Party City Holdco Inc. (the “Company” or “PRTY”; NYSE:PRTY)
today announced financial results for the quarter ended June 30,
2020.
Brad Weston, Chief Executive Officer, stated,
“Against a difficult, pandemic impacted backdrop, our teams
continued to execute with discipline and demonstrate their
resilience as we adapted quickly to changing operating conditions
in the second quarter. We made progress on our key strategic
priorities including the rapid launch and expansion of additional
customer fulfillment options, as well as relevant merchandising and
marketing strategies that resonated with our customers and
reflected their evolving approach to celebrations. We also took
significant steps to strengthen our financial position and just
last week successfully completed our exchange offers that enabled
us to extend our debt maturities, reduce our leverage and increase
our liquidity.”
Mr. Weston continued, “As our stores reopened,
overall business trends improved, and we have seen a continuation
of that improving trend so far in the third quarter, driven in
large part by a very successful graduation season, as well as kids’
birthday, including strength in balloon sales. However, the
environment remains highly uncertain and, as we head into the
important third quarter and Halloween selling season, we remain
disciplined in our approach to managing the business, continuing to
prioritize preservation of our financial health and liquidity,
while staying flexible so we can swiftly react to changing
operating conditions. With focused execution of our strategic
priorities, we are moving forward with our plan to stabilize the
business and reposition Party City for enduring success.”
Second Quarter Summary:
- Total revenues decreased 54.8% on a reported basis to $254.7
million and decreased 54.6% on a constant currency basis.
- Total Retail sales decreased 56.3% on a reported basis and
56.3% on a constant currency basis, principally due to the
temporary closure of all the Company’s retail stores during the
quarter.
- The Company began reopening stores on May 1, 2020, in
accordance with state and local health ordinances, and as of June
12, 2020 had reopened 85% of its stores. By June 22, 2020,
substantially all stores were re-opened.
- Brand comparable sales decreased 52.4% in the second quarter
due to the loss of store operating days for all of April and most
of May. For the month of June, brand comparable sales were down
6.5%. When looking at the cohort of stores that were open for the
entire month of June, including BOPIS (buy online, pickup in
store), curbside pickup, and same day delivery, brand comparable
sales for this cohort increased 6.3%.
- North American e-commerce sales increased 83.2% including
BOPIS, curbside pickup, and delivery, and increased 3.3% excluding
BOPIS, curbside pickup, and delivery.
- Net third-party Wholesale revenues decreased 50.3% or 49.5% in
constant currency and maintained approximately 70% of prior year
sales volume in the month of June.
- Total gross profit margin decreased 3,094 basis points to 6.2%
of net sales. Excluding certain items not indicative of core
operating performance, gross profit margin decreased 1,860 basis
points to 19.4% of net sales mainly due to deleveraging from lower
sales caused by the temporary closure of stores.
- Operating expenses totaled $142.4 million or $24.1 million
lower than the second quarter of 2019. Excluding certain
items not indicative of core operating performance, Operating
expenses totaled $115.7 million or $41.0 million lower than the
second quarter of 2019, primarily due to the temporary store
closures during the second quarter of 2020 and resulting cost
reductions implemented in response to the COVID-19 pandemic.
- Interest expense was $25.4 million during the second quarter of
2020, compared to $30.2 million during the second quarter of 2019
driven by lower interest rates and the pay down of debt associated
with the proceeds from the sale leaseback and Canadian retail
transactions.
- Reported GAAP net loss was $130.0 million, or a loss of $1.39
per share.
- Adjusted net loss was $61.3 million, or a loss of $0.66 per
share, compared to adjusted net income of $20.2 million, or $0.22
per share, in the second quarter of 2019. (See “Non-GAAP Financial
Information”)
- Adjusted EBITDA was a loss of $42.8 million, versus $81.0
million during the second quarter of 2019. (See “Non-GAAP Financial
Information”)
Balance Sheet Highlights:
As of the end of the second quarter on June 30,
2020, the Company had $154.1 million in cash, $1,743 million in
debt (net of cash) and approximately $136.1 million of availability
under the ABL Facility, for total liquidity of $290 million.
Reset of Capital Structure:
The previously announced exchange offers (the
“Exchange Offers”) that the Company commenced on June 26, 2020,
settled on July 30, 2020 with the participation of approximately
84.7% of the Company’s outstanding existing notes, including
approximately 93.5% of 6.125% Senior Notes due 2023 and
approximately 78.6% of 6.625% Senior Notes due 2026.
Through the Exchange Offers, participating
holders received a combination of:
- approximately 15.9 million shares of common stock of the
Company, par value $0.01 per share (the “Exchange Shares”);
- approximately $156.7 million of Senior Secured First Lien
Floating Rate Notes due 2025 (the “First Lien Party City Notes”)
issued by Party City Holdings Inc., a wholly owned indirect
subsidiary of the Company (“Holdings”), and secured by
first-priority liens on all assets of Holdings and its subsidiaries
that currently secure the Company’s existing senior credit
facilities; and
- approximately $84.7 million of 10.00% PIK/Cash Senior Secured
Second Lien Notes due 2026 (the “Second Lien Anagram Notes”) issued
by Anagram Holdings, LLC and Anagram International, Inc., wholly
owned indirect subsidiaries of the Company (together, the “Anagram
Issuers”), and secured by second-priority liens on assets of the
Anagram Issuers and their subsidiaries guaranteeing such notes,
subject to certain agreed upon exceptions.
In addition, in connection with the previously
announced rights offering and private placement related to the
Exchange Offers (together with the Exchange Offers, the
“Refinancing Transactions”), (i) the Anagram Issuers issued $110.0
million of 15.00% PIK/Cash Senior Secured First Lien Notes due
2025, secured by first-priority liens on assets of the Anagram
Issuers and their subsidiaries guaranteeing such notes, subject to
certain agreed upon exceptions; and (ii) Holdings issued an
additional $5.0 million of First Lien Party City Notes.
The Refinancing Transactions have the combined
effect of deleveraging the Company’s balance sheet by approximately
$463 million including raising $100 million in new capital to
increase its financial strength and support the Company’s global
operations and ongoing transformation initiatives. The accompanying
supplemental earnings material, available on the Company’s investor
relations website, contains further information, including on
pro-forma debt and cash. Given the completion of these
transactions, interest expense, assuming currently prevailing
interest rates and the current pro-forma capital structure, is
expected to be reduced by approximately $10 million on an
annualized basis. In addition, approximately 15.9 million
shares are being issued, which increases shares outstanding by the
same amount.
