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Price
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For the fiscal year ended July 3, 2011
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Part I.
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||
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Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
(Removed and Reserved)
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1
11
18
19
19
20
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Part II
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I
tem 8.
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Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Controls and Procedures
Other Information
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22
24
26
43
43
43
43
46
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Part III.
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Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
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46
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Part IV.
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Exhibits, Financial Statement Schedules
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47
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·
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Convenience
. All of the Company’s product offerings can be purchased either via the web and wireless devices, or via the Company’s toll-free telephone numbers, 24 hours a day, seven days a week, for those customers who prefer a personal gift advisor to assist them. The Company offers a variety of delivery options, including same-day or next-day service throughout the world.
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·
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Quality
. High-quality products are critical to the Company’s continued brand strength and are integral to the brand loyalty that it has built over the years. The Company offers its customers a 100% satisfaction guarantee on all of its products.
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·
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Delivery Capability
. The Company has developed a market-proven fulfillment infrastructure that allows delivery on a same-day, next-day and any-day basis. Key to the Company’s fulfillment capability is an innovative “hybrid” model which combines BloomNet (comprised of independent florists operating retail flower shops, Company-owned stores, and franchised stores), with its distribution centers located in California, Delaware, Florida, Illinois, New York and Ohio, and third-party vendors who ship directly to the Company’s customers. These fulfillment points are connected by the Company’s
proprietary “BloomLink®” communication system, a secure internet-based system through which orders and related information are transmitted.
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·
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Selection
. Over the course of a year, the Company offers more than 2,900 varieties of fresh-cut flowers, floral arrangements and plants, and more than 4,700 SKUs of gifts, gourmet foods and gift baskets, cookies, chocolates and wines.
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·
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Customer Service
. The Company strives to ensure that customer service, whether online, wireless, via the telephone, or in one of its retail stores is of the highest caliber. The Company operates a customer service center at its headquarters in New York, and employs a network of home agents to provide helpful assistance on everything from advice on product selection to the monitoring of the fulfillment and delivery process.
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·
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leveraging the Company’s operating cost structure;
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·
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merchandising initiatives that emphasize truly original product designs and product line extensions;
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·
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marketing programs that provide improved return on investment by engaging directly with customers to deepen our relationship with them;
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·
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manufacturing and sourcing enhancements that can help mitigate commodity and shipping price increases and deliver increased gross profit margins, and;
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·
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continuous innovation
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·
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Know and Take Care of Our Customer
– by providing the right products and the best services to help them express themselves and deliver smiles. This is evidenced in 1-800-FLOWERS.COM recent number one ranking vs. competitors for customer service by STELLAService as well as being named by the E-Tailing Group as one of only nine online retailers out of 100 benchmarked to meet the criteria for Excellence in Online Customer Service.
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·
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Maintain and enhance our Financial Strength and Flexibility
- by seeking ways to reducing our operating costs while strengthening our balance sheet and adding flexibility to our capital structure. During fiscal 2010, the Company completed the sale of its non-strategic Home and Children’s Gifts business and used the proceeds to further pay down term debt, strengthening its balance sheet and revising its bank credit facility to provide additional flexibility; and in the first quarter of fiscal 2012, completed the sale of
certain assets of its WinetastingNetwork wine
fulfillment services business.
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·
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Continue to Innovate and Invest for the Future
– in new technology opportunities such as mobile e-commerce, where the Compnay was awarded the 2010 “Best Mobile App for E-commerce” by DPAC (Digiday’s Publishing & Advertising Awards) and the 2010 Mobile App of the Year Award in the “Best Shopping” category by RIS (Retail Info Systems). In addition, 1-800-FLOWERS.COM has been honored in Internet Retailer’s “Hot 100: America’s Best Retail Web Sites” for 2011 and was one of only five retailers to receive the 2011 Customer Innovation Award from Avaya for transforming the business through innovative use of business
communications and collaboration technologies.
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·
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undertake more extensive marketing campaigns for their brands and services;
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adopt more aggressive pricing policies; and
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·
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make more attractive offers to potential employees, distributors and retailers.
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·
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retail floral shops, some of which maintain toll-free telephone numbers and web sites;
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·
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online floral retailers;
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catalog companies that offer floral products;
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floral telemarketers and wire services; and
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supermarkets, mass merchants and specialty retailers with floral departments.
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price reductions, decreased revenues and lower profit margins;
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loss of market share; and
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·
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increased marketing expenditures.
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user privacy;
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pricing;
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content;
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connectivity;
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intellectual property;
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distribution;
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taxation;
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liabilities;
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antitrust; and
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characteristics and quality of products and services.
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seasonality;
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the retail economy;
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the timing and effectiveness of marketing programs;
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the timing of the introduction of new products and services;
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the Company’s ability to find and maintain reliable sources for certain of its products;
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the timing and effectiveness of capital expenditures;
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the Company’s ability to enter into or renew online marketing agreements; and
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competition.
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retail floral shops, some of which maintain toll-free telephone numbers, and web sites;
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online floral retailers;
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catalog companies that offer floral products;
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floral telemarketers and wire services; and
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supermarkets, mass merchants and specialty gift retailers with floral departments.
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price reductions, decreased revenue and lower profit margins;
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·
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loss of market share; and
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increased marketing expenditures.
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import duties and quotas;
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agricultural limitations and restrictions to manage pests and disease;
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changes in trading status;
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economic uncertainties and currency fluctuations;
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severe weather;
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work stoppages;
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foreign government regulations and political unrest; and
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trade restrictions, including United States retaliation against foreign trade practices.
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system interruptions;
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long response times; and
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degradation in service.
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Location
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Type
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Principal Use
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Square
Footage
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Ownership
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Commerce, CA
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Office
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Administrative
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500 |
leased
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Napa, CA
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Office and warehouse
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Distribution, administrative and customer service
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68,000 |
leased
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Wilmington, DE
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Office and warehouse
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Distribution, administrative and customer service
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27,000 |
leased
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Jacksonville, FL
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Office and warehouse
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Distribution and administrative
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180,000 |
owned
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Lake Forest, IL
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Office, plant and warehouse
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Manufacturing, distribution and administrative
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148,000 |
leased
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Melrose Park, IL
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Office and warehouse
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Distribution, administrative and customer service
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249,000 |
leased
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Reno, NV
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Warehouse
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Distribution
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50,000 |
leased
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Carle Place, NY
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Office
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Headquarters and customer service
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92,000 |
leased
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Bethpage, NY
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Warehouse
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Distribution
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35,000 |
leased
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Akron, OH
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Office, plant and warehouse
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Manufacturing, distribution and administrative
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189,000 |
leased
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Maple Heights, OH
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Warehouse
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Distribution
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165,000 |
leased
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Obetz, OH
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Warehouse
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Distribution
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176,000 |
leased
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Westerville, OH
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Office, plant and warehouse
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Manufacturing, distribution and administrative
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150,000 |
owned
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|||
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Albany, NY (*)
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Warehouse
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Distribution
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42,000 |
leased
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Ardmore, OK (**)
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Office
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Customer service
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24,000 |
leased
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Chicago, IL (***)
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Office
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Administrative and customer service
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18,000 |
leased
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(*) Facility was closed in December 2010.
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(**) Facility was closed during August 2008 and lease term expired November 30, 2010.
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(***) Facility was closed during July 2010.
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Name
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Age
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Position with the Company
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James F. McCann…………………………...
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60
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Chairman of the Board and Chief Executive Officer
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Christopher G. McCann……………………
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50
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Director, President, 1-800-Flowers.com, Inc. and President, Floral Group
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Stephen J. Bozzo…………………………....
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56
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Senior Vice President and Chief Information Officer
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Gerard M. Gallagher…………………..........
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58
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Senior Vice President of Business Affairs, General Counsel, and Corporate Secretary
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William E. Shea……………………………..
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52
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Senior Vice President, Treasurer, and Chief Financial Officer
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David Taiclet………………………………..
