1 800 FLOWERS COM INC
For the period ended Dec 29, 2024. Filed Jan 31, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 29, 2024 · Filed Jan 31, 2025
FLWS$2.58-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-29; filed 2024-11-01.
0001437749-24-032937
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-29; filed 2025-01-31.
0001437749-25-002365
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 107 current paragraphs.
61 unchanged; 36 reworded; 10 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 21 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Intangible Impairment
Current report
During the quarter ended December 31, 2023, as a result of a decline in the actual and projected revenue for the Company’s PersonalizationMall tradename, as well as a higher discount rate resulting from the higher interest rate environment, the Company determined that an impairment assessment was required for this tradename. This assessment resulted in the Company recording a non-cash impairment charge of $19.8 million to reduce the recorded carrying value of the PersonalizationMall tradename. SeeNote 6 – Goodwill and other intangibles, net in Item 1 for further information.
Current report
Based on the Company's performance during the fiscal second quarter, the Company is updating its fiscal 2025 guidance as outlined below. TheCompany expects its revenue trend to improve as the fiscal year progresses, benefitting from its Relationship Innovation initiatives that have expanded the Company's offerings, broadened price points and enhanced the user experience.
Current report
Other revenues during the three and six months ended December 29, 2024 increased 17.4% and 3.0%, respectively, compared to the same periods of the prior year, due to higher wholesale volumes within the Gourmet Foods & Gift Baskets segment due to increased orders from big box retailers, which was partially offset by lower BloomNet revenues due to lower order volume through the network, including our 1-800-Flowers brand.
Current report
Net revenues within this segment decreased4.0% and 5.6%during thethree and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, as a result of lower e-commerce revenues, which were impacted by lower demand, partially offset by increased wholesale volume as big box retailers increased orders in the current year. In addition, the implementation of a new order management system for our Harry & David brand negatively impacted sales in the current period by approximately $20 million.
Current report
During the three months ended December 29, 2024, the gross profit percentage was in-line with the same period of the prior year. During the six months ended December 29, 2024, the gross profit percentage increased 20 basis points compared to the same period of the prior year, which was driven by increased gross profit percentage in the BloomNet and Gourmet Foods & Gift Baskets segments.
Current report
Intangible impairment
Current report
During the three and six months ended December 31, 2023, the Company recorded a non-cash impairment charge of $19.8 million related to its PersonalizationMall trademark, due to a decline in the actual and projected revenue, combined with a higher discount rate resulting from the higher interest rate environment. See Note 6 – Goodwill and other intangibles, net in Item 1 for further information.
Current report
Interest expense was lower compared to the prior year, during the three and six months ended December 29, 2024, driven by the lower interest rates and outstanding Term Loan balance, offset by increased borrowings against our revolving credit facility throughout the quarter.
Current report
Other income, net
Removed paragraphs (6)
Previous report
For Fiscal 2025, the Company continues to expect its revenue trend to improve as the fiscal year progresses. The Adjusted EBITDA range reflects the acknowledgement that the consumer environment remains uncertain.
Previous report
Other revenues during the three months ended September 29, 2024, decreased 17.3%, compared to the same period of the prior year, due to slightly lower wholesale volumes within the Gourmet Foods & Gift Baskets segment largely due to timing of shipments from the first quarter to the second quarter, as well as lower BloomNet revenues due to lower shop-to-shop volumes, as well as wholesale volumes.
Previous report
Net revenues within this segment decreased14.4% during thethree months ended September 29, 2024, compared to the same period of the prior year, as a result of lower e-commerce revenues, primarily due to macro-economic weakness and the timing of wholesale shipments.
Previous report
Gross profit percentage increased 20 basis points during the three months ended September 29, 2024, compared to the same period of the prior year, driven by improved inventory management, production efficiencies, and lower florist fulfillment costs.
Previous report
Interest expense was relatively in-line with the prior year, during the three months ended September 29, 2024.
