Los Angeles, Aug. 25, 2015 (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 thirteen weeks ended June 28, 2015.
Second Quarter Highlights:
- Net sales at Glendale Galleria location increased 5.5% year-over-year
- Private party rentals and other sales increased 3.4% year-over-year to $451,258
- Total net sales increased 0.8% year-over-year to $830,812
“The recent additions to our management team, Philip Gay as chief business development officer and John Kaufman as interim-president, have brought a tremendous level of experience and leadership to Giggles N’ Hugs in the few short months they’ve been on board,” commented Joey Parsi, founder and CEO of Giggles N’ Hugs. “Having worked together previously in their roles as CFO and COO respectively at California Pizza Kitchen, where they helped grow the chain from two locations to more than 70, they are helping us immensely as we prepare for our expansion on the West Coast and beyond.”
Parsi continued, “Together with the help of Todd Star, the former head of west coast leasing at Westfield USA who is now spearheading our negotiations with all the major mall owners in the country, we’re moving forward on our plans to open new locations in markets like Seattle and San Francisco in the north and San Diego and Orange County in the south., With the expected significant discounts from current market rents as well as attractive tenant allowances that have been offered, we should see great reductions in construction costs and rent for the new locations.”
“We also continue to receive substantial interest from large multi-unit franchising operators and small individual franchisees, both domestically and internationally. This is an area that represents immense growth potential for Giggles N’ Hugs, and will provide very attractive margins , and complements our core company-owned expansion plans. With John and Philip’s extensive experience in the franchising space, with John serving as President of Koo Koo Roo Chicken and Philip serving as CFO at California Pizza Kitchen, and interim CEO at Wolfgang Puck Foods, I believe this will be an area that brings solid improvements to shareholder value as we execute.” With what I consider to be an all star management team we now have in place, we are very excited about what the future holds for Giggles N Hugs, Parsi Concluded".
Net sales for the thirteen weeks ended June 28, 2015 and June 29, 2014 were $830,812 and $824,611 respectively. The marginal increase of 0.8% was due primarily to a continuing trend for higher party rentals. The net sales consist of revenue from food and beverages, private party rentals, fees for access to the children’s play area, sales from membership cards (of varying terms), sales from Giggles N’ Hugs-branded merchandise, net of allowances, returns and discounts. Sales were up 3.4% for private party rentals and other sales, offsetting the higher allowances, returns and discounts. The Glendale location showed the highest increase of 5.5% over the comparable period from last year, which offset the slightly lower sales from the other locations.
Costs related to food purchases, supplies and general restaurant operations decreased 7.6% to $212,038 during the thirteen weeks ended June 28, 2015, compared to $229,570 for the thirteen weeks ended June 29, 2014. We were able to achieve this even though many commoddities we use have increased in price. Any future increase in costs of certain commodities could adversely impact operations unless such price increases are passed on to the Company’s guests.
Labor expenses for the thirteen weeks ended June 28, 2015 and June 29, 2014, were $336,877, and $315,747, respectively, reflecting an increase of 6.7%. Despite constant pressure for increased wages, the Company was successful in keeping labor costs at around 39% of revenue, which is in-line with comparable periods.
The net loss for the thirteen weeks ended June 28, 2015 decreased 0.5% to $474,826, compared to a net loss of $477,309 for the thirteen weeks ended June 29, 2014. Management believes losses will continue to be reduced and profitability will be attained in future quarters as the popularity of its restaurants increases.
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.
For more information, visit www.gigglesnhugs.com
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.
| Adjusted Store-Level Net Loss (non-GAAP) Reconciliation | ||||||||
| 2Q15 | 2Q14 | |||||||
| Net sales, as reported | $ | 830,812 | $ | 824,611 | ||||
| Total operating expenses, as reported | $ | 860,829 | $ | 854,765 | ||||
| Add back depreciation & amortization | ($ | 93,753 | ) | ($ | 86,966 | ) | ||
| Other expenses | ||||||||
| General & administrative | $ | 63,332 | $ | 59,359 | ||||
| Finance & interest expense | $ | 5,006 | $ | 14,744 | ||||
| Gain on debt modification | ($ | 69,228 | ) | - | ||||
| Total costs & operating expenses | $ | 766,186 | $ | 841,902 | ||||