1-800-FLOWERS.COM, Inc. Reports Continued Positive Trends in Top and Bottom-Line Growth for Its Fiscal 2013 Second Quarter

  1-800-FLOWERS.COM, Inc. Reports Continued Positive Trends in Top and
  Bottom-Line Growth for Its Fiscal 2013 Second Quarter

  *Company reports revenue growth in all three of its business segments with
    total revenue for the quarter increasing 5.5 percent to $253.0 million led
    by growth of 8.9 percent in its Gourmet Food and Gift Baskets segment.
  *Adjusted EBITDA from continuing operations increased 3.6 percent to $31.8
    million compared with $30.7 million in the prior year period
  *Net Income and EPS from continuing operations increased 12.0 percent and
    9.0 percent, to $16.0 million and $0.24 per diluted share, respectively,
    compared with adjusted net income from continuing operations of $14.3
    million and EPS of $0.22 per diluted share in the prior year period.

Business Wire

CARLE PLACE, N.Y. -- January 31, 2013

1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS), the world’s leading florist and gift
shop, today reported revenues from continuing operations of $253.0 million for
its fiscal 2013 second quarter ended December 30, 2012, compared with revenues
from continuing operations of $239.8 million in the prior year period. The
Company said the 5.5 percent increase, or $13.2 million, reflected growth
across all three of its business segments, driven primarily by its Gourmet
Food and Gift Baskets segment, which grew 8.9 percent, or $11.6 million, to
$142.7 million compared with $131.1 million in the prior year period.

Gross profit margin for the quarter was 41.3 percent compared with 41.8
percent in the prior year period, primarily reflecting product mix associated
with strong wholesale gift basket growth in the Company’s Gourmet Food and
Gift Baskets segment. Operating expenses as a percent of revenue improved 60
basis points to 31.0 percent compared with 31.6 percent in the prior year
period. The improved operating expense ratio primarily reflects the increased
revenues for the quarter as well as the Company’s continued focus on improving
leverage across its business platform.

Adjusted EBITDA from continuing operations for the quarter increased 3.6
percent to $31.8 million compared with Adjusted EBITDA of $30.7 million in the
prior year period. Net income from continuing operations was $16.0 million, or
$0.24 per diluted share, compared with adjusted net income from continuing
operations of $14.3 million, or $0.22 per diluted share, in the prior year
period.

Jim McCann, CEO of 1-800-FLOWERS.COM, said, “During the fiscal second quarter
we achieved top and bottom line growth in all three of our business segments,
continuing a trend that we have seen for two years now. This was achieved
despite a combination of the significant headwinds that characterized the
quarter, including the impacts of Superstorm Sandy on deliveries and customer
demand and the effects of weakening consumer confidence, particularly in
December, stemming from worries over the “fiscal cliff.”

“Despite these issues, we achieved revenue growth of 5.5 percent, driven
primarily by our Gourmet Food and Gift Basket segment. In this area, we saw a
rebound, both top and bottom-line, in our wholesale gift baskets business,
after several years of declines in this area, as well as strong ecommerce
growth in our Cheryl’s bakery gifts, Fannie May Fine Chocolates and The
Popcorn Factory brands, somewhat offset by lower results in our Fannie May
retail and wholesale operations. In our 1-800-FLOWERS.COM consumer floral and
BloomNet wire service businesses, we achieved enhanced bottom-line
contributions on modest revenue growth reflecting our continued focus on
enhanced merchandising and marketing programs to drive higher gross profit
margins and effective management of operating expenses.”

During the fiscal second quarter, the Company attracted 612,000 new customers.
Approximately 1.6 million customers placed orders during the quarter, of whom
61 percent were repeat customers. This reflects the Company’s successful
efforts to engage with its customers and deepen its relationships as their
trusted Florist and Gift Shop for all of their celebratory occasions.

