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Exhibit 99.1

 

FTD Companies, Inc. Announces Second Quarter 2015 Financial Results

 

Company Reports Second Quarter 2015 Consolidated Revenues of $365.8 Million

Company Reports Second Quarter 2015 Net Income of $17.8 Million, Adjusted Net Income of

$25.5 Million and Adjusted EBITDA of $47.5 Million

Company Updates 2015 Annual Guidance

 

DOWNERS GROVE, Ill. — August 5, 2015 — FTD Companies, Inc. (Nasdaq: FTD) (“FTD” or the “Company”), a premier floral and gifting company, today announced financial results for the second quarter and six months ended June 30, 2015.

 

“Our strong second quarter profitability reflects the improved operational and financial disciplines we have applied to our Provide Commerce segment in the six months since the closing of the acquisition,” said FTD President and Chief Executive Officer, Robert S. Apatoff. “We continue to make solid progress on our integration efforts as we execute against our strategic initiatives and focus on profitably growing our premier family of brands. We remain very excited about our future as we continue to focus on driving shareholder value.”

 

Second Quarter Results

 

Consolidated revenues were $365.8 million for the second quarter of 2015, compared to $168.1 million in the second quarter of 2014. The increase in consolidated revenues was largely due to the addition of the Provide Commerce segment, which the Company acquired on December 31, 2014, as well as an increase in revenues for each of the Consumer, Florist and International segments, excluding fluctuations in foreign currency. Changes in foreign currency exchange rates negatively impacted 2015 second quarter revenues by $3.3 million.

 

Net income was $17.8 million for the second quarter of 2015, compared to $4.7 million for the second quarter of 2014. Adjusted Net Income for the second quarter of 2015 was $25.5 million, compared to $11.3 million for the same period of the prior year. The increase in Adjusted Net Income was largely due to the addition of the Provide Commerce segment. Adjusted Net Income excludes the after-tax impact of stock-based compensation, amortization, transaction-related costs, litigation and dispute settlement charges, and restructuring and other exit costs.

 

Adjusted EBITDA was $47.5 million, or 13.0% of consolidated revenues, for the second quarter of 2015, compared to $22.5 million, or 13.4% of consolidated revenues, for the second quarter of 2014. Adjusted EBITDA for the second quarter of 2015 includes a contribution of $26.1 million from the Provide Commerce segment. Note that as a result of the Company’s increased size after the acquisition of Provide Commerce, certain incremental corporate costs are being incurred in 2015 and are not allocated to the segments. Adjusted Net Income and Adjusted EBITDA are non-GAAP financial measures. Please refer to the tables in this press release for a reconciliation of all non-GAAP financial measures.

 

Six Month Results

 

Consolidated revenues were $733.6 million for the six months ended June 30, 2015, compared to $357.9 million in the six months ended June 30, 2014. The increase in consolidated revenues was

 



 

largely due to the addition of the Provide Commerce segment, which the Company acquired on December 31, 2014, as well as an increase in revenues for each of the Consumer, Florist and International segments, excluding fluctuations in foreign currency. Changes in foreign currency exchange rates negatively impacted revenues by $8.6 million in the first six months of 2015.

 

Net income was $19.9 million for the six months ended June 30, 2015, compared to $14.3 million for the six months ended June 30, 2014. Adjusted Net Income was $42.0 million for the first six months of 2015, compared to $25.2 million for the same period of the prior year. The increase in Adjusted Net Income was largely due to the addition of the Provide Commerce segment.

 

Adjusted EBITDA was $80.8 million, or 11.0% of consolidated revenues, for the first six months of 2015, compared to $47.7 million, or 13.3% of consolidated revenues, for the same period of the prior year. Adjusted EBITDA for the first six months of 2015 includes a contribution of $35.0 million from the Provide Commerce segment. Note that as a result of the Company’s increased size after the acquisition of Provide Commerce, certain incremental corporate costs were incurred in the six months ended June 30, 2015 and are not allocated to the segments.

