1-800-FLOWERS.COM, Inc. Reports Fiscal 2023 Second Quarter Results

About this update from 1-800-flowers.com, Inc.

Second Quarter Results Reflect Successful Holiday Performance Generates Net Income of $82.5 million and Adjusted EBITDA1 of $131 million Updates Fiscal 2023 Guidance (1) Refer to “Definitions of Non-GAAP Financial Measures” and the tables attached at the end of this press release for reconciliation of non-GAAP results to applicable GAAP results.) JERICHO, N.Y. --(BUSINESS WIRE)-- 1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS), a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships, today reported results for its Fiscal 2023 second quarter ended January 1, 2023 . Fiscal 2023 Second Quarter Highlights Total consolidated revenues decreased 4.8% to $897.9 million , compared with total consolidated revenues of $943.0 million in the prior year period. Gross profit margin for the quarter was 41.0%, as compared with 40.1% in the prior year period. Operating expenses were 28.1% of total sales, as compared with 27.9% in the prior year period. Net income for the quarter was $82.5 million , or $1.27 per diluted share, as compared with net income of $88.5 million , or $1.34 per diluted share in the prior year period. Adjusted EBITDA1 for the quarter was $131.4 million , as compared to Adjusted EBITDA1 of $133.1 million in the prior year period. Expands leadership position in personalized gifting marketplace through the acquisition of the Things Remembered® brand, which occurred after the second quarter ended. Chris McCann , CEO of 1-800-FLOWERS.COM, Inc. , said, “Our second quarter results benefited from the strength of our Gourmet Foods and Gift Baskets business with improving gross margins, as well as an enterprise-wide reduction in operating expenses. As we had anticipated, consumers continued to spend for the major holidays and they reverted to their historical shopping patterns, shopping much later in the holiday period. PersonalizationMall.com® kicked off our holiday period with its biggest Cyber Monday ever, and as demand on our platform grew throughout the month of December, Harry & David® achieved record revenues for the quarter on the consumer side of its business. We did see demand soften in corporate gifting, which we attribute to macro-economic pressures and hybrid work environments, whereas a year ago there were fewer in-person holiday get-togethers.” McCann added, “Our margins began to stabilize during the quarter, as we started to benefit from lower inbound freight costs and strategic pricing initiatives. Margins within our Gourmet Foods and Gift Baskets business also benefited from our logistics optimization and automation initiatives. We expect these favorable trends to continue and further improve our margins throughout the remainder of this fiscal year and beyond.” “As we look to the balance of the year, we expect consumers to continue to shop and spend for the major upcoming holidays, while continuing to moderate their spend on everyday gifting occasions due to macro inflationary pressures.” Second Quarter 2023 Financial Results Total consolidated revenues decreased 4.8% to $897.9 million , as compared with total consolidated revenues of $943.0 million in the prior year period. Gross profit margin for the quarter was 41.0%, increasing 90 basis points as compared with 40.1% in the prior year period. Gross profit margin improved based on strong performance within our Gourmet Foods and Gift Baskets business, primarily related to strategic pricing initiatives, lower in-bound freight costs, as well as an improvement in labor availability and automation. Operating expenses were 28.1% of total sales, as compared with 27.9% in the prior year period. On a dollar basis, operating expenses declined $10.1 million , primarily reflecting lower marketing costs, as the Company shifted its advertising investments to lower cost, higher return on investment areas of the marketing funnel. As a result, the Company generated net income of $82.5 million , or $1.27 per diluted share, and Adjusted Net Income1 of $82.7 million , or $1.28 per share, as compared with net income of $88.5 million , or $1.34 per share, and Adjusted Net Income1 of $88.6 million , or $1.34 per share, in the prior year period. Adjusted EBITDA1 for the quarter was $131.4 million , as compared with Adjusted EBITDA1 of $133.1 million in the prior year period. Segment Results The Company provides selected financial results for its Gourmet Foods and Gift Baskets, Consumer Floral and Gifts, and BloomNet segments in the tables attached to this release and as follows: Gourmet Foods and Gift Baskets: Revenues for the quarter decreased 0.4% to $588.4 million , compared with $590.9 million in the prior year period, reflecting the resiliency of our gourmet food gifting businesses. Gross profit margin was 41.0%, compared with 39.3% in the prior year period, benefiting