- Revenues grew 29.3 percent to $232.2
million, primarily reflecting contributions from Harry & David,
which the Company acquired in September 2014.
- Adjusted EBITDA*, excluding stock-based
compensation, was a loss of $4.1 million, reflecting the
seasonality of Harry & David. Excluding Harry & David,
Adjusted EBITDA increased 95.3 percent to $6.5 million.
- Adjusted EPS* was a loss of $0.13 per
share, reflecting the Harry & David seasonality. Excluding
Harry & David, Adjusted EPS increased $0.03 per share to $0.01
per diluted share.
- Company raises its guidance for Fiscal
2015 Adjusted EBITDA and Adjusted EPS.
(*Adjusted EBITDA, Adjusted EPS and Adjusted Net Loss exclude
one-time costs associated with the integration of Harry & David
and the impact of the Fannie May warehouse fire.)
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), the world’s leading
florist and gift shop, today reported revenues from continuing
operations grew 29.3 percent to $232.2 million for its fiscal 2015
third quarter, ended March 29, 2015, compared with revenues from
continuing operations of $179.6 million in the prior year period.
The Company said the increase in revenues primarily reflected
contributions from Harry & David which the Company acquired on
September 30, 2014. Total revenues also grew, excluding Harry &
David, reflecting solid growth in the Company’s Gourmet Food and
Gift Baskets and BloomNet segments, somewhat offset by modestly
lower revenues in the Company’s Consumer Floral segment due to the
Saturday placement of the Valentine holiday.
Gross profit margin for the third quarter was 41.0 percent,
consistent with the prior year period. Operating expense ratio was
48.0 percent, up 540 basis points, compared with 42.6 percent in
the prior year period, primarily reflecting increased operating
expenses associated with Harry & David.
Adjusted EBITDA for the quarter, excluding stock-based
compensation, was a loss of $4.1 million, compared with $3.3
million in the prior year period, reflecting the seasonal losses
associated with Harry & David. Excluding Harry & David,
Adjusted EBITDA, excluding stock-based compensation, increased 95.3
percent to $6.5 million, reflecting contributions from the
Company’s Gourmet Foods and Gift Baskets segment and continued
strong year-over-year performance in its Consumer Floral segment.
Adjusted Net Loss* from continuing operations attributable to the
Company was $8.5 million, or ($0.13) per share, compared with a net
loss of $1.4 million, or ($0.02) per share in the prior year
period. Excluding Harry & David, Adjusted Net Income*
attributable to the Company and Adjusted EPS from continuing
operations was $342,000 and $0.01 per diluted share,
respectively.
Reported EBITDA loss, excluding stock-based compensation, was
$6.8 million, compared with $3.3 million in the prior year period.
Reported net loss from continuing operations attributable to the
Company was $10.5 million, or ($0.16) per share, compared with a
net loss of $1.4 million, or ($0.02) per share in the prior year
period.
Jim McCann, CEO of 1-800-FLOWERS.COM, said, “During the fiscal
third quarter, we saw solid performance across all of our business
segments while facing a number of headwinds, most notably the
significant seasonality of the Harry & David business, the
Saturday placement of the Valentine holiday and the lingering
impacts of the Thanksgiving Day fire on our Fannie May Fine
Chocolates business. Regarding Harry & David, during the third
quarter, while the business generated an anticipated loss, we were
pleased to see year-over-year improvements in both top and
bottom-line results. As we continue our integration of Harry &
David, we plan to build on this by leveraging our business
platform, our growing family of gift brands and the millions of
customers we serve across all of our business channels.” McCann
noted that, excluding Harry & David, the Company’s Gourmet
Foods and Gift Baskets segment achieved strong top and bottom-line
growth during the quarter.
McCann also noted that the Company’s was pleased with the
performance of its consumer floral business. “Valentine’s Day is
always challenging because of its varying day placement and
unpredictable winter weather. With that said, we achieved
year-over-year growth in our gross profit margin and bottom-line
contribution as we were able to largely mitigate the modestly lower
order volumes related to the Saturday placement. We believe these
results reflect the strength of the 1-800-FLOWERS.COM brand and the
expansion of our leadership position in the floral gifting
space.”
During the fiscal third quarter, the Company attracted 815,000
new customers. Approximately 1.9 million customers placed orders
during the quarter, of whom 56.4 percent were repeat customers.
