time-based | 93 | 111 | 310 | 671 | ||||||||||||
| Stock option expense - performance - based | - | - | - | 7,847 | ||||||||||||
| Restricted stock unit and restricted cash awards expense - performance-based | 923 | 510 | 2,901 | 510 | ||||||||||||
| Restricted stock units - time-based | 876 | 429 | 1,643 | 1,568 | ||||||||||||
| Non-employee equity-based compensation (f) | - | - | - | 1,033 | ||||||||||||
| Undistributed loss (income) in equity method investments | (609 | ) | (59 | ) | (820 | ) | 356 | |||||||||
| Corporate development expenses (g) | 5 | 581 | 5 | 6,193 | ||||||||||||
| Non-recurring legal settlements/costs | - | 661 | - | 7,170 | ||||||||||||
| Loss on sale of property, plant and equipment* | 2,687 | - | 2,798 | - | ||||||||||||
| COVID - 19 (i) | - | 679 | 1,270 | 71,059 | ||||||||||||
| Loss on sale of business | - | - | 3,211 | - | ||||||||||||
| (Gain) on debt repayment/refinancing (k) | (1,332 | ) | (273,149 | ) | (1,106 | ) | (273,149 | ) | ||||||||
| Other* | 943 | 546 | 2,331 | 3,034 | ||||||||||||
| Adjusted EBITDA | $ | 42,887 | $ | 49,151 | $ | 161,139 | $ | 18,272 |
* Prior period amounts have been reclassified to conform with current period presentation.
PARTY CITY HOLDCO INC.
RECONCILIATION OF ADJUSTED EBITDA, Continued
(In thousands, unaudited)
| Three Months Ended September 30, 2021 EBITDA Adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
|
September 30, 2021 GAAP Basis (as reported) |
Inventory restructuring and early lease terminations (j) | Net gain on debt repayment (k) |
Corporate development expenses (g) |
Stock Option Expense/Non- Employee Equity Compensation/ Restricted stock units |
Deferred Rent (d) |
Other restructuring, retention and severance (b) |
Closed store expense (e) |
COVID- 19 (i) |
Foreign currency gains |
Other |
September 30, 2021 Non-GAAP basis |
||||||||||||||||||||||||||||||||||||
| Net sales | $ | 510,199 | $ | 510,199 | |||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 326,501 | (520 | ) | (945 | ) | 325,036 | |||||||||||||||||||||||||||||||||||||||||
| Gross profit | 183,698 | 185,163 | |||||||||||||||||||||||||||||||||||||||||||||
| Wholesale selling expenses | 7,503 | 7,503 | |||||||||||||||||||||||||||||||||||||||||||||
| Retail operating expenses | 105,206 | (612 | ) | (908 | ) | 103,686 | |||||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 45,495 | (1,892 | ) | 41 | 9 | (2,639 | ) | 41,014 | |||||||||||||||||||||||||||||||||||||||
| Art and development costs | 5,440 | 5,440 | |||||||||||||||||||||||||||||||||||||||||||||
| Income from operations | 20,054 | 27,520 | |||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 23,899 | (33 | ) | 23,866 | |||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | (1,444 | ) | 1,332 | (5 | ) | (343 | ) | 559 | 99 | ||||||||||||||||||||||||||||||||||||||
| (Loss) income before income taxes | (2,401 | ) | 3,555 | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 23,899 | 23,899 | |||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 15,433 | 15,433 | |||||||||||||||||||||||||||||||||||||||||||||
| EBITDA | 36,931 | 42,887 | |||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to EBITDA | 5,956 | (520 | ) | 1,332 | (5 | ) | (1,892 | ) | (904 | ) | - | (603 | ) | - | (343 | ) | (3,021 | ) | - | ||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 42,887 | $ | (520 | ) | $ | 1,332 | $ | (5 | ) | $ | (1,892 | ) | $ | (904 | ) | $ | - | $ | (603 | ) | $ | - | $ | (343 | ) | $ | (3,021 | ) | $ | 42,887 |
PARTY CITY HOLDCO INC.