Previous report
Other (income) expense, net
Reworded paragraphs (36)
Previous wording
Overall, broader macro-economic conditions continue to impact our consumers as they continue to moderate their discretionary spending. Consumers remain pressured by persistent inflation and higher interest rates. Our fiscal first quarter contains no major holiday occasions, which means that our e-commerce sales for the quarter are primarily comprised of everyday or just-because gift giving. Based on this, we expected our sales to be the most challenged during the first quarter of Fiscal 2025. In line with our expectations, total consolidated revenues in the first quarter of Fiscal 2025 decreased 10.0% to $242.1 million, compared with total consolidated revenues of $269.1 million in the same prior year period. As we look ahead to the holiday period in the current environment, we expect our sales trends to improve as our gifting business has historically proven to be more resilient during holiday periods as consumers tend to view holiday gifting periods as being somewhat less discretionary.
Current wording
Overall, broader macro-economic conditions continue to impact our consumers as they continue to moderate their discretionary spending. Throughout the first half of fiscal 2025, we have seen sales challenged by a reduction in everyday or just-because gift giving. As our second quarter contains the Thanksgiving to Christmas holiday season, we anticipated sales trends to improve as our gifting business has historically proven to be more resilient during holiday periods. However, due to a more condensed holiday season with fewer shopping days between Thanksgiving and Christmas, we anticipated consumers to begin their holiday shopping later in the season. In line with our expectations, consumer spending increased later in the season, but not to anticipated levels. Total consolidated revenues decreased 5.7% to $775.5 million and 6.7% to $1,017.6 million during the three and six months ended December 29, 2024 respectively, compared with total consolidated revenues of $822.1 million and $1,091.1 million in the same prior year periods.
Previous wording
As a result, for Fiscal 2025 the Company continues to expect:
Current wording
As a result, for fiscal 2025 the Company nowexpects:
Previous wording
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.
Current wording
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 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.
Previous wording
The following table presents the EBITDA and Adjusted EBITDA for the three months ended September 29, 2024 and October 1, 2023, respectively.
Current wording
The following table presents the EBITDA and Adjusted EBITDA for the three and six months ended December 29, 2024 and December 31, 2023, respectively.
Previous wording
Adjusted net loss and adjusted or comparable net loss per common share
Current wording
Adjusted net income and adjusted or comparable net income per common share
Previous wording
The following table presents the adjusted net loss and adjusted net loss per common share for the three months ended September 29, 2024 and October 1, 2023, respectively.
Current wording
The following table presents the adjusted net income and adjusted net income per common share for the three and six months ended December 29, 2024 and December 31, 2023, respectively.
Previous wording
The following table presents the net revenues, gross profit, segment contribution margin, and adjusted segment contribution margin from each of the Company’s business segments, for the three months ended September 29, 2024 and October 1, 2023, respectively.
Current wording
The following table presents the net revenues, gross profit, segment contribution margin, and adjusted segment contribution margin from each of the Company’s business segments, for the three and six months ended December 29, 2024 and December 31, 2023, respectively.
Previous wording
(c) See reconciliation of the Company's net loss to Adjusted EBITDA (non-GAAP) above.
Current wording
(c) See reconciliation of the Company's net income to Adjusted EBITDA (non-GAAP) above.
Previous wording
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.
Current wording
We define free cash flow as net cash provided by (used in) 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.
Previous wording
The following table reconciles net cash used in operating activities, a GAAP Measure, to free cash flow, a non-GAAP Measure for the three months ended September 29, 2024 and October 1, 2023, respectively.
Current wording
The following table reconciles net cash provided by operating activities, a GAAP measure, to free cash flow, a non-GAAP measure for the six months ended December 29, 2024 and December 31, 2023, respectively.
Previous wording
Net revenues decreased 10.0% during the three months ended September 29, 2024, compared to the same period of the prior year, due to lower order volume across the Company's three segments, reflecting a continuation of the trends that the Company had experienced throughout the prior fiscal year, as consumer discretionary income remains pressured, and consumers continue to moderate their spending.