McCann also noted that the company has continued to strengthen its balance
sheet, finishing the second quarter with $27.0 million in cash and total debt
of approximately $21.8 million, resulting in a net positive cash position
which the Company expects to build upon during the second half of fiscal 2013.
“Our cash position at the end of the second quarter also reflects the more
than $5 million we have spent buying back our stock since the start of the
fiscal year,” said McCann. “The strength of our balance sheet and the
increasing cash flows we are generating, provide us with significant
flexibility to grow our business and build shareholder value. We view our
stock repurchase program as one component of our strategy for cash uses and an
effective way of providing value for our shareholders. As such, we expect to
continue to be in the market, buying back shares, during the second half of
the fiscal year.”

McCann noted that the second half of the Company’s fiscal year, beginning in
January, is more floral in nature due to the Valentine, Easter and Mother’s
Day holidays as well as other spring gifting occasions. “During our second
half, we expect to achieve year-over-year growth in revenues, gross margin and
contribution margin driven primarily by our core 1-800-FLOWERS.COM Consumer
Floral and BloomNet Wire Services businesses.” McCann added that the majority
of this growth would likely occur during its fiscal third quarter, reflecting
the shift of the Easter holiday into the period versus the prior year when it
fell in the Company’s fiscal fourth quarter.

“Based on the deepening relationships we have with our customers who continue
to embrace our truly original product offerings – such as our hit
“A-Dog-Able^®” floral gift line and our new FM Berries^® (incredible, fresh
strawberries dipped in real Fannie May^® chocolate), we believe we are well
positioned to build on the positive trends we have been seeing in our business
for several years now and build long-term shareholder value,” he said.

SEGMENT RESULTS FROM CONTINUING OPERATIONS:

The Company provides selected financial results for its Consumer Floral,
BloomNet and Gourmet Foods and Gift Baskets business segments in the tables
attached to this release and as follows:

  *1-800-FLOWERS.COM Consumer Floral: During the fiscal 2013 second quarter,
    revenues in this segment grew 1.0 percent to $91.8 million compared with
    $91.0 million in the prior year period. This segment was the most impacted
    of the Company’s businesses by Superstorm Sandy which affected deliveries
    as well as customer ordering capabilities throughout the Northeast.
    Revenue growth in this segment was also affected by softer demand
    reflecting declines in the closely followed Consumer Confidence Index,
    particularly in December, stemming from worries over the “fiscal cliff.”
    Gross profit margin for the fiscal second quarter increased 20 basis
    points to 39.2 percent compared with 39.0 percent in last year’s second
    quarter. Segment contribution margin increased 3.0 percent, to $10.3
    million compared with $10.0 million in the prior year period. (The Company
    defines Segment Contribution Margin as earnings before interest, taxes,
    depreciation and amortization and before allocation of corporate overhead
    expenses.)
  *BloomNet Wire Service: Revenues increased 2.5 percent to $18.7 million
    compared with $18.3 million in the prior year period, also reflecting the
    impact of Superstorm Sandy on wholesale product orders from florists.
    Gross margin for the quarter increased 310 basis points to 52.3 percent
    compared with 49.2 percent in the prior year period, primarily reflecting
    product and service mix. Segment contribution margin increased 19.2
    percent to $6.0 million compared with $5.1 million in the prior year
    period.
  *Gourmet Food and Gift Baskets: Revenues increased 8.9 percent to $142.7
    million compared with $131.1 million in the prior year period. This was
    driven primarily by a rebound in wholesale gift baskets sales into the
    Mass channel, after several years of declines in this area. Ecommerce
    revenues also showed strong growth, particularly in the Company’s Cheryl’s
    bakery gifts, Fannie May Fine Chocolates and The Popcorn Factory brands.
    This was somewhat offset by lower sales in Fannie May retail and wholesale
    channels, reflecting both the economic headwinds and weather impacts
    during the quarter. Gross margin was 41.0 percent compared with 42.4
    percent, primarily reflecting product mix as well as operational issues
    associated with the relocation of a warehouse and distribution facility
    prior to the holiday season. Segment contribution margin increased 1.9
    percent to $26.9 million compared with $26.4 million in the prior year
    period excluding the $3.8 million gain on the sale of 17 Fannie May stores
    to a new franchisee. This reflects the solid revenue growth during the
    quarter somewhat offset by the aforementioned lower gross margin
    percentage and higher costs associated with operational issues.