Store Optimization Program:
In 2019, the Company initiated a store
optimization program under which the Company identified
approximately 55 Party City stores to be closed. In addition, 21
stores were identified in 2020 for closure at a future date. The
Company also recorded an impairment charge for open stores where
sales were affected by COVID-19. In conjunction with the
program and store impairment, the Company’s Retail segment recorded
$1.2 million and $8.9 million of store impairment and restructuring
charges in the second quarter of 2020 and 2019, respectively.
Fiscal 2020 Outlook:
During the remainder of 2020, the Company plans
to close approximately 21 stores, open 4 new stores, with
approximately 6 new store openings planned to shift into 2021.
In 2020, the Company continues to plan to invest
approximately $35-$40 million dollars in capital expenditures, with
approximately one third invested in its retail segment, and the
balance invested in its manufacturing and distribution
capabilities.
Full year 2020 interest expense is expected to
be approximately $80 million. This is approximately $25 million
below our original expectation of $104-$106 million at the start of
the year and before COVID-19 related guidance withdrawal. The
reduction is due to approximately $5 million in partial year impact
of the Exchange Offers, as well as approximately $20 million in the
one-time elimination of the August 2020 semi-annual interest
payments for the senior notes participating in the Exchange
Offers.
Full year 2020 depreciation & amortization
is expected to be approximately $77 million.
As a result of the continued disruption and
uncertainty caused by the COVID-19 pandemic, the Company is not
providing any additional financial outlook information at this time
for fiscal 2020.
Conference Call
Information:
A conference call to discuss the second quarter
2020 financial results is scheduled for today, August 6, 2020, at
8:00 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 866-270-1533 (U.S. domestic) or
412-317-0797 (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 and Adjusted
Earnings per Share. 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. 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 free cash flow, defined as Adjusted EBITDA less capital
expenditures, and net debt leverage, 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. Adjusted Earnings per Share is
calculated by dividing Adjusted Net Income by the Weighted Average
Number of Common Shares-Diluted. 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 a 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, including Party City’s expectations regarding its
ability to maximize the potential of its plans to open and close
stores, plans to invest capital expenditures, and anticipated
interest expense and depreciation and amortization expense for
fiscal year 2020. 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: potential risks and uncertainties relating to the ultimate
geographic spread of COVID-19; the severity of the COVID-19
pandemic; the duration of the COVID-19 pandemic; actions that may
be taken by governmental authorities to contain the COVID-19
pandemic or to treat its impact; the potential negative impacts of
COVID-19 on the global economy and foreign sourcing; the impacts of
COVID-19 on our financial condition and business operation; 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 helium shortages 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, including as a result of the COVID-19
pandemic; 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, 2019 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 the 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 approximately 850 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
PARTY CITY HOLDCO INC.CONSOLIDATED
BALANCE SHEETS(In thousands, except share data,
unaudited)
|
|
June 30, |
|
|
December 31, |
|
2020 |
2019 |
|
|
(Note 2) |
|
|
(Note 2) |
|
(Unaudited) |
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
154,133 |
|
|
$ |
34,917 |
|
Accounts receivable, net |
|
|
85,081 |
|
|
|
149,109 |
|
Inventories, net |
|
|
635,014 |
|
|
|
658,419 |
|
Prepaid expenses and other current assets |
|
|
94,710 |
|
|
|
51,685 |
|
Total current assets |
|
|
968,938 |
|
|
|
894,130 |
|
Property,
plant and equipment, net |
|
|
223,433 |
|
|
|
243,572 |
|
Operating
lease asset |
|
|
755,288 |
|
|
|
802,634 |
|
Goodwill |
|
|
666,084 |
|
|
|
1,072,330 |
|
Trade
names |
|
|
394,203 |
|
|
|
530,320 |
|
Other
intangible assets, net |
|
|
39,402 |
|
|
|
45,060 |
|
Other
assets, net |
|
|
9,435 |
|
|
|
7,273 |
|
Total assets |
|
$ |
3,056,783 |
|
|
$ |
3,595,319 |
|
LIABILITIES, REDEEMABLE SECURITIES AND
STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Loans and notes payable |
|
$ |
325,754 |
|
|
$ |
128,806 |
|
Accounts payable |
|
|
144,849 |
|
|
|
152,300 |
|
Accrued expenses |
|
|
179,159 |
|
|
|
150,921 |
|
Current portion of operating lease liability |
|
|
202,971 |
|
|
|
155,471 |
|
Income taxes payable |
|
|
— |
|
|
|
35,905 |
|
Current portion of long-term obligations |
|
|
13,810 |
|
|
|
71,524 |
|
Total current liabilities |
|
|
866,543 |
|
|
|
694,927 |
|
Long-term
obligations, excluding current portion |
|
|
1,557,576 |
|
|
|
1,503,987 |
|
Long-term
portion of operating lease liability |
|
|
685,290 |
|
|
|
720,735 |
|
Deferred
income tax liabilities, net |
|
|
67,458 |
|
|
|
126,081 |
|
Other
long-term liabilities |
|
|
16,932 |
|
|
|
16,517 |
|
Total liabilities |
|
|
3,193,799 |
|
|
|
3,062,247 |
|
Redeemable
securities |
|
|
— |
|
|
|
