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Disappointing results for FTD/Interflora released.

nt story hero 14.03.19In a release issued today FTD, owners of Interflora in the UK, have recorded a 11% drop in sales and downgraded 2019 forecasts.   It comes on the heels of UK rumours about the creation of a network of 'super florists'; shops who will carry out orders and deliveries for a huge area resulting in other members receiving no orders from April. 

DOWNERS GROVE, Ill., March 14, 2019 (GLOBE NEWSWIRE) -- FTD Companies, Inc. (FTD) (“FTD” or the “Company”), a premier floral and gifting company, today announced financial results for the fourth quarter and full year ended December 31, 2018.

“We are disappointed we did not achieve our financial objectives for the fourth quarter and full year 2018. The shortfall was largely due to business performance during the fourth quarter holiday period,” commented Scott Levin, FTD’s President and Chief Executive Officer. “For 2019, we are updating our outlook based on lower than expected results for the Valentine’s Day holiday, and we are focused on improving the Company’s performance for the upcoming Mother’s Day holiday. Our Board of Directors and management team remain committed to our ongoing review of strategic alternatives as we seek to maximize stockholder value. We are also focused on realizing the benefits from our previously announced corporate restructuring and cost savings plan, which we expect will total $25 million to $28 million for 2019.”

Fourth Quarter Results

Consolidated revenues were $247.5 million for the fourth quarter of 2018, a decrease of 11.0% compared to $278.1 million for the fourth quarter of 2017, due to lower revenues in all of the Company’s business segments. Foreign currency exchange rates had a $1.3 million unfavorable impact on consolidated revenues during the fourth quarter of 2018.

Net loss was $68.8 million for the fourth quarter of 2018, compared to a net loss of $153.5 million for the fourth quarter of 2017. Net loss includes pre-tax non-cash impairment charges related to goodwill, intangible assets, and other long-lived assets of $67.1 million and $194.6 million, for the fourth quarters of 2018 and 2017, respectively.

Adjusted EBITDA was $12.6 million, or 5.1% of consolidated revenues, for the fourth quarter of 2018, compared to Adjusted EBITDA of $15.6 million, or 5.6% of consolidated revenues, for the fourth quarter of 2017. Adjusted EBITDA is a non-GAAP financial measure. Please refer to the tables in this press release for a reconciliation of all non-GAAP financial measures.

Full Year Results
Consolidated revenues were $1.01 billion for the year ended December 31, 2018, a decrease of 6.4% compared to $1.08 billion for the year ended December 31, 2017, due to lower revenues in all of the Company’s business segments. Foreign currency exchange rates had a $6.5 million favorable impact on consolidated revenues for the year ended December 31, 2018.

Net loss was $224.7 million for the year ended December 31, 2018, compared to a net loss of $234.0 million for the year ended December 31, 2017. Net loss includes pre-tax non-cash impairment charges related to goodwill, intangible assets, and other long-lived assets of $206.7 million and $300.3 million for the years ended December 31, 2018 and 2017, respectively. Restructuring and other exit costs incurred were $18.2 million and $2.2 million for the years ended December 31, 2018 and 2017, respectively.

Adjusted EBITDA was $33.4 million, or 3.3% of consolidated revenues, for the year ended December 31, 2018, compared to Adjusted EBITDA of $79.8 million, or 7.4% of consolidated revenues, for the year ended December 31, 2017.

Segment Results

U.S. Consumer Segment: U.S. Consumer segment revenues for the fourth quarter of 2018 decreased 10.9% to $180.3 million, compared to $202.3 million for the fourth quarter of 2017. This decline was primarily due to a 6.0% decrease in consumer orders and a $1.84, or 4.5%, decrease in average order value to $39.07, compared to the fourth quarter of 2017. Revenues decreased 18.6%, 17.4%, 13.6% and 0.3% for the Gourmet Foods, ProFlowers, FTD.com, and Personal Creations businesses, respectively, for the fourth quarter of 2018 compared to the prior-year quarter. U.S. Consumer segment operating income was $5.4 million for the fourth quarter of 2018 compared to $9.3 million for the prior-year quarter.

U.S. Consumer segment revenues for the year ended December 31, 2018 decreased 7.7% to $727.9 million, compared to $789.0 million for the prior-year. This decline was primarily due to a 5.1% decrease in consumer orders and a $1.36, or 2.7%, decrease in average order value to $49.95, compared to the year ended December 31, 2017. Revenues decreased 12.0%, 11.1%, and 7.3% in the FTD.com, ProFlowers, and Gourmet Foods businesses, respectively, for the year ended December 31, 2018 compared to the prior year. Partially offsetting these decreases was an increase in revenues for Personal Creations of 9.0% for the year ended December 31, 2018 compared to the prior year. The U.S. Consumer segment operating loss was $4.6 million for the year ended December 31, 2018, compared to operating income of $46.4 million for the year ended December 31, 2017. The decline in segment profitability was primarily due to lower revenue, increased marketing and shipping costs, and increased inventory write-offs from lower than anticipated Valentine’s Day orders in 2018.

Florist Segment: Florist segment revenues for the fourth quarter of 2018 decreased 13.5% to $35.0 million, compared to $40.5 million for the fourth quarter of 2017. Services revenues decreased $3.6 million primarily due to lower clearinghouse order volume. Products revenues decreased $1.8 million primarily as a result of a planned reduction in container offerings and related pricing. Average revenues per member decreased 5.6% to $3,659 for the fourth quarter of 2018, compared to $3,875 for the prior-year quarter. Florist segment operating income was $10.7 million, or 30.6% of segment revenues, for the fourth quarter of 2018, compared to $10.7 million, or 26.5% of segment revenues, for the fourth quarter of 2017.

