FTD Group, Inc. Reports Fourth Quarter and Fiscal Year 2007 Results

-- Fiscal Year 2007 Consolidated Revenues Grew 31.8% to $613.0 Million

-- Fiscal Year 2007 Diluted EPS Increased to $1.08 from $0.86 in the Prior Year

-- Fiscal Year 2008 Targeted Revenue of $645 Million; Targeted EBITDA and Targeted Diluted 
     EPS of $98 Million and $1.18, Respectively
 

DOWNERS GROVE, IL. – August 16, 2007 – FTD Group, Inc. (NYSE: FTD), a leading provider of floral products and services, today announced fourth quarter and full year fiscal 2007 financial results for the period ended June 30, 2007.

FULL YEAR 2007 RESULTS

Fiscal year 2007 revenues grew 31.8% to $613.0 million, compared with revenues of $465.1 million for fiscal year 2006. The International Segment contributed $143.4 million to fiscal year 2007 revenues, representing eleven months of operations.

Net income for fiscal year 2007 was $31.9 million, or $1.08 per diluted share, compared to net income for fiscal year 2006 of $25.5 million, or $0.86 per diluted share. The increase in net income during the year was attributable to strong performance in the Company's International Segment and operating efficiencies in the domestic businesses.

Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") for fiscal year 2007 was $92.5 million compared to Adjusted EBITDA of $69.0 million for the prior fiscal year, representing a 34.0% increase. Adjusted EBITDA for fiscal year 2007 excludes $0.9 million of other income, net, which reflects foreign currency gains partially offset by the costs related to the March 2007 secondary stock offering, while Adjusted EBITDA for fiscal year 2006 excludes $1.0 million related to the gain on the sale of the Renaissance greeting cards business which was sold in December 2005, a $1.6 million gain related to the settlement of the class action lawsuit entitled In Re: Visacheck/Mastermoney Antitrust Litigation and $0.4 million of other income which is primarily comprised of foreign currency gains.

"Our focus on profitability and margin expansion during fiscal year 2007 drove our strong bottom-line results," said Michael J. Soenen, President and Chief Executive Officer of FTD.

A table reconciling net income to EBITDA and Adjusted EBITDA is included with the attached consolidated financial statements. The Company believes EBITDA and Adjusted EBITDA provide useful supplemental information related to the Company's operations and results.

Domestic Consumer Segment

The Consumer Segment achieved revenues of $287.6 million in fiscal year 2007, compared to revenues of $275.8 million in fiscal year 2006, representing a 4.3% increase. Growth was primarily driven by a 1.8% increase in order volume and a 1.5% increase in average order value. Fiscal year 2007 operating income for the Consumer Segment was $21.2 million, compared to $16.1 million for the prior fiscal year, representing an increase of 31.7%. The Company's focus on profitable growth was reflected in the operating margin in the Consumer Segment for fiscal year 2007 of 7.4%, versus 5.8% in the prior fiscal year.

Consumer orders for fiscal year 2007 totaled 4,590,000 compared to 4,508,000 orders in the prior fiscal year. Average order value increased to $61.31 in fiscal year 2007 from $60.38 in the prior fiscal year. Internet orders as a percentage of total orders in this segment increased slightly to 90.3% for fiscal year 2007 from 90.1% in fiscal year 2006.

Domestic Florist Segment

The Florist Segment recorded revenues of $182.0 million in fiscal year 2007, compared to revenues of $189.4 million in fiscal year 2006, representing a decrease of 3.9%. The decline in Florist Segment revenues was primarily due to the sale of Renaissance in December 2005 and the elimination of certain unprofitable customers. Fiscal year 2007 operating income in the Florist Segment was $58.7 million, compared to operating income of $58.4 million in the prior fiscal year, which represents an increase of 0.5%. Operating margins in the Florist Segment continued to show improvement, increasing to 32.2% from 30.8% in fiscal year 2006.

International Segment

For fiscal year 2007, the International Segment, comprised of the Interflora business which was acquired in July 2006, achieved revenues of $143.4 million and operating income of $13.0 million, or 9.1% of revenues. Consumer order volume in the International Segment totaled 1,785,000, up 15.9% over Interflora's orders for the same 11-month period of the prior year. Average order value in the International Segment was $64.78 for the 11-month period and Internet orders comprised 71.0% of the order volume.
 

BALANCE SHEET AND OTHER HIGHLIGHTS

As of June 30, 2007 the Company's cash and cash equivalents totaled $25.5 million with $48.4 million of operating cash flows generated during the fiscal year ended June 30, 2007. The Company's debt balance was $313.7 million as of June 30, 2007, including notes payable of $1.7 million related to the Interflora acquisition, down from $336.9 million as of March 31, 2007. At the time of the acquisition of Interflora, the Company entered into a new senior secured credit facility consisting of a $150 million term loan and a $75 million revolving credit facility. As of June 30, 2007, the Company had $72.2 million available under its revolving credit facility.