This reflects the Company’s successful efforts to engage with its
customers with truly original product designs and relevant
marketing programs designed to deepen its relationships as their
trusted Florist and Gift Shop for all of their celebratory
occasions.
The Company provides selected financial results for its Consumer
Floral, BloomNet wire service and Gourmet Foods and Gift Baskets
business segments in the tables attached to this release and as
follows:
SEGMENT RESULTS FROM CONTINUING
OPERATIONS:
- 1-800-FLOWERS.COM
Consumer Floral: During the fiscal 2015 third quarter,
revenues in this segment were $116.7 million, down 4.5 percent,
compared with $122.3 million in the prior year period reflecting
the Saturday placement of the Valentine holiday during the quarter.
Gross margin increased 30 basis points to 39.2 percent, compared
with 38.9 percent in the prior year period. Gross margin benefited
from enhanced sourcing and logistics as well as strong customer
service metrics. Combined with efficient marketing programs, these
factors resulted in a contribution margin increase of 12.5 percent
to $12.6 million, compared with $11.2 million in the prior year
period.
- BloomNet Wire
Service: Revenues for the quarter were $23.0 million, up 1.7
percent compared with $22.6 million in the prior year period. Gross
margin for the quarter increased 150 basis points to 54.8 percent,
compared with 53.3 percent in the prior year period, reflecting
revenue mix, which included growth in sales of higher-margin
services, such as web-marketing and directory advertising programs
as well as pricing initiatives. As a result of these factors,
segment contribution margin increased to $7.3 million, compared
with $7.1 million in the prior year period.
- Gourmet Food and
Gift Baskets: Revenues for the fiscal third quarter were
$93.0 million, compared with $35.3 million in the prior year
period. The significant increase primarily reflects the
contributions from Harry & David. Excluding Harry & David,
revenues grew at a double-digit pace, primarily reflecting benefits
from the Easter holiday day placement early in the Company’s fourth
quarter which resulted in some sales being captured at the end of
its fiscal third quarter. Gross margin for the quarter increased 90
basis points to 39.6 percent, compared with 38.7 percent in the
prior year period. Segment contribution margin was a loss of $5.4
million, compared with a loss of $3.2 million in the prior year
period, primarily reflecting the seasonality of the Harry &
David business. Excluding Harry & David’s contribution loss of
$4.9 million, and adjusting for the impact of the Fannie May
warehouse fire on Thanksgiving Day, 2014, segment contribution
margin increased to $400,000.
Company Guidance:
The Company’s guidance for fiscal 2015 includes contributions
from the addition of the Harry & David business, which it
acquired on September 30, 2014.
- Regarding total net revenues for fiscal
2015, the Company continues to anticipate generating revenues from
continuing operations in excess of $1.1 billion.
- In terms of bottom-line results, based
on its results through the first nine months of fiscal 2015, the
Company is raising its guidance for Adjusted EBITDA, excluding
stock-based compensation, which it now anticipates will exceed $90
million for the full fiscal year, and for Adjusted EPS, which it
now anticipates will exceed the high end of its previous guidance
range of $0.45-to-$0.50 per diluted share.
The Company noted that its fiscal 2015 guidance for top and
bottom-line results does not include Harry & David’s results
for the fiscal first quarter of the year which is typically their
lowest in terms of revenues and includes a substantial bottom-line
loss.
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 38 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 was named a winner of
the 2015 “Best Companies to Work for in New York State” award by
The New York Society for Human Resource Management (NYS-SHRM).
1-800-FLOWERS.COM was awarded the 2014 Silver Stevie Award,
recognizing the organization's outstanding Customer Service and
commitment to our 100% Smile Guarantee®.
1-800-FLOWERS.COM received a Gold Award for Best User
Experience on a Mobile Optimized Site for
the 2013 Horizon Interactive Awards. 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 premium, gift-quality fruits and other gourmet
items from Harry & David® (1-877-322-1200 or
www.harryanddavid.com), 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®
(www.fanniemay.com and www.harrylondon.com); gift
baskets and towers from 1-800-Baskets.com®
(www.1800baskets.com); carved fresh fruit arrangements from
FruitBouquets.com (www.fruitbouquets.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 source for
creative party ideas, must-read articles, online invitations and
e-cards, all created to help people celebrate holidays and the
everyday. 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," 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, among others: the Company's ability
to achieve its reiterated guidance for revenue and its raised
guidance for Adjusted EBITDA and Adjusted EPS for fiscal year 2015;
its ability to manage the significantly increased seasonality of
its business; 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 manage
expenses associated with sales and marketing and necessary general
and administrative and technology investments 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, and a
list of definitions of non-GAAP terms, including EBITDA and Free
Cash Flow, among others, 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
results for its fiscal 2015 third quarter today, Tuesday, April 28,
2015 at 11:00 am 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, Inc. website at www.1800flowersinc.com. A
recording of the call will be posted on the Investor Relations
section of the Company's website within two hours of the live
call's completion. A telephonic replay of the call can be accessed
for 48 hours beginning at 2:00 pm EDT on the day of the call at
1-855-859-2056 or 1-404-537-3406 (international); enter conference
ID: 27458954.