Current wording
Net revenues decreased 5.7% and 6.7% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to lower e-commerce order volume across the Company's three segments, reflecting a continuation of the trends that the Company had experienced throughout the prior fiscal year, as consumer discretionary income remains pressured, and consumers continue to moderate their spending. In addition, the implementation of a new order management system for our Harry & David brand within the Gourmet Foods & Gift Baskets segment negatively impacted sales in the current period by approximately $20 million. The decrease was partially offset by increased wholesale demand due to increased orders from big box retailers.
Previous wording
The Company acquired Scharffen Berger and Card Isle on July 1, 2024 and April 3, 2024, respectively. Revenues related to these acquisitions were not significant during the three months ended September 29, 2024.
Current wording
The Company acquired Scharffen Berger and Card Isle on July 1, 2024 and April 3, 2024, respectively. Revenues related to these acquisitions were not significant during the three and six months ended December 29, 2024.
Previous wording
E-commerce revenues (combined online and telephonic) decreased 8.0% during the three months ended September 29, 2024, compared to the same period of the prior year, primarily due to the decline in demand across our three segments, as a result of the macro-economic conditions noted above. These external influences have negatively impacted consumer discretionary spending.
Current wording
E-commerce revenues (combined online and telephonic) decreased 8.3% and 8.2% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, primarily due to the decline in demand across our three segments, as well as product mix with customers trending toward lower price point items.
Previous wording
During the three months ended September 29, 2024, the Company fulfilled approximately 2.5 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of 6.5%, compared to a year-over-year decrease of 16.1% for the same period in the prior year. During the three months ended September 29, 2024, average order value decreased 1.5% to $78.25 compared to the same period in the prior year. The average order value decreased as a result of product mix as the Company has introduced a wider selection of more modestly priced items to target a broader consumer base.
Current wording
During the three and six months ended December 29, 2024, the Company fulfilled approximately 7.4 million and 9.8 million orders through its e-commerce sales channel (online and telephonic sales), a decrease of 7.2% and 6.9%, respectively, compared to the same periods of the prior year. During the three and six months ended December 29, 2024, average order value decreased 1.2% and 1.4% to $92.02 and $88.82, respectively, compared to the same periods in the prior year. The average order value decreased as a result of higher promotions due to a competitive market and product mix as the Company has introduced a wider selection of more modestly priced items to target a broader consumer base.
Previous wording
Consumer Floral & Gifts – this segment, which includes the operations of the 1-800-Flowers.com, PersonalizationMall, the Things Remembered and Alice’s Table brands, derives revenue from the sale of consumer floral products and gifts through its e-commerce sales channels (telephonic and online sales), retail stores, and royalties from its franchise operations.
Current wording
Consumer Floral & Gifts – this segment, which includes the operations of the 1-800-Flowers.com, PersonalizationMall, Things Remembered and Alice’s Table brands, derives revenue from the sale of consumer floral products and gifts through its e-commerce sales channels (telephonic and online sales), retail stores, and royalties from its franchise operations.
Previous wording
Net revenues within this segment decreased 4.9% during the three months ended September 29, 2024, compared to the same period of the prior year, due to continued macro-economic pressure.
Current wording
Net revenues within this segment decreased 8.0% and 6.9% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to continued macro-economic pressure and use of promotional offerings due to the competitive environment.
Previous wording
During the three months ended September 29, 2024, Consumer Floral & Gifts orders through its e-commerce sales channel (online and telephonic sales) decreased 2.8%, compared to the same period of the prior year. In addition, the average order value decreased 2.1%, as a result of product mix trending towards lower price point items.
Current wording
During the three and six months ended December 29, 2024, Consumer Floral & Gifts orders through its e-commerce sales channel (online and telephonic sales) decreased 7.3% and 5.8%, respectively, compared to the same periods of the prior year. In addition, the average order value decreased 0.8% and 1.1%, respectively, as a result of product mix trending towards lower price point items and higher promotions due to the competitive market.