3,351 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock (94,602,386 and 94,461,576 shares outstanding and
121,819,456 and |
|
|
1,211 |
|
|
|
1,211 |
|
121,662,540 shares issued at June 30, 2020 and
December 31, 2019, respectively) |
Additional paid-in capital |
|
|
941,745 |
|
|
|
928,573 |
|
Accumulated deficit |
|
|
(708,747 |
) |
|
|
(37,219 |
) |
Accumulated other comprehensive loss |
|
|
(43,849 |
) |
|
|
(35,734 |
) |
Total Party City Holdco Inc. stockholders’ equity before common
stock held in |
|
|
190,360 |
|
|
|
856,831 |
|
treasury |
Less: Common stock held in treasury, at cost (27,217,070 and
27,200,964 shares at |
|
|
(327,170 |
) |
|
|
(327,086 |
) |
June 30, 2020 and December 31, 2019, respectively) |
Total Party City Holdco Inc. stockholders’ equity |
|
|
(136,810 |
) |
|
|
529,745 |
|
Noncontrolling interests |
|
|
(206 |
) |
|
|
(24 |
) |
Total stockholders’ equity |
|
|
(137,016 |
) |
|
|
529,721 |
|
Total liabilities, redeemable securities and stockholders’
equity |
|
$ |
3,056,783 |
|
|
$ |
3,595,319 |
|
|
|
|
|
|
|
|
|
|
PARTY CITY HOLDCO INC.CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except share and per share data,
unaudited)
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
253,646 |
|
|
$ |
561,702 |
|
|
$ |
666,107 |
|
|
$ |
1,072,804 |
|
Royalties and franchise fees |
|
|
1,045 |
|
|
|
2,189 |
|
|
|
2,627 |
|
|
|
4,203 |
|
Total revenues |
|
|
254,691 |
|
|
|
563,891 |
|
|
|
668,734 |
|
|
|
1,077,007 |
|
Cost of
sales |
|
|
237,907 |
|
|
|
353,056 |
|
|
|
534,664 |
|
|
|
692,098 |
|
Wholesale
selling expenses |
|
|
9,707 |
|
|
|
16,884 |
|
|
|
25,165 |
|
|
|
34,845 |
|
Retail
operating expenses |
|
|
65,236 |
|
|
|
96,143 |
|
|
|
153,402 |
|
|
|
191,161 |
|
Franchise
expenses |
|
|
3,121 |
|
|
|
3,236 |
|
|
|
6,430 |
|
|
|
6,539 |
|
General and
administrative expenses |
|
|
59,931 |
|
|
|
41,510 |
|
|
|
119,927 |
|
|
|
83,435 |
|
Art and
development costs |
|
|
3,516 |
|
|
|
5,712 |
|
|
|
8,838 |
|
|
|
11,641 |
|
Development
stage expenses |
|
|
903 |
|
|
|
3,012 |
|
|
|
2,932 |
|
|
|
5,238 |
|
Gain on
sale/leaseback transaction |
|
|
— |
|
|
|
(58,381 |
) |
|
|
— |
|
|
|
(58,381 |
) |
Store
impairment and restructuring charges |
|
|
1,164 |
|
|
|
5,234 |
|
|
|
18,892 |
|
|
|
23,243 |
|
Goodwill and
intangibles impairment |
|
|
— |
|
|
|
— |
|
|
|
536,648 |
|
|
|
— |
|
Total expenses |
|
|
381,485 |
|
|
|
466,406 |
|
|
|
1,406,898 |
|
|
|
989,819 |
|
(Loss) income from operations |
|
|
(126,794 |
) |
|
|
97,485 |
|
|
|
(738,164 |
) |
|
|
87,188 |
|
Interest
expense, net |
|
|
25,412 |
|
|
|
30,176 |
|
|
|
50,532 |
|
|
|
59,433 |
|
Other
expense, net |
|
|
1,484 |
|
|
|
3,342 |
|
|
|
7,160 |
|
|
|
4,596 |
|
(Loss) income before income taxes |
|
|
(153,690 |
) |
|
|
63,967 |
|
|
|
(795,856 |
) |
|
|
23,159 |
|
Income tax
(benefit) expense |
|
|
(23,631 |
) |
|
|
15,962 |
|
|
|
(124,129 |
) |
|
|
5,443 |
|
Net (loss) income |
|
|
(130,059 |
) |
|
|
48,005 |
|
|
|
(671,727 |
) |
|
|
17,716 |
|
Less: Net
loss attributable to noncontrolling interests |
|
|
(44 |
) |
|
|
(69 |
) |
|
|
(199 |
) |
|
|
(140 |
) |
Net (loss) income attributable to common shareholders of Party City
Holdco Inc. |
|
$ |
(130,015 |
) |
|
$ |
48,074 |
|
|
$ |
(671,528 |
) |
|
$ |
17,856 |
|
Net (loss)
income per share attributable to common shareholders of Party City
Holdco Inc.–Basic |
|
$ |
(1.39 |
) |
|
$ |
0.52 |
|
|
$ |
(7.19 |
) |
|
$ |
0.19 |
|
Net (loss)
income per share attributable to common shareholders of Party City
Holdco Inc.–Diluted |
|
$ |
(1.39 |
) |
|
$ |
0.51 |
|
|
$ |
(7.19 |
) |
|
$ |
0.19 |
|
Weighted-average number of common shares-Basic |
|
|
93,419,078 |
|
|
|
93,293,176 |
|
|
|
93,407,344 |
|
|
|
93,233,865 |
|
Weighted-average number of common shares-Diluted |
|
|
93,419,078 |
|
|
|
93,703,546 |
|
|
|
93,407,344 |
|
|
|
93,791,763 |
|
Dividends
declared per share |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Comprehensive (loss) income |
|
$ |
(125,961 |
) |
|
$ |
48,327 |
|
|
$ |
(679,842 |
) |
|
$ |
21,690 |
|
Less:
Comprehensive loss attributable to noncontrolling interests |
|
|
(44 |
) |
|
|
(89 |
) |
|
|
(199 |
) |
|
|
(151 |
) |
Comprehensive (loss) income attributable to common shareholders of
Party City Holdco Inc. |
|
$ |
(125,917 |
) |
|
$ |
48,416 |
|
|
$ |
(679,643 |
) |
|
$ |
21,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTY CITY HOLDCO INC. RECONCILIATION OF ADJUSTED
EBITDA(In thousands, unaudited)
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income |
|
$ |
(130,059 |
) |
|
$ |
48,005 |
|
|
$ |
(671,727 |
) |
|
$ |
17,716 |
|
Interest expense, net |
|
|
25,412 |
|
|
|
30,176 |
|
|
|
50,532 |
|
|
|
59,433 |
|
Income tax (benefit) expense |
|
|
(23,631 |
) |
|
|
15,962 |
|
|
|
(124,129 |
) |
|
|
5,443 |
|
Depreciation and amortization |
|
|
22,766 |
|
|
|
21,884 |
|
|
|
40,518 |
|
|
|
43,225 |
|
EBITDA |
|
|
(105,512 |
) |
|
|
116,027 |
|
|
|
(704,806 |
) |
|
|
125,817 |
|
Non-cash purchase accounting adjustments |
|
|
— |
|
|
|
1,756 |
|
|
|
— |
|
|
|
2,757 |
|
Store impairment and restructuring charges (a) |
|
|
1,761 |
|
|
|
10,628 |
|
|
|
29,522 |
|
|
|
46,266 |
|
Other restructuring, retention and severance (b) |
|
|
5,697 |
|
|
|
3,933 |
|
|
|
8,744 |
|
|
|
5,321 |
|
Goodwill and intangibles impairment (c) |
|
|
— |
|
|
|
— |
|
|
|
536,648 |
|
|
|
— |
|
Deferred rent (d) |
|
|
(1,488 |
) |
|
|
(338 |
) |
|
|
(2,872 |
) |
|
|
(1,488 |
) |
Closed store expense (e) |
|
|
400 |
|
|
|
507 |
|
|
|
1,635 |
|
|
|
1,098 |
|
Foreign currency losses/(gains), net |
|
|
12 |
|
|
|
133 |
|
|
|
4,267 |
|
|
|
(160 |
) |
Stock option expense – time – based (f) |
|
|
206 |
|
|
|
371 |
|
|
|
