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8 5 DISCLAIMER 8 Transaction Disclaimer This investor presentation - PowerPoint PPT Presentation

Feb 06, 2024 •433 likes •732 views

8 5 DISCLAIMER 8 Transaction Disclaimer This investor presentation (the Presentation) is being furnished to a limited number of parties who have expressed an inter ests in submitted proposals to acquire Party City Holdco Inc. (together with

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  2. DISCLAIMER 8 Transaction Disclaimer This investor presentation (the “Presentation”) is being furnished to a limited number of parties who have expressed an inter ests in submitted proposals to acquire Party City Holdco Inc. (together with its subsidiaries, the “Company”), each of whom has entered into a Confidentiality Agreement to protect this an d other confidential information relating to the Company (the “Confidentiality Agreement”). This Presentation is being provided solely in connection with the review of strategic alternatives for the Company to assist the recipient in deciding whether to proceed with further analysis and not for any other purpose. This Presentation is not, and shall not be construed as, an offering of securities or an invitation for the purchase or sale of securities. By accepting this Presentation, the recipient agrees to be bound by the terms of the Confidentiality Agreement, including the obligation to keep strictly confidential the information contained herein or made available in connection with any further investigation or analysis of the Company and not to use such information for any purpose other than the evaluation of 5 the possible acquisition of the Company. The recipient should familiarize himself with the Confidentiality Agreement before reading, circulating or using this Presentation. You hereby acknowledge and agree that you are aware that the U.S. securities laws prohibit any person who has material non-public information concerning the matters which are the subject of this Presentation from purchasing or selling securities of the Company, or from communicating such material non-public information to any other person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities. This Presentation may not be distributed, reproduced, summarized or distributed to any other party without the prior written consent of the Company or as otherwise provided in the Confidentiality Agreement. The Company does not make any express or implied representations or warranties as to the accuracy or completeness of the information contained in this Presentation or any other oral or written information made available to any interested party or its advisors in connection with any further investigation or analysis of the Company. In furnishing this Presentation, the Company does not undertake any obligation to provide the recipient with access to any additional information. Forward Looking Statements Disclaimer Some of the statements in this presentation are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. The Company generally identifies forward-looking statements in this presentation using words li ke “believe,” “intend,” “target,” “expect,” “estimate,” “may,” “should,” “plan,” “project,” “contemplate,” “anticipate,” “predict” or similar expressions. You can also identify forw ard-looking statements by discussions of strategy, plans or intentions. These forward- looking statements are based on the Company’s expectations, assumptions, estimates and projections abo ut its business and the industry in which it operates as of the date of this presentation. These statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and uncertainties include: our ability to compete effectively in a competitive industry; fluctuations in commodity prices; our ability to appropriately respond to changing merchandise trends and consumer preferences; successful implementation of our store growth strategy; decreases in our Halloween sales; disruption to the transportation system or increases in transportation costs; product recalls or product liability; economic slowdown affecting consumer spending and general economic conditions; loss or actions of third party vendors and loss of the right to use licensed material; disruptions at our manufacturing facilities; and the additional risks and uncertainties set forth in “Risk Factors” in the Company’s latest Form 10 -K and in subsequent reports filed with or furnished to the Securities and Exchange Commission. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future events, outlook, guidance, results, actions, levels of activity, performance or achievements. You are cautioned not to place undue reliance on these forward-looking statements. Except as may be required by any applicable laws, the Company assumes no obligation to publicly update or revise such forward-looking statements, which are made as of the date hereof or the earlier date specified herein, whether as a result of new information, future developments or otherwise. 2

  3. AGENDA 8 Agenda Our Growth 5 Our Business 1 2 3 Our Company and Platform Model and the Strength of our Financial Results Model 3

  4. OUR COMPANY AND THE STRENGTH OF OUR MODEL

  5. COMPANY OVERVIEW World’s largest designer, manufacturer and distributor of consumer party products….. 8 Design Manufacturing / Sourcing Distribution Almost 80% of what we sell through >45,000 SKUs sold into 100+ ~200 person design team allows us our retail business is either sourced countries and in over 40,000 retail to introduce over 8,000 new or manufactured through our outlets, including our own stores products each year wholesale business 5 …that also owns the world’s largest retailer of party goods #1 party goods retailer in North America with nationwide footprint of over 930 locations, including ~140 franchise locations #1 party goods global e-commerce platform 5

  6. CONSUMER PRODUCTS CATEGORY LEADERSHIP 8 Party Consumer Goods Technology Athletic Cosmetics Mattresses Toys Consumer Products 5 (Consumer Products) #1 vs. #2 player (1) +4.0x ~1.2x ~1.6x ~2.5x ~1.2x ~1.0x Party Specialty Home Retail Pet Supplies Sporting Goods Improvement Mattresses Toys / Crafts Specialty Retail 1 Represents comparison of global sales of the #1 vs. #2 player 6 Source: Company filings and websites and Management estimates

  7. POWERED BY OUR VERTICAL MODEL A “Virtuous Circle of Strength” 8 Our vertical model and significant, global scale provide unique competitive advantages: / Enhanced profitability by capturing substantial portion of the manufacturing-to-retail margin on a significant portion of the products sold in our retail stores / Maintain greater control of every step from design and production through the sale of our products 5 across channels Increases speed to market Ensures best Cost competitive products and sourcing inventory Design and Enhanced control innovation capabilities of inflation pressures Rapid Enhance design response to changes capabilities via in consumer retail insights preferences 7

  8. DIVERSIFIED PROFIT SOURCES Our unique Vertical Model drives our industry leading profitability 8 Sales Mix EBITDA Mix (LTM EBITDA margin 17.4%) Metallic Balloons International 3% Third party 5 Consumer Consumer Products Products ~35% 10% Vertically- integrated ~40% Domestic Retail Consumer 52% Products 35% Retail - Non-vertical ~25% Note: Financials represent 2016, unless otherwise noted 8 1 Represents total net sales of each business unit, excluding the effects of intercompany eliminations to reflect stand-alone size and scale of each business Source: Company filings, management estimates

  9. VERTICALLY DRIVEN SALES AND PROFITS 8 Sales Mix 1 Operating Income Mix Metallic Balloons Retail- Non-Vertical International 3% 5 ~ 5% Consumer Products 10% Vertically - Third party integrated Consumer Products ~ 60% 35% ~ Domestic Retail Consumer 52% Products 35% 2016 sales of $3.2bn on an entity stand-alone Diversified profit sources driven by vertical model / / basis 1 ~95% of operating income generated by / 48% of sales generated by global consumer manufacturing, sourcing and global distribution / products business 2016 operating Income of $274mm / Note: Financials represent 2016, unless otherwise noted 9 1 Represents total net sales of each business unit, excluding the effects of intercompany eliminations to reflect stand-alone size and scale of each business Source: Company filings, management estimates

  10. OUR CONSUMER PRODUCTS BUSINESSES 8 / Over $1.2bn 1 in sales, ~50% to owned retail and e-commerce / Product sold in over 40,000 retail locations in 5 100+ countries / 60% U.S. / 40% International (3 rd Party Sales) / Deep assortment with over 45,000 SKUs across 5 product categories / 400+ party goods ensembles, which contain 5 to 50 design-coordinated items / Balanced, multi-channel customer base – no single customer represents more than 10% of third party sales at wholesale 1 Based on total wholesale sales including intercompany sales to retail operations. 10

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