1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), the leading gourmet food and floral gift provider for all occasions, today reported total net revenues from continuing operations increased $2.0 million to $234.2 million for its fiscal 2016 third quarter ended March 27, 2016, compared with total revenues from continuing operations of $232.2 million in the prior year period. The revenue increase was driven by the Company’s Gourmet Food and Gift Baskets segment. In addition, the Company’s Consumer Floral and BloomNet business segments performed ahead of expectations given the impact of the Sunday day-placement of the Valentine’s Day holiday.

Gross profit margin for the quarter increased 30 basis points to 41.3 percent, compared with 41.0 percent in the prior year period, while operating expenses improved 110 basis points to 46.9 percent of total net revenues compared with 48.0 percent in the prior year period. This reflected the Company’s focus on leveraging its business platform to achieve cost reductions, including increased benefits achieved through the effective integration of Harry & David.

EBITDA, excluding stock-based compensation, improved $2.8 million to a loss of $4.0 million, compared with a loss of $6.8 million in the prior year period. The EBITDA loss, excluding stock-based compensation, improved slightly compared with the prior year period’s Adjusted EBITDA* loss of $4.1 million. Net loss attributable to the Company improved $1.4 million to a loss of $9.1 million, or ($0.14) per share, compared with a loss of $10.5 million, or ($0.16) per share, in the prior year period. On an Adjusted* basis, the prior year period’s net loss was $8.5 million, or ($0.13) per share. The losses in the quarter reflect the seasonality of the Company’s Gourmet Food and Gift Baskets segment which records the majority of its sales and all of its profits in the Company’s fiscal second quarter which includes the calendar year-end holiday period. (*See tables attached to the end of this press release for reconciliation of all adjustments to applicable GAAP results).

Jim McCann, CEO of 1-800-FLOWERS.COM, said, “We are very pleased with the results of the quarter. Both our Consumer Floral and BloomNet segments achieved better than anticipated revenues and year-over-year increases in bottom-line contribution. In addition, our Gourmet Food and Gift Basket segment achieved solid revenue growth despite continued weak retail traffic impacting our Fannie May stores.

McCann also noted that several recent announcements illustrated the Company’s reputation as a leading innovator. “We remain laser focused enhancing our customers’ experience by leveraging technology to help them act on their thoughtfulness and deliver smiles. We were thrilled, earlier this month, when we were featured in the keynote address at Facebook’s annual “f8” developers’ conference as one of their first partners to deploy new “bot” technology to place gift orders from within the Facebook Messenger service. In addition, we announced today our partnership with Amazon where we will be one the first ecommerce companies to enable our customers to place orders via voice commands on Amazon’s Alexa platform. These relationships speak to the reach of our portfolio of great gifting brands and our willingness to embrace new innovations that help drive enhanced customer experience.”

During the fiscal third quarter, the Company attracted 821,000 new customers. Approximately 1.8 million customers placed orders during the quarter, of whom 55.3 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 enhance customer experience and solve for all of their celebratory and gifting 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 2016 third quarter, revenues in this segment were $113.2 million, a decrease of 3.0 percent, compared with $116.7 million in the prior year period reflecting the impact of the Sunday placement of the Valentine holiday partially offset by the shift of the Easter holiday into the quarter. On a comparable basis, revenues for the quarter in this segment were essentially flat, year-over-year, when adjusted for the sale of two small, non-core businesses that provided $3.4 million in revenue in the prior year period. Gross margin increased 140 basis points to 40.6 percent, compared with 39.2 percent in the prior year period. Gross margin benefited from enhanced sourcing and logistics as well as strong customer satisfaction metrics. These factors, combined with a continued focus on efficient marketing programs, resulted in a contribution margin increase of $1.2 million, or 9.5 percent, to $13.7 million, compared with $12.6 million in the prior year period.