RECONCILIATION OF ADJUSTED EBITDA, Continued
(In thousands, unaudited)
| Three Months Ended September 30, 2020 EBITDA Adjustments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
September 30, 2020 GAAP Basis (as reported) |
Goodwill, intangibles and long-lived assets impairment (c) |
Store impairment and restructuring charges (a) |
Gain on debt refinancing (k) |
Corporate development expenses (g) |
Legal |
Stock Option Expense/Non- Employee Equity Compensation/ Restricted stock units - time-based |
Deferred Rent (d) |
Other restructuring, retention and severance (b) |
Closed store expense (e) |
COVID- 19 (i) |
Foreign currency losses |
Other |
September 30, 2020 Non-GAAP basis |
|||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 533,775 | $ | 533,775 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 355,923 | (4,837 | ) | (80 | ) | (1,266 | ) | (469 | ) | 349,271 | ||||||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 177,852 | 184,504 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale selling expenses | 11,950 | 11,950 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail operating expenses | 97,100 | (224 | ) | (1,225 | ) | (1,745 | ) | 93,906 | ||||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 44,986 | (370 | ) | (661 | ) | (1,050 | ) | 50 | (2,957 | ) | (22 | ) | 2,332 | 42,308 | ||||||||||||||||||||||||||||||||||||||||||
| Art and development costs | 4,257 | 4,257 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Store impairment and restructuring charges | 1,926 | (1,926 | ) | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill, intangibles and long-lived assets impairment | 44,732 | (44,732 | ) | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Loss) from operations | (27,099 | ) | 32,083 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 13,422 | 13,422 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | (2,873 | ) | (211 | ) | 3,312 | (18 | ) | 210 | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Gain) on debt refinancing | (273,149 | ) | 273,149 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | 235,501 | 18,451 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 13,422 | 13,422 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 17,278 | 17,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EBITDA | 266,201 | 49,151 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to EBITDA | (217,050 | ) | (44,732 | ) | (6,763 | ) | 273,149 | (581 | ) | (661 | ) | (1,050 | ) | (254 | ) | (2,957 | ) | (1,247 | ) | (679 | ) | 3,312 | (487 | ) | - | |||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 49,151 | $ | (44,732 | ) | $ | (6,763 | ) | $ | 273,149 | $ | (581 | ) | $ | (661 | ) | $ | (1,050 | ) | $ | (254 | ) | $ | (2,957 | ) | $ | (1,247 | ) | $ | (679 | ) | $ | 3,312 | $ | (487 | ) | $ | 49,151 |
PARTY CITY HOLDCO INC
RECONCILIATION OF ADJUSTED EBITDA, Continued
(In thousands, unaudited)
| Nine Months Ended September 30, 2021 EBITDA Adjustments | ||||||||||||||||||||||||||||||||||||||||||||||||
|
September 30, 2021 GAAP Basis (as reported) |
Inventory restructuring and early lease terminations (j) | Net gain on debt repayment (k) |
Corporate development expenses (g) |
Stock Option Expense/Non- Employee Equity Compensation/ Restricted stock units |
Deferred Rent (d) |
Other restructuring, retention and severance (b) |
Closed store expense (e) |
COVID- 19 (i) |
Foreign currency gains |
Other |
September 30, 2021 Non-GAAP basis |
|||||||||||||||||||||||||||||||||||||
| Net sales | $ | 1,472,752 | $ | 1,472,752 | ||||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 919,596 | (4,214 | ) | (945 | ) | 124 | 914,561 | |||||||||||||||||||||||||||||||||||||||||
| Gross profit | 553,156 | 558,191 | ||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale selling expenses | 23,977 | 23,977 | ||||||||||||||||||||||||||||||||||||||||||||||
| Retail operating expenses | 291,281 | (2,943 | ) | (1,212 | ) | (3,690 | ) | (1,053 | ) | (1,626 | ) | 280,757 | ||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 137,328 | (4,854 | ) | 125 | (2,082 | ) | (49 | ) | (217 | ) | (3,328 | ) | 126,923 | |||||||||||||||||||||||||||||||||||
| Art and development costs | 15,415 | 15,415 | ||||||||||||||||||||||||||||||||||||||||||||||
| Loss on disposal of assets in international operations | 3,211 | (3,211 | ) | - | ||||||||||||||||||||||||||||||||||||||||||||
| Income from operations | 81,944 | 111,119 | ||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 64,229 | (138 | ) | 64,091 | ||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | (2,317 | ) | 1,106 | (5 | ) | 968 | 659 | 411 | ||||||||||||||||||||||||||||||||||||||||
| Income before Income Taxes | 20,032 | 46,617 | ||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 64,229 | 64,229 | ||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 50,293 | 50,293 | ||||||||||||||||||||||||||||||||||||||||||||||
| EBITDA | 134,554 | 161,139 | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to EBITDA | 26,585 | (7,157 | ) | 1,106 | (5 | ) | (4,854 | ) | (2,032 | ) | (2,082 | ) | (3,739 | ) | (1,270 | ) | 968 | (7,520 | ) | - | ||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 161,139 | $ | (7,157 | ) | $ | 1,106 | $ | (5 | ) | $ | (4,854 | ) | $ | (2,032 | ) | $ | (2,082 | ) | $ | (3,739 | ) | $ | (1,270 | ) | $ | 968 | $ | (7,520 | ) | $ | 161,139 |
PARTY CITY HOLDCO INC.