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48
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President of Gourmet Foods and Gift Baskets
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Item 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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High
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Low
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|||||||
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Year ended July 3, 2011
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June 28, 2010 – September 26, 2010
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$ | 2.56 | $ | 1.52 | ||||
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September 27, 2010 – December 26, 2010
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$ | 2.75 | $ | 1.67 | ||||
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December 27, 2010 – March 27, 2011
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$ | 3.22 | $ | 2.18 | ||||
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March 28, 2011 – July 3, 2011
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$ | 3.84 | $ | 2.26 | ||||
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Year ended June 27, 2010
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June 29, 2009 – September 27, 2009
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$ | 3.52 | $ | 1.73 | ||||
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September 28, 2009 – December 27, 2009
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$ | 4.88 | $ | 2.05 | ||||
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December 28, 2009 – March 28, 2010
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$ | 2.75 | $ | 1.78 | ||||
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March 29, 2010 – June 27, 2010
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$ | 3.66 | $ | 2.17 | ||||
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Period
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Total Number of Shares Purchased
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
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||||||||||||
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(in thousands, except average price paid per share)
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6/28/10 – 7/25/10
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- | $ | - | - | $ | 12,278 | ||||||||||
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7/26/10 – 8/22/10
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7.7 | $ | 1.69 | 7.7 | $ | 12,265 | ||||||||||
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8/23/10 – 9/26/10
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1.8 | $ | 2.35 | 1.8 | $ | 12,261 | ||||||||||
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9/27/10 – 10/24/10
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19.0 | $ | 1.76 | 19.0 | $ | 12,228 | ||||||||||
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10/25/10 – 11/21/10
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26.9 | $ | 1.78 | 26.9 | $ | 12,180 | ||||||||||
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11/22/10 – 12/26/10
12/27/10 – 1/23/11
1/24/11 – 2/20/11
2/21/11 – 3/27/11
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-
-
0.8
-
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$
$
$
$
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-
-
2.74
-
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-
-
0.8
-
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$
$
$
$
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12,180
12,180
12,178
12,178
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||||||||||
| 3/28/11 - 4/24/11 | - | $ | - | - | $ | 12,178 | ||||||||||
| 4/25/11 - 5/22/11 | 112.1 | $ | 3.15 | 112.1 | $ | 11,825 | ||||||||||
| 5/23/10 - 7/3/11 | - | $ | - | - | $ | 11,825 | ||||||||||
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Total
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168.2 | $ | 2.70 | 168.2 | ||||||||||||
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Years ended
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|||||||||||||||||||||
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Consolidated Statement of Operations Data:
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July 3,
2011
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June 27,
2010
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June 28,
2009
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June 29,
2008
|
July 1,
2007,
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(in thousands, except per share data) | ||||||||||||||||||||
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Net revenues:
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E-commerce
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$ | 485,377 | $ | 469,974 | $ | 498,519 | $ | 584,174 | $ | 576,627 | |||||||||||
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Other
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204,410 | 197,736 | 215,431 | 155,037 | 149,023 | ||||||||||||||||
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Total net revenues
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689,787 | 667,710 | 713,950 | 739,211 | 725,650 | ||||||||||||||||
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Cost of revenues
|
409,703 | 401,908 | 432,744 | 426,916 | 419,083 | ||||||||||||||||
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Gross profit
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280,084 | 265,802 | 281,206 | 312,295 | 306,567 | ||||||||||||||||
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Operating expenses:
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Marketing and sales
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174,758 | 172,640 | 175,839 | 183,430 | 180,238 | ||||||||||||||||
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Technology and development
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20,424 | 17,952 | 21,000 | 19,611 | 18,871 | ||||||||||||||||
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General and administrative
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50,774 | 50,450 | 50,451 | 52,107 | 50,236 | ||||||||||||||||
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Depreciation and amortization
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20,715 | 21,378 | 21,010 | 17,822 | 15,353 | ||||||||||||||||
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Goodwill and intangible impairment
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- | - | 85,438 | - | - | ||||||||||||||||
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Total operating expenses
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266,671 | 262,420 | 353,738 | 272,970 | 264,698 | ||||||||||||||||
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Operating income (loss)
|
13,413 | 3,382 | (72,532 | ) | 39,325 | 41,869 | |||||||||||||||
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Other income (expense), net
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(4,077 | ) | (5,752 | ) | (9,295 | ) | (4,170 | ) | (6,133 | ) | |||||||||||
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Income (loss) from continuing operations before income taxes
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9,336 | (2,370 | ) | (81,827 | ) | 35,155 | 35,736 | ||||||||||||||
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Income tax expense (benefit) from continuing operations
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3,614 | (282 | ) | (15,326 | ) | 13,126 | 14,755 | ||||||||||||||
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Income (loss) from continuing operations
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5,722 | (2,088 | ) | (66,501 | ) | 22,029 | 20,981 | ||||||||||||||
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Income (loss) from discontinued operations, before income taxes
|
- | (1,723 | ) | (39,754 | ) | (1,785 | ) | (6,727 | ) | ||||||||||||
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Income tax expense (benefit) from discontinued operations
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- | 410 | (7,838 | ) | (810 | ) | (2,864 | ) | |||||||||||||
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Income (loss) from discontinued operations
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- | (2,133 | ) | (31,916 | ) | (975 | ) | (3,863 | ) | ||||||||||||
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Net income (loss)
|
$ | 5,722 | $ | ( 4,221 | ) | $ | ( 98,417 | ) | $ | 21,054 | $ | 17,118 | |||||||||
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Net income (loss) per common share (basic):
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From continuing operations
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$ | 0.09 | $ | (0.03 | ) | $ | (1.05 | ) | $ | 0.35 | $ | 0.33 | |||||||||
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From discontinued operations
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- | (0.03 | ) | (0.50 | ) | (0.02 | ) | (0.06 | ) | ||||||||||||
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Net income (loss) per common share (basic)
|
$ | 0.09 | $ | (0.07 | ) | $ | (1.55 | ) | $ | 0.33 | $ | 0.27 | |||||||||
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Net income (loss) per common share (diluted):
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From continuing operations
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$ | 0.09 | $ | (0.03 | ) | $ | (1.05 | ) | $ | 0.34 | $ | 0.32 | |||||||||
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From discontinued operations
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- | (0.03 | ) | (0.50 | ) | (0.01 | ) | (0.06 | ) | ||||||||||||
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Net income (loss) per common share (diluted)
|
$ | 0.09 | $ | (0.07 | ) | $ | (1.55 | ) | $ | 0.32 | $ | 0.26 | |||||||||
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Weighted average shares used in the calculation of net income (loss) per common share:
|
|||||||||||||||||||||
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Basic
|
64,001 | 63,635 | 63,565 | 63,074 | 63,786 | ||||||||||||||||
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Diluted
|
65,153 | 63,635 | 63,565 | 65,458 | 65,526 | ||||||||||||||||
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As of
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||||||||||||||||||||
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
June 29,
2008
|
July 1,
2007
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Consolidated Balance Sheet Data:
|
||||||||||||||||||||
|
Cash and equivalents and short-term investments
|
$ | 21,442 | $ | 27,843 | $ | 29,562 | $ | 12,124 | $ | 16,087 | ||||||||||
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Working capital
|
17,778 | 22,963 | 43,679 | 33,416 | 51,419 | |||||||||||||||
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Total assets
|
256,951 | 256,086 | 286,127 | 371,338 | 352,507 | |||||||||||||||
|
Long-term liabilities
|
32,243 | 48,745 | 73,945 | 63,739 | 78,911 | |||||||||||||||
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Total stockholders' equity
|
141,661 | 132,626 | 133,783 | 231,465 | 201,031 | |||||||||||||||
|
·
|
leveraging the Company’s operating cost structure;
|
|
·
|
merchandising initiatives that emphasize truly original product designs and product line extensions;
|
|
·
|
marketing programs that provide improved return on investment by engaging directly with customers to deepen our relationship with them;
|
|
·
|
manufacturing and sourcing enhancements that can help mitigate commodity and shipping price increases and deliver increased gross profit margins, and;
|
|
·
|
continuing investments for the future, particularly in social and mobile commerce initiatives, growing the 1-800-Baskets.com business and expanded franchising opportunities in its Fannie May and 1-800-Flowers brands.
|
|
Years Ended
|
||||||||||||||||||||
|
Net Revenues from Continuing Operations:
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
|||||||||||||||
|
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(in thousands)
|
|||||||||||||||||||
|
Net revenues from continuing operations:
|
||||||||||||||||||||
|
1-800-Flowers.com Consumer Floral (*)
|
$ | 369,198 | 0.7 | % | $ | 366,516 | (7.2 | %) | $ | 394,782 | ||||||||||
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BloomNet Wire Service
|
73,281 | 18.4 | % | 61,883 | (2.6 | %) | 63,515 | |||||||||||||
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Gourmet Food & Gift Baskets
|
247,574 | 3.2 | % | 239,942 | (7.3 | %) | 258,710 | |||||||||||||
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Corporate (**)
|
1,150 | 7.4 | % | 1,071 | (4.3 | %) | 1,119 | |||||||||||||
|
Intercompany eliminations
|
(1,416 | ) | (16.8 | %) | (1,702 | ) | 59.2 | % | (4,176 | ) | ||||||||||
|
Total net revenues from continuing operations
|
$ | 689,787 | 3.3 | % | $ | 667,710 | (6.5 | %) | $ | 713,950 | ||||||||||
|
Years Ended
|
||||||||||||||||||||
|
Gross Profit from Continuing Operations:
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
|||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Gross profit:
|
||||||||||||||||||||
|
1-800-Flowers.com Consumer Floral (*)
|
$ | 140,162 | 8.5 | % | $ | 129,239 | (11.4 | %) | $ | 145,881 | ||||||||||
| 38.0 | % | 35.3 | % | 37.0 | % | |||||||||||||||
|
BloomNet Wire Service
|
36,877 | 5.7 | % | 34,890 | (1.4 | %) | 35,374 | |||||||||||||
| 50.3 | % | 56.4 | % | 55.7 | % | |||||||||||||||
|
Gourmet Food & Gift Baskets
|
102,472 | 1.5 | % | 100,990 | 0.8 | % | 100,187 | |||||||||||||
| 41.4 | % | 42.1 | % | 38.7 | % | |||||||||||||||
|
Corporate (**)
|
573 | (16.1 | %) | 683 | 136.3 | % | 289 | |||||||||||||
|
Intercompany eliminations
|
- | - | (525 | ) | ||||||||||||||||
|
Total gross profit from continuing operations
|
$ | 280,084 | 5.4 | % | $ | 265,802 | (5.5 | %) | $ | 281,206 | ||||||||||
| 40.6 | % | 39.8 | % | 39.4 | % | |||||||||||||||
|
Years Ended
|
||||||||||||||||||||
|
Adjusted EBITDA (***) from Continuing Operations:
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
|||||||||||||||
|
Category Contribution Margin
(***):
|
(in thousands)
|
|||||||||||||||||||
|
1-800-Flowers.com Consumer Floral (*)
|
$ | 32,669 | 47.6 | % | $ | 22,141 | (43.0 | %) | $ | 38,830 | ||||||||||
|
BloomNet Wire Service
|
20,195 | 6.0 | % | 19,051 | 1.5 | % | 18,764 | |||||||||||||
|
Gourmet Food & Gift Baskets
|
28,833 | 5.6 | % | 27,303 | 11.0 | % | 24,606 | |||||||||||||
|
Category Contribution Margin Subtotal
|
81,697 | 19.3 | % | 68,495 | (16.7 | %) | 82,200 | |||||||||||||
|
Corporate (**)
|
(47,569 | ) | (8.8 | %) | (43,735 | ) | 9.4 | % | (48,284 | ) | ||||||||||
|
Goodwill and intangible impairment
|
- | - | - | - | (85,438 | ) | ||||||||||||||
|
EBITDA
|
34,128 | 37.8 | % | 24,760 | 148.1 | % | (51,522 | ) | ||||||||||||
|
Goodwill and intangible impairment
|
- | - | - | - | 85,438 | |||||||||||||||
|
Severance and other restructuring costs
|
- | - | - | - | 2,543 | |||||||||||||||
|
Litigation settlement
|
- | - | 898 | - | - | |||||||||||||||
|
Termination of Martha Stewart marketing agreement
|
- | - | 1,931 | - | - | |||||||||||||||
|
Termination of post sale 3
rd
party marketing agreement
|
- | - | 1,039 | - | - | |||||||||||||||
|
Adjusted EBITDA from continuing operations
|
$ | 34,128 | 19.2 | % | $ | 28,628 | (21.5 | %) | $ | 36,459 | ||||||||||
|
Years Ended
|
||||||||||||||||||||
|
Discontinued operations:
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
|||||||||||||||
|
|
(in thousands)
|
|||||||||||||||||||
|
Net revenues from discontinued operations
|
- | - | $ | 87,852 | (38.9 | %) | $ | 143,746 | ||||||||||||
|
Gross profit from discontinued operations
|
- | - | 40,905 | (39.3 | %) | 67,439 | ||||||||||||||
|
Adjusted EBITDA from discontinued operations
|
- | - | 4,640 | 280.6 | % | (2,569 | ) | |||||||||||||
|
(*) During the second quarter of fiscal 2010 the Company launched the 1-800-Baskets.com brand which is included within the results of the Gourmet Food & Gift Baskets category. Prior period results, which had previously been included within the 1-800-Flowers Consumer Floral category, have been reclassified accordingly.
