Los Angeles, Aug. 23, 2017 (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 second quarter ended July 2, 2017 and provides a shareholder update on recent business activities.
Second Quarter Highlights:
- Same store Net sales for Glendale location increased 4.3% year-over-year
- Same store Net sales for Topanga location increased 5.0% year-over-year
- Cost of operations decreased 41.5% year-over-year to $429,164
- Loss from operations improved 46.2% year-over-year
- Glendale location generated record positive cashflow of over 35% at the unit level
“We’re pleased to report yet another quarter of same store sales growth at our two Southern California locations, further substantiating the attractiveness of our business model,” stated Joey Parsi, Founder and CEO of Giggle N’ Hugs. “While we will continue to focus on growing sales at these locations and improving overall operating results, we’re excited to be moving forward on plans to expand our business domestically and internationally, both through potential new company and franchise locations, as well as through synergistic acquisitions.”
Update on Recent Business Activities:
Bahrain - In May, the Company signed a non-binding Letter of Intent (LOI) with City Scape Trading (franchisee), a Bahrain-based hospitality company, to open up to two (2) Giggles N’ Hugs franchise locations in Bahrain with additional locations to follow if successful.
The Company began making progress on finalizing the LOI once Ramadan concluded in late June. We have been working with the franchisee on technical questions related to utility needs, floor plans and build-out specifications. Under the terms of the agreement, the franchisee has 12 months from the closing of the Area Development Agreement ( ADA ) to open its first location. As such, they had been waiting to get all technical questions answered prior to finalizing. Notwithstanding any other issues, we currently anticipate the LOI closing in late September.
Under the terms of the master license agreement, Giggles N’ Hugs will receive up-front development fees for each location, as well as ongoing royalties based on a percentage of monthly gross sales. The company is engaged in similar discussions with other parties internationally as well as here in the US on additional potential franchising opportunities. We will update shareholders as these discussions progress.
Tanforan Mall – Previously, the Company announced an LOI with QIC, landlord of San Francisco’s the Shops at Tanforan, to open the first Giggles N’ Hugs location in Northern California. Since signing the LOI, QIC has decided to begin a complete renovation of the mall. We believe this is due to some of their existing retail anchors, including Sears, closing at this location. As evident in recent years, the retail environment has changed dramatically due to consumers shift to online shopping. As such many landlords are changing the look and feel of the malls to attract more foot traffic. This bodes well for our unique concept which attracts thousands of people per month to to each of the mall we are located in. The project is in the early stages but having experienced challenges with a similar renovation project at our Century City location, we have decided to put this project on hold until the renovation is completed and then we can revisit.
We continue to explore other options with QIC throughout the country, and we have also been in talks with other leading mall owners, including, Simon Properties, Macerich, General Growth Properties and Westfield about potential additional locations. Our business model calls for large landlord/owner concessions, including rent discounts and build-out costs. As such, negotiations for each location can be extensive and can take longer than usual. Given that we are asking for the bulk of the build out costs to be paid by the landlord, there is a lot more work that must take place, as a result deals can take up to 6 months or longer to negotiate.
Pacificshore Ventures – In April, we engaged PacificShore Ventures, a global specialty finance and M&A firm, to explore potential synergistic acquisition opportunities. They have introduced us to a variety of companies in different sectors of the market that complement our business and provide synergies. While multiple discussions have been had with many companies in different sectors, including kids clothing companies, frozen food companies, event companies, and catering companies, no agreements have been finalized at this time and discussions are ongoing. We believe that if and when we find a suitable synergistic company that these discussions and the due diligence can take months before we can finalize a deal.
Domain LA - We continue to work with Michelle Steinberg and DomainLA to extend the reach of the Giggles N’ Hugs story. Our celebrity brand ambassadors, Jillian Michaels and Tia Mowry-Hardict, remain very active, and with their help, we were recently featured on NBCs Extra !, as well as being featured in every major entertainment news magazine in the country as part of our recent Fitness Friday launch event. Over the next year, we expect our brand ambassadors and CEO to be interviewed on national and local news, talk shows, business programs, and entertainment shows, and social media outlets, creating significant visibility for the brand in the coming months.
Financing - It has been a long time coming but soon, we expect to announce our financing strategy that should provide the Company the needed capital to execute all the above. Joey Parsi, Founder and CEO of Giggles N’ Hugs, stated, “We are still at the early stages of building a concept that we hope will grow into a global enterprise encompassing multiple synergistic business lines. Building something of this scale takes time and money. We believe we’ve set the foundation for future success, and we will work tirelessly in the weeks, months and years ahead to execute on our vision. Parsi Continued, we understand that the stock price has been very volatile in recent months but that is out of our control. All that we can do is to execute and we hope as a result, the stock will take care of itself, stated Parsi. Thank you for your patience and continued support of Giggles N’ Hugs.”
During the second quarter ended July 2, 2017, net sales reflected a drop of $255,641, a decline of 30.7%, from the year ago period, primarily due to the major remodeling of the Century City Westfield Mall, which led to the closure of our Century City location on June 30, 2016. Same store sales at the Company’s Topanga and Glendale stores increased 5.0% and 4.3%, respectively with Glendale throwing off record cash flow of over 35% at the unit level
Total costs and operating expenses decreased 34.0% to $724,056 in the second quarter, down from $1,142,818 in the year ago period. The decline of was due to multiple factors such as the closing of the Century City store; lower general and administrative costs; lower other operating expenses; and lower depreciation.
Cost of operations decreased 41.5% to $429,164 in the second quarter, down from $734,151 in the year ago period. Costs of food and other operating expenses decreased, which was offset slightly by higher labor costs.
Total general and administrative costs decreased 21.9% to $249,823 in the second quarter, down from $319,926 in the year ago period. Again, the closing of the Century City store, contributed proportionately ($24,800), to this decline. Additionally, lower professional fees were accountable for much of the remaining difference.
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.
INVESTORS RELATIONS CONTACT: Bruce Haase RedChip Companies, Inc. 800.733.2447, ext. 131 email@example.com PUBLIC RELATIONS CONTACT: Michelle Steinberg dOMAIN New York 601 West 26th St. Suite #1750 New York, NY 10001 212-675-0012 dOMAIN Los Angeles 7961 W 3rd Street, 2nd Floor Los Angeles, CA 90048 323-549-0012 Joey Parsi - Founder/CEO Giggles N Hugs Joey@gigglesnhugs.com http://www.gigglesnhugs.com
Source:Giggles N Hugs INC