Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Fiscal Year Focus | 2019 | |
Document Period End Date | Sep. 30, 2019 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Registrant Name | Party City Holdco Inc. | |
Entity Central Index Key | 0001592058 | |
Trading Symbol | PRTY | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 94,461,576 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-37344 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-0539758 | |
Entity Address, Address Line One | 80 Grasslands Road | |
Entity Address, State or Province | NY | |
City Area Code | 914 | |
Local Phone Number | 345-2020 | |
Entity Address, Postal Zip Code | 10523 | |
Entity Address, City or Town | Elmsford | |
Entity Shell Company | false | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common Stock |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 34,572 | $ 58,909 |
Accounts receivable, net | 168,124 | 146,983 |
Inventories, net | 760,179 | 756,038 |
Prepaid expenses and other current assets | 75,919 | 61,905 |
Assets held for sale | 172,189 | |
Total current assets | 1,210,983 | 1,023,835 |
Property, plant and equipment, net | 241,413 | 321,044 |
Operating lease asset | 827,817 | |
Goodwill | 1,358,137 | 1,656,950 |
Trade names | 534,611 | 568,031 |
Other intangible assets, net | 46,258 | 60,164 |
Other assets, net | 12,578 | 12,323 |
Total assets | 4,231,797 | 3,642,347 |
Current liabilities: | ||
Loans and notes payable | 461,016 | 302,751 |
Accounts payable | 140,112 | 208,149 |
Accrued expenses | 166,609 | 161,228 |
Liabilities held for sale | 48,618 | |
Current portion of operating lease liability | 140,781 | |
Income taxes payable | 25,993 | |
Current portion of long-term obligations | 13,498 | 13,316 |
Total current liabilities | 970,634 | 711,437 |
Long-term obligations, excluding current portion | 1,564,098 | 1,621,963 |
Long-term portion of operating lease liability | 747,079 | |
Deferred income tax liabilities, net | 147,904 | 174,427 |
Other long-term liabilities | 16,305 | 87,548 |
Total liabilities | 3,446,020 | 2,595,375 |
Redeemable securities | 3,351 | 3,351 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock (94,448,333 and 93,622,934 shares outstanding and 121,629,237 and 120,788,159 shares issued at September 30, 2019 and December 31, 2018, respectively) | 1,211 | 1,208 |
Additional paid-in capital | 928,749 | 922,476 |
Retained earnings | 231,597 | 495,777 |
Accumulated other comprehensive loss | (52,043) | (49,201) |
Total Party City Holdco Inc. stockholders' equity before common stock held in treasury | 1,109,514 | 1,370,260 |
Less: Common stock held in treasury, at cost (27,180,904 and 27,165,225 shares at September 30, 2019 and December 31, 2018) | (327,086) | (326,930) |
Total Party City Holdco Inc. stockholders' equity | 782,428 | 1,043,330 |
Noncontrolling interests | (2) | 291 |
Total stockholders' equity | 782,426 | 1,043,621 |
Total liabilities, redeemable securities and stockholders' equity | $ 4,231,797 | $ 3,642,347 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, shares outstanding | 94,448,333 | 93,622,934 |
Common stock, shares issued | 121,629,237 | 120,788,159 |
Treasury stock, shares | 27,180,904 | 27,165,225 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations And Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 540,231 | $ 553,046 | $ 1,617,238 | $ 1,621,881 |
Cost of sales | 373,413 | 349,641 | 1,065,511 | 996,084 |
Wholesale selling expenses | 16,084 | 17,538 | 50,929 | 53,581 |
Retail operating expenses | 111,595 | 103,833 | 302,756 | 285,019 |
Franchise expenses | 3,274 | 862 | 9,813 | 8,624 |
General and administrative expenses | 43,062 | 42,239 | 126,497 | 136,230 |
Art and development costs | 5,927 | 5,573 | 17,568 | 17,278 |
Development stage expenses | 2,728 | 1,622 | 7,966 | 5,620 |
Gain on sale/leaseback transaction | (58,381) | |||
Store impairment and restructuring charges | 2,574 | 25,817 | ||
Goodwill impairment | 259,100 | 259,100 | 0 | |
Total expense | 817,757 | 521,308 | 1,807,576 | 1,502,436 |
(Loss) income from operations | (277,526) | 31,738 | (190,338) | 119,445 |
Interest expense, net | 29,424 | 27,705 | 88,857 | 76,481 |
Other expense, net | 2,047 | 5,696 | 6,643 | 9,076 |
(Loss) income before income taxes | (308,997) | (1,663) | (285,838) | 33,888 |
Income tax (benefit) expense | (27,252) | 777 | (21,809) | 9,443 |
Net (loss) income | (281,745) | (2,440) | (264,029) | 24,445 |
Add: Net income attributable to redeemable securities holder | (8) | 402 | ||
Less: Net loss attributable to noncontrolling interests | (212) | (28) | (352) | (87) |
Net (loss) income attributable to common shareholders of Party City Holdco Inc. | $ (281,533) | $ (2,420) | $ (263,677) | $ 24,934 |
Net (loss) income per share attributable to common shareholders of Party City Holdco Inc.–Basic | $ (3.02) | $ (0.03) | $ (2.83) | $ 0.26 |
Net (loss) income per share attributable to common shareholders of Party City Holdco Inc.–Diluted | $ (3.02) | $ (0.03) | $ (2.83) | $ 0.26 |
Weighted-average number of common shares-Basic | 93,346,448 | 96,494,565 | 93,271,392 | 96,449,011 |
Weighted-average number of common shares-Diluted | 93,346,448 | 96,494,565 | 93,271,392 | 97,684,290 |
Dividends declared per share | $ 0 | $ 0 | $ 0 | $ 0 |
Comprehensive (loss) income | $ (288,573) | $ (2,003) | $ (266,883) | $ 20,889 |
Add: Comprehensive income (loss) attributable to redeemable securities holder | (8) | 402 | ||
Less: Comprehensive loss attributable to noncontrolling interests | (213) | (35) | (364) | (108) |
Comprehensive (loss) income attributable to common shareholders of Party City Holdco Inc. | (288,360) | (1,976) | (266,519) | 21,399 |
Net sales [Member] | ||||
Revenues: | ||||
Revenues | 538,345 | 550,840 | 1,611,149 | 1,614,049 |
Royalties and franchise fees [Member] | ||||
Revenues: | ||||
Revenues | $ 1,886 | $ 2,206 | $ 6,089 | $ 7,832 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Total Party City Holdco Inc. Stockholders' Equity Before Common Stock Held In Treasury [Member] | Common Stock Held In Treasury [Member] | Total Party City Holdco Inc. Stockholders' Equity [Member] | Non-Controlling Interests [Member] |
Balance at Dec. 31, 2017 | $ 968,790 | $ 1,198 | $ 917,192 | $ 372,596 | $ (35,818) | $ 1,255,168 | $ (286,733) | $ 968,435 | $ 355 |
Cumulative effect of change in accounting principle, net | (78) | (78) | (78) | (78) | |||||
Balance, adjusted at Dec. 31, 2017 | 968,712 | 1,198 | 917,192 | 372,518 | (35,818) | 1,255,090 | (286,733) | 968,357 | 355 |
Net income (loss) | 24,445 | 24,532 | 24,532 | 24,532 | (87) | ||||
Net income (loss) attributable to redeemable securities holder | 402 | 402 | 402 | 402 | |||||
Stock option expense | 1,492 | 1,492 | 1,492 | 1,492 | |||||
Restricted stock units – time-based | 722 | 1 | 721 | 722 | 722 | ||||
Restricted stock units – performance-based | 1,482 | 5 | 1,477 | 1,482 | 1,482 | ||||
Director – non-cash compensation | 196 | 196 | 196 | 196 | |||||
Warrant expense | 242 | 242 | 242 | 242 | |||||
Exercise of stock options | 878 | 1 | 877 | 878 | 878 | ||||
Foreign currency adjustments | (4,909) | (4,888) | (4,888) | (4,888) | (21) | ||||
Impact of foreign exchange contracts, net | 1,353 | 1,353 | 1,353 | 1,353 | |||||
Balance at Sep. 30, 2018 | 995,015 | 1,205 | 922,197 | 397,452 | (39,353) | 1,281,501 | (286,733) | 994,768 | 247 |
Balance at Jun. 30, 2018 | 994,668 | 1,199 | 919,845 | 399,872 | (39,797) | 1,281,119 | (286,733) | 994,386 | 282 |
Net income (loss) | (2,440) | (2,412) | (2,412) | (2,412) | (28) | ||||
Net income (loss) attributable to redeemable securities holder | (8) | (8) | (8) | (8) | |||||
Stock option expense | 550 | 550 | 550 | 550 | |||||
Restricted stock units – time-based | 470 | 1 | 469 | 470 | 470 | ||||
Restricted stock units – performance-based | 889 | 5 | 884 | 889 | 889 | ||||
Director – non-cash compensation | 137 | 137 | 137 | 137 | |||||
Warrant expense | (84) | (84) | (84) | (84) | |||||
Exercise of stock options | 396 | 396 | 396 | 396 | |||||
Foreign currency adjustments | 412 | 419 | 419 | 419 | (7) | ||||
Impact of foreign exchange contracts, net | 25 | 25 | 25 | 25 | |||||
Balance at Sep. 30, 2018 | 995,015 | 1,205 | 922,197 | 397,452 | (39,353) | 1,281,501 | (286,733) | 994,768 | 247 |
Balance at Dec. 31, 2018 | 1,043,621 | 1,208 | 922,476 | 495,777 | (49,201) | 1,370,260 | (326,930) | 1,043,330 | 291 |
Cumulative effect of change in accounting principle, net | 159 | 662 | (503) | 159 | 159 | ||||
Balance, adjusted at Dec. 31, 2018 | 1,043,780 | 1,208 | 923,138 | 495,274 | (49,201) | 1,370,419 | (326,930) | 1,043,489 | 291 |
Net income (loss) | (264,029) | (263,677) | (263,677) | (263,677) | (352) | ||||
Stock option expense | 1,150 | 1,150 | 1,150 | 1,150 | |||||
Restricted stock units – time-based | 1,543 | 1,543 | 1,543 | 1,543 | |||||
Restricted stock units – performance-based | 1,036 | 1,036 | 1,036 | 1,036 | |||||
Director – non-cash compensation | 313 | 313 | 313 | 313 | |||||
Warrant expense | 386 | 386 | 386 | 386 | |||||
Exercise of stock options | 1,145 | 3 | 1,142 | 1,145 | 1,145 | ||||
Acquired non-controlling interest | 112 | 41 | 41 | 41 | 71 | ||||
Treasury stock purchases | (156) | (156) | (156) | ||||||
Foreign currency adjustments | (2,220) | (2,208) | (2,208) | (2,208) | (12) | ||||
Impact of foreign exchange contracts, net | (634) | (634) | (634) | (634) | |||||
Balance at Sep. 30, 2019 | 782,426 | 1,211 | 928,749 | 231,597 | (52,043) | 1,109,514 | (327,086) | 782,428 | (2) |
Balance at Jun. 30, 2019 | 1,069,087 | 1,210 | 926,838 | 513,130 | (45,216) | 1,395,962 | (327,086) | 1,068,876 | 211 |
Net income (loss) | (281,745) | 0 | (281,533) | (281,533) | (281,533) | (212) | |||