Note: The following 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)
March 29,2015
June 29,2014
Assets (unaudited) Current assets: Cash and cash
equivalents $52,721 $5,203 Receivables, net 31,493 13,339 Insurance
receivable 1,477 - Inventories 82,350 58,520 Deferred tax assets
6,898 5,156 Prepaid and other 14,953 9,600 Total current assets
189,892 91,818 Property, plant and equipment, net 152,081
60,147 Goodwill 99,690 60,166 Other intangibles, net 58,489 44,616
Deferred tax assets - 2,002 Other assets 13,005 8,820 Total assets
$513,157 $267,569
Liabilities and Stockholders'
Equity Current liabilities: Accounts payable $33,245 $24,447
Accrued expenses 94,546 49,517 Current maturities of long-term debt
14,509 343 Total current liabilities 142,300 74,307
Long-term debt 121,125 - Deferred tax liabilities 21,204 649 Other
liabilities 8,542 6,495 Total liabilities 293,171 81,451 Total
1-800-FLOWERS.COM, Inc. stockholders' equity 217,944 183,199
Noncontrolling interest in subsidiary 2,042 2,919 Total equity
219,986 186,118 Total liabilities and equity $513,157 $267,569
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial InformationCondensed
Consolidated Statements of Income(Unaudited, in thousands,
except for per share data)
Three Months Ended
Nine Months Ended
March 29,2015
March 30,2014
March 29,2015
March 30,2014
Net revenues: E-commerce (combined online and telephonic) $177,903
$139,918 $671,023 $400,893 Other 54,334 39,673 222,192 168,083
Total net revenues 232,237 179,591 893,215 568,976 Cost of revenues
136,915 106,048 504,155 333,159 Gross profit 95,322 73,543 389,060
235,817 Operating expenses: Marketing and sales 70,574 51,581
228,172 143,716 Technology and development 10,389 6,045 25,318
16,762 General and administrative 22,772 13,865 61,998 41,944
Depreciation and amortization 7,825 4,932 21,605 14,657 Total
operating expenses 111,560 76,423 337,093 217,079 Operating income
(loss) (16,238) (2,880) 51,967 18,738 Interest expense and other,
net 1,631 249 5,022 959 Income (loss) from continuing operations
before income taxes (17,869) (3,129) 46,945 17,779 Income tax
expense (benefit) from continuing operations (7,056) (1,391) 16,796
6,590 Income (loss) from continuing operations (10,813) (1,738)
30,149 11,189 Income from discontinued operations, net of tax - 13
- 434 Net income (loss) $(10,813) $(1,725) $30,149 $11,623 Less:
Net loss attributable to noncontrolling interest (318) (300) (877)
(341) Net income (loss) attributable to 1-800-FLOWERS.COM, Inc.
$(10,495) $(1,425) $31,026 $11,964
Basic net income (loss) per common share
attributable to 1-800-
FLOWERS.COM, Inc.
From continuing operations $(0.16) $(0.02) $0.48 $0.18 From
discontinued operations $- $0.00 $- $0.01 Basic net income per
common share $(0.16) $(0.02) $0.48 $0.19
Diluted net income (loss) per common share
attributable to 1-800-
FLOWERS.COM, Inc.
