1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), the world’s leading
florist and gift shop, today reported results for its fiscal 2013
fourth quarter and full year. For the year, total revenue from
continuing operations increased 4.0 percent to $735.5 million,
compared with $707.5 million in fiscal 2012. Gross profit margin
from continuing operations for the year increased 10 basis points
to 41.5 percent, compared with 41.4 percent in the prior year.
Operating expense ratio for the year improved 50 basis points to
38.0 percent of total net sales, compared with 38.5 percent in the
prior year. As a result of these factors, Adjusted EBITDA for the
year, which excludes stock-based compensation expense and a pre-tax
gain of $3.8 million in fiscal 2012 related to the sale of 17
Fannie May company-owned stores, increased $4.5 million, or 10.2
percent, to $48.9 million, compared with $44.3 million in the prior
year. Adjusted Net Income from continuing operations for the year
increased 43.9 percent to $15.7 million, or $0.24 per fully-diluted
share, compared with $10.9 million, or $0.16 per fully-diluted
share, in the prior year.
Revenues from continuing operations for the Company’s fourth
quarter grew approximately 1.4 percent on a comparable, non-GAAP
basis (adjusted for the shift of the Easter holiday which fell in
the Company’s third quarter during fiscal 2013 compared with fiscal
2012 when it fell in the Company’s fourth quarter). On a reported
basis, fourth quarter revenues declined 2.5 percent to $173.0
million compared with $177.3 million in the prior year period.
Gross margin for the quarter was 41.0 percent, compared with
41.6 percent in the prior year period. Operating expense ratio for
the quarter was 40.7 percent of total net sales, compared with 40.1
percent in the prior year period. As a result of these factors,
which reflect the impact of the aforementioned Easter shift, for
the fourth quarter EBITDA, excluding stock-based compensation
expense, was $6.3 million, compared with $8.6 million in the prior
year period and net income from continuing operations was $538,000,
or $0.01 per fully-diluted share, compared with $1.7 million, or
$0.03 per fully-diluted share, in the prior year period.
During the fourth quarter, the Company made the strategic
decision to divest its Winetasting.com business to focus on growth
opportunities in its Gourmet Foods and Gift Baskets business
segment. The Company anticipates completing the divestiture of the
Winetasting.com business in fiscal 2014. Therefore, it is
classified as a discontinued operation for all periods
presented.
Results from discontinued operations for the year were a loss of
$3.4 million, or ($0.05) per share, including a loss of $1.5
million, or ($0.02) per share, related to the anticipated loss on
divestiture of the business compared with a gain of $4.5 million,
or $0.07 per share in the prior year. The prior year’s income from
discontinued operations of $4.3 million reflects a gain of $4.5
million resulting from the September, 2011 sale of the Company’s
winery services business. For the fourth quarter, results from
discontinued operations were a loss of $2.3 million, or ($0.04) per
share including the aforementioned loss of $1.5 million, or ($0.02)
per share, related to the anticipated loss on divestiture of the
Winetasting.com business, compared with income of $100,000 or $0.00
per share in the prior year period.
Consolidated net income for the year was $12.3 million, or $0.19
per share, compared with net income of $17.6 million, or $0.27 per
share in the prior year. For the quarter, net loss including
discontinued operations was $1.7 million, or ($0.03) per share,
compared with net income of $1.8 million, or $0.03 per share in the
prior year period.
Jim McCann, CEO of 1-800-FLOWERS.COM, said, “The solid top and
bottom line results we achieved in fiscal 2013 reflect a
continuation of the positive trends that we have seen in our
business for the past several years. This has been driven primarily
by the strong performance of our 1-800-FLOWERS.COM consumer floral
business along with contributions from our BloomNet wire service
and strong ecommerce growth in our Gourmet Foods and Gift Baskets
category. Importantly, we achieved these results despite an uneven
consumer economy, illustrating the effectiveness of our strategy to
focus on those aspects of our business where we can exert control
and drive consistent, incremental improvements. These include our
innovative Social and Mobile marketing programs and enhanced
merchandising efforts featuring truly original product designs.
These efforts contributed to continued year-over-year revenue
growth while improving both our operating expense ratio and gross
profit margins.”
McCann also noted that, during the fourth quarter, the Company
paid off the final $18 million on its term debt and finished fiscal
2013 with a debt-free balance sheet. Also during the quarter, the
Company closed on a new, cost efficient bank credit facility.