Stock option expense | 409 | 409 | 409 | 409 | |||||
Restricted stock units – time-based | 610 | 610 | 610 | 610 | |||||
Restricted stock units – performance-based | 560 | 560 | 560 | 560 | |||||
Director – non-cash compensation | 148 | 148 | 148 | 148 | |||||
Warrant expense | 128 | 128 | 128 | 128 | |||||
Exercise of stock options | 57 | 1 | 56 | 57 | 57 | ||||
Foreign currency adjustments | (6,921) | (6,920) | (6,920) | (6,920) | (1) | ||||
Impact of foreign exchange contracts, net | 93 | 93 | 93 | 93 | |||||
Balance at Sep. 30, 2019 | $ 782,426 | $ 1,211 | $ 928,749 | $ 231,597 | $ (52,043) | $ 1,109,514 | $ (327,086) | $ 782,428 | $ (2) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows used in operating activities: | ||
Net (loss) income | $ (264,029) | $ 24,445 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization expense | 62,380 | 57,786 |
Amortization of deferred financing costs and original issuance discounts | 3,511 | 9,834 |
Provision for doubtful accounts | 1,110 | 726 |
Deferred income tax (benefit) expense | (26,458) | 1,075 |
Deferred rent | 3,623 | |
Change in operating lease liability/asset | (23,361) | |
Undistributed income in equity method investments | (195) | (580) |
(Gain) loss on disposal of assets | (59,088) | 23 |
Store impairment and restructuring charges | 25,817 | |
Goodwill impairment | 259,100 | 0 |
Non-employee equity based compensation | 386 | 352 |
Stock option expense | 1,150 | 1,492 |
Restricted stock unit expense – time-based | 1,543 | 722 |
Restricted stock unit expense – performance-based | 1,036 | 1,482 |
Directors – non-cash compensation | 313 | 196 |
Changes in operating assets and liabilities, net of effects of acquired businesses: | ||
Increase in accounts receivable | (23,712) | (32,802) |
Increase in inventories | (35,628) | (194,419) |
Increase in prepaid expenses and other current assets | (11,009) | (13,890) |
(Decrease) increase in accounts payable, accrued expenses and income taxes payable | (88,771) | 53,744 |
Net cash used in operating activities | (182,279) | (86,191) |
Cash flows provided by (used in) investing activities: | ||
Cash paid in connection with acquisitions, net of cash acquired | (9,485) | (63,840) |
Capital expenditures | (45,769) | (65,491) |
Proceeds from disposal of property and equipment | 113,845 | 22 |
Net cash provided by (used in) investing activities | 58,591 | (129,309) |
Cash flows provided by financing activities: | ||
Repayment of loans, notes payable and long-term obligations | (106,133) | (417,281) |
Proceeds from loans, notes payable and long-term obligations | 203,381 | 636,884 |
Stock repurchases | (156) | |
Exercise of stock options | 1,145 | 878 |
Debt issuance costs | (411) | (10,343) |
Net cash provided by financing activities | 97,826 | 210,138 |
Effect of exchange rate changes on cash and cash equivalents | 1,220 | (772) |
Net decrease in cash and cash equivalents and restricted cash | (24,642) | (6,134) |
Cash and cash equivalents and restricted cash at beginning of period | 59,219 | 54,408 |
Cash and cash equivalents and restricted cash at end of period | 34,577 | 48,274 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 97,744 | 77,371 |
Cash paid during the period for income taxes, net of refunds | $ 34,357 | $ 56,683 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
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, gifts and stationery. The Company’s retail operations include approximately 900 specialty retail party supply stores (including franchise stores) in the United States e-commerce e-commerce 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 most of the Company’s operating subsidiaries. |
Basis of Presentation and Recen
Basis of Presentation and Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
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 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 53-week 13-week 53-week Operating results for interim periods are not necessarily indicative of the results to be expected for the year ending December 31, 2019. Our business is subject to substantial seasonal variations as our retail segment has historically 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 Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, disclosure of In June 2018, the FASB issued ASU 2018-07 , “Compensation – Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting”. The ASU simplifies the accounting for non-employee share-based payments. The Company adopted the update during the first quarter of . The pronouncement requires companies to record the impact of adoption, if any, as a cumulative-effect adjustment to retained earnings as of the adoption date. Therefore, on January , , the Company decreased retained earnings by $ . Additionally, the Company increased additional paid-in capital by $ and recorded a $ deferred income tax asset. In August 2017, the FASB issued ASU 2017-12, In January 2017 the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates the requirement to measure a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the amendments in ASU 2017-04, an entity will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized will not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity will consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The Company adopted ASU No. 2017-04 during the first quarter of 2019. In , the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses”. The ASU changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The pronouncement is effective for the Company during the first quarter of . The Company is still evaluating the impact of the ASU on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, The Company adopted the new lease standard during the first quarter of 2019 and, to the extent required by the pronouncement, recognized a right of use asset and liability for its operating lease arrangements with terms of greater than twelve months. See the Company’s September 30, 2019 consolidated balance sheet for the impact of such adoption. The pronouncement provided companies with a transition option under which they could opt to continue to apply legacy lease guidance in comparative periods. The Company elected such option. The Company’s December 31, 2018 consolidated balance sheet includes a $74,464 deferred rent liability in other long-term liabilities and a $7,170 deferred rent liability in accrued expenses. In the Company’s September 30, 2019 consolidated balance sheet, such accounts reduce the operating lease asset. Additionally, in the Company’s December 31, 2018 consolidated balance sheet, other intangible assets, net, includes a $3,904 intangible asset related to favorable leases and prepaid expenses and other current assets includes a $2,552 asset related to capitalized broker costs. In the Company’s September 30, 2019 consolidated balance sheet, such assets are included in the operating lease asset. The pronouncement had no impact on the Company’s consolidated statement of operations and comprehensive loss and it did not impact the Company’s compliance with its debt covenants. Additionally, the standard requires companies to make certain disclosures. See Note 1 9 |
Store Impairment and Restructur
Store Impairment and Restructuring Charges | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Store Impairment and Restructuring Charges | Note 3 – Store Impairment and Restructuring Charges Each year, the Company typically closes approximately ten Party City stores as part of its typical network rationalization process and in response to ongoing consumer, market and economic changes that naturally arise in the business. During the nine months ended September 30, 2019, the Company performed a comprehensive review of its store locations aimed at improving the overall productivity of such locations (“store optimization program”) and, after careful consideration and evaluation of the store locations, the Company made the decision to accelerate the optimization of its store portfolio with the closure of approximately 55 stores which are primarily located in close proximity to other Party City stores. These closings should provide the Company with capital flexibility to expand into underserved markets. In conjunction with the store optimization program, during the three and nine months ended September 30, 2019, the Company recorded the following charges: Three Months Ended 2019 Nine Months Ended 2019 Inventory reserves $ — $ 21,285 Operating lease asset impairment — 14,149 Property, plant and equipment impairment — 4,680 Labor and other costs incurred closing stores 2,574 6,327 Severance — 661 Total $ 2,574 $ 47,102 Such amounts represent the Company’s best estimate of the total charges that are expected to be recorded for such items. As the Company closes the stores, it records charges for common area maintenance, insurance and taxes to be paid subsequent to such closures in accordance with the stores’ lease agreements. However, such amounts are immaterial. Additionally, the Company incurs costs while moving inventory, cleaning the stores and returning them to their original condition. Such costs are also immaterial. The fair values of the operating lease assets and property, plant and equipment were determined based on estimated future discounted cash flows for such assets using market participant assumptions, including data on the ability to sub-lease The charge for inventory reserves represents inventory that is disposed of following the closures of the stores and inventory that is sold below cost prior to such closures. The charge for inventory reserves was recorded in cost of sales in the Company’s statement of operations and comprehensive loss. The other charges were recorded in Store impairment and restructuring charges in the Company’s statement of operations and comprehensive loss. The Company cannot guarantee that it will be able to achieve the anticipated benefits from the store optimization program. If the Company is unable to achieve such benefits, its results of operations and financial condition could be affected. |
