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1-800-FLOWERS.COM, Inc. Reports Fiscal 2024 Second Quarter Results

Reports Revenues of $822.1 million and Net Income of $62.9 million, or $0.97 per share, which Includes a Non-Cash Impairment Charge of $19.8 million

Adjusted Net Income (1) was $82.7 million, or $1.27 per share

Gross Profit Margin Improves 230 basis points to 43.3%, Marking the Fifth Consecutive Quarter of Year-Over-Year Gross Profit Margin Expansion

Generates Adjusted EBITDA (1) of $130.1 million

Updates Fiscal 2024 Revenue Guidance

(1) Refer to "Definitions of Non-GAAP Financial Measures" and the tables attached at the end of this press release for reconciliation of non-GAAP results to applicable GAAP results.)

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JERICHO, N.Y., February 01, 2024--(BUSINESS WIRE)--1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS), a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships, today reported results for its fiscal 2024 second quarter ended December 31, 2023.

Fiscal 2024 Second Quarter Highlights

  • Total consolidated revenues decreased 8.4% to $822.1 million, compared with total consolidated revenues of $897.9 million in the prior year period. E-commerce revenue declined 6.6% to $738.4 million.

  • Gross profit margin increased 230 basis points to 43.3%, compared with 41.0% in the prior year period. The gross profit margin expansion was led by improvements across the Company’s three business segments, which benefited from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts.

  • Operating expenses increased $11.8 million from the prior year period, including a $19.8 million non-cash impairment charge in the Consumer Floral and Gifts segment related to the Personalization Mall trademark. Excluding the impact of this charge and the appreciation or depreciation of investments in the Company’s non-qualified compensation plan, operating expenses declined $10.8 million as compared with the prior year period to $242.0 million.

  • Net income for the quarter was $62.9 million, or $0.97 per diluted share, which includes a non-cash impairment charge of $19.8 million or $0.30 per diluted share. Adjusted Net Income1 was $82.7 million, or $1.27 per diluted share. In the prior year period, Net income was $82.5 million, or $1.27 per diluted share.

  • Adjusted EBITDA1 for the quarter was $130.1 million, as compared with Adjusted EBITDA1 of $131.4 million in the prior year period.

"Our second quarter earnings came in line with our expectations, as our gross profit margin recovery and expense optimization efforts helped offset a softer than anticipated consumer environment," said Jim McCann, Chairman and Chief Executive Officer of 1-800-FLOWERS.COM, Inc. "This was our fifth consecutive quarter of gross margin expansion, and we are well on our path to returning to our historical mean annual gross margin rate in the low 40s percent range. Our gross profit margin is benefiting from a reversion to the mean of certain commodity costs combined with our Work Smarter initiatives that are centered on operating more efficiently and provide a benefit to both our gross profit margin and operating expenses."

"We are maintaining our full year Adjusted EBITDA estimate, as our Work Smarter initiatives that are contributing to our gross profit margin and operating margin are expected to continue to mitigate a softer topline environment," continued Mr. McCann. "Our quarter-over-quarter sales trends continue to move in the right direction and our Relationship Innovation and Work Smarter initiatives are having a clear and direct impact on our business, which we expect to only be further buoyed as the broader consumer discretionary environment improves."

Segment Results

The Company provides Fiscal 2024 second quarter selected financial results for its Gourmet Foods and Gift Baskets, Consumer Floral and Gifts, and BloomNet segments in the tables attached to this release and as follows:

  • Gourmet Foods and Gift Baskets: Revenues for the quarter were $540.0 million, declining 8.2% compared with $588.4 million in the prior year period. Gross profit margin expanded 220 basis points to 43.2%, compared with 41.0% percent in the prior year period, benefiting from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts. Segment contribution margin1 declined by $5.4 million to $118.2 million, compared with segment contribution margin1 of $123.5 million in the prior year period, primarily due to the revenue decline.