“Combined with our growing cash flows, this provides us with
significant flexibility to grow our business in fiscal 2014 and
over the long term,” he said.
Category Results:
The Company provides selected financial results for its business
categories in the tables attached to this release and as
follows:
- Consumer
Floral: full year revenues grew $13.3 million, or 3.4
percent to $411.5 million and fourth quarter revenues grew $1.9
million or 1.5 percent to $125.9 million, compared with $398.2
million and $124.0 million in the respective prior year periods.
Gross profit margin increased 90 basis points to 39.8 percent for
the year and 130 basis points to 40.5 percent for the fourth
quarter, compared with 38.9 percent and 39.2 percent in the
respective prior year periods. The significant improvement in gross
profit margin reflects benefits from enhanced product mix,
logistics and reduced promotional marketing programs. Reflecting
the higher revenues, gross margin and enhanced marketing
efficiencies, category contribution margin increased 20.6 percent
to $47.2 million for the year and 31.6 percent to $16.1 million for
the fourth quarter, compared with $39.1 million and $12.2 million
in the respective prior year periods.
- BloomNet Wire
Service: full year revenues were $81.8 million, down 0.9
percent and fourth quarter revenues were $20.5 million, down 5.7
percent compared with $82.6 million and $21.7 million in the
respective prior year periods. In addition to the impact of the
aforementioned shift of the Easter holiday on the fourth quarter,
the decline in revenues for the quarter and the year were primarily
related to a reduction in lower margin shop-to-shop orders and
wholesale product sales, somewhat offset by growth in high margin
services, including web marketing, directory advertising and the
florist selection guide. As a result of these factors, gross profit
margin increased 400 basis points for both the year and the
quarter, to 50.9 percent and 52.2 percent, respectively, compared
with 46.9 percent and 48.2 percent in the respective prior year
periods. Reflecting the higher gross margins and effective
operating cost controls, category contribution margin increased
14.6 percent to $25.6 million for the year and 6.2 percent to $6.8
million for the fourth quarter, compared with $22.3 million and
$6.4 million in the respective prior year periods.
- Gourmet Food and
Gift Baskets: full year revenues increased 6.7 percent to
$243.2 million while fourth quarter revenues declined 15.7 percent
to $26.7 million reflecting the shift of the Easter holiday,
compared with $228.0 million and $31.7 million in the respective
prior year periods. Revenue growth for the year was driven
primarily by strong ecommerce performance by the Company’s Cheryl’s
and The Popcorn Factory brands combined with renewed growth in
wholesale gift baskets, somewhat offset by lower wholesale volumes
in its Fannie May Fine Chocolates brand. Gross profit margin was
40.6 percent for the year and 32.9 percent for the fourth quarter,
compared with 43.1 percent and 45.6 percent in the respective prior
year periods. Gross profit margin for the fourth quarter was
impacted by product mix associated with the aforementioned shift of
the Easter holiday as well as operational issues at the Company’s
Fannie May production and distribution facilities. Gross margin for
the year was impacted by the aforementioned operational issues as
well as product mix, particularly higher growth in wholesale gift
baskets. Category contribution margin was $20.3 million for the
year, compared with $26.4 million (excluding a one-time gain of
$3.8 million from the sale of 17 Fannie May company-owned stores in
fiscal 2012) and a loss of $6.6 million in the fourth quarter,
compared with $760,000 in the prior year period. While fourth
quarter category contribution margin loss reflected the
aforementioned shift of the Easter holiday, both the quarter and
the full year results were impacted by costs associated with the
aforementioned Fannie May operational issues and subsequent
investments in initiatives addressing those issues as well as costs
associated with the introduction of the new Fannie May Berries
line.
Customer Metrics
In terms of its key customer metrics from continuing operations,
approximately 4.9 million e-commerce customers placed orders during
fiscal 2013, of which 52.3 percent were repeat customers. During
the year, the Company attracted approximately 2.3 million new
customers. For the fiscal fourth quarter, the Company said
approximately 1.6 million e-commerce customers placed orders, with
repeat customers representing 60.2 percent of the total. During the
quarter, the Company attracted approximately 650,000 new e-commerce
customers.