Goodwill Impairment
Goodwill Impairment | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Asset Impairment [Abstract] | |
Goodwill Impairment | Note 4 – Goodwill Impairment The Company reviews goodwill and other intangibles that have indefinite lives for impairment annually as of October 1 or when events or changes in circumstances indicate the carrying value of t h During the three months ended September 30, 2019, the Company identified an impairment indicator associated with its market capitalization and performed interim impairment tests on the goodwill at its retail and wholesale reporting units and its other indefinite lived intangible assets as of September 30, 2019. The interim impairment tests were performed using a combination of a market approach and an income approach. As a result of a sustained decline in the Company’s market capitalization, the Company recognized non-cash pre-tax of $ and $35,000 against the goodwill associated with its retail and wholesale reporting units , respectively There was no goodwill impairment charge for the nine months ended September 30, 2018. |
Sale_Leaseback Transaction
Sale/Leaseback Transaction | 9 Months Ended |
Sep. 30, 2019 | |
Sales Leaseback Transaction Disclosure [Abstract] | |
Sale/Leaseback Transaction | Note 5 – Sale/Leaseback Transaction In June 2019, the Company sold its main distribution center in Chester, New York, its metallic balloons manufacturing facility in Eden Prairie, Minnesota and its injection molded plastics manufacturing facility in Los Lunas, New Mexico. Simultaneously, the Company entered into twenty-year leases for each of the facilities. The aggregate sale price was $128,000 and, during the nine months ended September 30, 2019, the Company recorded a $58,381 gain on the sale, net of transaction costs, in the Company’s condensed consolidated statement of operations and comprehensive loss. Under the terms of the lease agreements, the Company will pay total rent of $8,320 during the first year and the annual rent will increase by 2% thereafter. The Chester and Eden Prairie leases are being accounted for as operating leases and the sale of such properties is included in the gain above. However, for the Los Lunas property, the present value of the lease payments is greater than substantially all of the fair value of the assets. Therefore, the lease is a finance lease and sale accounting treatment is prohibited. As such, the Company is accounting for the $12,080 of proceeds as a financing lease and has recorded such amount in long-term obligations in its September 30, 2019 condensed consolidated balance sheet. In conjunction with the sale/leaseback transaction, the Company amended its Term Loan Credit Agreement. The amendment required the Company to use half of the proceeds from the transaction, net of costs, to paydown part of the outstanding balance under such debt agreement. Additionally, the amendment required the Company to pay an immaterial “consent fee” to the lenders. As the Term Loan Credit Agreement is a loan syndication, the Company assessed, on a creditor-by-creditor During June 2019, the Company used proceeds from the sale (net of costs) of $125,864 to paydown outstanding debt. |
Assets and Liabilities Held for
Assets and Liabilities Held for Sale | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Held for Sale | Note 6 – Assets and Liabilities Held for Sale On October 1, 2019, the Company sold its Canadian-based Party City stores to a Canadian-based retailer for $174,500 Canadian dollars and enter into a 10-year s As of September 30, 2019, the Company reported the assets of its Canadian-based Party City stores as assets held for sale in its condensed consolidated balance sheet. Assets held for sale as of September 30, 2019 include the following: At September 30, 2019 Inventories, net $ 31,302 Property, plant and equipment, net 14,779 Operating lease asset 40,470 Goodwill 51,370 Trade names 33,044 Other assets, net 1,224 Total, net $ 172,189 In addition to the assets held for sale, the Company reported the related operating lease liabilities of $48,618 as liabilities held for sale. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 7 Inventories consisted of the following: September 30, 2019 December 31, 2018 Finished goods $ 709,830 $ 706,327 Raw materials 34,045 33,423 Work in process 16,304 16,288 $ 760,179 $ 756,038 Inventories are valued at the lower of cost or net realizable value. The Company principally determines the cost of inventory using the weighted average method. The Company estimates retail inventory shrinkage for the period between physical inventory dates on a store-by-store |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 The effective income tax rate for the nine months ended September 30, 2019, 7.6%, is lower to the non-deductible portions of goodwill impairment charges. (See Note 4 above for further discussion). |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | Note 9 The changes in accumulated other comprehensive loss consisted of the following: Three Months Ended September 30, 2019 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at June 30, 2019 $ (45,344 ) $ 128 $ (45,216 ) Other comprehensive (loss) income before reclassifications, net of tax (6,920 ) 166 (6,754 ) Gains reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net of income tax — (73 ) (73 ) Net current-period other comprehensive (loss) income (6,920 ) 93 (6,827 ) Balance at September 30, 2019 $ (52,264 ) $ 221 $ (52,043 ) Three Months Ended September 30, 2018 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at June 30, 2018 $ (40,917 ) $ 1,120 $ (39,797 ) Other comprehensive income before reclassifications 419 217 636 Gain reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net of income tax — (192 ) (192 ) Net current-period other comprehensive income 419 25 444 Balance at September 30, 2018 $ (40,498 ) $ 1,145 $ (39,353 ) Nine Months Ended September 30, 2019 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at December 31, 2018 $ (50,056 ) $ 855 $ (49,201 ) Other comprehensive (loss) income before reclassifications, net of tax (2,208 ) 226 (1,982 ) Gain reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net of income tax — (860 ) (860 ) Net current-period other comprehensive loss (2,208 ) (634 ) (2,842 ) Balance at September 30, 2019 $ (52,264 ) $ 221 $ (52,043 ) Nine Months Ended September 30, 2018 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at December 31, 2017 $ (35,610 ) $ (208 ) $ (35,818 ) Other comprehensive (loss) income before reclassifications, net of income tax (4,888 ) 1,188 (3,700 ) Loss reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive income, net of income tax — 165 165 Net current-period other comprehensive (loss) income (4,888 ) 1,353 (3,535 ) Balance at September 30, 2018 $ (40,498 ) $ 1,145 $ (39,353 ) |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Capital Stock | Note 10 At September 30, 2019, the Company’s auth o |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Note 1 1 Industry Segments The Company has two identifiable business segments. The Wholesale segment designs, manufactures, sources and distributes decorated party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and stationery throughout the world. The Retail segment operates specialty retail party supply stores in the United States and, through September 30, 2019, Canada, principally under the names Party City and Halloween City, and it operates e-commerce and nine Wholesale Retail Consolidated Three Months Ended September 30, 2019 Revenues: Net sales $ 383,425 $ 369,467 $ 752,892 Royalties and franchise fees — 1,886 1,886 Total revenues 383,425 371,353 754,778 Eliminations (214,547 ) — (214,547 ) Net revenues $ 168,878 $ 371,353 $ 540,231 L $ (32,424 ) $ (245,102 ) $ (277,526 ) Interest expense, net 29,424 Other expense, net 2,047 Loss before income tax benefits $ (308,997 ) Wholesale Retail Consolidated Three Months Ended September 30, 2018 Revenues: Net sales $ 424,569 $ 375,680 $ 800,249 Royalties and franchise fees — 2,206 2,206 Total revenues 424,569 377,886 802,455 Eliminations (249,409 ) — (249,409 ) Net revenues $ 175,160 $ 377,886 $ 553,046 Income from operations $ 15,501 $ 16,237 $ 31,738 Interest expense, net 27,705 Other expense, net 5,696 Loss before income taxes $ (1,663 ) The Company’s industry segment data for the nine months ended September 30, 2019 and September 30, 2018 was as follows: Wholesale Retail Consolidated Nine Months Ended September 30, 2019 Revenues: Net sales $ 962,793 $ 1,170,777 $ 2,133,570 Royalties and franchise fees — 6,089 6,089 Total revenues 962,793 1,176,866 2,139,659 Eliminations (522,421 ) — (522,421 ) Net revenues $ 440,372 $ 1,176,866 $ 1,617,238 Income (loss) $ 30,096 $ (220,434 ) $ (190,338 ) Interest expense, net 88,857 Other expense, net 6,643 Loss before income tax benefits $ (285,838 ) Wholesale Retail Consolidated Nine Months Ended September 30, 2018 Revenues: Net sales $ 988,129 $ 1,150,609 $ 2,138,738 Royalties and franchise fees — 7,832 7,832 Total revenues 988,129 1,158,441 2,146,570 Eliminations (524,689 ) — (524,689 ) Net revenues $ 463,440 $ 1,158,441 $ 1,621,881 Income from operations $ 31,997 $ 87,448 $ 119,445 Interest expense, net 76,481 Other expense, net 9,076 Income before income taxes $ 33,888 During June 2019, the Company’s Wholesale segment sold its main distribution center in Chester, New York, its metallic balloons manufacturing facility in Eden Prairie, Minnesota and its injection molded plastics manufacturing facility in Los Lunas, New Mexico. The aggregate sale price was $128,000 and, during the nine months ended September 30, 2019, the Company’s Wholesale segment recorded a $58,381 gain on the sale in the Company’s condensed consolidated statement of operations and comprehensive ( ) income During the three and nine months ended September 30, 2019, the Company executed a store optimization program under which the Company plans to close approximately 55 Party City stores during the course of 2019. In conjunction with the program, during the three months and nine months ended September 30, 2019, the Company’s Retail segment recorded charges of $2,574 and $47,102, respectively. See Note 3 for further detail. During the nine months ended September 30, 2019, the Company adopted ASU 2016-02, 9 During the three months ended September 30, 2019, the Company identified an impairment indicator associated with its market capitalization and performed interim impairment tests on the goodwill at its retail and wholesale reporting units as of September 30, 2019. As a result of a sustained decline in the Company’s market capitalization, the Company recognized non-cash pre-tax of $ and $35,000 against the goodwill associated with its retail and wholesale reporting units. See Note 4 for further detail. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 1 2 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. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 1 3 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 risks managed through the use of derivative financial instruments are interest rate risk and foreign currency exchange rate risk. Interest Rate Risk Management As part of the Company’s risk management strategy, the Company periodically uses interest rate swap agreements to hedge the variability of cash flows on floating rate debt obligations. Accordingly, interest rate swap agreements are reflected in the consolidated balance sheets at fair value and the related gains and losses on these contracts are deferred in equity and recognized in interest expense over the same period in which the related interest payments being hedged are recognized in income. The Company did not utilize interest rate swap agreements during the nine months ended September 30, 2019 and the nine months ended September 30, 2018. Foreign Exchange Risk Management A portion of the Company’s cash flows are 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, the Australian Dollar, and the Mexican Peso, 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. At September , and December , , the Company had 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 are % effective, there is no current 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 . The following table displays the fair values of the Company’s derivatives at September 30, 2019 and December 31, 2018: Derivative Assets Derivative Liabilities Balance Sheet Line Fair Value Balance Sheet Line Fair Value Balance Sheet Line Fair Value Balance Sheet Line Fair Value Derivative Instrument September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Foreign Exchange Contracts (a) PP $ 151 (a) PP $ 115 (b) AE $ 22 (b) AE $ — (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, 2019 and December 31, 2018: Derivative Instrument September 30, 2019 December 31, 2018 Foreign Exchange Contracts $ 3,650 $ 10,942 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 1 4 The provisions of 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. During 2017, the Company acquired a 28% ownership interest in Punchbowl, Inc. (“Punchbowl”), a provider of digital greeting cards and digital invitations. At such time, the Company provided Punchbowl’s other investors with the ability to “put” their interest in Punchbowl to the Company at a future date. Additionally, at such time, the Company received the ability to “call” the interest of the other investors. During the nine months ended September 30, 2019, the option was terminated and the Company wrote off its asset related to the call option and reversed its liability related to the put option and recorded a net charge of $1,890 in other expenses, net. Prior to such time, the Company had been adjusting the put liability to fair value on a recurring basis. The liability represented a Level 3 fair value measurement as it was based on unobservable inputs. During 2017, the Company and Ampology, a subsidiary of Trivergence, reached an agreement to form a new legal entity, Kazzam, LLC (“Kazzam”), for the purpose of designing, developing and launching an online exchange platform for party-related services. As part of Ampology’s compensation for designing, developing and launching the exchange platform, Ampology received an ownership interest in Kazzam. The interest has been recorded as redeemable securities in the mezzanine of the Company’s consolidated balance sheet as, in the future, Ampology has the right to cause the Company to purchase the interest. On a recurring basis, the liability is adjusted to the greater of the current fair value or the original fair value at the time at which the ownership interest was issued (adjusted for any subsequent changes in the ownership interest percentage). As of both September 30, 2019 and December 31, 2018, the original value was greater and, therefore, the liabilities are not included in the table below. The following table shows assets and liabilities as of September 30, 2019 that are measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total as of September 30, 2019 Derivative assets $ — $ 151 $ — $ 151 Derivative liabilities — 22 — 22 The following table shows assets and liabilities as of December 31, 2018 that are measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total as of December 31, 2018 Derivative assets $ — $ 115 $ — $ 115 Derivative liabilities — — — — Punchbowl put liability — — 316 316 The majority of the Company’s non-financial non-financial non-financial non-financial During the three months ended September 30, 2019, the Company identified an impairment indicator associated with its market capitalization and performed interim impairment tests on the goodwill at its retail and non-cash pre-tax and $35,000 against the goodwill associated with its retail and wholesale reporting units. See Note 4 for further detail. 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, 2019 because of the short-term maturities of the instruments and/or their variable rates of interest. The carrying amounts and fair values of borrowings under the Term Loan Credit Agreement and the Company’s senior notes as of September 30, 2019 are as follows: September 30, 2019 Carrying Amount Fair Value Term Loan Credit Agreement $ 720,743 $ 722,488 6.125% Senior Notes – due 2023 346,809 356,125 6.625% Senior Notes – due 2026 494,717 493,125 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, 2019 based on the discounted future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturity. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 1 5 Basic earnings per share are computed by dividing net income attributable to common shareholders of Party City Holdco Inc. 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 and warrants, as if they were exercised, and restricted stock units, as if they vested. A reconciliation between basic and diluted income (loss) per share is as follows: Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Net (loss) income attributable to common shareholders of Party City Holdco Inc. $ (281,533 ) $ (2,420 ) $ (263,677 ) $ 24,934 Weighted average shares - Basic 93,346,448 96,494,565 93,271,392 96,449,011 Effect of dilutive securities: Warrants — — — — Restricted stock units — — — 9,004 Stock options — — — 1,226,275 Weighted average shares - Diluted 93,346,448 96,494,565 93,271,392 97,684,290 Net (loss) income per share attributable to common shareholders of Party City Holdco Inc. - Basic $ (3.02 ) $ (0.03 ) $ (2.83 ) $ 0.26 Net (loss) income per share attributable to common shareholders of Party City Holdco Inc. - Diluted $ (3.02 ) $ (0.03 ) $ (2.83 ) $ 0.26 During the three months ended September 30, 2019 and September 30, 2018, 3,544,501 stock options and 4,157,559 stock options, respectively, were excluded from the calculation of diluted earnings per share as they were anti-dilutive. Additionally, during the three months ended September 30, 2019 and September 30, 2018, 596,000 warrants were excluded from the calculation of diluted earnings per share as they were anti-dilutive. Further, during the three months ended September 30, 2019 and September 30, 2018, 416,260 restricted stock units and 191,033 restricted stock units, respectively, were excluded from the calculation of diluted earnings per share as they were anti-dilutive. During the nine months ended September 30, 2019 and September 30, 2018, 3,544,501 stock options and 2,354,244 stock options, respectively, were excluded from the calculation of diluted earnings per share as they were anti-dilutive. Additionally, during the nine months ended September 30, 2019 and September 30, 2018, 596,000 warrants were excluded from the calculation of diluted earnings per share as they were anti-dilutive. Further, during the nine months ended September 30, 2019, 416,260 restricted stock units were excluded from the calculation of diluted earnings per share as they were anti-dilutive. During the nine months ended September 30, 2018, all restricted stock units were dilutive. |
Current and Long-Term Obligatio