  • Consumer Floral & Gifts: Revenues for the quarter were $254.8 million, declining 8.0% compared with $277.0 million in the prior year period. Gross profit margin expanded 230 basis points to 42.8%, compared with 40.5% percent in the prior year period, improving on lower freight and labor costs. Segment contribution margin1 excluding the impairment charge was $30.4 million, compared with segment contribution margin1 of $27.9 million in the prior year period.

  • BloomNet: Revenues for the quarter were $27.2 million, declining 17.1% compared with $32.9 million in the prior year period. Revenue was impacted by the lower order volume processed by BloomNet. Gross profit margin was 47.6%, compared with 42.2% in the prior year period, primarily reflecting product mix and lower freight costs. Segment contribution margin1 was $9.1 million, compared with $9.3 million in the prior year period.

Company Guidance

The Company is updating its Fiscal 2024 guidance to reduce its revenue outlook for the full year, while maintaining its Adjusted EBITDA and Free Cash Flow expectations, as the improvement in gross profit margin and the company’s expense optimization efforts are expected to mitigate the softer than anticipated revenue improvement.

As a result, the Company now expects Fiscal 2024:

  • total revenues on a percentage basis to decline in a range of 7% to 9%, as compared with the prior year;

  • Adjusted EBITDA1 to be in a range of $95 million to $100 million; and

  • Free Cash Flow1 to be in a range of $60 million to $65 million.

Conference Call

The Company will conduct a conference call to discuss the above details and attached financial results today, February 1, 2024, at 8:00 a.m. (ET). The conference call will be webcast from the Investors section of the Company’s website at www.1800flowersinc.com. A recording of the call will be posted on the Investors section of the Company’s website within two hours of the call’s completion. A telephonic replay of the call can be accessed beginning at 2:00 p.m. (ET) today through February 8, 2024, at: (US) 1-877-344-7529; (Canada) 855-669-9658; (International) 1-412-317-0088; enter conference ID #: 4402294.

Definitions of non-GAAP Financial Measures:

We sometimes use financial measures derived from consolidated financial information, but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). Certain of these are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. Non-GAAP financial measures referred to in this document are either labeled as "non-GAAP" or designated as such with a "1". See below for definitions and the reasons why we use these non-GAAP financial measures. Where applicable, see the Selected Financial Information below for reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, tax items, amortization or others that may arise during the year, and the Company’s management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The lack of such reconciling information should be considered when assessing the impact of such disclosures.

EBITDA and Adjusted EBITDA:

We define EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of stock-based compensation, Non-Qualified Plan Investment appreciation/depreciation, and for certain items affecting period-to-period comparability. See Selected Financial Information for details on how EBITDA and Adjusted EBITDA were calculated for each period presented. The Company presents EBITDA and Adjusted EBITDA 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 uses EBITDA and Adjusted EBITDA as factors 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 determine its interest rate and to measure compliance with certain covenants. EBITDA and Adjusted EBITDA are also used by the Company to evaluate and price potential acquisition candidates. EBITDA and Adjusted EBITDA 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 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 Adjusted EBITDA should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

Segment Contribution Margin and Adjusted Segment Contribution Margin

We define Segment Contribution Margin as earnings before interest, taxes, depreciation, and amortization, before the allocation of corporate overhead expenses. Adjusted Segment Contribution Margin is defined as Segment Contribution Margin adjusted for certain items affecting period-to-period comparability. See Selected Financial Information for details on how Segment Contribution Margin and Adjusted Segment Contribution Margin were calculated for each period presented. When viewed together with our GAAP results, we believe Segment Contribution Margin and Adjusted Segment Contribution Margin provide management and users of the financial statements meaningful information about the performance of our business segments. Segment Contribution Margin and Adjusted Segment Contribution Margin are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of Segment Contribution Margin and Adjusted Segment Contribution Margin is that they are an incomplete measure of profitability as they do not include all operating expenses or non-operating income and expenses. Management compensates for this limitation when using these measures by looking at other GAAP measures, such as Operating Income and Net Income.

Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share:

We define Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share as Net Income (Loss) and Net Income (Loss) Per Common Share adjusted for certain items affecting period-to-period comparability. See Selected Financial Information below for details on how Adjusted Net Income (Loss) Per Common Share and Adjusted or Comparable Net Income (Loss) Per Common Share were calculated for each period presented. We believe that Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share are meaningful measures because they increase the comparability of period-to-period results. Since these are not measures of performance calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, GAAP Net Income (Loss) and Net Income (Loss) Per Common share, as indicators of operating performance and they may not be comparable to similarly titled measures employed by other companies.

Free Cash Flow:

We define Free Cash Flow as net cash provided by operating activities less capital expenditures. The Company considers Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of fixed assets, which can then be used to, among other things, invest in the Company’s business, make strategic acquisitions, strengthen the balance sheet, and repurchase stock or retire debt. Free Cash Flow is a liquidity measure that is frequently used by the investment community in the evaluation of similarly situated companies. Since Free Cash Flow is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. A limitation of the utility of Free Cash Flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company's cash balance for the period.

About 1-800-FLOWERS.COM, Inc.

1-800-FLOWERS.COM, Inc. is a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships. The Company’s e-commerce business platform features an all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, PersonalizationMall.com®, Shari’s Berries®, FruitBouquets.com®, Things Remembered®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge across our portfolio of brands, 1-800-FLOWERS.COM, Inc. strives to deepen relationships with customers. The Company also operates BloomNet®, an international floral and gift industry service provider offering a broad-range of products and services designed to help members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; and Alice’s Table®, a lifestyle business offering fully digital floral, culinary and other experiences to guests across the country. 1-800-FLOWERS.COM, Inc. was recognized among the top 5 on the National Retail Federation’s 2021 Hot 25 Retailers list, which ranks the nation’s fastest-growing retail companies, and was named to the Fortune 1000 list in 2022. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS. For more information, visit 1800flowersinc.com or follow @1800FLOWERSInc on Twitter.

FLWS–COMP
FLWS-FN

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 using statements that include words such as "estimate," "expects," "project," "believe," "anticipate," "intend," "plan," "foresee," "forecast," "likely," "should," "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 not limited to, statements regarding the Company’s ability to achieve its guidance for the full Fiscal year; the Company’s ability to leverage its operating platform and reduce its operating expense ratio; its ability to successfully integrate acquired businesses and assets; its ability to successfully execute its strategic initiatives; 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 industry 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 because of new information, future events or otherwise, made in this release or in any of its SEC filings. Consequently, you should not consider any such list to be a complete set of all potential risks and uncertainties. For a more detailed description of these and other risk factors, 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.

Note: The following 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)

 

 

December 31, 2023

 

 

July 2, 2023

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

312,017

 

 

$

126,807

 

Trade receivables, net

 

 

46,578

 

 

 

20,419

 

Inventories

 

 

161,324

 

 

 

191,334

 

Prepaid and other

 

 

24,557

 

 

 

34,583

 

Total current assets

 

 

544,476

 

 

 

373,143

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

227,643

 

 

 

234,569

 

Operating lease right-of-use assets

 

 

117,825

 

 

 

124,715

 

Goodwill

 

 

153,577

 

 

 

153,376

 

Other intangibles, net

 

 

117,897

 

 

 

139,888

 

Other assets

 

 

30,292

 

 

 

25,739

 

Total assets

 

$

1,191,710

 

 

$

1,051,430

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

92,418

 

 

$

52,588

 

Accrued expenses

 

 

224,084

 

 

 

141,914

 

Current maturities of long-term debt

 

 

10,000

 

 

 

10,000

 

Current portion of long-term operating lease liabilities

 

 

15,433

 

 

 

15,759

 

Total current liabilities

 

 

341,935

 

 

 

220,261

 

 

 

 

 

 

 

 

 

Long-term debt, net

 

 

181,749

 

 

 

186,391

 

Long-term operating lease liabilities

 

 

110,740

 

 

 

117,330

 

Deferred tax liabilities, net

 

 

25,026

 

 

 

31,134

 

Other liabilities

 

 

