1-800-FLOWERS.COM Reports Record Revenue of $197.4 Million For its Fiscal 2003 Second Quarter, Representing Growth of 22 Percent; EPS Increased 400 Percent to $0.15 Per Share.Business Editors WESTBURY Westbury, residential village (1990 pop. 13,060), Nassau co., SE N.Y., on Long Island; settled 1650, inc. 1932. The State Univ. of New York's Westbury campus is located in the village. Harness races are held at Roosevelt Raceway there. , N.Y.--(BUSINESS WIRE)--Jan. 22, 2003 1-800-FLOWERS.COM (1) (Computer Output Microfilm) Creating microfilm or microfiche from the computer. A COM machine receives print-image output from the computer either online or via tape or disk and creates a film image of each page. (R), Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : FLWS FLWS Force Level Warfare Systems ): -- Combined online and telephonic revenue increased 23.2 percent to $189.7 million driven by online revenue growth of 25.2 percent to $75.8 million -- Gross profit margin increased 200 basis points to 45.6 percent -- Approximately 1.2 million new customers acquired; Repeat customers represented 46.9 percent of combined online and telephonic orders 1-800-FLOWERS.COM(R), Inc. (NASDAQ: FLWS), a leading multi-channel See multichannel. retailer of thoughtful gifts for all occasions, today reported record revenues of $197.4 million for its fiscal 2003 second quarter ended December December: see month. 29, 2002, representing an increase of 21.6 percent compared with revenues of $162.3 million in the prior year period. Online revenues increased 25.2 percent to $75.8 million compared with $60.5 million in the second quarter of 2002. Telephonic revenues increased 21.9 percent to $114.0 million compared with $93.5 million in the prior year period. For the fiscal 2003 second quarter, the Company reported a 200 basis point improvement in gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. to 45.6 percent compared with 43.6 percent in the prior year period. The Company attributed the improvement to increased demand for its expanded offering of non-floral gifts, enhanced operating efficiencies and a continued focus on providing excellent customer service. Also during the quarter, the Company further leveraged prior investments made in its infrastructure and reduced operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. as a percentage of total sales. As a result of the increased revenues and gross profit margin, combined with an improved operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. ratio, the Company achieved EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (earnings before income taxes, depreciation and amortization) of $14.2 million compared with EBITDA of $5.2 million in the prior year period. Net income for the quarter increased 457 percent to $10.1 million, or $0.15 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with $1.8 million or $0.03 per fully diluted share in the prior year period. Jim McCann McCann is the surname of several people, including:
The combination of the Company's convenient, multi-channel customer access and its expanded gift offerings helped attract 1.2 million new customers during the second quarter, 42.7 percent of whom (approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 510,000) came to the Company online. Approximately 2.2 million customers placed orders during the period of which 46.9 percent were repeat customers. This reflects the Company's continuing emphasis on deepening deep·en tr. & intr.v. deep·ened, deep·en·ing, deep·ens To make or become deep or deeper. Noun 1. deepening - a process of becoming deeper and more profound the relationship with its existing customers in its marketing and selling efforts. Continued customer acceptance of the Company's expanded product offering resulted in 67.0 percent of combined online and telephonic revenues coming from higher margin non-floral gifts compared with 62.1 percent in the second quarter last year. McCann noted that the Company avoided the aggressive promotional discounting that characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. much of the retail sector during the holiday shopping period. "As a result, we were able to significantly enhance our already strong gross profit margin. Additionally, we finished the quarter with a strong balance sheet. Our ending inventory position was in line with our business plan and we had more than $80 million in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments," he said. Company Guidance: The Company reiterated the guidance it provided in its January January: see month. 6, 2003 press release, saying that it believes the overall economy will remain unsettled and that consumers will continue to be cautious in their spending. Based on this outlook, the Company said it expects to grow revenue during the second half of fiscal 2003 (ending June June: see month. 