Current and Long-Term Obligations | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Current and Long-Term Obligations | Note 1 6 Long-term obligations at September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 Term Loan Credit Agreement $ 720,743 $ 791,135 6.125% Senior Notes – due 2023 346,809 346,191 6.625% Senior Notes – due 2026 494,717 494,138 Finance lease obligations 15,327 3,815 Total long-term obligations 1,577,596 1,635,279 Less: current portion (13,498 ) (13,316 ) Long-term obligations, excluding current portion $ 1,564,098 $ 1,621,963 Prior to April 2019, the Company had a $540,000 asset-based revolving credit facility (with a seasonal increase to $640,000 during a certain period of each calendar year) (“ABL Facility”), which matures during August 2023 During April 2019, the Company amended the ABL Facility. Such amendment removed the seasonal component and made the facility a $640,000 facility on a year-round basis. During June 2019, in conjunction with a sale/leaseback transaction, the Company amended its Term Loan Credit Agreement and financed its Los Lunas, New Mexico facility. See Note 5 for further detail. The finance lease obligations above include $ 12,035 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Note 1 7 The following table summarizes revenue from contracts with customers for the three and nine months ended September 30, 2019 and September 30, 2018: Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Retail Net Sales: North American Party City Stores $ 326,810 $ 336,355 $ 1,060,258 $ 1,043,422 Global E-commerce 36,823 34,221 103,995 102,083 Other 5,834 5,104 6,524 5,104 Total Retail Net Sales $ 369,467 $ 375,680 $ 1,170,777 $ 1,150,609 Royalties and Franchise Fees 1,886 2,206 6,089 7,832 Total Retail Revenue $ 371,353 $ 377,886 $ 1,176,866 $ 1,158,441 Wholesale Net Sales: Domestic $ 82,670 $ 88,287 $ 231,257 $ 247,243 International 86,208 86,873 209,115 216,197 Total Wholesale Net Sales $ 168,878 $ 175,160 $ 440,372 $ 463,440 Total Consolidated Revenue $ 540,231 $ 553,046 $ 1,617,238 $ 1,621,881 |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Note 1 8 The Company’s September 30, 2019 consol i The Company’s September 30, 2018 consolidated balance sheet included $48,097 of cash and cash equivalents and $177 of restricted cash and the Company’s December 31, 2017 consolidated balance sheet included $54,291 of cash and cash equivalents and $117 of restricted cash. Restricted cash is recorded in Prepaid expenses and other current assets. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Note 1 9 In February 2016, the FASB issued ASU 2016-02, The FASB has provided companies with a transition option under which they can opt to continue to apply the legacy guidance, including its disclosure requirements, in the comparative periods presented in the year during which they adopt the new lease standard. Entities that elect the option only make annual disclosures for the comparative periods as legacy guidance does not require interim disclosures. The Company has elected this transition option . Practical Expedients/Policy Elections Under the new standard, companies may elect the following practical expedients, which must be elected as a package and applied consistently to all leases: 1. An entity need not reassess whether any expired or existing contracts are or contain leases. 2. An entity need not reassess the lease classification for any expired or existing leases. 3. An entity need not reassess initial direct costs for any existing leases. The Company elected this package of practical expedients. Under the new standard, an entity may also elect a practical expedient to use hindsight in determining the lease term and in assessing impairment of the entity’s right-of-use Additionally, under the new standard, lessees can make an accounting policy election (by class of underlying asset to which the right of use relates) to apply accounting similar to legacy accounting to leases that meet the new standard’s definition of a “short-term lease” (a lease that, at the commencement date, has a lease term of twelve months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). The Company has made this election for all classes of underlying assets. Further, the new standard provides a practical expedient that permits lessees to make an accounting policy election (by class of underlying asset) to account for each separate lease component of a contract and its associated non-lease Lease Population The Company’s lease portfolio is primarily comprised of real estate leases for its permanent Party City stores. The Company also leases manufacturing facilities, distribution facilities, warehouse space and office space. Additionally, the Company enters into short leases (generally less than four months) in order to operate its temporary stores. Further, the Company enters into leases of equipment, copiers, printers and automobiles. Substantially all of the Company’s leases are operating leases. The Company’s finance leases are immaterial. The right-of-use The Company’s sub-leases Variable Lease Payments A limited number of the Company’s store leases require rent to be paid based on sales levels. The Company’s cost for such leases is immaterial. Variable lease consideration is not included in lease payments until the contingency is resolved. Additionally, for most store leases, the Company pays variable taxes and insurance. Renewal Options Many of the Company’s store leases, and certain of the Company’s other leases, contain renewal options. However, the renewal periods are generally not included in the right-of-use Discount Rates The Company is unable to determine the discount rates that are implicit in its operating leases. Therefore, for such leases, the Company is utilizing its incremental borrowing rate. For leases that existed as of January 1, 2019, the Company determined the applicable incremental borrowing rates for such leases based on the remaining lease terms for the leases as of such date. Quantitative Disclosures During the three months and nine months ended September 30, 2019, the Company’s operating lease cost was $56,366 and $153,813, respectively. Such amount excludes impairment charges recorded in conjunction with the Company’s store optimization program (see Note 3). The Company’s variable lease cost during the three and nine months ended September 30, 2019 was $6,530 and $23,716, respectively. During the three and nine months ended September 30, 2019, cash paid for amounts included in the measurement of operating lease liabilities was $49,947 and $165,398, respectively. During the three and nine months ended September 30, 2019, right-of-use As of September 30, 2019, the weighted-average remaining lease term for operating leases was eight years As of September 30, 2019, the future cash flows for the Company’s operating leases were: Three months ended December 31, 2019 $ 35,386 2020 197,177 2021 182,950 2022 163,685 2023 135,792 Thereafter 480,287 Total Undiscounted Cash Flows $ 1,195,277 Less: Interest (307,417 ) Total Operating Lease Liability 887,860 Less: Current Portion of Operating Lease Liability (140,781 ) Long-Term Portion of Operating Lease Liability $ 747,079 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 20 On November 4, 2019, the Company acquired the stock of a European-based online retailer for total consideration of approximately $9,000. |
Basis of Presentation and Rec_2
Basis of Presentation and Recently Issued Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, disclosure of In June 2018, the FASB issued ASU 2018-07 , “Compensation – Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting”. The ASU simplifies the accounting for non-employee share-based payments. The Company adopted the update during the first quarter of . The pronouncement requires companies to record the impact of adoption, if any, as a cumulative-effect adjustment to retained earnings as of the adoption date. Therefore, on January , , the Company decreased retained earnings by $ . Additionally, the Company increased additional paid-in capital by $ and recorded a $ deferred income tax asset. In August 2017, the FASB issued ASU 2017-12, In January 2017 the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates the requirement to measure a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the amendments in ASU 2017-04, an entity will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized will not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity will consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The Company adopted ASU No. 2017-04 during the first quarter of 2019. In , the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses”. The ASU changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The pronouncement is effective for the Company during the first quarter of . The Company is still evaluating the impact of the ASU on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, The Company adopted the new lease standard during the first quarter of 2019 and, to the extent required by the pronouncement, recognized a right of use asset and liability for its operating lease arrangements with terms of greater than twelve months. See the Company’s September 30, 2019 consolidated balance sheet for the impact of such adoption. The pronouncement provided companies with a transition option under which they could opt to continue to apply legacy lease guidance in comparative periods. The Company elected such option. The Company’s December 31, 2018 consolidated balance sheet includes a $74,464 deferred rent liability in other long-term liabilities and a $7,170 deferred rent liability in accrued expenses. In the Company’s September 30, 2019 consolidated balance sheet, such accounts reduce the operating lease asset. Additionally, in the Company’s December 31, 2018 consolidated balance sheet, other intangible assets, net, includes a $3,904 intangible asset related to favorable leases and prepaid expenses and other current assets includes a $2,552 asset related to capitalized broker costs. In the Company’s September 30, 2019 consolidated balance sheet, such assets are included in the operating lease asset. The pronouncement had no impact on the Company’s consolidated statement of operations and comprehensive loss and it did not impact the Company’s compliance with its debt covenants. Additionally, the standard requires companies to make certain disclosures. See Note 1 9 |
