Press Releases
First Quarter Results
Consolidated revenues were
Net income was
Adjusted EBITDA was
Segment Results
Provide Commerce Segment: Provide Commerce segment revenues for the first quarter of 2017 decreased 0.8% to
Consumer Segment: Consumer segment revenues for the first quarter of 2017 decreased 7.4% to
Florist Segment: Florist segment revenues for the first quarter of 2017 decreased 1.0% to
International Segment: International segment revenues for the first quarter of 2017 were
Balance Sheet and Cash Flow Highlights
Net cash provided by operating activities was
Cash and cash equivalents decreased
Business Outlook
For the full year 2017, the Company reiterated the following outlook:
- Consolidated
revenues in 2017 to be largely in-line on a reported basis with the Company's 2016 revenues of
$1.12 billion , or up low single digits on a constant currency basis (using an average GBP to USD exchange rate of 1:1.21 as compared to the 2016 average exchange rate of 1:1.36) - Net income of approximately
$10.0 million to$15.0 million - Consolidated Adjusted EBITDA margin is anticipated to decline to approximately 8.0% to 8.5% of consolidated net revenues, primarily as a result of expected increases in marketing investments
- Capital expenditures of approximately
$28.0 million , primarily due to planned enhancements to the Company's technology platform
In connection with the outlook provided above, please note that the seasonality of the Company's business impacts its profitability and cash flows from operations on a quarterly basis. In addition, due to a variety of factors, actual results may differ significantly from the outlook provided. These factors include, without limitation, the factors referenced in this release under "Cautionary Information Regarding Forward-Looking Statements."
Conference Call
The Company will be hosting a conference call today,
A telephonic
playback and archived webcast will be available through
About
Cautionary Information Regarding Forward-Looking Statements
This release contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on our current expectations, estimates and projections about our operations, industry, financial condition, performance, results of operations, and liquidity. Statements containing words such as "may," "believe," "anticipate," "expect," "intend," "plan," "project," "projections," "business outlook," "estimate," or similar expressions constitute forward-looking statements. These forward-looking statements include, but are not limited to, statements about the Company's strategies and future financial performance; expectations about future business plans,
prospective performance and opportunities, including potential acquisitions; revenues; segment metrics; operating expenses; market trends, including those in the markets in which the Company competes; liquidity; cash flows and uses of cash; dividends; capital expenditures; depreciation and amortization; tax payments; foreign currency exchange rates; hedging arrangements; the Company's ability to repay indebtedness and invest in initiatives; the Company's products and services; pricing; marketing plans; competition; settlement of legal matters; and the impact of accounting changes and other pronouncements. Potential factors that could affect these forward-looking statements include, among others, the factors disclosed in the Company's most recent Annual Report on Form 10-K and the Company's other filings with the
Definitions
(1) Segment operating income. The Company's chief operating decision maker uses segment operating income to evaluate the performance of the business segments and to make decisions about allocating resources among segments. Segment operating income is operating income excluding depreciation, amortization, litigation and dispute settlement charges and gains, transaction-related costs, restructuring and other exit costs, and impairment of goodwill and intangible assets. In addition, stock-based and incentive compensation and general corporate expenses are not allocated to the segments. Segment operating income is prior to intersegment eliminations and excludes other income/(expense), net. Please refer to the tables in this press release for a reconciliation of segment operating income to net income.
(2) Consumer orders. The Company monitors the number of consumer orders for floral, gift, and related products during a given period. Consumer orders are individual units delivered during the period that were originated through our consumer websites, associated mobile sites and applications, and various telephone numbers. The number of consumer orders is not adjusted for non-delivered orders that are refunded on or after the scheduled delivery date. Orders originating with a florist or other retail location for delivery to consumers are not included as part of this number.
(3) Average order value. The Company monitors the average value for consumer orders delivered in a given period, which is referred to as the average order value. Average
order value represents the average amount received for consumer orders delivered during a period. The average order value of consumer orders within the Provide Commerce, Consumer, and International segments is tracked in their local currency, the
(4) Average revenues per member. The Company monitors average revenues per member for floral network members in the Florist segment. Average revenues per member represents the average revenues earned from a member of the Company's floral network during a period. Revenues include services revenues and products revenues, but exclude revenues from sales to non-members. Floral network members include retail florists and other non-florist retail locations that offer floral and gifting solutions. Average revenues per member is calculated by dividing Florist segment revenues for the period, excluding sales to non-members, by the average number of floral network members for the period.