 

Segment Results

 

As a result of the acquisition of Provide Commerce, the Company’s operating and reportable segments changed to include a fourth segment, Provide Commerce. Accordingly, the Company’s reportable segments now consist of Consumer, Florist, International, and Provide Commerce. The Provide Commerce results of operations for the quarter and six months ended June 30, 2014 set forth below were derived from the pre-acquisition results of operations of Provide Commerce, as the Company’s acquisition of Provide Commerce was not completed until December 31, 2014. These pre-acquisition results of operations for Provide Commerce have been included for informational purposes only and do not purport to be indicative of the results of future operations of the Provide Commerce segment or the results that would have actually been attained had the acquisition been completed on or prior to January 1, 2014.

 

Consumer Segment: Consumer segment revenues for the second quarter of 2015 increased 1.7% to $97.7 million, compared to $96.1 million in the second quarter of 2014. This increase was driven by a $1.19, or 1.8%, increase in average order value to $68.74. Consumer segment operating income was $10.9 million, or 11.1% of segment revenues, in the second quarter of 2015, compared to $10.6 million, or 11.0% of segment revenues, in the prior year quarter.

 

Consumer segment revenues for the first six months of 2015 increased 1.1% to $185.7 million, compared to $183.7 million in the first six months of 2014. This increase was driven by a $1.70, or 2.5%, increase in average order value to $69.97, partially offset by a 1.2% decrease in consumer orders. Consumer segment operating income was $18.4 million, or 9.9% of segment revenues, in the six months ended June 30, 2015, compared to $18.7 million or 10.2% of segment revenues, in the prior year period.

 

Florist Segment: Florist segment revenues for the second quarter of 2015 increased 3.5% to $43.2 million, compared to $41.7 million in the second quarter of 2014. This increase was primarily due to higher product revenues. Florist segment operating income was $12.1 million,

 



 

consistent with the second quarter of 2014. Florist segment operating income was 28.1% of segment revenues in the second quarter of 2015, compared to 29.0% in the second quarter of 2014. Average revenues per member increased 7.9% to $3,456 for the second quarter of 2015, compared to $3,203 in the prior year quarter.

 

Florist segment revenues for the first six months of 2015 increased 1.5% to $89.2 million, compared to $87.8 million in the first six months of 2014. This increase was due to higher product revenues of $1.9 million, partially offset by a $0.6 million decrease in services revenues. Florist segment operating income was $26.3 million, or 29.4% of segment revenues, in the six months ended June 30, 2015, compared to $25.2 million, or 28.7% of segment revenues, in the prior year period. Average revenues per member increased 7.5% to $7,076 for the first six months of 2015, compared to $6,582 in the prior year period.

 

International Segment: International segment revenues for the second quarter of 2015 were $33.9 million, compared to $35.8 million in the second quarter of 2014. On a constant currency basis, International segment revenues increased 3.8%, or $1.4 million, driven by 1.8% growth in average order value to $51.64 as well as 0.7% growth in consumer orders in the International segment. International segment operating income was $3.8 million, or 11.3% of segment revenues, for the second quarter of 2015, compared to $3.5 million, or 9.9% of segment revenues, in the prior year quarter.

 

International segment revenues for the first six months of 2015 were $89.2 million, compared to $96.8 million in the first six months of 2014. On a constant currency basis, International segment revenues increased 0.9%, or $0.9 million. International segment operating income was $11.8 million, or 13.2% of segment revenues, for the six months ended June 30, 2015, compared to $11.6 million, or 11.9% of segment revenues, in the prior year period. Consumer orders in the International segment decreased 2.1% and average order value was $51.29 in the first six months of 2015, representing growth of 1.2% in constant currency compared to the prior year period.

