Fourth Quarter Highlights:
Full Year Highlights:
(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 (“Adjusted”) results to applicable GAAP results.)
JERICHO, N.Y. - (BUSINESS WIRE) - Aug 26, 2021 - 1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS), a leading e-commerce provider of products and services designed to inspire more human expression, connection, and celebration, today reported results for its Fiscal 2021 fourth quarter and full year ended June 27, 2021.
Chris McCann, CEO of 1-800-FLOWERS.COM, Inc., said, “We are very proud of our record top and bottom-line results for fiscal 2021. These achievements, in what was both an incredibly dynamic and challenging year, reflect the dedication of our associates across the Company who worked diligently to overcome the unprecedented hurdles of the global pandemic to help millions of customers stay connected and express themselves to the important people in their lives.” For the year, McCann noted that the Company had achieved a significant milestone, surpassing $2 billion in revenues and it expects to continue to drive sustainable, long-term revenue growth, as well as strong cash flows, both organically and through strategic acquisitions that can help expand its unique ecommerce platform. “Our guidance for double-digit revenue growth in fiscal 2022 is based on several factors, including the significant shift of consumers to ecommerce shopping, which we anticipate will continue, the tremendous growth and positive behaviors we have seen in our customer files and our significantly expanded product offering.”
McCann said the Company’s customer file grew at an unprecedented level in fiscal 2021 with new-to-file customers increasing 62 percent, adding more than 6.5 million new customers, and helping to bring the Company’s 12-month active customer file to approximately 14 million. “Equally important,” he said, “was that, even with strong new customer growth, existing customers represented approximately 64 percent of our total revenue in fiscal 2021.”
“Looking ahead into fiscal 2022, we will continue to focus on engaging with our customers through increasingly personalized content, enhanced customer care initiatives, and a growing range of experiential programs designed to deepen our relationships and build a true customer community,” he said.
Fiscal 2021 Fourth Quarter Results:
For the fourth quarter of 2021, total net revenues increased 16.5 percent to $487.0 million compared with $418.0 million in the prior year period. Excluding contributions from PersonalizationMall.com®, which the Company acquired in August of 2020, total revenue for the quarter increased 3.8 percent. Revenues for the quarter increased 87.7 percent compared with total revenues of $259.4 million in the fourth quarter of fiscal 2019.
Gross profit margin for the quarter increased 20 basis points to 40.7 percent, compared with gross profit margin of 40.5 percent in the prior year period. Operating expenses as a percent of total revenues improved 10 basis points to 37.5 percent, compared with 37.6 percent in the prior year period. Excluding the impact of the Company’s non-qualified deferred 401k compensation plan and, in fiscal 2020, the costs associated with the closing of its Harry & David® retail stores and its acquisition of PersonalizationMall.com, operating expenses as a percentage of total revenues increased 180 basis points to 37.2 percent compared with 35.4 percent in the prior year. This reflects higher digital marketing and advertising rates compared with the prior year period.
As a result, Adjusted EBITDA1 for the quarter was $30.2 million compared with $32.5 million in the prior year period. Net Income and Adjusted Net Income1 for the quarter was $13.3 million, or $0.20 per diluted share, compared with Net Income of $9.8 million, or $0.15 per diluted share and Adjusted Net Income1 of $15.1 million, or $0.23 per diluted share in the prior year period.
Fiscal 2021 Full Year Results:
Total net revenues for the full year increased 42.5 percent to $2.12 billion, compared with $1.49 billion in the prior year, reflecting strong growth across the Company’s three business segments as well as contributions from PersonalizationMall.com which the Company acquired in August of 2020. Excluding the contribution from PersonalizationMall.com, total net revenues grew 26.6 percent compared with the prior year. Gross profit margin for the year increased 40 basis points to 42.2 percent, compared with 41.8 percent in the prior year. Operating expense as a percent of total revenues improved 120 basis points to 35.2 percent, compared with 36.4 percent in the prior year. Excluding the impact of the Company’s non-qualified deferred 401k compensation plan and costs associated with the closing of its Harry & David retail stores and its acquisition of PersonalizationMall.com, operating expenses as a percentage of total revenues improved 110 basis points to 34.7 percent compared with 35.8 percent in the prior year. Strong revenue growth and enhanced operating leverage resulted in Adjusted EBITDA1 growth of 64.5 percent to $213.1 million, compared with $129.5 million in the prior year. Net Income for the year was $118.7 million, or $1.78 per diluted share, compared with $59.0 million, or $0.89 per diluted share, in the prior year. Adjusted Net Income1 for the year was $122.6 million, or $1.84 per diluted share, compared with $65.0 million, or $0.98 per diluted share in the prior year.
SEGMENT RESULTS:
The Company provides fiscal 2021 fourth quarter and full year 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:
COMPANY GUIDANCE
For the fiscal 2022 full year, the Company is providing the following guidance:
The Company’s guidance for the year is based on several factors including:
The Company is also aware of several headwinds affecting its business, including:
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.
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 Contribution Margin is defined as 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 the 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 these limitations when using this measure 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) 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 EPS 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.
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,” “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 fiscal-year 2021 first quarter and the key holiday season; the impact of the Covid-19 pandemic on the Company; its ability to leverage its operating platform and reduce 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. 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. The lack of such reconciling information should be considered when assessing the impact of such disclosures. 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.
Conference Call:
The Company will conduct a conference call to discuss the above details and attached financial results today, Thursday, August 26, 2021, at 8:00 a.m. (ET). The conference call will be webcast from the Investor Relations section of the Company’s website. A recording of the call will be posted on the Investor Relations section of the Company’s website within two hours of the call’s completion. A replay of the call can be accessed beginning at 2:00 p.m.
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)
1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information
Consolidated Statements of Operations
(in thousands, except for per share data)
(unaudited)
1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information – Category Information
(dollars in thousands) (unaudited)
Segment Information shown below is appended to the Company's Earnings Release and includes the impact of Stock Based Compensation
1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information – Category Information
(dollars in thousands) (unaudited)
Segment Information shown below is appended to the Company's Earnings Release and includes the impact of Stock Based Compensation
1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information
(in thousands) (unaudited)
1-800-FLOWERS.COM, Inc. and Subsidiaries
Selected Financial Information
(in thousands) (unaudited)
(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.
SOURCE 1-800-FLOWERS.COM, Inc.