Company Guidance:

The Company reiterated its top- and bottom-line guidance for fiscal 2013,
saying it continues to expect to achieve revenue growth across all three of
its business segments with consolidated revenue growth for the year
anticipated to be in the mid-single-digit range. Also, based on anticipated
continued improvements in gross profit margin and operating leverage, the
Company expects to achieve double-digit, year-over-year increases in EBITDA
and EPS as well as Free Cash Flow in excess of $20 million.

Definitions:

* EBITDA: Net income (loss) before interest, taxes, depreciation,
amortization. Free Cash Flow: net cash provided by operating activities less
capital expenditures. Category contribution margin: earnings before interest,
taxes, depreciation and amortization, before the allocation of corporate
overhead expenses. The Company presents EBITDA and Adjusted EBITDA from
continuing operations because it considers such information meaningful
supplemental measures of its performance and believes such information is
frequently used by the investment community in the evaluation of similarly
situated companies. The Company also uses EBITDA and Adjusted EBITDA as
factors used to determine the total amount of incentive compensation available
to be awarded to executive officers and other employees. The Company’s credit
agreement uses EBITDA and Adjusted EBITDA to measure compliance with covenants
such as interest coverage and debt incurrence. EBITDA and Adjusted EBITDA are
also used by the Company to evaluate and price potential acquisition
candidates. EBITDA, Adjusted EBITDA and Free Cash Flow have limitations as
analytical tools and should not be considered in isolation or as a substitute
for analysis of the Company's results as reported under GAAP. Some of the
limitations of EBITDA and Adjusted EBITDA are: (a) EBITDA and Adjusted EBITDA
do not reflect changes in, or cash requirements for, the Company's working
capital needs; (b) EBITDA and Adjusted EBITDA do 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. EBITDA and Free Cash Flow should
only be used on a supplemental basis combined with GAAP results when
evaluating the Company's performance.

About 1-800-FLOWERS.COM, Inc.

1-800-FLOWERS.COM, Inc. is the world’s leading florist and gift shop. For more
than 30 years, 1-800-FLOWERS® (1-800-356-9377 or www.1800flowers.com) has been
helping deliver smiles for our customers with gifts for every occasion,
including fresh flowers and the finest selection of plants, gift baskets,
gourmet foods, confections, candles, balloons and plush stuffed animals. As
always, our 100% Smile Guarantee backs every gift. 1-800-FLOWERS.COM’s Mobile
Flower & Gift Center was named winner of the Mobile Shopping Summit’s “Best
Mobile Site of 2011.” 1-800-FLOWERS.COM was also rated number one vs.
competitors for customer satisfaction by STELLAService and 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. 1-800-FLOWERS.COM
has been honored in Internet Retailer’s “Hot 100: America’s Best Retail Web
Sites” for 2011. The Company’s BloomNet® international floral wire service
(www.mybloomnet.net) provides a broad range of quality products and
value-added services designed to help professional florists grow their
businesses profitably. The 1-800-FLOWERS.COM “Gift Shop” also includes gourmet
gifts such as popcorn and specialty treats from The Popcorn Factory®
(1-800-541-2676 or www.thepopcornfactory.com); cookies and baked gifts from
Cheryl’s® (1-800-443-8124 or www.cheryls.com); premium chocolates and
confections from Fannie May® confections brands (www.fanniemay.com and
www.harrylondon.com); gift baskets and towers from 1-800-Baskets.com®
(www.1800baskets.com); delicious cut-fruit arrangements from FruitBouquets.com
(www.fruitbouquets.com); wine gifts from Winetasting.com®
(www.winetasting.com); ultra- premium meats from Stockyards.com
(www.stockyards.com); as well as exquisite, customizable invitations and
personal stationery from FineStationery.com (www.finestationery.com). The
Company’s Celebrations® brand (www.celebrations.com) is a new premier online
destination for fabulous party ideas and planning tips. 1-800-FLOWERS.COM,
Inc. is involved in a broad range of corporate social responsibility
initiatives including continuous expansion and enhancement of its
environmentally-friendly “green” programs as well as various philanthropic and
charitable efforts. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ
Global Select Market, ticker symbol: FLWS.