    BloomNet Wire Service: Revenues for the quarter were $22.5 million, a decrease of 1.9 percent compared with $23.0 million in the prior year period reflecting the impact of the Sunday placement of the Valentine holiday somewhat offset by the shift of Easter into the quarter. Gross margin for the quarter increased 20 basis points to 55.0 percent, compared with 54.8 percent in the prior year period. This, combined with enhanced operating cost leverage, resulted in an increase of 6.3 percent in segment contribution margin to $7.8 million, compared with $7.3 million in the prior year period.
  • Gourmet Food and Gift Baskets: Revenues for the fiscal third quarter increased 6.6 percent to $99.1 million, compared with $93.0 million in the prior year period. Compared with adjusted prior year revenues that include $3.4 million related to the impact of the Fannie May warehouse fire on Thanksgiving Day 2014, the year-over-year increase was 2.9 percent. Gross margin for the quarter declined 120 basis points to 38.4 percent, compared with 39.6 percent in the prior year period, primarily reflecting continued weak retail traffic in the Company’s Fannie May stores. Segment contribution margin was a loss of $6.8 million, compared with a loss of $5.4 million in the prior year period. On an adjusted basis, including the impact of the aforementioned Fannie May fire, the prior year period segment contribution loss was $4.5 million. The increased segment contribution loss reflects a lower gross margin and higher marketing expenses in the period that were only partially offset by revenue growth.

Company Guidance:

Based on its results through the first nine months of fiscal 2016, the Company is reiterating its guidance for revenue growth and updating its guidance for bottom-line results as follows:

  • Consolidated revenue growth for the year in a range of four-to-five percent, compared with revenues of $1.12 billion reported for fiscal 2015.
  • EBITDA growth in a range of 5-to-7 percent and EPS growth of approximately 30 percent, compared with pro forma fiscal 2015 Adjusted EBITDA(1) of $80.5 million and pro forma fiscal 2015 Adjusted EPS(1) of $0.33 per diluted share, respectively.
  • The Company expects to achieve synergy cost savings of $20 million over three years related to its integration of the Harry & David business.
  • The Company reiterated its guidance for Free Cash Flow for the year of approximately $35 million.

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. (1)Pro forma fiscal 2015 EBITDA and EPS adjusts for seasonal losses associated with the Harry & David business in its fiscal 2015 first quarter which were not captured in the Company’s fiscal 2015 results due to the close of the acquisition on September 30, 2014. The Company presents EBITDA, Adjusted EBITDA from continuing operations, Comparable EBITDA and Comparable EPS 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 a leading provider of gourmet food and floral gifts for all occasions. For the past 40 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. The company’s Celebrations® suite of services including Celebrations Passport® Free Shipping/No Service Charge program, Celebrations Rewards® and Celebrations Reminderssm, are all designed to engage with customers and deepen relationships as a one-stop destination for all celebratory and gifting occasions. In 2016, 1-800-Flowers.com was awarded a Silver Stevie “e-Commerce Customer Service” Award, recognizing the company’s innovative use of online technologies and social media to service the needs of customers. In addition, 1-800-FLOWERS.COM, Inc. was recognized as one of Internet Retailer’s Top 300 B2B e-commerce companies and was also recently named in Internet Retailer’s 2016 Top Mobile 500 as one of the world’s leading mobile commerce sites. The company was included in Internet Retailer’s 2015 Top 500 for fast growing e-commerce companies. In 2015, 1-800-Flowers.com was named a winner of the “Best Companies to Work for in New York State” Award by The New York Society for Human Resource Management (NYS-SHRM). 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, Inc. “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); premium English muffins and other breakfast treats from Wolferman’s® (1-800-999-1910 or www.wolfermans.com); carved fresh fruit arrangements from FruitBouquets.com (www.fruitbouquets.com); and top quality steaks and chops from Stock Yards® (www.stockyards.com). 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,” “forecast,” “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: capturing integration operating synergy cost savings of $20 million over three years; its ability to offset rising input costs through rigorous cost management and synergy savings; its ability to leverage its consolidated customer database and new multi-brand website to attract and retain customers and help grow revenues; its ability to achieve its guidance for consolidated revenue growth for the full year in a range of four-to-five percent; its ability to achieve EBITDA growth in a range of 5-to-7 percent EPS growth in a range of 30-to-35 percent, compared with pro forma fiscal 2015 Adjusted EBITDA* of $80.5 million and pro forma fiscal 2015 Adjusted EPS* of $0.33 per fully diluted share and its ability to generate Free Cash Flow for the year in a range of $20-$30 million; its ability to leverage its operating platform and reduce operating expense ratio; 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, Tuesday, April 26, 2016, 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: 1-877-344-7529 (US); 1-855-6699658 (CA); 1-412-317-0088 (Int); Conference ID: 10083799.