Excluding the $50 million repayment of the prior credit agreement, the Company paid down $31.2 million of debt during fiscal year 2007, comprised of $23.1 million of notes payable related to the Interflora acquisition and $8.1 million on the term loan.

In addition, the Company paid a quarterly cash dividend of $0.1625 per share on July 6, 2007 to shareholders of record on June 26, 2007, in an amount totaling $4.7 million. In total, the Company's Board of Directors declared $9.4 million in cash dividends during fiscal year 2007, or $0.325 per share, of which $4.7 million was paid to shareholders during fiscal year 2007.

FOURTH QUARTER FISCAL YEAR 2007 RESULTS

Fourth quarter fiscal year 2007 consolidated revenues grew 20.0% to $169.8 million, compared to revenue of $141.5 million for the same period of fiscal year 2006. This revenue growth was driven by the July 2006 acquisition of Interflora. Interflora experienced strong sales in a non-holiday quarter, achieving revenues of $34.8 million.

Fourth quarter revenue for the Domestic Consumer Segment was $90.5 million compared to $95.3 million in the same period of the prior fiscal year. Fourth quarter Consumer Segment operating margins increased to 10.5% from 7.0% in the same period of the prior fiscal year, reflecting the Company's continued focus on profitability.

Domestic Florist Segment fourth quarter revenue was $44.5 million compared with $46.2 million in the prior fiscal year. Excluding the $1.6 million Visa/Mastercard settlement in the prior fiscal year, fourth quarter operating margins grew to 30.9% from 30.7% in the prior fiscal year period.

Net income for the fourth quarter of fiscal year 2007 was $10.7 million, or $0.36 per diluted share, compared to net income of $8.8 million, or $0.30 per diluted share, in the prior fiscal year fourth quarter. Adjusted EBITDA for the fourth quarter of fiscal year 2007 was $26.7 million compared to Adjusted EBITDA of $20.3 million for the same period of the prior fiscal year, representing a 32.0% increase.
 

FISCAL YEAR 2008 OUTLOOK

"We believe that the Company is positioned to demonstrate continued growth and our focus will remain on operating margins and net income growth," concluded Soenen.

For fiscal year 2008, the Company is targeting annual revenues to be approximately $645 million. The Company is targeting net income for the fiscal year to be $35.7 million, with diluted earnings per share of $1.18. In addition, the Company targets EBITDA for fiscal year 2008 to be approximately $98 million, with targeted annual EBITDA as a percentage of revenues of approximately 15%. The Company's targeted EBITDA includes approximately $4 million of expense related to stock compensation associated with Statement of Financial Accounting Standards No. 123R and a deferred compensation plan related to Interflora. The Company expects to report Adjusted EBITDA, which represents EBITDA adjusted for items not considered reflective of the Company's core operations. The Company is not projecting any such adjustments for fiscal year 2008 at this time, including other expense (income), net, which historically has primarily related to foreign currency gains and losses.

The above targets are only estimates, which may be exceeded or alternatively may not be achieved.

CONFERENCE CALL

A conference call has been scheduled for August 16, 2007 at 11:00 a.m., ET, to review the results for the full year and fourth quarter of fiscal year 2007. To listen to the call over the Internet, go to the investor relations portion of the Company's Web site, www.ftd.com. Please allow at least 15 minutes to register, download and install any necessary audio software. To listen to the call by phone dial (877) 381-6199 for North American callers or (706) 679-4384 for International callers; mention Conference ID #21346468. A replay of the conference call will be available through August 30, 2007 beginning one hour after the completion of the live call by phone at (800) 633-8284 for North American callers or (402) 977-9140 for International callers or on the Web at www.ftd.com. The conference call contains time-sensitive information that is accurate only as of August 16, 2007, the date of the live broadcast. The call is the property of FTD Group, Inc. Any redistribution, retransmission or rebroadcast of the conference call in any form without the express written consent of FTD Group, Inc. is strictly prohibited.

ABOUT FTD GROUP, INC.

FTD Group, Inc. is a leading provider of floral related products and services to consumers and retail florists, as well as other retail locations offering floral products, in the U.S., Canada, the U.K. and the Republic of Ireland. The business utilizes the highly recognized FTD and Interflora brands, both supported by the Mercury Man logo, which is displayed in approximately 45,000 floral shops worldwide. The consumer businesses operate primarily through the www.ftd.com Web site in the U.S. and Canada and the www.interflora.co.uk Web site in the U.K. and are complemented by the florist businesses which provide products and services to the Company's independent members.
 