RECONCILIATION OF ADJUSTED EBITDA, Continued
(In thousands, unaudited)
| Nine Months Ended September 30, 2020 EBITDA Adjustments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
September 30, 2020 GAAP Basis (as reported) |
Goodwill, intangibles and long-lived assets impairment (c) |
Store impairment and restructuring charges (a) |
Gain on debt refinancing (k) |
Corporate development expenses (g) |
Legal |
Stock Option Expense/Non- Employee Equity Compensation/ Restricted stock units (f)(g) |
Deferred Rent (d) |
Other restructuring, retention and severance (b) |
Closed store expense (e) |
COVID- 19 (i) |
Foreign currency loss |
Other |
September 30, 2020 Non-GAAP basis |
||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 1,202,509 | $ | 1,202,509 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 890,587 | (15,467 | ) | (214 | ) | (4,437 | ) | (42,446 | ) | (898 | ) | 827,125 | |||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 311,922 | 375,384 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale selling expenses | 37,115 | (1,840 | ) | (623 | ) | 34,652 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Retail operating expenses | 250,502 | 2,685 | (2,733 | ) | (16,312 | ) | 234,142 | ||||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 174,275 | (3,502 | ) | (7,170 | ) | (10,596 | ) | 147 | (7,264 | ) | (149 | ) | (11,678 | ) | 134,063 | ||||||||||||||||||||||||||||||||||||||||
| Art and development costs | 13,095 | 13,095 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Store impairment and restructuring charges | 20,818 | (20,818 | ) | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill, intangibles and long-lived assets impairment | 581,380 | (581,380 | ) | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (Loss) from operations | (765,263 | ) | (40,568 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 63,954 | 63,954 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | 4,287 | (851 | ) | (1,033 | ) | (955 | ) | (2,492 | ) | (1,044 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| (Gain) on debt refinancing | (273,149 | ) | 273,149 | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (Loss) before income taxes | (560,355 | ) | (103,478 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 63,954 | 63,954 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 57,796 | 57,796 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| EBITDA | (438,605 | ) | 18,272 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to EBITDA | 456,877 | (581,380 | ) | (36,285 | ) | 273,149 | (6,193 | ) | (7,170 | ) | (11,629 | ) | 2,618 | (11,701 | ) | (2,882 | ) | (71,059 | ) | (955 | ) | (3,390 | ) | - | |||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 18,272 | $ | (581,380 | ) | $ | (36,285 | ) | $ | 273,149 | $ | (6,193 | ) | $ | (7,170 | ) | $ | (11,629 | ) | $ | 2,618 | $ | (11,701 | ) | $ | (2,882 | ) | $ | (71,059 | ) | $ | (955 | ) | $ | (3,390 | ) | $ | 18,272 |
PARTY CITY HOLDCO INC.
