We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Party City Holdco Inc | NYSE:PRTY | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.3742 | 0 | 01:00:00 |
Announces $100 Million Share Repurchase Program
Party City Holdco Inc. (NYSE:PRTY) today announced financial results for the third quarter ended September 30, 2017, as well as total revenue, retail and wholesale sales and brand comparable sales for fiscal October 2017.
For the quarter ended September 30, 2017, the Company reported total revenues of $560.1 million, up 0.6% from the prior year period or up 0.3% on a constant currency basis. Income from operations increased 1.3% to $37.4 million and adjusted EBITDA (see "Non-GAAP Information") increased slightly to $66.1 million. Reported GAAP diluted earnings per share were $0.08 in the third quarters of both 2017 and 2016. Adjusted diluted earnings per share increased 8.3%, to $0.13 from $0.12 in the third quarter of fiscal 2016 (see "Non-GAAP Information").
James M. Harrison, Chief Executive Officer, stated, “Our bottom-line performance in the third quarter once again demonstrated the inherent benefits of our unique vertical model. Despite modest topline growth, and slightly softer than expected retail brand comps, in part driven by the hurricane disruptions, we delivered solid financial performance which was largely in-line with expectations, as we focused on the core fundamentals of gross margin expansion and disciplined cost control, resulting in Adjusted EPS growth of over 8%.”
Mr. Harrison continued, “We are encouraged by the progress made on our strategic growth initiatives during the quarter, and remain focused on enhancing the shopping experience both in our stores and online. We are also encouraged by the comp sales performance across our permanent stores and the improved trend for the core Everyday business. However, our web business experienced platform performance issues that negatively affected traffic levels on our site and drove the overall brand comp sales decline in the quarter, and we are aggressively addressing these issues.”
For fiscal October 2017 (for the Company’s retail segment fiscal October 2017 consisted of the five-week period ended November 4, 2017), the Company reported total revenue of $475 million, or 5.5% above the same period of last year. Growth in the month was driven both by the retail segment (revenue of $419 million, a 4.0% increase) and the wholesale segment (sales of $56 million, a 20% increase). Brand comparable sales, which include Company-owned Party City stores in the U.S. and Canada and North American e-commerce operations, decreased 1.4%.
During the Halloween season, the Company operated 272 temporary Halloween City stores, compared to 270 in 2016.
“We are also pleased to announce today that our Board of Directors approved a $100 million share repurchase program, as our consistent free cash flow affords us the opportunity to return value to shareholders, while we also remain focused on reinvesting in the business, pursuing accretive acquisitions, and paying down debt. This authorization gives us the flexibility to make opportunistic share repurchases as we continue to allocate capital in a balanced and disciplined manner to drive shareholder returns,” added Mr. Harrison.
Highlights for the third quarter:
“Based on our year-to-date performance, we are updating our full year guidance. Looking ahead, we remain focused on executing our retail initiatives as well as elevating our e-commerce capabilities which, combined with the power of our vertical model, will drive sustainable top and bottom line improvement.” Mr. Harrison concluded.
Third quarter summary:
Balance sheet highlights as of September 30, 2017:
The Company ended the quarter with $1,730 million in debt (net of cash) resulting in net debt leverage3 of 4.3 times and approximately $372 million in availability under its asset-based revolving credit facility.
Share Repurchase Program:
The Company also announced today that its Board of Directors has approved a share repurchase program under which the Company may purchase up to $100 million of its outstanding common shares from time to time, depending upon a variety of factors, including market and industry conditions, share price, regulatory requirements and other corporate considerations, as determined by the Company from time to time. The authorization expires on November 12, 2018, subject to extension or earlier termination by the Board of Directors. The Company may purchase shares of its common stock in open-market and/or privately negotiated transactions in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, and repurchases may be executed pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934. The authorization may be suspended or discontinued at any time without notice.
Fiscal 2017 Outlook:
For full-year 2017, the Company is adjusting its guidance as follows:
* The above outlook excludes any impact from potential share repurchases made by the Company.
The Company has reconciled Non-GAAP outlook measures to the most directly comparable GAAP measures later in this release. See "Non-GAAP Information" and “Reconciliation of 2017 Outlook” for a more detailed explanation, including definitions of the various Non-GAAP terms used in this release.