 

Provide Commerce Segment: Provide Commerce segment revenues for the second quarter of 2015 decreased 11.8% to $196.5 million, compared to $222.8 million in the second quarter of 2014. This decrease was primarily driven by a 13.2% decrease in consumer order volume, partially offset by a $0.95, or 2.0%, increase in average order value to $48.63. The decline in revenues was primarily attributable to the ProFlowers business. Provide Commerce segment operating income was $26.1 million, or 13.3% of segment revenues, for the second quarter of 2015, compared to $14.0 million, or 6.3% of segment revenues, for the prior year quarter.

 

Provide Commerce segment revenues for the first six months of 2015 were $379.8 million, compared to $414.6 million in the first six months of 2014. This decrease was primarily driven by a 9.9% decrease in consumer order volume, partially offset by a $0.91, or 1.9%, increase in average order value to $49.64. A decline in revenues for the ProFlowers business was partially offset by growth in the Personal Creations business. Revenues in the Gourmet Foods business were consistent with the prior year period. Provide Commerce segment operating income was $35.0 million, or 9.2% of segment revenues, for the six months ended June 30, 2015, compared to $24.4 million, or 5.9% of segment revenues, for the prior year period.

 



 

Balance Sheet and Cash Flow Highlights

 

Cash flows from operating activities increased $8.2 million to $27.4 million for the six months ended June 30, 2015, compared to $19.2 million for the prior year period. Under the Company’s existing stock repurchase program, the Company has repurchased approximately 673,000 shares as of June 30, 2015 at an aggregate cost of $20 million. Of this total, approximately 342,000 shares were repurchased during the three months ended June 30, 2015 for an aggregate cost of $10 million. Cash and cash equivalents decreased $41.7 million to $53.9 million as of June 30, 2015, compared to $95.6 million as of December 31, 2014. Debt outstanding as of June 30, 2015 was $310 million, compared to $340 million as of December 31, 2014.

 

For the six months ended June 30, 2015, the Company generated Free Cash Flow of $30.6 million compared to $16.7 million for the prior year period. Free Cash Flow is a non-GAAP financial measure. Please refer to the tables in this press release for a reconciliation of all non-GAAP financial measures.

 

Business Outlook

 

For the full year 2015, the Company updated its outlook. The Company now expects the following:

 

·                  Consolidated revenues to decline modestly, approximately 2% to 4%, compared to pro forma revenues of $1,270 million for 2014

·                  Consolidated Adjusted EBITDA margins expanding to approximately 9% to 10% of consolidated revenues

·                  Capital expenditures of approximately $25 million

·                  Amortization of intangible assets of approximately $60 million, stock-based compensation expense of approximately $15 million* and transaction-related costs between $7 and $10 million primarily related to the integration of Provide Commerce

 


* The stock based compensation expense reflects additional equity-based awards under consideration by the compensation committee of the board of directors as the company continues to evaluate and align its compensation structure.

 

Conference Call

 

The Company will be hosting a conference call today, August 5, 2015, at 5:00 p.m. ET. Live audio of the call will be webcast and archived on the investor relations section of the Company’s website at http://www.ftdcompanies.com. In addition, you may dial 877-407-4018 to listen to the live broadcast.

 

A telephonic playback and archived webcast will be available through August 19, 2015.  Participants can dial 877-870-5176 to hear the playback. The passcode is 13615347.

 

About FTD Companies, Inc.

 

FTD Companies, Inc. is a premier floral and gifting company. Through our diversified family of brands, we provide floral, specialty foods, gifts and related products to consumers primarily in the United States, Canada, the United Kingdom and the Republic of Ireland. We also provide floral products and services to retail florists and other retail locations throughout these same geographies. FTD has been delivering flowers since 1910 and the highly-recognized FTD® and

 



 

Interflora® brands are supported by the iconic Mercury Man® logo, which is displayed in nearly 40,000 floral shops in approximately 150 countries. In addition to FTD and Interflora, our diversified portfolio of brands includes the following trademarks: ProFlowers®, ProPlants®, Shari’s Berries®, Personal Creations®, RedEnvelope®, Cherry Moon Farms®, Flying Flowers, Flowers Direct, Drake Algar, SincerelyTM and Gifts.comTM. FTD Companies, Inc. is headquartered in Downers Grove, Ill. For more information, please visit www.ftdcompanies.com.