Company Guidance:
For fiscal 2014, the Company said it expects to achieve revenue
growth across all three of its business segments with consolidated
revenue growth for the year anticipated to be in the
mid-single-digit range. The Company expects to grow EBITDA and EPS
at rates in excess of expected revenue growth reflecting
anticipated continued improvements in gross profit margin and
operating leverage. The Company also anticipates generating Free
Cash Flow for the year of approximately $20 million.
McCann said, “In fiscal 2014, we expect to continue the growth
trends that we have seen over the past several years. We will also
continue to invest in key strategic areas that can provide
long-term growth such as our Social and Mobile initiatives, our
FruitBouquets.com and Cheryl’s Cookie Cards lines, and our programs
to accelerate BloomNet’s market penetration. While we remain
cognizant of the uncertainty in the global economy, we believe the
efforts we have underway will help us deepen our relationship with
our customers, helping them deliver smiles, and build shareholder
value.”
Definitions:
* EBITDA: Net income (loss) before interest, taxes,
depreciation, amortization. Free Cash Flow: net cash provided by
operating activities less capital expenditures. Category
contribution margin: earnings before interest, taxes, depreciation
and amortization, before the allocation of corporate overhead
expenses The Company presents EBITDA, Adjusted EBITDA from
continuing operations and Free Cash Flow because it considers such
information meaningful supplemental measures of its performance and
believes such information is frequently used by the investment
community in the evaluation of similarly situated companies. The
Company also uses EBITDA and Adjusted EBITDA as factors used to
determine the total amount of incentive compensation available to
be awarded to executive officers and other employees. The Company’s
credit agreement uses EBITDA and Adjusted EBITDA to measure
compliance with covenants such as interest coverage and debt
incurrence. EBITDA and Adjusted EBITDA are also used by the Company
to evaluate and price potential acquisition candidates. EBITDA,
Adjusted EBITDA and Free Cash Flow have limitations as analytical
tools and should not be considered in isolation or as a substitute
for analysis of the Company's results as reported under GAAP. Some
of the limitations of EBITDA and Adjusted EBITDA are: (a) EBITDA
and Adjusted EBITDA do not reflect changes in, or cash requirements
for, the Company's working capital needs; (b) EBITDA and Adjusted
EBITDA do not reflect the significant interest expense, or the cash
requirements necessary to service interest or principal payments,
on the Company's debts; and (c) although depreciation and
amortization are non-cash charges, the assets being depreciated and
amortized may have to be replaced in the future and EBITDA does not
reflect any cash requirements for such capital expenditures. EBITDA
and Free Cash Flow should only be used on a supplemental basis
combined with GAAP results when evaluating the Company's
performance.
About 1-800-FLOWERS.COM, Inc.
1-800-FLOWERS.COM, Inc. is the world’s leading florist and gift
shop. For more than 35 years, 1-800-FLOWERS® (1-800-356-9377 or
www.1800flowers.com) has been helping deliver smiles for our
customers with gifts for every occasion, including fresh flowers
and the finest selection of plants, gift baskets, gourmet foods,
confections, candles, balloons and plush stuffed animals. As
always, our 100% Smile Guarantee backs every gift.
1-800-FLOWERS.COM has been honored in Internet Retailer’s “Hot 500
Guide” for 2013. The 1-800-FLOWERS.COM mobile commerce site was
recognized with a Gold Award in the Ecommerce/Shopping category of
the 2012 Horizon Interactive Awards. 1-800-FLOWERS.COM was also
rated number one vs. competitors for customer service by
STELLAService in 2011 and named by the E-Tailing Group as one of
only nine online retailers out of 100 benchmarked to meet the
criteria for Excellence in Online Customer Service in 2011. The
Company’s BloomNet® international floral wire service
(www.mybloomnet.net) provides a broad range of quality products and
value-added services designed to help professional florists grow
their businesses profitably. The 1-800-FLOWERS.COM “Gift Shop” also
includes gourmet gifts such as popcorn and specialty treats from:
The Popcorn Factory® (1-800-541-2676 or www.thepopcornfactory.com);
cookies and baked gifts from Cheryl’s® (1-800-443-8124 or
www.cheryls.com); premium chocolates and confections from Fannie
May® confections brands (www.fanniemay.com and
www.harrylondon.com); gift baskets and towers from
1-800-Baskets.com® (www.1800baskets.com); incredible, carved fresh
fruit arrangements from FruitBouquets.com (www.fruitbouquets.com);
wine gifts from Winetasting.com® (www.winetasting.com); top quality
steaks and chops from Stock Yards® (www.stockyards.com); as well as
premium branded customizable invitations and personal stationery
from FineStationery.com® (www.finestationery.com). The Company’s
Celebrations® brand (www.celebrations.com) is a premier online
destination for fabulous party ideas and planning tips.