(**) 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 Share-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 category.
(***) Performance is measured based on category contribution margin or consolidated EBITDA (and for fiscal 2010 and 2009, Adjusted EBITDA), reflecting only the direct controllable revenue and operating expenses of the categories. As such, management’s measure of profitability for these categories does not include the effect of corporate overhead, described above, depreciation and amortization, other income (net), nor does it include one-time charges. Management utilizes EBITDA, and adjusted financial information, as a performance measurement tool because it considers such information a meaningful supplemental measure of its performance and believes it is frequently used by the investment community in
the evaluation of companies with comparable market capitalization. The Company also uses EBITDA and adjusted financial information as one of the factors used to determine the total amount of bonuses available to be awarded to executive officers and other employees. The Company’s credit agreement uses EBITDA and adjusted financial information to measure compliance with covenants such as interest coverage and debt incurrence. EBITDA and adjusted financial information is also used by the Company to evaluate and price potential acquisition candidates. EBITDA and adjusted financial information have limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of these limitations are: (a) EBITDA does not reflect changes in, or cash requirements for, the
Company's working capital needs; (b) EBITDA does 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. Because of these limitations, EBITDA should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.
|
|
Years ended
|
||||||||||||
|
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
|||||||||
| (in thousands) | ||||||||||||
|
Net income (loss) from continuing operations:
|
$ | 5,722 | $ | (2,088 | ) | $ | (66,501 | ) | ||||
|
Add:
|
||||||||||||
|
Interest expense
|
4,200 | 5,571 | 6,364 | |||||||||
|
Depreciation and amortization
|
20,715 | 21,378 | 21,010 | |||||||||
|
Deferred financing cost write-off
|
- | 340 | 3,245 | |||||||||
|
Income tax expense
|
3,614 | - | - | |||||||||
|
Less:
|
||||||||||||
|
Interest income
|
123 | 159 | 314 | |||||||||
|
Income tax benefit
|
- | 282 | 15,326 | |||||||||
|
EBITDA
|
34,128 | 24,760 | (51,522 | ) | ||||||||
|
Goodwill and intangible impairment
|
- | - | 85,438 | |||||||||
|
Severance and other restructuring costs
|
- | - | 2,543 | |||||||||
|
Litigation settlement
|
- | 898 | - | |||||||||
|
Termination of Martha Stewart marketing agreement
|
- | 1,931 | - | |||||||||
|
Termination of post sale 3
rd
party marketing agreement
|
- | 1,039 | - | |||||||||
|
Adjusted EBITDA from continuing operations
|
$ | 34,128 | $ | 28,628 | $ | 36,459 | ||||||
|
Years Ended
|
||||||||||||||||||||
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Net revenues:
|
||||||||||||||||||||
|
E-Commerce
|
$ | 485,377 | 3.3 | % | $ | 469,974 | (5.7 | %) | $ | 498,519 | ||||||||||
|
Other
|
204,410 | 3.4 | % | 197,736 | (8.2 | %) | 215,431 | |||||||||||||
| $ | 689,787 | 3.3 | % | $ | 667,710 | (6.5 | %) | $ | 713,950 | |||||||||||
|
Years Ended
|
||||||||||||||||||||
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Gross profit
|
$ | 280,084 | 5.4 | % | $ | 265,802 | (5.5 | %) | $ | 281,206 | ||||||||||
|
Gross margin %
|
40.6 | % | 39.8 | % | 39.4 | % | ||||||||||||||
|
Years Ended
|
||||||||||||||||||||
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Marketing and sales
|
$ | 174,758 | 1.2 | % | $ | 172,640 | (1.8 | %) | $ | 175,839 | ||||||||||
|
Percentage of sales
|
25.3 | % | 25.9 | % | 24.6 | % | ||||||||||||||
|
Years Ended
|
||||||||||||||||||||
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Technology and development
|
$ | 20,424 | 13.8 | % | $ | 17,952 | (14.5 | %) | $ | 21,000 | ||||||||||
|
Percentage of sales
|
3.0 | % | 2.7 | % | 2.9 | % | ||||||||||||||
|
Years Ended
|
||||||||||||||||||||
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
General and administrative
|
$ | 50,744 | 0.6 | % | $ | 50,450 | 0.1 | % | $ | 50,451 | ||||||||||
|
Percentage of sales
|
7.4 | % | 7.6 | % | 7.1 | % | ||||||||||||||
|
Years Ended
|
||||||||||||||||||||
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Depreciation and amortization
|
$ | 20,715 | (3.0 | %) | $ | 21,378 | 1.8 | % | $ | 21,010 | ||||||||||
|
Percentage of sales
|
3.0 | % | 3.2 | % | 2.9 | % | ||||||||||||||
|
Years Ended
|
||||||||||||||||||||
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Interest income
|
$ | 123 | (22.6 | %) | $ | 159 | (49.4 | %) | $ | 314 | ||||||||||
|
Interest expense
|
(4,200 | ) | 24.6 | % | (5,571 | ) | 12.5 | % | (6,364 | ) | ||||||||||
|
Deferred financing write-off
|
- | 100 | % | (340 | ) | 89.5 | % | (3,245 | ) | |||||||||||
| $ | (4,077 | ) | 29.1 | % | $ | (5,752 | ) | 38.1 | % | $ | (9,295 | ) | ||||||||
|
Years Ended
|
||||||||||||||||||||
|
July 3,
2011
|
% Change
|
June 27,
2010
|
% Change
|
June 28,
2009
|
||||||||||||||||
|
|
(in thousands)
|
|||||||||||||||||||
|
Net revenues from discontinued operations
|
- | - | $ | 87,852 | (38.9 | %) | $ | 143,746 | ||||||||||||
|
Gross profit from discontinued operations
|
- | - | $ | 40,905 | (39.3 | %) | $ | 67,439 | ||||||||||||
|
Operating loss from discontinued operations
|
- | - | $ | (1,723 | ) | 95.7 | % | $ | (39,754 | ) | ||||||||||
|
(including losses on disposal of $5.2 million and $14.7 million during the years ended June 27, 2010 and June 28, 2009, respectively, and impairment charges of $20.0 million during the year ended June 27, 2009)
|
||||||||||||||||||||
|
Loss from discontinued operations
|
- | - | $ | (2,133 | ) | 93.3 | % | $ | (31,916 | ) | ||||||||||
|
Jul. 3,
2011
|
Mar. 27,
2011
|
Dec. 26,
2010
|
Sep. 26,
2010
|
Jun. 27,
2010
|
Mar. 28,
2010
|
Dec. 27,
2009
|
Sep. 27,
2009
|
|||||||||||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||||||||||||||
|
Net revenues:
|
||||||||||||||||||||||||||||||||
|
E-commerce (telephonic/online)
|
$ | 142,059 | $ | 117,506 | $ | 154,599 | $ | 71,213 | $ | 130,444 | $ | 113,030 | $ | 151,660 | $ | 74,840 | ||||||||||||||||
|
Other
|
45,026 | 45,273 | 80,803 | 33,308 | 34,983 | 42,483 | 86,794 | 33,476 | ||||||||||||||||||||||||
|
Total net revenues
|
187,085 | 162,779 | 235,402 | 104,521 | 165,427 | 155,513 | 238,454 | 108,316 | ||||||||||||||||||||||||
|
Cost of revenues
|
112,619 | 99,574 | 136,570 | 60,940 | 102,455 | 96,100 | 138,791 | 64,562 | ||||||||||||||||||||||||
|
Gross profit
|
74,466 | 63,205 | 98,832 | 43,581 | 62,972 | 59,413 | 99,663 | 43,754 | ||||||||||||||||||||||||
|
Operating expenses:
|
||||||||||||||||||||||||||||||||
|
Marketing and sales
|
50,180 | 43,812 | 50,848 | 29,918 | 44,459 | 46,729 | 51,976 | 29,476 | ||||||||||||||||||||||||
|
Technology and development
|
5,578 | 5,179 | 4,786 | 4,881 | 4,688 | 4,183 | 4,525 | 4,556 | ||||||||||||||||||||||||
|
General and administrative
|
13,133 | 12,930 | 12,831 | 11,880 | 11,946 | 11,297 | 14,673 | 12,534 | ||||||||||||||||||||||||
|
Depreciation and amortization
|
5,064 | 5,230 | 5,286 | 5,135 | 5,607 | 5,482 | 5,343 | 4,946 | ||||||||||||||||||||||||
|
Total operating expenses
|
73,955 | 67,151 | 73,751 | 51,814 | 66,700 | 67,691 | 76,517 | 51,512 | ||||||||||||||||||||||||
|
Operating income (loss)
|
511 | (3,946 | ) | 25,081 | (8,233 | ) | (3,728 | ) | (8,278 | ) | 23,146 | (7,758 | ) | |||||||||||||||||||
|
Other income (expense), net
|
(756 | ) | (854 | ) | (1,298 | ) | (1,169 | ) | (1,142 | ) | (1,119 | ) | (1,961 | ) | (1,530 | ) | ||||||||||||||||
|
Income (loss) from continuing operations before income taxes
|
(245 | ) | (4,800 | ) | 23,783 | (9,402 | ) | (4,870 | ) | (9,397 | ) | 21,185 | (9,288 | ) | ||||||||||||||||||