Store Impairment and Restruct_2
Store Impairment and Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs [Table Text Block] | In conjunction with the store optimization program, during the three and nine months ended September 30, 2019, the Company recorded the following charges: Three Months Ended 2019 Nine Months Ended 2019 Inventory reserves $ — $ 21,285 Operating lease asset impairment — 14,149 Property, plant and equipment impairment — 4,680 Labor and other costs incurred closing stores 2,574 6,327 Severance — 661 Total $ 2,574 $ 47,102 |
Assets and Liabilities Held f_2
Assets and Liabilities Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets Held for Sale | Assets held for sale as of September 30, 2019 include the following: At September 30, 2019 Inventories, net $ 31,302 Property, plant and equipment, net 14,779 Operating lease asset 40,470 Goodwill 51,370 Trade names 33,044 Other assets, net 1,224 Total, net $ 172,189 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following: September 30, 2019 December 31, 2018 Finished goods $ 709,830 $ 706,327 Raw materials 34,045 33,423 Work in process 16,304 16,288 $ 760,179 $ 756,038 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss consisted of the following: Three Months Ended September 30, 2019 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at June 30, 2019 $ (45,344 ) $ 128 $ (45,216 ) Other comprehensive (loss) income before reclassifications, net of tax (6,920 ) 166 (6,754 ) Gains reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net of income tax — (73 ) (73 ) Net current-period other comprehensive (loss) income (6,920 ) 93 (6,827 ) Balance at September 30, 2019 $ (52,264 ) $ 221 $ (52,043 ) Three Months Ended September 30, 2018 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at June 30, 2018 $ (40,917 ) $ 1,120 $ (39,797 ) Other comprehensive income before reclassifications 419 217 636 Gain reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net of income tax — (192 ) (192 ) Net current-period other comprehensive income 419 25 444 Balance at September 30, 2018 $ (40,498 ) $ 1,145 $ (39,353 ) Nine Months Ended September 30, 2019 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at December 31, 2018 $ (50,056 ) $ 855 $ (49,201 ) Other comprehensive (loss) income before reclassifications, net of tax (2,208 ) 226 (1,982 ) Gain reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive loss, net of income tax — (860 ) (860 ) Net current-period other comprehensive loss (2,208 ) (634 ) (2,842 ) Balance at September 30, 2019 $ (52,264 ) $ 221 $ (52,043 ) Nine Months Ended September 30, 2018 Foreign Currency Adjustments Impact of Foreign Exchange Contracts, Net of Taxes Total, Net of Taxes Balance at December 31, 2017 $ (35,610 ) $ (208 ) $ (35,818 ) Other comprehensive (loss) income before reclassifications, net of income tax (4,888 ) 1,188 (3,700 ) Loss reclassified from accumulated other comprehensive loss to the condensed consolidated statement of operations and comprehensive income, net of income tax — 165 165 Net current-period other comprehensive (loss) income (4,888 ) 1,353 (3,535 ) Balance at September 30, 2018 $ (40,498 ) $ 1,145 $ (39,353 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Company's Industry Segment Data | The Company’s industry segment data for the three and nine Wholesale Retail Consolidated Three Months Ended September 30, 2019 Revenues: Net sales $ 383,425 $ 369,467 $ 752,892 Royalties and franchise fees — 1,886 1,886 Total revenues 383,425 371,353 754,778 Eliminations (214,547 ) — (214,547 ) Net revenues $ 168,878 $ 371,353 $ 540,231 L $ (32,424 ) $ (245,102 ) $ (277,526 ) Interest expense, net 29,424 Other expense, net 2,047 Loss before income tax benefits $ (308,997 ) Wholesale Retail Consolidated Three Months Ended September 30, 2018 Revenues: Net sales $ 424,569 $ 375,680 $ 800,249 Royalties and franchise fees — 2,206 2,206 Total revenues 424,569 377,886 802,455 Eliminations (249,409 ) — (249,409 ) Net revenues $ 175,160 $ 377,886 $ 553,046 Income from operations $ 15,501 $ 16,237 $ 31,738 Interest expense, net 27,705 Other expense, net 5,696 Loss before income taxes $ (1,663 ) The Company’s industry segment data for the nine months ended September 30, 2019 and September 30, 2018 was as follows: Wholesale Retail Consolidated Nine Months Ended September 30, 2019 Revenues: Net sales $ 962,793 $ 1,170,777 $ 2,133,570 Royalties and franchise fees — 6,089 6,089 Total revenues 962,793 1,176,866 2,139,659 Eliminations (522,421 ) — (522,421 ) Net revenues $ 440,372 $ 1,176,866 $ 1,617,238 Income (loss) $ 30,096 $ (220,434 ) $ (190,338 ) Interest expense, net 88,857 Other expense, net 6,643 Loss before income tax benefits $ (285,838 ) Wholesale Retail Consolidated Nine Months Ended September 30, 2018 Revenues: Net sales $ 988,129 $ 1,150,609 $ 2,138,738 Royalties and franchise fees — 7,832 7,832 Total revenues 988,129 1,158,441 2,146,570 Eliminations (524,689 ) — (524,689 ) Net revenues $ 463,440 $ 1,158,441 $ 1,621,881 Income from operations $ 31,997 $ 87,448 $ 119,445 Interest expense, net 76,481 Other expense, net 9,076 Income before income taxes $ 33,888 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 and December 31, 2018: Derivative Assets Derivative Liabilities Balance Sheet Line Fair Value Balance Sheet Line Fair Value Balance Sheet Line Fair Value Balance Sheet Line Fair Value Derivative Instrument September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Foreign Exchange Contracts (a) PP $ 151 (a) PP $ 115 (b) AE $ 22 (b) AE $ — (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, 2019 and December 31, 2018: Derivative Instrument September 30, 2019 December 31, 2018 Foreign Exchange Contracts $ 3,650 $ 10,942 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 that are measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total as of September 30, 2019 Derivative assets $ — $ 151 $ — $ 151 Derivative liabilities — 22 — 22 The following table shows assets and liabilities as of December 31, 2018 that are measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total as of December 31, 2018 Derivative assets $ — $ 115 $ — $ 115 Derivative liabilities — — — — Punchbowl put liability — — 316 316 |
Summary of Carrying Amount and Fair Value | The carrying amounts and fair values of borrowings under the Term Loan Credit Agreement and the Company’s senior notes as of September 30, 2019 are as follows: September 30, 2019 Carrying Amount Fair Value Term Loan Credit Agreement $ 720,743 $ 722,488 6.125% Senior Notes – due 2023 346,809 356,125 6.625% Senior Notes – due 2026 494,717 493,125 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Net (loss) income attributable to common shareholders of Party City Holdco Inc. $ (281,533 ) $ (2,420 ) $ (263,677 ) $ 24,934 Weighted average shares - Basic 93,346,448 96,494,565 93,271,392 96,449,011 Effect of dilutive securities: Warrants — — — — Restricted stock units — — — 9,004 Stock options — — — 1,226,275 Weighted average shares - Diluted 93,346,448 96,494,565 93,271,392 97,684,290 Net (loss) income per share attributable to common shareholders of Party City Holdco Inc. - Basic $ (3.02 ) $ (0.03 ) $ (2.83 ) $ 0.26 Net (loss) income per share attributable to common shareholders of Party City Holdco Inc. - Diluted $ (3.02 ) $ (0.03 ) $ (2.83 ) $ 0.26 |
Current and Long-Term Obligat_2
Current and Long-Term Obligations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Obligations | Long-term obligations at September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 Term Loan Credit Agreement $ 720,743 $ 791,135 6.125% Senior Notes – due 2023 346,809 346,191 6.625% Senior Notes – due 2026 494,717 494,138 Finance lease obligations 15,327 3,815 Total long-term obligations 1,577,596 1,635,279 Less: current portion (13,498 ) (13,316 ) Long-term obligations, excluding current portion $ 1,564,098 $ 1,621,963 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue from Contracts with Customers | The following table summarizes revenue from contracts with customers for the three and nine months ended September 30, 2019 and September 30, 2018: Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Retail Net Sales: North American Party City Stores $ 326,810 $ 336,355 $ 1,060,258 $ 1,043,422 Global E-commerce 36,823 34,221 103,995 102,083 Other 5,834 5,104 6,524 5,104 Total Retail Net Sales $ 369,467 $ 375,680 $ 1,170,777 $ 1,150,609 Royalties and Franchise Fees 1,886 2,206 6,089 7,832 Total Retail Revenue $ 371,353 $ 377,886 $ 1,176,866 $ 1,158,441 Wholesale Net Sales: Domestic $ 82,670 $ 88,287 $ 231,257 $ 247,243 International 86,208 86,873 209,115 216,197 Total Wholesale Net Sales $ 168,878 $ 175,160 $ 440,372 $ 463,440 Total Consolidated Revenue $ 540,231 $ 553,046 $ 1,617,238 $ 1,621,881 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