560 |
|
|
|
741 |
|
Stock option expense – performance – based (n) |
|
|
7,847 |
|
|
|
— |
|
|
|
7,847 |
|
|
|
— |
|
Non-employee equity-based compensation (g) |
|
|
— |
|
|
|
129 |
|
|
|
1,033 |
|
|
|
258 |
|
Undistributed income in equity method investments |
|
|
559 |
|
|
|
(4 |
) |
|
|
415 |
|
|
|
(202 |
) |
Corporate development expenses (h) |
|
|
2,643 |
|
|
|
4,349 |
|
|
|
5,612 |
|
|
|
7,194 |
|
Restricted stock units – time-based (i) |
|
|
518 |
|
|
|
541 |
|
|
|
1,139 |
|
|
|
933 |
|
Restricted stock unit expense – performance-based (m) |
|
|
— |
|
|
|
476 |
|
|
|
— |
|
|
|
476 |
|
Non-recurring legal settlements/costs |
|
|
188 |
|
|
|
869 |
|
|
|
6,509 |
|
|
|
1,601 |
|
Gain on sale/leaseback transaction (o) |
|
|
— |
|
|
|
(58,381 |
) |
|
|
— |
|
|
|
(58,381 |
) |
COVID - 19 (l) |
|
|
44,200 |
|
|
|
— |
|
|
|
70,380 |
|
|
|
— |
|
Other |
|
|
216 |
|
|
|
44 |
|
|
|
2,488 |
|
|
|
291 |
|
Adjusted EBITDA |
|
$ |
(42,753 |
) |
|
$ |
81,040 |
|
|
$ |
(30,879 |
) |
|
$ |
132,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTY CITY HOLDCO INC. RECONCILIATION OF ADJUSTED
EBITDA, Continued(In thousands,
unaudited)
|
|
|
|
Three Months Ended June 30, 2020 EBITDA
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
June 30,2020GAAPBasis (asreported) |
Storeimpairmentandrestructuringcharges
(a) |
Corporatedevelopmentexpenses (h) |
Stock OptionExpense/Non-Employee
EquityCompensation/Restrictedstock
units – time-based(f)(g)(i)(n) |
DeferredRent (d) |
Other restructuring, retention and severance
(b) |
Closed store expense (e) |
COVID-19 (l) |
Foreign currency losses |
June 30, 2020 Non-GAAP basis |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
253,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
253,646 |
|
Royalties and franchise fees |
|
1,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,045 |
|
Total revenues |
|
254,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
254,691 |
|
Cost of
sales |
|
237,907 |
|
|
|
(597 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(134 |
) |
|
|
(4,437 |
) |
|
|
|
|
|
|
(28,376 |
) |
|
|
|
|
|
|
|
|
|
|
204,363 |
|
Wholesale
selling expenses |
|
9,707 |
|
|
|
|
|
|
|
(1,104 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(509 |
) |
|
|
|
|
|
|
|
|
|
|
8,094 |
|
Retail
operating expenses |
|
65,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,573 |
|
|
|
|
|
|
|
(342 |
) |
|
|
(4,389 |
) |
|
|
|
|
|
|
|
|
|
|
62,078 |
|
Franchise
expenses |
|
3,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(343 |
) |
|
|
|
|
|
|
|
|
|
|
2,778 |
|
General and
administrative |
|
59,931 |
|
|
|
|
|
|
|
(100 |
) |
|
|
(188 |
) |
|
|
(8,571 |
) |
|
|
49 |
|
|
|
(1,260 |
) |
|
|
(58 |
) |
|
|
(10,583 |
) |
|
|
|
|
|
|
|
|
|
|
39,220 |
|
expenses |
Art and
development costs |
|
3,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,516 |
|
Development
stage expenses |
|
903 |
|
|
|
|
|
|
|
(903 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Store
impairment and restructuring |
|
1,164 |
|
|
|
(1,164 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
charges |
Total expenses |
|
381,485 |
|
|
|
(1,761 |
) |
|
|
(2,107 |
) |
|
|
(188 |
) |
|
|
(8,571 |
) |
|
|
1,488 |
|
|
|
(5,697 |
) |
|
|
(400 |
) |
|
|
(44,200 |
) |
|
|
— |
|
|
|
— |
|
|
|
320,049 |
|
Loss
from operations |
|
(126,794 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(65,358 |
) |
Interest
expense, net |
|
25,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,412 |
|
Other
expense, net |
|
1,484 |
|
|
|
|
|
|
|
(536 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12 |
) |
|
|
(775 |
) |
|
|
161 |
|
Loss before
income taxes |
|
(153,690 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(90,931 |
) |
Interest expense, net |
|
25,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,412 |
|
Depreciation and amortization |
|
22,766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,766 |
|
EBITDA |
|
(105,512 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(42,753 |
) |
Adjustments to EBITDA |
|
62,759 |
|
|
|
(1,761 |
) |
|
|
(2,643 |
) |
|
|
(188 |
) |
|
|
(8,571 |
) |
|
|
1,488 |
|
|
|
(5,697 |
) |
|
|
(400 |
) |
|
|
(44,200 |
) |
|
|
(12 |
) |
|
|
(775 |
) |
|
|
— |
|
Adjusted EBITDA |
$ |
(42,753 |
) |
|
$ |
(1,761 |
) |
|
$ |
(2,643 |
) |
|
$ |
(188 |
) |
|
$ |
(8,571 |
) |
|
$ |
1,488 |
|
|
$ |
(5,697 |
) |
|
$ |
(400 |
) |
|
$ |
(44,200 |
) |
|
$ |
(12 |
) |
|
$ |
(775 |
) |
|
$ |
(42,753 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTY CITY HOLDCO INC. RECONCILIATION OF ADJUSTED
EBITDA, Continued(In thousands,
unaudited)
|
|
|
|
|
|
Three Months Ended June 30, 2019 EBITDA
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
June 30, 2019 GAAP Basis (as reported) |
Storeimpairmentandrestructuringcharges
(a) |
Gain on sale/leaseback transaction (o) |
Corporatedevelopmentexpenses
(h) |
Stock
OptionExpense/Non-Employee
EquityCompensation/Restrictedstock
units – time-based(f)(g)(i)(m) |
Deferred Rent (d) |
Other restructuring, retention and severance
(b) |
Closed store expense (e) |
Non-Cash Purchase Accounting
Adjustments |
Foreign currency gains |
June 30, 2019 Non-GAAP basis |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
561,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
561,702 |
|
Royalties and franchise fees |
|
|
2,189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,189 |
|
Total revenues |
|
|
563,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
563,891 |
|
Cost of
sales |
|
|
353,056 |
|
|
|
(5,394 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
348,000 |
|
Wholesale
selling expenses |
|
|
16,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,884 |
