FLWS 8-K

1 800 Flowers Com Inc (FLWS)

8-K 2020-04-30 For: 2020-04-30

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Delaware		0-26841		11-3117311
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	FLWS	The Nasdaq Stock Market

	1-800-FLOWERS.COM, Inc.


	By:	/s/ William E. Shea
		William E. Shea
		Chief Financial Officer, Senior Vice-President
		Finance and Administration



	Date: April 30, 2020


1-800-FLOWERS.COM, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands)

	March 29, 2020		June 30, 2019
		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	232,115	$	172,923
Trade receivables, net		26,217		12,374
Inventories		74,037		92,361
Prepaid and other		21,312		25,580
Total current assets		353,681		303,238

Property, plant and equipment, net		166,399		166,681
Operating lease right-of-use assets		70,284		-
Goodwill		74,711		62,590
Other intangibles, net		66,500		59,615
Other assets		17,054		14,316
Total assets	$	748,629	$	606,440

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	37,314	$	25,704
Accrued expenses		116,815		96,793
Current maturities of long-term debt		5,000		5,000
Current portion of long-term operating lease liabilities		9,524		-
Total current liabilities		168,653		127,497

Long-term debt		88,648		91,973
Long-term operating lease liabilities		64,251		-
Deferred tax liabilities		27,300		28,898
Other liabilities		11,766		15,361
Total liabilities		360,618		263,729
Total stockholders’ equity		388,011		342,711
Total liabilities and stockholders’ equity	$	748,629	$	606,440


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

	Three Months Ended				Nine Months Ended
	March 29, 2020		March 31, 2019		March 29, 2020		March 31, 2019
Net revenues:
E-Commerce	$	231,851	$	204,362	$	847,985	$	780,883
Other		46,925		44,051		223,696		208,342
Total net revenues		278,776		248,413		1,071,681		989,225
Cost of revenues		171,324		150,893		618,911		568,338
Gross profit		107,452		97,520		452,770		420,887
Operating expenses:
Marketing and sales		78,606		71,163		262,849		243,781
Technology and development		11,900		11,511		34,436		32,696
General and administrative		20,031		22,447		64,187		64,480
Depreciation and amortization		7,803		7,028		23,268		22,840
Total operating expenses		118,340		112,149		384,740		363,797
Operating income (loss)		(10,888)		(14,629)		68,030		57,090
Interest (income) expense, net		147		(30)		1,727		2,390
Other (income) expense, net		2,605		(1,285)		1,714		(293)
Income (loss) before income taxes		(13,640)		(13,314)		64,589		54,993
Income tax expense (benefit)		(3,983)		(5,073)		15,365		11,922
Net income (loss)	$	(9,657)	$	(8,241)	$	49,224	$	43,071

Basic net income (loss) per common share	$	(0.15)	$	(0.13)	$	0.76	$	0.67

Diluted net income (loss) per common share	$	(0.15)	$	(0.13)	$	0.74	$	0.65

Weighted average shares used in the calculation of net income (loss) per common share:
Basic		64,348		64,194		64,517		64,383
Diluted		64,348		64,194		66,378		66,456

FLWS 8-K

1-800-FLOWERS.COM, Inc. Reports Strong Revenue Growth for its Fiscal 2020 Third Quarter; Reaffirms Guidance for Strong Top and Bottom-Line Growth for the Full Fiscal 2020 Year

Contacts


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

Reconciliation of net income (loss) to adjusted net
income (loss) (non-GAAP):	Three Months Ended						Nine Months Ended
	March 29, 2020			March 31, 2019			March 29, 2020			March 31, 2019

Net income (loss)	$	(9,657	)	$	(8,241	)	$	49,224		$	43,071
Adjustments to reconcile net income (loss) to adjusted net income (loss) (non-GAAP)
Add: Personalization Mall transaction costs		911						911
Deduct: Income tax (benefit) on transaction costs		(217	)					(217	)
Adjusted net income (loss) (non-GAAP)	$	(8,963	)	$	(8,241	)	$	49,918		$	43,071