1-800-FLOWERS.COM, Inc. is involved in a broad range of corporate
social responsibility initiatives including continuous expansion
and enhancement of its environmentally-friendly “green” programs as
well as various philanthropic and charitable efforts. Shares in
1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select
Market, ticker symbol: FLWS.
Special Note Regarding Forward-Looking
Statements:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements represent the Company’s
current expectations or beliefs concerning future events and can
generally be identified by the use of statements that include words
such as “estimate,” “expects,” “project,” “believe,” “anticipate,”
“intend,” “plan,” “foresee,” “likely,” “will,” “target” or similar
words or phrases. These forward-looking statements are subject to
risks, uncertainties and other factors, many of which are outside
of the Company’s control, which could cause actual results to
differ materially from the results expressed or implied in the
forward- looking statements, including, but are not limited to,
statements regarding the Company’s expectations for: continued
market penetration in its BloomNet wire service business, its
ability to build on positive trends including increases in revenue,
gross margin and contribution margin in its Consumer Floral
business; its ability to achieve top and bottom line growth in its
BloomNet and Gourmet Food and Gift Baskets categories; its ability
to achieve its guidance for consolidated revenue growth for the
full year in mid-single digit range along with higher
year-over-year increases in EBITDA and EPS, its ability to leverage
its operating platform and reduce operating expense ratio, its
ability to remediate operational issues and improve performance in
its Fannie May business, its ability to divest its Winetasting.com
business on a timely and cost effective basis, its ability to
manage the seasonality of its businesses; its ability to cost
effectively acquire and retain customers; the outcome of
contingencies, including legal proceedings in the normal course of
business; its ability to compete against existing and new
competitors; its ability to manage expenses associated with sales
and marketing and necessary general and administrative and
technology investments; its ability to reduce promotional
activities and achieve more efficient marketing programs; and
general consumer sentiment and economic conditions that may affect
levels of discretionary customer purchases of the Company’s
products. The Company undertakes no obligation to publicly update
any of the forward-looking statements, whether as a result of new
information, future events or otherwise, made in this release or in
any of its SEC filings except as may be otherwise stated by the
Company. For a more detailed description of these and other risk
factors, please refer to the Company’s SEC filings including the
Company’s Annual Reports on Form 10-K and its Quarterly Reports on
Form 10-Q. Consequently, you should not consider any such list to
be a complete set of all potential risks and uncertainties.
Conference Call:
The Company will conduct a conference call to discuss the above
details and attached financial results today, Thursday, August 29,
2013 at 11:00 a.m. (EDT). The call will be “web cast” live via the
Internet and can be accessed from the Investor Relations section of
the 1-800-FLOWERS.COM web site at www.1800flowersinc.com. A
recording of the call will be posted on the Investor Relations
section of the Company’s web site within two hours of the call’s
completion. A telephonic replay of the call can be accessed for 48
hours beginning at 2:00 p.m. EDT on the day of the call at:
1-855-859-2056 or 1-404-537-3406; Conference ID: 89359157.
Note: Attached tables are an integral part of this press
release without which the information presented in this press
release should be considered incomplete.