RECONCILIATION OF ADJUSTED NET INCOME
(Unaudited)
| Three Months Ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||||
| (Loss) income before income taxes | $ | (2,401 | ) | $ | 235,501 | $ | 20,032 | $ | (560,355 | ) | ||||||
| Intangible asset amortization | 2,177 | 2,899 | 7,008 | 8,444 | ||||||||||||
| Amortization of deferred financing costs and original issuance discounts | 1,320 | 875 | 3,257 | 3,276 | ||||||||||||
| Store impairment and restructuring charges (a) | - | 1,321 | - | 29,475 | ||||||||||||
| Other restructuring charges (b) | - | 2,622 | 1,967 | 10,139 | ||||||||||||
| Goodwill, intangibles and long-lived assets impairment (c) | - | 44,732 | - | 581,380 | ||||||||||||
| Non-employee equity-based compensation (f) | - | - | - | 1,033 | ||||||||||||
| Non-recurring legal settlements/costs | - | 605 | - | 7,026 | ||||||||||||
| Stock option expense - time-based | 93 | 110 | 310 | 671 | ||||||||||||
| Stock option expense - performance - based | - | - | - | 7,847 | ||||||||||||
| Loss on sale of assets | 2,642 | - | 2,642 | - | ||||||||||||
| (Gain) on debt repayment/refinancing (k) | - | (273,149 | ) | - | (273,149 | ) | ||||||||||
| Restricted stock unit and restricted cash awards expense - performance-based | 930 | - | 2,901 | - | ||||||||||||
| COVID - 19 (i) | - | 733 | 1,270 | 71,113 | ||||||||||||
| Loss on sale of business | - | - | 3,211 | - | ||||||||||||
| Inventory disposals | - | - | 926 | - | ||||||||||||
| Adjusted income (loss) before income taxes | 4,761 | 16,249 | 43,524 | (113,100 | ) | |||||||||||
| Adjusted income tax expense (benefit) (h) | 1,902 | 5,234 | 11,966 | (36,416 | ) | |||||||||||
| Adjusted net income (loss) | $ | 2,859 | $ | 11,015 | $ | 31,558 | $ | (76,684 | ) | |||||||
| Adjusted net income (loss) per common share - diluted | $ | 0.02 | $ | 0.10 | $ | 0.27 | $ | (0.78 | ) | |||||||
| Weighted-average number of common shares-diluted | 116,467,755 | 106,875,631 | 115,822,121 | 97,872,174 |
(a) The Company performed a comprehensive review of its store locations aimed at improving the overall productivity of such locations ("store optimization program"). After careful consideration and evaluation of the store locations, the Company made the decision to accelerate the optimization of its store portfolio with the closure of stores, which are primarily located in close proximity to other Party City stores. For further detail, refer to Note 3 - Store Impairment and Restructuring Charges of Item 1, "Condensed Consolidated Financial Statements (Unaudited)" in the September 30, 2021 Quarterly Report on Form 10-Q 2021.
(b) Amounts expensed principally relate to severance due to organizational changes.
(c) As a result of a sustained decline in market capitalization and reduced fair value of certain intangibles and long-lived assets, the Company recognized non-cash pre-tax goodwill and intangibles impairment charges.
(d) The "deferred rent" adjustment reflects the difference between accounting for rent and landlord incentives in accordance with GAAP and the Company's actual cash outlay.
(e) Charges incurred related to closing and relocating stores in the ordinary course of business.
(f) The acquisition of Ampology's interest in Kazzam, LLC in an equity transaction. See Note 17 - Kazzam, LLC of Item 1 in the September 30, 2021 Quarterly Report on Form 10-Q.
(g) Primarily represents costs for Kazzam (See Note 17 - Kazzam, LLC of Item 1 in the September 30, 2021 Quarterly Report on Form 10-Q for further discussion).
(h) Represents income tax expense/benefit after excluding the specific tax impacts for each of the pre-tax adjustments. The tax impacts for each of the adjustments were determined by applying to the pre-tax adjustments the effective income tax rates for the specific legal entities in which the adjustments were recorded.
(i) Represents COVID-19 expenses for employees on temporary furlough for whom the Company provides health benefits; non-payroll expenses including advertising, occupancy and other store expenses.
(j) Costs incurred for early lease terminations and a merchandise transformation project to transition and optimize stores to the reduced SKU assortment levels.
(k) The Company recognized net gain on debt repayment in 2021. The Company recognized a gain on debt refinancing transactions in 2020.
PARTY CITY HOLDCO INC.