Click here to subscribe to Mobile Alerts for 1-800-Flowers.

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 Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)

 
     

March 27,
2016
(unaudited)

   

June 28,
2015

 
Assets
Current assets:
Cash and cash equivalents $ 61,696 $ 27,940
Trade receivables, net 30,307 16,191
Insurance receivable - 2,979
Inventories 95,406 93,163
Prepaid and other   14,666   14,822
Total current assets $ 202,075 $ 155,095
 
Property, plant and equipment, net 165,553 170,100
Goodwill 76,956 77,097
Other intangibles, net 79,393 82,125
Other assets   12,593   12,656
Total assets $ 536,570 $ 497,073
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 33,091 $ 35,425
Accrued expenses 87,638 73,639
Current maturities of long-term debt   17,813   14,543
Total current liabilities 138,542 123,607
 
Long-term debt 103,313 117,563
Deferred tax liabilities 36,014 37,807
Other liabilities   9,515   7,840
Total liabilities   287,384   286,817
Total 1-800-FLOWERS.COM, Inc. stockholders' equity 249,186 208,449
Noncontrolling interest in subsidiary   -   1,807
Total equity   249,186   210,256
Total liabilities and equity $ 536,570 $ 497,073
 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information
Condensed Consolidated Statements of Operations
(In thousands, except for per share data)
(unaudited)

 
    Three Months Ended   Nine Months Ended

March 27,
2016

  

March 29,
2015

March 27,
2016

  

March 29,
2015

Net revenues:
E-commerce (combined online and telephonic) $ 179,413 $ 177,903 $ 696,371 $ 671,023
Other   54,794     54,334     242,258     222,192  
Total net revenues 234,207 232,237 938,629 893,215
Cost of revenues   137,486     136,915     521,816     504,155  
Gross profit 96,721 95,322 416,813 389,060
Operating expenses:
Marketing and sales 71,502 70,574 243,567 228,172
Technology and development 9,903 10,389 29,059 25,318
General and administrative 21,006 22,772 61,032 61,998
Depreciation and amortization   7,546     7,825     24,279     21,605  
Total operating expenses   109,957     111,560     357,937     337,093  
Operating income (loss) (13,236 ) (16,238 ) 58,876 51,967
Interest expense, net 1,239 1,513 5,292 4,322
Other (income) expense, net   145     118     (15,151 )   700  
Income (loss) before income taxes (14,620 ) (17,869 ) 68,735 46,945
Income tax expense (benefit)   (5,494 )   (7,056 )   21,813     16,796  
Net income (loss) $ (9,126 ) $ (10,813 ) $ 46,922   $ 30,149  
Less: Net loss attributable to noncontrolling interest   -     (318 )   (1,007 )   (877 )
Net income (loss) attributable to 1-800-FLOWERS.COM, Inc. $ (9,126 ) $ (10,495 ) $ 47,929   $ 31,026  
 
Basic net income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc. $ (0.14 ) $ (0.16 ) $ 0.74   $ 0.48  
 
Diluted net income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc. $ (0.14 ) $ (0.16 ) $ 0.71   $ 0.46  
 
Weighted average shares used in the calculation of net income (loss) per common share:
Basic   64,687     64,909     64,724     64,433  
Diluted   64,687     64,909     67,053     67,134  
 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)

 
    Nine months ended

March 27,
2016

  

March 29,
2015

 
Operating activities:
Net income $ 46,922 $ 30,149

Reconciliation of net income to net cash provided by operating activities, net
of acquisitions/dispositions:

Depreciation and amortization 24,279 21,605
Amortization of deferred financing costs 1,209 1,076
Deferred income taxes (1,793 ) (4,071 )
Foreign equity method investment impairment 1,728 -
Loss on sale/impairment of iFlorist 2,121 -
Non-cash impact of write-offs related to warehouse fire - 29,522
Acquisition transaction costs - 925
Bad debt expense 973 1,170
Stock-based compensation 4,831 4,405
Other non-cash items 299 748
Changes in operating items:
Trade receivables (15,090 ) (6,647 )
Insurance receivable 3,053 (1,477 )
Inventories (2,488 ) 37,448
Prepaid and other 156 7,489
Accounts payable and accrued expenses 10,453 14,967
Other assets (47 ) (1,026 )
Other liabilities   412     679  
Net cash provided by operating activities 77,018 136,962
 