|
Income tax expense (benefit)
|
(237 | ) | (2,124 | ) | 10,253 | (4,278 | ) | (1,644 | ) | (3,468 | ) | 8,452 | (3,622 | ) | ||||||||||||||||||
|
Income (loss) from continuing operations
|
(8 | ) | (2,676 | ) | 13,530 | (5,124 | ) | (3,226 | ) | (5,929 | ) | 12,733 | (5,666 | ) | ||||||||||||||||||
|
Loss from discontinued operations, before income taxes
|
- | - | - | - | (1,168 | ) | (1,712 | ) | 3,795 | (2,638 | ) | |||||||||||||||||||||
|
Income tax expense (benefit)
|
- | - | - | - | 560 | (345 | ) | 1,225 | (1,030 | ) | ||||||||||||||||||||||
|
Loss from discontinued operations
|
- | - | - | - | (1,728 | ) | (1,367 | ) | 2,570 | (1,608 | ) | |||||||||||||||||||||
|
Net income (loss)
|
$ | (8 | ) | $ | (2,676 | ) | $ | 13,530 | $ | (5,124 | ) | $ | (4,954 | ) | $ | (7,296 | ) | $ | 15,303 | $ | (7,274 | ) | ||||||||||
|
Basic and diluted net income (loss) per common share:
|
||||||||||||||||||||||||||||||||
|
From continuing operations
|
$ | 0.00 | $ | (0.04 | ) | $ | 0.21 | $ | (0.08 | ) | $ | (0.05 | ) | $ | (0.09 | ) | $ | 0.20 | $ | (0.09 | ) | |||||||||||
|
From discontinued operations
|
- | - | - | - | (0.03 | ) | (0.02 | ) | 0.04 | (0.03 | ) | |||||||||||||||||||||
|
Net income (loss) per common share
|
$ | 0.00 | $ | (0.04 | ) | $ | 0.21 | $ | (0.08 | ) | $ | (0.08 | ) | $ | (0.11 | ) | $ | 0.24 | $ | (0.11 | ) | |||||||||||
|
Weighted average shares used in the calculation of net income (loss) per common share:
|
||||||||||||||||||||||||||||||||
|
Basic
|
64,135 | 63,999 | 63,966 | 63,894 | 63,828 | 63,687 | 63,555 | 63,472 | ||||||||||||||||||||||||
|
Diluted
|
64,135 | 63,999 | 64,801 | 63,894 | 63,828 | 63,687 | 64,070 | 63,472 | ||||||||||||||||||||||||
|
Payments due by period
|
||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Total
|
Less than
1 year
|
1 – 2 years
|
3 – 5 years
|
More than
5 years
|
||||||||||||||||
|
Long-term debt, including interest
|
$ | 48,077 | $ | 17,145 | $ | 30,932 | $ | - | $ | - | ||||||||||
|
Capital lease obligations, including interest
|
1,647 | 1,641 | 6 | - | - | |||||||||||||||
|
Operating lease obligations
|
68,485 | 12,724 | 22,334 | 14,254 | 19,173 | |||||||||||||||
|
Sublease obligations
|
3,917 | 1,667 | 1,617 | 490 | 143 | |||||||||||||||
|
Purchase commitments (*)
|
41,841 | 41,841 | - | - | - | |||||||||||||||
|
Total
|
$ | 163,967 | $ | 75,018 | $ | 54,889 | $ | 14,744 | $ | 19,316 | ||||||||||
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
|
·
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and
|
|
·
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
(a) (1) Index to Consolidated Financial Statements:
|
|
|
Page
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
|
Consolidated Balance Sheets as of July 3, 2011 and June 27, 2010
|
F-2
|
|
Consolidated Statements of Operations for the years ended July 3, 2011, June 27, 2010 and June 28, 2009
|
F-3
|
|
Consolidated Statements of Stockholders’ Equity for the years ended July 3, 2011, June 27, 2010 and June 28, 2009
|
F-4
|
|
Consolidated Statements of Cash Flows for the years ended July 3, 2011, June 27, 2010 and June 28, 2009
|
F-5
|
|
Notes to Consolidated Financial Statements
|
F-6
|
|
(a) (2) Index to Financial Statement Schedules:
|
|
|
Schedule II- Valuation and Qualifying Accounts
|
S-1
|
|
All other information and financial statement schedules are omitted because they are not applicable, or required, or
|
|
|
because the required information is included in the consolidated financial statements or notes thereto.
|
|
|
(a) (3) Index to Exhibits
|
|
Exhibit
|
Description
|
|
|
*3.1
|
Third Amended and Restated Certificate of Incorporation. (Registration Statement on Form S-1/A (No. 333-78985) filed on July 9, 1999, Exhibit 3.1)
|
|
|
*3.2
|
Amendment No. 1 to Third Amended and Restated Certificate of Incorporation. (Registration Statement on Form S-1/A (No. 333-78985) filed on July 22, 1999, Exhibit 3.2)
|
|
|
*3.3
|
Amended and Restated By-laws. (Registration Statement on Form S-1 (No 333-78985) filed on May 21, 1999, Exhibit 3.3)
|
|
|
*4.1
|
Specimen Class A common stock certificate. (Registration Statement on Form S-1/A (No. 333-78985 filed on July 9, 1999, Exhibit 4.1)
|
|
|
*4.2
|
See Exhibits 3.1, 3.2 and 3.3 for provisions of the Certificate of Incorporation and By-laws of the Registrant defining the rights of holders of Common Stock of the Registrant.
|
|
|
*10.3
|
1997 Stock Option Plan, as amended. (Registration Statement on Form S-1 (No. 333-78985) filed on May 21, 1999, Exhibit 10.10)
|
|
|
*10.4
|
1999 Stock Incentive Plan. (Registration Statement on Form S-1/A (No. 333-78985) filed on July 27, 1999, Exhibit 10.18)
|
|
|
*10.5
|
Employment Agreement, effective as of July 1, 1999, between James F. McCann and 1-800-FLOWERS.COM, Inc. (Form S-1/A (No. 333-78985) filed on July 9, 1999, Exhibit 10.19)
|
|
|
*10.6
|
Amendment dated December 3, 2008 to Employment Agreement between James F. McCann and 1-800-FLOWERS.COM, Inc. (Quarterly Report on Form 10-Q filed on February 6, 2009, Exhibit 10.1)
|
|
|
*10.7
|
Employment Agreement, effective as of July 1, 1999, between Christopher G. McCann and 1-800-FLOWERS.COM, Inc. (Form S-1/A (No. 333-78985) filed on July 9, 1999, Exhibit 10.20)
|
|
|
*10.8
|
Amendment dated December 3, 2008 to Employment Agreement between Christopher G. McCann and 1-800-FLOWERS.COM, Inc. (Quarterly Report on Form 10-Q filed on February 6, 2009, Exhibit 10.2)
|
|
|
*10.9
|
2003 Long Term Incentive and Share Award Plan, as amended and restated on October 22, 2009. (Definitive Proxy Statement filed on October 23, 2009 (No. 000-26841), Annex A)
|
|
|
*10.10
|
Section 16 Executive Officer’s Bonus Plan (as amended and restated as of October 22, 2009) (Definitive Proxy filed on October 23, 2009 (No. 000-26841), Annex B)
|
|
|
*10.11
|
Employment Agreement, dated as of May 2, 2006, by and among 1-800-FLOWERS.COM, Inc., Fannie May Confections Brands, Inc. and David Taiclet. (Annual Report on Form 10-K for the fiscal year ended July 3, 2005 filed on September 15, 2006, Exhibit 10.8)
|
|
|
*10.12
|
Lease, dated May 20, 2005, between Treeline Mineola, LLC and 1-800-FLOWERS.COM, Inc. (Annual Report on Form 10-K for the fiscal year ended July 3, 2005 filed on September 15, 2005, Exhibit 10.26)
|
|
|
*10.13
|
Offer letter to Julie McCann Mulligan (Annual Report on Form 10-K for the fiscal year ended June 28, 2009 filed on September 11, 2009, Exhibit 10.12)
|
|
|
*10.14
|
Offer letter to Stephen Bozzo (Quarterly Report on Form 10-Q filed on November 8, 2007, Exhibit 10.4).
|
|
|
*10.15
|
Form of Restricted Share Agreement under 2003 Long Term Incentive and Share Award Plan. (Annual Report on Form 10-K for the fiscal year ended June 29, 2008 filed on September 12, 2008, Exhibit 10.15)
|
|
|
*10.16
|
Form of Incentive Stock Option Agreement under 2003 Long Term Incentive and Share Award Plan. (Annual Report on Form 10-K for the fiscal year ended June 29, 2008 filed on September 12, 2008, Exhibit 10.16)
|
|
|
*10.17
|
Form of Non-statutory Stock Option Agreement under 2003 Long Term Incentive and Share Award Plan. (Annual Report on Form 10-K for the fiscal year ended June 29, 2008 filed on September 12, 2008, Exhibit 10.17)
|
|
|
*10.18
|
Second Amended and Restated Credit Agreement dated as of April 16, 2010 among 1-800-Flowers.com, Inc, The Subsidiary Borrowers Party hereto, The Guarantors Party hereto, The Lenders Party hereto and J.P. Morgan Chase Bank, N.A., as Administrative Agent. (Current Report on Form 8-K filed on April 23, 2010, Exhibit 99.2)
|
|
|
21.1
|
Subsidiaries of the Registrant.
|
|
|
23.1
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
31.1
|
Certification of the principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification of the principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Dated: September 16, 2011
|
1-800-FLOWERS.COM, Inc.