28,900

 

 

 

24,471

 

Total liabilities

688,350

 

 

 

579,587

 

Total stockholders’ equity

 

 

503,360

 

 

 

471,843

 

Total liabilities and stockholders’ equity

 

$

1,191,710

 

 

$

1,051,430

 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information

Consolidated Statements of Operations

(in thousands, except for per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

December 31,
2023

 

 

January 1,
2023

 

 

December 31,
2023

 

 

January 1,
2023

 

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

E-Commerce

 

$

738,406

 

 

$

790,410

 

 

$

948,317

 

 

$

1,029,332

 

Other

 

 

83,648

 

 

 

107,467

 

 

 

142,787

 

 

 

172,149

 

Total net revenues

 

 

822,054

 

 

 

897,877

 

 

 

1,091,104

 

 

 

1,201,481

 

Cost of revenues

 

 

466,357

 

 

 

530,111

 

 

 

633,479

 

 

 

732,257

 

Gross profit

 

 

355,697

 

 

 

367,766

 

 

 

457,625

 

 

 

469,224

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing and sales

 

 

188,557

 

 

 

194,466

 

 

 

271,075

 

 

 

283,605

 

Technology and development

 

 

14,822

 

 

 

14,952

 

 

 

30,126

 

 

 

29,692

 

General and administrative

 

 

27,154

 

 

 

28,908

 

 

 

55,643

 

 

 

55,153

 

Depreciation and amortization

 

 

14,152

 

 

 

14,315

 

 

 

27,346

 

 

 

27,009

 

Intangible impairment

 

 

19,762

 

 

 

-

 

 

 

19,762

 

 

 

-

 

Total operating expenses

 

 

264,447

 

 

 

252,641

 

 

 

403,952

 

 

 

395,459

 

Operating income

 

 

91,250

 

 

 

115,125

 

 

 

53,673

 

 

 

73,765

 

Interest expense, net

 

 

4,611

 

 

 

4,143

 

 

 

8,093

 

 

 

6,964

 

Other (income) expense, net

 

 

(2,736

)

 

 

148

 

 

 

(2,262

)

 

 

1,070

Income before income taxes

 

 

89,375

 

 

 

110,834

 

 

 

47,842

 

 

 

65,731

 

Income tax expense

 

 

26,468

 

 

 

28,304

 

 

 

16,177

 

 

 

16,893

 

Net income

 

$

62,907

 

 

$

82,530

 

 

$

31,665

 

 

$

48,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.97

 

 

$

1.28

 

 

$

0.49

 

 

$

0.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share

 

$

0.97

 

 

$

1.27

 

 

$

0.49

 

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in the calculation of net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

64,835

 

 

 

64,675

 

 

 

64,814

 

 

 

64,606

 

Diluted

 

 

65,177

 

 

 

64,835

 

 

 

65,155

 

 

 

64,820

 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

 

Six Months Ended

 

 

 

December 31, 2023

 

January 1, 2023

 

 

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

31,665

 

 

 

$

48,838

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Intangible impairment

 

 

19,762

 

 

 

 

-

 

 

Depreciation and amortization

 

 

27,346

 

 

 

 

27,009

 

 

Amortization of deferred financing costs

 

 

361

 

 

 

 

671

 

 

Deferred income taxes

 

 

(6,108

)

 

 

 

(846

)

 

Bad debt expense

 

 

225

 

 

 

 

2,407

 

 

Stock-based compensation

 

 

4,595

 

 

 

 

3,454

 

 

Other non-cash items

 

 

(385

)

 

 

 

(470

)

 

Changes in operating items:

 

 

 

 

 

 

 

 

Trade receivables

 

 

(26,384

)

 

 

 

(31,622

)

 

Inventories

 

 

29,808

 

 

 

 

46,506

 

 

Prepaid and other

 

 

6,640

 

 

 

 

7,550

 

 

Accounts payable and accrued expenses

 

 

125,404

 

 

 

 

89,050

 

 

Other assets and liabilities

 

 

(169

)

 

 

 