Special Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements represent the Company’s current expectations or beliefs concerning
future events and can generally be identified by the use of statements that
include words such as “estimate,” “expects,” “project,” “believe,”
“anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “target” or
similar words or phrases. Forward-looking statements include, but are not
limited to, statements regarding the Company’s expectations for: its ability
to build on positive trends including increases in revenue, gross margin and
contribution margin in its Consumer Floral business; its ability to achieve
continued top and bottom line growth in its BloomNet and Gourmet Food and Gift
Baskets categories; its ability to achieve its guidance for consolidated
revenue growth for the full year in mid-single digit range along with further
improvement in gross profit margin and double-digit year-over-year increases
in EBITDA and EPS. These forward-looking statements are subject to risks,
uncertainties and other factors, many of which are outside of the Company’s
control, which could cause actual results to differ materially from the
results expressed or implied in the forward- looking statements, including,
among others: the Company’s ability to leverage its operating platform and
reduce operating expenses; its ability to grow its 1-800-Baskets.com business;
its ability to manage the seasonality of its businesses; its ability to cost
effectively acquire and retain customers; the outcome of contingencies,
including legal proceedings in the normal course of business; its ability to
compete against existing and new competitors; its ability to manage expenses
associated with sales and marketing and necessary general and administrative
and technology investments; its ability to reduce promotional activities and
achieve more efficient marketing programs; and general consumer sentiment and
economic conditions that may affect levels of discretionary customer purchases
of the Company’s products. The Company undertakes no obligation to publicly
update any of the forward-looking statements, whether as a result of new
information, future events or otherwise, made in this release or in any of its
SEC filings except as may be otherwise stated by the Company. For a more
detailed description of these and other risk factors, please refer to the
Company’s SEC filings including the Company’s Annual Reports on Form 10-K and
its Quarterly Reports on Form 10-Q. Consequently, you should not consider any
such list to be a complete set of all potential risks and uncertainties.

Conference Call:

The Company will conduct a conference call to discuss the above details and
attached financial results today, Thursday, January 31, 2013 at 11:00 a.m.
(ET). The call will be “web cast” live via the Internet and can be accessed
from the Investor Relations section of the 1-800-FLOWERS.COM web site at
www.1800flowersinc.com A recording of the call will be posted on the Investor
Relations section of the Company’s web site within two hours of the call’s
completion. A telephonic replay of the call can be accessed for 48 hours
beginning at 2:00 p.m. ET on the day of the call at: 1-855-859-2056 or
1-404-537-3406; Conference ID: 86548135.

Note: Attached tables are an integral part of this press release without which
the information presented in this press release should be considered
incomplete.

                                                                
1-800-FLOWERS.COM, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)
                                                                     
                                                    December 30,     July 1,

                                                    2012             2012
                                                                     
Assets
Current assets:
Cash and equivalents                                $   26,964       $ 28,854
Receivables, net                                        36,407         14,968
Inventories                                             58,435         55,744
Deferred tax assets                                     5,902          4,993
Prepaid and other                                       7,262          11,082
Current assets of discontinued operations              -             100
Total current assets                                $   134,970      $ 115,741
                                                                     
Property, plant and equipment, net                      49,757         48,669
Goodwill                                                47,901         47,901
Other intangibles, net                                  40,412         41,838
Deferred income taxes                                   2,822          2,824
Other assets                                           9,283         7,875
Total assets                                        $   285,145      $ 264,848
                                                                     