Basic and diluted net income (loss) per common share
Basic	$	(0.15	)	$	(0.13	)	$	0.76		$	0.67
Diluted	$	(0.15	)	$	(0.13	)	$	0.74		$	0.65


Basic and diluted adjusted net income (loss) per common share (non-GAAP)
Basic	$	(0.14	)	$	(0.13	)	$	0.77		$	0.67
Diluted	$	(0.14	)	$	(0.13	)	$	0.75		$	0.65


Weighted average shares used in the calculation of net income (loss) and adjusted net income (loss) per common share
Basic		64,348			64,194			64,517			64,383
Diluted		64,348			64,194			66,378			66,456


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

Reconciliation of net income (loss) to adjusted EBITDA
(non-GAAP):
	Three Months Ended						Nine Months Ended
	March 29, 2020			March 31, 2019			March 29, 2020			March 31, 2019

Net income (loss)	$	(9,657	)	$	(8,241	)	$	49,224		$	43,071
Add:
Interest expense, net		2,752			(1,315	)		3,441			2,097
Depreciation and amortization		7,803			7,028			23,268			22,840
Income tax expense								15,365			11,922
Less:
Income tax benefit		3,983			5,073
EBITDA		(3,085	)		(7,601	)		91,298			79,930
Add: Transaction costs		911						911
Add: Stock-based compensation		2,396			1,903			6,441			4,531
Add: Compensation charge related to NQ plan investment appreciation/(depreciation)		(2,611	)		1,294			(1,653	)		327
Adjusted EBITDA	$	(2,389	)	$	(4,404	)	$	96,997		$	84,788


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

	Nine months ended
	March 29, 2020			March 31, 2019

Operating activities:
Net income	$	49,224		$	43,071
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		23,268			22,840
Amortization of deferred financing costs		486			671
Deferred income taxes		(1,597	)		811
Bad debt expense		1,201			1,018
Stock-based compensation		6,441			4,531
Other non-cash items		(23	)		(301	)
Changes in operating items:
Trade receivables		(15,044	)		(7,249	)
Inventories		19,353			14,448
Prepaid and other		3,148			2,675
Accounts payable and accrued expenses		31,442			14,741
Other assets and liabilities		(557	)		(251	)
Net cash provided by operating activities		117,342			97,005

Investing activities:
Acquisitions, net of cash acquired		(20,500	)		-
Capital expenditures, net of non-cash expenditures		(22,282	)		(16,845	)
Purchase of equity investments		(1,176	)		-
Net cash used in investing activities		(43,958	)		(16,845	)

Financing activities:
Acquisition of treasury stock		(10,667	)		(14,765	)
Proceeds from exercise of employee stock options		285			929
Proceeds from bank borrowings		20,000			30,000
Repayment of notes payable and bank borrowings		(23,750	)		(37,187	)
Debt issuance cost		(60	)		-
Net cash used in financing activities		(14,192	)		(21,023	)

Net change in cash and cash equivalents		59,192			59,137
Cash and cash equivalents:
Beginning of period		172,923			147,240


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

	Three Months Ended
	March 29, 2020			Transaction Costs		As Adjusted (non-GAAP) March 29, 2020			March 31, 2019			% Change
Net revenues:
1-800-Flowers.com Consumer Floral	$	152,620				$	152,620		$	144,821		5.4	%
BloomNet Wire Service		30,414					30,414			28,185		7.9	%
Gourmet Food & Gift Baskets		95,906					95,906			75,445		27.1	%
Corporate		112					112			263		-57.4	%
Intercompany eliminations		(276	)				(276	)		(301	)	8.3	%
Total net revenues	$	278,776		$	-	$	278,776		$	248,413		12.2	%