|
Retail
operating expenses |
|
|
96,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
(393 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95,750 |
|
Franchise
expenses |
|
|
3,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,236 |
|
General and
administrative expenses |
|
|
41,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(869 |
) |
|
|
(1,517 |
) |
|
|
|
|
|
|
(3,933 |
) |
|
|
(114 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,077 |
|
Art and
development costs |
|
|
5,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,712 |
|
Development
stage expenses |
|
|
3,012 |
|
|
|
|
|
|
|
|
|
|
|
(3,012 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Gain on
sale/leaseback transaction |
|
|
(58,381 |
) |
|
|
|
|
|
|
58,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Store
impairment and restructuring charges |
|
|
5,234 |
|
|
|
(5,234 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Total expenses |
|
|
466,406 |
|
|
|
(10,628 |
) |
|
|
58,381 |
|
|
|
(3,012 |
) |
|
|
(869 |
) |
|
|
(1,517 |
) |
|
|
338 |
|
|
|
(3,933 |
) |
|
|
(507 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
504,659 |
|
Income from operations |
|
|
97,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,232 |
|
Interest
expense, net |
|
|
30,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,176 |
|
Other
expense, net |
|
|
3,342 |
|
|
|
|
|
|
|
|
|
|
|
(1,337 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,756 |
) |
|
|
(133 |
) |
|
|
(40 |
) |
|
|
76 |
|
Income
before income taxes |
|
|
63,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,980 |
|
Interest expense, net |
|
|
30,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,176 |
|
Depreciation and amortization |
|
|
21,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,884 |
|
EBITDA |
|
|
116,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81,040 |
|
Adjustments to EBITDA |
|
|
(34,987 |
) |
|
|
(10,628 |
) |
|
|
58,381 |
|
|
|
(4,349 |
) |
|
|
(869 |
) |
|
|
(1,517 |
) |
|
|
338 |
|
|
|
(3,933 |
) |
|
|
(507 |
) |
|
|
(1,756 |
) |
|
|
(133 |
) |
|
|
(40 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
81,040 |
|
|
$ |
(10,628 |
) |
|
$ |
58,381 |
|
|
$ |
(4,349 |
) |
|
$ |
(869 |
) |
|
$ |
(1,517 |
) |
|
$ |
338 |
|
|
$ |
(3,933 |
) |
|
$ |
(507 |
) |
|
$ |
(1,756 |
) |
|
$ |
(133 |
) |
|
$ |
(40 |
) |
|
$ |
81,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTY CITY HOLDCO INC. RECONCILIATION OF ADJUSTED
EBITDA, Continued(In thousands,
unaudited)
|
|
|
|
|
|
Six Months Ended June 30, 2020 EBITDA
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
June 30, 2020 GAAP Basis (as reported) |
Goodwill and intangibles impairment (c) |
Store impairment and restructuring charges
(a) |
Corporate development expenses (h) |
Stock Option Expense/Non-Employee Equity
Compensation/Restricted stock units
(f)(g)(i)(n) |
Deferred Rent (d) |
Other restructuring, retention and severance
(b) |
Closed store expense (e) |
COVID-19 (l) |
Foreign currency losses |
June 30, 2020 Non-GAAP basis |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
666,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
666,107 |
|
Royalties and franchise fees |
|
|
2,627 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,627 |
|
Total revenues |
|
|
668,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
668,734 |
|
Cost of
sales |
|
|
534,664 |
|
|
|
|
|
|
|
(10,630 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(134 |
) |
|
|
(4,437 |
) |
|
|
|
|
|
|
(41,180 |
) |
|
|
|
|
|
|
(429 |
) |
|
|
477,854 |
|
Wholesale
selling expenses |
|
|
25,165 |
|
|
|
|
|
|
|
|
|
|
|
(1,840 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(623 |
) |
|
|
|
|
|
|
|
|
|
|
22,702 |
|
Retail
operating expenses |
|
|
153,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,909 |
|
|
|
|
|
|
|
(1,508 |
) |
|
|
(14,567 |
) |
|
|
|
|
|
|
|
|
|
|
140,236 |
|
Franchise
expenses |
|
|
6,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(672 |
) |
|
|
|
|
|
|
|
|
|
|
5,758 |
|
General and
administrative expenses |
|
|
119,927 |
|
|
|
|
|
|
|
|
|
|
|
(200 |
) |
|
|
(6,509 |
) |
|
|
(9,546 |
) |
|
|
97 |
|
|
|
(4,307 |
) |
|
|
(127 |
) |
|
|
(13,338 |
) |
|
|
|
|
|
|
|
|
|
|
85,997 |
|
Art and
development costs |
|
|
8,838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,838 |
|
Development
stage expenses |
|
|
2,932 |
|
|
|
|
|
|
|
|
|
|
|
(2,932 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Store
impairment and restructuring charges |
|
|
18,892 |
|
|
|
|
|
|
|
(18,892 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Goodwill and
intangibles impairment |
|
|
536,648 |
|
|
|
(536,648 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Total expenses |
|
|
1,406,898 |
|
|
|
(536,648 |
) |
|
|
(29,522 |
) |
|
|
(4,972 |
) |
|
|
(6,509 |
) |
|
|
(9,546 |
) |
|
|
2,872 |
|
|
|
(8,744 |
) |
|
|
(1,635 |
) |
|
|
(70,380 |
) |
|
|
— |
|
|
|
(429 |
) |
|
|
741,385 |
|
Loss
from operations |
|
|
(738,164 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(72,651 |
) |
Interest expense, net |
|
|
50,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,532 |
|
Other expense, net |
|
|
7,160 |
|
|
|
|
|
|
|
|
|
|
|
(640 |
) |
|
|
|
|
|
|
(1,033 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,267 |
) |
|
|
(2,474 |
) |
|
|
(1,254 |
) |
Loss before
income taxes |
|
|
(795,856 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(121,929 |
) |
Interest expense, net |
|
|
50,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,532 |
|
Depreciation and amortization |
|
|
40,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,518 |
|
EBITDA |
