1-800-FLOWERS.COM (FLWS) Q4 2012 earnings summary

Executive summary

• FY12 delivered revenue and earnings growth across all three segments, supported by merchandising innovation, more efficient marketing, and leverage of the operating platform.

• Revenue rose 6.6% to $716.3M; on a comparable basis excluding FY11’s 53rd week, growth was 7.6%.

• Adjusted EBITDA excluding stock-based compensation was $43.8M; reported net income was $17.6M, including discontinued-operations gains.

Financial highlights

• Net revenue was $716.3M, up 6.6%; e-commerce revenue rose 6.1% to $515.2M, while other revenue increased 8.0% to $201.1M.

• Gross profit increased 6.3% to $294.0M; operating income was $23.2M, including a $3.8M gain on Fannie May store sales.

• Net income was $17.6M versus $5.7M; continuing-operations net income was $13.1M versus $5.5M, with diluted continuing-operations EPS of $0.20 versus $0.08.

• Adjusted EBITDA excluding stock-based compensation was $43.8M versus $37.3M; FY12 EBITDA excluding stock-based compensation was $47.6M before adjusting for the store-sale gain.

• Operating cash flow was $40.2M; free cash flow rose 65.9% to $22.9M.

Outlook and guidance

• FY13 consolidated revenue growth was forecast in the mid-single digits, with growth expected across all three segments.

• Gross margin and operating leverage were expected to improve; comparative EBITDA and EPS growth was projected at a double-digit pace, adjusted for the Fannie May store-sale gain.

• Free cash flow was expected to exceed $20M again; scheduled term-debt payments were expected to reduce debt by a further $16M during FY13.