FORWARD-LOOKING STATEMENTS

This press release contains various "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include statements regarding the Company's outlook, anticipated revenue growth and profitability; anticipated benefits of its acquisition of Interflora, anticipated benefits of investments in new products, programs and offerings and opportunities and trends within both the domestic and international floral businesses, including opportunities to expand these businesses and capitalize on growth opportunities or increase penetration of service offerings. The international business reflects the operations of Interflora Holdings Limited. These forward-looking statements are based on management's current expectations, assumptions, estimates and projections about the Company and the Company's industry. Investors are cautioned that actual results could differ from those contained in any forward-looking statements as a result of: the Company's ability to acquire and retain FTD and Interflora members and continued recognition by members of the value of the Company's products and services; the acceptance by members of new or modified service offerings recently introduced; the Company's ability to sell additional products and services to FTD and Interflora members; the Company's ability to expand existing marketing partnerships and secure new marketing partners within the domestic and international consumer businesses; the success of the Company's marketing campaigns; the ability to retain customers and maintain average order value within the domestic and international consumer businesses; the Company's performance during key holiday selling seasons such as Christmas, Valentine's Day and Mother's Day; the existence of failures in the Company's computer systems; competition from existing and potential new competitors; levels of discretionary consumer purchases of flowers and specialty gifts; the Company's ability to manage or reduce its level of expenses within both the domestic and international businesses; actual growth rates for the markets in which the Company competes compared with forecasted growth rates; the Company's ability to increase capacity and introduce enhancements to its Web sites; and the Company's ability to integrate additional partners or acquisitions, if any are identified. These factors, along with other potential risks and uncertainties, are discussed in the Company's reports and other documents filed with the Securities and Exchange Commission. The Company expressly disclaims any obligation to update its forward-looking statements.
 

Financial statements follow...   

                            FTD GROUP, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts)

                               Three Months Ended      Year Ended
                                    June 30,            June 30,
                               ------------------- -------------------
                                 2007      2006      2007      2006
                               --------- --------- --------- ---------

Revenues:
  Consumer segment              $90,537   $95,252  $287,621  $275,773
  Florist segment                44,473    46,242   181,995   189,360
  International segment          34,792         -   143,396         -
                               --------- --------- --------- ---------
    Total revenues              169,802   141,494   613,012   465,133

Costs of goods sold and
 services provided:
  Consumer segment               63,020    68,285   203,487   200,549
  Florist segment                13,331    13,029    57,498    59,990
  International segment          23,187         -    98,390         -
  Corporate                         489       517     1,996     2,235
                               --------- --------- --------- ---------
    Total costs of goods sold
     and services provided      100,027    81,831   361,371   262,774

Gross profit:
  Consumer segment               27,517    26,967    84,134    75,224
  Florist segment                31,142    33,213   124,497   129,370
  International segment          11,605         -    45,006         -
  Corporate                        (489)     (517)   (1,996)   (2,235)
                               --------- --------- --------- ---------
    Total gross profit           69,775    59,663   251,641   202,359

Advertising and selling:
  Consumer segment               11,013    13,153    36,100    35,921
  Florist segment                12,657    13,684    47,699    53,200
  International segment           1,988         -    10,626         -
                               --------- --------- --------- ---------
    Total advertising and
     selling                     25,658    26,837    94,425    89,121

General and administrative:
  Consumer segment                5,952     6,295    22,702    19,917
  Florist segment                 2,009       984     8,357     6,591
  International segment           5,803         -    21,352         -
  Corporate                       7,070     6,459    26,685    25,674
                               --------- --------- --------- ---------
    Total general and
     administrative              20,834    13,738    79,096    52,182

Operating income (loss) before
 corporate allocations:
  Consumer segment               10,552     7,519    25,332    19,386
  Florist segment                16,476    18,545    68,441    69,579
  International segment           3,814         -    13,028         -
  Corporate                      (7,559)   (6,976)  (28,681)  (27,909)
                               --------- --------- --------- ---------
    Total operating income
     before corporate
     allocations                 23,283    19,088    78,120    61,056
                               --------- --------- --------- ---------

Corporate Allocations:
  Consumer segment                1,090       821     4,111     3,272
  Florist segment                 2,753     2,802     9,760    11,166
  International segment               -         -         -         -
  Corporate                      (3,843)   (3,623)  (13,871)  (14,438)
                               --------- --------- --------- ---------
    Total corporate
     allocations                      -         -         -         -

Income (loss) from operations:
  Consumer segment                9,462     6,698    21,221    16,114
  Florist segment                13,723    15,743    58,681    58,413
  International segment           3,814         -    13,028         -
  Corporate                      (3,716)   (3,353)  (14,810)  (13,471)
                               --------- --------- --------- ---------
    Total income from
     operations                  23,283    19,088    78,120    61,056
                               --------- --------- --------- ---------

Other income and expenses:
  Interest income                  (757)     (396)   (1,883)     (924)
  Interest expense                6,548     4,853    28,227    19,449
  Other income, net                (204)     (192)     (929)     (398)
                               --------- --------- --------- ---------

    Total other expenses          5,587     4,265    25,415    18,127
                               --------- --------- --------- ---------

    Income before income tax     17,696    14,823    52,705    42,929

Income tax expense                6,949     6,029    20,793    17,386
                               --------- --------- --------- ---------