29, 2003) in a range of 7-to-9 percent compared with the same period in fiscal 2002. This is consistent with the rate of growth achieved during the fiscal second quarter when adjusted for the effect of The Popcorn POPCORN - AI system built on POP-2. "The POPCORN Reference Manual", S. Hardy, Essex U, Colchester, 1973. Factory product line, which was acquired in May, 2002. "As we enter the second half of our fiscal year, it is worth noting that, unlike many retail companies that are dependent on the year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. holiday shopping period for the majority of their sales, we have two good quarters ahead of us. Our current fiscal third quarter includes the busy Valentine's Day Valentine's Day: see Saint Valentine's Day. Valentine's Day Lovers' holiday celebrated on February 14, the feast day of St. Valentine, one of two 3rd-century Roman martyrs of the same name. St. holiday, followed by our traditionally strong fourth quarter - expected to be our second largest this year in terms of revenue and earnings - which includes such important gift-giving occasions as Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it , Administrative Professional's Week and Mother's Day. "We believe we are well positioned to accelerate our revenue growth rate and operating results when the economy and consumer demand improves. We anticipate continued success in our efforts to profitably grow our business and thereby enhance shareholder value by leveraging our strong and trusted brand name, a growing database with more than 10 million customers, increasing acceptance of our higher margin non-floral gifts, and a unique fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. system that includes same-day delivery capability," said McCann. About 1-800-FLOWERS.COM(R) For more than 25 years, 1-800-FLOWERS.COM has helped millions of customers connect to the people they care about with a broad range of thoughtful gifts, award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" customer service and its unique technology and fulfillment infrastructure. The Company's product line - including flowers, plants, gourmet foods, candies, gift baskets A gift basket, or fruit basket is typically a gift that is delivered to the recipient at their home or workplace. There are different varieties of gift baskets, some which have fruit only, some with dry/canned goods only (such as tea, crackers and jam) although the standard and other unique gifts - is available to customers around the world via: the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the (www.1800flowers.com); by calling 1-800-FLOWERS(R) (1-800-356-9377) 24 hours a day; or by visiting one of the Company-operated or franchised stores. The Company's collection of thoughtful gifting brands includes home decor and garden merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain from Plow plow or plough, agricultural implement used to cut furrows in and turn up the soil, preparing it for planting. The plow is generally considered the most important tillage tool. & Hearth(R) (phone: 1-800-627-1712 and web: www.plowandhearth.com), premium popcorn and other food gifts from The Popcorn Factory(R)(phone: 1-800-541-2676 and web: www.thepopcornfactory.com), gourmet food products from GreatFood.com(R) (www.greatfood.com), and children's gifts from HearthSong(R) (www.hearthsong.com) and Magic Cabin(R) (www.magiccabin.com). The Company's Class A common stock is listed on the NASDAQ National Market (ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "FLWS"). Special Note Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : The Company expressly disclaims any intent or obligation to update any of the forward looking statements made in this release, the scheduled conference call pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to fiscal 2003 second quarter results and Company guidance for fiscal year 2003, and any recordings thereof, or in any of its SEC filings except as may be otherwise stated by the Company. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in the applicable statements. These risks and uncertainties include, but are not limited to: the Company's ability to achieve solid, cost efficient growth; its ability to maintain and enhance its online shopping web sites to attract customers; its ability to successfully introduce new products and product categories; its ability to maintain and enhance profit margins for its various products; its ability to provide timely fulfillment of customer orders; its ability to cost effectively acquire and retain customers; its ability to continue growing revenues; its ability to compete against existing and new competitors; its ability to manage expenses associated with necessary general and administrative and technology investments; its ability to cost efficiently manage inventories; its ability to improve its bottom line results and build long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. shareholder value; its ability to leverage its operating infrastructure; its ability to achieve its stated results guidance for fiscal 2003, and general consumer sentiment Sentiment can refer to:
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. . The Company expressly disclaims any intent or obligation to update any of the forward looking statements made in this release, the scheduled conference call pertaining to fiscal 2003 second quarter results and Company guidance for fiscal year 2003, and any recordings thereof, or in any of its SEC filings except as may be otherwise stated by the Company.