1,113

 

 

Net cash provided by operating activities

 

 

212,760

 

 

 

 

193,660

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(17,807

)

 

 

 

(23,849

)

 

Net cash used in investing activities

 

 

(17,807

)

 

 

 

(23,849

)

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Acquisition of treasury stock

 

 

(4,787

)

 

 

 

(1,175

)

 

Proceeds from exercise of employee stock options

 

 

44

 

 

 

 

-

 

 

Proceeds from bank borrowings

 

 

82,000

 

 

 

 

195,900

 

 

Repayment of bank borrowings

 

 

(87,000

)

 

 

 

(205,900

)

 

Debt issuance cost

 

 

-

 

 

 

 

(383

)

 

Net cash used in financing activities

 

 

(9,743

)

 

 

 

(11,558

)

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

185,210

 

 

 

 

158,253

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

Beginning of period

 

 

126,807

 

 

 

 

31,465

 

 

End of period

 

$

312,017

 

 

 

$

189,718

 

 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information – Category Information

(dollars in thousands)

(unaudited)

 

Three Months Ended

December
31, 2023

Intangible
Impairment

 

As
Adjusted
(non-
GAAP)
December
31, 2023

January
1, 2023

Things
Remembered
Transaction
Costs

 

As
Adjusted
(non-
GAAP)
January
1, 2023

%
Change

Net revenues:

 

 

 

Consumer Floral & Gifts

$

254,835

 

$

-

 

$

254,835

 

$

277,049

 

$

-

 

$

277,049

 

-8.0

%

BloomNet

 

27,236

 

 

 

27,236

 

 

32,852

 

 

 

32,852

 

-17.1

%

Gourmet Foods & Gift Baskets

 

539,963

 

 

 

539,963

 

 

588,431

 

 

 

588,431

 

-8.2

%

Corporate

 

279

 

 

 

279

 

 

72

 

 

 

72

 

287.5

%

Intercompany eliminations

 

(259

)

 

 

 

(259

)

 

(527

)

 

 

 

(527

)

50.9

%

Total net revenues

$

822,054

 

$

-

 

$

822,054

 

$

897,877

 

$

-

 

$

897,877

 

-8.4

%

 

 

 

Gross profit:

 

 

Consumer Floral & Gifts

$

109,176

 

 

$

109,176

 

$

112,274

 

 

$

112,274

 

-2.8

%

 

42.8

%

 

 

42.8

%

 

40.5

%

 

 

40.5

%

 

 

 

BloomNet

 

12,974

 

 

 

12,974

 

 

13,879

 

 

 

13,879

 

-6.5

%

 

47.6

%

 

 

47.6

%

 

42.2

%

 

 

42.2

%

 

 

 

Gourmet Foods & Gift Baskets

 

233,200

 

 

 

233,200

 

 

241,418

 

 

 

241,418

 

-3.4

%

 

43.2

%

 

 

43.2

%

 

41.0

%

 

 

41.0

%

 

 

 

Corporate

 

347

 

 

 

347

 

 

195

 

 

 

195

 

77.9

%

 

124.4

%

 

 

124.4

%

 

270.8

%

 

 

270.8

%

 

 

 

 

 

 

 

 

Total gross profit

$

355,697

 

$

-

 

$

355,697

 

$

367,766

 

$

-

 

$

367,766

 

-3.3

%

 

43.3

%

 

-

 

 

43.3

%

 

41.0

%

 

-

 

 

41.0

%

 

 

 

EBITDA (non-GAAP):

 

 

Segment Contribution Margin (non-GAAP) (a):

 

 

Consumer Floral & Gifts

$

10,593

 

$

19,762

 

$

30,355

 

$

27,886

 

$

-

 

$

27,886

 

8.9

%

BloomNet

 

9,088

 

 

 

9,088

 

 

9,348

 

 

 

9,348

 

-2.8

%

Gourmet Foods & Gift Baskets

 

118,153

 

 

 

 

118,153

 

 

123,503

 

 

 

 

123,503

 