By
:
/s/ James F. McCann
James F. McCann
Chief Executive Officer
Chairman of the Board of Directors
(Principal Executive Officer)
|
|
Dated: September 16, 2011
|
By
:
/s/ James F. McCann
James F. McCann
Chief Executive Officer
Chairman of the Board of Directors
(Principal Executive Officer)
|
|
|
Dated: September 16, 2011
|
By
:
/s/ William E. Shea
William E. Shea
Senior Vice President Finance and Administration (Principal Financial and Accounting Officer)
|
|
Dated: September 16, 2011
|
By
: h
/s/ Christopher G. McCann
Christopher G. McCann
Director, President
|
|
|
Dated: September 16, 2011
|
By
:
/s/ Lawrence Calcano
Lawrence Calcano
Director
|
|
|
Dated: September 16, 2011
|
By
:
/s/ James A. Cannavino
James A. Cannavino
Director
|
|
|
Dated: September 16, 2011
|
By
:
/s/ John J. Conefry, Jr.
John J. Conefry, Jr.
Director
|
|
|
Dated: September 16, 2011
|
By
:
/s/ Leonard J. Elmore
Leonard J. Elmore
Director
|
|
|
Dated: September 16, 2011
|
By
:
/s/ Jeffrey C. Walker
Jeffrey C. Walker
Director
|
|
|
Dated: September 16, 2011
|
By
:
/s/ Larry Zarin
Larry Zarin
Director
|
|
July 3,
2011
|
June 27,
2010
|
|||||||
|
Assets
|
||||||||
|
Current assets:
|
||||||||
|
Cash and equivalents
|
$ | 21,442 | $ | 27,843 | ||||
|
Receivables, net
|
15,278 | 13,943 | ||||||
|
Inventories
|
51,314 | 45,121 | ||||||
|
Deferred tax assets
|
5,416 | 5,109 | ||||||
|
Prepaid and other
|
7,375 | 5,662 | ||||||
|
Total current assets
|
100,825 | 97,678 | ||||||
|
Property, plant and equipment, net
|
50,354 | 51,324 | ||||||
|
Goodwill
|
41,547 | 41,211 | ||||||
|
Other intangibles, net
|
41,808 | 41,042 | ||||||
|
Deferred tax assets
|
17,181 | 19,265 | ||||||
|
Other assets
|
5,236 | 5,566 | ||||||
|
Total assets
|
$ | 256,951 | $ | 256,086 | ||||
|
Liabilities and Stockholders' Equity
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable and accrued expenses
|
$ | 66,559 | $ | 59,914 | ||||
|
Current maturities of long-term debt and obligations under capital leases
|
16,488 | 14,801 | ||||||
|
Total current liabilities
|
83,047 | 74,715 | ||||||
|
Long-term debt and obligations under capital leases
|
29,250 | 45,707 | ||||||
|
Other liabilities
|
2,993 | 3,038 | ||||||
|
Total liabilities
|
115,290 | 123,460 | ||||||
|
Stockholders' equity:
|
||||||||
|
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued
|
– | – | ||||||
|
Class A common stock, $.01 par value, 200,000,000 shares authorized, 32,987,313
and 32,492,266 shares issued in 2011 and 2010, respectively
|
330 | 325 | ||||||
|
Class B common stock, $.01 par value, 200,000,000 shares authorized, 42,138,465
shares issued in 2011 and 2010
|
421 | 421 | ||||||
|
Accumulated other comprehensive loss
|
(158 | ) | (334 | ) | ||||
|
Additional paid-in capital
|
289,101 | 285,515 | ||||||
|
Retained deficit
|
(114,755 | ) | (120,477 | ) | ||||
|
Treasury stock, at cost, 5,633,253 and 5,465,046 Class A shares in 2011 and 2010,
respectively, and 5,280,000 Class B shares
|
(33,278 | ) | (32,824 | ) | ||||
|
Total stockholders' equity
|
141,661 | 132,626 | ||||||
|
Total liabilities and stockholders' equity
|
$ | 256,951 | $ | 256,086 | ||||
|
Years ended
|
||||||||||||
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
||||||||||
|
Net revenues
|
$ | 689,787 | $ | 667,710 | $ | 713,950 | ||||||
|
Cost of revenues
|
409,703 | 401,908 | 432,744 | |||||||||
|
Gross profit
|
280,084 | 265,802 | 281,206 | |||||||||
|
Operating expenses:
|
||||||||||||
|
Marketing and sales
|
174,758 | 172,640 | 175,839 | |||||||||
|
Technology and development
|
20,424 | 17,952 | 21,000 | |||||||||
|
General and administrative
|
50,774 | 50,450 | 50,451 | |||||||||
|
Depreciation and amortization
|
20,715 | 21,378 | 21,010 | |||||||||
|
Goodwill and intangible impairment
|
- | - | 85,438 | |||||||||
|
Total operating expenses
|
266,671 | 262,420 | 353,738 | |||||||||
|
Operating income (loss)
|
13,413 | 3,382 | (72,532 | ) | ||||||||
|
Other income (expense):
|
||||||||||||
|
Interest income
|
123 | 159 | 314 | |||||||||
|
Interest expense
|
(4,200 | ) | (5,571 | ) | (6,364 | ) | ||||||
|
Deferred financing cost write-off
|
- | (340 | ) | (3,245 | ) | |||||||
|
Total other income (expense), net
|
(4,077 | ) | (5,752 | ) | (9,295 | ) | ||||||
|
Income (loss) from continuing operations before income taxes
|
9,336 | (2,370 | ) | (81,827 | ) | |||||||
|
Income tax expense (benefit) from continuing operations
|
3,614 | (282 | ) | (15,326 | ) | |||||||
|
Income (loss) from continuing operations
|
5,722 | (2,088 | ) | (66,501 | ) | |||||||
|
Loss from discontinued operations before income taxes
|
- | (1,723 | ) | (39,754 | ) | |||||||
|
(including losses on disposal of $5.2 million and $14.7 million during the years ended June 27, 2010 and June 28, 2009, respectively, and impairment charges of $20.0 million during the year ended June 27, 2009)
|
||||||||||||
|
Income tax expense (benefit) from discontinued operations
|
- | 410 | (7,838 | ) | ||||||||
|
Loss from discontinued operations
|
- | (2,133 | ) | (31,916 | ) | |||||||
|
Net income (loss)
|
$ | 5,722 | $ | (4,221 | ) | $ | (98,417 | ) | ||||
|
Basic and diluted net income (loss) per common share:
|
||||||||||||
|
From continuing operations
|
$ | 0.09 | $ | (0.03 | ) | $ | (1.05 | ) | ||||
|
From discontinued operations
|
- | (0.03 | ) | (0.50 | ) | |||||||
|
Net income (loss) per common share
|
$ | 0.09 | $ | (0.07 | ) | $ | (1.55 | ) | ||||
|
Weighted average shares used in the calculation of net income
(loss) per common share:
|
||||||||||||
|
Basic
|
64,001 | 63,635 | 63,565 | |||||||||
|
Diluted
|
65,153 | 63,635 | 63,565 | |||||||||
|
Accumulated
|
||||||||||||||||||||||||||||||||||||||||
|
Common Stock
|
Additional
|
Other
|
||||||||||||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury Stock
|
Stockholders’
|
||||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Loss
|
Shares
|
Amount
|
Equity
|
|||||||||||||||||||||||||||||||
|
Balance at June 29, 2008
|
31,368,241 | $ | 314 | 42,138,465 | $ | 421 | $ | 279,718 | $ | (17,839 | ) | - | 10,004,326 | $ | (31,149 | ) | $ | 231,465 | ||||||||||||||||||||||
|
Net loss
|
- | - | - | - | - | (98,417 | ) | - | - | - | (98,417 | ) | ||||||||||||||||||||||||||||
|
Exercise of employee stock options
and vesting of restricted stock and
stock based compensation
|
362,163 | 3 | - | - | 1,835 | - | - | - | - | 1,838 | ||||||||||||||||||||||||||||||
|
Deferred tax shortfall from
stock-based compensation
|
- | - | - | - | (306 | ) | - | - | - | - | (306 | ) | ||||||||||||||||||||||||||||
|
Stock repurchase program
|
- | - | - | - | - | - | - | 397,899 | (797 | ) | (797 | ) | ||||||||||||||||||||||||||||
|
Balance at June 28, 2009
|
31,730,404 | 317 | 42,138,465 | 421 | 281,247 | (116,256 | ) | - | 10,402,225 | (31,946 | ) | 133,783 | ||||||||||||||||||||||||||||
|
Net Loss
|
- | - | - | - | - | (4,221 | ) | - | - | - | (4,221 | ) | ||||||||||||||||||||||||||||
|
Change in value of cash flow hedge
|
- | - | - | - | - | - | (334 | ) | - | - | (334 | ) | ||||||||||||||||||||||||||||
|
Comprehensive loss
|
- | - | - | - | - | - | - | - | - | (4,555 | ) | |||||||||||||||||||||||||||||
|
Vest
ing of restricted stock and stock-based compensation
|
761,862 | 8 | - | - | 4,635 | - | - | - | - | 4,643 | ||||||||||||||||||||||||||||||
|
Deferred tax shortfall from
stock-based compensation
|
- | - | - | - | (367 | ) | - | - | - | - | (367 | ) | ||||||||||||||||||||||||||||
|
Stock repurchase program
|
- | - | - | - | - | - | - | 342,821 | (878 | ) | (878 | ) | ||||||||||||||||||||||||||||
|
Balance at June 27, 2010
|
32,492,266 | $ | 325 | 42,138,465 | $ | 421 | $ | 285,515 | $ | (120,477 | ) | $ | (334 | ) | 10,745,046 | $ | (32,824 | ) | $ | 132,626 | ||||||||||||||||||||
