1-800-FLOWERS.COM Inc. (FLWS)
F4Q09 (Qtr End 06/28/2009) Earnings Call
August 20, 2009 11:00 am ET
Joseph Pititto - President of IR
Jim McCann - CEO
Bill Shea - CFO
Chris McCann - President
Eric Beder - Brean Murray
Kristine Koerber - JMP Securities
Anthony Lebiedzinski - Sidoti & Company
Alejandro Maldonado - Bayside Capital
Robert Nicholson - Pine Cobble Capital
Previous Statements by FLWS
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» 1-800-FLOWERS.COM, Inc. F1Q09 (Qtr End 09/30/08) Earnings Call Transcript
Thank you. Good morning and thank you all for joining us today to discuss the 1-800-FLOWERS.COM financial results for our fiscal 2009 fourth quarter and full year. My name is Joe Pititto and I'm Vice President of Investor Relations. For those of you who have not received a copy of our press release issued earlier this morning, the release can be accessed at the Investor Relations section of our website at 1800flowers.com or you can call Patty Altadonna at 516-237-6113 to receive a copy of the release by email or fax.
In terms of structure, our call today will begin with brief formal remarks and then we'll open the call for your questions. Presenting today will be Jim McCann, CEO, Chris McCann, President and Bill Shea, Chief Financial Officer.
Before we begin, I need to remind everyone that a number of the statements that we'll make today maybe forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. For a detailed description of these risks and uncertainties, please refer to our press release issued this morning, as well as our SEC filings including the company's annual report on form 10-K and quarterly reports on form 10-Q.
In addition, this morning, we will discuss certain adjusted results and supplemental financial measures that were not prepared in accordance with Generally Accepted Accounting Principles. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in the tables accompanying the company's press release issued this morning.
The company expressly disclaims any intent or obligation to update any of the forward-looking statements made in today's call, and the recordings of today's call, the press released earlier today or any of the SEC filings except as maybe otherwise stated by the company.
I'll now turn the call over to Jim McCann.
Fiscal 2009 was an incredibly challenging year during which we saw unprecedented changes in our economy. There was turmoil in the world financial markets, major financial institutions failed, the housing market slump intensified and unemployment increased dramatically.
As a result, consumer confidence fell to its lowest level on record. Under tremendous pressure, consumers reacted by dramatically reducing their spending. This weakness clearly impacted our business affecting our revenue and margins.
However, we were able to react effectively to the changes in the marketplace by accelerating the operating expense reduction programs we already had in place. As a result, during the year, we generated positive adjusted earnings per share and more than $36 million in adjusted EBITDA from continuing operations.
During the second half of fiscal 2009, we achieved the target of $50 million in operating cost savings from a fiscal 2010 which we discussed in our previous quarterly calls. This was on top of the more than $25 million in operating expenses that we had previously removed from our platform.
We accomplished this by leveraging our unique business model which features lower capital requirements compared with most other retailers. As a result, we believe we are positioned to drive improved bottom-line results in our current fiscal year and beyond.
Importantly, our expectation for strong growth in earnings, EBITDA and free cash flow for this fiscal year is not predicated on improvement in the consumer demand. We think it is prudent to assume that the current economic climate will continue to put pressure on consumers and dampen their discretionary spending. Should the economy improve, and consumers begin to increase their level of gift spending, we believe the strength of our brand combined with the flexibility of our business model will allow us to drive additional revenues and further enhancements to our profitability.
As part of the continuing evolution of our business, during fiscal 2009, we made a strategic decision to divest our Home and Children's Gift segment. This will allow us to focus all of our efforts and investments on our key business categories in Floral and Gourmet Gifts. These businesses leverage our platform best and offer the greatest opportunity for top and bottom line growth in the years ahead.
As a result, we have classified our Home and Children's Gift segments as a discontinued operation. This decision was not made lightly and it is important to note that the segments' day-to-day business activities will remain unchanged while we work toward a possible sale.
As we saw the decline in the consumer economy unfolding during the year, we intensified our focus on three key strategic priorities that drive our business in good times and challenging times.
These are first, Know and Take Care of our customer. We do this by providing the right products and best services to help them express themselves and connect to the important people in their lives. Second, maintain and enhance our financial strength and flexibility.