SEGMENT INFORMATION
(In thousands, except percentages, unaudited)
| Three Months Ended September 30, | ||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||
|
Dollars in Thousands |
Percentage of Net sales |
Dollars in Thousands |
Percentage of Net sales |
|||||||||||||||
| Net sales: | ||||||||||||||||||
| Wholesale | $ | 279,634 | 54.8 | % | $ | 346,621 | 64.9 | % | ||||||||||
| Eliminations | (168,308 | ) | (33.0 | ) | (179,049 | ) | (33.5 | ) | ||||||||||
| Net wholesale | 111,326 | 21.8 | 167,572 | 31.4 | ||||||||||||||
| Retail* | 398,873 | 78.2 | 366,203 | 68.6 | ||||||||||||||
| Total net sales | $ | 510,199 | 100.0 | % | $ | 533,775 | 100.0 | % |
*Retail net sales include royalties and franchise fees. Prior year amount conformed to current year presentation.
| Nine months ended September 30, | ||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||
|
Dollars in Thousands |
Percentage of Net sales |
Dollars in Thousands |
Percentage of Net sales |
|||||||||||||||
| Net sales: | ||||||||||||||||||
| Wholesale | $ | 722,732 | 49.1 | % | $ | 692,715 | 57.6 | % | ||||||||||
| Eliminations | (425,947 | ) | (28.9 | ) | (345,167 | ) | (28.7 | ) | ||||||||||
| Net wholesale | 296,785 | 20.2 | 347,548 | 28.9 | ||||||||||||||
| Retail* | 1,175,967 | 79.8 | 854,961 | 71.1 | ||||||||||||||
| Total net sales | $ | 1,472,752 | 100.0 | % | $ | 1,202,509 | 100.0 | % |
*Retail net sales include royalties and franchise fees. Prior year amount conformed to current year presentation.
| Three Months Ended September 30, | ||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||
|
Dollars in Thousands |
Percentage of Net Sales |
Dollars in Thousands |
Percentage of Net Sales |
|||||||||||||||
| Retail gross profit* | $ | 161,822 | 40.6 | % | $ | 135,539 | 37.0 | % | ||||||||||
| Wholesale gross profit | 21,876 | 19.7 | 42,313 | 25.3 | ||||||||||||||
| Total gross profit | $ | 183,698 | 36.0 | % | $ | 177,852 | 33.3 | % |
*Retail gross profit include royalties and franchise fees. Prior year amount conformed to current year presentation.
| Nine months ended September 30, | ||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||
| Dollars in Thousands | Percentage of Net Sales | Dollars in Thousands | Percentage of Net Sales | |||||||||||||||
| Retail gross profit* | $ | 478,565 | 40.7 | % | $ | 257,035 | 30.1 | % | ||||||||||
| Wholesale gross profit | 74,591 | 25.1 | 50,538 | 14.5 | ||||||||||||||
| Total gross profit | $ | 553,156 | 37.6 | % | $ | 307,573 | 25.6 | % |
*Retail gross profit include royalties and franchise fees. Prior year amount conformed to current year presentation.
PARTY CITY HOLDCO INC.
OPERATING METRICS
| Three months ended September 30, | LTM | |||||||||||
| 2021 | 2020 | 2021 | ||||||||||
| Store Count | ||||||||||||
| Corporate Stores: | ||||||||||||
| Beginning of period | 749 | 757 | 739 | |||||||||
| New stores opened | 4 | 1 | 12 | |||||||||
| Acquired | 6 | 2 | 10 | |||||||||
| Closed | (5 | ) | (21 | ) | (7 | ) | ||||||
| End of period | 754 | 739 | 754 | |||||||||
| Franchise Stores | ||||||||||||
| Beginning of period | 82 | 96 | 90 | |||||||||
| New stores opened | - | - | - | |||||||||
| Sold to Party City | (6 | ) | (1 | ) | (10 | ) | ||||||
| Closed | - | (5 | ) | (4 | ) | |||||||
| End of period | 76 | 90 | 76 | |||||||||
| Grand Total | 830 | 829 | 830 |
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Wholesale Share of Shelf (a) | 80.2 | % | 81.1 | % | 80.9 | % | 81.4 | % | ||||
| Manufacturing Share of Shelf (b) | 28.2 | % | 29.6 | % | 30.3 | % | 30.2 | % | ||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Brand comparable sales (c) | 7.5 | % | 8.3 | % | 43.7 | % | -21.8 | % |
(a) Wholesale share of shelf represents the percentage of our retail product cost of sales supplied by our wholesale operations.
(b) Manufacturing share of shelf represents the percentage of our retail product cost of sales manufactured by the company.
(c) Party City brand comparable sales include North American e-commerce sales.
Contact: ICR Farah Soi and Rachel Schacter 203-682-8200 [email protected]Source: Party City Holdco Inc.