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IParty Corp. Announces Third Quarter 2012 Financial Results

Stocks in this article: IPT

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. Due to the unusual event related to the 2011 Tropical Storm Irene flood loss, the Company has also presented Adjusted EBITDA to permit comparison with the corresponding periods of the current year.

                 
 
For the three months ended For the nine months ended
RECONCILIATION OF NON-GAAP MEASURES Sep 29, 2012 Sep 24, 2011 Sep 29, 2012 Sep 24, 2011
 
Net loss as reported under GAAP $ (2,163,455 ) $ (2,830,663 ) $ (3,317,568 ) $ (4,298,321 )
 
plus, Interest expense, net 48,176 87,724 140,794 231,510
plus, Depreciation and amortization 321,282 377,807 997,826 1,132,586
plus, Income taxes   -     -     -     -  
EBITDA, non-GAAP $ (1,793,997 ) $ (2,365,132 ) $ (2,178,948 ) $ (2,934,225 )
 
plus, Tropical Storm Irene Flood Loss   -     393,036     -     393,036  
 
Adjusted EBITDA, non-GAAP $ (1,793,997 ) $ (1,972,096 ) $ (2,178,948 ) $ (2,541,189 )
 

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; disruptions to our most important selling season, Halloween; 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 MKT. 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 31, 2011 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 three months ended For the nine months ended
Sep 29, 2012 Sep 24, 2011 Sep 29, 2012 Sep 24, 2011
Revenues $ 16,888,248 $ 16,462,631 $ 52,204,972 $ 51,171,966
Operating costs:
Cost of products sold and occupancy costs 11,004,882 10,813,669 33,083,437 32,234,434
Marketing and sales 6,345,436 6,329,882 17,288,783 17,426,635
General and administrative 1,653,209 1,668,983 5,009,526 5,184,672
Flood loss   -     393,036     -     393,036  
 
Operating loss (2,115,279 ) (2,742,939 ) (3,176,774 ) (4,066,811 )
 
Interest expense, net   (48,176 )   (87,724 )   (140,794 )   (231,510 )
 
Net loss

$

(2,163,455 )  

$

(2,830,663 )  

$

(3,317,568 )  

$

(4,298,321 )
 
Loss per share: basic and diluted $ (0.09 ) $ (0.12 ) $ (0.14 ) $ (0.18 )
 
Weighted-average shares outstanding:
Basic and diluted   24,418,284     24,408,594     24,414,432     24,378,188  
 

iPARTY CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
      Sep 29, 2012     Dec 31, 2011

ASSETS

Current assets:
Cash $ 72,650 $ 63,650
Restricted cash 568,773 819,604
Accounts receivable 955,133 1,377,234
Inventories 20,920,546 15,965,507
Prepaid expenses and other assets 1,852,720 1,415,780
Deferred income tax asset   46,762     46,762  
Total current assets 24,416,584 19,688,537
Property and equipment, net 2,855,074 2,664,086
Intangible assets, net 386,494 626,900
Other assets 294,866 333,731
Deferred income tax asset   540,841     540,841  
Total assets $ 28,493,859   $ 23,854,095  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and book overdrafts $ 11,454,547 $ 5,970,015
Accrued expenses 2,741,417 2,295,467
Current portion of capital lease obligations - 4,613
Borrowings under line of credit   7,177,003     5,366,512  
Total current liabilities 21,372,967 13,636,607
 
Long-term liabilities:
Deferred rent   1,583,555     1,504,973  
Total long-term liabilities 1,583,555 1,504,973
 
Commitments and contingencies
 
Convertible preferred stock 13,001,508 13,012,668
Common stock 24,418 24,409
Additional paid-in capital 53,141,115 52,987,574
Accumulated deficit   (60,629,704 )   (57,312,136 )
Total stockholders' equity   5,537,337     8,712,515  
 
Total liabilities and stockholders' equity $ 28,493,859   $ 23,854,095  
 




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