|
Net income
|
- | - | - | - | - | 5,722 | - | - | - | 5,722 | ||||||||||||||||||||||||||||||
|
Change in value of cash flow hedge
|
- | - | - | - | - | - | 176 | - | - | 176 | ||||||||||||||||||||||||||||||
|
Comprehensive Income
|
- | - | - | - | - | - | - | - | - | 5,898 | ||||||||||||||||||||||||||||||
|
Exercise of employee stock options
and vesting of restricted stock and
stock-based compensation
|
495,047 | 5 | - | - | 4,005 | - | - | - | - | 4,010 | ||||||||||||||||||||||||||||||
|
Deferred tax shortfall from stock-based compensation
|
- | - | - | - | (419 | ) | - | - | - | - | (419 | ) | ||||||||||||||||||||||||||||
|
Stock repurchase program
|
- | - | - | - | - | - | - | 168,207 | (454 | ) | (454 | ) | ||||||||||||||||||||||||||||
|
Balance at July 3, 2011
|
32,987,313 | $ | 330 | 42,138,465 | $ | 421 | $ | 289,101 | $ | (114,755 | ) | $ | (158 | ) | 10,913,253 | $ | (33,278 | ) | $ | 141,661 | ||||||||||||||||||||
|
Years ended
|
||||||||||||
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
||||||||||
|
Operating activities:
|
||||||||||||
|
Net income (loss)
|
$ | 5,722 | $ | (4,221 | ) | $ | (98,417 | ) | ||||
|
Reconciliation of net income (loss) to net cash provided by operating activities, net of acquisitions:
|
||||||||||||
|
Operating activities of discontinued operations
|
- | 8,204 | 7,210 | |||||||||
|
Loss on sale/impairment from discontinued operations
|
- | 5,275 | 34,758 | |||||||||
|
Goodwill and intangible asset impairment from continuing operations
|
- | - | 85,438 | |||||||||
|
Depreciation and amortization
|
20,715 | 21,378 | 21,010 | |||||||||
|
Amortization of deferred financing costs
|
474 | 763 | 3,751 | |||||||||
|
Deferred income taxes
|
2,262 | (127 | ) | (22,249 | ) | |||||||
|
Bad debt expense
|
1,546 | 1,908 | 2,264 | |||||||||
|
Stock-based compensation
|
3,961 | 4,643 | 1,724 | |||||||||
|
Tax benefits from stock-based compensation
|
419 | 275 | 306 | |||||||||
|
Other non-cash items
|
27 | 77 | (178 | ) | ||||||||
|
Changes in operating items, excluding the effects of
acquisitions:
|
||||||||||||
|
Receivables
|
(2,881 | ) | (4,516 | ) | 516 | |||||||
|
Inventories
|
(5,491 | ) | 733 | (2,589 | ) | |||||||
|
Prepaid and other
|
(1,703 | ) | (1,082 | ) | (219 | ) | ||||||
|
Accounts payable and accrued expenses
|
6,647 | 6,453 | (5,754 | ) | ||||||||
|
Other assets
|
(748 | ) | (124 | ) | 412 | |||||||
|
Other liabilities
|
(225 | ) | 389 | 511 | ||||||||
|
Net cash provided by operating activities
|
30,725 | 40,028 | 28,494 | |||||||||
|
Investing activities:
|
||||||||||||
|
Acquisitions, net of cash acquired
|
(4,310 | ) | - | (12,001 | ) | |||||||
|
Proceeds from sale of business
|
- | 10,468 | 25 | |||||||||
|
Capital expenditures
|
(17,017 | ) | (15,041 | ) | (12,265 | ) | ||||||
|
Purchase of investment
|
(268 | ) | (2,192 | ) | - | |||||||
|
Other, net
|
100 | 325 | 215 | |||||||||
|
Investing activities of discontinued operations
|
- | (78 | ) | (1,202 | ) | |||||||
|
Net cash used in investing activities
|
(21,495 | ) | (6,518 | ) | (25,228 | ) | ||||||
|
Financing activities:
|
||||||||||||
|
Acquisition of treasury stock
|
(454 | ) | (878 | ) | (797 | ) | ||||||
|
Proceeds from exercise of employee stock options
|
49 | - | 114 | |||||||||
|
Tax benefits from stock based compensation
|
(419) | (367 | ) | (306 | ) | |||||||
|
Proceeds from bank borrowings
|
40,000 | 49,000 | 120,000 | |||||||||
|
Repayment of bank borrowings
|
(52,750 | ) | (79,352 | ) | (100,648 | ) | ||||||
|
Debt issuance cost
|
(17 | ) | (1,637 | ) | (3,603 | ) | ||||||
|
Repayment of capital lease obligations
|
(2,040 | ) | (1,995 | ) | (502 | ) | ||||||
|
Financing activities of discontinued operations
|
- | - | (86 | ) | ||||||||
|
Net cash (used in) provided by financing activities
|
(15,631 | ) | (35,229 | ) | 14,172 | |||||||
|
Net change in cash and equivalents
|
(6,401 | ) | (1,719 | ) | 17,438 | |||||||
|
Cash and equivalents:
|
||||||||||||
|
Beginning of year
|
27,843 | 29,562 | 12,124 | |||||||||
|
End of year
|
$ | 21,442 | $ | 27,843 | $ | 29,562 | ||||||
|
-
|
Interest paid amounted to $4.2 million, $5.4 million, and $5.8 million for the years ended July 3, 2011, June 27, 2010 and June 28, 2009, respectively.
|
|
-
|
Capital expenditures excludes capital lease financing of $-, $- and $6.0 million for the years ended July 3, 2011, June 27, 2010 and June 28, 2009, respectively.
|
|
-
|
The Company paid income taxes of approximately $1.4 million, $1.4 million and $3.0 million, net of tax refunds received, for the years ended July 3, 2011, June 27, 2010 and June 28, 2009, respectively.
|
|
Buildings
|
40 years
|
|
Leasehold Improvements
|
3-10 years
|
|
Furniture, Fixtures and Equipment
|
3-10 years
|
|
Software
|
3-5 years
|
|
Years Ended
|
||||||||||||
|
July 3, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||
|
Numerator:
|
||||||||||||
|
Net income (loss)
|
$ | 5,722 | $ | (4,221 | ) | $ | (98,417 | ) | ||||
|
Denominator:
|
||||||||||||
|
Weighted average shares outstanding
|
64,001 | 63,635 | 63,565 | |||||||||
|
Effect of dilutive securities:
|
||||||||||||
|
Employee stock options (1)
|
16 | - | - | |||||||||
|
Employee restricted stock awards
|
1,136 | - | - | |||||||||
| - | - | - | ||||||||||
|
Adjusted weighted-average shares and assumed conversions
|
65,153 | 63,635 | 63,565 | |||||||||
|
Net income (loss) per common share:
|
||||||||||||
|
Basic
|
$ | 0.09 | $ | (0.07 | ) | $ | (1.55 | ) | ||||
|
Diluted
|
$ | 0.09 | $ | (0.07 | ) | $ | (1.55 | ) | ||||
|
Mrs. Beasley’s Purchase Price Allocation
|
Fine Stationery
Purchase
Price Allocation
|
|||||||
|
(in thousands)
|
||||||||
|
Current assets
|
$ | 353 | $ | 360 | ||||
|
Intangible assets
|
585 | 1,674 | ||||||
| Goodwill | 308 | 1,051 | ||||||
|
Property, plant & equipment
|
204 | 269 | ||||||
|
Total assets acquired
|
1,450 | 3,354 | ||||||
|
Current liabilities
|
- | 20 | ||||||
|
Total liabilities assumed
|
- | 20 | ||||||
|
Net assets acquired
|
$ | 1,450 | $ | 3,334 | ||||
|
Napco
Purchase
Price
Allocation
|
||||
|
(in thousands)
|
||||
|
Current assets
|
$ | 5,119 | ||
|
Property, plant and equipment
|
3,929 | |||
|
Intangible assets
|
397 | |||
|
Other
|
74 | |||
|
Total assets acquired
|
9,519 | |||
|
Current liabilities
|
162 | |||
|
Total liabilities assumed
|
162 | |||
|
Net assets acquired
|
$ | 9,357 | ||
|
Geerlings
&
Wade
Purchase
Price
Allocation
|
||||
|
(in thousands)
|
||||
|
Current assets
|
$ | 990 | ||
|
Intangible assets
|
253 | |||
|
Goodwill
|
1,440 | |||
|
Total assets acquired
|
2,683 | |||
|
Current liabilities
|
77 | |||
|
Total liabilities assumed
|
77 | |||
|
Net assets acquired
|
$ | 2,606 | ||
|
Years Ended
|
||||||||||||
|
July 3, 2011
(pro forma)
|
June 27, 2010
(pro forma)
|
June 28, 2009
(pro forma)
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||
|
Net revenues from continuing operations
|
$ | 702,168 | $ | 683,182 | $ | 736,381 | ||||||
|
Operating income (loss) from continuing operations
|
$ | 16,104 | $ | 5,389 | $ | (70,309 | ) | |||||
|
Net income (loss) from continuing operations
|
$ | 6,625 | $ | (3,504 | ) | $ | (68,095 | ) | ||||
|
Net income (loss) per common share from continuing operations
|
||||||||||||
|
Basic
|
$ | 0.10 | $ | (0.06 | ) | $ | (1.07 | ) | ||||
|
Diluted
|
$ | 0.10 | $ | (0.06 | ) | $ | (1.07 | ) | ||||
|
July 3,
2011
|
June 27,
2010
|
|||||||
|
(in thousands)
|
||||||||
|
Finished goods
|
$ | 26,629 | $ | 23,611 | ||||
|
Work-in-process
|
15,442 | 13,390 | ||||||
|
Raw materials
|
9,243 | 8,120 | ||||||
| $ | 51,314 | $ | 45,121 | |||||
|
1-800-Flowers.com Consumer Floral
|