From continuing operations $(0.16) $(0.02) $0.46 $0.17 From
discontinued operations $- $0.00 $- $0.01 Diluted net income per
common share $(0.16) $(0.02) $0.46 $0.18 Weighted average
shares used in the calculation of net income per common share Basic
64,909 64,214 64,433 64,010 Diluted 64,909 64,214 67,134 66,429
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial InformationCondensed
Consolidated Statements of Cash Flows(Unaudited, in
thousands)
Nine Months Ended
March 29,2015
March 30,2014
Operating activities Net income $30,149 $11,623
Reconciliation of net income to net cash
provided by operating activities, net of
acquisitions:
Operating activities of discontinued operations - 869 Gain on sale
of discontinued operations - (815) Depreciation and amortization
21,605 14,657 Amortization of deferred financing costs 1,076 229
Deferred income taxes (4,071) (1,376) Non-cash impact of write-offs
related to warehouse fire 29,522 - Insurance proceeds for warehouse
fire related to property damage 30,000 - Acquisition transaction
costs 925 - Bad debt expense 1,170 1,027 Stock based compensation
4,405 3,491 Other non-cash items 748 433 Other non-cash items:
Receivables (36,647) (5,492) Insurance receivable (1,477) -
Inventories 37,448 (5,585) Prepaid and other 7,489 4,162 Accounts
payable and accrued expenses 14,967 197 Other assets (1,026) (274)
Other liabilities 679 426
Net cash provided by operating
activities
136,962 23,572
Investing activities Acquisitions, net
of cash acquired (133,117) (1,385) Capital expenditures (20,946)
(14,458) Investing activities of discontinued operations - 500
Other 642 18
Net cash used in investing activities
(153,421) (15,325)
Financing activities Acquisition
of treasury stock (5,730) (7,423) Proceeds from exercise of
employee stock options 5,303 334 Proceeds from bank borrowings
239,500 120,000 Repayment of bank borrowings (169,567) (120,002)
Debt issuance costs (5,642) - Other 113 4
Net cash
provided by (used in) financing activities 63,977 (7,087)
Net change in cash and equivalents 47,518 1,160 Cash and
equivalents: Beginning of period 5,203 154 End of period $52,721
$1,314
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial Information - Segment
Information(Unaudited, in thousands)
Three Months Ended
March 29,2015
Impact
ofWarehouseFire
Impact ofAcquisition
Costs
Impact of Integration and
Severance Costs
AdjustedMarch
29,2015
March 30,2014
% Change Net revenues from continuing
operations:
1-800-Flowers.com Consumer Floral $116,705 $- $- $- $116,705
$122,256 -4.5% BloomNet Wire Service 22,950 100 - - 23,050 22,571
2.1% Gourmet Food & Gift Baskets 92,951 3,338 - - 96,289 35,330
172.5% Corporate 283 - - - 283 202 40.1% Intercompany eliminations
(652) - - - (652) (768) 15.1%
Total net revenues from continuing operations $232,237
$3,438 $- $- $235,675 $179,591
31.2%
Three Months Ended
March 29,2015
Impact
ofWarehouseFire
Impact ofAcquisition
Costs
Impact of Integration
andSeverance Costs
AdjustedMarch
29,2015
March 30,2014
% Change Gross profit from continuing
operations: 1-800-Flowers.com Consumer Floral $45,716 $- $- $-
$45,716 $47,565 -3.9% 39.2% - - - 39.2% 38.9% BloomNet Wire Service
12,574 20 - - 12,594 12,019 4.8% 54.8% - - - 54.6% 53.3% Gourmet
Food & Gift Baskets 36,846 888 - - 37,734 13,686 175.7% 39.6% -
- - 39.2% 38.7% Corporate (*) 186 - - - 186 273 -31.9% 65.7%
- - - 65.7% 135.1%
Total gross
profit from continuing operations $95,322 $908 $-
$- $96,230 $73,543 30.8% 41.0% 26.4%
0.0% 0.0% 40.8% 41.0%
Three Months Ended
EBITDA from continuing operations,
excluding
stock- based compensation
March 29,2015
Impact
ofWarehouseFire
Impact ofAcquisition
Costs
Impact of Integration and
Severance Costs
AdjustedMarch
29,2015
March 30,2014
% Change Category Contribution Margin from
continuing operations: 1-800-Flowers.com Consumer Floral
$12,557 $- $- $- $12,557 $11,165 12.5% BloomNet Wire Service 7,290
20 - - 7,310 7,079 3.3% Gourmet Food & Gift Baskets (5,413)
