Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PRTY | |
Entity Registrant Name | Party City Holdco Inc. | |
Entity Central Index Key | 1,592,058 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 119,498,654 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 47,617 | $ 42,919 |
Accounts receivable, net | 177,943 | 132,287 |
Inventories, net | 683,655 | 564,259 |
Prepaid expenses and other current assets | 68,752 | 50,450 |
Total current assets | 977,967 | 789,915 |
Property, plant and equipment, net | 282,666 | 272,420 |
Goodwill | 1,580,551 | 1,562,515 |
Trade names | 567,142 | 568,712 |
Other intangible assets, net | 76,933 | 89,157 |
Other assets, net | 5,269 | 9,684 |
Total assets | 3,490,528 | 3,292,403 |
Current liabilities: | ||
Loans and notes payable | 208,056 | 126,136 |
Accounts payable | 189,278 | 111,616 |
Accrued expenses | 162,853 | 146,319 |
Income taxes payable | 48 | 8,504 |
Current portion of long-term obligations | 14,235 | 14,552 |
Total current liabilities | 574,470 | 407,127 |
Long-term obligations, excluding current portion | 1,638,643 | 1,646,121 |
Deferred income tax liabilities | 277,358 | 276,667 |
Deferred rent and other long-term liabilities | 60,166 | 49,471 |
Total liabilities | 2,550,637 | 2,379,386 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock (119,498,654 and 119,258,374 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively) | 1,195 | 1,193 |
Additional paid-in capital | 908,942 | 904,425 |
Retained earnings | 72,490 | 40,189 |
Accumulated other comprehensive loss | (42,736) | (32,790) |
Total stockholders' equity | 939,891 | 913,017 |
Total liabilities and stockholders' equity | $ 3,490,528 | $ 3,292,403 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, shares issued | 119,498,654 | 119,258,374 |
Common stock, shares outstanding | 119,498,654 | 119,258,374 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Net sales | $ 553,382 | $ 551,380 | $ 1,523,094 | $ 1,500,781 |
Royalties and franchise fees | 3,568 | 4,027 | 11,009 | 12,251 |
Total revenues | 556,950 | 555,407 | 1,534,103 | 1,513,032 |
Expenses: | ||||
Cost of sales | 356,662 | 361,530 | 952,294 | 958,667 |
Wholesale selling expenses | 14,739 | 15,465 | 45,854 | 48,825 |
Retail operating expenses | 100,746 | 102,432 | 278,070 | 267,975 |
Franchise expenses | 3,370 | 3,608 | 10,507 | 10,597 |
General and administrative expenses | 38,972 | 35,979 | 115,828 | 110,048 |
Art and development costs | 5,543 | 4,913 | 16,596 | 15,369 |
Total expenses | 520,032 | 523,927 | 1,419,149 | 1,411,481 |
Income from operations | 36,918 | 31,480 | 114,954 | 101,551 |
Interest expense, net | 22,424 | 29,554 | 67,857 | 101,430 |
Other (income) expense, net | (905) | 79,130 | (4,107) | 126,519 |
Income (loss) before income taxes | 15,399 | (77,204) | 51,204 | (126,398) |
Income tax expense (benefit) | 5,219 | (32,715) | 18,903 | (50,334) |
Net income (loss) | 10,180 | (44,489) | 32,301 | (76,064) |
Comprehensive income (loss) | $ 6,028 | $ (55,797) | $ 22,355 | $ (92,980) |
Net income (loss) per common share-Basic | $ 0.09 | $ (0.37) | $ 0.27 | $ (0.69) |
Net income (loss) per common share-Diluted | $ 0.08 | $ (0.37) | $ 0.27 | $ (0.69) |
Weighted-average number of common shares-Basic | 119,406,751 | 119,253,707 | 119,340,610 | 109,470,099 |
Weighted-average number of common shares-Diluted | 120,472,297 | 119,253,707 | 120,312,492 | 109,470,099 |
Dividends declared per share | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] |
Balance at Dec. 31, 2015 | $ 913,017 | $ 1,193 | $ 904,425 | $ 40,189 | $ (32,790) |
Balance, Shares at Dec. 31, 2015 | 119,258,374 | 119,258,374 | |||
Net income | $ 32,301 | 32,301 | |||
Equity based compensation | 2,829 | 2,829 | |||
Impact of foreign exchange contracts, net of taxes | (310) | (310) | |||
Exercise of stock options | 1,281 | $ 2 | 1,279 | ||
Exercise of stock options,Shares | 240,280 | ||||
Foreign currency adjustments | (9,636) | (9,636) | |||
Excess tax benefit | 526 | 526 | |||
Other | (117) | (117) | |||
Balance at Sep. 30, 2016 | $ 939,891 | $ 1,195 | $ 908,942 | $ 72,490 | $ (42,736) |
Balance, Shares at Sep. 30, 2016 | 119,498,654 | 119,498,654 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows provided by (used in) operating activities: | ||
Net income (loss) | $ 32,301 | $ (76,064) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | 61,186 | 59,567 |
Amortization of deferred financing costs and original issuance discounts | 3,821 | 39,225 |
Provision (credit) for doubtful accounts | 429 | (10) |
Deferred income tax expense (benefit) | 933 | (5,994) |
Deferred rent | 12,240 | 9,580 |
Undistributed loss in unconsolidated joint venture | 380 | 377 |
Loss (gain) on sale of assets | 14 | (2,488) |
Equity based compensation | 2,829 | 2,094 |
Changes in operating assets and liabilities, net of effects of acquired businesses: | ||
Increase in accounts receivable | (46,576) | (50,034) |
Increase in inventories | (108,882) | (104,968) |
Increase in prepaid expenses and other current assets | (15,046) | (12,178) |
Increase (decrease) in accounts payable, accrued expenses and income taxes payable | 79,848 | (23,656) |
Net cash provided by (used in) operating activities | 23,477 | (164,549) |
Cash flows used in investing activities: | ||
Cash paid in connection with acquisitions, net of cash acquired | (31,820) | (18,405) |
Capital expenditures | (57,324) | (62,032) |
Proceeds from disposal of property and equipment | 31 | 604 |
Net cash used in investing activities | (89,113) | (79,833) |
Cash flows provided by financing activities: | ||
Repayment of loans, notes payable and long-term obligations | (28,158) | (2,327,517) |
Proceeds from loans, notes payable and long-term obligations | 97,943 | 2,198,600 |
Cash held in escrow in connection with acquisitions | 0 | (3,832) |
Issuance of common stock | 0 | 397,159 |
Excess tax benefit from stock options | 526 | 0 |
Exercise of stock options | 1,281 | 30 |
Debt issuance costs | (44) | (11,248) |
Net cash provided by financing activities | 71,548 | 253,192 |
Effect of exchange rate changes on cash and cash equivalents | (1,214) | (2,219) |
Net increase in cash and cash equivalents | 4,698 | 6,591 |
Cash and cash equivalents at beginning of period | 42,919 | 47,214 |
Cash and cash equivalents at end of period | 47,617 | 53,805 |
Cash paid during the period | ||
Interest | 71,095 | 127,367 |
