- Consolidated revenues of $16.9 million for the third quarter of 2010, a 3.0% increase compared to the third quarter of 2009.
- Comparable store sales increase of 1.4% for the third quarter of 2010, and for the nine month period then ended.
- Net loss of $1.9 million for the third quarter of 2010, including incremental pre-Halloween season costs of $400 thousand, compared to net loss of $1.4 million for the third quarter of 2009.
- Net loss for the nine month period of $2.7 million, compared to net loss of $2.4 million for the nine month period in 2009.
- EBITDA net loss for the third quarter of 2010 of $1.4 million, compared to EBITDA net loss in the third quarter of 2009 of $775 thousand (See accompanying schedule for reconciliation of non-GAAP EBITDA to net loss for the period).
- EBITDA net loss for the nine month period of $1.1 million compared to an EBITDA net loss of $481 thousand for the nine month period in 2009.
- The opening of eleven temporary Halloween stores in September, bringing the number of iParty storefronts this Halloween season to 62 from 54 last year.
Mr. Perisano further stated, “As we close out our third quarter and report our operating results for those three months, we are now well positioned for Halloween, the most important part of our year, with an increased presence in our markets. With eleven temporary stores now open and ready for business, we have 62 storefronts open this Halloween season, compared to 54 storefronts at this time last year. Also, one of those new temporary stores, in Boston’s South Bay Center, will reopen shortly after Halloween as the 52 nd full-line iParty store. The opening of this new permanent store will further develop the urban store strategy we initiated in late 2009, when we opened our first urban store on Boylston Street in the Back Bay section of Boston.”Operating Results For the third quarter of 2010, consolidated revenues were $ 16.9 million, a 3.0% increase compared to $16.4 million for the third quarter in 2009. Comparable store sales in the third quarter of 2010 increased 1.4% compared to the year-ago period. Consolidated gross profit margin was 36.8% for the third quarter of 2010 compared to a gross profit margin of 37.3% for the same period in 2009. Consolidated net loss for the third quarter of 2010 was $1.9 million, or $0.08 per basic and diluted share, compared to consolidated net loss of $1.4 million, or $0.06 per basic and diluted share, for the third quarter in 2009. On a non-GAAP basis, net loss for the third quarter of 2010 before interest, taxes, depreciation and amortization (“ EBITDA net loss”) was $1.4 million compared to EBITDA net loss of $775 thousand for the third quarter in 2009. EBITDA is calculated as net income (loss), as reported under United States generally accepted accounting principles (“ GAAP”), plus net interest expense, depreciation and amortization and income taxes. The schedule accompanying this release provides the reconciliation of net loss for the third quarters of 2010 and 2009, and net loss for the nine-month periods then ended, under GAAP to a non-GAAP, EBITDA basis. For the nine-month year-to-date period ended September 25, 2010, consolidated revenues were $ 51.8 million, a 2.5% increase compared to $50.5 million for the first nine months of 2009. Consolidated revenues for the first nine months of 2010 included a 1.4% increase in comparable store sales from the year-ago period. Consolidated gross profit margin was 38.0% for both the 2010 and 2009 nine-month periods. For the nine-month period, consolidated net loss was $2.7 million, or $0.12 per basic and diluted share, compared to a consolidated net loss of $2.4 million, or $0.11 per basic and diluted share for the first nine months of 2009. On a non-GAAP basis, EBITDA net loss was $1.1 million compared to an EBITDA net loss of $481 thousand for the first nine months of 2009.
