Los Angeles, May 20, 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 March 29, 2015.
First Quarter Highlights:
· Revenue increased 11.7% year-over-year to $0.9 million
· Total costs and operating expenses decreased 6.9% year-over-year
· Total long-term liabilities were $1.7 million at quarter end, down 3.8% from year-end 2014
"This is the first quarter we're seeing true year-over-year comparisons for our three current locations, and to report double-digit revenue growth in the period bodes very well for our long-term success," commented Joey Parsi, founder and CEO of Giggles N' Hugs. "We also took important steps to prepare for our expansion by further strengthening 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 locations, Gay and Kaufman are incredible additions to our team and provide a strong endorsement of our concept as we move into the next phase of our expansion."
Parsi continued, "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 goal of expanding to 12 company-owned locations by the end of 2017. We're also very excited about the potential of further growth fueled by franchise locations. Since opening our first Giggles N' Hugs in 2009, we've seen a steady stream of interest from franchisees looking to take our concept to markets here in the U.S. and around the world. We look forward to reporting on our progress on these and other fronts in the coming quarters as we work diligently to generate continued shareholder value improvements."
The net sales for the thirteen weeks ended March 29, 2015 and March 30, 2014 were $918,228 and $822,050, respectively. The increase of $96,178, or 11.7%, was due primarily to a continuing trend for higher party rentals. The net sales consist of revenues 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, and net of allowances, returns and discounts. Sales were up for private party rentals and other sales, offsetting the decrease in allowances, returns and discounts. The Century City location showed the highest increase of 19.0% over the comparable period from last year.
Costs related to food purchases, supplies and general restaurant operations totaled $214,316 during the thirteen weeks ended March 29, 2015 which showed virtually no change in costs from the comparable period last year. Food costs fluctuate regularly and are difficult to offset or minimize, as any increase in costs of certain commodities could adversely impact the Company's operations unless it passes any such price increases to its guests.
Labor expenses for the thirteen weeks ended March 29, 2015 and March 30, 2014 were $332,071, and $319,518, respectively. The increase of 3.9% was largely due to wage increases. As a customer service company our primary variable cost is related to providing such services. With constant pressure for increased wages, the Company was successfully in keeping labor costs at 39% of revenue versus 38% for a comparable period in 2014. Labor costs are constantly fluctuating and any changes to minimum wages payable could adversely impact the Company's operations.
Adjusted net loss (non-GAAP) for the thirteen weeks ended March 29, 2015 was $120,000. The net loss for the thirteen weeks ended March 29, 2015 was $318,680, compared to a net loss of $506,272 for the thirteen weeks ended March 30, 2014. The decrease of $187,592, or 37%, was a function of stabilizing operating costs and a drop in overall general and administrative costs 37%. Management believe 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.
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||($0.32)|
|add back non-cash and non-recurring items:|
|Loss on settlement||$0.02|
|Depreciation and amortization||$0.09|
|Share based comp||$0.07|
|Litigation expense, non-recurring||$|
|Finance and interest expense, related to warrant exercise||$0.02|
|Adjusted net loss||($0.12)|
Source:Giggles N Hugs INC