Los Angeles, May 25, 2018 (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, today announced its financial performance for the first quarter ended April 1, 2018 and provides a shareholder update on recent business activities.
First Quarter Highlights include:
- Completed Rights Offering, raising approx. $600,000
- Overall net sales declined 7.3% year-over-year to $613,363
- Loss from operations decreased 73.1% year-over-year
- Net loss decreased 68.0% year-over-year
- 1Q18 EPS of $0.00 per share vs. a loss of ($0.01) in 1Q17
- Restaurant level net margin at Glendale was 23% for the quarter
“We continued to improve our bottom line in the first quarter, reducing net loss by 73.1% year-over-year and achieving an earnings per share of $0.00, up from a loss of a penny in the year ago period,” stated Joey Parsi, Founder and co-CEO of Giggle N’ Hugs.
“In April we announced Philip Gay, former CFO of California Pizza Kitchen and former CFO and CEO of Wolfgang Puck Food Company, took a leadership role at Giggles N’ Hugs as CEO, I’m pleased to announce today that I will continue to stay actively involved in the day-to-day management, joining Philip as co-CEO”, stated Parsi
“Over the past month or so, given Philip’s continued leadership role at Triple Enterprises, the consulting firm he founded, we recognized with all the time commitments and traveling that Philip has been doing for Triple, he did not have the ability to attend to all the meetings and discussions that he was needed for as the CEO, as a result we decided that it would be beneficial for both of us being co-CEOs.”
“While we are pleased to have completed our rights offering this spring, raising gross proceeds of approximately $600,000, after factoring in commissions and fees, the company believes that the funding is insufficient to achieve our growth objectives and as a result we are evaluating alternatives and next steps. As co-CEO, I look forward to working closely with Philip to explore and execute our best options.”
Parsi continued, “Great weather in Southern California during the quarter negatively impacted revenue, driven mainly by lower party sales, which tend to decline in good and or sunny weather as customers tend to do their parties at home and or the park. The same is true for our regular business. When the weather is nice, customers tend to go outdoors to the beach or play in the park or go swimming at home which means less visits. Conversely, when the weather is bad, our regular sales tend to be about double compared to a sunny and warm day. When you compare the weather this year which has not really rained all that much, versus last year which was one of more rainier seasons, this led to the decline.”
“Ultimately, these trends are a key driver behind our goal to expand into new markets,” stated Parsi. “We know the demand is there, and with the proper funding in place to execute on expansion plans, we believe we could create and improve shareholder value over the long term.”
Financial Results
During the first quarter ended April 1, 2018, net sales decreased 7.3% from the year ago period, driven primarily by a decline in party sales due to weather conditions as discussed above.
Cost of operations decreased declined 1% to $499,677 in the first quarter, down from $503,791 in the year ago period. The improvement was mostly due to decreased labor costs.
Total general and administrative costs decreased 70.3% in the first quarter to $278,227, down from $935,734 in the year ago period. The increase was mainly attributable to approximately $639,000 of non-employee stock-based compensation recognized in the year ago period.
The overall net losses of $241,565 and $756,186 for the thirteen weeks ended April 1, 2018 and April 2, 2017, respectively, reflects a decrease of 514,621. This significant change was mostly attributable to the fair value of $531,000 for warrants granted for services in the same period last year.
Investor Conference Call
Giggles N’ Hugs co-CEOs, Joey Parsi and Philip Gay, will host an investor conference call to further discuss recent developments, outline plans moving forward, and dispel misinformation that has been disseminated by a few individuals on social media and the message boards, which as a rule we do not read or follow.
As such, we will be holding a shareholder Q & A conference call next month to provide a forum for shareholders to ask question and get correct and true answers from the company. The call will be open to current and prospective investors. Further details, including date and time, are forthcoming.
About Giggles N’ Hugs
Giggles N' Hugs is the first of a kind family 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.