Income taxes, net of refunds | $ 26,103 | $ 36,675 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Note 1 – Description of Business Party City Holdco Inc. (the “Company” or “Party City Holdco”) is a vertically integrated supplier of decorated party goods. The Company designs, manufactures, sources and distributes party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties and stationery throughout the world. The Company’s retail operations include over 900 specialty retail party supply stores (including approximately 180 franchise stores) in the United States and Canada operating under the names Party City and Halloween City, and e-commerce websites, principally through the domain name PartyCity.com. Party City Holdco franchises both individual stores and franchise areas throughout the United States, Mexico and Puerto Rico, principally under the name Party City. Party City Holdco is a holding company with no operating assets or operations. The Company owns 100% of PC Nextco Holdings, LLC (“PC Nextco”), which owns 100% of PC Intermediate Holdings, Inc. (“PC Intermediate”). PC Intermediate owns 100% of Party City Holdings Inc. (“PCHI”), which owns the Company’s operating subsidiaries. During January 2016, the Company acquired 19 franchise stores located in Arizona and New Mexico in one transaction for total consideration of approximately $26,500. Additionally, during March 2016, the Company acquired Festival S.A. (“Festival”), a manufacturer of costumes and accessories, for approximately $5,000. |
Basis of Presentation and Recen
Basis of Presentation and Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Recently Issued Accounting Pronouncements | Note 2 – Basis of Presentation and Recently Issued Accounting Pronouncements The unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its majority-owned and controlled entities. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included in the unaudited condensed consolidated financial statements. The majority of our retail operations define a fiscal year (“Fiscal Year”) as the 52-week period or 53-week period ended on the Saturday nearest December 31st of each year and define fiscal quarters (“Fiscal Quarter”) as the four interim 13-week periods following the end of the previous Fiscal Year, except in the case of a 53-week Fiscal Year when the fourth Fiscal Quarter is extended to 14 weeks. The condensed consolidated financial statements of the Company combine the Fiscal Quarters of our retail operations with the calendar quarters of our wholesale operations. The Company has determined the differences between the retail operation’s Fiscal Year and Fiscal Quarters and the calendar year and calendar quarters to be insignificant. Operating results for interim periods are not necessarily indicative of the results to be expected for the year ending December 31, 2016. Our business is subject to substantial seasonal variations as our retail segment has realized a significant portion of its net sales, cash flows and net income in the fourth quarter of each year, principally due to its Halloween season sales in October and, to a lesser extent, other year-end holiday sales. We expect that this general pattern will continue. Our results of operations may also be affected by industry factors that may be specific to a particular period such as movement in and the general level of raw material costs. For further information see the consolidated financial statements, and notes thereto, included in the Company’s Form 10-K for the fiscal year ended December 31, 2015, as filed with the Securities and Exchange Commission on March 11, 2016. Recently Issued Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”. The pronouncement clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The update is effective for the Company during the first quarter of 2018. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting”. The pronouncement simplifies several aspects of the accounting for share-based payment transactions. The update is effective for the Company during the first quarter of 2017. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases”. The ASU requires that companies recognize on their balance sheets assets and liabilities for the rights and obligations created by the companies’ leases. The update is effective for the Company during the first quarter of 2019. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. The update impacts the accounting for equity investments and the recognition of changes in fair value of financial liabilities when the fair value option is elected. The pronouncement will be effective for the Company during the first quarter of 2018. Although the Company continues to evaluate this pronouncement, it does not believe that it will have a material impact on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments”. The update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The Company adopted the update during the three months ended March 31, 2016 and such adoption did not have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Inventory: Simplifying the Measurement of Inventory”. The update changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. The pronouncement will be effective for the Company during the first quarter of 2017. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”. The update amended the guidance on internal use software to clarify how customers in cloud computing arrangements should determine whether the arrangements include software licenses. The Company adopted the update during the three months ended March 31, 2016 and such adoption did not have a material impact on the Company’s consolidated financial statements. In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The update clarifies that a performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition. The Company adopted the update during the three months ended March 31, 2016 and such adoption did not have any impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The pronouncement contains a five-step model which replaces most existing revenue recognition guidance. The update is effective for the Company during the first quarter of 2018; however, early adoption is permitted. The pronouncement can be applied retrospectively to prior reporting periods or through a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements and its method of adoption. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 – Inventories Inventories consisted of the following: September 30, 2016 December 31, 2015 Finished goods $ 649,880 $ 532,606 Raw materials 24,329 21,278 Work in process 9,446 10,375 $ 683,655 $ 564,259 Inventories are valued at the lower of cost or market. The Company estimates retail inventory shortage for the periods between physical inventory dates on a store-by-store basis. Inventory shrinkage estimates can be affected by changes in merchandise mix and changes in actual shortage trends. The shrinkage rate from the most recent physical inventory, in combination with historical experience, is the basis for estimating shrinkage. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 4 – Income Taxes The income tax expense for the three and nine months ended September 30, 2016 was determined based upon the Company’s estimated consolidated effective income tax rate for the year ending December 31, 2016. The difference between the estimated consolidated effective income tax rate for the year ending December 31, 2016 and the U.S. federal statutory rate is primarily attributable to state income taxes, unrecognized foreign tax credits and benefits on certain foreign losses, partially offset by a foreign rate differential and available domestic manufacturing deductions. