Company Quick10K Filing
Party City
Price5.64 EPS-2
Shares94 P/E-3
MCap533 P/FCF-3
Net Debt1,543 EBIT-84
TEV2,076 TEV/EBIT-25
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-06-12
10-K 2019-12-31 Filed 2020-03-12
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-02-28
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-09
10-K 2017-12-31 Filed 2018-03-14
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-03
10-Q 2017-03-31 Filed 2017-05-09
10-K 2016-12-31 Filed 2017-03-16
10-Q 2016-09-30 Filed 2016-11-10
10-Q 2016-06-30 Filed 2016-08-09
10-Q 2016-03-31 Filed 2016-05-13
10-K 2015-12-31 Filed 2016-03-14
10-Q 2015-09-30 Filed 2015-11-13
10-Q 2015-06-30 Filed 2015-08-14
10-Q 2015-03-31 Filed 2015-05-15
8-K 2020-07-27 Other Events, Exhibits
8-K 2020-07-10 Other Events, Exhibits
8-K 2020-07-02 Officers, Shareholder Vote, Regulation FD, Exhibits
8-K 2020-06-26 Enter Agreement, Regulation FD, Other Events, Exhibits
8-K 2020-06-12
8-K 2020-05-28
8-K 2020-05-08
8-K 2020-04-09
8-K 2020-04-08
8-K 2020-03-27
8-K 2020-03-12
8-K 2020-01-09
8-K 2019-12-17
8-K 2019-11-19
8-K 2019-11-12
8-K 2019-11-07
8-K 2019-09-11
8-K 2019-08-08
8-K 2019-07-17
8-K 2019-06-28
8-K 2019-06-24
8-K 2019-06-06
8-K 2019-05-09
8-K 2019-04-12
8-K 2019-04-08
8-K 2019-02-28
8-K 2019-02-01
8-K 2018-11-08
8-K 2018-08-31
8-K 2018-08-09
8-K 2018-08-06
8-K 2018-08-02
8-K 2018-07-26
8-K 2018-07-23
8-K 2018-06-06
8-K 2018-05-15
8-K 2018-05-09
8-K 2018-04-12
8-K 2018-03-09
8-K 2018-02-16
8-K 2018-02-08
8-K 2018-01-09

PRTY 10Q Quarterly Report

Note 1 - Description of Business
Note 2 - Basis of Presentation and Recently Issued Accounting Pronouncements
Note 3 - Store Impairment and Restructuring Charges
Note 4 - Goodwill and Intangibles Impairment
Note 5 - Sale/Leaseback Transaction
Note 6 - Disposition of Assets
Note 7 - Inventories
Note 8 - Income Taxes
Note 9 - Changes in Accumulated Other Comprehensive Loss
Note 10 - Capital Stock
Note 11 - Segment Information
Note 12 - Commitments and Contingencies
Note 13 - Derivative Financial Instruments
Note 14 - Fair Value Measurements
Note 15 - Earnings per Share
Note 16 - Current and Long - Term Obligations
Note 17 - Revenue From Contracts with Customers
Note 18 - Cash, Cash Equivalents and Restricted Cash
Note 19 - Kazzam, Llc
Note 20 - Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 5. Other Information
Item 6. Exhibits
EX-10.1 prty-ex101_107.htm
EX-10.2 prty-ex102_83.htm
EX-10.5 prty-ex105_393.htm
EX-10.6 prty-ex106_158.htm
EX-21.1 prty-ex211_109.htm
EX-31.1 prty-ex311_8.htm
EX-31.2 prty-ex312_6.htm
EX-32.1 prty-ex321_7.htm
EX-32.2 prty-ex322_9.htm

Party City Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
4.53.62.71.80.90.02013201520172020
Assets, Equity
0.80.60.40.1-0.1-0.32013201520172020
Rev, G Profit, Net Income
0.30.20.1-0.1-0.2-0.32013201520172020
Ops, Inv, Fin

prty-10q_20200331.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                  to                 

Commission file number 001-37344

 

 

Party City Holdco Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

46-0539758

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

80 Grasslands Road Elmsford, NY

 

10523

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code:

(914345-2020

 

 

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

 

Title of each class 

 

Trading

Symbol(s) 

 

Name of each exchange on which registered 

 

 

 

 

 

Common Stock, Par Value: $0.01/share

 

PRTY

 

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

Emerging Growth Company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of May 31, 2020, 94,491,352 shares of the Registrant’s common stock were outstanding.