 

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; statements regarding expected synergies and benefits of the Company’s acquisition of Provide Commerce, Inc.; 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 Annual Report for the year ended December 31, 2014 and the Company’s other filings with the Securities and Exchange Commission (www.sec.gov), including, without limitation, information under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that may cause actual performance and results to differ materially from those predicted. Reported results should not be considered an indication of future performance. Except as required by law, we undertake no obligation to publicly release the results of any revision or update to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. In addition, the Company may not provide guidance of the type provided under “Business Outlook” in the future.

 

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 or gains, transaction-related costs, and restructuring and other exit costs. Stock-based compensation and

 



 

general corporate expenses are not allocated to the segments. Segment operating income is prior to intersegment eliminations and excludes other income (expense). 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, specialty food, gift, and related products during a given period. Consumer orders are orders delivered during the period that originated in the U.S. and Canada, primarily from its www.ftd.com, www.proflowers.com, www.berries.com, www.personalcreations.com websites, associated mobile sites and applications, and the 1-800-SEND-FTD and various other telephone numbers; and in the U.K. and the Republic of Ireland, primarily from the www.interflora.co.uk, www.flyingflowers.co.uk and www.interflora.ie websites, associated mobile sites, 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 Consumer, International, and Provide Commerce segments is tracked for each segment in their local currency, the U.S. Dollar for the Consumer and Provide Commerce segments, and the British Pound (“GBP”) for the International segment. The local currency amounts received for the International segment are then translated into U.S. dollars at the average currency exchange rate for the period. Average order value includes merchandise revenues and shipping or service fees paid by the consumer, less discounts and refunds (net of refund-related fees charged to floral network members).

 

(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 received 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 before net interest expense, provision (benefit) for income taxes, depreciation, amortization, stock-based compensation, transaction-related costs, litigation and dispute settlement charges or gains, restructuring and other exit costs, and impairment of goodwill, intangible assets and long-lived assets.

 

Litigation and dispute settlement charges or 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) compensation expenses 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.

 

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 SEC filings, when applicable.

 

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 for litigation and dispute settlement charges or gains, and cash paid for restructuring and other exit costs. Beginning with the quarter ended March 31, 2015, when presenting the Free Cash Flow metric, the Company is no longer further adjusting to exclude the change in intercompany payable to United Online, Inc. and the change in current income taxes payable. The Company believes that these further adjustments no longer provide investors with meaningful information as such adjustments related to the Company’s former status as a wholly-owned subsidiary of United Online, Inc.

 

(7) Adjusted Net Income. The Company defines Adjusted Net Income as net income excluding the after tax impact of stock-based compensation, amortization, transaction-related costs, litigation and dispute settlement charges or gains, restructuring and other exit costs, and loss on extinguishment of debt.

 

Contacts

 

Investor Relations:
Jandy Tomy
630-724-6984
ir@ftdi.com

 

Media Inquiries:

Amy Toosley

858-638-4648

pr@ftdi.com

 



 

FTD COMPANIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Consumer segment

 

$

97,652

 

$

96,053

 

$

185,722

 

$

183,669

 

Florist segment

 

43,165

 

41,713

 

89,169

 

87,823

 

International segment

 

33,906

 

35,835

 

89,162

 

96,832

 

Provide Commerce segment

 

196,548

 

 

379,784

 

 

Intersegment eliminations

 

(5,470

)

(5,507

)

(10,255

)

(10,377

)

Total revenues

 

365,801

 

168,094

 

733,582

 

357,947

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Cost of revenues

 

228,027

 

105,823

 

464,452

 