    Net income                  $10,747    $8,794   $31,912   $25,543
                               ========= ========= ========= =========

Net income per common share -
 basic                            $0.37     $0.31     $1.12     $0.89
                               ========= ========= ========= =========
Net income per common share -
 diluted                          $0.36     $0.30     $1.08     $0.86
                               ========= ========= ========= =========

Weighted average common shares
 outstanding - basic             28,955    27,977    28,496    28,736
                               ========= ========= ========= =========
Weighted average common shares
 outstanding - diluted           30,014    28,936    29,577    29,779
                               ========= ========= ========= =========

                           FTD GROUP, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS
                 (In thousands, except share amounts)

                                           June 30, 2007 June 30, 2006
                                           ------------- -------------
                  ASSETS
------------------------------------------

Current Assets:
  Cash and cash equivalents                     $25,462       $10,954
  Accounts receivable, less allowance for
   doubtful accounts of $5,431 at June 30,
   2007 and $4,437 at June 30, 2006              32,416        26,044
  Inventories, net                                3,694         3,542
  Other current assets                            9,916         5,985
                                           ------------- -------------
    Total current assets                         71,488        46,525

Property and equipment:
  Property and equipment                         35,791        25,265
  Less accumulated depreciation                  11,018         6,051
                                           ------------- -------------
    Property and equipment, net                  24,773        19,214

Other assets:
  Computer software, net                         12,699        10,577
  Other noncurrent assets                        21,085        21,405
  Other intangible assets, less
   accumulated amortization of $9,154 at
   June 30, 2007 and $5,993 at June 30,
   2006                                          13,454        14,780
  Trademark                                     187,816       121,577
  Goodwill                                      418,001       336,659
                                           ------------- -------------
    Total other assets                          653,055       504,998
                                           ------------- -------------
    Total assets                               $749,316      $570,737
                                           ============= =============

   LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------

Current liabilities:
  Accounts payable                              $52,009       $45,273
  Other accrued liabilities                      26,936        24,083
  Current maturities of long-term debt            1,430         1,125
  Dividends payable                               4,707             -
                                           ------------- -------------
    Total current liabilities                    85,082        70,481

Senior secured credit facility                  140,463        48,875
Senior subordinated notes                       170,117       170,117
Post-retirement benefits, accrued pension
 obligations and other liabilities                4,535         2,368
Deferred income taxes                            87,341        61,160

Stockholders' equity:
  Common stock: $0.01 par value,
   75,000,000 shares authorized;
   29,482,182 shares issued as of June 30,
   2007 and June 30, 2006                           295           295
  Additional paid-in capital                    235,589       233,362
  Retained earnings (accumulated deficit)        20,952        (1,554)
  Accumulated other comprehensive income          9,933           200
  Treasury stock, at cost, 519,479 shares
   as of June 30, 2007 and 1,504,480
   shares as of June 30, 2006                    (4,991)      (14,567)
                                           ------------- -------------
    Total stockholders' equity                  261,778       217,736
                                           ------------- -------------
    Total liabilities and stockholders'
     equity                                    $749,316      $570,737
                                           ============= =============

                           FTD GROUP, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands)

                                                        Year Ended
                                                         June 30,
                                                    ------------------

                                                      2007      2006
                                                    --------- --------

Cash flows from operating activities:
  Net income                                         $31,912  $25,543
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                     14,335   10,461
    Gain from sale of business and related
     transaction                                           -     (961)
    Stock-based compensation expense                   1,965      625
    Amortization and write off of deferred
     financing costs                                   2,775    1,679
    Provision for doubtful accounts                    3,260    3,436
    Deferred income taxes                              3,790      726
    Increase (decrease) in cash due to changes in
     operating assets and liabilities, net of
     acquisition
      Accounts receivable                              5,208   (7,430)
      Inventories                                        (31)     581
      Prepaid expenses and other                       2,305    4,083
      Other noncurrent assets                           (214)  (4,129)
      Accounts payable                               (14,733)   4,225
      Other accrued liabilities, unearned income,
       and customer deposits                          (2,182)   1,808

                                                    --------- --------
            Net cash provided by operating
             activities                               48,390   40,647
                                                    --------- --------

Cash flows from investing activities:
  Acquisition of business, net of cash acquired      (96,702)       -
  Capital expenditures                                (7,835)  (8,754)
  Settlement of foreign exchange contract              1,386
  Proceeds from sale of business                           -    3,500
                                                    --------- --------

            Net cash used in investing activities   (103,151)  (5,254)
                                                    --------- --------

Cash flows from financing activities:
  Proceeds from issuance of long-term debt, net of
   financing costs                                   148,536        -
  Repayments of long-term debt                       (58,107) (18,963)
  Repayment of notes payable and capital lease
   obligations                                       (23,572)       -
  Dividends paid                                      (4,699)       -
  Excess tax benefit from stock-based compensation     4,122      220
  Proceeds from exercise of stock options              2,510      212
  Purchase of company stock                                -  (14,999)
  Net proceeds from the issuance of common stock           -      (22)
                                                    --------- --------

