FTD Q3 Numbers Released

Status
Not open for further replies.
CHR

CHR

Design matters
Nov 28, 2002
8,951
8,442
113
Anaheim
www.avantegardens.com
State / Prov
CA
FTD Group, Inc. Reports Third Quarter of Fiscal Year 2006 Results
  • consolidated revenue grew 3.0%
  • slow growth is blamed on the loss of the Easter holiday during the comparison period, plus the loss of income from the sale of Renaissance Greeting Cards during Q2.
  • consumer orders during the third quarter of fiscal year 2006 totaled 1,194,000 million compared to 1,124,000 orders in the same period of the prior fiscal year.
  • average order value decreased slightly to $62.18 in the third quarter of fiscal year 2006 from $62.84 in the same period of the prior fiscal year
  • specialty gift orders, which include all orders delivered via common carrier, comprised 36.1% of total orders for the third quarter of the current fiscal year compared to 27.6% of total orders for the same period of fiscal year 2005
  • the Florist Segment achieved revenues of $52.9 million in the third quarter of fiscal year 2006, compared to revenues of $54.3 million in the same period of the prior fiscal year.
  • the Company's debt balance was $228.0 million as of March 31, 2006
Several questions come to mind:
  • If FTD had a 14% increase during Valentine's Day, why was growth in overall sales so soft?
  • Where's the mention of growth through via supermarkets?
  • If Renaissance was such a great asset, why was it sold?
  • Why are accounts receivable, less allowance for doubtful accounts of $3,851 at March 31, 2006 and $2,521 at June 30, 2005 at 31,463 compared to 23,419 for the same quarter in 2005?
The report contains a number of ways to compare the Q3 numbers with previous periods since they are trying very hard to convince analysts that the quarter was a 'success'.

Hear the spin by tuning into the conference call scheduled for today at 10:00 a.m., ET.
 
Wow. Wall Street loves the numbers. Stock opening price up almost a buck.

Soenen took a couple swipes at 1-800 during the conference call - primarily at the inability of 1-800 to generate profits despite increased sales.

The florist directory revenue issue came up again (mentioned at the end of the last quarter) and callers were told that FTD was actively assisting and encouraging florists to move their ad dollars from the F2F directory to consumer direct online search.

Perhaps related, a question was asked about the FTD.com average sale figure and comment was made that the numbers didn't 'add up'. I believe it was Carrie Wolfe that responded that 'ad revenue' helped improved the number. The caller said "Ad revenue?" ... and then the call feed broke up so I never head the response.

Soenen expects the Florist side to stay strong in the near term despite declining order volume through the channel.

He said the response to the Todd Oldham products during their first few days after launch had been 'spectacular.'
 
How do you spit on this thing?

Phewie!!!!!!!!!!!!!!

Kind of neat to see the continued drop in *Florist Revenues*...and it will continue as more of us leave, and more and more do not buy their junk for holidays...
 
Forgot to mention that one of the questions dealt with the ongoing lawsuits against ProFlowers and Interflora. Soenen said both sides were 'dug in' and the suits would just have to wind their way through the courts. He did say that attorney costs had reduced FTD's profits, but didn't provide a number.

Anybody know anything about the suit against Interflora?
 
ProFlowers suit is about $2-3 million per year. Mike's committed to seeing it through.

Related note: All Butterfieldblooms.com ads are run past FTD's lawyers first to make sure they don't conflict with the ProFlowers suit. Target for BFB is the Calyx & Corrolla high-end dropship crowd.

Ryan
 
CHR said:
The florist directory revenue issue came up again (mentioned at the end of the last quarter) and callers were told that FTD was actively assisting and encouraging florists to move their ad dollars from the F2F directory to consumer direct online search.
Click to expand...

What a load of bunk! Yea, they want you to sign up for the online search tools, but NEVER say, "Oh, why don't you cut out your directory listings so that you can afford this GREAT search tool!"

- H.
 
Since FTD owns 33.3% of Interflora, I'm wondering if the suit is not FTD against Interflora, but instead related to Interflora's recent sale and/or its dictatorial practices.

Ryan
 
Related note: All Butterfieldblooms.com ads are run past FTD's lawyers first to make sure they don't conflict with the ProFlowers suit.
Click to expand...

*laughs* Who told you that Ryan? Look at their site www.butterfieldblooms.com and is says in many places about them and farms/growers. If FTD has nothing to hide, maybe they could let their own paying memebers know about BFB. :)

I called them just now and asked if the flowers were fresh from the farm and she said yes. Maybe those 2-3 million lawyers should check into this. FTD is a hypocrite and the whole thing, imo, is a PR stunt to gain favorability with FTD florists.

Target for BFB is the Calyx & Corrolla high-end dropship crowd.
Click to expand...

Agreed. Both places are serviced by the same company in Miami that epic used. Costs a little bit more, but the flowers are designed and not just thrown in a box. Andy Williams, who used to own a part of C&C and now sits on the board of directors at the Vermont Teddy Bear Company also sits on the board of FloralSource. Andy is a really really cool guy and I've learned a lot from him. If you guys know Andy, you know what I am talking about.
 