-4.3

%

Segment Contribution Margin Subtotal

 

137,834

 

 

19,762

 

 

157,596

 

 

160,737

 

 

-

 

 

160,737

 

-2.0

%

Corporate (b)

 

(32,432

)

 

 

 

(32,432

)

 

(31,297

)

 

243

 

 

(31,054

)

-4.4

%

EBITDA (non-GAAP)

 

105,402

 

 

19,762

 

 

125,164

 

 

129,440

 

 

243

 

 

129,683

 

-3.5

%

Add: Stock-based compensation

 

2,231

 

 

 

2,231

 

 

1,899

 

 

 

1,899

 

17.5

%

Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation)

 

2,682

 

 

 

 

2,682

 

 

(196

)

 

 

 

(196

)

1468.4

%

Adjusted EBITDA (non-GAAP)

$

110,315

 

$

19,762

 

$

130,077

 

$

131,143

 

$

243

 

$

131,386

 

-1.0

%

 

 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information – Category Information

(dollars in thousands)

(unaudited)

 

Six Months Ended

December
31, 2023

Intangible
Impairment

 

As
Adjusted
(non-
GAAP)
December
31, 2023

January 1,
2023

Things
Remembered
Transaction
Costs

 

As
Adjusted
(non-
GAAP)
January 1,
2023

%
Change

Net revenues:

 

 

Consumer Floral & Gifts

$

397,029

 

$

-

 

$

397,029

 

$

439,229

 

$

-

 

$

439,229

 

-9.6

%

BloomNet

 

56,106

 

 

 

56,106

 

 

66,219

 

 

 

66,219

 

-15.3

%

Gourmet Foods & Gift Baskets

 

638,072

 

 

 

638,072

 

 

696,659

 

 

 

696,659

 

-8.4

%

Corporate

 

549

 

 

 

549

 

 

116

 

 

 

116

 

373.3

%

Intercompany eliminations

 

(652

)

 

 

 

(652

)

 

(742

)

 

 

 

(742

)

12.1

%

Total net revenues

$

1,091,104

 

$

-

 

$

1,091,104

 

$

1,201,481

 

$

-

 

$

1,201,481

 

-9.2

%

 

 

 

Gross profit:

 

 

Consumer Floral & Gifts

$

165,498

 

$

-

 

$

165,498

 

$

174,193

 

$

-

 

$

174,193

 

-5.0

%

 

41.7

%

 

 

41.7

%

 

39.7

%

 

 

39.7

%

 

 

 

BloomNet

 

27,472

 

 

 

27,472

 

 

28,366

 

 

 

28,366

 

-3.2

%

 

49.0

%

 

 

49.0

%

 

42.8

%

 

 

42.8

%

 

 

 

Gourmet Foods & Gift Baskets

 

264,107

 

 

 

264,107

 

 

266,531

 

 

 

266,531

 

-0.9

%

 

41.4

%

 

 

41.4

%

 

38.3

%

 

 

38.3

%

 

 

 

Corporate

 

548

 

 

 

548

 

 

134

 

 

 

134

 

309.0

%

 

99.8

%

 

 

99.8

%

 

115.5

%

 

 

115.5

%

 

 

 

 

 

 

 

 

Total gross profit

$

457,625

 

$

-

 

$

457,625

 

$

469,224

 

$

-

 

$

469,224

 

-2.5

%

 

41.9

%

 

-

 

 

41.9

%

 

39.1

%

 

-

 

 

39.1

%

 

 

 

EBITDA (non-GAAP):

 

 

Segment Contribution Margin (non-GAAP) (a):

 

 

Consumer Floral & Gifts

$

19,419

 

$

19,762

 

$

39,181

 

$

38,696

 

$

-

 

$

38,696

 

1.3

%

BloomNet

 

18,475

 

 

 

18,475

 

 

18,865

 

 

 

18,865

 

-2.1

%

Gourmet Foods & Gift Baskets

 

107,125

 

 

 

 

107,125

 

 

104,793

 

 

-

 

 

104,793

 