 

 

 

 


 

EXPLANATORY NOTE

 

On May 8, 2020, Party City Holdco Inc. (the “Company” or “Party City Holdco”) filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission (the “SEC”) indicating its reliance on the SEC’s March 25, 2020 Order (Release No. 34-88465) (the “Order”). The Order allows for the delay of certain filings required under the Securities and Exchange Act of 1934, as amended.

The Company filed the Form 8-K indicating its intension to rely on the Order permitting extensions in filings due to circumstances related to the novel coronavirus (“COVID-19”) pandemic. As stated in the Form 8-K, the Company’s operations and business have experienced disruptions due to the unprecedented conditions surrounding the spread of COVID-19 throughout North America. In particular, COVID-19 and measures implemented to reduce the spread of the virus have limited access to the Company’s facilities and disrupted its normal interactions with its accounting personnel, legal advisors, auditors and others involved in the preparation of the Quarterly Report.  Due to the factors listed above, the Company required additional time to finalize its Quarterly Report on Form 10-Q as of and for the quarter ended March 31, 2020, (the “Quarterly Report”) by the original deadline of May 13, 2020.

In light of the impact of the factors described above, the Company was unable to compile and review certain information required in order to permit it to timely file the Quarterly Report by May 13, 2020, the original filing deadline, without unreasonable effort or expense. The Company relied on the Order in furnishing the Form 8-K by the original filing deadline of the Quarterly Report.

 

 


2


 

PARTY CITY HOLDCO INC.

Form 10-Q

March 31, 2020

TABLE OF CONTENTS

 

 

 

Page

 

 

 

PART I

 

 

 

 

 

Item 1. Condensed Consolidated Financial Statements (Unaudited)

 

 

 

 

 

Condensed Consolidated Balance Sheets at March 31, 2020 and December 31, 2019

 

4

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months ended March 31, 2020 and March 31, 2019

 

5

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three Months ended March 31, 2020 and March 31, 2019

 

6

 

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2020 and March 31, 2019

 

7

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

Item  2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

21

 

 

 

Item  3. Quantitative and Qualitative Disclosures about Market Risk

 

35

 

 

 

Item 4. Controls and Procedures

 

35

 

 

 

PART II

 

 

 

 

 

Item 1. Legal Proceedings

 

36

 

 

 

Item 1A. Risk Factors

 

36

 

 

 

Item 5. Other Information

        

37

 

 

 

Item 6. Exhibits

 

38

 

 

 

Signature

 

39

 

3


 

PARTY CITY HOLDCO INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

 

 

March 31,

2020

 

 

December 31,

2019

 

 

 

(Note 2)

(Unaudited)

 

 

(Note 2)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

194,433

 

 

$

34,917

 

Accounts receivable, net

 

 

116,223

 

 

 

149,109

 

Inventories, net

 

 

629,875

 

 

 

658,419

 

Prepaid expenses and other current assets

 

 

76,698

 

 

 

51,685

 

Total current assets

 

 

1,017,229

 

 

 

894,130

 

Property, plant and equipment, net

 

 

235,577

 

 

 

243,572

 

Operating lease asset

 

 

773,775

 

 

 

802,634

 

Goodwill

 

 

665,129

 

 

 

1,072,330

 

Trade names

 

 

394,221

 

 

 

530,320

 

Other intangible assets, net

 

 

41,960

 

 

 

45,060

 

Other assets, net

 

 

6,904

 

 

 

7,273

 

Total assets

 

$

3,134,795

 

 

$

3,595,319

 

LIABILITIES, REDEEMABLE SECURITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Loans and notes payable

 

$

381,422

 

 

$

128,806

 

Accounts payable

 

 

96,383

 

 

 

152,300

 

Accrued expenses

 

 

154,847

 

 

 

150,921

 

Current portion of operating lease liability

 

 

153,614

 

 

 

155,471

 

Income taxes payable

 

 

 

 

 

35,905

 

Current portion of long-term obligations

 

 

98,588

 

 

 

71,524

 

Total current liabilities

 

 

884,854

 

 

 

694,927

 

Long-term obligations, excluding current portion

 

 

1,474,854

 

 

 

1,503,987

 

Long-term portion of operating lease liability

 

 

707,734

 

 

 

720,735

 

Deferred income tax liabilities, net

 

 

70,943

 

 

 

126,081

 

Other long-term liabilities

 

 

16,036

 

 

 

16,517

 

Total liabilities

 

 

3,154,421

 

 

 

3,062,247

 

Redeemable securities

 

 

 

 

 

3,351

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock (94,491,352 and 94,461,576 shares outstanding and 121,708,422 and

   121,662,540 shares issued at March 31, 2020 and December 31, 2019, respectively)

 

 

1,211

 

 

 

1,211

 

Additional paid-in capital

 