Dazeal said:
Andy Williams, who used to own a part of C&C and now sits on the board of directors at the Vermont Teddy Bear Company also sits on the board of FloralSource.
Click to expand...
Actually Andy put $10MM of his own money into FSI last year if I recall right...he may be a board member, but......

You would think with a "floral" company and VTB he'd stop with the negative advertising from VTB....but with FSI in the shape it is...
 
Oh I am not a FSI cheerleader at all. I am just saying I have learned a lot from him and his actions.
 
CHR said:
He said the response to the Todd Oldham products during their first few days after launch had been 'spectacular.'
Click to expand...
Yea Cath from the florists who are ready to jump...
 
gr8vet said:
Yea Cath from the florists who are ready to jump...
Click to expand...
Would be nice if that move woke up a few sleeping giants. 'Bout time. It would only take a few big guys to whallop their bottom line.

No doubt, the corporate line will be about 'just testing the products' to gauge consumer response. *sure*

Any word if the OG's are allowed to sell these?
 
I'm not very good with numbers, but

here is a couple of things that might raise some questions.

FTD.com processed 1,194,000 orders in the quarter and 63.9% went to florists. If they have 20,000 members, that is roughly 12 orders per month for each member. And you have florists members paying how much per month to get orders?

If the average order was for roughly $68 and the roughly 763,000 orders were sent to florists, the total revenue of approx. 51.9 million dollars is roughly equal to the total the total revenue generated by the florist membership which includes dues, fees and f2f order transmission.

Can someone tell me again if all but 36% of your revenue comes from florists, why would Wall Street be so impressed with these numbers. Especially when the cost of gas is going up and the lion share of revenues is highly dependent on other people delivering your product. Or better yet, why so many florists are convinced their leaving WON'T have an effect.
 
Griff said:
I'm not very good with numbers...
Click to expand...
Yea..and I have this bridge....

I'm not convinced my leaving won;t have an "effect", in fact I'm pretty sure it will, to some minor extent. Thing is, there seems to be an endless supply of "fillers" waiting to sign up, and to date there have not been any *BIG* florists willing to make the leap, but I can guarantee you there are a few looking...

With the rise of gas, it'll take even a bigger chunck out of that remaining 70%, but Griff, you know as well as I do, that the florists won;t even notice it, nor will they adjust to compensate for it, until it's too late...if ever...
 
Sorry BOSS, miscalculated

Figured the per order value at $68 and see after re-reading it is only $62. That actually drops the .com revenue with florists down to $47.3 million.

The interesting thing about "fillers" is I can't imagine anyone being willing to pay the membership dues and fees of any of these guys if they knew they were only going to get 12 orders a month. Add maybe another 24 from the other 2 WS for 36 a month. Of course, that is just an average, but if the average florist is open 26 or 27 days a month, that comes to about 1.33 orders per day. Pretty slim pickins, don't you agree. Even if they "shave" the heck out of these orders, there still isn't enough money there to even pay your electric bill this summer.

Wonder how many florists will be willing to increase their delivery area this summer because the WS will ask them to fill in the open areas where flower shops have closed? Then we'll see who really hasn't figured in higher gas prices. Of course, maybe they will just take more money out for delivery like they always do until there is no flowers left in a empty vase.
 
Griff -

You're probably right about the average volume moving through FTD.com.

I believe the other selling agents (Wal-Mart, SFO's and real florists) are not included in Consumer Channel numbers. Some of the SFO's are transmitted under the FTD.com banner but aren't sold by them so florists' perception of volume via FTD.com will be higher. None of us knows that true number.

Another interesting number - Don't forget that the average sale of $62.18 includes an $11.99 service fee, so the dollars sent to local florists may only average out to $50.19 per order ~ for a net of $35.64 (27% and a $1.00 receiving fee). Even worse, Bloomnet 'penalty' members get $34.64.

Let's not forget that in some markets, certain members are guaranteed a high percentage (60% or more) of all incomings, leaving the shops that sign up for filling privileges with little more than a trickle and hope.

You have to wonder if the 'high guarantee' guys are worried about the new drop-ship arrangements and the increase of parcel delivered flower sales. Should they prepare for the holiday 'as usual' and risk getting stuck with a lot of unsold, prepped product? Are big fillers revising numbers downward this week? I would be.
 
Thanks Cathy for your comments

I wasn't aware of quaranteed filler percentages. No wonder some florists just feel that they won't be affected. Silly rabbit.

I also agree that the consumer side is pretty clear with the numbers, but the membership side is really cloaked in darkness and I'm sure that is how they want it. That, Eric, is why they pay big bucks to the book keepers. It is their job to make sure that no one understands the number including Wall Street.

No matter how much you try and scrutinize these numbers, the only fact that you should notice is that only 36% of their revenue comes from something other than florists. After all the years of .com operations and money spent to promote their business, only 36% is accomplished without assistance from florists. And that goes for 1-800 flowers. It continues to be florists who keep these guys alive and yet able to divert business from the real florists. We continue to spend time looking at these numbers every quarter and the only thing that changes is the percentage of their revenue is INCREASING in the drop ship business and DECREASING on the florist side even with increase dues and fees. It would be interesting to note what percentage anyone thinks that the WS has to reach with drop shipping before the alarm goes off!!
 
Status
Not open for further replies.
Top Bottom
Back