            Net cash provided by (used in)
             financing activities                     68,790  (33,552)
                                                    --------- --------

  Effect of foreign exchange rate changes on cash
   and cash equivalents                                  479      223
                                                    --------- --------

Net increase in cash and cash equivalents             14,508    2,064

Cash and cash equivalents at beginning of period      10,954    8,890
                                                    --------- --------

Cash and cash equivalents at end of period           $25,462  $10,954
                                                    ========= ========

                           FTD GROUP, INC.
                         SEGMENT INFORMATION
                            (In thousands)

                                         Three Months Ended
                                            June 30, 2007
                               ---------------------------------------
                               Gross Segment Eliminations Consolidated
                               ------------- ------------ ------------

Revenues:
Consumer segment                    $95,582      $(5,045)     $90,537
Florist segment                      44,719         (246)      44,473
International segment                34,650          142       34,792
                               ------------- ------------ ------------
                         Total      174,951       (5,149)     169,802
                               ------------- ------------ ------------

Costs of Goods Sold and
 Services Provided:
Consumer segment                     63,899         (879)      63,020
Florist segment                      14,118         (787)      13,331
International segment                23,231          (44)      23,187
Corporate                               489            -          489
                               ------------- ------------ ------------
                         Total      101,737       (1,710)     100,027
                               ------------- ------------ ------------

Gross Profit:
Consumer segment                     31,683       (4,166)      27,517
Florist segment                      30,601          541       31,142
International segment                11,419          186       11,605
Corporate                              (489)           -         (489)
                               ------------- ------------ ------------
                         Total       73,214       (3,439)      69,775
                               ------------- ------------ ------------

Advertising and Selling:
Consumer segment                     11,013            -       11,013
Florist segment                      16,282       (3,625)      12,657
International segment                 2,172         (184)       1,988
                               ------------- ------------ ------------
                         Total       29,467       (3,809)      25,658
                               ------------- ------------ ------------

General and Administrative:
Consumer segment                      6,847         (895)       5,952
Florist segment                       2,009            -        2,009
International segment                 5,677          126        5,803
Corporate                             6,175          895        7,070
                               ------------- ------------ ------------
                         Total       20,708          126       20,834
                               ------------- ------------ ------------

Operating Income (Loss) before
 Corporate Allocations:
Consumer segment                     13,823       (3,271)      10,552
Florist segment                      12,310        4,166       16,476
International segment                 3,570          244        3,814
Corporate                            (6,664)        (895)      (7,559)
                               ------------- ------------ ------------
                         Total       23,039          244       23,283
                               ------------- ------------ ------------

Corporate Allocations:
Consumer segment                      1,090            -        1,090
Florist segment                       2,753            -        2,753
International segment                     -            -            -
Corporate                            (3,843)           -       (3,843)
                               ------------- ------------ ------------
                         Total            -            -            -
                               ------------- ------------ ------------

Operating Income (Loss):
Consumer segment                     12,733       (3,271)       9,462
Florist segment                       9,557        4,166       13,723
International segment                 3,570          244        3,814
Corporate                            (2,821)        (895)      (3,716)
                               ------------- ------------ ------------
                         Total      $23,039         $244      $23,283
                               ============= ============ ============

Depreciation and Amortization:
Consumer segment                       $885           $-         $885
Florist segment                         837            -          837
International segment                 1,062            -        1,062
Corporate                               661            -          661
                               ------------- ------------ ------------
                         Total       $3,445           $-       $3,445
                               ============= ============ ============

                                         Three Months Ended
                                            June 30, 2006
                               ---------------------------------------
                               Gross Segment Eliminations Consolidated
                               ------------- ------------ ------------

Revenues:
Consumer segment                   $101,351      $(6,099)     $95,252
Florist segment                      46,351         (109)      46,242
International segment                     -            -            -
                               ------------- ------------ ------------
                         Total      147,702       (6,208)     141,494
                               ------------- ------------ ------------

Costs of Goods Sold and
 Services Provided:
Consumer segment                     69,162         (877)      68,285
Florist segment                      13,844         (815)      13,029
International segment                     -            -            -
Corporate                               517            -          517
                               ------------- ------------ ------------
                         Total       83,523       (1,692)      81,831
                               ------------- ------------ ------------

Gross Profit:
Consumer segment                     32,189       (5,222)      26,967
Florist segment                      32,507          706       33,213
International segment                     -            -            -
Corporate                              (517)           -         (517)
                               ------------- ------------ ------------
                         Total       64,179       (4,516)      59,663
                               ------------- ------------ ------------

Advertising and Selling:
Consumer segment                     13,153            -       13,153
Florist segment                      18,199       (4,515)      13,684
International segment                     -            -            -
                               ------------- ------------ ------------
                         Total       31,352       (4,515)      26,837
                               ------------- ------------ ------------

