Los Angeles, CA, April 16, 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 year ended December 28, 2014.
Fiscal Year 2014 Highlights:
· Revenue increased 48% year-over-year to a record $3.3 million, up from $2.3 million in fiscal 2013
· Total current assets increased 41% to $169,000, up from $119,000 at fiscal year-end 2013
· Total long-term liabilities decreased 14% to $1.8 million, down from $2.1 million at fiscal year-end 2013
"We're pleased to report yet another period of strong financial performance with revenue surging 48% over prior year results," commented Joey Parsi, founder and CEO of Giggles N' Hugs. "Our unique concept fills a significant unmet need in the market and addresses the top trends shaping the evolution of the restaurant industry. According to a year-end survey by the National Restaurant Association that polled more than 1,000 chefs across the U.S., these trends include locally-sourced meats, seafood, and produce, environmental sustainability, more natural ingredients, less processed foods, and healthier kids' meals. We hit the mark in each of these categories and stand to benefit tremendously as we work to expand our operations from three locations today to more than 12 locations by 2017."
Parsi continued, "Subsequent to year-end we significantly strengthened our management team with the addition of Philip Gay as chief business development officer and John Kaufman as interim-president. 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, Gay and Kaufman are great additions to our team as we move into the next phase of our expansion."
Gay brings nearly three decades of industry-related senior executive experience to Giggles N' Hugs. In addition to his role at California Pizza Kitchen, he served as director, president, and CEO of Grill Concepts, a publicly-traded operator of upscale casual and fine dining restaurants throughout the U.S. Previously he served as chief financial officer for Wolfgang Puck Food Company, and he has held various COO and CEO positions at Color Me Mine and Diversified Food Group.
After successfully expanding California Pizza Kitchen, Kaufman was recruited by Lee Iacocca, Chairman of Koo Koo Roo and former Chairman and CEO of the Chrysler Company, to lead operations as president and COO of Koo Koo Roo, one of the fastest growing healthy casual restaurant concepts. In less than three years, Kaufman and the Koo Koo Roo team opened an additional 20 locations, bringing the total to 45, and turned the company from cash flow negative to cash flow positive by focusing resources on the core brand, increasing performance, controlling costs, and improving customer service.
During Kaufman's 36 years of experience in the restaurant industry, he has opened more than 100 restaurants including two of his own. Kaufman has worked with some of the most successful restaurant companies to maximize operational effectiveness and significantly increase cash flow and customer counts. By combining his proven leadership skills with a deep understanding of food industry operations, P&L management, menu/brand development, and systems and procedures, Kaufman created beneficial relationships with owners, staff, customers, and management that enabled him to achieve and maintain substantial increases in productivity, service, and profitability.
"To have the two main executives who grew California Pizza Kitchen from just two locations to the behemoth that it became is unbelievable and a huge testament to the strength of the Giggles N' Hugs concept," stated Parsi. "I can't think of two better executives to have on our team at this stage of our growth. Add in Todd Star, the former head of west coast leasing at Westfield USA, who is now spearheading our expansion with all the major mall owners in the country, along with Sean Richards, who ran operations at Pink Taco, House of Blues, and the Hooters Casino, and then top it off with Joan Barnes, former CEO and founder of Gymboree, we truly have assembled one of the best management teams in the restaurant world. Add in our branded merchandising program and the potential for expansion via franchising and we have the recipe for a significant increase in revenue and shareholder value in the quarters ahead."
Net sales for the fiscal year ended December 28, 2014, were up 48% to $3.3 million, compared to $2.3 million in fiscal year 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 decreased moderately; as a percentage of revenues, this represented a significant improvement which was largely a factor of more efficient operating procedures. 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 $545,000 during the fiscal year ended December 28, 2014, representing a 45% increase from the $376,000 cost of sales in the prior fiscal year. 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 fiscal year ended December 28, 2014 were $1.3 million, an increase of 46% from $874,000 in the prior fiscal year. As a customer service company whose primary variable cost is related to providing such services, labor costs comprised 38% of total operating expenses during fiscal year 2014, compared to 39% in fiscal year 2013.
Adjusted net loss (non-GAAP) for the fiscal year ended December 28, 2014 was $870,000. Net loss for fiscal year 2014 was $2.4 million, compared to a net loss of $1.5 million in fiscal 2013. The Company believes the loss will 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.
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 Net Loss (non-GAAP) Reconciliation (in millions)|
|Net Loss, as reported||$2.40|
|add back non-cash and non-recurring items:|
|Loss on settlement||$0.10|
|Loss on legal settlement||$0.04|
|Depreciation and amortization||$0.35|
|Share based comp||$0.39|
|Litigation expense, non-recurring||$0.20|
|Finance and interest expense, related to warrant exercise||$0.45|
|Adjusted net loss||($0.87)|
A photo accompanying this release is available at:
Source:Giggles N Hugs INC