The Future Cash flows for The Company's Operating Leases | As of September 30, 2019, the future cash flows for the Company’s operating leases were: Three months ended December 31, 2019 $ 35,386 2020 197,177 2021 182,950 2022 163,685 2023 135,792 Thereafter 480,287 Total Undiscounted Cash Flows $ 1,195,277 Less: Interest (307,417 ) Total Operating Lease Liability 887,860 Less: Current Portion of Operating Lease Liability (140,781 ) Long-Term Portion of Operating Lease Liability $ 747,079 |
Description of Business- Additi
Description of Business- Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019CountryStoreoutlet | |
Minimum [Member] | |
Basis Of Presentation [Line Items] | |
Number stores | outlet | 40,000 |
Number of countries in which products available | Country | 100 |
PC Nextco [Member] | |
Basis Of Presentation [Line Items] | |
Ownership percentage | 100.00% |
PC Intermediate [Member] | |
Basis Of Presentation [Line Items] | |
Ownership percentage | 100.00% |
Party City Holdings Inc [Member] | |
Basis Of Presentation [Line Items] | |
Ownership percentage | 100.00% |
United States and Canada [Member] | |
Basis Of Presentation [Line Items] | |
Number stores | 900 |
United States and Canada [Member] | Minimum [Member] | Halloween City Stores [Member] | |
Basis Of Presentation [Line Items] | |
Number stores | 250 |
United States and Canada [Member] | Maximum [Member] | Halloween City Stores [Member] | |
Basis Of Presentation [Line Items] | |
Number stores | 300 |
Basis of Presentation and Rec_3
Basis of Presentation and Recently Issued Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 02, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Significant Accounting Policies [Line Items] | |||
Amount of the cumulative effect on retained earnings net of related income tax effect. | $ 503 | ||
Increased Additional Paid In Capital | 662 | ||
Increased Deferred Income Tax Asset | $ 159 | ||
Lease Agreements [Member] | |||
Significant Accounting Policies [Line Items] | |||
Decrease infinite lived intangible assets net | $ 3,904 | ||
Accounts Payable and Accrued Liabilities [Member] | |||
Significant Accounting Policies [Line Items] | |||
Decrease in current deferred rent credit | 7,170 | ||
Other Noncurrent Liabilities [Member] | |||
Significant Accounting Policies [Line Items] | |||
Decrease in long term deferred rent credit | 74,464 | ||
Other Current Assets [Member] | |||
Significant Accounting Policies [Line Items] | |||
Prepaid expenses and other current assets | $ 2,552 | ||
Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Retail operations period of fiscal year | 371 days | ||
Retail operations period of fiscal quarter | 98 days | ||
Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Retail operations period of fiscal year | 364 days | ||
Retail operations period of fiscal quarter | 91 days |
Store Impairment and Restruct_3
Store Impairment and Restructuring Charges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Total | $ 2,574 | $ 47,102 |
Cost of Sales [Member] | ||
Inventory reserves | 21,285 | |
Restructuring Charges [Member] | ||
Operating lease asset impairment | 14,149 | |
Property, plant and equipment impairment | 4,680 | |
Labor and other costs incurred closing stores | $ 2,574 | 6,327 |
Severance | $ 661 |
Goodwill Impairment - Additiona
Goodwill Impairment - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill, Impairment Loss | $ 259,100 | $ 259,100 | $ 0 |
Retail [Member] | Operating Segments [Member] | |||
Goodwill, Impairment Loss | 224,100 | ||
Wholesale [Member] | Operating Segments [Member] | |||
Goodwill, Impairment Loss | $ 35,000 |
Sale_Leaseback Transaction - Ad
Sale/Leaseback Transaction - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended |
Jun. 30, 2019 | Sep. 30, 2019 | |
Aggregate sale price | $ 128,000 | |
Gain on the sale net | $ 58,381 | |
Lease agreement term | Under the terms of the lease agreements, the Company will pay total rent of $8,320 during the first year and the annual rent will increase by 2% thereafter. | |
Total rent payment | $ 8,320 | |
Los Lunas New Mexico facility financing [Member] | ||
Financing from long-term obligations | $ 12,080 | |
Term Loan Credit Agreement [Member] | ||
Proceeds from the sale (net of costs) | $ 125,864 |
Assets and Liabilities Held f_3
Assets and Liabilities Held for Sale - Schedule Of Assets Held For Sale (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories, net | $ 760,179 | $ 756,038 |
Property, plant and equipment, net | 241,413 | 321,044 |
Operating lease asset | 827,817 | |
Goodwill | 1,358,137 | 1,656,950 |
Other assets, net | 12,578 | $ 12,323 |
Total, net | 172,189 | |
Assets Held For Sale [Member] | ||
Inventories, net | 31,302 | |
Property, plant and equipment, net | 14,779 | |
Operating lease asset | 40,470 | |
Goodwill | 51,370 | |
Trade names | 33,044 | |
Other assets, net | 1,224 | |
Total, net | $ 172,189 |
Assets and Liabilities Held f_4
Assets and Liabilities Held for Sale - Additional Information (Detail) $ in Thousands, $ in Thousands | Oct. 01, 2019CAD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) |
Income before income taxes | $ (308,997) | $ (1,663) | $ (285,838) | $ 33,888 | |
Operating lease liability | 887,860 | 887,860 | |||
CANADA [Member] | |||||
Income before income taxes | (140) | $ 1,507 | 2,631 | $ 4,843 | |
Operating lease liability | $ 48,618 | $ 48,618 | |||
Subsequent Event [Member] | Canadian Based Retailer [Member] | CANADA [Member] | |||||
Sale of stores | $ 174,500 |
Inventories- Inventories (Detai
Inventories- Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 709,830 | $ 706,327 |
Raw materials | 34,045 | 33,423 |
Work in process | 16,304 | 16,288 |
Inventories, net | $ 760,179 | $ 756,038 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Line Items] | |
U.S. corporate statutory income tax rate | 21.00% |
U.S. corporate income tax rate | 7.60% |
Changes in Accumulated Other _3
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, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ 1,043,330 | |||
Ending balance | $ 782,428 | 782,428 | ||
Foreign Currency Adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (45,344) | $ (40,917) | (50,056) | $ (35,610) |
Other comprehensive income (loss) before reclassifications, net of income tax | (6,920) | 419 | (2,208) | (4,888) |
Net current-period other comprehensive income (loss) | (6,920) | 419 | (2,208) | (4,888) |
Ending balance | (52,264) | (40,498) | (52,264) | (40,498) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | 128 | 1,120 | 855 | (208) |
Other comprehensive income (loss) before reclassifications, net of income tax | 166 | 217 | 226 | 1,188 |
(Gains) Loss reclassified from accumulated other comprehensive income (loss) to the condensed consolidated statement of operations and comprehensive income (loss), net of income (loss) tax | (73) | (192) | (860) | 165 |
Net current-period other comprehensive income (loss) | 93 | 25 | (634) | 1,353 |
Ending balance | 221 | 1,145 | 221 | 1,145 |
Accumulated Other Comprehensive Loss [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (45,216) | (39,797) | (49,201) | (35,818) |
Other comprehensive income (loss) before reclassifications, net of income tax | (6,754) | 636 | (1,982) | (3,700) |
(Gains) Loss reclassified from accumulated other comprehensive income (loss) to the condensed consolidated statement of operations and comprehensive income (loss), net of income (loss) tax | (73) | (192) | (860) | 165 |
Net current-period other comprehensive income (loss) | (6,827) | 444 | (2,842) | (3,535) |
Ending balance | $ (52,043) | $ (39,353) | $ (52,043) | $ (39,353) |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) | Sep. 30, 2019$ / sharesshares |
Equity [Abstract] | |
Authorized capital stock | shares | 300,000,000 |
Common stock, par value | $ / shares | $ 0.01 |
Preferred stock, par value | $ / shares | $ 0.01 |
Authorized preferred stock | shares | 15,000,000 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($)Store | Sep. 30, 2019USD ($)Store | Sep. 30, 2018USD ($) | |
Operating lease asset | $ 827,817 | $ 827,817 | |
Store Optimization Program Charges | 2,574 | 47,102 | |
Gain on the sale net | 58,381 | ||
Aggregate sale price | 128,000 | 128,000 | |
Goodwill impairment charge | 259,100 | 259,100 | $ 0 |
Retail Segment [Member] | Accounting Standards Update 2016-02 [Member] | |||
Operating lease asset | 684,004 | 684,004 | |
Wholesale Segment [Member] | |||
Gain on the sale net | 58,381 | ||
Wholesale Segment [Member] | Accounting Standards Update 2016-02 [Member] | |||
Operating lease asset | $ 143,813 | $ 143,813 | |
Discontinued Operations [Member] | |||
Number of Stores | Store | 55 | 55 | |
Operating Segments [Member] | Retail Segment [Member] | |||
Goodwill impairment charge | $ 224,100 | ||
Operating Segments [Member] | Wholesale [Member] | |||
Goodwill impairment charge | $ 35,000 |
Segment Information - Schedule
Segment Information - Schedule of Company's Industry Segment Data (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 540,231 | $ 553,046 | $ 1,617,238 | $ 1,621,881 |
Income (loss) from operations | (277,526) | 31,738 | (190,338) | 119,445 |
Interest expense, net | 29,424 | 27,705 | 88,857 | 76,481 |
Other income (expense), net | 2,047 | 5,696 | 6,643 | 9,076 |
Income before income taxes | (308,997) | (1,663) | (285,838) | 33,888 |
Net Sales [Member] | ||||
Revenues: | ||||
Revenues | 538,345 | 550,840 | 1,611,149 | 1,614,049 |
Royalties and Franchise Fees [Member] | ||||
Revenues: | ||||
Revenues | 1,886 | 2,206 | 6,089 | 7,832 |
Wholesale [Member] | ||||
Revenues: | ||||
Total revenues | 168,878 | 175,160 | 440,372 | 463,440 |
Income (loss) from operations | (32,424) | 15,501 | 30,096 | 31,997 |
Retail [Member] | ||||
Revenues: | ||||
Total revenues | 371,353 | 377,886 | 1,176,866 | 1,158,441 |
Income (loss) from operations | (245,102) | 16,237 | (220,434) | 87,448 |
Operating Segments [Member] | ||||