General and Administrative:
Consumer segment                      7,222         (927)       6,295
Florist segment                         984            -          984
International segment                     -            -            -
Corporate                             5,533          926        6,459
                               ------------- ------------ ------------
                         Total       13,739           (1)      13,738
                               ------------- ------------ ------------

Operating Income (Loss) before
 Corporate Allocations:
Consumer segment                     11,814       (4,295)       7,519
Florist segment                      13,324        5,221       18,545
International segment                     -            -            -
Corporate                            (6,050)        (926)      (6,976)
                               ------------- ------------ ------------
                         Total       19,088            -       19,088
                               ------------- ------------ ------------

Corporate Allocations:
Consumer segment                        821            -          821
Florist segment                       2,802            -        2,802
International segment                     -            -            -
Corporate                            (3,623)           -       (3,623)
                               ------------- ------------ ------------
                         Total            -            -            -
                               ------------- ------------ ------------

Operating Income (Loss):
Consumer segment                     10,993       (4,295)       6,698
Florist segment                      10,522        5,221       15,743
International segment                     -            -            -
Corporate                            (2,427)        (926)      (3,353)
                               ------------- ------------ ------------
                         Total      $19,088           $-      $19,088
                               ============= ============ ============

Depreciation and Amortization:
Consumer segment                       $847           $-         $847
Florist segment                         908            -          908
International segment                     -            -            -
Corporate                               966            -          966
                               ------------- ------------ ------------
                         Total       $2,721           $-       $2,721
                               ============= ============ ============

                           FTD GROUP, INC.
                         SEGMENT INFORMATION
                            (In thousands)

                                             Year Ended
                                            June 30, 2007
                               ---------------------------------------
                               Gross Segment Eliminations Consolidated
                               ------------- ------------ ------------

Revenues:
Consumer segment                   $305,033     $(17,412)    $287,621
Florist segment                     182,592         (597)     181,995
International segment               143,072          324      143,396
                               ------------- ------------ ------------
                         Total      630,697      (17,685)     613,012
                               ------------- ------------ ------------

Costs of Goods Sold and
 Services Provided:
Consumer segment                    206,234       (2,747)     203,487
Florist segment                      60,782       (3,284)      57,498
International segment                98,511         (121)      98,390
Corporate                             1,996            -        1,996
                               ------------- ------------ ------------
                         Total      367,523       (6,152)     361,371
                               ------------- ------------ ------------

Gross Profit:
Consumer segment                     98,799      (14,665)      84,134
Florist segment                     121,810        2,687      124,497
International segment                44,561          445       45,006
Corporate                            (1,996)           -       (1,996)
                               ------------- ------------ ------------
                         Total      263,174      (11,533)     251,641
                               ------------- ------------ ------------

Advertising and Selling:
Consumer segment                     36,100            -       36,100
Florist segment                      59,677      (11,978)      47,699
International segment                11,006         (380)      10,626
                               ------------- ------------ ------------
                         Total      106,783      (12,358)      94,425
                               ------------- ------------ ------------

General and Administrative:
Consumer segment                     25,537       (2,835)      22,702
Florist segment                       8,357            -        8,357
International segment                20,908          444       21,352
Corporate                            23,850        2,835       26,685
                               ------------- ------------ ------------
                         Total       78,652          444       79,096
                               ------------- ------------ ------------

Operating Income (Loss) before
 Corporate Allocations:
Consumer segment                     37,162      (11,830)      25,332
Florist segment                      53,776       14,665       68,441
International segment                12,647          381       13,028
Corporate                           (25,846)      (2,835)     (28,681)
                               ------------- ------------ ------------
                         Total       77,739          381       78,120
                               ------------- ------------ ------------

Corporate Allocations:
Consumer segment                      4,111            -        4,111
Florist segment                       9,760            -        9,760
International segment                     -            -            -
Corporate                           (13,871)           -      (13,871)
                               ------------- ------------ ------------
                         Total            -            -            -
                               ------------- ------------ ------------

Operating Income (Loss):
Consumer segment                     33,051      (11,830)      21,221
Florist segment                      44,016       14,665       58,681
International segment                12,647          381       13,028
Corporate                           (11,975)      (2,835)     (14,810)
                               ------------- ------------ ------------
                         Total      $77,739         $381      $78,120
                               ============= ============ ============

Depreciation and Amortization:
Consumer segment                     $3,768           $-       $3,768
Florist segment                       3,267            -        3,267
International segment                 3,845            -        3,845
Corporate                             3,455            -        3,455
                               ------------- ------------ ------------
                         Total      $14,335           $-      $14,335
                               ============= ============ ============

                                             Year Ended
                                            June 30, 2006
                               ---------------------------------------
                               Gross Segment Eliminations Consolidated
                               ------------- ------------ ------------

Revenues:
Consumer segment                   $295,187     $(19,414)    $275,773
Florist segment                     189,674         (314)     189,360
International segment                     -            -            -
                               ------------- ------------ ------------
                         Total      484,861      (19,728)     465,133
                               ------------- ------------ ------------