BloomNet Wire Service
|
Gourmet Food and Gift Baskets
|
Total
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Balance at June 29, 2008
|
$ | 6,165 | $ | - | $ | 99,734 | $ | 105,899 | ||||||||
|
Acquisition
|
1,438 | 1,438 | ||||||||||||||
|
Goodwill impairment
|
(65,644 | ) | (65,644 | ) | ||||||||||||
|
Acquisition related adjustments
|
(437 | ) | (51 | ) | (488 | ) | ||||||||||
|
Balance at June 28, 2009
|
$ | 5,728 | $ | - | $ | 35,477 | $ | 41,205 | ||||||||
|
Acquisition related adjustments
|
6 | 6 | ||||||||||||||
|
Balance at June 27, 2010
|
$ | 5,728 | $ | - | $ | 35,483 | $ | 41,211 | ||||||||
|
Acquisitions
|
1,051 | 308 | 1,359 | |||||||||||||
|
Acquisition related
adjustment
|
(1,023 | ) | (1,023 | ) | ||||||||||||
|
Balance at July 3, 2011
|
$ | 6,779 | $ | - | $ | 34,768 | $ | 41,547 | ||||||||
|
July 3, 2011
|
June 27, 2010
|
||||||||||||||||||||||||
|
Amortization
Period
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net
|
Gross
Carrying Amount
|
Accumulated Amortization
|
Net
|
|||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||
|
Intangible assets with determinable lives:
|
|||||||||||||||||||||||||
|
Investment in licenses
|
14 - 16 years
|
$ | 5,314 | $ | 5,314 | $ | - | $ | 5,314 | $ | 5,314 | $ | - | ||||||||||||
|
Customer lists
|
3 - 10 years
|
15,804 | 8,619 | 7,185 | 15,695 | 6,758 | 8,937 | ||||||||||||||||||
|
Other
|
5 - 8 years
|
2,538 | 1,770 | 768 | 2,388 | 1,351 | 1,037 | ||||||||||||||||||
| 23,656 | 15,703 | 7,953 | 23,397 | 13,423 | 9,974 | ||||||||||||||||||||
|
Trademarks with
indefinite lives
|
33,855 | - | 33,855 | 31,068 | - | 31,068 | |||||||||||||||||||
|
Total intangible
assets
|
$ | 57,511 | $ | 15,703 | $ | 41,808 | $ | 54,465 | $ | 13,423 | $ | 41,042 | |||||||||||||
|
July 3,
2011
|
June 27,
2010
|
|||||||
|
(in thousands)
|
||||||||
|
Land
|
$ | 2,907 | $ | 2,907 | ||||
|
Building and building improvements
|
9,807 | 9,659 | ||||||
|
Leasehold improvements
|
17,193 | 16,722 | ||||||
|
Furniture and fixtures
|
4,471 | 3,966 | ||||||
|
Production equipment
|
26,192 | 22,462 | ||||||
|
Computer equipment
|
57,090 | 57,036 | ||||||
|
Telecommunication equipment
|
8,355 | 8,523 | ||||||
|
Software
|
99,819 | 82,895 | ||||||
| 225,834 | 204,170 | |||||||
|
Accumulated depreciation and amortization
|
175,480 | 152,846 | ||||||
| $ | 50,354 | $ | 51,324 | |||||
|
July 3,
2011
|
June 27,
2010
|
|||||||
|
(in thousands)
|
||||||||
|
Term loan and revolving credit line (1)
|
$ | 44,250 | $ | 57,000 | ||||
|
Obligations under capital leases (2)
|
1,488 | 3,508 | ||||||
| 45,738 | 60,508 | |||||||
|
Less current maturities of long-term debt obligations under capital leases
|
16,488 | 14,801 | ||||||
| $ | 29,250 | $ | 45,707 | |||||
|
(1)
|
On April 14, 2009, the Company amended its 2008 Credit Facility with JPMorgan Chase Bank N.A., as administrative agent, and a group of lenders (the “Amended 2008 Credit Facility”). The Amended 2008 Credit Facility provided for term loan debt of $92.4 million and a seasonally adjusted revolving credit line ranging from $75.0 to $125.0 million. The Amended 2008 Credit Facility, effective March 28, 2009, also revised certain financial and non-financial covenants.
|
|
(2)
|
During March 2009, the Company obtained a $5.0 million equipment lease line of credit with a bank and a $5.0 million equipment lease line of credit with a vendor. Interest under these lines, which both mature in April 2012, range from 2.99% to 7.48%. Borrowings under the bank line are collateralized by the underlying equipment purchased, while the equipment lease line with the vendor is unsecured. The borrowings are payable in 36 monthly installments of principal and interest commencing in April 2009.
|
|
Year
|
Debt
Maturities
|
|||
|
(in thousands)
|
||||
|
2012
|
15,000 | |||
|
2013
|
15,750 | |||
|
2014
|
13,500 | |||
| $ | 44,250 | |||
|
Level 1
|
|
Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
|
|
Level 2
|
|
Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
|
|
Level 3
|
|
Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
Fair Value Measurements
Assets (Liabilities)
|
||||||||||
|
Balance
|
Level 1
|
Level 2
|
Level 3
|
|||||||
|
(in thousands)
|
||||||||||
|
Interest rate swap (1) – July 3, 2011
|
$(263)
|
|
-
|
$(263)
|
|
-
|
||||
|
Interest rate swap (1) – June 27, 2010
|
$(557)
|
|
-
|
$(557)
|
|
-
|
||||
|
|
(1) Included in other long-term liabilities on the consolidated balance sheet.
|
|
Years ended
|
||||||||||||
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Current provision (benefit):
|
||||||||||||
|
Federal
|
$ | 543 | $ | (213 | ) | $ | 1,254 | |||||
|
State
|
809 | 482 | 54 | |||||||||
|
|
1,352 | 269 | 1,308 | |||||||||
|
Deferred provision (benefit):
|
||||||||||||
|
Federal
|
2,152 | (522 | ) | (15,089 | ) | |||||||
|
State
|
110 | (29 | ) | (1,545 | ) | |||||||
| 2,262 | (551 | ) | (16,634 | ) | ||||||||
|
Income tax expense (benefit)
|
$ | 3,614 | $ | (282 | ) | $ | (15,326 | ) | ||||
|
Years ended
|
||||||||||||
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
||||||||||
|
Tax at U.S. statutory rates
|
35.0 | % | 35.0 | % | 35.0 | % | ||||||
|
State income taxes, net of federal tax benefit
|
6.6 | (14.0 | ) | 2.4 | ||||||||
|
Non-deductible stock-based compensation
|
1.9 | (11.4 | ) | (0.2 | ) | |||||||
|
Non-deductible goodwill amortization
|
- | (4.0 | ) | (17.7 | ) | |||||||
|
Rate change
|
0.1 | - | (1.4 | ) | ||||||||
|
Tax credits
|
(2.9 | ) | 4.3 | (0.1 | ) | |||||||
|
Tax settlements
|
(1.6 | ) | - | - | ||||||||
|
Other, net
|
(0.4 | ) | 2.0 | 0.7 | ||||||||
| 38.7 | % | 11.9 | % | 18.7 | % | |||||||
|
Years ended
|
||||||||||||
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Deferred income tax assets:
|
||||||||||||
|
Net operating loss and credit carryforwards
|
$ | 9,872 | $ | 11,284 | $ | 4,031 | ||||||
|
Accrued expenses and reserves
|
5,159 | 5,035 | 12,142 | |||||||||
|
Stock-based compensation
|
3,452 | 3,116 | 2,871 | |||||||||
|
Other intangibles
|
6,257 | 7,293 | 8,370 | |||||||||
|
Deferred income tax liabilities:
|
||||||||||||
|
Tax in excess of book depreciation
|
(2,143 | ) | (2,354 | ) | (3,023 | ) | ||||||
|
Net deferred income tax assets
|
$ | 22,597 | $ | 24,374 | $ | 24,391 | ||||||
|
Years Ended
|
||||||||||||
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||
|
Stock options
|
$ | 1,181 | $ | 1,460 | $ | 1,383 | ||||||
|
Restricted stock awards
|
2,780 | 2,423 | 341 | |||||||||
|
Total
|
3,961 | 3,883 | 1,724 | |||||||||
|
Deferred income tax benefit
|
1,381 | 1,245 | 444 | |||||||||
|
Stock-based compensation expense, net
|
$ | 2,580 | $ | 2,638 | $ | 1,280 | ||||||
|
Years Ended
|
||||||||||||
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Marketing and sales
|
$ | 1,587 | $ | 1,590 | $ | 465 | ||||||
|
Technology and development
|
791 | 795 | 583 | |||||||||
|
General and administrative
|
1,583 | 1,498 | 676 | |||||||||
|
Total
|
$ | 3,961 | $ | 3,883 | $ | 1,724 | ||||||
|
Years ended
|
||||||||||||
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
||||||||||
|
Weighted average fair value of options granted
|
$ | 1.23 | $ | 1.71 | $ | 1.83 | ||||||
|
Expected volatility
|
68 | % | 63 | % | 56 | % | ||||||
|
Expected life (in years)
|
7.5 | 5.6 | 5.8 | |||||||||
|
Risk-free interest rate
|
1.3 | % | 2.4 | % | 2.2 | % | ||||||
|
Expected dividend yield
|
0.0 | % | 0.0 | % | 0.0 | % | ||||||
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value (000s)
|
||||||||||
|
Outstanding beginning of period
|
6,890,089 | $ | 6.50 | ||||||||||
|
Granted
|
1,329,500 | $ | 1.86 | ||||||||||
|
Exercised
|
(20,000 | ) | $ | 2.44 | |||||||||
|
Forfeited/Expired
|