|
|
(704,806 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(30,879 |
) |
Adjustments to EBITDA |
|
|
673,927 |
|
|
|
(536,648 |
) |
|
|
(29,522 |
) |
|
|
(5,612 |
) |
|
|
(6,509 |
) |
|
|
(10,579 |
) |
|
|
2,872 |
|
|
|
(8,744 |
) |
|
|
(1,635 |
) |
|
|
(70,380 |
) |
|
|
(4,267 |
) |
|
|
(2,903 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
(30,879 |
) |
|
$ |
(536,648 |
) |
|
$ |
(29,522 |
) |
|
$ |
(5,612 |
) |
|
$ |
(6,509 |
) |
|
$ |
(10,579 |
) |
|
$ |
2,872 |
|
|
$ |
(8,744 |
) |
|
$ |
(1,635 |
) |
|
$ |
(70,380 |
) |
|
$ |
(4,267 |
) |
|
$ |
(2,903 |
) |
|
$ |
(30,879 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTY CITY HOLDCO INC. RECONCILIATION OF ADJUSTED
EBITDA, Continued(In thousands,
unaudited)
|
|
|
|
|
|
Six Months Ended June 30, 2019 EBITDA
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
June 30,2019 GAAP Basis (as
reported) |
Store impairment and restructuring charges
(a) |
Gain on sale/leaseback transaction (o) |
Corporate development expenses (h) |
Stock Option Expense/Non-Employee Equity
Compensation/Restricted stock units (f)(g)(i)(m) |
Deferred Rent (d) |
Other restructuring, retention and severance
(b) |
Closed store expense (e) |
Non-Cash Purchase Accounting
Adjustments |
Foreign Currency gains |
June 30, 2019 Non-GAAP basis |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
1,072,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,072,804 |
|
Royalties and franchise fees |
|
|
4,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,203 |
|
Total revenues |
|
|
1,077,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,077,007 |
|
Cost of
sales |
|
|
692,098 |
|
|
|
(23,023 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
670,563 |
|
Wholesale
selling expenses |
|
|
34,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,845 |
|
Retail
operating expenses |
|
|
191,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31 |
) |
|
|
(872 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
190,258 |
|
Franchise
expenses |
|
|
6,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,539 |
|
General and
administrative expenses |
|
|
83,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,601 |
) |
|
|
(2,408 |
) |
|
|
|
|
|
|
(5,290 |
) |
|
|
(226 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,910 |
|
Art and
development costs |
|
|
11,641 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,641 |
|
Development
stage expenses |
|
|
5,238 |
|
|
|
|
|
|
|
|
|
|
|
(5,238 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Gain on
sale/leaseback transaction |
|
|
(58,381 |
) |
|
|
|
|
|
|
58,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Store
impairment and restructuring charges |
|
|
23,243 |
|
|
|
(23,243 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Total expenses |
|
|
989,819 |
|
|
|
(46,266 |
) |
|
|
58,381 |
|
|
|
(5,238 |
) |
|
|
(1,601 |
) |
|
|
(2,408 |
) |
|
|
1,488 |
|
|
|
(5,321 |
) |
|
|
(1,098 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
987,756 |
|
Income from operations |
|
|
87,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
89,251 |
|
Interest
expense, net |
|
|
59,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,433 |
|
Other
expense, net |
|
|
4,596 |
|
|
|
|
|
|
|
|
|
|
|
(1,956 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,757 |
) |
|
|
160 |
|
|
|
(89 |
) |
|
|
(46 |
) |
Income
before income taxes |
|
|
23,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,864 |
|
Interest expense, net |
|
|
59,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,433 |
|
Depreciation and amortization |
|
|
43,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,225 |
|
EBITDA |
|
|
125,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
132,522 |
|
Adjustments to EBITDA |
|
|
6,705 |
|
|
|
(46,266 |
) |
|
|
58,381 |
|
|
|
(7,194 |
) |
|
|
(1,601 |
) |
|
|
(2,408 |
) |
|
|
1,488 |
|
|
|
(5,321 |
) |
|
|
(1,098 |
) |
|
|
(2,757 |
) |
|
|
160 |
|
|
|
(89 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
132,522 |
|
|
$ |
(46,266 |
) |
|
$ |
58,381 |
|
|
$ |
(7,194 |
) |
|
$ |
(1,601 |
) |
|
$ |
(2,408 |
) |
|
$ |
1,488 |
|
|
$ |
(5,321 |
) |
|
$ |
(1,098 |
) |
|
$ |
(2,757 |
) |
|
$ |
160 |
|
|
$ |
(89 |
) |
|
$ |
132,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
During the three and six months ended June 30, 2019, the
Company initiated a store optimization program under which it
identified 55 stores for closure, out of which 35 stores were
closed in 2019 and 20 stores were closed in January 2020. In
addition, 21 stores were identified in 2020 for closure at a future
date. In conjunction with the program, during the first six months
of 2020, the Company recorded the following charges: inventory
reserves: $11,696, operating lease asset impairment: $8,343, plant
and equipment impairment: $2,065 and labor and other costs related
to closing the stores: $2,434. In addition the Company recorded
$6,051 of operating lease asset impairment related to its active
stores, driven partially by stores that were closed due to
COVID-19. During the first six months of 2019, the Company recorded
the following charges related to the store optimization program:
inventory reserves: $21,285, operating lease asset impairment:
$14,149, property, plant and equipment impairment: $4,680 and
severance: $661. See Note 3 – Store Impairment and Restructuring
Charges in Item 1 for further discussion. Additionally, during the
process of liquidating the inventory in such stores, the Company
lost margin of $1,577. |
(b) |
|
Amounts expensed during the first six months of 2020
principally relate to severance due to organizational changes.