Previous wording
Net revenues decreased 20.1% during the three months ended September 29, 2024, compared to the same period of the prior year. The net revenue decline was due to soft wholesale product revenues, as well as lower services revenues, attributable to a decline in order volume processed through the network.
Current wording
Net revenues decreased 16.2% and 18.2% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year. The net revenue decline was primarily due to lower service revenues, which were attributable to a decline in order volume processed through the network.
Previous wording
During the three months ended September 29, 2024, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 13.8%, compared to the same period of the prior year. In addition, the average order value decreased 0.5%, as a result of product mix trending towards lower price point items.
Current wording
During the three and six months ended December 29, 2024, Gourmet Foods & Gift Baskets orders through its e-commerce sales channel (online and telephonic sales) decreased 7.0% and 8.0%, respectively, compared to the same periods of the prior year. In addition, the average order value decreased 1.5% and 1.2%, respectively, as a result of product mix trending towards lower price point items and the higher promotions due to the competitive market.
Previous wording
Gross profit decreased 9.4% during the three months ended September 29, 2024, compared to the same period of the prior year, due to lower revenues as noted above, partially offset by a favorable gross profit percentage.
Current wording
Gross profit decreased 5.7% and 6.5% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to lower revenues as noted above.
Previous wording
Consumer Floral & Gifts segment - Gross profit decreased by 4.2% during the three months ended September 29, 2024, compared to the same period of the prior year, due to the impact of the lower revenues noted above, partially offset by favorable gross profit percentage attributable to production efficiencies and lower florist fulfillment costs.
Current wording
Consumer Floral & Gifts segment - Gross profit decreased by 10.0% and 8.0% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to the impact of the lower revenues noted above, as well as the unfavorable gross profit percentage primarily attributable to higher cost of merchandise.
Previous wording
BloomNet **segment -**Gross profit decreased by 20.5% during the three months ended September 29, 2024, compared to the same period of the prior year, due to the decrease in revenues noted above, as well as a slight decline in gross profit percentage. Gross profit percentage decreased in comparison to the prior year due to higher cost of merchandise, delivery and shipping, and labor costs, partially offset by lower florist rebates.
Current wording
BloomNet **segment -**Gross profit decreased by 10.4% and 15.7% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to the decrease in revenues noted above, partially offset by an increase in the gross profit percentage. Gross profit percentage increased in comparison to the same periods of the prior year due to lower florist rebates, which was driven by lower florist-to-florist volume.
Previous wording
Gourmet Foods & Gift Baskets segment – Gross profit decreased by 13.1% during the three months ended September 29, 2024, compared to the same period of the prior year, due to the decrease in revenue noted above, partially offset by improved gross profit percentage. Gross profit percentage increased 50 basis points during the three months ended September 29, 2024, compared to the same period of the prior year. The increased gross profit percentage was attributable to lower cost of merchandise, which was the result of operational efficiencies and strong inventory management.
Current wording
Gourmet Foods & Gift Baskets segment - Gross profit decreased by 3.3% and 4.5% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, due to the decrease in revenue noted above, partially offset by a slightly improved gross profit percentage. Gross profit percentage increased 30 basis points and 50 basis points during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year. The increased gross profit percentage was attributable to lower delivery and shipping costs and labor efficiencies, which was partially offset by a higher cost of merchandise and incremental costs associated with the implementation of a new order management system for our Harry & David Brand.
Previous wording
Marketing and sales expense decreased 0.5% during the three months ended September 29, 2024, compared to the same period of the prior year, mainly related to decreased labor costs.
Current wording
Marketing and sales expense decreased 0.8% and 0.7% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, mainly related to decreased labor costs, which was partially offset by increased advertising costs due to a competitive environment.