1-800-FLOWERS.COM, Inc. and
SubsidiariesCondensed Consolidated Balance Sheets(In
thousands)
June 30,2013
July 1,2012
Assets Current assets:
Cash and equivalents
$ 154 $ 28,854 Receivables, net 14,957 11,887 Inventories 55,756
53,933 Deferred tax assets 5,746 4,993
Prepaid and other
9,941
8,286
Current assets of discontinued
operations
6,095
5,153
Total current assets 92,649 113,106 Property, plant and
equipment, net 52,943 48,550 Goodwill 47,943 47,485 Other
intangibles, net 43,276 41,576 Deferred income taxes 2,127 2,824
Other assets
10,086
7,875
Non-current assets of discontinued
operations
1,049
797
Total assets $ 250,073 $ 262,213
Liabilities and
stockholders’ equity Current liabilities:
Accounts payable
$
26,235
$
17,619
Accrued expenses
45,044
48,811
Current maturities of long-term debt and
obligations under capital leases
-
15,756
Current liabilities of discontinued
operations
4,484
1,199
Total current liabilities 75,763 83,385 Long-term debt and
obligations under capital leases - 13,500 Other liabilities
5,039 3,580 Total liabilities 80,802 100,465
Total stockholders’ equity 169,271 161,748 Total
liabilities and stockholders’ equity $ 250,073 $ 262,213
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial
InformationConsolidated Statements of Operations(In
thousands, except for per share data)
Three Months Ended Year Ended
June 30,2013
July 1,2012
June 30,2013
July 1,2012
Net revenues: E-commerce (combined online and telephonic) $
139,489 $ 139,094 $ 538,466 $ 515,205 Other 33,474
38,246 197,031 192,312
Total net revenues 172,963 177,340 735,497 707,517
Cost of revenues 102,134 103,652
430,305 414,940 Gross profit 70,829
73,688 305,192 292,577 Operating expenses:
Marketing and sales
48,075 48,249 186,720 181,199 Technology and development 5,328
5,215 21,700 20,426 General and administrative 12,016 12,776 52,188
51,474 Depreciation and amortization 4,992
4,861 18,798 19,540 Total
operating expenses 70,411 71,101
279,406 272,639 Gain on sale of stores
- - - 3,789
Operating income 418 2,587 25,786 23,727 Interest
income (expense), net 32 (410 ) (991 )
(2,635 ) Income from continuing operations before
income taxes 450 2,177 24,795 21,092 Income tax expense (benefit)
from continuing operations (88 ) 453
9,073 7,771 Income from continuing operations
538 1,724 15,722 13,321 Loss from discontinued operations,
net of tax (749 ) (92 ) (1,889 ) (217 ) Gain (loss) on sale of
discontinued operations, net of tax (1,512 ) 200
(1,512 ) 4,542 Income (loss) from
discontinued operations (2,261 ) 108
(3,401 ) 4,325 Net income (loss) $ (1,723 ) $
1,832 $ 12,321 $ 17,646 Net income
(loss) per common share (basic) From continuing operations $ 0.01 $
0.03 $ 0.24 $ 0.21 From discontinued operations (0.04 )
0.00 (0.05 ) 0.07 Net income
(loss) per common share (basic) $ (0.03 ) $ 0.03 $ 0.19
$ 0.27 Net income (loss) per common share
(diluted)
From continuing operations $ 0.01 $ 0.03 $ 0.24 $ 0.20 From
discontinued operations (0.04 ) 0.00
(0.05 ) 0.07 Net income (loss) per common share
(diluted) $ (0.03 ) $ 0.03 $ 0.19 $ 0.27
Weighted average shares used in the calculation of net
income (loss) per common share Basic 63,891
64,741 64,369 64,697 Diluted
66,620 66,381 66,792
66,239
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial
InformationConsolidated Statements of Cash Flows(In
thousands)
Year Ended June 30,
2013
July 1,
2012
Operating activities Net income $ 12,321 $ 17,646
Reconciliation of net income to net cash provided by operations:
Operating activities of discontinued
operations
(179
)
1,435
Loss (gain) on sale of discontinued
operations
2,348
(8,683
)
Depreciation and amortization 18,799 19,539 Amortization of
deferred financing costs 420 457 Deferred income taxes (811 ) 7,790
Bad debt expense 1,085 869
Stock-based compensation
4,283
4,850
(Excess)/deficiency tax benefit from stock
based compensation
(739
)
123
Other non-cash items 483 42 Changes in operating items, excluding
the effects of acquisitions: Receivables (4,108 ) (2,135 )
Inventories (1,822 ) (3,919 ) Prepaid and other (1,654 ) (2,126 )