Gross profit:
1-800-Flowers.com Consumer Floral	$	59,943				$	59,943		$	56,334		6.4	%
		39.3	%				39.3	%		38.9	%

BloomNet Wire Service		14,401					14,401			14,071		2.3	%
		47.3	%				47.3	%		49.9	%

Gourmet Food & Gift Baskets		32,956					32,956			26,848		22.8	%
		34.4	%				34.4	%		35.6	%

Corporate		152					152			267		-43.1	%
		135.7	%				135.5	%		101.5	%

Total gross profit	$	107,452		$	-	$	107,452		$	97,520		10.2	%
		38.5	%		-		38.5	%		39.3	%

EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
1-800-Flowers.com Consumer Floral	$	15,439		$	-	$	15,439		$	15,364		0.5	%
BloomNet Wire Service		10,025			-		10,025			9,480		5.7	%
Gourmet Food & Gift Baskets		(6,275	)		-		(6,275	)		(7,202	)	12.9	%
Segment Contribution Margin Subtotal		19,189			-		19,189			17,642		8.8	%
Corporate (b)		(22,274	)		911		(21,363	)		(25,243	)	15.4	%
EBITDA (non-GAAP)		(3,085	)		911		(2,174	)		(7,601	)	71.4	%
Add: Stock-based compensation		2,396					2,396			1,903		25.9	%
Add: Comp charge related to NQ Plan Investment Appreciation/(Depreciation)		(2,611	)				(2,611	)		1,294		-301.8	%
Adjusted EBITDA (non-GAAP)	$	(3,300	)	$	911	$	(2,389	)	$	(4,404	)	-45.8	%


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

	Nine Months Ended
	March 29, 2020			Transaction Costs		As Adjusted (non-GAAP) March 29, 2020			March 31, 2019			% Change
Net revenues:
1-800-Flowers.com Consumer Floral	$	359,104		$	-	$	359,104		$	338,003		6.2	%
BloomNet Wire Service		81,576					81,576			75,613		7.9	%
Gourmet Food & Gift Baskets		631,705					631,705			575,966		9.7	%
Corporate		472					472			845		-44.1	%
Intercompany eliminations		(1,176	)				(1,176	)		(1,202	)	2.2	%
Total net revenues	$	1,071,681		$	-	$	1,071,681		$	989,225		8.3	%

Gross profit:
1-800-Flowers.com Consumer Floral	$	140,537		$	-	$	140,537		$	131,254		7.1	%
		39.1	%				39.1	%		38.8	%

BloomNet Wire Service		40,520					40,520			38,306		5.8	%
		49.7	%				49.7	%		50.7	%

Gourmet Food & Gift Baskets		271,360					271,360			250,550		8.3	%
		43.0	%				43.0	%		43.5	%

Corporate		353					353			777		-54.6	%
		74.8	%				74.8	%		92.0	%

Total gross profit	$	452,770		$	-	$	452,770		$	420,887		7.6	%
		42.2	%		-		42.2	%		42.5	%

EBITDA (non-GAAP):
Segment Contribution Margin (non-GAAP) (a):
1-800-Flowers.com Consumer Floral	$	34,853		$	-	$	34,853		$	32,667		6.7	%
BloomNet Wire Service		27,516			-		27,516			25,375		8.4	%
Gourmet Food & Gift Baskets		100,512			-		100,512			89,191		12.7	%
Segment Contribution Margin Subtotal		162,881			-		162,881			147,233		10.6	%
Corporate (b)		(71,583	)		911		(70,672	)		(67,303	)	-5.0	%
EBITDA (non-GAAP)		91,298			911		92,209			79,930		15.4	%
Add: Stock-based compensation		6,441					6,441			4,531		42.2	%
Add: Comp charge related to NQ Plan Investment Appreciation/(Depreciation)		(1,653	)				(1,653	)		327		-605.5	%
Adjusted EBITDA (non-GAAP)	$	96,086		$	911	$	96,997		$	84,788		14.4	%