Amounts expensed during 2019 principally relate to executive
severance and the write-off of inventory for a section of the
Company’s Party City stores that is being restructured. |
(c) |
|
As a result of a sustained decline in market capitalization,
the Company recognized a non-cash pre-tax goodwill and intangibles
impairment charge for six months ended June 30, 2020 of
$536.6. |
(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 for such items. During the
first quarter of 2019, the Company adopted ASC 842. Under the
standard, the difference between accounting for rent and landlord
incentives in accordance with GAAP and the Company’s actual cash
outlay for such items is now incorporated in the Company’s
operating lease asset. |
(e) |
|
Charges incurred related to closing and relocating stores in
the ordinary course of business. |
(f) |
|
Represents non-cash charges related to stock options –
time-based and performance-based. |
(g) |
|
The acquisition of Ampology’s interest in Kazzam, LLC in an
equity transaction. See Note 19 – Kazzam, LLC in Item 1 for further
discussion. |
(h) |
|
Primarily represents costs for Kazzam (see Note 19 – Kazzam,
LLC in Item 1 for further discussion) and third-party costs related
to acquisitions (principally legal and diligence
expenses). |
(i) |
|
Non-cash charges for restricted stock units that vest based on
service conditions. |
(j) |
|
During February 2018, the Company amended the Term Loan Credit
Agreement. In conjunction with the amendment, the Company wrote-off
capitalized deferred financing costs, original issue discounts and
call premiums. The amounts are included in “Amortization of
deferred financing costs and original issuance discounts” in the
adjusted net income table above. |
(k) |
|
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. |
(l) |
|
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. |
(m) |
|
Non-cash charges for restricted stock units that vest based on
performance conditions. |
(n) |
|
Represents non-cash charges related to stock options that vest
based on performance conditions. For the three and six months ended
June 30, 2020, this includes a one-time compensation expense of
$7,847 that resulted fromTHL not achieving specified investment
returns. See Note 10 - Capital Stock in the Company’s Form 10-Q for
the quarterly period ended June 30, 2020. |
(o) |
|
During June 2019, the Company reported a $58,381 gain from the
sale and leaseback of its main distribution center in Chester, New
York and its metallic balloons manufacturing facility in Eden
Prairie, Minnesota. The aggregate sale price for the three
properties was $128,000. Simultaneous with the sale, the Company
entered into twenty-year leases for each of the facilities. |
PARTY CITY HOLDCO INC. RECONCILIATION OF ADJUSTED NET
INCOME(In thousands, except share and per share
data, unaudited)
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(Dollars in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes |
|
$ |
(153,690 |
) |
|
$ |
63,967 |
|
|
$ |
(795,856 |
) |
|
$ |
23,159 |
|
Intangible asset amortization |
|
|
2,679 |
|
|
|
3,546 |
|
|
|
5,545 |
|
|
|
6,975 |
|
Non-cash purchase accounting adjustments |
|
|
— |
|
|
|
2,459 |
|
|
|
— |
|
|
|
3,776 |
|
Amortization of deferred financing costs and original |
|
|
1,199 |
|
|
|
1,146 |
|
|
|
2,401 |
|
|
|
2,289 |
|
issuance discounts (j) |
Store impairment and restructuring charges (a) |
|
|
181 |
|
|
|
10,628 |
|
|
|
28,154 |
|
|
|
46,266 |
|
Other restructuring charges (b) |
|
|
6,595 |
|
|
|
3,085 |
|
|
|
7,517 |
|
|
|
3,085 |
|
Goodwill and intangibles impairment (c) |
|
|
— |
|
|
|
— |
|
|
|
536,648 |
|
|
|
— |
|
Non-employee equity-based compensation (g) |
|
|
— |
|
|
|
129 |
|
|
|
1,033 |
|
|
|
258 |
|
Refinancing charges (j) |
|
|
— |
|
|
|
36 |
|
|
|
— |
|
|
|
36 |
|
Non-recurring legal settlements/costs |
|
|
100 |
|
|
|
— |
|
|
|
6,421 |
|
|
|
— |
|
Stock option expense – time – based (f) |
|
|
561 |
|
|
|
371 |
|
|
|
561 |
|
|
|
741 |
|
Stock option expense – performance – based (n) |
|
|
7,493 |
|
|
|
— |
|
|
|
7,847 |
|
|
|
— |
|
Gain on sale/leaseback transaction (o) |
|
|
— |
|
|
|
(58,381 |
) |
|
|
— |
|
|
|
(58,381 |
) |
Restricted stock unit expense – performance-based (m) |
|
|
— |
|
|
|
476 |
|
|
|
— |
|
|
|
476 |
|
COVID - 19 (l) |
|
|
44,200 |
|
|
|
— |
|
|
|
70,380 |
|
|
|
— |
|
Adjusted (loss) income before income taxes |
|
|
(90,682 |
) |
|
|
27,462 |
|
|
|
(129,349 |
) |
|
|
28,680 |
|
Adjusted income tax (benefit) expense (k) |
|
|
(29,366 |
) |
|
|
7,227 |
|
|
|
(41,650 |
) |
|
|
7,342 |
|
Adjusted net (loss) income |
|
$ |
(61,316 |
) |
|
$ |
20,235 |
|
|
$ |
(87,699 |
) |
|
$ |
21,338 |
|
Adjusted net (loss) income per common share
– diluted |
|
$ |
(0.66 |
) |
|
$ |
0.22 |
|
|
$ |
(0.94 |
) |
|
$ |
0.23 |
|
Weighted-average number of common shares-diluted |
|
|
93,419,078 |
|
|
|
93,703,546 |
|
|
|
93,407,344 |
|
|
|
93,791,763 |
|
(a) |
|
During the three and six months ended June 30, 2019, the
Company initiated a store optimization program under which it
identified 55 stores for closure, out of which 35 stores were
closed in 2019 and 20 stores were closed in January 2020. In
addition, 21 stores were identified in 2020 for closure at a future
date. In conjunction with the program, during the first six months
of 2020, the Company recorded the following charges: inventory
reserves: $11,696, operating lease asset impairment: $8,343, plant
and equipment impairment: $2,065 and labor and other costs related
to closing the stores: $2,434. In addition the Company recorded
$6,051 of operating lease asset impairment related to its active
stores, driven partially by stores that were closed due to
COVID-19. During the first six months of 2019, the Company recorded
the following charges related to the store optimization program:
inventory reserves: $21,285, operating lease asset impairment:
$14,149, property, plant and equipment impairment: $4,680 and
severance: $661. See Note 3 – Store Impairment and Restructuring
Charges in Item 1 for further discussion. Additionally, during the
process of liquidating the inventory in such stores, the Company
lost margin of $1,577. |
(b) |
|
Amounts expensed during the first six months of 2020
principally relate to severance due to organizational changes.
Amounts expensed during 2019 principally relate to executive
severance and the write-off of inventory for a section of the
Company’s Party City stores that is being restructured. |
(c) |
|
As a result of a sustained decline in market capitalization,
the Company recognized a non-cash pre-tax goodwill and intangibles
impairment charge for six months ended June 30, 2020 of
$536.6. |
(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 for such items. During the
first quarter of 2019, the Company adopted ASC 842. Under the
standard, the difference between accounting for rent and landlord
incentives in accordance with GAAP and the Company’s actual cash
outlay for such items is now incorporated in the Company’s
operating lease asset. |
(e) |
|
Charges incurred related to closing and relocating stores in
the ordinary course of business. |
(f) |
|
Represents non-cash charges related to stock options –
time-based and performance-based. |
(g) |
|
The acquisition of Ampology’s interest in Kazzam, LLC in an
equity transaction. See Note 19 – Kazzam, LLC in Item 1 for further
discussion. |
(h) |
|
Primarily represents costs for Kazzam (see Note 19 – Kazzam,
LLC in Item 1 for further discussion) and third-party costs related
to acquisitions (principally legal and diligence
expenses). |
(i) |
|
Non-cash charges for restricted stock units that vest based on
service conditions. |
(j) |
|
During February 2018, the Company amended the Term Loan Credit
Agreement. In conjunction with the amendment, the Company wrote-off
capitalized deferred financing costs, original issue discounts and
call premiums. The amounts are included in “Amortization of
deferred financing costs and original issuance discounts” in the
adjusted net income table above. |
(k) |
|
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. |
(l) |
|
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. |
(m) |
|
Non-cash charges for restricted stock units that vest based on
performance conditions. |
(n) |
|
Represents non-cash charges related to stock options that vest
based on performance conditions. For the three and six months ended
June 30, 2020, this includes a one-time compensation expense of
$7,847 that resulted fromTHL not achieving specified investment
returns. See Note 10 - Capital Stock in the Company’s Form 10-Q for
the quarterly period ended June 30, 2020. |
(o) |
|
During June 2019, the Company reported a $58,381 gain from the
sale and leaseback of its main distribution center in Chester, New
York and its metallic balloons manufacturing facility in Eden
Prairie, Minnesota. The aggregate sale price for the three
properties was $128,000. Simultaneous with the sale, the Company
entered into twenty-year leases for each of the facilities. |
PARTY CITY HOLDCO INC.RECONCILIATION OF
2020 OUTLOOK(In millions, unaudited)
As a result of the continued disruption and uncertainty caused
by the COVID-19 pandemic, the Company is not providing financial
guidance for fiscal 2020.