Costs of Goods Sold and
 Services Provided:
Consumer segment                    203,235       (2,686)     200,549
Florist segment                      63,329       (3,339)      59,990
International segment                     -            -            -
Corporate                             2,235            -        2,235
                               ------------- ------------ ------------
                         Total      268,799       (6,025)     262,774
                               ------------- ------------ ------------

Gross Profit:
Consumer segment                     91,952      (16,728)      75,224
Florist segment                     126,345        3,025      129,370
International segment                     -            -            -
Corporate                            (2,235)           -       (2,235)
                               ------------- ------------ ------------
                         Total      216,062      (13,703)     202,359
                               ------------- ------------ ------------

Advertising and Selling:
Consumer segment                     35,921            -       35,921
Florist segment                      66,902      (13,702)      53,200
International segment                     -            -            -
                               ------------- ------------ ------------
                         Total      102,823      (13,702)      89,121
                               ------------- ------------ ------------

General and Administrative:
Consumer segment                     22,629       (2,712)      19,917
Florist segment                       6,591            -        6,591
International segment                     -            -            -
Corporate                            22,963        2,711       25,674
                               ------------- ------------ ------------
                         Total       52,183           (1)      52,182
                               ------------- ------------ ------------

Operating Income (Loss) before
 Corporate Allocations:
Consumer segment                     33,402      (14,016)      19,386
Florist segment                      52,852       16,727       69,579
International segment                     -            -            -
Corporate                           (25,198)      (2,711)     (27,909)
                               ------------- ------------ ------------
                         Total       61,056            -       61,056
                               ------------- ------------ ------------

Corporate Allocations:
Consumer segment                      3,272            -        3,272
Florist segment                      11,166            -       11,166
International segment                     -            -            -
Corporate                           (14,438)           -      (14,438)
                               ------------- ------------ ------------
                         Total            -            -            -
                               ------------- ------------ ------------

Operating Income (Loss):
Consumer segment                     30,130      (14,016)      16,114
Florist segment                      41,686       16,727       58,413
International segment                     -            -            -
Corporate                           (10,760)      (2,711)     (13,471)
                               ------------- ------------ ------------
                         Total      $61,056           $-      $61,056
                               ============= ============ ============

Depreciation and Amortization:
Consumer segment                     $3,201           $-       $3,201
Florist segment                       3,398            -        3,398
International segment                     -            -            -
Corporate                             3,862            -        3,862
                               ------------- ------------ ------------
                         Total      $10,461           $-      $10,461
                               ============= ============ ============

                           FTD GROUP, INC.
                     NON-GAAP FINANCIAL MEASURES
                                EBITDA
                             (Unaudited)
                            (In thousands)

Reconciliation of certain financial measures reported in accordance
 with Generally Accepted Accounting Principles ("GAAP") to those
 presented on the basis of methodologies other than in accordance with
 GAAP ("non-GAAP").

The Company defines EBITDA as net income before net interest expense,
 income tax expense, depreciation and amortization. The Company
 defines Adjusted EBITDA as EBITDA plus expenses that are not
 considered reflective of the Company's core operations. For the
 periods presented, the items not considered part of the Company's
 core operations include the gain on the sale of the Renaissance
 greeting card business, the income related to the settlement of the
 Visa/MasterCard litigation and other (income) expense, which
 primarily consists of net foreign currency gains and losses and the
 costs associated with the March 2007 secondary stock offering. EBITDA
 and Adjusted EBITDA include $3.1 million of expense related to stock
 compensation associated with Statement of Financial Accounting
 Standards No. 123R ("SFAS No. 123R") and a deferred compensation plan
 related to Interflora. EBITDA and Adjusted EBITDA are calculated as
 follows for the periods presented:

                                  Three Months Ended    Year Ended
                                       June 30,          June 30,
                                  ------------------ -----------------
                                    2007      2006     2007     2006
                                  --------- -------- -------- --------

   Net income, as reported (GAAP
    basis)                         $10,747   $8,794  $31,912  $25,543
   plus: Interest expense, net       5,791    4,457   26,344   18,525
   plus: Depreciation and
    amortization                     3,445    2,721   14,335   10,461
   plus: Income tax expense          6,949    6,029   20,793   17,386
                                  --------- -------- -------- --------
   EBITDA (1)                       26,932   22,001   93,384   71,915
   Gain on sale of Renaissance
    (2)                                  -        -        -     (961)
   Income related to settlement
    of Visa/MasterCard litigation
    (3)                                  -   (1,558)       -   (1,558)
   Other income, net                  (204)    (192)    (929)    (398)
                                  --------- -------- -------- --------
   Adjusted EBITDA (1)             $26,728  $20,251  $92,455  $68,998
                                  ========= ======== ======== ========

