With spring springing up all around us, now seems like the perfect time of year to discuss flower power company FTD Group (NYSE:FTD). Which, not coincidentally, reports its fiscal Q3 2006 earnings news on Monday. Here's what you'll need to know to put Monday's numbers in context.
What analysts say:
- Buy, sell, or waffle? Six analysts follow FTD, which gets five holds and a sell.
- Revenues. Analysts expect to see $125 million in sales tomorrow.
- Earnings. And $0.23 per share in profits.
What management says:
In its most recent update on operations, FTD reported 14% growth in orders placed during this year's Valentine's Day season (Feb. 1-15). CEO Michael Soenen praised the company for generating "strong revenue growth while keeping marketing costs in line with our expectations," and reiterated FTD's expectations of $450-460 million in sales and $0.76 per share in profits for this fiscal year.
What management does:
Not exactly the results you'd expect to hear promised, based on the below chart. True, rolling gross margins are up over the last year or so. And rolling operating margins have been climbing for three quarters running. But the net margins all look very negative. The reason: FTD recorded a $25.6 million loss in the year-ago quarter in connection with FTD's IPO. The bulk of this loss resulted from "$21.5 million of prepayment fees related to the Company's preferred shares subject to mandatory redemption." Which is, of course, an event that we won't see repeated this year.
|
Margins % |
9/04 |
12/04 |
3/05 |
6/05 |
9/05 |
12/05 |
|---|---|---|---|---|---|---|
|
Gross |
42.7 |
43 |
43 |
43.3 |
43.7 |
43.5 |
|
Op. |
9.9 |
11.2 |
14.4 |
9.1 |
9.5 |
9.6 |
|
Net |
(3.5) |
(4.5) |
(6.9) |
(5.2) |
(3.6) |
(2.5) |
One Fool says:
Another sign that FTD may be getting things back on track: its working capital management has improved significantly over last year. Although the sales growth of 2% year over year that we saw in the last six months isn't particularly impressive, consider how it compares with what's going on with inventories and accounts receivable. The latter dropped 8%, suggesting that FTD is collecting its bills much faster. And inventories declined 44% -- which can only be viewed as a positive, considering that a flower company's inventories are pretty darn perishable. These improvements help to explain how the company's free cash flow exceeded reported net income by 17% during the period.
|
Competitors |
Creditors |
|---|---|
|
RedEnvelope (NASDAQ:REDE) |
Credit Suisse (NYSE:CSR) |
|
1-800-Flowers (NASDAQ:FLWS) |
UBS (NYSE:UBS) |
|
Provide Commerce (NASDAQ:PRVD) |
Fool contributor Rich Smith does not own shares of any company named above.