_____________________
1 The percentage of our retail product cost of sales supplied by our wholesale operations
2 Defined as adjusted EBITDA less capital expenditures
3 Defined as net debt to adjusted EBITDA
Conference Call Information
A conference call to discuss the third quarter 2017 financial results and fiscal October 2017 sales is scheduled for today, November 9, 2017, at 8:00 a.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (833) 241-4256 (U.S. domestic) and (647) 689-4207 (international), and enter conference ID#99511792, 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 contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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, Adjusted EBITDA, Adjusted net income/loss, adjusted diluted earnings per share, average common shares outstanding and the effective tax rate. 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; 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 latest Form 10-K 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. Party City Holdco 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 over 900 specialty retail party supply stores (including approximately 150 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)
September 30, December 31, 2017 2016 ASSETS Unaudited Current assets: Cash and cash equivalents $ 58,143 $ 64,610 Accounts receivable, net 169,059 134,091 Inventories, net 687,254 613,868 Prepaid expenses and other current assets 84,859 68,255 Total current assets 999,315 880,824 Property, plant and equipment, net 298,758 292,904 Goodwill 1,631,806 1,572,568 Trade names 567,507 566,599 Other intangible assets, net 65,023 76,581 Other assets, net 12,703 4,502 Total assets $ 3,575,112 $ 3,393,978 LIABILITIES, REDEEMABLE SECURITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Loans and notes payable $ 241,339 $ 120,138 Accounts payable 169,130 163,415 Accrued expenses 184,115 149,683 Income taxes payable - 46,675 Current portion of long-term obligations 13,064 13,348 Total current liabilities 607,648 493,259 Long-term obligations, excluding current portion 1,534,146 1,539,604 Deferred income tax liabilities 282,376 278,819 Deferred rent and other long-term liabilities 80,389 65,507 Total liabilities 2,504,559 2,377,189 Redeemable securities 3,000 - Stockholders’ equity: Common stock (119,662,869 and 119,515,894 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively) 1,197 1,195 Additional paid-in capital 915,090 910,167 Retained earnings 188,049 157,666 Accumulated other comprehensive loss (36,783 ) (52,239 ) Total stockholders’ equity 1,067,553 1,016,789 Total liabilities, redeemable securities and stockholders’ equity $ 3,575,112 $ 3,393,978PARTY CITY HOLDCO INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except share and per share data, unaudited)
Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Revenues: Net sales $ 557,350 $ 553,382 $ 1,572,966 $ 1,523,094 Royalties and franchise fees 2,759 3,568 9,020 11,009 Total revenues 560,109 556,950 1,581,986 1,534,103 Expenses: Cost of sales 357,523 356,662 978,142 952,294 Wholesale selling expenses 16,274 14,739 47,946 45,854 Retail operating expenses 100,739 100,746 281,981 278,070 Franchise expenses 3,636 3,370 10,666 10,507 General and administrative expenses 37,971 38,972 125,763 115,828 Art and development costs 5,898 5,543 17,638 16,596 Development stage expenses 680 - 7,092 - Total expenses 522,721 520,032 1,469,228 1,419,149 Income from operations 37,388 36,918 112,758 114,954 Interest expense, net 23,228 22,424 65,214 67,857 Other expense (income), net 593 (905 ) 860 (4,107 ) Income before income taxes 13,567 15,399 46,684 51,204 Income tax expense 3,483 5,219 16,301 18,903 Net income $ 10,084 $ 10,180 $ 30,383 $ 32,301 Comprehensive income $ 15,329 $ 6,028 $ 45,839 $ 22,355 Net income per common share-Basic $ 0.08 $ 0.09 $ 0.25 $ 0.27 Net income per common share-Diluted $ 0.08 $ 0.08 $ 0.25 $ 0.27 Weighted-average number of common shares-Basic 119,587,339 119,406,751 119,546,451 119,340,610 Weighted-average number of common shares-Diluted 120,912,849 120,472,297 120,907,979 120,312,492PARTY CITY HOLDCO INC.