 

933,174

 

 

 

928,573

 

Retained deficit

 

 

(578,732

)

 

 

(37,219

)

Accumulated other comprehensive loss

 

 

(47,947

)

 

 

(35,734

)

Total Party City Holdco Inc. stockholders’ equity before common stock held in

   treasury

 

 

307,706

 

 

 

856,831

 

Less: Common stock held in treasury, at cost (27,217,070 and 27,200,964 shares at

   March 31, 2020 and December 31, 2019, respectively)

 

 

(327,170

)

 

 

(327,086

)

Total Party City Holdco Inc. stockholders’ equity

 

 

(19,464

)

 

 

529,745

 

Noncontrolling interests

 

 

(162

)

 

 

(24

)

Total stockholders’ equity

 

 

(19,626

)

 

 

529,721

 

Total liabilities, redeemable securities and stockholders’ equity

 

$

3,134,795

 

 

$

3,595,319

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

4


 

PARTY CITY HOLDCO INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except share and per share data)

 

 

 

Three Months Ended March 31,

 

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

Net sales

 

$

412,461

 

 

$

511,102

 

Royalties and franchise fees

 

 

1,582

 

 

 

2,014

 

Total revenues

 

 

414,043

 

 

 

513,116

 

Cost of sales

 

 

296,757

 

 

 

339,042

 

Wholesale selling expenses

 

 

15,458

 

 

 

17,961

 

Retail operating expenses

 

 

88,166

 

 

 

95,018

 

Franchise expenses

 

 

3,309

 

 

 

3,303

 

General and administrative expenses

 

 

59,996

 

 

 

41,925

 

Art and development costs

 

 

5,322

 

 

 

5,929

 

Development stage expenses

 

 

2,029

 

 

 

2,226

 

Store impairment and restructuring charges

 

 

17,728

 

 

 

18,009

 

Goodwill and intangibles impairment

 

 

536,648

 

 

 

 

Total expenses

 

 

1,025,413

 

 

 

523,413

 

Loss from operations

 

 

(611,370

)

 

 

(10,297

)

Interest expense, net

 

 

25,120

 

 

 

29,257

 

Other expense, net

 

 

5,676

 

 

 

1,254

 

Loss before income taxes

 

 

(642,166

)

 

 

(40,808

)

Income tax benefit

 

 

(100,498

)

 

 

(10,519

)

Net loss

 

 

(541,668

)

 

 

(30,289

)

Less: Net loss attributable to noncontrolling interests

 

 

(155

)

 

 

(71

)

Net loss attributable to common shareholders of Party City Holdco Inc.

 

$

(541,513

)

 

$

(30,218

)

Net loss per share attributable to common shareholders of Party City Holdco Inc.–Basic

 

$

(5.80

)

 

$

(0.32

)

Net loss per share attributable to common shareholders of Party City Holdco Inc.–Diluted

 

$

(5.80

)

 

$

(0.32

)

Weighted-average number of common shares-Basic

 

 

93,395,609

 

 

 

93,174,553

 

Weighted-average number of common shares-Diluted

 

 

93,395,609

 

 

 

93,174,553

 

Dividends declared per share

 

$

 

 

$

 

Comprehensive loss

 

$

(553,881

)

 

$

(26,637

)

Less: Comprehensive loss attributable to noncontrolling interests

 

 

(155

)

 

 

(62

)

Comprehensive loss attributable to common shareholders of Party City Holdco Inc.

 

$

(553,726

)

 

$

(26,575

)

 

See accompanying notes to unaudited condensed consolidated financial statements.

5


 

PARTY CITY HOLDCO INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands)

 

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Retained

Deficit

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Total Party City

Holdco Inc.

Stockholders’

Equity Before

Common Stock

Held In Treasury

 

 

Common

Stock Held

In Treasury

 

 

Total Party City

Holdco Inc.

Stockholders’

Equity

 

 

Non-

Controlling

Interests

 

 

Total

Stockholders’

Equity

 

Balance at December 31, 2019

 

$

1,211

 

 

$

928,573

 

 

$

(37,219

)

 

$

(35,734

)

 

$

856,831

 

 

$

(327,086

)

 

$

529,745

 

 

$

(24

)

 

$

529,721

 

Net loss

 

 

 

 

 

 

 

 

(541,513

)

 

 

 

 

 

(541,513

)

 

 

 

 

 

(541,513

)

 

 

(155

)

 

 

(541,668

)

Stock option expense

 

 

 

 

 

354

 

 

 

 

 

 

 

 

 

354

 

 

 

 

 

 

354

 

 

 

 

 

 

354

 