Accounts payable and accrued expenses 4,368 1,694 Other assets (612
) 1,646 Other liabilities 463 947
Net cash provided by operating activities 34,645
40,175
Investing activities Acquisitions, net of cash
acquired (3,700 ) (4,336 ) Proceeds from sale of business - 12,823
Capital expenditures (20,044 ) (17,180 ) Purchase of investments
(903 ) (3,945 ) Other, net 117 (119 ) Investing activities of
discontinued operations - (124 )
Net
cash used in investing activities (24,530 ) (12,881 )
Financing activities
Acquisition of treasury stock
(9,599
)
(3,277
)
Excess (deficiency) tax benefits from
stock based compensation
739
(123
)
Proceeds from exercise of employee stock options 535 - Proceeds
from bank borrowings 62,000 56,000
Repayment of notes payable and bank
borrowings
(91,250
)
(71,000
)
Debt issuance costs
(1,234
)
-
Repayment of capital leases (6 ) (1,482 )
Net cash used in financing activities (38,815 )
(19,882 ) Net change in cash and equivalents (28,700
) 7,412 Cash and equivalents: Beginning of period 28,854
21,442 End of period $ 154 $
28,854
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial InformationCategory
Information(in thousands)
Three Months Ended
Year Ended
June 30,2013
July 1,2012
% Change
June 30,2013
July 1,2012
% Change
Net revenues from continuing operations:
1-800-Flowers.com Consumer Floral $ 125,918 $ 124,017 1.5 % $
411,526 $ 398,184 3.4 % BloomNet Wire Service 20,502 21,745 -5.7 %
81,822 82,582 -0.9 % Gourmet Food & Gift Baskets 26,716 31,697
-15.7 % 243,225 228,002 6.7 % Corporate (*) 195 198 -1.5 % 789 773
2.1 % Intercompany eliminations (368 ) (317 ) -16.1 %
(1,865 ) (2,024 ) 7.9 %
Total net revenues from
continuing operations $ 172,963 $ 177,340 -2.5 %
$ 735,497 $ 707,517 4.0 %
Three Months Ended
Year Ended
June 30,2013
July 1,2012
% Change
June 30,2013
July 1,2012
% Change
Gross profit from continuing operations:
1-800-Flowers.com Consumer Floral $ 51,024 $ 48,634 4.9 % $ 163,725
$ 154,892 5.7 % 40.5 % 39.2 % 39.8 % 38.9 % BloomNet Wire
Service 10,700 10,483 2.1 % 41,674 38,737 7.6 % 52.2 % 48.2 % 50.9
% 46.9 % Gourmet Food & Gift Baskets 8,801 14,439 -39.0
% 98,839 98,381 0.5 % 32.9 % 45.6 % 40.6 % 43.1 %
Corporate (*)
304
132
130.3 %
953
566
68.4 %
155.9
%
66.7
%
120.8
%
73.2
%
Total gross profit from continuing operations $ 70,829
$ 73,688 -3.9 % $ 305,192 $ 292,576 4.3
%
41.0
%
41.6
%
41.5
%
41.4
%
Three Months Ended
Year Ended
June 30,2013
July 1,2012
% Change
June 30,2013
July 1,2012
% Change
Adjusted EBITDA from continuing operations:
Segment Contribution Margin from
continuingoperations (**)
1-800-Flowers.com Consumer Floral $ 16,120 $ 12,248 31.6 % $ 47,193
$ 39,147 20.6 % BloomNet Wire Service 6,814 6,414 6.2 % 25,611
22,339 14.6 % Gourmet Food & Gift Baskets (***) (6,581 )
760 -965.9 % 20,345 30,193
-32.6 % Segment Contribution Margin Subtotal 16,353 19,422
-15.8 % 93,149 91,679 1.6 % Corporate (*) (10,943 )
(11,974 ) 8.6 % (48,565 ) (48,412 ) -0.3 %
EBITDA
from continuing operations 5,410 7,448 -27.4 % 44,584 43,267
3.0 % Add: Stock-based compensation 886 1,114
-20.5 % 4,283 4,850 -11.7 %
EBITDA from continuing operations,
excludingstock-based compensation
6,296
8,562
-26.5
%
48,867
48,117
1.6
%
Less: Gain on sale of stores (***) - -
- - 3,789 -
Adjusted EBITDA from
continuing operations $ 6,296 $ 8,562 -26.5 % $
48,867 $ 44,328 10.2 %
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial InformationCategory
Information(in thousands)
Three Months Ended
Year Ended
June 30,2013
July 1,2012
June 30,2013
July 1,2012
Reconciliation of Net Income from
continuing operations to Adjusted EBITDAfrom continuing
operations, less stock-based compensation (**):
Net income from continuing operations $ 538 $ 1,724 $ 15,722 $
13,321 Add: Interest expense, net - 410 991 2,635 Depreciation and
amortization 4,992 4,861 18,798 19,540 Income tax expense - 453
9,073 7,771 Less: Income tax benefit 88 - - - Interest income, net
32 - - -
EBITDA 5,410 7,448
44,584 43,267 Add: Stock-based compensation 886 1,114
4,283 4,850
EBITDA , less stock-based
compensation 6,296 8,562 48,867 48,117 Less: Gain on sale of