2.2

%

Segment Contribution Margin Subtotal

 

145,019

 

 

19,762

 

 

164,781

 

 

162,354

 

 

-

 

 

162,354

 

1.5

%

Corporate (b)

 

(64,000

)

 

 

 

(64,000

)

 

(61,580

)

 

243

 

 

(61,337

)

-4.3

%

EBITDA (non-GAAP)

 

81,019

 

 

19,762

 

 

100,781

 

 

100,774

 

 

243

 

 

101,017

 

-0.2

%

Add: Stock-based compensation

 

4,595

 

 

 

4,595

 

 

3,454

 

 

 

3,454

 

33.0

%

Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation)

 

2,178

 

 

 

2,178

 

 

(1,102

)

 

 

(1,102

)

297.6

%

Adjusted EBITDA (non-GAAP)

$

87,792

 

$

19,762

 

$

107,554

 

$

103,126

 

$

243

 

$

103,369

 

4.0

%

 

 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information

(in thousands)

(unaudited)

 

Reconciliation of net income to adjusted net income (non-GAAP):

Three Months Ended

Six Months Ended

December
31, 2023

January
1, 2023

December
31, 2023

January
1, 2023

 

Net income

$

62,907

$

82,530

 

$

31,665

$

48,838

 

Adjustments to reconcile net income to adjusted net income (non-GAAP)

Add: Transaction costs

 

-

 

243

 

 

-

 

243

 

Add: Intangible impairment

 

19,762

 

 

-

 

 

 

19,762

 

 

-

 

Deduct: Income tax effect on adjustments

 

-

 

(63

)

 

-

 

(63

)

Adjusted net income (non-GAAP)

$

82,669

$

82,710

 

$

51,427

$

49,018

 

 

Basic and diluted net income per common share

Basic

$

0.97

$

1.28

 

$

0.49

$

0.76

 

Diluted

$

0.97

$

1.27

 

$

0.49

$

0.75

 

 

 

Basic and diluted adjusted net income per common share (non-GAAP)

Basic

$

1.28

$

1.28

 

$

0.79

$

0.76

 

Diluted

$

1.27

$

1.28

 

$

0.79

$

0.76

 

 

Weighted average shares used in the calculation of basic and diluted net income and adjusted net income per common share

Basic

 

64,835

 

64,675

 

 

64,814

 

64,606

 

Diluted

 

65,177

 

64,835

 

 

65,155

 

64,820

 

 

1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information

(in thousands)

(unaudited)

 

Reconciliation of net income to adjusted EBITDA (non-GAAP):

Three Months Ended

Six Months Ended

December
31, 2023

January
1, 2023

December
31, 2023

January
1, 2023

 

Net income

$

62,907

$

82,530

 

$

31,665

$

48,838

 

Add: Interest expense and other, net

 

1,875

 

4,291

 

 

5,831

 

8,034

 

Add: Depreciation and amortization

 

14,152

 

14,315

 

 

27,346

 

27,009

 

Add: Income tax expense

 

26,468

 

28,304

 

 

16,177

 

16,893

 

EBITDA

 

105,402

 

129,440

 

 

81,019

 

100,774

 

Add: Stock-based compensation

 

2,231

 

1,899

 

 

4,595

 

3,454

 

Add: Compensation charge related to NQ Plan Investment Appreciation (Depreciation)

 

2,682

 

(196

)

 

2,178

 

(1,102

)

Add: Intangible Impairment

 

19,762

 

 

-

 

 

 

19,762

 

 

-

 

Add: Transaction costs

 

-

 

243

 

 

-

 

243

 

Adjusted EBITDA

$

130,077

$

131,386

 

$

107,554

$

103,369

 

(a) 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, both of which are non-GAAP measurements. 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), and other items that we do not consider indicative of our core operating performance.

 

(b) 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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240201472134/en/

Contacts

Investor Contact:
Andy Milevoj
(516) 237-4617
amilevoj@1800flowers.com

Media Contact:
Cherie Gallarello
cgallarello@1800flowers.com