PARTY CITY HOLDCO INC. SEGMENT
INFORMATION(In thousands, except percentages,
unaudited)
|
|
Three Months Ended
June 30, |
|
|
2020 |
|
|
|
2019 |
|
|
Dollars in |
|
|
Percentage of |
|
Dollars in |
|
|
Percentage of |
Thousands |
Total Revenues |
Thousands |
Total Revenues |
Net Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale |
|
$ |
131,296 |
|
|
|
51.6 |
|
% |
|
$ |
289,067 |
|
|
|
51.3 |
|
% |
Eliminations |
|
|
(62,387 |
) |
|
|
(24.5 |
) |
|
|
|
(150,522 |
) |
|
|
(26.7 |
) |
|
Net wholesale |
|
|
68,909 |
|
|
|
27.1 |
|
|
|
|
138,545 |
|
|
|
24.6 |
|
|
Retail |
|
|
184,737 |
|
|
|
72.5 |
|
|
|
|
423,157 |
|
|
|
75 |
|
|
Total net sales |
|
|
253,646 |
|
|
|
99.6 |
|
|
|
|
561,702 |
|
|
|
99.6 |
|
|
Royalties
and franchise fees |
|
|
1,045 |
|
|
|
0.4 |
|
|
|
|
2,189 |
|
|
|
0.4 |
|
|
Total revenues |
|
$ |
254,691 |
|
|
|
100 |
|
% |
|
$ |
563,891 |
|
|
|
100 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
|
2020 |
|
|
|
|
2019 |
|
|
Dollars in |
|
|
Percentage
of |
|
Dollars in |
|
|
Percentage of |
Thousands |
Total Revenues |
Thousands |
Total Revenues |
Net Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale |
|
$ |
346,094 |
|
|
|
51.8 |
|
% |
|
$ |
579,368 |
|
|
|
53.8 |
|
% |
Eliminations |
|
|
(166,118 |
) |
|
|
(24.8 |
) |
|
|
|
(307,874 |
) |
|
|
(28.6 |
) |
|
Net wholesale |
|
|
179,976 |
|
|
|
26.9 |
|
|
|
|
271,494 |
|
|
|
25.2 |
|
|
Retail |
|
|
486,131 |
|
|
|
72.7 |
|
|
|
|
801,310 |
|
|
|
74.4 |
|
|
Total net sales |
|
|
666,107 |
|
|
|
99.6 |
|
|
|
|
1,072,804 |
|
|
|
99.6 |
|
|
Royalties
and franchise fees |
|
|
2,627 |
|
|
|
0.4 |
|
|
|
|
4,203 |
|
|
|
0.4 |
|
|
Total revenues |
|
$ |
668,734 |
|
|
|
100 |
|
% |
|
$ |
1,077,007 |
|
|
|
100 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
|
2020 |
|
|
|
2019 |
|
|
Dollars in |
|
|
Percentage |
|
|
|
Dollars in |
|
|
Percentage |
|
|
Thousands |
of Net
Sales |
Thousands |
of Net
Sales |
Retail |
|
$ |
28,857 |
|
|
|
15.6 |
|
% |
|
$ |
172,051 |
|
|
|
40.7 |
|
% |
Wholesale |
|
|
(13,118 |
) |
|
|
(19.0 |
) |
|
|
|
36,595 |
|
|
|
26.4 |
|
|
Total Gross
Profit |
|
$ |
15,739 |
|
|
|
6.2 |
|
% |
|
$ |
208,646 |
|
|
|
37.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
|
2020 |
|
|
2019 |
|
|
Dollars in |
|
|
Percentage |
|
|
|
Dollars in |
|
|
Percentage |
|
|
Thousands |
of Net
Sales |
Thousands |
of Net
Sales |
Retail |
|
$ |
123,218 |
|
|
|
25.3 |
|
% |
|
$ |
308,069 |
|
|
|
38.4 |
|
% |
Wholesale |
|
|
8,225 |
|
|
|
4.6 |
|
|
|
|
72,637 |
|
|
|
26.8 |
|
|
Total Gross
Profit |
|
$ |
131,443 |
|
|
|
19.7 |
|
% |
|
$ |
380,706 |
|
|
|
35.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTY CITY HOLDCO INC. OPERATING METRICS
|
|
Three Months Ended
June 30, |
|
|
LTM |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store Count |
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Stores: |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
757 |
|
|
|
868 |
|
|
|
865 |
|
New stores opened |
|
|
1 |
|
|
|
3 |
|
|
|
1 |
|
Acquired |
|
|
— |
|
|
|
3 |
|
|
|
3 |
|
Closed |
|
|
(1 |
) |
|
|
(9 |
) |
|
|
(112 |
) |
End of period |
|
|
757 |
|
|
|
865 |
|
|
|
757 |
|
Franchise Stores |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
97 |
|
|
|
98 |
|
|
|
98 |
|
New stores opened |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Sold to Party City |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Closed |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
End of period |
|
|
97 |
|
|
|
98 |
|
|
|
97 |
|
Grand Total |
|
|
854 |
|
|
|
963 |
|
|
|
854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Share of Shelf (a) |
|
82.3 |
% |
|
|
77.6 |
% |
|
|
81.7 |
% |
|
|
77.8 |
% |
|
Manufacturing Share of Shelf (b) |
|
33.5 |
% |
|
|
27.1 |
% |
|
|
30.7 |
% |
|
|
27.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brand comparable sales (c) |
|
-52.4 |
% |
|
|
-2.1 |
% |
|
|
-35.6 |
% |
|
|
-1.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
Contacts:
Investor Relations
ICR
Farah Soi and Rachel Schacter
203-682-8200
InvestorRelations@partycity.com
Media Relations
ICR
Brittany Fraser
203-682-8200
PartyCityPR@partycity.com
Source: Party City Holdco Inc.
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