Revenues: | ||||
Total revenues | 754,778 | 802,455 | 2,139,659 | 2,146,570 |
Operating Segments [Member] | Net Sales [Member] | ||||
Revenues: | ||||
Revenues | 752,892 | 800,249 | 2,133,570 | 2,138,738 |
Operating Segments [Member] | Royalties and Franchise Fees [Member] | ||||
Revenues: | ||||
Revenues | 1,886 | 2,206 | 6,089 | 7,832 |
Operating Segments [Member] | Wholesale [Member] | ||||
Revenues: | ||||
Total revenues | 383,425 | 424,569 | 962,793 | 988,129 |
Operating Segments [Member] | Wholesale [Member] | Net Sales [Member] | ||||
Revenues: | ||||
Revenues | 383,425 | 424,569 | 962,793 | 988,129 |
Operating Segments [Member] | Retail [Member] | ||||
Revenues: | ||||
Total revenues | 371,353 | 377,886 | 1,176,866 | 1,158,441 |
Operating Segments [Member] | Retail [Member] | Net Sales [Member] | ||||
Revenues: | ||||
Revenues | 369,467 | 375,680 | 1,170,777 | 1,150,609 |
Operating Segments [Member] | Retail [Member] | Royalties and Franchise Fees [Member] | ||||
Revenues: | ||||
Revenues | 1,886 | 2,206 | 6,089 | 7,832 |
Eliminations [Member] | ||||
Revenues: | ||||
Total revenues | (214,547) | (249,409) | (522,421) | (524,689) |
Eliminations [Member] | Wholesale [Member] | ||||
Revenues: | ||||
Total revenues | $ (214,547) | $ (249,409) | $ (522,421) | $ (524,689) |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative [Line Items] | |
Foreign currency exchange contracts reclassified date | 2020-06 |
Foreign Exchange Risk Management [Member] | |
Derivative [Line Items] | |
Foreign exchange forward contracts maturity | 1 year |
Hedging effectiveness | 100.00% |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Fair Values of Derivatives (Detail) - Foreign Exchange Contracts [Member] - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 151 | $ 115 |
Accrued Expenses [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 22 | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Notional Amounts of Derivatives (Detail) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Foreign Exchange Contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 3,650,000 | $ 10,942,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($)Store | Sep. 30, 2019USD ($)Store | Sep. 30, 2018USD ($) | |
Debt Instrument [Line Items] | |||
Goodwill impairment charge | $ 259,100 | $ 259,100 | $ 0 |
Operating Segments [Member] | Retail Segment [Member] | |||
Debt Instrument [Line Items] | |||
Goodwill impairment charge | 224,100 | ||
Operating Segments [Member] | Wholesale [Member] | |||
Debt Instrument [Line Items] | |||
Goodwill impairment charge | 35,000 | ||
Option on Securities [Member] | |||
Debt Instrument [Line Items] | |||
Derivative assets wrote off cost | $ 1,890 | ||
Discontinued Operations [Member] | |||
Debt Instrument [Line Items] | |||
Number of Stores | Store | 55 | 55 | |
Punchbowl Inc [Member] | |||
Debt Instrument [Line Items] | |||
Equity method investment, ownership percentage | 28.00% | 28.00% |
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, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 151 | $ 115 |
Derivative liabilities | 22 | 0 |
Punchbowl Inc [Member] | Put Option [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 316 | |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 151 | 115 |
Derivative liabilities | $ 22 | 0 |
Level 3 [Member] | Punchbowl Inc [Member] | Put Option [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | $ 316 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Carrying Amount and Fair Value (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Term Loan Credit Agreement [Member] | Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument Carrying Amount | $ 720,743 |
Debt Instrument Fair Value | 722,488 |
6.125% Senior Notes - due 2023 [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument Carrying Amount | 346,809 |
Debt Instrument Fair Value | 356,125 |
6.625% Senior Notes - due 2026 [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument Carrying Amount | 494,717 |
Debt Instrument Fair Value | $ 493,125 |
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, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disclosure Of Earnings Per Share [Line Items] | ||||
Net (loss) income attributable to common shareholders of Party City Holdco Inc. | $ (281,533) | $ (2,420) | $ (263,677) | $ 24,934 |
Weighted average shares - Basic | 93,346,448 | 96,494,565 | 93,271,392 | 96,449,011 |
Effect of dilutive securities: | ||||
Warrants | 0 | 0 | 0 | 0 |
Restricted stock units | 9,004 | |||
Stock options | 1,226,275 | |||
Weighted average shares - Diluted | 93,346,448 | 96,494,565 | 93,271,392 | 97,684,290 |
Net (loss) income per share attributable to common shareholders of Party City Holdco Inc. - Basic | $ (3.02) | $ (0.03) | $ (2.83) | $ 0.26 |
Net (loss) income per share attributable to common shareholders of Party City Holdco Inc. - Diluted | $ (3.02) | $ (0.03) | $ (2.83) | $ 0.26 |
Earnings Per share - Additional
Earnings Per share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Stock Option [Member] | ||||
Disclosure Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,544,501 | 4,157,559 | 3,544,501 | 2,354,244 |
Warrant [Member] | ||||
Disclosure Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 596,000 | 596,000 | 596,000 | 596,000 |
Restricted Stock Units (RSUs) [Member] | ||||
Disclosure Of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 416,260 | 191,033 | 416,260 | 416,260 |
Current and Long-Term Obligat_3
Current and Long-Term Obligations - Summary of Long-Term Obligations (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total long-term obligations | $ 1,577,596 | $ 1,635,279 |
Less: current portion | (13,498) | (13,316) |
Long-term obligations, excluding current portion | 1,564,098 | 1,621,963 |
6.125% Senior Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term obligations | 346,809 | 346,191 |
6.625% Senior Notes due 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term obligations | 494,717 | 494,138 |
Finance lease obligation [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term obligations | 15,327 | 3,815 |
Term Loan Credit Agreement [Member] | Senior Secured Term Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term obligations | $ 720,743 | $ 791,135 |
Current and Long-Term Obligat_4
Current and Long-Term Obligations - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Sep. 30, 2019 | Apr. 25, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 640,000 | |||
Long-term debt and capital lease obligations | $ 1,577,596 | $ 1,635,279 | ||
New Mexico facility [Member] | Finance lease obligation [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations | $ 12,035 | |||
Asset Based Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 640,000 | 540,000 | ||
Debt instrument maturity date | Aug. 31, 2023 | |||
Letters Of Credit, Maximum Outstanding | $ 50,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Summary of Revenue from Contracts with Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 540,231 | $ 553,046 | $ 1,617,238 | $ 1,621,881 |
Retail Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 371,353 | 377,886 | 1,176,866 | 1,158,441 |
Wholesale Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 168,878 | 175,160 | 440,372 | 463,440 |
Global E-commerce [Member] | Retail Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 36,823 | 34,221 | 103,995 | 102,083 |
Other retail Segment Store [Member] | Retail Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,834 | 5,104 | 6,524 | 5,104 |
Domestic [Member] | Wholesale Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 82,670 | 88,287 | 231,257 | 247,243 |
International [Member] | Wholesale Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 86,208 | 86,873 | 209,115 | 216,197 |
North America [Member] | Party City Stores [Member] | Retail Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 326,810 | 336,355 | 1,060,258 | 1,043,422 |
Net Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 538,345 | 550,840 | 1,611,149 | 1,614,049 |
Net Sales [Member] | Retail Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 369,467 | 375,680 | 1,170,777 | 1,150,609 |
Royalties and Franchise Fees [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,886 | 2,206 | 6,089 | 7,832 |
Royalties and Franchise Fees [Member] | Retail Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,886 | $ 2,206 | $ 6,089 | $ 7,832 |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 34,572 | $ 58,909 | $ 48,097 | $ 54,291 |
Prepaid Expenses and Other Current Assets [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 5 | $ 310 | $ 177 | $ 117 |
Leases - Future Cash flows for
Leases - Future Cash flows for the Company's operating leases (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Three months ended December 31, 2019 | $ 35,386 |
2020 | 197,177 |
2021 | 182,950 |
2022 | 163,685 |
2023 | 135,792 |
Thereafter | 480,287 |
Total Undiscounted Cash Flows | 1,195,277 |
Less: Interest | (307,417) |
Total Operating Lease Liability | 887,860 |
Less: Current Portion of Operating Lease Liability | (140,781) |
Long-Term Portion of Operating Lease Liability | $ 747,079 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 56,366 | $ 153,813 |
Variable lease cost | 6,530 | 23,716 |
Operating lease liabilities | 49,947 | 165,398 |
Right of use assets in exchange for operating lease liabilities | $ 30,257 | $ 187,124 |
Weighted average remaining lease term | 8 years | 8 years |
Weighted average discount rate | 6.80% | 6.80% |
Subsequent Event - Additional i
Subsequent Event - Additional information (Detail) $ in Thousands | Nov. 04, 2019USD ($) |
Subsequent Event [Member] | European Based Online Retailer [Member] | |
Consideration for acquistion | $ 9,000 |