RECONCILIATION OF ADJUSTED EBITDA
(In thousands)
Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income $ 10,084 $ 10,180 $ 30,383 $ 32,301 Interest expense, net 23,228 22,424 65,214 67,857 Income taxes 3,483 5,219 16,301 18,903 Depreciation and amortization 20,694 20,015 62,519 61,186 EBITDA 57,489 57,838 174,417 180,247 Non-cash purchase accounting adjustments 1,500 - 6,350 3,689 Restructuring, retention and severance (a) 212 92 8,839 254 Deferred rent (b) 2,719 7,095 5,634 12,240 Closed store expense (c) 1,285 971 4,164 2,927 Foreign currency losses (gains), net 36 (1,767 ) (1,684 ) (6,945 ) Employee equity based compensation (d) 630 948 3,852 2,829 Non-employee equity based compensation (e) 21 - 3,286 - Undistributed loss (income) in unconsolidated joint ventures 134 113 (92 ) 380 Corporate development expenses (f) 1,634 683 6,078 1,895 Hurricane-related costs 385 - 385 - Other 84 61 562 118 Adjusted EBITDA $ 66,129 $ 66,034 $ 211,791 $ 197,634 Adjusted EBITDA margin 11.8 % 11.9 % 13.4 % 12.9 % (a) During the first quarter of 2017, the Company entered into a consulting agreement with Gerald Rittenberg and recorded a severance charge in accordance with the terms of such agreement (this amount excludes a $1,362 stock option modification charge for Mr. Rittenberg, which is included in “Employee equity based compensation” in this table). Additionally, during the first quarter of 2017, the Company restructured its retail operations and recorded a severance charge. Further, the “restructuring, retention and severance” amounts in the adjusted EBITDA table also include additional restructuring, retention and severance charges incurred by the Company and excluded from the definition of adjusted EBITDA in the Company’s credit facilities (see "Non-GAAP Information" above for a discussion of the Company’s use of adjusted EBITDA). (b) 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. (c) Charges incurred related to closing underperforming stores. (d) The first quarter of 2017 includes a $1,362 stock option modification charge for Gerald Rittenberg. (e) Principally represents shares of Kazzam awarded to Ampology as compensation for Ampology’s services. (f) Primarily represents start-up costs for Kazzam and third-party costs related to acquisitions (principally legal expenses).PARTY CITY HOLDCO INC.
RECONCILIATION OF ADJUSTED NET INCOME
(In thousands, except share and per share data)
Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Income before income taxes $13,567 $15,399 $46,684 $51,204 Intangible asset amortization 3,879 4,049 11,704 12,182 Non-cash purchase accounting adjustments (a) 2,241 (102) 8,165 4,991 Amortization of deferred financing costs and original issuance discounts 1,240 1,277 3,699 3,821 Restructuring, retention and severance (b) (323) - 7,491 - Non-employee equity based compensation (c) 21 - 3,286 - Hurricane-related costs 385 - 385 - Employee equity based compensation (d) 630 948 3,852 2,829 Adjusted income before income taxes 21,640 21,571 85,266 75,027 Adjusted income tax expense (e) 6,467 7,568 30,713 27,918 Adjusted net income $15,173 $14,003 $54,553 $47,109 Adjusted net income per common share - diluted $0.13 $0.12 $0.45 $0.39 Weighted-average number of common shares-diluted 120,912,849 120,472,297 120,907,979 120,312,492 (a) On July 27, 2012, PC Merger Sub, Inc., which was our wholly-owned indirect subsidiary, merged into Party City Holdings Inc. (“PCHI”), with PCHI being the surviving entity (the “Transaction”). As a result of the Transaction, the Company applied the acquisition method of accounting and increased the value of certain property, plant and equipment. The impact of such adjustments on depreciation expense increased the Company’s expenses. These property, plant and equipment depreciation amounts are included in “Non-cash purchase accounting adjustments” for purposes of calculating “adjusted net income,” but are excluded from “Non-cash purchase accounting adjustments” for purposes of calculating adjusted EBITDA since they are included in depreciation expense. (b) During the first quarter of 2017, the Company entered into a consulting agreement with Gerald Rittenberg and recorded a severance charge in accordance with the terms of such agreement (this amount excludes a $1,362 stock option modification charge for Mr. Rittenberg, which is included in “Employee equity based compensation” in this table). Additionally, during the first quarter of 2017, the Company restructured its retail operations and recorded a severance charge. (c) Principally represents shares of Kazzam awarded to Ampology as compensation for Ampology’s services. (d) The first quarter of 2017 includes a $1,362 stock option modification charge for Gerald Rittenberg. (e) 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.PARTY CITY HOLDCO INC.