from strategic pricing, lower inbound transportation costs, and automation initiatives. As a result, segment contribution margin1 was $123.5 million , compared with $110.5 million a year ago. Consumer Floral and Gifts: Revenues decreased 12.1% to $277.0 million , compared with $315.1 million in the prior year period. Gross profit margin decreased to 40.5%, compared with 41.3% in the prior year period, primarily due to higher fulfillment costs and outbound transportation costs. Segment contribution margin1 was $27.9 million , compared with $38.2 million the prior year. BloomNet : Revenues for the quarter decreased 13.4% to $32.9 million , compared with $37.9 million in the prior year period. Gross profit margin of 42.2% was flat with the prior year. Segment contribution margin1 was $9.3 million , compared with $11.9 million in the prior year period. Company Guidance The Company is updating its Fiscal 2023 guidance based on its second quarter performance and the current economic environment. While the highly unpredictable nature of the current macro economy makes it difficult to forecast in this environment, the Company continues to expect that after growing revenues 77% over the past three fiscal years, revenues will decline in Fiscal 2023 on cautious consumer behavior. The Company also anticipates that as a result of the investments it has made, and continues to make, in its business platform, along with strategic pricing programs and a moderation of certain cost inputs, gross margins and bottom-line results will gradually improve during the latter half of the current fiscal year. Full Year Fiscal 2023 Guidance Total revenues to decline in the mid-single digit range on a percentage basis as compared with the prior year; Adjusted EBITDA1 is now expected to be in a range of $80 million to $85 million ; and Free Cash Flow1 to exceed $75 million . Conference Call The Company will conduct a conference call to discuss the above details and attached financial results today, Thursday, February 2 , at 8:00 a.m. (ET) . The conference call will be webcast from the Investors section of the Company’s website at www.1800flowersinc.com . A recording of the call will be posted on the Investors section of the Company’s website within two hours of the call’s completion. A telephonic replay of the call can be accessed beginning at 2:00 p.m. (ET) today through February 9, 2023 , at: (US) 1-877-344-7529; ( Canada ) 855-669-9658; (International) 1-412-317-0088; enter conference ID #: 7691597. If you have any questions regarding the above information, please contact the Investor Relations office at [email protected] . Definitions of non-GAAP Financial Measures: We sometimes use financial measures derived from consolidated financial information, but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. Non-GAAP financial measures referred to in this document are either labeled as “non-GAAP” or designated as such with a “1”. See below for definitions and the reasons why we use these non-GAAP financial measures. Where applicable, see the Selected Financial Information below for reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, tax items, amortization or others that may arise during the year, and the Company’s management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The lack of such reconciling information should be considered when assessing the impact of such disclosures. EBITDA and Adjusted EBITDA: We define EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of stock-based compensation, Non-Qualified Plan Investment appreciation/depreciation, and for certain items affecting period-to-period comparability. See Selected Financial Information for details on how EBITDA and Adjusted EBITDA were calculated for each period presented. The Company presents EBITDA and Adjusted EBITDA 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 uses EBITDA and Adjusted EBITDA as factors 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 determine its interest rate and to measure compliance with certain covenants. EBITDA and Adjusted EBITDA are also used by the Company to evaluate and price potential acquisition candidates. EBITDA and Adjusted EBITDA 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 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 Adjusted EBITDA should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance. Segment Contribution Margin: We define Segment Contribution Margin as earnings before interest, taxes, depreciation, and amortization, before the allocation of corporate overhead expenses. See Selected Financial Information for details on how Segment Contribution Margin was calculated for each period presented. When viewed together with our GAAP results, we believe Segment Contribution Margin provides management and users of the financial statements meaningful information about the performance of our business segments. Segment Contribution Margin is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of Segment Contribution Margin is that it is an incomplete measure of profitability as it does not include all operating expenses or non-operating income and expenses. Management compensates for these limitations when using this measure by looking at other GAAP measures, such as Operating Income and Net Income. Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share: We define Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share as Net Income (Loss) and Net Income (Loss) Per Common Share adjusted for certain items affecting period-to-period comparability. See Selected Financial Information below for details on how Adjusted Net Income (Loss) Per Common Share and Adjusted or Comparable Net Income (Loss) Per Common Share were calculated for each period presented. We believe that Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share are meaningful measures because they increase the comparability of period-to-period results. Since these are not measures of performance calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, GAAP Net Income (Loss) and Net Income (Loss) Per Common share, as indicators of operating performance and they may not be comparable to similarly titled measures employed by other companies. Free Cash Flow: We define Free Cash Flow as net cash provided by operating activities less capital expenditures. The Company considers Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of fixed assets, which can then be used to, among other things, invest in the Company’s business, make strategic acquisitions, strengthen the balance sheet, and repurchase stock or retire debt. Free Cash Flow is a liquidity measure that is frequently used by the investment community in the evaluation of similarly situated companies. Since Free Cash Flow is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. A limitation of the utility of Free Cash Flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company's cash balance for the period. About 1-800-FLOWERS.COM, Inc. 1-800-FLOWERS.COM, Inc. is a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships. The Company’s e-commerce business platform features an all-star family of brands, including: 1-800-Flowers.com ®, 1-800-Baskets.com ®, Cheryl’s Cookies ®, Harry & David ®, PersonalizationMall.com ®, Shari’s Berries ®, FruitBouquets.com ®, Things Remembered® , Moose Munch ®, The Popcorn Factory ®, Wolferman’s Bakery ®, Vital Choice ®, Stock Yards ® and Simply Chocolate ®. Through the Celebrations Passport ® loyalty program, which provides members with free standard shipping and no service charge across our portfolio of brands, 1-800-FLOWERS.COM, Inc. strives to deepen relationships with customers. The Company also operates BloomNet ®, an international floral and gift industry service provider offering a broad-range of products and services designed to help members grow their businesses profitably; Napco ℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC , a manufacturer of gift baskets and towers; and Alice’s Table ®, a lifestyle business offering fully digital livestreaming and on demand floral, culinary and other experiences to guests across the country. 1-800-FLOWERS.COM, Inc. was recognized among the top 5 on the National Retail Federation’s 2021 Hot 25 Retailers list, which ranks the nation’s fastest-growing retail companies, and was named to the Fortune 1000 list in 2022. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS. For more information, visit 1800flowersinc.com or follow @1800FLOWERSInc on Twitter . FLWS–COMP FLWS-FN 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 using statements that include words such as “estimate,” “expects,” “project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,” “forecast,” “likely,” “will,” “target” or similar words or phrases. 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, but not limited to, statements regarding the Company’s ability to achieve its guidance for the full Fiscal year; the impact of the Covid-19 pandemic on the Company; its ability to leverage its operating platform and reduce its operating expense ratio; its ability to sell through existing inventories; its ability to successfully integrate acquired businesses and assets; its ability to successfully execute its strategic initiatives; 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 industry 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 because of new information, future events or otherwise, made in this release or in any of its SEC filings. Consequently, you should not consider any such list to be a complete set of all potential risks and uncertainties. For a more detailed description of these and other risk factors, 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. Note: The following 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) January 1, 2023 July 3, 2022 (unaudited) Assets Current assets: Cash and cash equivalents $ 189,718 $ 31,465 Trade receivables, net 53,027 23,812 Inventories 201,057 247,563 Prepaid and other 24,929 45,398 Total current assets 468,731 348,238 Property, plant and equipment, net 235,913 236,481 Operating lease right-of-use assets 131,722 129,390 Goodwill 213,999 213,287 Other intangibles, net 142,847 145,568 Other assets 23,787 21,927 Total assets $ 1,216,999 $ 1,094,891 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 75,095 $ 57,386 Accrued expenses 233,926 175,392 Current maturities of long-term debt 20,000 20,000 Current portion of long-term operating lease liabilities 15,289 12,919 Total current liabilities 344,310 265,697 Long-term debt, net 132,786 142,497 Long-term operating lease liabilities 124,725 123,662 Deferred tax liabilities, net 34,895 35,742 Other liabilities 19,757 17,884 Total liabilities 656,473 585,482 Total stockholders’ equity 560,526 509,409 Total liabilities and stockholders’ equity $ 1,216,999 $ 1,094,891 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information Consolidated Statements of Operations (in thousands, except for per share data) (unaudited) Three Months Ended Six Months Ended January 1 , 2023 December 26 , 2021 January 1 , 2023 December 26 , 2021 Net revenues: E-Commerce $ 790,410 $ 827,522 $ 1,029,332 $ 1,090,893 Other 107,467 115,522 172,149 161,524 Total net revenues 897,877 943,044 1,201,481 1,252,417 Cost of revenues 530,111 564,594 732,257 748,453 Gross profit 367,766 378,450 469,224 503,964 Operating expenses: Marketing and sales 194,466 207,771 283,605 302,150 Technology and development 14,952 13,490 29,692 26,913 General and administrative 28,908 28,872 55,153 55,938 Depreciation and amortization 14,315 12,588 27,009 23,558 Total operating expenses 252,641 262,721 395,459 408,559 Operating income 115,125 115,729 73,765 95,405 Interest expense, net 4,143 1,723 6,964 3,251 Other expense (income), net 148 (2,457) 1,070 (3,053) Income before income taxes 110,834 116,463 65,731 95,207 Income tax expense 28,304 27,995 16,893 19,938 Net income $ 82,530 $ 88,468 $ 48,838 $ 75,269 Basic net income per common share $ 1.28 $ 1.36 $ 0.76 $ 1.16 Diluted net income per common share $ 1.27 $ 1.34 $ 0.75 $ 1.14 Weighted average shares used in the calculation of net income per common share: Basic 64,675 65,261 64,606 65,161 Diluted 64,835 65,969 64,820 65,954 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended January 1, 2023 December 26, 2021 Operating activities: Net income $ 48,838 $ 75,269 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 27,009 23,558 Amortization of deferred financing costs 671 616 Deferred income taxes (846) (1,306) Bad debt expense 2,407 (1,285) Stock-based compensation 3,454 5,296 Other non-cash items (470) (448) Changes in operating items: Trade receivables (31,622) (55,074) Inventories 46,506 (28,534) Prepaid and other 7,550 8,172 Accounts payable and accrued expenses 89,050 160,459 Other assets and liabilities 1,113 (875) Net cash provided by operating activities 193,660 185,848 Investing activities: Acquisitions, net of cash acquired - (20,786) Capital expenditures, net of non-cash expenditures (23,849) (32,608) Net cash used in investing activities (23,849) (53,394) Financing activities: Acquisition of treasury stock (1,175) (25,521) Proceeds from exercise of employee stock options - 846 Proceeds from bank borrowings 195,900 125,000 Repayment of notes payable and bank borrowings (205,900) (135,000) Debt issuance cost (383) (284) Net cash used in financing activities (11,558) (34,959) Net change in cash and cash equivalents 158,253 97,495 Cash and cash equivalents: Beginning of period 31,465 173,573 End of period $ 189,718 $ 271,068 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information – Category Information (dollars in thousands) (unaudited) Three Months Ended January 1 , 2023 Things Remembered Transaction Costs As Adjusted (non-GAAP) January 1 , 2023 December 26, 2021 Vital Choice and Alice's Table Transaction Costs As Adjusted (non-GAAP) December 26, 2021 % Change Net revenues: Consumer Floral & Gifts $ 277,049 $ 277,049 $ 315,083 $ - $ 315,083 -12.1% BloomNet 32,852 32,852 37,930 37,930 -13.4% Gourmet Foods & Gift Baskets 588,431 588,431 590,946 590,946 -0.4% Corporate 72 72 69 69 4.3% Intercompany eliminations (527) (527) (984) (984) 46.4% Total net revenues $ 897,877 $ - $ 897,877 $ 943,044 $ - $ 943,044 -4.8% Gross profit: Consumer Floral & Gifts $ 112,274 $ 112,274 $ 130,025 $ 130,025 -13.7% 40.5% 40.5% 41.3% 41.3% BloomNet 13,879 13,879 16,021 16,021 -13.4% 42.2% 42.2% 42.2% 42.2% Gourmet Foods & Gift Baskets 241,418 241,418 232,239 232,239 4.0% 41.0% 41.0% 39.3% 39.3% Corporate 195 195 165 165 18.2% 270.8% 270.8% 239.1% 239.1% Total gross profit $ 367,766 $ - $ 367,766 $ 378,450 $ - $ 378,450 -2.8% 41.0% - 41.0% 40.1% - 40.1% EBITDA (non-GAAP): Segment Contribution Margin (non-GAAP) (a): Consumer Floral & Gifts $ 27,886 $ - $ 27,886 $ 38,156 $ - $ 38,156 -26.9% BloomNet 9,348 9,348 11,887 11,887 -21.4% Gourmet Foods & Gift Baskets 123,503 123,503 110,502 110,502 11.8% Segment Contribution Margin Subtotal 160,737 - 160,737 160,545 - 160,545 0.1% Corporate (b) (31,297) 243 (31,054) (32,228) 59 (32,169) 3.5% EBITDA (non-GAAP) 129,440 243 129,683 128,317 59 128,376 1.0% Add: Stock-based compensation 1,899 1,899 2,291 2,291 -17.1% Add: Compensation charge related to NQ Plan Investment (Depreciation) Appreciation (196) (196) 2,425 2,425 -108.1% Adjusted EBITDA (non-GAAP) $ 131,143 $ 243 $ 131,386 $ 133,033 $ 59 $ 133,092 -1.3% 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information – Category Information (dollars in thousands) (unaudited) Six Months Ended January 1 , 2023 Things Remembered Transaction Costs As Adjusted (non-GAAP) January 1 , 2023 December 26, 2021 Vital Choice and Alice's Table Transaction Costs As Adjusted (non-GAAP) December 26, 2021 % Change Net revenues: Consumer Floral & Gifts $ 439,229 $ - $ 439,229 $ 496,312 $ - $ 496,312 -11.5% BloomNet 66,219 66,219 68,764 68,764 -3.7% Gourmet Foods & Gift Baskets 696,659 696,659 688,428 688,428 1.2% Corporate 116 116 114 114 1.8% Intercompany eliminations (742) (742) (1,201) (1,201) 38.2% Total net revenues $ 1,201,481 $ - $ 1,201,481 $ 1,252,417 $ - $ 1,252,417 -4.1% Gross profit: Consumer Floral & Gifts $ 174,193 $ - $ 174,193 $ 206,028 $ - $ 206,028 -15.5% 39.7% 39.7% 41.5% 41.5% BloomNet 28,366 28,366 31,430 31,430 -9.7% 42.8% 42.8% 45.7% 45.7% Gourmet Foods & Gift Baskets 266,531 266,531 266,402 266,402 0.0% 38.3% 38.3% 38.7% 38.7% Corporate 134 134 104 104 28.8% 115.5% 115.5% 91.2% 91.2% Total gross profit $ 469,224 $ - $ 469,224 $ 503,964 $ - $ 503,964 -6.9% 39.1% - 39.1% 40.2% - 40.2% EBITDA (non-GAAP): Segment Contribution Margin (non-GAAP) (a): Consumer Floral & Gifts $ 38,696 $ - $ 38,696 $ 57,346 $ - $ 57,346 -32.5% BloomNet 18,865 18,865 22,747 22,747 -17.1% Gourmet Foods & Gift Baskets 104,793 104,793 102,829 102,829 1.9% Segment Contribution Margin Subtotal 162,354 - 162,354 182,922 - 182,922 -11.2% Corporate (b) (61,580) 243 (61,337) (63,959) 515 (63,444) 3.3% EBITDA (non-GAAP) 100,774 243 101,017 118,963 515 119,478 -15.5% Add: Stock-based compensation 3,454 3,454 5,296 5,296 -34.8% Add: Compensation charge related to NQ Plan Investment (Depreciation) Appreciation (1,102) (1,102) 2,992 2,992 -136.8% Adjusted EBITDA (non-GAAP) $ 103,126 $ 243 $ 103,369 $ 127,251 $ 515 $ 127,766 -19.1% 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited) Reconciliation of net income to adjusted net income (non-GAAP): Three Months Ended Six Months Ended January 1 , 2023 December 26 , 2021 January 1 , 2023 December 26 , 2021 Net income $ 82,530 $ 88,468 $ 48,838 $ 75,269 Adjustments to reconcile net income to adjusted net income (non-GAAP) Add: Transaction costs 243 59 243 515 Deduct: Income tax effect on adjustments (63) 65 (63) (108) Adjusted net income (non-GAAP) $ 82,710 $ 88,592 $ 49,018 $ 75,676 Basic and diluted net income per common share Basic $ 1.28 $ 1.36 $ 0.76 $ 1.16 Diluted $ 1.27 $ 1.34 $ 0.75 $ 1.14 Basic and diluted adjusted net income per common share (non-GAAP) Basic $ 1.28 $ 1.36 $ 0.76 $ 1.16 Diluted $ 1.28 $ 1.34 $ 0.76 $ 1.15 Weighted average shares used in the calculation of basic and diluted net income and adjusted net income per common share Basic 64,675 65,261 64,606 65,161 Diluted 64,835 65,969 64,820 65,954 1-800-FLOWERS.COM, Inc. and Subsidiaries Selected Financial Information (in thousands) (unaudited) Reconciliation of net income to adjusted EBITDA (non-GAAP): Three Months Ended Six Months Ended January 1 , 2023 December 26 , 2021 January 1 , 2023 December 26 , 2021 Net income $ 82,530 $ 88,468 $ 48,838 $ 75,269 Add: Interest expense and other, net 4,291 (734) 8,034 198 Add: Depreciation and amortization 14,315 12,588 27,009 23,558 Add: Income tax expense 28,304 27,995 16,893 19,938 EBITDA 129,440 128,317 100,774 118,963 Add: Stock-based compensation 1,899 2,291 3,454 5,296 Add: Compensation charge related to NQ plan investment (depreciation) appreciation (196) 2,425 (1,102) 2,992 Add: Transaction costs 243 59 243 515 Adjusted EBITDA $ 131,386 $ 133,092 $ 103,369 $ 127,766 (a) 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, both of which are non-GAAP measurements. 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), and other items that we do not consider indicative of our core operating performance. (b) 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 categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment. View source version on businesswire.com : https://www.businesswire.com/news/home/20230202005134/en/ Investors: Andy Milevoj (516) 237-4617 [email protected] Media: Cherie Gallarello [email protected] Source: 1-800-FLOWERS.COM, Inc.

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