1-800-FLOWERS.COM, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
December 29, June 30,
2002 2002
------------ ---------
(Unaudited)
Assets
Cash and equivalents $71,149 $40,601
Short-term investments 10,953 22,798
Receivables, net 15,367 9,345
Inventories 20,408 15,647
Prepaid and other current assets 2,837 2,220
----------- ---------
Total current assets 120,714 90,611
Property, plant and equipment at cost, net 46,747 51,002
Investments 1,367 9,591
Capitalized investment in leases 371 465
Goodwill 37,825 37,772
Other intangibles, net 3,527 4,074
Other assets 12,859 13,642
----------- ---------
Total assets $223,410 $207,157
=========== =========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $77,471 $64,156
Current maturities of long-term debt and
obligations under capital leases 2,950 3,154
----------- ---------
Total current liabilities 80,421 67,310
Long-term debt and obligations under capital
leases 10,708 12,244
Other liabilities 5,248 3,695
----------- ---------
Total liabilities 96,377 83,249
Total stockholders' equity 127,033 123,908
----------- ---------
Total liabilities and stockholders' equity $223,410 $207,157
=========== =========
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 December December December
29, 30, 29, 30,
2002 2001 2002 2001
--------- -------- --------- --------
Net revenues:
Online $75,750 $60,497 $116,550 $92,837
Telephonic 113,999 93,550 156,530 134,517
Retail/fulfillment 7,680 8,278 13,574 14,140
--------- -------- --------- --------
Total net revenues 197,429 162,325 286,654 241,494
Cost of revenues 107,335 91,626 159,882 139,503
--------- -------- --------- --------
Gross profit 90,094 70,699 126,772 101,991
Operating expenses:
Marketing and sales 64,978 54,945 93,931 81,576
Technology and development 3,415 3,532 6,993 7,222
General and administrative 7,462 7,065 14,869 13,979
Depreciation and amortization 4,068 3,767 8,097 7,361
--------- -------- --------- --------
Total operating expenses 79,923 69,309 123,890 110,138
--------- -------- --------- --------
Operating income (loss) 10,171 1,390 2,882 (8,147)
Other income (expense):
Interest income 284 735 635 1,659
Interest expense (262) (314) (576) (612)
Other (106) (1) (148) (36)
--------- -------- --------- --------
Total other income (expense),
net (84) 420 (89) 1,011
--------- -------- --------- --------
Net income (loss) $10,087 $1,810 $2,793 $(7,136)
========= ======== ========= ========
Basic and diluted net income
(loss) per
common share: $0.15 $0.03 $0.04 $(0.11)
========= ======== ========= ========
Weighted average shares
used in the calculation
of net income (loss)
per common share:
Basic 65,522 64,401 65,500 64,357
========= ======== ========= ========
Diluted 67,804 67,753 67,704 64,357
========= ======== ========= ========
1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
-----------------
December December
29, 30,
2002 2001
-------- --------
Operating activities:
Net income (loss) $2,793 ($7,136)
Reconciliation of net income (loss) to net cash
provided by operations:
Depreciation and amortization 8,097 7,361
Bad debt expense 317 300
Other non-cash items 187 376
Changes in operating items:
Receivables (6,339) (3,565)
Inventories (4,761) (185)
Prepaid and other (617) (95)
Accounts payable and accrued expenses 13,315 8,752
Other assets 648 2,130
Other liabilities 1,553 78
-------- --------
Net cash provided by operating activities 15,193 8,016
Investing activities:
Purchase of investments (18,364) -
Sale of investments 38,434 990
Capital expenditures, net of non-cash expenditures (3,522) (6,704)
Other 132 137
-------- --------
Net cash provided by (used in) investing
activities 16,680 (5,577)
Financing activities:
Proceeds from employee stock options/stock
purchase plan 333 752
Repayment of notes payable and bank borrowings (466) (407)
Payment of capital lease obligations (1,192) (877)
-------- --------
Net cash used in financing activities (1,325) (532)
-------- --------
Net change in cash and equivalents 30,548 1,907
Cash and equivalents:
Beginning of period 40,601 63,896
-------- --------
End of period $71,149 $65,803
======== ========
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