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable                                    $   26,135       $ 17,619
Accrued expenses                                        63,442         52,535
Current maturities of long-term debt and                17,250         15,756
obligations under capital leases
Current liabilities of discontinued operations         59            110
Total current liabilities                           $   106,886      $ 86,020
                                                                     
Long-term debt and obligations under capital            4,500          13,500
leases
Other liabilities                                      3,368         3,580
Total liabilities                                      114,754       103,100
Total stockholders’ equity                             170,391       161,748
Total liabilities and stockholders’ equity          $   285,145      $ 264,848
                                                                       

                                               

1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information

Consolidated Statements of Operations

(In thousands, except for per share data)
                                                    
                     Three Months Ended             Six Months Ended
                     December      January 1,     December     January 1,
                     30,                            30,
                     2012            2012           2012           2012
                                                                   
Net revenues:
E-commerce
(combined online     $  172,629      $  165,130     $  254,090     $ 243,920
and telephonic)
Other                  80,387         74,715        119,794      113,123 
Total net               253,016         239,845        373,884       357,043
revenues
Cost of revenues       148,531        139,519       219,762      210,155 
Gross profit            104,485         100,326        154,122       146,888
                                                                   
Operating
expenses:
Marketing and           54,901          53,020         87,891        85,302
sales
Technology and          5,376           4,854          10,791        9,606
development
General and             13,679          12,932         26,900        25,291
administrative
Depreciation and       4,531          4,929         8,989        9,831   
amortization
                                                                             
Total operating        78,487         75,735        134,571      130,030 
expenses
                                                                             
Gain on sale of        -              3,789         -            3,789   
stores
                                                                   
Operating income        25,998          28,380         19,551        20,647
                                                                   
Interest               559            849           861          1,671   
expense, net
                                                                   
Income from
continuing
operations              25,439          27,531         18,690        18,976
before income
taxes
Income tax
expense from           9,428          10,955        7,285        7,533   
continuing
operations
Income from
continuing              16,011          16,576         11,405        11,443
operations
                                                                   
Operating income
from
discontinued            -               63             -             (23     )
operations, net
of tax
Gain on sale of
discontinued           -              -             -            4,478   
operations, net
of tax
Income from
discontinued           -              63            -            4,455   
operations
                                                                             
Net income           $  16,011       $  16,639      $  11,405      $ 15,898  
                                                                   
Net income per
common share
(basic)
From continuing      $  0.25         $  0.26        $  0.18        $ 0.18
operations
From
discontinued           -              -             -            0.07    
operations
Net income per
common share         $  0.25         $  0.26        $  0.18        $ 0.25    
(basic)
Net income per
common share                                                     
(diluted)
From continuing      $  0.24         $  0.25        $  0.17        $ 0.17
operations
From
discontinued           -              -             -            0.07    
operations
Net income per
common share         $  0.24         $  0.25        $  0.17        $ 0.24    
(diluted)
Weighted average
shares used in
the calculation
of net income
per common share
Basic                  64,824         64,841        64,665       64,530  
Diluted                66,557         66,050        66,695       65,989  
                                                                             

                                               
1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information

Consolidated Statements of Cash Flows

(In thousands)
                                                  
                                                  Six Months Ended
                                                  December 30,   January 1,
                                                    2012          2012    
                                                                   
Operating activities
Net income                                        $  11,405        $ 15,898
Reconciliation of net income to net cash
provided by operations:
Operating activities of discontinued                 49              1,112
operations
Gain on sale of discontinued operations              -               (8,953  )
Depreciation and amortization                        8,989           9,831
Amortization of deferred financing costs             229             229
Deferred income taxes                                (909    )       6,032
Bad debt expense                                     477             327
Stock based compensation                             2,304           2,380
Other non-cash items                                 213             97
Changes in operating items, excluding the
effects of acquisitions:
Receivables                                          (21,916 )       (18,526 )
Inventories                                          (2,691  )       (7,896  )
Prepaid and other                                    3,820           307
Accounts payable and accrued expenses                19,687          16,214
Other assets                                         (306    )       2,772
Other liabilities                                   (212    )      16      
Net cash provided by operating activities            21,139          19,840
                                                                   
