Calyx & Corolla Segment Boosts Vermont Teddy Bear

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Investors have cuddled up to Vermont Teddy Bear Co. lately as its stock price has jumped more than 20 percent, rising from $4.32 on Oct. 26 to $5.19 on Nov. 30.

The Shelburne, VT, company reported in November a 22 percent increase in net revenue to $6.1 million for the three months ended Sept. 30, the first quarter of its 2005 fiscal year. Net revenue was $5 million for the three months ended Sept. 30, 2003.

Company spokeswoman Nicole L'Huillier explained the results in one word: diversification. Specifically, she cited the company's Aug. 29, 2003, acquisition of Calyx & Corolla, which provides direct-from-the-grower floral gifts through its catalog, by telephone or online. Calyx & Corolla, which still maintains an office in Vero Beach, FL, was acquired in a cash/stock deal for $3.7 million.

"We've had it for over a full year," she said. "Last year's first-quarter numbers in 2003 only reflected one month of Calyx & Corolla."

In its earnings statement last month, Vermont Teddy Bear said the higher revenue included an increase of just over $1.5 million in the Calyx & Corolla segment versus last year, which included one month of revenue in the first quarter subsequent to the acquisition. Also, net revenue in the PajamaGram and TastyGram segments climbed $31,000 and $11,000, respectively.

However, the company reported a $260,000 decline in net revenue in the BearGram segment as it "reduced BearGram marketing and selling expenses by $321,000 in the first quarter, the company's only quarter that does not include a major gift-giving holiday."

Vermont Teddy Bear said revenue in its retail segment decreased $99,000 because of reduced tourist traffic during the summer tourism season. Revenue in the corporate/wholesale segment fell $58,000.

"The integration of Calyx & Corolla has gone smoothly," said L'Huillier, who gave much of the credit for the transition to Katie Camardo, vice president of operations. "We didn't want to offend, and we didn't want to change a lot of what was the core of Calyx & Corolla. We knew we could help with efficiency and margins. They utilize our PR people, marketing, call center, shipping and fulfillment. The [Calyx & Corolla] vases are shipped mostly from Shelburne. In Florida, there are merchandising people and a corporate salesperson."

The company is optimistic about the holiday season and St. Valentine's Day.

"We are anticipating this could be one of our biggest Christmases on record because of Calyx & Corolla," L'Huillier said. "We just hired an additional 250 seasonal employees for the holidays, and we just doubled the size of our fulfillment center in Shelburne."

Also noted was that the company is designing more than half its pajamas as part of its PajamaGram operation.


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