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IParty Corp. Reports First Quarter 2011 Financial Results

Accordingly, EBITDA should be used in addition to and in conjunction with results presented in accordance with GAAP and should not be considered as an alternative to net income, operating income, cash flows from operating activities or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. EBITDA reflects additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provides a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.

 
RECONCILIATION OF NON-GAAP MEASURES
   
For the quarter ended
Mar 26, 2011 Mar 27, 2010
Net loss, as reported under GAAP $ (1,510,911 ) $ (1,485,134 )
 
plus, Interest expense, net 82,225 66,163
plus, Depreciation and amortization 375,282 442,647
plus, Income taxes   -     -  
 
EBITDA net loss, non-GAAP $ (1,053,404 ) $ (976,324 )
 

Safe harbor statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify these statements by the fact that they use words such as "anticipate," "believe," "estimate," "expect," "intend," "project," "plan," "outlook," and other words and terms of similar meaning. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: changes in consumer confidence and consumer spending patterns, particularly those impacting the New England region and Florida, which may result from, among other factors, rising or sustained high levels of unemployment, access to consumer credit, mortgage foreclosures, credit market turmoil, declines in the stock market, general feelings and expectations about the overall economy, and unseasonable weather; the successful implementation of our growth and marketing strategies; our ability to access our existing credit line or to obtain additional financing, if required, on acceptable terms and conditions; rising commodity prices, especially oil and gas prices; effect of Chinese inflation on our suppliers and product pricing; our relationships with our third party suppliers; the failure of our inventory management system and our point of sale system; competition from other party supply stores and stores that merchandise and market party supplies, including big discount retailers, dollar store chains, and temporary Halloween merchandisers; risks related to e-commerce; the availability of retail store space on reasonable lease terms; and compliance with evolving federal securities, accounting, and stock exchange rules and regulations applicable to publicly-traded companies listed on the NYSE Amex. For a more detailed discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, "Risk Factors" of iParty's most recently filed Annual Report on Form 10-K for the fiscal year ended December 25, 2010 and our other periodic reports filed with the SEC. iParty is providing this information as of this date, and does not undertake to update the information included in this press release, whether as a result of new information, future events or otherwise.

iPARTY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
   
For the quarter ended
Mar 26, 2011 Mar 27, 2010
Revenues $ 15,092,128 $ 14,836,379
Operating costs:
Cost of products sold and occupancy costs 9,600,871 9,534,769
Marketing and sales 5,136,742 4,936,767
General and administrative   1,783,201     1,783,814  
 
Operating loss (1,428,686 ) (1,418,971 )
 
Change in fair value of warrant liability (9,043 ) -
Interest expense, net   (73,182 )   (66,163 )
 
Net loss $ (1,510,911 ) $ (1,485,134 )
 
Loss per share:
Basic and diluted $ (0.06 ) $ (0.07 )
 
Weighted-average shares outstanding:
Basic and diluted   24,319,464     22,798,647  
 

iPARTY CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
   
Mar 26, 2011 Dec 25, 2010
ASSETS
Current assets:
Cash $ 63,650 $ 62,650
Restricted cash 440,213 616,742
Accounts receivable 665,469 626,181
Inventories 15,850,976 14,950,933
Prepaid expenses and other assets 251,162 253,749
Deferred income tax asset - current   95,163     95,163  
Total current assets 17,366,633 16,605,418
Property and equipment, net 3,005,371 3,000,798
Intangible assets, net 855,274 934,477
Other assets 243,040 264,179
Deferred income tax asset   476,354     476,354  
Total assets $ 21,946,672   $ 21,281,226  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and book overdrafts $ 5,601,591 $ 4,572,147
Accrued expenses 1,854,488 2,254,049
Warrant liability 19,043 10,000
Current portion of capital lease obligations 9,228 9,228
Borrowings under line of credit   4,584,717     3,102,213  
Total current liabilities 12,069,067 9,947,637
 
Long-term liabilities:
Capital lease obligations, net of current portion 2,306 4,613
Other liabilities   1,508,437     1,517,157  
Total long-term liabilities 1,510,743 1,521,770
 
Commitments and contingencies
 
Convertible preferred stock 13,024,721 13,024,721
Common stock 24,398 24,294
Additional paid-in capital 52,826,152 52,760,302
Accumulated deficit   (57,508,409 )   (55,997,498 )
Total stockholders' equity   8,366,862     9,811,819  
 
Total liabilities and stockholders' equity $ 21,946,672   $ 21,281,226  




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