Investing activities
Acquisitions, net of cash acquired                   -               (4,336  )
Proceeds from sale of business                       -               12,826
Capital expenditures                                 (9,128  )       (8,689  )
Purchase of investments                              (1,321  )       (1,111  )
Other, net                                          34            (299    )
Net cash used in investing activities                (10,415 )       (1,609  )
                                                                   
Financing activities
Acquisition of treasury stock                        (5,149  )       (1,111  )
Proceeds from exercise of employee stock             83              -
options
Proceeds from bank borrowings                        47,000          56,000
Repayment of notes payable and bank                  (54,500 )       (63,500 )
borrowings
Repayment of capital lease obligations              (48     )      (984    )
Net cash used in financing activities               (12,614 )      (9,595  )
                                                                   
Net change in cash and equivalents                   (1,890  )       8,636
Cash and equivalents:
Beginning of period                                 28,854        21,442  
End of period                                     $  26,964       $ 30,078  

                                                              
1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information

Segment Information

(in thousands)
                                                                   
                      Three Months Ended                           Six Months Ended
                      December      January 1,                 December      January 1,   
                      30,                                          30,
                       2012          2012         %            2012          2012         %      
                                                      Change                                       Change
                                                                                                   
Net revenues from
continuing
operations:
1-800-Flowers.com     $ 91,826        $ 91,041        0.9    %     $ 164,603       $ 161,181       2.1    %
Consumer Floral
BloomNet Wire           18,734          18,272        2.5    %       38,501          36,777        4.7    %
Service
Gourmet Food &          142,736         131,100       8.9    %       171,142         159,725       7.1    %
Gift Baskets
Corporate (*)           200             189           5.8    %       394             376           4.8    %
Intercompany           (480    )      (757    )     36.6   %      (756    )      (1,016  )     25.6   %
eliminations
Total net
revenues from         $ 253,016      $ 239,845      5.5    %     $ 373,884      $ 357,043      4.7    %
continuing
operations
                                                                                                          

                                                                
                      Three Months Ended                             Six Months Ended
                      December       January 1,                 December       January 1,   
                      30,                                            30,
                       2012            2012         %            2012            2012         %      
                                                        Change                                         Change
                                                                                                       
Gross profit from
continuing
operations:
1-800-Flowers.com     $ 35,954          $ 35,524        1.2    %     $ 64,246          $ 62,213        3.3    %
Consumer Floral
                        39.2    %         39.0    %                    39.0    %         38.6    %
                                                                                                       
BloomNet Wire           9,792             8,992         8.9    %       19,592            17,521        11.8   %
Service
                        52.3    %         49.2    %                    50.9    %         47.6    %
                                                                                                       
Gourmet Food &          58,577            55,650        5.3    %       69,782            66,865        4.4    %
Gift Baskets
                        41.0    %         42.4    %                    40.8    %         41.9    %
                                                                                                       
Corporate (*)           162               160           1.0    %       502               289           73.7   %
                      81.0    %        84.7    %                  127.4   %        76.9    %     
                                                                                                       
Total gross
profit from           $ 104,485        $ 100,326      4.1    %     $ 154,122        $ 146,888      4.9    %
continuing
operations
                       41.3    %        41.8    %                   41.2    %        41.1    %
                                                                                                       

                                                             
                      Three Months Ended                         Six Months Ended
                      December      January 1,                December      January 1,    
                      30,                                         30,
                       2012          2012         %            2012          2012           %
                                                      Change                                        Change
                                                                                                    