955 - - (4,458) (3,180) -40.2%
Category Contribution Margin Subtotal 14,434 975 - - 15,409 15,064
2.3% Corporate (*) (22,847) - - 1,730
(21,117) (13,012) -62.3%
EBITDA from continuing
operations $(8,413) $975 $- $1,730 $(5,708) $2,052 -378.2%
Add: Stock-based compensation 1,623 - -
- 1,623 1,279 26.9%
EBITDA from continuing
operations, excluding stock-based compensation $(6,790)
$975 $- $1,730 $(4,085) $3,331 -222.6%
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial Information - Segment
Information (continued)(Unaudited, in thousands)
Nine Months Ended
March 29,2015
Impact
ofWarehouseFire
Impact of PurchaseAccounting
Adjustment to Deferred Revenue
Impact of PurchaseAccounting
Adjustment for |Inventory Fair Value Step-Up
Impact ofAcquisition
Costs
Impact ofIntegration
andSeverance Costs
AdjustedMarch 29,
2015
March30, 2014
%Change
Net revenues from continuing operations:
1-800-Flowers.com
Consumer Floral $290,703 $- $- $- $- $- $290,703 $290,938 -0.1%
BloomNet Wire Service 63,071 350 - - - - 63,421 62,829 0.9% Gourmet
Food & Gift Baskets 539,979 16,934 1,621 - - - 558,534 216,193
158.3% Corporate 795 - - - - - 795 600 32.5% Intercompany
eliminations (1,333) - - - - -
(1,333) (1,584) 15.8%
Total net revenues from
continuing operations $893,215 $17,284 $1,621
$- $- $- $912,120 $568,976 60.3%
Nine Months Ended
March 29,2015
Impact
ofWarehouseFire
Impact of PurchaseAccounting
Adjustment toDeferred Revenue
Impact of Purchase Accounting
Adjustment for Inventory FairValue Step-Up
Impact ofAcquisition
Costs
Impact ofIntegration
andSeverance Costs
AdjustedMarch 29,
2015
March 30, 2014
%Change
Gross profit from continuing operations:
1-800-Flowers.com Consumer Floral $113,027 $- $- $- $- $- $113,027
$113,166 -0.1% 38.9% - - - - - 38.9% 38.9% BloomNet Wire Service
34,725 70 - - - - 34,795 33,566 3.7% 55.1% - - - - - 54.9% 53.4%
Gourmet Food & Gift Baskets 240,645 6,745 1,621 4,760 - -
253,771 88,328 187.3% 44.6% - - - - - 45.4% 40.9% Corporate (*) 663
- - - - - 663 757 -12.4% 83.4% - - - -
- 83.4% 126.2%
Total gross profit from
continuing operations $389,060 $6,815 $1,621
$4,760 $- $- $402,256 $235,817
70.6% 43.6% 39.4% 0.0% 0.0% 0.0%
0.0% 44.1% 41.4%
Nine Months Ended
EBITDA from continuing operations, excluding stock- based
compensation
March 29,2015
Impact
ofWarehouseFire
Impact of PurchaseAccounting
Adjustment toDeferred Revenue
Impact of PurchaseAccounting
Adjustment for Inventory Fair Value Step-Up
Impact of Acquisition
Costs
Impact ofIntegration
andSeverance Costs
AdjustedMarch
29,2015
March 30,2014
%Change
Category Contribution Margin from continuing operations:
1-800-Flowers.com Consumer Floral $29,334 $- $- $- $- $-
$29,334 $26,274 11.6% BloomNet Wire Service 20,455 70 - - - -
20,525 20,043 2.4% Gourmet Food & Gift Baskets 82,607
6,486 1,621 4,760 - - 95,474
25,817 269.8% Category Contribution Margin Subtotal 132,396
6,556 1,621 4,760 - - 145,333 72,134 101.5% Corporate (*) (58,824)
- - - 4,062 2,135 (52,627) (38,739) -35.9%
EBITDA from continuing operations
$73,572 $6,556 $1,621 $4,760 $4,062 $2,135 $92,706 $33,395 177.6%
Add: Stock-based compensation 4,405 - -
- - - 4,405 3,491 26.2%
EBITDA from
continuing operations, excluding stock-based compensation
$77,977 $6,556 $1,621 $4,760 $4,062
$2,135 $97,111 $36,886 163.3%
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial Information - Appendix A –
Reconciliations of Historical Information(Unaudited, in
thousands)
Three Months Ended Nine
Months Ended
Reconciliation of net income (loss)
from continuing operations to adjusted net
income (loss) from continuing
operations attributable to 1-800-
FLOWERS.COM, Inc.:
March 29,2015
March 30, 2014
March 29, 2015
March 30, 2014
Income (loss) from continuing operations $(10,813) $(1,738)
$30,149 $11,189 Less: Net loss attributable to noncontrolling
interest (318) (300) (877) (341)
Income (loss) from
continuing operations attributable to 1-800-FLOWERS.COM, Inc.