About iParty Corp.Headquartered in Dedham, Massachusetts, iParty Corp. is a party goods retailer that operates 51 iParty retail stores and licenses the operation of an Internet site for party goods and party planning at www.iparty.com. iParty’s aim is to make throwing a successful event both stress-free and fun. With over 20,000 party supplies and costumes and an online party magazine and party-related content, iParty offers consumers a sophisticated, yet fun and easy-to-use, resource with an extensive assortment of products to customize any party, including birthday bashes, Easter get-togethers, graduation parties, summer barbecues, and, of course, Halloween. iParty aims to offer reliable, time-tested knowledge of party-perfect trends, and superior customer service to ensure convenient and comprehensive merchandise selections for every occasion. Please visit our site at www.iparty.com. Non-GAAP Financial Measures Pursuant to the requirements of Regulation G, we have provided below reconciliations of any non-GAAP financial measures we use in this press release to the most directly comparable GAAP financial measures. We believe that our presentation of EBITDA, which is a non-GAAP financial measure, is an important supplemental measure of operating performance to investors. The discussion below defines this term, why we believe it is a useful measure of our performance, and explains certain limitations on the use of non-GAAP financial measures such as our use of EBITDA. EBITDA EBITDA is a commonly used measure of performance in our industry which we believe, when considered with measures calculated in accordance with United States generally accepted accounting principles (" GAAP"), gives investors a more complete understanding of operating results before the impact of investing and financing transactions and income taxes and facilitates comparisons between us and our competitors. EBITDA is a non-GAAP financial measure and has been presented in this release because our management and the audit committee of our board of directors use this financial measure in monitoring and evaluating our ongoing financial results and trends. Our management and audit committee believe that this non-GAAP operating performance measure is useful for investors because it enhances investors' ability to analyze trends in our business and compare our financial and operating performance to that of our peers. Limitations on the Use of Non-GAAP Measures The use of EBITDA has certain limitations. Our presentation of EBITDA may be different from the presentation used by other companies and therefore comparability may be limited. Depreciation expense for various long-term assets, interest expense, income taxes and other items have been and will be incurred and are not reflected in the presentation of EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. In particular, we have opened new stores through the expenditure of capital funded with borrowings under our bank line of credit. Our results of operations, therefore, reflect significant charges for depreciation, amortization and interest expense. EBITDA, which excludes these expenses, provides helpful information about the operating performance of our business, but EBITDA does not purport to represent operating income or cash flow from operating activities, as those terms are defined under GAAP, and should not be considered as an alternative to those measurements as an indicator of our performance.
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, 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.
|For the three months ended||For the nine months ended|
|RECONCILIATION OF NON-GAAP MEASURES||Sep 25, 2010||Sep 26, 2009||Sep 25, 2010||Sep 26, 2009|
|Net income (loss) as reported under GAAP||$||(1,945,873||)||$||(1,396,982||)||$||(2,663,523||)||$||(2,443,385||)|
|plus, Interest expense, net||70,326||125,724||208,034||390,759|
|plus, Depreciation and amortization||446,307||495,986||1,322,568||1,571,641|
|plus, Income taxes||-||-||-||-|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|For the three months ended||For the nine months ended|
|Sep 25, 2010||Sep 26, 2009||Sep 25, 2010||Sep 26, 2009|
|Cost of products sold and occupancy costs||10,676,032||10,282,326||32,114,729||31,356,342|
|Marketing and sales||6,371,234||5,810,227||16,894,562||16,231,004|
|General and administrative||1,726,532||1,582,751||5,245,660||5,006,742|
|Operating income (loss)||(1,875,547||)||(1,271,258||)||(2,455,489||)||(2,052,626||)|
|Interest expense, net||(70,326||)||(125,724||)||(208,034||)||(390,759||)|
|Net income (loss)||$||(1,945,873||)||$||(1,396,982||)||$||(2,663,523||)||$||(2,443,385||)|
|Income (loss) per share:|
|Basic and diluted||$||(0.08||)||$||(0.06||)||$||(0.12||)||$||(0.11||)|
|Weighted-average shares outstanding:|
|Basic and diluted||23,267,507||22,731,667||23,081,165||22,731,667|
|CONSOLIDATED BALANCE SHEETS|
|Sep 25, 2010||Dec 26, 2009|
|Cash and cash equivalents||$||72,950||$||61,050|
|Prepaid expenses and other assets||381,591||174,752|
|Deferred income tax asset - current||70,997||70,997|
|Total current assets||22,542,481||15,099,934|
|Property and equipment, net||3,060,266||2,892,835|
|Intangible assets, net||1,102,504||1,606,585|
|Deferred income tax asset||343,690||343,690|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Current portion of capital lease obligations||9,228||9,228|
|Current note payable||-||600,000|
|Borrowings under line of credit||5,129,464||2,526,982|
|Total current liabilities||19,205,488||9,670,740|
|Capital lease obligations, net of current portion||6,920||13,841|
|Total long-term liabilities||1,518,251||1,543,098|
|Commitments and contingencies|
|Convertible preferred stock||13,043,321||13,589,491|
|Additional paid-in capital||53,061,546||52,311,059|
|Total stockholders' equity||6,619,847||9,078,584|
|Total liabilities and stockholders' equity||$||27,343,586||$||20,292,422|