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | Note 5 – Changes in Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss consisted of the following: Three Months Ended September 30, 2016 Foreign Currency Adjustments Impact of Total, Net of Taxes Balance at June 30, 2016 $ (39,500 ) $ 916 $ (38,584 ) Other comprehensive loss before reclassifications, net (3,537 ) (470 ) (4,007 ) Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive income, net 0 (145 ) (145 ) Net current-period other comprehensive loss, net (3,537 ) (615 ) (4,152 ) Balance at September 30, 2016 $ (43,037 ) $ 301 $ (42,736 ) Three Months Ended September 30, 2015 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at June 30, 2015 $ (18,589 ) $ 246 $ (18,343 ) Other comprehensive (loss) income before reclassifications, net (11,502 ) 211 (11,291 ) Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net 0 (17 ) (17 ) Net current-period other comprehensive (loss) income, net (11,502 ) 194 (11,308 ) Balance at September 30, 2015 $ (30,091 ) $ 440 $ (29,651 ) Nine Months Ended September 30, 2016 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at December 31, 2015 $ (33,401 ) $ 611 $ (32,790 ) Other comprehensive (loss) income before reclassifications, net (9,636 ) 183 (9,453 ) Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive income, net 0 (493 ) (493 ) Net current-period other comprehensive loss, net (9,636 ) (310 ) (9,946 ) Balance at September 30, 2016 $ (43,037 ) $ 301 $ (42,736 ) Nine Months Ended September 30, 2015 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at December 31, 2014 $ (12,969 ) $ 234 $ (12,735 ) Other comprehensive (loss) income before reclassifications, net (17,122 ) 476 (16,646 ) Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net 0 (270 ) (270 ) Net current-period other comprehensive (loss) income, net (17,122 ) 206 (16,916 ) Balance at September 30, 2015 $ (30,091 ) $ 440 $ (29,651 ) |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Capital Stock | Note 6 – Capital Stock At September 30, 2016, the Company’s authorized capital stock consisted of 300,000,000 shares of $0.01 par value common stock. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Note 7 – Segment Information Industry Segments The Company has two identifiable business segments. The Wholesale segment designs, manufactures, contracts for manufacture and distributes party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties and stationery throughout the world. The Retail segment operates specialty retail party supply stores in the United States and Canada, principally under the names Party City and Halloween City, and it operates e-commerce websites, principally through the domain name Partycity.com. The Retail segment also franchises both individual stores and franchise areas throughout the United States, Mexico and Puerto Rico, principally under the name Party City. The Company’s industry segment data for the three months ended September 30, 2016 and September 30, 2015 was as follows: Wholesale Retail Consolidated Three Months Ended September 30, 2016 Revenues: Net sales $ 416,387 $ 347,557 $ 763,944 Royalties and franchise fees 0 3,568 3,568 Total revenues 416,387 351,125 767,512 Eliminations (210,562 ) 0 (210,562 ) Net revenues $ 205,825 $ 351,125 $ 556,950 Income from operations $ 35,532 $ 1,386 $ 36,918 Interest expense, net 22,424 Other income, net (905 ) Income before income taxes $ 15,399 Wholesale Retail Consolidated Three Months Ended September 30, 2015 Revenues: Net sales $ 418,447 $ 339,465 $ 757,912 Royalties and franchise fees 0 4,027 4,027 Total revenues 418,447 343,492 761,939 Eliminations (206,532 ) 0 (206,532 ) Net revenues $ 211,915 $ 343,492 $ 555,407 Income (loss) from operations $ 35,860 $ (4,380 ) $ 31,480 Interest expense, net 29,554 Other expense, net 79,130 Loss before income taxes $ (77,204 ) The Company’s industry segment data for the nine months ended September 30, 2016 and September 30, 2015 was as follows: Wholesale Retail Consolidated Nine Months Ended September 30, 2016 Revenues: Net sales $ 945,071 $ 1,043,212 $ 1,988,283 Royalties and franchise fees 0 11,009 11,009 Total revenues 945,071 1,054,221 1,999,292 Eliminations (465,189 ) 0 (465,189 ) Net revenues $ 479,882 $ 1,054,221 $ 1,534,103 Income from operations $ 65,669 $ 49,285 $ 114,954 Interest expense, net 67,857 Other income, net (4,107 ) Income before income taxes $ 51,204 Wholesale Retail Consolidated Nine Months Ended September 30, 2015 Revenues: Net sales $ 923,717 $ 1,003,196 $ 1,926,913 Royalties and franchise fees 0 12,251 12,251 Total revenues 923,717 1,015,447 1,939,164 Eliminations (426,132 ) 0 (426,132 ) Net revenues $ 497,585 $ 1,015,447 $ 1,513,032 Income from operations $ 59,882 $ 41,669 $ 101,551 Interest expense, net 101,430 Other expense, net 126,519 Loss before income taxes $ (126,398 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 – Commitments and Contingencies The Company is a party to certain claims and litigation in the ordinary course of business. The Company does not believe these proceedings will result, individually or in the aggregate, in a material adverse effect on its financial condition or future results of operations. On November 18, 2015, a putative class action complaint was filed in the U.S. District Court for the Southern District of New York, naming Party City Holdco Inc. and certain executives as defendants. An Amended Complaint was filed on April 25, 2016, which named additional defendants. The Amended Complaint alleges violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 in connection with public filings related to the Company’s April 2015 initial public offering (“IPO”). The plaintiff seeks to represent a class of shareholders who purchased stock in the initial public offering or who can trace their shares to that offering. The complaint seeks unspecified damages and costs. The Company intends to vigorously defend itself against this action. The Company is unable, at this time, to determine whether the outcome of the litigation would have a material impact on its results of operations, financial condition or cash flows. On April 5, 2016, a derivative complaint was filed in the Supreme Court for the State of New York, naming certain directors and executives as defendants, and naming the Company as a nominal defendant. The complaint seeks unspecified damages and costs, and corporate governance reforms, for alleged injury to the Company in connection with public filings related to the Company’s April 2015 IPO, compensation paid to executives, and the termination of the management agreement disclosed in the IPO-related public filings. On June 15, 2016, by agreement of the parties, the court entered a temporary stay of the proceedings pending (among other things) resolution of the motion to dismiss in connection with the November 18, 2015 filed class action. The Company intends to vigorously defend itself against this action. The Company is unable, at this time, to determine whether the outcome of the litigation would have a material impact on its results of operations, financial condition or cash flows. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 9 – Derivative Financial Instruments The Company is directly and indirectly affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company’s financial performance and are referred to as market risks. The Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential impact of certain market risks. The primary market risk managed through the use of derivative financial instruments is foreign currency exchange rate risk. Foreign Exchange Risk Management A portion of the Company’s cash flows is derived from transactions denominated in foreign currencies. In order to reduce the uncertainty of foreign exchange rate movements on transactions denominated in foreign currencies, including the British Pound Sterling, the Canadian Dollar, the Euro, the Malaysian Ringgit and the Australian Dollar, the Company enters into foreign exchange contracts with major international financial institutions. These forward contracts, which typically mature within one year, are designed to hedge anticipated foreign currency transactions, primarily inventory purchases and sales. For contracts that qualify for hedge accounting, the terms of the foreign exchange contracts are such that cash flows from the contracts should be highly effective in offsetting the expected cash flows from the underlying forecasted transactions. The foreign currency exchange contracts are reflected in the condensed consolidated balance sheets at fair value. The fair value of the foreign currency exchange contracts is the estimated amount that the counterparties would receive or pay to terminate the foreign currency exchange contracts at the reporting date, taking into account current foreign exchange spot rates. At September 30, 2016 and December 31, 2015, the Company had certain foreign currency exchange contracts that qualified for hedge accounting. No components of these agreements were excluded in the measurement of hedge effectiveness. As these hedges were 100% effective, there was no impact on earnings due to hedge ineffectiveness. The Company anticipates that substantially all unrealized gains and losses in accumulated other comprehensive loss related to these foreign currency exchange contracts will be reclassified into earnings by June 2018. The following table displays the fair values of the Company’s derivatives at September 30, 2016 and December 31, 2015: Derivative Assets Derivative Liabilities Balance Fair Value Balance Sheet Line Fair Value Balance Sheet Line Fair Value Balance Sheet Line Fair Value Derivative Instrument September 30, 2016 December 31, 2015 September 30, 2016 December 31, 2015 Foreign Exchange Contracts (a) PP $ 385 (a) PP $ 773 (b) AE $ 288 (b) AE $ 391 (a) PP = Prepaid expenses and other current assets (b) AE = Accrued expenses The following table displays the notional amounts of the Company’s derivatives at September 30, 2016 and December 31, 2015: Derivative Instrument September 30, 2016 December 31, 2015 Foreign Exchange Contracts $ 21,825 $ 23,028 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10 – Fair Value Measurements The provisions of FASB ASC Topic 820, “Fair Value Measurement”, define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The following table shows assets and liabilities as of September 30, 2016 that are measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total Derivative assets $ 0 $ 385 $ 0 $ 385 Derivative liabilities 0 288 0 288 The following table shows assets and liabilities as of December 31, 2015 that are measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total Derivative assets $ 0 $ 773 $ 0 $ 773 Derivative liabilities 0 391 0 391 In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company is required to record other assets and liabilities at fair value on a nonrecurring basis, generally as a result of impairment charges. The carrying amounts for cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximated fair value at September 30, 2016 because of the short-term maturities of the instruments and/or their variable rates of interest. The carrying amount and fair value of the Company’s borrowings under its $1,340,000 senior secured term loan facility (“Term Loan Credit Agreement”) and its $350,000 of 6.125% senior notes (“Senior Notes”) are as follows: September 30, 2016 Carrying Amount Fair Value Term Loan Credit Agreement $ 1,307,026 $ 1,331,575 Senior Notes 344,339 363,125 The fair values of the Term Loan Credit Agreement and the Senior Notes represent Level 2 fair value measurements as the debt instruments trade in inactive markets. The carrying amounts for other long-term debt approximated fair value at September 30, 2016 based on the discounted future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturity. During August 2015, the Company acquired 75% of the operations of Accurate Custom Injection Molding Inc. (“ACIM”). Based on the terms of the acquisition agreement, the Company will acquire the remaining 25% interest in ACIM over the next eight years and the Company’s liability for the estimated purchase price of such interest was $405 at September 30, 2016. The liability represents a Level 3 fair value measurement as it is based on unobservable inputs. During March 2015, the Company acquired all of the stock of Travis Designs Limited (“Travis”), a United Kingdom-based entity with costume design and sourcing capabilities. The purchase price includes contingent consideration, based on the sales of the business acquired through the end of 2016. As of September 30, 2016, the liability was $1,102. The liability represents a Level 3 fair value measurement as it is based on unobservable inputs. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 11 – Earnings Per Share Basic earnings per share are computed by dividing net income available for common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share are calculated based on the weighted average number of outstanding common shares plus the dilutive effect of stock options as if they were exercised. A reconciliation between basic and diluted income (loss) per share is as follows: Three Months Ended September 30, 2016 Three Months Nine Months Ended September 30, 2016 Nine Months Net income (loss) $ 10,180 $ (44,489 ) $ 32,301 $ (76,064 ) Weighted average shares - Basic 119,406,751 119,253,707 119,340,610 109,470,099 Effect of dilutive securities: Stock options 1,065,546 0 971,882 0 Weighted average shares - Diluted 120,472,297 119,253,707 120,312,492 109,470,099 Net income (loss) per common share - Basic $ 0.09 $ (0.37 ) $ 0.27 $ (0.69 ) Net income (loss) per common share - Diluted $ 0.08 $ (0.37 ) $ 0.27 $ (0.69 ) During both the three and nine months ended September 30, 2016 and September 30, 2015, 2,276,695 stock options and 4,544,964 stock options, respectively, were excluded from the calculation of net income (loss) per common share – diluted as they were anti-dilutive. |