229,312

 

Sales and marketing

 

70,638

 

29,418

 

147,050

 

59,946

 

General and administrative

 

29,363

 

17,039

 

62,498

 

32,937

 

Amortization of intangible assets

 

15,336

 

4,429

 

30,737

 

8,841

 

Restructuring and other exit costs

 

2,244

 

287

 

4,412

 

287

 

Total operating expenses

 

345,608

 

156,996

 

709,149

 

331,323

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

20,193

 

11,098

 

24,433

 

26,624

 

Interest expense, net

 

(2,359

)

(1,243

)

(4,667

)

(2,481

)

Other (expense) income, net

 

437

 

86

 

426

 

472

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

18,271

 

9,941

 

20,192

 

24,615

 

(Benefit) provision for income taxes

 

452

 

5,232

 

339

 

10,286

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

17,819

 

$

4,709

 

$

19,853

 

$

14,329

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.61

 

$

0.24

 

$

0.67

 

$

0.74

 

Diluted earnings per share

 

$

0.61

 

$

0.24

 

$

0.67

 

$

0.74

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

28,693

 

18,932

 

28,953

 

18,905

 

Diluted

 

28,728

 

18,970

 

29,004

 

18,950

 

 



 

FTD COMPANIES, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

June 30, 2015

 

December 31, 2014

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

53,879

 

$

95,595

 

Accounts receivable, net

 

27,307

 

32,753

 

Inventories

 

24,310

 

28,342

 

Deferred tax assets, net

 

12,333

 

17,233

 

Property and equipment, net

 

67,333

 

63,607

 

Intangible assets, net

 

374,053

 

435,653

 

Goodwill

 

646,490

 

632,212

 

Other assets

 

50,108

 

47,218

 

Total assets

 

$

1,255,813

 

$

1,352,613

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

117,127

 

$

161,584

 

Debt

 

310,000

 

340,000

 

Deferred tax liabilities, net

 

134,394

 

149,834

 

Other liabilities

 

25,299

 

35,982

 

Total liabilities

 

586,820

 

687,400

 

Total equity

 

668,993

 

665,213

 

Total liabilities and equity

 

$

1,255,813

 

$

1,352,613

 

 



 

FTD COMPANIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

17,819

 

$

4,709

 

$

19,853

 

$

14,329

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

21,158

 

7,102

 

41,913

 

14,029

 

Impairment of fixed assets

 

1,282

 

 

1,282

 

 

Stock-based compensation

 

2,398

 

1,901

 

4,340

 

3,563

 

Provision for doubtful accounts receivable

 

624

 

485

 

909

 

843

 

Accretion of discounts and amortization of deferred financing and debt issue costs

 

340

 

193

 

680

 

386

 

Deferred taxes, net

 

537

 

(1,923

)

(4,296

)

(3,831

)

Excess tax benefits from equity awards

 

50

 

(81

)

(339

)

(408

)

Other, net

 

(24

)

(3

)

29

 

(9

)

Changes in operating assets and liabilities, net of Acquisition-related purchase accounting adjustments:

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

10,059

 

7,260

 

5,620

 

(168

)

Inventories

 

5,320

 

(127

)

2,990

 

2,108

 

Other assets

 

3,121

 

(123

)

7,446

 

1,007

 

Accounts payable and accrued liabilities

 

(40,812

)

(13,457

)

(40,687

)

(18,189

)

Income taxes payable or receivable

 

(12,146

)

(1,841

)

(9,567

)

4,069

 

Other liabilities

 

(4,273

)

(376

)

(2,777

)

1,505

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

5,453

 

3,719

 

27,396

 

19,234

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment and intangible assets

 

(3,930

)

(1,641

)

(7,532

)

(3,139

)

Cash paid for acquisitions, net of cash acquired

 

(9,935

)

 

(9,935

)

 

 

 

 

 

 

 

 

 

 

 

Net cash used for investing activities

 