Investing activities:
Acquisitions, net of cash acquired - (133,117 )
Capital expenditures, net of non-cash expenditures (20,022 ) (20,946 )
Other   -     642  
Net cash used in investing activities (20,022 ) (153,421 )
 
Financing activities:
Acquisition of treasury stock (12,958 ) (5,730 )
Proceeds from exercise of employee stock options 700 5,303
Proceeds from bank borrowings 178,000 239,500
Repayment of notes payable and bank borrowings (188,980 ) (169,567 )
Debt issuance costs - (5,642 )
Other   (2 )   113  
Net cash (used in) provided by financing activities (23,240 ) 63,977
   
Net change in cash and cash equivalents 33,756 47,518
Cash and cash equivalents:
Beginning of year   27,940     5,203  
End of year $ 61,696   $ 52,721  
 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information – Category Information
(in thousands)
(unaudited)

 

   

March 27, 2016

 

Reported March 29,
2015

 

Impact of
Warehouse Fire

 

Impact of Purchase
Accounting
Adjustment to
Deferred Revenue

 

Impact of Purchase
Accounting
Adjustment for
Inventory Fair
Value Step-Up

 

Impact of Harry &
David Integration
and Severance
Costs

 

As Adjusted
March 29, 2015

  % Change
           
Net revenues:
1-800-Flowers.com Consumer Floral $ 113,182 $ 116,705 $ - $ - $ - $ - $ 116,705 -3.0 %
BloomNet Wire Service 22,517 22,950 100 - - - 23,050 -2.3 %
Gourmet Food & Gift Baskets 99,096 92,951 3,338 - - - 96,289 2.9 %
Corporate 262 283 - - - - 283 -7.4 %
Intercompany eliminations   (850 )   (652 )     -       -     -     -     (652 ) 30.4 %
Total net revenues $ 234,207   $ 232,237     $ 3,438     $ -   $ -   $ -   $ 235,675   -0.6 %
 
Gross profit:
1-800-Flowers.com Consumer Floral $ 45,974 $ 45,716 $ - $ - $ - $ - $ 45,716 0.6 %
40.6 % 39.2 % - - - - 39.2 %
 
BloomNet Wire Service 12,390 12,574 20 - - - 12,594 -1.6 %
55.0 % 54.8 % - - - - 54.6 %
 
Gourmet Food & Gift Baskets 38,043 36,846 888 - - - 37,734 0.8 %
38.4 % 39.6 % - - - - 39.2 %
 
Corporate (a) 314 186 - - - - 186 68.8 %
119.8 % 65.7 % - - - - 65.7 %
                       
Total gross profit $ 96,721   $ 95,322     $ 908     $ -   $ -   $ -   $ 96,230   0.5 %
  41.3 %   41.0 %     26.4 %     -     -     -     40.8 %
 
Category Contribution Margin:
1-800-Flowers.com Consumer Floral $ 13,748 $ 12,557 $ - $ - $ - $ - $ 12,557 9.5 %
BloomNet Wire Service 7,747 7,290 20 - - - 7,310 6.0 %
Gourmet Food & Gift Baskets   (6,753 )   (5,413 )     955       -     -     -     (4,458 ) -51.5 %
Category Contribution Margin Subtotal 14,742 14,434 975 - - - 15,409 -4.3 %
Corporate (a) (20,432 ) (22,847 ) - - - 1,730 (21,117 ) 3.2 %
                       
EBITDA $ (5,690 ) $ (8,413 ) $ 975 $ - $ - $ 1,730 $ (5,708 ) 0.3 %
 
Add: Stock-based compensation 1,650 1,623 - - - - 1,623 -1.7 %
                       
EBITDA, excluding stock-based compensation $ (4,040 ) $ (6,790 )   $ 975     $ -   $ -   $ 1,730   $ (4,085 ) 1.1 %
 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information – Category Information
(in thousands) (unaudited)

 
 

Reported
March 27,
2016

 

Impact of
Harry & David
Integration
Costs

 

As Adjusted
March 27, 2016

 