Non-GAAP Measures
(5) Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). The Company defines Adjusted EBITDA as net income/(loss) before net interest expense, provision/(benefit) for income taxes, depreciation, amortization, stock-based compensation, transaction-related costs, litigation and dispute settlement charges and gains, restructuring and other exit costs, and impairment of goodwill and intangible assets.
Litigation and dispute settlement charges and gains include estimated losses for which the Company has established a reserve, as well as actual settlements, judgments, fines, penalties, assessments or other resolutions against, or in favor of, the Company related to litigation, arbitration, investigations, disputes, or similar matters. Insurance recoveries received by the Company related to such matters are also included in these adjustments.
Transaction-related costs are certain expense items resulting from actual or potential transactions such as business combinations, mergers, acquisitions, dispositions, spin-offs, financing transactions, and other strategic transactions, including, without limitation, (i) transaction-related bonuses and (ii) expenses for advisors and representatives such as investment bankers, consultants, attorneys, and accounting firms. Transaction-related costs may also include, without limitation, transition and integration costs such as retention bonuses and acquisition-related milestone payments to acquired employees, in addition to consulting, compensation, and other incremental costs associated with integration projects.
The Company's definition of Adjusted EBITDA may be modified from time to time. Management believes that because Adjusted EBITDA excludes (i) certain non-cash expenses (such as depreciation, amortization, and stock-based compensation) and (ii) expenses that are not reflective of the Company's core operations, this measure provides investors with additional useful information to measure the Company's financial performance, particularly with respect to changes in performance from period to period. Management uses Adjusted EBITDA to measure the Company's performance. The Adjusted EBITDA metric also is used as a performance measure under the Company's senior secured credit facility and includes adjustments such as the items defined above and other further adjustments, which are defined in the senior secured credit facility. The Company also uses this measure as a basis in determining certain incentive compensation targets for certain members of the Company's management.
Adjusted EBITDA is not determined in accordance with GAAP and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. A limitation associated with the use of
Adjusted EBITDA is that it does not reflect the periodic costs of certain tangible and intangible assets used in generating revenues in the Company's business. Management evaluates the costs of such tangible and intangible assets through other financial activities such as evaluations of capital expenditures and purchase accounting. An additional limitation associated with this measure is that it does not include stock-based compensation expenses related to the Company's workforce. A further limitation associated with the use of this measure is that it does not reflect expenses or gains that are not considered reflective of the Company's core operations. Management compensates for this limitation by providing supplemental information about such charges, gains and costs within its financial press releases and
An additional limitation associated with the use of this measure is that the term "Adjusted EBITDA" does not have a standardized meaning. Therefore, other companies may use the same or a similarly named measure but exclude different items or use different computations, which may not provide investors a comparable view of the Company's performance in relation to other companies. Management compensates for this limitation by presenting the most comparable GAAP measure, net income, directly ahead of Adjusted EBITDA within this and other financial press releases and by providing a reconciliation that shows and describes the adjustments made. A reconciliation to net income is provided in the accompanying tables. In addition, many of the adjustments to the Company's GAAP financial measures reflect the exclusion of items that are recurring in nature and will be reflected in the Company's financial results for the foreseeable future.
(6) Free Cash Flow. The Company defines Free Cash Flow as net cash provided by operating activities less capital expenditures, plus cash paid for transaction-related costs, cash paid or received for litigation and dispute settlement charges or gains, and cash paid for restructuring and other exit costs.