(1,284,054 | ) | $ | 4.00 | |||||||||
|
Outstanding end of period
|
6,915,535 | $ | 6.08 |
4.2 years
|
$ | 1,827 | |||||||
|
Options vested or expected to vest at end of period
|
6,576,081 | $ | 6.29 |
3.9 years
|
$ | 1,409 | |||||||
|
Exercisable at July 3, 2011
|
5,044,561 | $ | 7.47 |
2.6 years
|
$ | 74 | |||||||
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||
|
Exercise Price
|
Options
Outstanding
|
Weighted-
Average
Remaining
Contractual Life
|
Weighted-
Average
Exercise
Price
|
Options
Exercisable
|
Weighted-
Average
Exercise
Price
|
||||||||||||||
| $ | 1.69 – 2.87 | 1,467,500 |
9.2 years
|
$ | 1.92 | 90,000 | $ | 2.57 | |||||||||||
| $ | 3.11 - 6.42 | 2,465,217 |
3.4 years
|
$ | 4.70 | 1,997,243 | $ | 5.03 | |||||||||||
| $ | 6.52 – 8.40 | 1,420,980 |
3.2 years
|
$ | 6.81 | 1,418,980 | $ | 6.81 | |||||||||||
| $ | 8.45 – 12.87 | 1,539,038 |
1.5 years
|
$ | 11.46 | 1,515,538 | $ | 11.49 | |||||||||||
| $ | 13.05 – 15.77 | 22,800 |
0.7 years
|
$ | 14.13 | 22,800 | $ | 14.13 | |||||||||||
| 6,915,535 |
4.2 years
|
$ | 6.08 | 5,044,561 | $ | 7.47 | |||||||||||||
|
Shares
|
Weighted
Average
Grant Date
Fair Value
|
|||||||
|
Non-vested –beginning of period
|
1,661,811 | $ | 4.35 | |||||
|
Granted
|
2,551,568 | $ | 1.82 | |||||
|
Vested
|
(475,047 | ) | $ | 4.72 | ||||
|
Forfeited
|
(343,071 | ) | $ | 3.41 | ||||
|
Non-vested at July 3, 2011
|
3,395,261 | $ | 2.49 | |||||
|
·
|
1-800-Flowers.com Consumer Floral;
|
|
·
|
BloomNet Wire Service; and
|
|
·
|
Gourmet Food and Gift Baskets; and
|
|
Years ended
|
||||||||||||
|
Net revenues
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
|||||||||
|
(in thousands)
|
||||||||||||
|
Net revenues (2):
|
||||||||||||
|
1-800-Flowers.com Consumer Floral
|
$ | 369,198 | $ | 366,516 | $ | 394,782 | ||||||
|
BloomNet Wire Service
|
73,281 | 61,883 | 63,515 | |||||||||
|
Gourmet Food & Gift Baskets
|
247,574 | 239,942 | 258,710 | |||||||||
|
Corporate (1)
|
1,150 | 1,071 | 1,119 | |||||||||
|
Intercompany eliminations
|
(1,416 | ) | (1,702 | ) | (4,176 | ) | ||||||
|
Total net revenues
|
$ | 689,787 | $ | 667,710 | $ | 713,950 | ||||||
|
Years ended
|
||||||||||||
|
Operating Income
|
July 3,
2011
|
June 27,
2010
|
June 28,
2009
|
|||||||||
|
(in thousands)
|
||||||||||||
|
Category Contribution Margin (2):
|
||||||||||||
|
1-800-Flowers.com Consumer Floral
|
$ | 32,669 | $ | 22,141 | $ | 38,830 | ||||||
|
BloomNet Wire Service
|
20,195 | 19,051 | 18,764 | |||||||||
|
Gourmet Food & Gift Baskets
|
28,833 | 27,303 | 24,606 | |||||||||
|
Category Contribution Margin Subtotal
|
81,697 | 68,495 | 82,200 | |||||||||
|
Corporate (1)
|
(47,569 | ) | (43,735 | ) | (48,284 | ) | ||||||
|
Depreciation and amortization
|
(20,715 | ) | (21,378 | ) | (21,010 | ) | ||||||
|
Goodwill and intangible impairment
|
- | - | (85,438 | ) | ||||||||
|
Operating income (loss)
|
$ | 13,413 | $ | 3,382 | $ | (72,532 | ) | |||||
|
(1)
Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among others, 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 category.
(2) Certain balances in the prior fiscal years have been reclassified to conform to the presentation in the current fiscal year. During the second quarter of fiscal 2010, the Company launched its 1-800-Baskets brand. Products within this business are now being managed within the Gourmet Food & Gift Baskets segment, resulting in a change to our reportable segment structure. Gift basket products, formerly included in the Consumer Floral reportable segment are now included in the Gourmet Food & Gift Baskets segment. These changes have been reflected in the Company’s segment reporting for
all periods presented.
|
|
Years Ended
|
||||||||||||
|
July 3, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||
|
Net revenues from discontinued operations
|
- | $ | 87,852 | $ | 143,786 | |||||||
|
Operating loss from discontinued operations
(1) (2)
|
- | $ | ( 1,723 | ) | $ | (39,754 | ) | |||||
|
(including losses on disposal of $5.2 million and $14.7 million during the years ended June 27, 2010 and June 28, 2009, respectively, and impairment charges of $20.0 million during the year ended June 27, 2009)
|
||||||||||||
|
Income tax expense (benefit) from discontinued operations
|
- | $ | 410 | $ | (7,838 | ) | ||||||
|
Loss from discontinued operations
|
- | $ | (2,133 | ) | $ | (31,916 | ) | |||||
|
|
(1) Operating income (loss) from discontinued operations during the year ended June 28, 2009 includes approximately $0.4 million of restructuring costs associated with the Company’s cost reduction initiatives implemented during the third quarter. Refer to Note 14. Restructuring.
|
|
|
(2) During the three months ended December 28, 2008, the Home and Children’s Gift segment experienced significant declines in revenue and operating performance when compared to prior years and their strategic outlook. The Company believes that this weak performance was attributable to reduced consumer spending due to the overall weakness in the economy, and in particular, as a result of the continued decline in demand for home décor products. As a result of these factors, as well as the Company’s plans to resize this category based on the expectation of continued weakness in the home décor retail sector, upon completion of the impairment analysis described above, the goodwill and intangibles related to this reporting unit was deemed to be fully
impaired. Therefore, during the three months ended December 28, 2008, the Company recorded a goodwill and intangible impairment charge of $20.0 million related to this business segment. In the fourth quarter ended June 28, 2009, the Company made the strategic decision to divest its Home & Children’s Gifts business segment. Consequently, the Company has classified the results of its Home & Children’s Gifts segment as a discontinued operation, and recorded losses on disposal of $14.7 million and $5.2 million to write-down the assets of the discontinued business to management’s estimate of their fair value.
|
|
Obligations
under
Capital
Leases
|
Operating
Leases
|
|||||||
|
(in thousands)
|
||||||||
|
2012
|
$ | 1,641 | $ | 12,724 | ||||
|
2013
|
6 | 11,710 | ||||||
|
2014
|
- | 10,624 | ||||||
|
2015
|
- | 7,391 | ||||||
|
2016
|
- | 6,863 | ||||||
|
Thereafter
|
- | 19,174 | ||||||
|
Total minimum lease payments
|
$ | 1,647 | $ | 68,486 | ||||
|
Less amounts representing interest
|
159 | |||||||
| $ | 1,488 | |||||||
|
Sublease
Income
|
Sublease
Expense
|
|||||||
|
(in thousands)
|
||||||||
|
2012
|
$ | 1,666 | $ | 1,666 | ||||
|
2013
|
1,082 | 1,082 | ||||||
|
2014
|
535 | 535 | ||||||
|
2015
|
265 | 265 | ||||||
|
2016
|
226 | 226 | ||||||
|
Thereafter
|
143 | 143 | ||||||
| $ | 3,917 | $ | 3,917 | |||||
|
Additions
|
||||||||||||||||||||
|
Description
|
Balance at
Beginning
of Period
|
Charged to
Costs
and Expenses
|
Charged to
Other
Accounts-
Describe (b)
|
Deductions-
Describe (a)
|
Balance at
End of
Period
|
|||||||||||||||
|
Reserves and allowances deducted from asset accounts:
|
||||||||||||||||||||
|
Reserve for estimated doubtful accounts-accounts/notes receivable
|
||||||||||||||||||||
|
Year Ended July 3, 2011
|
$ | 1,458,000 | $ | 346,000 | $ | - | $ | (773,000 | ) | $ | 1,031,000 | |||||||||
|
Year Ended June 27, 2010
|
$ | 1,803,000 | $ | 708,000 | $ | - | $ | (1,053,000 | ) | $ | 1,458,000 | |||||||||
|
Year Ended June 28, 2009
|
$ | 1,386,000 | $ | 566,000 | $ | 300,000 | $ | (449,000 | ) | $ | 1,803,000 | |||||||||
|
(a)
|
Reduction in reserve due to write-off of accounts/notes receivable balances.
|
|
(b)
|
Amount represents opening balances from acquired businesses.
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|