Adjusted EBITDA
from continuing
operations:
Segment
Contribution
Margin (**)
1-800-Flowers.com     $ 10,286        $ 9,984         3.0   %     $ 17,172        $ 15,951          7.7   %
Consumer Floral
BloomNet Wire           6,049           5,074         19.2  %       11,845          9,667           22.5  %
Service
Gourmet Food &         26,868        30,166       -10.9 %      24,381        28,240         -13.7 %
Gift Baskets
Segment
Contribution            43,203          45,224        -4.5  %       53,398          53,858          -0.9  %
Margin Subtotal
Corporate (*)          (12,674 )      (11,915 )     -6.4  %      (24,858 )      (23,380 )       -6.4  %
EBITDA from
continuing              30,529          33,309        -8.3  %       28,540          30,478          -6.4  %
operations
Add: Stock-based       1,315         1,211        8.6   %      2,304         2,380          -3.2  %
compensation
EBITDA from
continuing
operations,
excluding              31,844        34,520       -7.8  %      30,844        32,858         -6.1  %
stock-based

compensation
Less: Gain on          -             3,789        -            -             3,789          -
sale of stores
                                                                                                          
Adjusted EBITDA
from continuing       $ 31,844       $ 30,731       3.6   %     $ 30,844       $ 29,069         6.1   %
operations:
                                                                                                          

                                                
1-800-FLOWERS.COM, Inc. and Subsidiaries

Selected Financial Information

(in thousands)
                                                     
                       Three Months Ended            Six Months Ended
                       December       January 1,     December       January 1,
                      30,                         30,         
                                      2012                          2012
                       2012                          2012
Reconciliation of
Net Income from
continuing
operations to
Adjusted EBITDA

from continuing
operations (**):
Net income from
continuing             $  16,011      $  16,576      $  11,405      $  11,443
operations
Add:
Interest expense,         559            849            861            1,671
net
Depreciation and          4,531          4,929          8,989          9,831
amortization
Income tax expense       9,428         10,955        7,285         7,533
EBITDA                 $  30,529      $  33,309      $  28,540      $  30,478
Add: Stock-based         1,315         1,211         2,304         2,380
compensation
EBITDA , excluding
stock-based            $  31,844      $  34,520      $  30,844      $  32,858
compensation
Less: Gain on sale       -             3,789         -             3,789
of stores
Adjusted EBITDA
from continuing        $  31,844      $  30,731      $  30,844      $  29,069
operations:
                                                                       

                                                
                       Three Months Ended            Six Months Ended
                       December     January 1,     December     January 1,
                       30,                           30,
                       2012           2012           2012           2012
Reconciliation of
Net Income and EPS
from continuing
operations to
Adjusted

Net Income and EPS
from continuing
operations:
Net income from
continuing             $  16,011      $  16,576      $  11,405      $  11,443
operations
Less: Gain on sale
of stores, net of        -             2,281         -             2,281
tax
Adjusted Net
Income from            $  16,011      $  14,295      $  11,405      $  9,162
continuing
operations
                                                                    
Net Income per
common share from
continuing
operations
Basic                  $  0.25        $  0.26        $  0.18        $  0.18
Diluted                $  0.24        $  0.25        $  0.17        $  0.17
                                                                    
Adjusted Net
Income per common
share from
continuing
operations
Basic                  $  0.25        $  0.22        $  0.18        $  0.14
Diluted                $  0.24        $  0.22        $  0.17        $  0.14
                                                                    
Weighted average
shares used in the
calculation of net
income per common
share

from continuing
operations
Basic                     64,824         64,841         64,665         64,530
Diluted                   66,557         66,050         66,695         65,989
                                                                       

       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 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 segments based upon usage, are included within corporate
       expenses as they are not directly allocable to a specific segment.
       
       Performance is measured based on segment contribution margin or segment
       Adjusted EBITDA, reflecting only the direct controllable revenue and
       operating expenses of the segments. As such, management’s measure of
       profitability for these segments does not include the effect of
       corporate overhead, described above, depreciation and amortization,
       other income (net), nor does it include one-time charges or gains.
       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.

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Contact:

1-800-FLOWERS.COM, Inc.
Investors:
Joseph D. Pititto, 516-237-6131
invest@1800flowers.com
or
Media:
Yanique Woodall, 516-237-6028
ywoodall@1800flowers.com
 
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