Reported
March 29,
2015

 

Impact of
Warehouse Fire

 

Impact of
Purchase
Accounting
Adjustment
to Deferred
Revenue

 

Impact of
Purchase
Accounting
Adjustment
for Inventory
Fair Value
Step-Up

 

Impact of
Harry &
David
Acquisition
Costs

 

Impact of
Harry &
David
Integration
and
Severance
Costs

 

Impact of
Annualization
of
Acquisition
of Harry &
David

 

As Adjusted
March 29,
2015

  % Change
                     
Net revenues:
1-800-Flowers.com Consumer Floral $ 280,956 $ - $ 280,956 $ 290,703 $ - $ - $ - $ - $ - $ - $ 290,703 -3.4 %
BloomNet Wire Service 63,740 63,740 63,071 350 - - - - - 63,421 0.5 %
Gourmet Food & Gift Baskets 595,006 595,006 539,979 16,934 1,621 - - - 29,393 587,927 1.2 %
Corporate 817 817 795 - - - - - - 795 2.8 %
Intercompany eliminations   (1,890 )         (1,890 )   (1,333 )     -       -     -     -     -     -       (1,333 ) 41.8 %
Total net revenues $ 938,629     $ -   $ 938,629   $ 893,215     $ 17,284     $ 1,621   $ -   $ -   $ -   $ 29,393     $ 941,513   -0.3 %
 
Gross profit:
1-800-Flowers.com Consumer Floral $ 112,961 $ - $ 112,961 $ 113,027 $ - $ - $ - $ - $ - $ - $ 113,027 -0.1 %
40.2 % 40.2 % 38.9 % - - - - - - 38.9 %
 
BloomNet Wire Service 35,360 35,360 34,725 70 - - - - - 34,795 1.6 %
55.5 % 55.5 % 55.1 % - - - - - - 54.9 %
 
Gourmet Food & Gift Baskets 267,650 267,650 240,645 6,745 1,621 4,760 - - 12,701 266,472 0.4 %
45.0 % 45.0 % 44.6 % - - - - - - 45.3 %
 
Corporate (a) 842 842 663 - - - - - - 663 27.0 %
103.1 % 103.1 % 83.4 % - - - - - - 83.4 %
                                       
Total gross profit $ 416,813     $ -   $ 416,813   $ 389,060     $ 6,815     $ 1,621   $ 4,760   $ -   $ -   $ 12,701     $ 414,957   0.4 %
  44.4 %     -     44.4 %   43.6 %     39.4 %     -     -     -         -       44.1 %
 
Category Contribution Margin:
1-800-Flowers.com Consumer Floral $ 33,031 $ - $ 33,031 $ 29,334 $ - $ - $ - $ - $ - $ - $ 29,334 12.6 %
BloomNet Wire Service 22,017 22,017 20,455 70 - - - - - 20,525 7.3 %
Gourmet Food & Gift Baskets   88,626           88,626     82,607       6,486       1,621     4,760     -     -     (7,441 )     88,033   0.7 %
Category Contribution Margin Subtotal 143,674 - 143,674 132,396 6,556 1,621 4,760 - (7,441 ) 137,892 4.2 %
Corporate (*) (60,519 ) 828 (59,691 ) (58,824 ) - - - 4,062 2,135 (7,397 ) (60,024 ) -0.6 %
                                       
EBITDA $ 83,155 $ 828 $ 83,983 $ 73,572 $ 6,556 $ 1,621 $ 4,760 $ 4,062 $ 2,135 $ (14,838 ) $ 77,868 7.9 %
 
Add: Stock-based compensation 4,831 4,831 4,405 - - - - - 4,405 -9.7 %
                                       
EBITDA, excluding stock-based compensation $ 87,986     $ 828   $ 88,814   $ 77,977     $ 6,556     $ 621   $ 4,760   $ 4,062   $ 2,135   $ (14,838 )   $ 82,273   8.0 %
 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information
(in thousands)
(unaudited)

 
    Three Months Ended   Nine Months Ended

Reconciliation of net income (loss) to adjusted net income (loss) attributable to
1-800-FLOWERS.COM, Inc.:

 March 27, 2016   March 29, 2015 March 27, 2016   March 29, 2015
 
Net income (loss) $ (9,126 ) $ (10,813 ) $ 46,922 $ 30,149
Less: Net loss attributable to noncontrolling interest   -     (318 )   (1,007 )   (877 )
Income (loss) attributable to 1-800-FLOWERS.COM, Inc. (9,126 ) (10,495 ) 47,929 31,026
Add back: Annualization of net loss attributable to Harry & David (b) (11,668 )
Add back: Loss on sale/impairment of iFlorist 1,169
Add back: Impairment of foreign equity method investment, net of tax 1,089
Add back: Harry & David integration costs, net of tax 1,236 522 1,385
Add back: Harry & David acquisition costs, net of tax 77 2,636
Add back: Harry & David Purchase accounting adjustment to deferred revenue, net of tax 1,052

Add back: Harry & David Purchase accounting adjustment for inventory fair value
step-up, net of tax

3,088
Add back: Impact of warehouse fire, net of tax 726 4,253
Deduct: Gain from insurance recovery on warehouse fire, net of tax       (12,361 )  
Adjusted income (loss) attributable to 1-800-FLOWERS.COM, Inc. $ (9,126 ) $ (8,456 ) $ 38,348   $ 31,772  
 
Income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc.
Basic $ (0.14 ) $ (0.16 ) $ 0.74   $ 0.48  
Diluted $ (0.14 ) $ (0.16 ) $ 0.71   $ 0.46  
 

Adjusted net income (loss) per common share attributable to
1-800-FLOWERS.COM, Inc.

Basic $ (0.14 ) $ (0.13 ) $ 0.59   $ 0.49  
Diluted $ (0.14 ) $ (0.13 ) $ 0.57   $ 0.47  
 

Weighted average shares used in the calculation of net income (loss) and adjusted
net income (loss) per common share attributable to 1-800-FLOWERS.COM, Inc.

Basic   64,678     64,909     64,724     64,433  
Diluted   64,678     64,909     67,053     67,134  
 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information
(in thousands)
(unaudited)

 
    Three Months Ended   Nine Months Ended

Reconciliation of net income (loss) attributable to 1-800-Flowers.com, Inc. to
Adjusted EBITDA, excluding stock-based compensation(a):

 March 27, 2016   March 29, 2015 March 27, 2016   March 29, 2015
 
Income (loss) attributable to 1-800-FLOWERS.COM, Inc. $ (9,126 ) $ (10,495 ) $ 47,929 $ 31,026
Add:
Interest expense and other, net 1,384 1,631 5,903 5,022
Depreciation and amortization 7,546 7,825 24,279 21,605
Income tax expense 21,813 16,796
Loss on sale/impairment of iFlorist 2,121
Impairment of foreign equity method investment 1,728
Less:
Net loss attributable to noncontrolling interest 318 1,007 877
Income tax benefit 5,494 7,056
Gain from insurance recovery on warehouse fire       19,611  
EBITDA (5,690 ) (8,413 ) 83,155 73,572
Add: Stock-based compensation   1,650     1,623     4,831   4,405  
EBITDA, excluding stock-based compensation (4,040 ) (6,790 ) 87,986 77,977
Add: Impact of warehouse fire 975 6,556
Add: Purchase accounting adjustment to deferred revenue 1,621
Add: Purchase accounting adjustment for inventory fair value step-up 4,760
Add: Acquisition costs 4,062
Add: Integration & severance costs 1,730 828 2,135
Add: EBITDA attributable to Harry & David ( pre-acquisition: three months ended 9/28/14b )         (14,838 )
Adjusted EBITDA, excluding stock-based compensation $ (4,040 ) $ (4,085 ) $ 88,814 $ 82,273  
 
(a)   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.
 
(b) In order to present comparable information, the financial information for the three and nine months ended March 27, 2016 is being presented on a pro-forma basis to give effect to the Harry & David acquisition as if it had been completed on June 30, 2014. This pro-forma information has been prepared by management for informational purposes only, and is not necessarily indicative of or intended to represent the results that would have been achieved had the acquisition been consummated as of this date. The operating results of Harry & David for the three months ended September 27, 2015 do not reflect any operating efficiencies and/or cost savings that the Company may have achieved with respect to the combined companies, but have been adjusted to give effect to non-recurring items that are directly attributable to the acquisition.