Long-Term Obligations
Long-Term Obligations | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations | Note 12 – Long-Term Obligations Long-term obligations at September 30, 2016 and December 31, 2015 consisted of the following: September 30, December 31, Term Loan Credit Agreement $ 1,307,026 $ 1,314,538 Capital lease obligations 1,513 2,414 Senior Notes 344,339 343,721 Total long-term obligations 1,652,878 1,660,673 Less: current portion (14,235 ) (14,552 ) Long-term obligations, excluding current portion $ 1,638,643 $ 1,646,121 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 13 — Subsequent Event During October 2016, the Company amended its Term Loan Credit Agreement. Prior to the execution of the amendment in October 2016, the Company borrowed $100,000 under its $540,000 asset-based revolving credit facility (which has a seasonal increase to $640,000 during a certain period of each calendar year) (“ABL Facility”) and used the proceeds to make a voluntary prepayment of a portion of the outstanding balance under the Term Loan Credit Agreement. Then, at the time of the amendment, all outstanding term loans were replaced with new term loans for the same principal amount. The applicable margin for ABR borrowings was lowered from 2.25% to 2.00% and the applicable margin for LIBOR borrowings was lowered from 3.25% to 3.00%. Additionally, the LIBOR floor was lowered from 1.00% to 0.75%. The amended agreement provides for two pricing options: (i) an ABR for any day, a rate per annum equal to the greater of (a) the prime rate in effect on such day, (b) the federal funds effective rate in effect on such day plus 0.5%, (c) the adjusted LIBOR rate plus 1% and (d) 1.75% or (ii) the LIBOR rate, with a LIBOR floor of 0.75%, in each case plus an applicable margin. The amendment provides that the term loans are subject to a 1.00% prepayment premium if voluntarily repaid within six months from the date of the amendment. Otherwise, the term loans may be voluntarily prepaid at any time without premium or penalty, other than customary breakage costs with respect to loans based on the LIBOR rate. The Company incurred $626 of costs, principally banker fees, in conjunction with the amendment. |
Basis of Presentation and Rec20
Basis of Presentation and Recently Issued Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”. The pronouncement clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The update is effective for the Company during the first quarter of 2018. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting”. The pronouncement simplifies several aspects of the accounting for share-based payment transactions. The update is effective for the Company during the first quarter of 2017. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases”. The ASU requires that companies recognize on their balance sheets assets and liabilities for the rights and obligations created by the companies’ leases. The update is effective for the Company during the first quarter of 2019. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. The update impacts the accounting for equity investments and the recognition of changes in fair value of financial liabilities when the fair value option is elected. The pronouncement will be effective for the Company during the first quarter of 2018. Although the Company continues to evaluate this pronouncement, it does not believe that it will have a material impact on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments”. The update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The Company adopted the update during the three months ended March 31, 2016 and such adoption did not have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Inventory: Simplifying the Measurement of Inventory”. The update changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. The pronouncement will be effective for the Company during the first quarter of 2017. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”. The update amended the guidance on internal use software to clarify how customers in cloud computing arrangements should determine whether the arrangements include software licenses. The Company adopted the update during the three months ended March 31, 2016 and such adoption did not have a material impact on the Company’s consolidated financial statements. In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The update clarifies that a performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition. The Company adopted the update during the three months ended March 31, 2016 and such adoption did not have any impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The pronouncement contains a five-step model which replaces most existing revenue recognition guidance. The update is effective for the Company during the first quarter of 2018; however, early adoption is permitted. The pronouncement can be applied retrospectively to prior reporting periods or through a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of the pronouncement on the Company’s consolidated financial statements and its method of adoption. |
Inventories | Inventories are valued at the lower of cost or market. |
Industry Segments | Industry Segments The Company has two identifiable business segments. The Wholesale segment designs, manufactures, contracts for manufacture and distributes party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties and stationery throughout the world. The Retail segment operates specialty retail party supply stores in the United States and Canada, principally under the names Party City and Halloween City, and it operates e-commerce websites, principally through the domain name Partycity.com. The Retail segment also franchises both individual stores and franchise areas throughout the United States, Mexico and Puerto Rico, principally under the name Party City. |
