Los Angeles, CA, Nov. 13, 2014 (GLOBE NEWSWIRE) -- Giggles N' Hugs, Inc. (OTCQB: GIGL), owner and operator of family-friendly restaurants that bring together high-end, organic food with active, cutting-edge play and entertainment for children, announces its financial results for the third quarter ended September 28, 2014.
Third Quarter Highlights:
· Revenue increased 49% year-over-year to a record $913,000 in the third quarter, up from $615,000 in the year ago period
· Third quarter revenue increased 10% sequentially, compared to the second quarter of 2014
· 39-week revenue increased 58% to $2.6 million, up from $1.6 million in the nine-month period ended September 30, 2013
· Total current assets increased 112% to $253,000, up from $119,000 at fiscal year-end 2013
· Total long-term liabilities decreased 16% to $1.8 million, down from $2.1 million at fiscal year-end 2013
· Retained Todd Star, a former senior executive at Westfield USA, to lead our expansion negotiations with several of the largest mall owners in the U.S., including General Growth Properties, Simon Property Group, and Westfield Group, who collectively own more than 500 properties worldwide
· Appointed Philip Gay to advisory board. Previously, Gay was the president and CEO of Grill Concepts, CFO of California Pizza Kitchen, CFO of Wolfgang Puck Food Company, CEO and CFO of Diversified Food Group, and CEO of Color Me Mine
"We're excited to report a great third quarter, with revenue up 49% over last year's results," commented Joey Parsi, founder and CEO of Giggles N' Hugs. "We also saw strong growth sequentially, with revenue increasing 10% over the second quarter of this year. This is yet another positive confirmation of the viability of our unique concept, bringing together high-end, organic food with cutting-edge play and entertainment for children. Our ability to generate this type of sequential growth in the LA market is noteworthy, as we regularly compete with outdoor parties due to weather factors. As we expand into other markets, such as San Francisco and Seattle, where weather will drive families indoors more often, we believe we can see even stronger performance."
Parsi continued, "Our expansion efforts got a great boost in the third quarter when we retained the services of Todd Star, a highly-regarded and successful senior executive with nearly three decades of real estate industry experience. As a former senior executive at Westfield USA, Todd knows the mall operators better than most, and as a result, we believe he can help us negotiate terms that will be advantageous to the Company going forward."
"We're also very pleased to have Philip Gay actively involved as a member of our recently established advisory board. As the former CFO of California Pizza Kitchen and Wolfgang Puck Food Company, Philip brings tremendous restaurant experience with some of the most recognizable eateries in the world and will be invaluable as we build Giggles N' Hugs domestically and internationally," concluded Parsi.
Net sales for the 13-week period ended September 28, 2014, were up 49% to $913,270, compared to $614,510 in the three-month period ended September 30, 2013. The net sales consist of revenues from private party rentals, fees for guests to access the children's play area, sales from our one-, three-, or six-month membership cards, sales from Giggles N' Hugs-branded merchandise, net of allowances, returns and discounts. Sales were up in all categories, while allowances, returns and discounts were mostly flat. The added stores for the full year, increased internal marketing, and periodic events held by the Malls, all contributed to the increase in revenue.
Costs related to food purchases, supplies and general restaurant operations totaled $229,459 during the thirteen-weeks ended September 28, 2014, representing a 128% increase from the $100,548 cost of sales in the three months ended September 30, 2013. Food costs fluctuate regularly and are difficult to offset or minimize. Cost of sales is higher due to the opening of the Westfield Topanga location and Glendale Galleria in 2013.
Labor expenses for the thirteen-weeks ended September 28, 2014 were $334,261, an increase of 45% from $230,979 in the three months ended September 30, 2013. As a customer service company whose primary variable cost is related to providing such services, labor costs comprised 38% of total operating expenses during the thirteen-weeks ended September 28, 2014, compared to 43% in the comparable three months ended September 30, 2013.
Adjusted net loss (non-GAAP) for the thirteen-weeks ended September 28, 2014 was $130,762. Net loss for the thirteen-weeks ended September 28, 2014 was $858,936, compared to a net loss of $356,496 for the three months ended September 30, 2013. The Company believes the loss will be reduced and profitability will be attained in future quarters as the popularity of its restaurants increases.
| Adjusted Net Loss (non-GAAP) Reconciliation | |||
| Q3 2014 | |||
| Net Loss, as reported | ($858,936) | ||
| add back non-cash and non-recurring items: | |||
| Depreciation and amortization | $89,019 | ||
| Share based comp | $134,155 | ||
| Litigation expense, non-recurring | $105,000 | ||
| Finance and interest expense, related to warrant exercise | $400,000 | ||
| Adjusted net loss | ($130,762) | ||
As of September 28, 2014, the Company had total current assets of $253,123, including $107,731 in cash and equivalents, $37,894 in inventory, and $107,498 in prepaid expenses and other. The Company expects to use its cash to invest in its core businesses, including new product innovations, advertising and marketing, as well as the construction and build-out of additional restaurant locations. Other than normal operating expenses, cash requirements for 2014 are expected to consist primarily of capital expenditures and additional investments in advertising and marketing efforts.
About Giggles N' Hugs
Giggles N' Hugs is the first and only restaurant that brings together high-end, organic food with active, cutting-edge play and entertainment for children. Every Giggles N' Hugs location offers an upscale, family-friendly atmosphere with a dedicated play area that children 10 and younger absolutely love. We feature high-quality menus made from fresh and local foods, nightly entertainment such as magic shows, concerts, puppet shows and face painting, and hugely popular party packages for families that want to do something special.
Forward Looking Statements:
Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation those set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"). Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law
A file accompanying this release is available at:
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