(13,865

)

(1,641

)

(17,467

)

(3,139

)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Payments on long-term debt

 

(5,000

)

 

(30,000

)

 

Exercise of stock options and purchases from employee stock plans

 

478

 

312

 

485

 

312

 

Repurchases of common stock

 

(10,009

)

(584

)

(22,021

)

(1,751

)

Excess tax benefits from equity awards

 

(50

)

81

 

339

 

408

 

 

 

 

 

 

 

 

 

 

 

Net cash used for financing activities

 

(14,581

)

(191

)

(51,197

)

(1,031

)

 

 

 

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents

 

482

 

282

 

(448

)

269

 

 

 

 

 

 

 

 

 

 

 

Change in cash and cash equivalents

 

(22,511

)

2,169

 

(41,716

)

15,333

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

76,390

 

61,326

 

95,595

 

48,162

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

53,879

 

$

63,495

 

$

53,879

 

$

63,495

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

1,965

 

$

4,845

 

$

4,121

 

$

2,352

 

Cash paid for income taxes, net

 

12,353

 

5,115

 

14,202

 

10,055

 

Cash paid for restructuring and other exit costs

 

3,437

 

258

 

3,455

 

362

 

Cash paid for legal settlements

 

2,282

 

35

 

2,282

 

35

 

Cash paid for transaction-related costs

 

1,879

 

176

 

4,997

 

176

 

 



 

FTD COMPANIES, INC.

UNAUDITED SEGMENT INFORMATION

(in thousands, except average order values, average revenues per member and average currency exchange rates)

 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Consumer:

 

 

 

 

 

 

 

 

 

Segment revenues

 

$

97,652

 

$

96,053

 

$

185,722

 

$

183,669

 

Segment operating income (1)

 

$

10,884

 

$

10,588

 

$

18,354

 

$

18,678

 

Consumer orders (2)

 

1,343

 

1,342

 

2,511

 

2,541

 

Average order value (3)

 

$

68.74

 

$

67.55

 

$

69.97

 

$

68.27

 

 

 

 

 

 

 

 

 

 

 

Florist:

 

 

 

 

 

 

 

 

 

Segment revenues

 

$

43,165

 

$

41,713

 

$

89,169

 

$

87,823

 

Segment operating income (1)

 

$

12,113

 

$

12,078

 

$

26,260

 

$

25,246

 

Average revenues per member (4)

 

$

3,456

 

$

3,203

 

$

7,076

 

$

6,582

 

 

 

 

 

 

 

 

 

 

 

International:

 

 

 

 

 

 

 

 

 

Segment revenues (in USD)

 

$

33,906

 

$

35,835

 

$

89,162

 

$

96,832

 

Segment revenues (in GBP)

 

£

22,096

 

£

21,280

 

£

58,613

 

£

58,078

 

Segment operating income (in USD) (1)

 

$

3,823

 

$

3,533

 

$

11,800

 

$

11,567

 

Consumer orders (2)

 

539

 

535

 

1,426

 

1,456

 

Average order value (in USD) (3)

 

$

51.64

 

$

55.68

 

$

51.29

 

$

55.55

 

Average order value (in GBP) (3)

 

£

33.66

 

£

33.08

 

£

33.73

 

£

33.33

 

Average currency exchange rate: GBP to USD

 

1.53

 

1.68

 

1.52

 

1.67

 

 

 

 

 

 

(see Note below)

 

 

 

(see Note below)

 

Provide Commerce:

 

 

 

 

 

 

 

 

 

Segment revenues

 

$

196,548

 

$

222,790

 

$

379,784

 

$

414,579

 

Segment operating income (1)

 

$

26,074

 

$

13,976

 

$

34,986

 

$

24,421

 

Consumer orders (2)

 

4,023

 

4,637

 

7,603

 

8,441

 

Average order value (3)

 

$

48.63

 

$

47.68

 

$

49.64

 

$

48.73

 

 

Note:  The results of operations for Provide Commerce for the quarter and six months ended June 30, 2014 set forth above were derived from the unaudited pre-acquisition results of operations of Provide Commerce. These pre-acquisition results of operations of Provide Commerce have been included herein for informational purposes only and do not purport to be indicative of the results of future operations of the Provide Commerce segment or the results that would have actually been attained had the Acquisition been completed on or before January 1, 2014.