Derivatives | The Company is directly and indirectly affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company’s financial performance and are referred to as market risks. The Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential impact of certain market risks. The primary market risk managed through the use of derivative financial instruments is foreign currency exchange rate risk. Foreign Exchange Risk Management A portion of the Company’s cash flows is derived from transactions denominated in foreign currencies. In order to reduce the uncertainty of foreign exchange rate movements on transactions denominated in foreign currencies, including the British Pound Sterling, the Canadian Dollar, the Euro, the Malaysian Ringgit and the Australian Dollar, the Company enters into foreign exchange contracts with major international financial institutions. These forward contracts, which typically mature within one year, are designed to hedge anticipated foreign currency transactions, primarily inventory purchases and sales. For contracts that qualify for hedge accounting, the terms of the foreign exchange contracts are such that cash flows from the contracts should be highly effective in offsetting the expected cash flows from the underlying forecasted transactions. The foreign currency exchange contracts are reflected in the condensed consolidated balance sheets at fair value. The fair value of the foreign currency exchange contracts is the estimated amount that the counterparties would receive or pay to terminate the foreign currency exchange contracts at the reporting date, taking into account current foreign exchange spot rates. At September 30, 2016 and December 31, 2015, the Company had certain foreign currency exchange contracts that qualified for hedge accounting. No components of these agreements were excluded in the measurement of hedge effectiveness. As these hedges were 100% effective, there was no impact on earnings due to hedge ineffectiveness. The Company anticipates that substantially all unrealized gains and losses in accumulated other comprehensive loss related to these foreign currency exchange contracts will be reclassified into earnings by June 2018. |
Fair Value Measurement | The provisions of FASB ASC Topic 820, “Fair Value Measurement”, define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following: September 30, 2016 December 31, 2015 Finished goods $ 649,880 $ 532,606 Raw materials 24,329 21,278 Work in process 9,446 10,375 $ 683,655 $ 564,259 |
Changes in Accumulated Other 22
Changes in Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss consisted of the following: Three Months Ended September 30, 2016 Foreign Currency Adjustments Impact of Total, Net of Taxes Balance at June 30, 2016 $ (39,500 ) $ 916 $ (38,584 ) Other comprehensive loss before reclassifications, net (3,537 ) (470 ) (4,007 ) Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive income, net 0 (145 ) (145 ) Net current-period other comprehensive loss, net (3,537 ) (615 ) (4,152 ) Balance at September 30, 2016 $ (43,037 ) $ 301 $ (42,736 ) Three Months Ended September 30, 2015 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at June 30, 2015 $ (18,589 ) $ 246 $ (18,343 ) Other comprehensive (loss) income before reclassifications, net (11,502 ) 211 (11,291 ) Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net 0 (17 ) (17 ) Net current-period other comprehensive (loss) income, net (11,502 ) 194 (11,308 ) Balance at September 30, 2015 $ (30,091 ) $ 440 $ (29,651 ) Nine Months Ended September 30, 2016 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at December 31, 2015 $ (33,401 ) $ 611 $ (32,790 ) Other comprehensive (loss) income before reclassifications, net (9,636 ) 183 (9,453 ) Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive income, net 0 (493 ) (493 ) Net current-period other comprehensive loss, net (9,636 ) (310 ) (9,946 ) Balance at September 30, 2016 $ (43,037 ) $ 301 $ (42,736 ) Nine Months Ended September 30, 2015 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at December 31, 2014 $ (12,969 ) $ 234 $ (12,735 ) Other comprehensive (loss) income before reclassifications, net (17,122 ) 476 (16,646 ) Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net 0 (270 ) (270 ) Net current-period other comprehensive (loss) income, net (17,122 ) 206 (16,916 ) Balance at September 30, 2015 $ (30,091 ) $ 440 $ (29,651 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Company's Industry Segment Data | The Company’s industry segment data for the three months ended September 30, 2016 and September 30, 2015 was as follows: Wholesale Retail Consolidated Three Months Ended September 30, 2016 Revenues: Net sales $ 416,387 $ 347,557 $ 763,944 Royalties and franchise fees 0 3,568 3,568 Total revenues 416,387 351,125 767,512 Eliminations (210,562 ) 0 (210,562 ) Net revenues $ 205,825 $ 351,125 $ 556,950 Income from operations $ 35,532 $ 1,386 $ 36,918 Interest expense, net 22,424 Other income, net (905 ) Income before income taxes $ 15,399 Wholesale Retail Consolidated Three Months Ended September 30, 2015 Revenues: Net sales $ 418,447 $ 339,465 $ 757,912 Royalties and franchise fees 0 4,027 4,027 Total revenues 418,447 343,492 761,939 Eliminations (206,532 ) 0 (206,532 ) Net revenues $ 211,915 $ 343,492 $ 555,407 Income (loss) from operations $ 35,860 $ (4,380 ) $ 31,480 Interest expense, net 29,554 Other expense, net 79,130 Loss before income taxes $ (77,204 ) The Company’s industry segment data for the nine months ended September 30, 2016 and September 30, 2015 was as follows: Wholesale Retail Consolidated Nine Months Ended September 30, 2016 Revenues: Net sales $ 945,071 $ 1,043,212 $ 1,988,283 Royalties and franchise fees 0 11,009 11,009 Total revenues 945,071 1,054,221 1,999,292 Eliminations (465,189 ) 0 (465,189 ) Net revenues $ 479,882 $ 1,054,221 $ 1,534,103 Income from operations $ 65,669 $ 49,285 $ 114,954 Interest expense, net 67,857 Other income, net (4,107 ) Income before income taxes $ 51,204 Wholesale Retail Consolidated Nine Months Ended September 30, 2015 Revenues: Net sales $ 923,717 $ 1,003,196 $ 1,926,913 Royalties and franchise fees 0 12,251 12,251 Total revenues 923,717 1,015,447 1,939,164 Eliminations (426,132 ) 0 (426,132 ) Net revenues $ 497,585 $ 1,015,447 $ 1,513,032 Income from operations $ 59,882 $ 41,669 $ 101,551 Interest expense, net 101,430 Other expense, net 126,519 Loss before income taxes $ (126,398 ) |
Derivative Financial Instrume24
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Derivatives | The following table displays the fair values of the Company’s derivatives at September 30, 2016 and December 31, 2015: Derivative Assets Derivative Liabilities Balance Fair Value Balance Sheet Line Fair Value Balance Sheet Line Fair Value Balance Sheet Line Fair Value Derivative Instrument September 30, 2016 December 31, 2015 September 30, 2016 December 31, 2015 Foreign Exchange Contracts (a) PP $ 385 (a) PP $ 773 (b) AE $ 288 (b) AE $ 391 (a) PP = Prepaid expenses and other current assets (b) AE = Accrued expenses |
Schedule of Notional Amounts of Derivatives | The following table displays the notional amounts of the Company’s derivatives at September 30, 2016 and December 31, 2015: Derivative Instrument September 30, 2016 December 31, 2015 Foreign Exchange Contracts $ 21,825 $ 23,028 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table shows assets and liabilities as of September 30, 2016 that are measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total Derivative assets $ 0 $ 385 $ 0 $ 385 Derivative liabilities 0 288 0 288 The following table shows assets and liabilities as of December 31, 2015 that are measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total Derivative assets $ 0 $ 773 $ 0 $ 773 Derivative liabilities 0 391 0 391 |