Florist segment revenues for the year ended December 31, 2018 decreased 9.3% to $150.3 million, compared to $165.7 million for the year ended December 31, 2017. Services revenues decreased $10.6 million primarily due to lower clearinghouse order volume. Products revenues decreased $4.8 million primarily as a result of a planned reduction in container offerings and related pricing. Average revenues per member decreased 2.3% to $14,919 for the year ended December 31, 2018, compared to $15,270 for the year ended December 31, 2017. Florist segment operating income was $42.7 million, or 28.4% of segment revenues, for the year ended December 31, 2018, compared to $46.5 million, or 28.0% of segment revenues, for the year ended December 31, 2017.

International Segment: International segment revenues for the fourth quarter of 2018 decreased 8.5% to $36.2 million, compared to $39.6 million for the fourth quarter of 2017. On a constant currency basis, International segment revenues decreased 5.2% compared to the prior-year quarter. Consumer orders in the International segment decreased 3.7% compared to the prior-year quarter. Average order value decreased 3.0% as reported and increased 0.6% on a constant currency basis. International segment operating income was $1.3 million, or 3.5% of segment revenues, for the fourth quarter of 2018, compared to $4.8 million, or 12.1% of segment revenues, for the prior-year quarter. On a constant currency basis, International segment operating income decreased $3.5 million for the fourth quarter of 2018 compared to the prior-year quarter.

International segment revenues for the year ended December 31, 2018 increased 3.6% to $151.1 million, compared to $146.0 million for the year ended December 31, 2017. On a constant currency basis, International segment revenues decreased 0.9% compared to the prior year. Consumer orders increased 1.1% and average order value increased 3.1% as reported and decreased 1.1% on a constant currency basis. International segment operating income was $13.0 million, or 8.6% of segment revenues, for the year ended December 31, 2018, compared to $16.8 million, or 11.5% of segment revenues, for the year ended December 31, 2017. On a constant currency basis, International segment operating income decreased $4.7 million for the year ended December 31, 2018 compared to the prior year.

Balance Sheet, Cash Flow and Financing Initiatives
Net cash used for operating activities was $11.2 million for the year ended December 31, 2018, compared to net cash provided by operating activities of $52.8 million for the year ended December 31, 2017. Free Cash Flow for the year ended December 31, 2018 was negative $36.0 million, compared to Free Cash Flow of $48.8 million for the year ended December 31, 2017. 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.

Cash and cash equivalents were $16.2 million as of December 31, 2018 compared to $29.5 million at December 31, 2017. At December 31, 2018, the aggregate principal amount of the Company’s indebtedness outstanding under its credit agreement was $217.7 million, before reduction for deferred financing fees, compared to $192.0 million at December 31, 2017. The credit agreement debt includes $118.7 million outstanding under a term loan and $99.0 million outstanding under revolving loans. The Company has continued to work with its lenders and has entered into an additional amendment to the credit agreement that is designed to provide more alignment between the requirements under the credit agreement and the Company’s current business plans. As part of the amended credit agreement terms, the Company is required to achieve certain milestones relating to the strategic alternatives review process by June 1, 2019, and the Company intends to continue to work proactively with its lenders in light of the September 2019 maturity of the credit agreement.

Full Year 2019 Business Outlook
FTD is updating its outlook for the full year ending December 31, 2019 previously provided on November 7, 2018 to incorporate its 2019 year-to-date results and its expectations for the rest of the year. The current outlook reflects lower than expected revenues for the Valentine’s Day holiday, primarily from ProFlowers and Gourmet Foods, largely due to media investments that did not generate the expected level of traffic, as well as competitive and weather-related headwinds, along with reductions over the balance of the year in revenue, capital spending and expenses, including lower incentive compensation expense. The Company expects to generate savings of $25 million to $28 million from its corporate restructuring and cost savings plan, compared to prior expectations of $32 million to $37 million.

The Company now expects the following for full year 2019:

Consolidated revenues of $960 million to $1.00 billion compared to prior expectations of $1.03 billion to $1.06 billion;
Adjusted EBITDA of approximately $41 million to $49 million compared to prior expectations of $58 million to $68 million; and
Capital expenditures of $22 million to $28 million compared to prior expectations of $35 million to $40 million.
In connection with the full year 2019 outlook provided above, please note that the seasonality of the Company’s business impacts the quarterly pattern of its profitability and cash flows from operations.

The Company is not providing 2019 guidance for net income/(loss), the GAAP measure most directly comparable to Adjusted EBITDA, and similarly cannot provide a reconciliation between its forecasted Adjusted EBITDA and net income/(loss) metrics without unreasonable effort due to the unavailability of reliable estimates for certain items including transaction-related costs, impairments of goodwill, intangible assets, and other long-lived assets, and discrete tax items. These items may vary significantly between periods and could materially impact future financial results.

Conference Call & Webcast
The Company will host a pre-recorded conference call today at 8:00 a.m. ET that includes additional comments and details. Audio of the call will be webcast and archived on the investor relations section of the Company’s website at http://www.ftdcompanies.com through Thursday, March 28, 2019. In addition, you may dial 877-407-0784 to listen to the broadcast. The passcode is 13687979.

http://investor.ftdcompanies.com/news-releases/news-release-details/ftd-companies-inc-announces-fourth-quarter-and-full-year-2018


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