(1)The Company uses EBITDA and Adjusted EBITDA as supplemental
    measures of performance. The Company presents Adjusted EBITDA
    because it considers it an important supplemental measure of
    performance, as it is used as a performance measure under the
    senior credit facility entered into in connection with the
    acquisition of Interflora Holdings Limited, the indenture
    governing the Notes and the Company's executive compensation plan.
    The adjustments made in the calculation of Adjusted EBITDA, as
    described above, are adjustments that would be made in calculating
    the Company's performance for purposes of coverage ratios under
    the senior credit facility and the indenture governing the Notes,
    and the Company's executive compensation plan bases incentive
    compensation payments in significant part on the Company's
    performance measured using Adjusted EBITDA as presented above.
    Measures similar to EBITDA and Adjusted EBITDA are also widely
    used by the Company and by others in the Company's industry to
    evaluate and price potential acquisition candidates.

   The Company believes EBITDA and Adjusted EBITDA facilitate
    operating performance comparisons from period to period and
    company to company by backing out potential differences caused by
    variations in capital structure (affecting relative interest
    expense), tax positions (such as the impact on periods or
    companies of changes in effective tax rates or net operating
    losses), the age and book depreciation of facilities and equipment
    (affecting relative depreciation expense), profits or losses
    related to sold businesses, currency fluctuations (primarily
    resulting from the Interflora business, which is based in the
    U.K.) and expenses related to financing transactions. The Company
    also presents EBITDA and Adjusted EBITDA because it believes they
    are frequently used by investors and other interested parties in
    the evaluation of high yield issuers, many of which present EBITDA
    and/or Adjusted EBITDA when reporting their results.

   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 of EBITDA and Adjusted EBITDA are that they do not
    reflect the Company's cash expenditures for capital expenditures,
    they do not reflect the significant interest expense or the cash
    requirements necessary to service interest or principal payments
    on the Company's debt, they do not reflect changes in, or cash
    requirements for, the Company's working capital requirements, they
    do not reflect other expenses or gains excluded above and other
    companies in the Company's industry may calculate these measures
    differently than presented above. The Company compensates for
    these limitations by relying primarily on GAAP results and using
    EBITDA and Adjusted EBITDA only supplementally.

(2)On December 21, 2005, we sold substantially all the assets and
    certain liabilities of our Renaissance greeting card business.

(3)Represents settlement proceeds received in connection with a class
    action litigation against Visa U.S.A. Inc. and MasterCard
    International, Inc.

                           FTD GROUP, INC.
                     NON-GAAP FINANCIAL MEASURES
                           TARGETED EBITDA
                             (Unaudited)
                            (In thousands)

Reconciliation of certain financial measures reported in accordance
 with Generally Accepted Accounting Principles ("GAAP") to those
 presented on the basis of methodologies other than in accordance with
 GAAP ("non-GAAP").

The Company defines EBITDA as net income before net interest expense,
 income tax expense, depreciation and amortization. Targeted EBITDA
 includes approximately $4 million of expense related to stock
 compensation associated with SFAS No. 123R and a deferred
 compensation plan related to Interflora. Targeted EBITDA is
 calculated as follows for the period presented:

                                                      Year Ending
                                                      June 30, 2008
                                                  (Forecasted Targets)
                                                  --------------------
   Revenues                                                   $645,000

   Net income (GAAP basis)                                     $35,700
   plus: Interest expense, net                                  24,200
   plus: Depreciation and amortization                          15,300
   plus: Income tax expense                                     22,800
                                                  --------------------
   EBITDA (1)                                                  $98,000
                                                  ====================

(1)The Company uses EBITDA as a supplemental measure of performance,
    as it is used as a performance measure under the senior credit
    facility entered into in connection with the acquisition of
    Interflora Holdings Limited, the indenture governing the Notes and
    the Company's executive compensation plan. Measures similar to
    EBITDA are also widely used by the Company and by others in the
    Company's industry to evaluate and price potential acquisition
    candidates.

   The Company believes EBITDA facilitates operating performance
    comparisons from period to period and company to company by
    backing out potential differences caused by variations in capital
    structure (affecting relative interest expense), tax positions
    (such as the impact on periods or companies of changes in
    effective tax rates or net operating losses) and the age and book
    depreciation of facilities and equipment (affecting relative
    depreciation expense). The Company also presents EBITDA because it
    believes it is frequently used by investors and other interested
    parties in the evaluation of high yield issuers, many of which
    present EBITDA when reporting their results.

   EBITDA has limitations as an analytical tool, 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
    of EBITDA are that it does not reflect the Company's cash
    expenditures for capital expenditures, it does not reflect the
    significant interest expense or the cash requirements necessary to
    service interest or principal payments on the Company's debt, it
    does not reflect changes in, or cash requirements for, the
    Company's working capital requirements and other companies in the
    Company's industry may calculate these measures differently than
    presented above. The Company compensates for these limitations by
    relying primarily on GAAP results and using EBITDA only
    supplementally.

###

Home | Programs & Services | Mercury Technology | FTD Marketplace | Investor Relations