Summary of Carrying Amount and Fair Value | The carrying amount and fair value of the Company’s borrowings under its $1,340,000 senior secured term loan facility (“Term Loan Credit Agreement”) and its $350,000 of 6.125% senior notes (“Senior Notes”) are as follows: September 30, 2016 Carrying Amount Fair Value Term Loan Credit Agreement $ 1,307,026 $ 1,331,575 Senior Notes 344,339 363,125 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation Between Basic and Diluted Income (Loss) Per Share | A reconciliation between basic and diluted income (loss) per share is as follows: Three Months Ended September 30, 2016 Three Months Nine Months Ended September 30, 2016 Nine Months Net income (loss) $ 10,180 $ (44,489 ) $ 32,301 $ (76,064 ) Weighted average shares - Basic 119,406,751 119,253,707 119,340,610 109,470,099 Effect of dilutive securities: Stock options 1,065,546 0 971,882 0 Weighted average shares - Diluted 120,472,297 119,253,707 120,312,492 109,470,099 Net income (loss) per common share - Basic $ 0.09 $ (0.37 ) $ 0.27 $ (0.69 ) Net income (loss) per common share - Diluted $ 0.08 $ (0.37 ) $ 0.27 $ (0.69 ) |
Long-Term Obligations (Tables)
Long-Term Obligations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Obligations | Long-term obligations at September 30, 2016 and December 31, 2015 consisted of the following: September 30, December 31, Term Loan Credit Agreement $ 1,307,026 $ 1,314,538 Capital lease obligations 1,513 2,414 Senior Notes 344,339 343,721 Total long-term obligations 1,652,878 1,660,673 Less: current portion (14,235 ) (14,552 ) Long-term obligations, excluding current portion $ 1,638,643 $ 1,646,121 |
Description of Business - Addit
Description of Business - Additional Information (Detail) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2016USD ($) | Jan. 31, 2016USD ($)Franchised_Stores | Sep. 30, 2016Store | |
Festival S A [Member] | |||
Basis Of Presentation [Line Items] | |||
Total consideration amount | $ | $ 5,000 | ||
PC Nextco [Member] | |||
Basis Of Presentation [Line Items] | |||
Ownership percentage | 100.00% | ||
Reportable Legal Entity Pc Intermediate Holdings Inc [Member] | |||
Basis Of Presentation [Line Items] | |||
Ownership percentage | 100.00% | ||
Party City Holdings Inc [Member] | |||
Basis Of Presentation [Line Items] | |||
Ownership percentage | 100.00% | ||
Arizona and New Mexico [Member] | |||
Basis Of Presentation [Line Items] | |||
Number of franchise stores acquired | Franchised_Stores | 19 | ||
Total consideration amount | $ | $ 26,500 | ||
United States and Canada [Member] | |||
Basis Of Presentation [Line Items] | |||
Number of specialty retail party supply stores | Store | 900 | ||
Number of franchise stores included in retail operation | Store | 180 |
Basis of Presentation and Rec29
Basis of Presentation and Recently Issued Accounting Pronouncements - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016 | |
Minimum [Member] | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |
Retail operations period of fiscal year | 52 Weeks |
Retail operations period of fiscal quarter | 13 Weeks |
Maximum [Member] | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |
Retail operations period of fiscal year | 53 Weeks |
Retail operations period of fiscal quarter | 14 Weeks |
Inventories - Inventories (Deta
Inventories - Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 649,880 | $ 532,606 |
Raw materials | 24,329 | 21,278 |
Work in process | 9,446 | 10,375 |
Inventories, net | $ 683,655 | $ 564,259 |
Changes in Accumulated Other 31
Changes in Accumulated Other Comprehensive Loss - Changes in Accumulated and Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ (38,584) | $ (18,343) | $ (32,790) | $ (12,735) |
Other comprehensive (loss) income before reclassifications, net | (4,007) | (11,291) | (9,453) | (16,646) |
Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive income (loss), net | (145) | (17) | (493) | (270) |
Net current-period other comprehensive (loss) income, net | (4,152) | (11,308) | (9,946) | (16,916) |
Ending balance | (42,736) | (29,651) | (42,736) | (29,651) |
Foreign Currency Adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (39,500) | (18,589) | (33,401) | (12,969) |
Other comprehensive (loss) income before reclassifications, net | (3,537) | (11,502) | (9,636) | (17,122) |
Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive income (loss), net | 0 | 0 | 0 | 0 |
Net current-period other comprehensive (loss) income, net | (3,537) | (11,502) | (9,636) | (17,122) |
Ending balance | (43,037) | (30,091) | (43,037) | (30,091) |
Impact of Foreign Exchange Contracts, Net of Taxes [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | 916 | 246 | 611 | 234 |
Other comprehensive (loss) income before reclassifications, net | (470) | 211 | 183 | 476 |
Amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive income (loss), net | (145) | (17) | (493) | (270) |
Net current-period other comprehensive (loss) income, net | (615) | 194 | (310) | 206 |
Ending balance | $ 301 | $ 440 | $ 301 | $ 440 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) | Sep. 30, 2016$ / sharesshares |
Equity [Abstract] | |
Authorized capital stock | shares | 300,000,000 |
Common stock, par value | $ / shares | $ 0.01 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016Segment | |
Segment Reporting [Abstract] | |
Number of business segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Company's Industry Segment Data (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Net sales | $ 553,382 | $ 551,380 | $ 1,523,094 | $ 1,500,781 |
Royalties and franchise fees | 3,568 | 4,027 | 11,009 | 12,251 |
Total revenues | 556,950 | 555,407 | 1,534,103 | 1,513,032 |
Income (loss) from operations | 36,918 | 31,480 | 114,954 | 101,551 |
Interest expense, net | 22,424 | 29,554 | 67,857 | 101,430 |
Other expense (income), net | (905) | 79,130 | (4,107) | 126,519 |
Income (loss) before income taxes | 15,399 | (77,204) | 51,204 | (126,398) |
Wholesale [Member] | ||||
Revenues: | ||||
Total revenues | 205,825 | 211,915 | 479,882 | 497,585 |
Income (loss) from operations | 35,532 | 35,860 | 65,669 | 59,882 |
Retail [Member] | ||||
Revenues: | ||||
Total revenues | 351,125 | 343,492 | 1,054,221 | 1,015,447 |
Income (loss) from operations | 1,386 | (4,380) | 49,285 | 41,669 |
Operating Segments [Member] | ||||
Revenues: | ||||
Net sales | 763,944 | 757,912 | 1,988,283 | 1,926,913 |
Royalties and franchise fees | 3,568 | 4,027 | 11,009 | 12,251 |
Total revenues | 767,512 | 761,939 | 1,999,292 | 1,939,164 |
Operating Segments [Member] | Wholesale [Member] | ||||
Revenues: | ||||
Net sales | 416,387 | 418,447 | 945,071 | 923,717 |
Royalties and franchise fees | 0 | 0 | 0 | 0 |
Total revenues | 416,387 | 418,447 | 945,071 | 923,717 |