(10,495) (1,438) 31,026 11,530 Add: Impact of warehouse fire, net
of tax 726 - 4,253 - Add: Purchase accounting adjustment to
deferred revenue, net of tax - - 1,052 - Add: Purchase accounting
adjustment for inventory fair value step-up, net of tax - - 3,088 -
Add: Integration and severance costs, net of tax 1,236 - 1,385 -
Add: Acquisition costs, net of tax 77 - 2,636 -
Adjusted
income (loss) from continuing operations attributable to
1-800-FLOWERS.COM, Inc. $(8,456) $(1,438) $43,440 $11,530 Less:
Income (loss) attributable to Harry & David (8,798) -
29,707 -
Adjusted income (loss) from continuing
operations attributable to 1-800-
FLOWERS.COM, Inc., excluding income
(loss) attributable to Harry & David
$342 $(1,438) $13,733 $11,530
Income (loss)
per common share from continuing operations attributable to
1-800-FLOWERS.COM, Inc. Basic $(0.16) $(0.02) $0.48
$0.18 Diluted $(0.16) $(0.02) $0.46 $0.17
Adjusted
net income (loss) per common share from continuing operations
attributable to 1-800-FLOWERS.COM, Inc. Basic $(0.13)
$(0.02) $0.67 $0.18 Diluted $(0.13) $(0.02) $0.65 $0.17
Adjusted net income (loss) per common
share from continuing operations
attributable to 1-800-FLOWERS.COM, Inc.
, excluding income (loss)
attributable to Harry &
David
Basic $0.01 $(0.02) $0.21 $0.18 Diluted $0.01 $(0.02)
$0.20 $0.17
Weighted average shares used in the
calculation of net income (loss) and adjusted
net income (loss) per common share from
continuing operations attributable to
1-800-FLOWERS.COM, Inc.
Basic 64,909 64,214 64,433 64,010 Diluted 67,571
64,214 67,134 66,429
1-800-FLOWERS.COM, Inc. and
SubsidiariesSelected Financial Information -- Appendix A –
Reconciliations of Historical Information
(continued)(Unaudited, in thousands)
Three Months Ended
Nine Months Ended
Reconciliation of income (loss) from
continuing operations attributable to
1-800-Flowers.com, Inc. to Adjusted
EBITDA from Continuing Operations,
excluding stock-based compensation(**)
and EBITDA attributable to Harry & David:
March 29,2015
March 30, 2014
March 29, 2015
March 30, 2014
Income (loss) from continuing operations attributable to
1-800-FLOWERS.COM, Inc. $(10,495) $(1,438) $31,026 $11,530 Add:
Interest expense and other, net 1,631 249 5,022 959 Depreciation
and amortization 7,825 4,932 21,605 14,657 Income tax expense - -
16,796 6,590 Less: Net loss attributable to noncontrolling interest
318 300 877 341 Income tax benefit 7,056 1,391 - - EBITDA
from continuing operations (8,413) 2,052 73,572 33,395 Add:
Stock-based compensation 1,623 1,279 4,405 3,491
EBITDA
from continuing operations, excluding stock-based compensation
(6,790) 3,331 77,977 36,886 Add: Impact of warehouse fire
975 - 6,556 - Add: Purchase accounting adjustment to deferred
revenue, net of tax - - 1,621 - Add: Purchase accounting adjustment
for inventory fair value step-up - - 4,760 - Add: Acquisition costs
- - 4,062 - Add: Integration and severance costs 1,730 -
2,135 -
Adjusted EBITDA from continuing operations, excluding
stock-based compensation $(4,085) $3,331 $97,111 $36,886 Less:
EBITDA attributable to Harry & David (10,591) - 53,912 -
Adjusted EBITDA from continuing
operations, excluding stock-based
compensation and EBITDA attributable to
Harry & David
$6,506 $3,331 $43,199 $36,886 (*) 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 or gains. 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.
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1-800-FLOWERS.COM, Inc.Investors:Joseph D. Pititto,
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516-237-6028ywoodall@1800flowers.com
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