stores (***) - - - 3,789
Adjusted
EBITDA from continuing operations $ 6,296 $ 8,562 $ 48,867 $
44,328 Three Months Ended
Year Ended
June 30,2013
July 1,2012
June 30,2013
July 1,2012
Reconciliation of Net Income and EPS
from continuing operations to AdjustedNet Income and EPS
from continuing operations:
Net income from continuing operations $ 538 $ 1,724 $ 15,722 $
13,321 Less: Gain on sale of stores, net of tax (***) -
- - 2,395
Adjusted Net Income from
continuing operations $ 538 $ 1,724 $ 15,722 $ 10,926
Net Income per common share from continuing operations
Basic $ 0.01 $ 0.03 $ 0.24 $ 0.21
Diluted $ 0.01 $
0.03 $ 0.24 $ 0.20
Adjusted Net Income per common share
from continuing operations Basic $ 0.01 $ 0.03 $ 0.24 $
0.17
Diluted $ 0.01 $ 0.03 $ 0.24 $ 0.16
Weighted average shares used in the
calculation of net income percommon share from continuing
operations
Basic 63,891 64,741 64,369 64,697 Diluted 66,620 66,381 66,792
66,239
(*)
Corporate expenses consist of the Company’s enterprise
shared service cost centers, and include, among other items,
Information Technology, Human Resources, Accounting and Finance,
Legal, Executive and Customer Service Center functions, as well as
Stock-Based Compensation. In order to leverage the Company’s
infrastructure, these functions are operated under a centralized
management platform, providing support services throughout the
organization. The costs of these functions, other than those of the
Customer Service Center, which are allocated directly to the above
categories based upon usage, are included within corporate expenses
as they are not directly allocable to a specific segment.
(**)
Performance is measured based on segment contribution margin or
segment Adjusted EBITDA, reflecting only the direct controllable
revenue and operating expenses of the segments. As such,
management’s measure of profitability for these segments does not
include the effect of corporate overhead, described above,
depreciation and amortization, other income (net), nor does it
include one-time charges. Management utilizes EBITDA, and adjusted
financial information, as a performance measurement tool because it
considers such information a meaningful supplemental measure of its
performance and believes it is frequently used by the investment
community in the evaluation of companies with comparable market
capitalization. The Company also uses EBITDA and adjusted financial
information as one of the factors used to determine the total
amount of bonuses available to be awarded to executive officers and
other employees. The Company’s credit agreement uses EBITDA and
adjusted financial information to measure compliance with covenants
such as interest coverage and debt incurrence. EBITDA and adjusted
financial information is also used by the Company to evaluate and
price potential acquisition candidates. EBITDA and adjusted
financial information have limitations as an analytical tool, and
should not be considered in isolation or as a substitute for
analysis of the Company's results as reported under GAAP. Some of
these limitations are: (a) EBITDA does not reflect changes in, or
cash requirements for, the Company's working capital needs; (b)
EBITDA does not reflect the significant interest expense, or the
cash requirements necessary to service interest or principal
payments, on the Company's debts; and (c) although depreciation and
amortization are non-cash charges, the assets being depreciated and
amortized may have to be replaced in the future, and EBITDA does
not reflect any cash requirements for such capital expenditures.
Because of these limitations, EBITDA should only be used on a
supplemental basis combined with GAAP results when evaluating the
Company's performance.
(***)
GFGB segment contribution margin during the year ended July 1, 2012
includes a $3.8 million gain on the sale ($2.4mm, net of tax) of 17
Fannie May stores, which are being operated as franchised locations
post-sale.
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1 800 Flowers Com (NASDAQ:FLWS)
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