 



 

FTD COMPANIES, INC.

UNAUDITED RECONCILIATIONS

(in thousands)

 

The following tables contain reconciliations of Adjusted EBITDA, Free Cash Flow, and Adjusted Net Income 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

 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Segment Operating Income (1) :

 

 

 

 

 

 

 

 

 

Consumer

 

$

10,884

 

$

10,588

 

$

18,354

 

$

18,678

 

Florist

 

12,113

 

12,078

 

26,260

 

25,246

 

International

 

3,823

 

3,533

 

11,800

 

11,567

 

Provide Commerce

 

26,074

 

 

34,986

 

 

Unallocated expenses

 

(11,543

)

(7,999

)

(25,054

)

(14,838

)

Depreciation and amortization

 

(21,158

)

(7,102

)

(41,913

)

(14,029

)

Operating income

 

20,193

 

11,098

 

24,433

 

26,624

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(2,359

)

(1,243

)

(4,667

)

(2,481

)

Other (expense) income, net

 

437

 

86

 

426

 

472

 

Provision for income taxes

 

(452

)

(5,232

)

(339

)

(10,286

)

Net income (GAAP basis)

 

$

17,819

 

$

4,709

 

$

19,853

 

$

14,329

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP basis)

 

$

17,819

 

$

4,709

 

$

19,853

 

$

14,329

 

Interest expense, net

 

2,359

 

1,243

 

4,667

 

2,481

 

Provision for income taxes

 

452

 

5,232

 

339

 

10,286

 

Depreciation and amortization

 

21,158

 

7,102

 

41,913

 

14,029

 

Stock-based compensation

 

2,398

 

1,901

 

4,340

 

3,563

 

Transaction-related costs

 

1,075

 

1,749

 

5,230

 

1,749

 

Litigation and dispute settlement charges

 

 

292

 

 

1,022

 

Restructuring and other exit costs

 

2,244

 

287

 

4,412

 

287

 

Adjusted EBITDA (5)

 

$

47,505

 

$

22,515

 

$

80,754

 

$

47,746

 

 

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities (GAAP basis)

 

$

5,453

 

$

3,719

 

$

27,396

 

$

19,234

 

Capital expenditures

 

(3,930

)

(1,641

)

(7,532

)

(3,139

)

Cash paid for transaction-related costs

 

1,879

 

 

4,997

 

176

 

Cash paid for litigation and dispute settlement charges

 

2,282

 

 

2,282

 

35

 

Cash paid for restructuring and other exit costs

 

3,437

 

258

 

3,455

 

362

 

Free Cash Flow (6)

 

$

9,121

 

$

2,336

 

$

30,598

 

$

16,668

 

 

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME

 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Net income, as reported (GAAP basis)

 

$

17,819

 

$

4,709

 

$

19,853

 

$

14,329

 

Stock-based compensation

 

2,398

 

1,901

 

4,340

 

3,563

 

Amortization of intangible assets

 

15,336

 

4,429

 

30,737

 

8,841

 

Transaction-related costs

 

1,075

 

1,749

 

5,230

 

1,749

 

Litigation and dispute settlement charges

 

 

292

 

 

1,022

 

Restructuring and other exit costs

 

2,244

 

287

 

4,412

 

287

 

Income tax effect of adjustments to net income

 

(13,409

)

(2,091

)

(22,523

)

(4,542

)

Adjusted Net Income (7)

 

$

25,463

 

$

11,276

 

$

42,049

 

$

25,249