Contacts
Investor Relations:
646-277-1228
ir@ftdi.com
Media Inquiries:
858-638-4648
pr@ftdi.com
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (in thousands, except per share amounts) | |||||||||
| Three Months Ended | |||||||||
| 2017 | 2016 | ||||||||
| Revenues: | |||||||||
| Provide Commerce segment | $ | 155,868 | $ | 157,097 | |||||
| Consumer segment | 72,804 | 78,607 | |||||||
| Florist segment | 46,506 | 46,992 | |||||||
| International segment | 45,737 | 52,377 | |||||||
| Intersegment eliminations | (4,422 | ) | (4,859 | ) | |||||
| Total revenues | 316,493 | 330,214 | |||||||
| Operating expenses: | |||||||||
| Cost of revenues | 196,374 | 213,766 | |||||||
| Sales and marketing | 68,896 | 67,916 | |||||||
| General and administrative | 28,755 | 29,744 | |||||||
| Amortization of intangible assets | 3,820 | 15,416 | |||||||
| Restructuring and other exit costs | 808 | 433 | |||||||
| Total operating expenses | 298,653 | 327,275 | |||||||
| Operating income | 17,840 | 2,939 | |||||||
| Interest expense, net | (2,273 | ) | (2,314 | ) | |||||
| Other income/(expense), net | (25 | ) | 1,809 | ||||||
| Net income before income taxes | 15,542 | 2,434 | |||||||
| Provision for income taxes | 6,519 | 683 | |||||||
| Net income | $ | 9,023 | $ | 1,751 | |||||
| Earnings per common share: | |||||||||
| Basic earnings per share | $ | 0.32 | $ | 0.06 | |||||
| Diluted earnings per share | $ | 0.32 | $ | 0.06 | |||||
| Average Shares Outstanding: | |||||||||
| Basic | 27,368 | 27,655 | |||||||
| Diluted | 27,435 | 27,716 | |||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (in thousands) | |||||||
| 2017 | 2016 | ||||||
| ASSETS | |||||||
| Cash and cash equivalents | $ | 50,444 | $ | 81,002 | |||
| Accounts receivable, net | 30,317 | 26,659 | |||||
| Inventories | 27,008 | 24,996 | |||||
| Property and equipment, net | 55,353 | 57,559 | |||||
| Intangible assets, net | 269,570 | 272,798 | |||||
| 464,708 | 463,465 | ||||||
| Other assets | 32,880 | 35,835 | |||||
| Total assets | $ | 930,280 | $ | 962,314 | |||
| LIABILITIES AND EQUITY | |||||||
| Accounts payable and accrued liabilities | $ | 157,996 | $ | 157,693 | |||
| Debt (a) | 226,646 | 276,306 | |||||
| Deferred tax liabilities, net | 89,238 | 85,932 | |||||
| Other liabilities | 17,446 | 14,656 | |||||
| Total liabilities | 491,326 | 534,587 | |||||
| Total equity | 438,954 | 427,727 | |||||
| Total liabilities and equity | $ | 930,280 | $ | 962,314 | |||
| UNAUDITED SEGMENT INFORMATION | |||||||||
| (in thousands, except average order values, average revenues per member, and average currency exchange rates) | |||||||||
| Three Months Ended | |||||||||
| 2017 | 2016 | ||||||||
| Provide Commerce: | |||||||||
| Segment revenues | $ | 155,868 | $ | 157,097 | |||||
| Segment operating income (1) | $ | 13,447 | $ | 7,076 | |||||
| Consumer orders (2) | 2,906 | 3,123 | |||||||
| Average order value (3) | $ | 52.99 | $ | 49.69 | |||||
| Consumer: | |||||||||
| Segment revenues | $ | 72,804 | $ | 78,607 | |||||
| Segment operating income (1) | $ | 5,660 | $ | 6,429 | |||||
| Consumer orders (2) | 941 | 1,022 | |||||||
| Average order value (3) | $ | 73.05 | $ | 72.62 | |||||
| Florist: | |||||||||
| Segment revenues | $ | 46,506 | $ | 46,992 | |||||
| Segment operating income (1) | $ | 13,954 | $ | 12,810 | |||||
| Average revenues per member (4) | $ | 4,140 | $ | 3,888 | |||||
| International: | |||||||||
| Segment revenues (in USD) | $ | 45,737 | $ | 52,377 | |||||
| Segment revenues (in GBP) | £ | 36,881 | £ | 36,563 | |||||
| Segment operating income (in USD) (1) | $ | 5,532 | $ | 7,417 | |||||
| Consumer orders (2) | 842 | 878 | |||||||
| Average order value (in USD) (3) | $ | 44.50 | $ | 49.23 | |||||
| Average order value (in GBP) (3) | £ | 35.90 | £ | 34.38 | |||||
| Average currency exchange rate: GBP to USD | 1.24 | 1.43 | |||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (in thousands) | ||||||||||
| Three Months Ended | ||||||||||
| 2017 | 2016 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 9,023 | $ | 1,751 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
| Depreciation and amortization | 9,298 | 21,277 | ||||||||