Restricted stock units – time – based

 

 

 

 

 

621

 

 

 

 

 

 

 

 

 

621

 

 

 

 

 

 

621

 

 

 

 

 

 

621

 

Director – non-cash compensation

 

 

 

 

 

75

 

 

 

 

 

 

 

 

 

75

 

 

 

 

 

 

75

 

 

 

 

 

 

75

 

Warrant expense (see Note 19 –

   Kazzam, LLC)

 

 

 

 

 

1,033

 

 

 

 

 

 

 

 

 

1,033

 

 

 

 

 

 

1,033

 

 

 

 

 

 

1,033

 

Acquired non-controlling interest

 

 

 

 

 

2,518

 

 

 

 

 

 

 

 

 

2,518

 

 

 

 

 

 

2,518

 

 

 

17

 

 

 

2,535

 

Treasury Stock purchases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(84

)

 

 

(84

)

 

 

 

 

 

(84

)

Foreign currency adjustments

 

 

 

 

 

 

 

 

 

 

 

(12,201

)

 

 

(12,201

)

 

 

 

 

 

(12,201

)

 

 

 

 

 

(12,201

)

Impact of foreign exchange

   contracts, net

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

(12

)

 

 

 

 

 

(12

)

 

 

 

 

 

(12

)

Balance at March 31, 2020

 

$

1,211

 

 

$

933,174

 

 

$

(578,732

)

 

$

(47,947

)

 

$

307,706

 

 

$

(327,170

)

 

$

(19,464

)

 

$

(162

)

 

$

(19,626

)

 

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Retained

Earnings

(Deficit)

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Total Party City

Holdco Inc.

Stockholders’

Equity Before

Common Stock

Held In Treasury

 

 

Common

Stock Held

In Treasury

 

 

Total Party City

Holdco Inc.

Stockholders’

Equity

 

 

Non-

Controlling

Interests

 

 

Total

Stockholders’

Equity

 

Balance at December 31, 2018

 

$

1,208

 

 

$

922,476

 

 

$

495,777

 

 

$

(49,201

)

 

$

1,370,260

 

 

$

(326,930

)

 

$

1,043,330

 

 

$

291

 

 

$

1,043,621

 

Cumulative effect of change in

   accounting principle, net (see Note 2)

 

 

 

 

 

662

 

 

 

(503

)

 

 

 

 

 

159

 

 

 

 

 

 

159

 

 

 

 

 

 

159

 

Balance at December 31, 2018,

   as adjusted

 

$

1,208

 

 

$

923,138

 

 

$

495,274

 

 

$

(49,201

)

 

$

1,370,419

 

 

$

(326,930

)

 

$

1,043,489

 

 

$

291

 

 

$

1,043,780

 

Net loss

 

 

 

 

 

 

 

 

(30,218

)

 

 

 

 

 

(30,218

)

 

 

 

 

 

(30,218

)

 

 

(71

)

 

 

(30,289

)

Stock option expense

 

 

 

 

 

370

 

 

 

 

 

 

 

 

 

370

 

 

 

 

 

 

370

 

 

 

 

 

 

370

 

Restricted stock units – time based

 

 

 

 

 

392

 

 

 

 

 

 

 

 

 

392

 

 

 

 

 

 

392

 

 

 

 

 

 

392

 

Director – non-cash compensation

 

 

 

 

 

77

 

 

 

 

 

 

 

 

 

77

 

 

 

 

 

 

77

 

 

 

 

 

 

77

 

Warrant expense

 

 

 

 

 

129

 

 

 

 

 

 

 

 

 

129

 

 

 

 

 

 

129

 

 

 

 

 

 

129

 

Exercise of stock options

 

 

2

 

 

 

1,086

 

 

 

 

 

 

 

 

 

1,088

 

 

 

 

 

 

1,088

 

 

 

 

 

 

1,088

 

Acquired non-controlling interest

 

 

 

 

 

41

 

 

 

 

 

 

 

 

 

41

 

 

 

 

 

 

41

 

 

 

71

 

 

 

112

 

Treasury Stock purchases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(156

)

 

 

(156

)

 

 

 

 

 

(156

)

Foreign currency adjustments

 

 

 

 

 

 

 

 

 

 

 

4,156

 

 

 

4,156

 

 

 

 

 

 

4,156

 

 

 

9

 

 

 

4,165

 

Impact of foreign exchange

   contracts, net

 

 

 

 

 

 

 

 

 

 

 

(513

)

 

 

(513

)

 

 

 

 

 

(513

)

 

 

 

 

 

(513

)

Balance at March 31, 2019

 

$

1,210

 

 

$

925,233

 

 

$