Operating Segments [Member] | Retail [Member] | ||||
Revenues: | ||||
Net sales | 347,557 | 339,465 | 1,043,212 | 1,003,196 |
Royalties and franchise fees | 3,568 | 4,027 | 11,009 | 12,251 |
Total revenues | 351,125 | 343,492 | 1,054,221 | 1,015,447 |
Eliminations [Member] | ||||
Revenues: | ||||
Total revenues | (210,562) | (206,532) | (465,189) | (426,132) |
Eliminations [Member] | Wholesale [Member] | ||||
Revenues: | ||||
Total revenues | (210,562) | (206,532) | (465,189) | (426,132) |
Eliminations [Member] | Retail [Member] | ||||
Revenues: | ||||
Total revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume35
Derivative Financial Instruments - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative [Line Items] | |
Foreign currency exchange contracts reclassified date | 2018-06 |
Foreign Exchange Risk Management [Member] | |
Derivative [Line Items] | |
Hedging effectiveness | 100.00% |
Foreign Exchange Risk Management [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Foreign exchange forward contracts maturity | 1 year |
Derivative Financial Instrume36
Derivative Financial Instruments - Schedule of Fair Values of Derivatives (Detail) - Foreign Exchange Contracts [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 385 | $ 773 |
Accrued Expenses [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 288 | $ 391 |
Derivative Financial Instrume37
Derivative Financial Instruments - Schedule of Notional Amounts of Derivatives (Detail) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Foreign Exchange Contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 21,825,000 | $ 23,028,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 385 | $ 773 |
Derivative liabilities | 288 | 391 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 385 | 773 |
Derivative liabilities | 288 | 391 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | |
Aug. 31, 2015 | Sep. 30, 2016 | |
Accurate Custom Injection Molding Inc [Member] | ||
Debt Instrument [Line Items] | ||
Business combination, acquisition percentage | 75.00% | |
Business combination, percentage of remaining interest | 25.00% | |
Business combination, period to acquire remaining interest | 8 years | |
Estimated contingent consideration | $ 405 | |
Travis Designs Limited [Member] | ||
Debt Instrument [Line Items] | ||
Estimated contingent consideration | 1,102 | |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument Carrying Amount | $ 350,000 | |
Notes issued rate | 6.125% | |
Term Loan Credit Agreement [Member] | Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Senior secured term loan facility | $ 1,340,000 |
Fair Value Measurements - Sum40
Fair Value Measurements - Summary of Carrying Amount and Fair Value (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument Carrying Amount | $ 344,339 |
Debt Instrument Fair Value | 363,125 |
Term Loan Credit Agreement [Member] | Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument Carrying Amount | 1,307,026 |
Debt Instrument Fair Value | $ 1,331,575 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Reconciliation Between Basic and Diluted Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 10,180 | $ (44,489) | $ 32,301 | $ (76,064) |
Weighted average shares - Basic | 119,406,751 | 119,253,707 | 119,340,610 | 109,470,099 |
Effect of dilutive securities: | ||||
Stock options | 1,065,546 | 0 | 971,882 | 0 |
Weighted average shares - Diluted | 120,472,297 | 119,253,707 | 120,312,492 | 109,470,099 |
Net income (loss) per common share - Basic | $ 0.09 | $ (0.37) | $ 0.27 | $ (0.69) |
Net income (loss) per common share - Diluted | $ 0.08 | $ (0.37) | $ 0.27 | $ (0.69) |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Employee Stock Option [Member] | ||||
Earnings Per Share Basic And Diluted [Line Items] | ||||
Antidilutive securities excluded from calculation of earnings per share | 2,276,695 | 4,544,964 | 2,276,695 | 4,544,964 |
Long-Term Obligations - Summary
Long-Term Obligations - Summary of Long-Term Obligations (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total long-term obligations | $ 1,652,878 | $ 1,660,673 |
Less: current portion | (14,235) | (14,552) |
Long-term obligations, excluding current portion | 1,638,643 | 1,646,121 |
Capital Lease Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term obligations | 1,513 | 2,414 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term obligations | 344,339 | 343,721 |
Term Loan Credit Agreement [Member] | Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term obligations | $ 1,307,026 | $ 1,314,538 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) | Oct. 31, 2016USD ($)OptionPlan | Sep. 30, 2016 |
Term Loan Credit Agreement [Member] | Secured Debt [Member] | Alternate Base Interest Rate Loans [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 2.25% | |
Term Loan Credit Agreement [Member] | Secured Debt [Member] | LIBOR [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 3.25% | |
Term Loan Credit Agreement [Member] | Secured Debt [Member] | LIBOR Floor Rate [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 1.00% | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Banker fees incurred during term loan amendment | $ 626,000 | |
Subsequent Event [Member] | Term Loan Credit Agreement [Member] | Secured Debt [Member] | ||
Subsequent Event [Line Items] | ||
Credit facility borrowing maximum capacity | 640,000,000 | |
Credit facility current borrowing capacity | 540,000,000 | |
Credit facility borrowing capacity | $ 100,000,000 | |
Minimum adjustment rate of LIBOR | 1.75% | |
Decreased LIBOR floor rate | 0.75% | |
Percentage of voluntary prepayments | 1.00% | |
Number of pricing options | OptionPlan | 2 | |
Subsequent Event [Member] | Term Loan Credit Agreement [Member] | Secured Debt [Member] | Alternate Base Interest Rate Loans [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 2.00% | |
Interest rate description | (i) an ABR for any day, a rate per annum equal to the greater of (a) the prime rate in effect on such day, (b) the federal funds effective rate in effect on such day plus 0.5%, (c) the adjusted LIBOR rate plus 1% and (d) 1.75% | |
Subsequent Event [Member] | Term Loan Credit Agreement [Member] | Secured Debt [Member] | LIBOR [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 3.00% | |
Basis spread on variable rate | 1.00% | |
Subsequent Event [Member] | Term Loan Credit Agreement [Member] | Secured Debt [Member] | LIBOR Floor Rate [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 0.75% | |
Subsequent Event [Member] | Term Loan Credit Agreement [Member] | Secured Debt [Member] | Federal Funds Rate [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Subsequent Event [Member] | Term Loan Credit Agreement [Member] | Secured Debt [Member] | Libor Based Loans [Member] | ||
Subsequent Event [Line Items] | ||
Interest rate description | (ii) the LIBOR rate, with a LIBOR floor of 0.75%, in each case plus an applicable margin. |