| Stock-based compensation | 2,341 | 4,040 | ||||||||
| Provision for doubtful accounts receivable | 350 | 1,693 | ||||||||
| Amortization of debt issue costs | 340 | 340 | ||||||||
| Deferred taxes, net | 3,152 | (2,515 | ) | |||||||
| Gains on life insurance | — | (1,583 | ) | |||||||
| Other, net | (17 | ) | 1 | |||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable, net | (3,941 | ) | (4,709 | ) | ||||||
| Inventories | (1,999 | ) | (1,949 | ) | ||||||
| Prepaid expenses and other assets | 3,141 | 4,206 | ||||||||
| Accounts payable and accrued liabilities | (143 | ) | (8,978 | ) | ||||||
| Income taxes receivable or payable | 1,240 | 2,744 | ||||||||
| Other liabilities | 1,431 | 1,253 | ||||||||
| Net cash provided by operating activities | 24,216 | 17,571 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Purchases of property and equipment and intangible assets | (3,196 | ) | (4,611 | ) | ||||||
| Proceeds from life insurance | — | 944 | ||||||||
| Net cash used for investing activities | (3,196 | ) | (3,667 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from long-term debt | 15,000 | — | ||||||||
| Payments on long-term debt | (65,000 | ) | (5,000 | ) | ||||||
| Repurchases of common stock withheld for taxes | (1,944 | ) | (1,633 | ) | ||||||
| Net cash used for financing activities | (51,944 | ) | (6,633 | ) | ||||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | 366 | 57 | ||||||||
| Change in cash and cash equivalents | (30,558 | ) | 7,328 | |||||||
| Cash and cash equivalents, beginning of period | 81,002 | 57,892 | ||||||||
| Cash and cash equivalents, end of period | $ | 50,444 | $ | 65,220 | ||||||
| Supplemental Cash Flow Information: | ||||||||||
| Cash paid for interest | $ | 1,904 | $ | 1,441 | ||||||
| Cash paid for income taxes, net | 2,032 | 436 | ||||||||
| Cash paid for restructuring and other exit costs | 2,618 | 765 | ||||||||
| Cash paid for litigation and dispute settlements charges | 25 | 167 | ||||||||
| Cash paid for transaction-related costs | 687 | 318 | ||||||||
| UNAUDITED RECONCILIATIONS | |||||||||
| (in thousands) | |||||||||
| The following tables contain reconciliations of Adjusted EBITDA and Free Cash Flow to financial measures reported in accordance with Generally Accepted Accounting Principles ("GAAP"). | |||||||||
| RECONCILIATION OF SEGMENT OPERATING INCOME TO NET INCOME | |||||||||
| AND NET INCOME TO ADJUSTED EBITDA | |||||||||
| Three Months Ended | |||||||||
| 2017 | 2016 | ||||||||
| Segment Operating Income (1) : | |||||||||
| Provide Commerce | $ | 13,447 | $ | 7,076 | |||||
| Consumer | 5,660 | 6,429 | |||||||
| Florist | 13,954 | 12,810 | |||||||
| International | 5,532 | 7,417 | |||||||
| Unallocated expenses | (11,455 | ) | (9,516 | ) | |||||
| Depreciation and amortization | (9,298 | ) | (21,277 | ) | |||||
| Operating income | 17,840 | 2,939 | |||||||
| Interest expense, net | (2,273 | ) | (2,314 | ) | |||||
| Other income/(expense), net | (25 | ) | 1,809 | ||||||
| Provision for income taxes | (6,519 | ) | (683 | ) | |||||
| Net income (GAAP basis) | $ | 9,023 | $ | 1,751 | |||||
| Net income (GAAP basis) | $ | 9,023 | $ | 1,751 | |||||
| Interest expense, net | 2,273 | 2,314 | |||||||
| Provision for income taxes | 6,519 | 683 | |||||||
| Depreciation and amortization | 9,298 | 21,277 | |||||||
| Stock-based compensation | 2,341 | 4,040 | |||||||
| Transaction-related costs | 801 | 126 | |||||||
| Restructuring and other exit costs | 808 | 433 | |||||||
| Adjusted EBITDA (5) | $ | 31,063 | $ | 30,624 | |||||
| RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||
| Three Months Ended | |||||||||
| 2017 | 2016 | ||||||||
| Net cash provided by operating activities (GAAP Basis) | $ | 24,216 | $ | 17,571 | |||||
| Capital expenditures | (3,196 | ) | (4,611 | ) | |||||
| Cash paid for transaction-related costs | 687 | 318 | |||||||
| Cash paid for litigation and dispute settlements | 25 | 167 | |||||||
| Cash paid for restructuring and other exit costs | 2,618 | 765 | |||||||
| Free Cash Flow (6) | $ | 24,350 | $ | 14,210 | |||||
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