Previous wording
Technology and development expense increased by 2.2% during the three months ended September 29, 2024, compared to the same period of the prior year, primarily due to higher maintenance and support costs for the Company's technology platform enhancements, including duplicate costs relating to the implementation of a new customer service platform, partially offset by lower labor and consulting costs.
Current wording
Technology and development expense increased by 7.8% and 4.9% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, primarily due to higher development and consulting costs for the Company's technology platform enhancements, including incremental costs relating to the implementation of a new customer service platform and order management system.
Previous wording
General and administrative expenses were essentially flat during the three months ended September 29, 2024, compared to the same period of the prior year, primarily due to increases in labor costs driven by changes in the value of the Company’s NQDC Plan investments (offset in Other (income) expense below), partially offset by lower bad debt expense and discretionary spending.
Current wording
General and administrative expenses increased 0.9% and 0.5% during the three and six months ended December 29, 2024, respectively, compared to the same periods of the prior year, primarily due to an increase in insurance costs, partially offset by lower labor costs, professional fees, and changes in the value of the Company’s NQDC Plan investments (offset in Other income, net below).
Previous wording
Depreciation and amortization expense was essentially in-line with the prior year, during the three months ended September 29, 2024.
Current wording
Depreciation and amortization expense was essentially in-line with the prior year, during the three and six months ended December 29, 2024.
Previous wording
Interest expense, net consists primarily of interest expense and amortization of deferred financing costs attributable to the Company’s credit facility (See Note 7 - Debt, Net in Item 1 for details), net of income earned on the Company’s available cash balances.
Current wording
Interest expense, net consists primarily of interest expense and amortization of deferred financing costs attributable to the Company’s credit facility (See Note 10 – Long-term debt, net in Item 1 for details), net of income earned on the Company’s available cash balances.
Previous wording
Other (income) expense consists primarily of investment losses (gains) on the Company’s NQDC Plan investments (for which the offsetting expense was recorded in the general and administration expense line item).
Current wording
Other income, net consists primarily of investment losses (gains) on the Company’s NQDC Plan investments (for which the offsetting expense was recorded in the general and administration expense above).
Previous wording
The Company recorded an income tax benefit of $14.4 million and $10.3 million, during the three months ended September 29, 2024 and October 1, 2023, respectively. The Company’s effective tax rate for the three months ended September 29, 2024 was 29.6%, compared to 24.8% in the same period of the prior year. The Company’s effective tax rate for the three months ended September 29, 2024 and October 1, 2023 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes and non-deductible executive compensation including tax deficiencies (shortfalls) from stock-based compensation, partially offset by tax credits.
Current wording
The Company recorded an income tax expense of $23.5 million and $9.1 million, during the three and six months ended December 29, 2024, respectively compared to an income tax expense of $26.5 million and $16.2 million, during the three and six months ended December 31, 2023, respectively. The Company’s effective tax rate for the three and six months ended December 29, 2024 was 26.7% and 23.2%, respectively, compared to 29.6% and 33.8% in the same respective periods of the prior year. The Company’s effective tax rate for the three and six months ended December 29, 2024 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes, tax deficiencies (shortfalls) from stock-based compensation and increases in valuation allowances, partially offset by tax credits. The Company’s effective tax rate for three and six months ended December 31, 2023 differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes and non-deductible executive compensation, partially offset by tax credits. The Company's effective tax rate for the three and six months ended December 31, 2023, was further impacted by the intangible impairment charge, which reduced the amount of income reflected in the Company’s estimated annual effective tax rate.
Previous wording
The Company's principal sources of liquidity are cash on hand, cash flows generated from operations, and borrowings available under the Company’s credit agreement (see Note 7 - Debt, Net in Item 1 for details). At September 29, 2024, the Company had working capital of $118.7 million, including cash and cash equivalents of $8.4 million, compared to working capital of $157.9 million, including cash and cash equivalents of $159.4 million, at June 30, 2024.
Current wording
The Company's principal sources of liquidity are cash on hand, cash flows generated from operations, and borrowings available under the Company’s credit agreement (see Note 10 – Long-term debt, net in Item 1 for details). At December 29, 2024, the Company had working capital of $167.3 million, including cash and cash equivalents of $247.2 million, compared to working capital of $157.9 million, including cash and cash equivalents of $159.4 million, at June 30, 2024.
Previous wording
As of September 29, 2024, the Company had $45.0 million outstanding under its revolving credit agreement in order to fund pre-holiday manufacturing and inventory procurement requirements. Working capital borrowings typically peak in November after which time cash generated from operations during the Christmas holiday shopping season is expected to enable the Company to repay such borrowings.
Current wording
During the first two quarters of fiscal 2025, the Company borrowed under its revolving credit agreement in order to fund pre-holiday manufacturing and inventory procurement requirements, with borrowings peaking at $110.0 million in November 2024. Cash generated from operations during the Christmas holiday shopping season enabled the Company to repay the borrowings under the Revolver in December 2024. Based on current projected cash flows, the Company believes that the available cash balances will be sufficient to provide for the Company's operating needs through the remainder of fiscal 2025, at which time the Company would again expect to borrow against its Revolver to fund pre-holiday manufacturing and inventory purchases. The Company had no amounts outstanding under the Revolver as of December 29, 2024. In addition, during the second quarter of fiscal 2025, the Company made a payment of $27.5 million on its Term Loan, which includes a $25.0 million prepayment.
Previous wording
Net cash used in operating activities of $177.2 million, for the three months ended September 29, 2024, was primarily attributable to the Company’s net loss during the period, adjusted by non-cash charges for depreciation and amortization and stock-based compensation, combined with seasonal changes in net working capital, including increases in inventory, trade receivables, and prepaid and other current assets.
Current wording
Net cash provided by operating activities of$151.3 million, for thesix months ended December 29, 2024, was primarily attributable to the Company’s net income during the period, adjusted by non-cash charges for depreciation and amortization and stock-based compensation, combined with seasonal changes in net working capital, including increases in accounts payable and accrued expenses and trade receivables and a decrease in inventory.
Previous wording
Net cash used in investing activities of $15.1 million, for the three months ended September 29, 2024, was attributable to capital expenditures primarily related to the Company's technology and automation initiatives, and the acquisition of Scharffen Berger as noted above.
Current wording
Net cash used in investing activitiesof$26.0 million, for the six months ended December 29, 2024, was attributable to capital expenditures primarily related to the Company's technology and automation initiatives, and the acquisition of Scharffen Berger as noted above.
Previous wording
Net cash provided by financing activities of $41.3 million, for the three months ended September 29, 2024, related primarily to net proceeds from bank borrowings under the Company’s working capital line of credit.
Current wording
Net cash used in financing activities of$37.5 million, for thesix months ended December 29, 2024, related primarily to net repayment of bank borrowings under the Company's working capital line of credit, as well as payments of $30.0 million on the Company's Term Loan, which includes a $25.0 million prepayment, and the repurchase of common stock of $7.7 million.
Previous wording
Free cash flow was negative $189.3 million for the three months ended September 29, 2024, compared with free cash flow of negative $150.8 million for three months ended October 1, 2023, a decrease of $38.5 million primarily driven by a decrease in cash flows from operations to fund the build in inventory for the holiday season. Refer to "Definitions of non-GAAP Financial Measures" for reconciliation of non-GAAP results to applicable GAAP results.
Current wording
Free cash flow waspositive$128.3 millionfor the six months ended December 29, 2024, compared with free cash flow of positive $195.0 million for the six months ended December 31, 2023, adecrease of$66.7 million primarily driven by a decrease in cash flows from operations primarily driven by lower net income, adjusted for non-cash items, as well as timing of changes in working capital. Refer to "Definitions of non-GAAP Financial Measures" for reconciliation of non-GAAP results to applicable GAAP results.