RECONCILIATION OF 2017 OUTLOOK
(In millions, unaudited)
Full year 2017 Outlook Net income: $ 121 - $ 126 Intangible asset amortization, net of tax:
9
Restructuring, retention and severance, net of tax: 5 Non-cash purchase accounting adjustments, net of tax:
5
Equity based compensation, net of tax: 4 Amortization of deferred financing costs and original issuance discount, net of tax:
2
Adjusted net income: $ 146 - $ 151 Net income: $ 121 - $ 126 Income taxes: 72 - 76 Interest expense, net: 87 Depreciation and amortization: 84 EBITDA: $ 364 - $ 373 Corporate development expenses: 9 Restructuring, retention and severance: 9 Equity based compensation:
8
Deferred rent: 6 - 7 Non-cash purchase accounting adjustments:
6
Foreign exchange gains:(2
) Adjusted EBITDA: $ 400 - $ 410PARTY CITY HOLDCO INC.
SEGMENT INFORMATION
(In thousands, except percentages)
Three Months Ended September 30, 2017 2016 Total RevenuesDollars inthousands
Percentage ofTotal Revenues
Dollars inthousands
Percentage ofTotal Revenues
Net Sales: Wholesale $ 381,858 68.2 % $ 416,387 74.8 % Eliminations (188,565 ) (33.7 %) (210,562 ) (37.8 %) Net wholesale 193,293 34.5 % 205,825 37.0 % Retail 364,057 65.0 % 347,557 62.4 % Total net sales 557,350 99.5 % 553,382 99.4 % Royalties and franchise fees 2,759 0.5 % 3,568 0.6 % Total revenues $ 560,109 100.0 % $ 556,950 100.0 % Nine Months Ended September 30, 2017 2016 Total RevenuesDollars inthousands
Percentage ofTotal Revenues
Dollars inthousands
Percentage ofTotal Revenues
Net Sales: Wholesale $ 929,255 58.7 % $ 945,071 61.6 % Eliminations (459,416 ) (29.0 %) (465,189 ) (30.3 %) Net wholesale 469,839 29.7 % 479,882 31.3 % Retail 1,103,127 69.7 % 1,043,212 68.0 % Total net sales 1,572,966 99.4 % 1,523,094 99.3 % Royalties and franchise fees 9,020 0.6 % 11,009 0.7 % Total revenues $ 1,581,986 100.0 % $ 1,534,103 100.0 % Three Months Ended September 30, 2017 2016 Total Gross ProfitDollars inthousands
Percentage ofNet Sales
Dollars inthousands
Percentage ofNet Sales
Retail $ 141,334 38.8 % $ 133,177 38.3 % Wholesale 58,493 30.3 % 63,543 30.9 % Total $ 199,827 35.9 % $ 196,720 35.5 % Nine Months Ended September 30, 2017 2016 Total Gross ProfitDollars inthousands
Percentage ofNet Sales
Dollars inthousands
Percentage ofNet Sales
Retail $ 447,787 40.6 % $ 419,283 40.2 % Wholesale 147,037 31.3 % 151,517 31.6 % Total $ 594,824 37.8 % $ 570,800 37.5 %PARTY CITY HOLDCO INC.
OPERATING METRICS
Three Months Ended September 30, LTM 2017 2016 2017 Store Count Corporate Stores: Beginning of period 789 730 737 New stores opened 6 8 28 Acquired - - 37 Closed (1 ) (1 ) (8 ) End of period 794 737 794 Franchise Stores: Beginning of period 147 183 184 New stores opened 1 1 3 Sold to Party City - - (36 ) Closed - - (3 ) End of period 148 184 148 Grand Total 942 921 942 Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Share of Shelf (a) 78.0 % 75.1 % 78.0 % 75.9 % Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Brand comparable sales (b) -2.6 % 1.2 % -0.3 % 1.3 % (a) Share of shelf represents the percentage of our retail product cost of sales supplied by our wholesale operations. (b) Party City brand comparable sales include North American e-commerce sales.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171109005120/en/
ICRFarah Soi and Rachel Schacter203-682-8200InvestorRelations@partycity.com
1 Year Party City Holdco Chart |
1 Month Party City Holdco Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions